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SECTION II.: MISCHIEFS OF THE PROHIBITORY SYSTEM. - Jeremy Bentham, The Works of Jeremy Bentham, vol. 3 
The Works of Jeremy Bentham, published under the Superintendence of his Executor, John Bowring (Edinburgh: William Tait, 1838-1843). 11 vols. Vol. 3.
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MISCHIEFS OF THE PROHIBITORY SYSTEM.
The prohibitory measure is introduced, then, into the country in question, in order to compel the sale within itself of its own productions, in opposition to foreign productions, under the notion of their being rival productions. Reader, whoever you may be, to avoid difficulties in the expression, we will call that country your country.
Mischief I. Dearer commodities are forced upon your countrymen, instead of cheaper; and all are sufferers by whom the cheaper article was, anterior to the prohibition, bought or consumed: in many cases, the whole population of the country, excepting such as were disabled by poverty from becoming purchasers. The gross sum of injury will be the difference of price between the home-produced and the foreign-prohibited article, calculated on the whole amount of consumption.
The loss in Spain immeasurably great;—probably not less than a fourth on all the manufactures consumed. Amount of imports of manufactured articles is about £500,000 yearly, from England only. (See Table A.)
Mischief II. Mischief, by commodities of inferior quality being forcibly substituted to commodities of superior quality. Sufferers, as before, all those who, antecedently to the prohibition, employed or consumed the good article, and who now are compelled to employ the bad one, or who employ none.—Amount of loss unsusceptible of calculation—incalculable.
In Spain, as before, peculiarly great. With the exception of a few silk manufactures, and some of fine woollens, which have lately been brought to a state of great excellence without the prohibitory system, and which, for their continued improvement and ultimate perfection, require no prohibitory system to protect them—with the exception of a few manufactured articles of silk and wool—the manufactures of Spain are in a state of wretched imperfection. Many excluded fabrics cannot be produced there. Bombazines, for instance, an article of very general consumption—an article so peculiar and beautiful in its perfect form, that it has not yet been manufactured even in France, where the silk-fabrics are in such an advanced state. So, again, the articles produced by the coarse long wool of this country; this wool being peculiar to England. Inferiority applies necessarily more or less to all home-encouraged articles compared with foreign prohibited articles. Manufactures become cheap and good in proportion to the advantages possessed in their creation; and the state of the mechanical arts in Spain being exceedingly backward, the production of articles moderate in price and excellent in quality cannot be contemplated. Another contingent mischief then follows the prohibition—an evil even to the few producers. The strongest motives to emulation being removed, the home-goods will not be improved as they would be when impelled by the rivalry of the superior foreign goods. Permanent inferiority is therefore likely to be entailed on a nation by the prohibitory system, and misdirection of capital from objects leaving certain and larger profit, to objects promising only uncertain and lesser profit.
Mischief III. Mischief, by the cessation or diminution of the demand for the home-produced commodities; such as before the prohibition were taken by the foreigners in exchange for the commodities now prohibited. Sufferers, those who antecedently to the prohibition were engaged in the production of the commodities so taken in exchange. Amount of this suffering uncertain. It will have place in so far as the prohibition takes effect: so also when it is evaded, for it cannot be evaded without a rise of price proportioned to the risk regarded as attached to the endeavour to evade. Suppose, then, the price to the customer in your country doubled, the quantity of commodities that can be employed in the purchase of your home-produced commodities is reduced one-half.
In Spain, again, this third mischief singularly great. Of some of her exporting produce, the greater part is bought for foreign markets by foreigners. Distress produced by the prohibition proportionably great. In 1819 an instance in point occurred, when in the interior provinces (particularly La Mancha and Castille) great distress was occasioned among the agricultural producers, by the excess of produce remaining unsold on their hands: in some districts the harvest was left to perish on the ground. But this was under the reign of the restrictive system only: how much would the evil have been augmented under the prohibitory system? It appears by Table C, that the amount of produce yearly imported into England from Spain varies between £1,500,000 and £2,000,000 sterling.
Mischief IV. Mischief by the loss of the tax, which antecedently to the prohibition was paid by the commodities now prohibited; i. e. of the correspondent supply received from that source by the government for the use of the people. Sufferers, all payers of taxes; i. e. all the population. Amount of the suffering, the annual amount of the supply received from this source.
In Spain, again, the mischief eminently great; the duties on imported goods being one of the most important sources—nearly a fourth of the whole revenue. The net amount of custom-house revenue from June 1820 to June 1821, is calculated 80,000,000 reals de Vellon. The expense of collecting the custom-house revenne is nearly 25 per cent.; its gross amount is about 100,000,000 reals, or one million sterling.*
Mischief V. Increase given to the number