Thoughts on the mechanism of societies

A General maxim, almost universally adopted beyond contradiction, and the foundation of an hundred regulations, enforced from pole to pole, is, that it is essential for all national commodities to be at the lowest price, in order that foreign trade may turn out to the best advantage; that is to say, for the native traders to be able to dispose abroad of the products of national industry, at a cheaper rate than any other nation can sell those of her own. Certain it is, that the less price national commodities will bring, the less of the products of national industry will be necessary to pay them off, the more of course will there remain of those products to stock the foreign markets, and the more also will the foreign purchaser be gratified by the reduced price at which they may be given, to the detriment of the land proprietor of the nation; this is so self-evident that it cannot be withstood. This, methinks, is carrying to an excess the principles of Christian charity, if the Legislators are land proprietors; it is a shameful abuse of power, if the Legislators are at the head of manufactures; and in either case one must be blind to the necessity of keeping up an even balance between agriculture and industry.—Had not Nature militated under hand, and with some advantage against the dreams of speculators in this respect, and against the much more dangerous surreptions of cupidity, to what state of abjection and misery would not agriculture be now reduced in all countries!

I have said, that the price of every thing would perhaps be now in France, very little different from what it was 40 years ago, had it not been for an eventual circumstance, (I might have said a regulation,) which a few years ago tertiated, at least, the fortune of every subject in that kingdom;—nominally at first, it is true; but afterwards in reality, owing to the prodigious encouragement that ensued; I mean the regulation which permitted the exportation of wheat, and authorised each of the French Provinces not to consider herself as a stranger to all the others. I shall only make a few reflexions on a matter which might furnish enough to fill a volume.

First, The adopted maxim of the pretended advantage of enjoying the national commodities at the lowest prices, for the better encouragement of industry, was not held less sacred at the time the regulation took place, than when that maxim was considered as the basis of the system of exportation the most advantageous to the kingdom, and the condition (sine quâ non) of the many wonders that might be expected therefrom, towards an increase of wealth.—Yet if there exist a regulation calculated to operate in diametrical opposition to the sacred maxim, it is clearly the freedom of the corn trade; to be convinced of this truth, one need but attend to its effect in France. The little success I have met with in my endeavours to come, in this respect, at some particulars which might perhaps have given me a few ideas, confines me to what I can gather from recollection; but with truth I can say that my memory seldom deceives me on the abstracts it presents to my mind. The reader may perceive, that the summary I now stand in need of, has no manner of connexion with the little springs that were put in play to ruin the author of the scheme; the chief and true point, is, that all secret intrigues, all public combinations, ended only in occasioning a reform in what was deemed abusive, in a regulation the advantages of which were fully demonstrated; and that the price of wheat, after having tertiated, doubled, trebled perhaps by the help of the forestallers, from whose abilities were expected the repeal of the law and the fall of its devisers, was fixed at last between one half and three fourths above the price, as it was upon the medium of ten years preceding the regulation. It is easily conceived that the price of wheat dictated that of all other commodities; in effect, previous to the last war, the only decisive period in the present point, the nominal revenue of the lands in France, increased by one half at least of what it was 15 years before;—then, commodities were, upon the whole, dearer by one half; yet the maxim was held sacred still, and is not less so at the present time—in England as well as in France;—nevertheless I can see no medium; either the maxim is absurd in itself, or French industry has lost one third of its benefits by a regulation which tertiated, almost suddenly, the price of all productions in France.

Secondly, In order that industry may be said to have lost that third, the increase of revenue, yielded by the land to its proprietor, must have been cast into some national vortex, or sent into some foreign one, or concealed in the earth by the suspicious proprietor; for if the surplus of the landed revenue has occasioned a greater demand for and consumption of the products of industry, and more culture of the land, industry, by raising the price of her goods on the very first increase of the demand, has obtained in the first year, her first share in that accession of wealth; and she could not miss the second, so soon as a larger sum of savings bestowed upon the lands, had brought about what they never fail to produce, I mean, more productions, and soon after a greater demand for goods, and soon after again more goods to answer the additional demands.

Thirdly, If that sudden advance in the price of provisions, ended only in an increase almost equally sudden in the price of the products of industry, there could not be then any inconvenience, either to industry or agriculture, in a sudden and proportionate rise which preserved the former equilibrium, and presented the same correspondence between the two revenues; (the only thing that can materially affect the two capitalists, though neither of them think about it.)

Fourthly, If there has been no inconvenience in so considerable but proportionable increase in the prices, coming from agriculture, where could be the inconvenience in a proportioned increase, equally sudden and general if it should come from industry?

Fifthly, What difference can there be between a regulation which raises the landed revenue in a kingdom, from 6 to 9, followed by a re-action in industry, which raises equally to 9 what usually went for 6; and another regulation which would begin the same operation in industry, and should be equally followed by a proportionable re-action in agriculture?

Sixthly, When, by a regulation respecting the corn, industry is at liberty to enhance the price of her goods, in the same proportion as the effects of the regulation have raised the products of agriculture, cannot a regulation that concerns or imposes taxes, and by which industry is forced to increase her prices by the full amount of the taxes,—cannot such a regulation, I say, permit the cultivator, without inconvenience, to advance the price of the productions of the earth, in the same proportion as the taxes, or the regulation concerning them, have increased that of the products of industry?

Seventhly, Let us suppose that the operation is effected, and followed by the sum of money which a nominal revenue, grown more considerable, requires for the circulation; can there exist then the most trifling difference between the present state of any individuals in the nation, and the state they were in previous to their being loaded with that enormous burden, called taxes?

Eighthly, If after enquiry, the only answer that could be given should be a negative, would it not be profitable to let the public into the secret, in order that after having observed a very singular analogy between a young nymph loaded with a column of several thousand pounds weight of air, each of them as heavy as if it were of lead, and the French as well as the English loaded annually, constantly, in the same manner, the one with 600 millions of livres Tournois, the other with 14 or 15 millions of pounds sterling, they should be led further to observe, with what agility, what graces, what sprightliness, the young dancer plays with her load—“trips it along on the fantastic toe,” and with what grimaces, what groans, what lamentations, the two vigorous nations shrink under a burden which is not more sensible than air, from the instant that it is as perfectly divided?

I must here go some steps back:

Ninthly, If the nullity of the burden depended on the equality with which it should be divided, and if this equality should depend on an addition to the supposed burden, might it not be expected (not from the tricks of customary seduction, or from the shorter method of authority, but from all the means calculated to enforce conviction) that the nation would find herself less aggrieved by an additional tax, which would tend to equalise the weight, than she could be by an increase of taxes laid for the purpose of effecting a reimbursement, which, upon a second thought, no one can wish for?

Tenthly, Before the regulation alluded to, wheat was, in France, one third or one half cheaper than it is at this day; the rest of the other productions of the earth stood in the same proportion: in England, at that very time, the price of wheat differed very little from what it now is. How could England then maintain a competition—a combat, as it were, of exportation, against her natural enemy (the French industry), so lightly, so advantageously armed by the low price of the commodities in France?—If the maxim is as just as it is held sacred, surely France must have derived a prodigious benefit from the barricadoes by which the exportation of wheat was prevented, even from one Province to another, in order that it should be in all at the lowest possible price:—it follows also that England, already compelled by her taxes, her internal monopoly, and her riches, to raise the price of her wheat at home, must have undergone dreadful inconveniences, by availing herself, as she has ever done, of the least dearth abroad, to make that very wheat dearer in England, whilst she was going to diminish its price wherever scarcity had made it excessive.

Eleventhly, If France has obtained such wonderful advantages from her internal as well as external barriers, it is not in respect to her agriculture; her agriculture has clearly lost, not only that part of the value in her productions, of which she was daily deprived by this barrier, but also the encouragement which a gradual increase in the price of the productions would have occasioned, to increase their quantity: it is therefore by the exportation of the products of her industry, which, being sold at a price below that of all other nations, have procured her in money that prodigious balance of exported goods, which the wretched state of the national cultivator did not permit him to pay for:—but observe, that the French exportation, carried on with that advantage (pretended to be so very considerable) of the low price of national commodities, brought no more money to France, than that which she wanted for the five articles I have mentioned before, when treating of the balance of England. This matter I hope I shall set in the fullest blaze of evidence.—But, on the other hand, observe also that England, by an exportation carried on with the utmost regularity, under the supposed disadvantage of her commodities being rated much higher than those of her competitors, a rate which she even increased herself, by the exportation of wheat, which she encouraged by premiums—by premiums, destructive of the sacred maxim; observe, I say, that under that disadvantage, in spite of those inconsistencies, as fortunate as they are real and palpable, England, nevertheless, has not failed to procure the money wanted for the five articles, the only ones that can give any value to money.—Shall it be said that France would have obtained a balance in money much less considerable, if she had not kept her prices so low, if she had acted with less respect to the maxim?—Shall it be said, that the balance in money would have been far more favourable to England, had not the price of her commodities been so high at home; if she had more consistently acted upon the maxim; if, above all, she had prohibited the exportation of wheat, which is so often lamented, and even sometimes so loudly complained of by her manufacturers?—This indeed would be to appropriate great merit to the resource of hiding money under ground, when we cannot flatter ourselves with the thoughts of having too much of it, but at the expence of agriculture: but no matter; let us see whether the inference be just.

Twelfthly, Had France been indebted to the disparagement in the prices of her commodities, for the advantage of procuring the money wanted for the five articles before mentioned, she would have found herself in the impossibility of answering that want, as soon as, by the new regulation, those commodities were restored to their natural value, as soon as the liberty of exporting wheat had raised its price almost to the level of that which it bore in England.—Now will it be said, that ever since the landed revenue in France has risen from 40 to 50 per cent. by an advance in the price of commodities, less bullion has been spent by the French in plate, in gilding, and other articles of luxury?—Will it be said that France stood in need of the money necessary to settle in cash with her foreign correspondents, when this resource from circumstances became preferable to the mode of paying in bills of exchange?—Will it be said that she fell short of it for all those Jewish and miserable operations, or for that reciprocally beneficial smuggling with her neighbours?—Will it be said, that her circulation, which, beyond any doubt, required a more considerable mass of money, as soon as her revenue had tertiated, has suffered by that necessity of a higher balance, become impossible (according to the maxim) as soon as it grew indispensable?—Will it be said, that her industry has lingered away as soon as her agriculture has been more able to enliven it?—Yet all these absurdities must be admitted, or it must be acknowledged that the price of commodities may be tertiated, or doubled in a nation, not only without injuring industry, whose business it is to keep within the kingdom all the money wanted for circulation, but even with securing to the nation a more considerable balance in money, since it must become so whenever the price of every thing is raised one third, and perhaps more than one half.—The sacred maxim therefore has not even common sense, when applied to the internal trade of the State.

Thirteenthly, If France, who has not the assistance of paper-money, did actually procure so clearly to herself an annual balance more considerable in money, as soon as she had tertiated her revenue, it follows that England must, really, have experienced a competition much more disagreeable, from that very circumstance from which, according to the maxim, she had less reason to fear it; for whilst the price of commodities was below par in France, it is clear that having no national vortex, she required less money for the circulation of a revenue of 100 than for one of 150: it was therefore more to the advantage of England, in spite of the maxim, that the commodities should be at a low price in France, than to have them raised 50 per cent. The sacred maxim then is destitute of common sense, when applied to foreign trade, to the competition abroad.

Fourteenthly, But if the circumstance which drove France to the necessity of acquiring a greater balance in real cash, stood at a very small distance from another circumstance by which England was compelled to procure one still more considerable, for a general re-coining of her guineas; and if France and England have done each other no material injury in this kind of competition, (this is proved by the fact, since both nations have equally and certainly, ever since, procured the annual balance which they wanted); may it not be fairly concluded, that England has been no loser, by a revolution in the price of wheat, which enriched France by tertiating her revenue, and forced her to receive annually, in cash, a balance far greater than she did previous to that revolution?

Fifteenthly, Now if England, since the revolution in the French prices, has obtained as much bullion as she wished for, or rather all that which she could lay out on the five articles of her common expenditure, and for the additional circumstance of a re-coinage, whilst on the other hand France had all her wants supplied with the greater ease, may it not be inferred that England could have gained nothing, even upon the supposition that the annual supply of money, become necessary to France, had been less considerable, that is to say, even if the French commodities had remained in their former state of disparagement?

Sixteenthly, If that increase of prices in the landed revenue has not been restrained to France; if it be a fact, as all travellers pretend to have observed, that all the other parts of Europe have experienced the same revolution, the same encouragement, the same success, except the difference produced in some places by the singularity of certain laws; may it not be concluded, that although England has lost nothing by the revolution, although France has proved a gainer by it, other nations have also enriched themselves, namely, one tenth, those where the prices have been advanced a tenth; a ninth, those where the prices have been raised one quarter; one half, those where the prices have risen one half, &c. independently of an increase still more essential, viz. that of the quantity of the productions of the earth, which always closely follows that of their prices.

Seventeenthly, Were one to reflect, that this increase in the prices, in regard to the productions of the earth, is always followed by a similar increase with respect to the products of industry, which thereby receives the same encouragement; if, after examination, no one can harbour any doubt of the fact; would it be an easy matter, even with the help of the sacred maxim, to persuade any nation, whose prices have been doubled, to reduce the nominal of her revenue from 20 to 18, in order to get the advantage in the competition with another nation who, by some disagreeable circumstances, should have been obliged to raise her products from 20 to 22, as England is compelled to do? Would not one, on the contrary, conjecture that every wise nation will follow the advice of the American of Philadelphia, i. e. that she will not hesitate to raise equally her own products from 20 to 22, certain, as she will be by this means, to give fresh encouragement both to her agriculture and her industry, and not to hurt in the least the interest of the nation whom those disagreeable circumstances should have compelled that rise from 20 to 22; compelled, I say, without procuring for her that encouragement which cannot spring from such a rise, but in as much as it is not necessitated by taxes?

Eighteenthly, Is it not even probable that every wise nation will be sensible that there is but one way to carry on, without being constantly duped, a commerce with another nation, obliged to raise the price of her goods; viz. to raise, in the same proportion, those which are given in exchange?—This, some will say, is an indirect advice which I take upon me to give to industry; nothing more useless, will they add; industry in all countries never fails making that calculation.—I do not assume the liberty of advising industry;—Industry is far better acquainted, than I am, with her own interest: it is to agriculture I presume to give advice; and this I have an incontestable right to do, since I myself am a cultivator, an American cultivator, and that my fortune cannot increase, nor even stand as it is, but with that of my brethren, the cultivators throughout all Europe, whose consumption is as essential to me, in regard to sugars, cottons, coffee, indigo, &c. as mine is essential to them, with respect to wines, flour, oils, hemp, iron, &c. How is it possible to charge them with an advanced price on the goods they purchase, without diminishing their means of buying, unless they raise their own commodities equally with the above goods?—How can one diminish their power of buying, without diminishing also my resources for a sale?—How can one diminish my resources for a sale, without diminishing my means of production?—And how is it possible to put a stop to the productions of America, without crushing in the very bud all the European productions, which are to pay for them?—There is not the least doubt, but that, between merchant and merchant, alien or native, there never is any difficulty: nothing more candid than their respective conduct; never a word about prices; each fixes his own, and it often happens that a bale of goods has been sold ten times upon the invoice, and never opened:—But when a merchant, no matter of what nation, says to his customer, no matter of what country; English goods have increased in price from 20 to 22, I cannot have them for less; it is essential for every land proprietor, from Pole to Pole, to know that he must not hesitate to answer: You cannot come down to me, give me leave to get up to you; or, in other words, I also advance my prices from 20 to 22, so that every thing is in its due order, and the cock of the balance stands still in its place. On this principle, clearly evident and of an irrefragable necessity, I maintain that it is England, successively compelled, as well by her wealth, as by her taxes and monopoly, to increase her prices at home,—England, trading to all parts of Europe, more largely than any other country,—it is England, I say, who, to this day, has raised the prices of every thing all over Europe; and I insist, that England, once more obliged to carry those prices still higher, once more will compel Europe to follow her example, and that all Europe will grow richer by her means, (as has been the case hitherto) on account of the encouragement which this increase will give in all countries, where England may think fit to continue or extend her trade on fair and equitable principles.

It is certain, that one cannot, without some reflexion, comprehend that chain composed of so many incoherent, so widely distant links, that union, that mutual dependance of interests, in appearance so opposite to each other; and that, even with the assistance of a few hypotheses sufficient to give an idea of the whole, the only confession subscribed to by the reader, will be, that they imply no palpable contradiction, but that they are nevertheless the mere offspring of imagination, and ought to be ranked amongst non-entities. Yet the two hypotheses of which Rome seemed to be the subject, were no more, if we except the paper-currency, than the type of the revolution which took place in France at the time of the regulation I have spoken of,—a regulation, which in less than two years increased the wealth of that nation from 16 to 24, 50 per cent.; as if the French had been at last made sensible, that England could not work for herself without working for them, and that consequently they had a right to say with my Roman: England is rich to the amount of 24, only because she denominates 24 that same quantity of wheat which our barricadoes and barriers have obliged us to call only 16 in our country; the only thing to be done therefore, is to set fire to our barricadoes, and break down our barriers, that henceforth the same 16 may be denominated 24, and all at once we shall be in fact as rich as England, without having been so judiciously at work.

Another advantage that would accrue from that uniformity, nearly general, in all prices, if one would lend an helping hand to Nature, after having been convinced of the impossibility of reaping any other benefit from the obstacles thrown in her way, but the sad advantage of retarding her progress;—another advantage, I say, that would accrue from that kind of uniformity in prices, which undergoes no alteration, but from the wants and demands, is, that all that monstrous system of prohibitions or equivalent restrictions, must crumble of itself: for, with what face could a national manufacturer solicit the means and privilege of making his own countrymen pay 10 per cent. dearer for those goods, which another nation tenders to them at 10 per cent. cheaper, notwithstanding the expence of exportation? What reasons could he urge when, instead of answering, a cultivator should rise in the national council, and ask, for the exportation of corn, an absurd premium which would instantly enhance its price 25 per cent.?—But the game of imports and exports to which this last observation alludes, requires to be treated in a separate article which it is not yet time to enter upon; all we have now to do is to think on the means of giving a free circulation to the revenue of all Europe, supposed to be increased in the proportion of 20 to 22, on account of the same increase necessary in England to pay three millions interest, without any one being the poorer for it. I shall say nothing of the facility of paper-currency, when the inutility of a national robbery shall be once generally acknowledged.

Nineteenthly and lastly, If we are frightened by the necessity of a balance in money, every where more considerable, in order to circulate every where, a revenue increased from 20 to 22, to face the indispensable rise in the prices of England, who trades to all parts of the globe; (when we consider besides, that France and England are by the same reason obliged to add to their respective balance already so loaded,) it appears to me, that, after a retrospective view of what has passed, one may readily be convinced, that whenever money becomes necessary for circulation, wherever nothing more is required to circulate and balance objects really existing, and equal to each other, there are always people enough ready to carry money thither; and that this operation, as all those that are beneficial to society, is generally effected when it is neither counteracted nor encouraged, without any one perceiving it.—Nevertheless it must be confessed, that the pretentions set up by France, in regard to a balance, are as terrible, as formidable, as those of England, due regard being paid to the difference between the exports of both; I shall examine these pretensions as I have done those of England, and bring them besides closer to each other, that they may be more properly estimated.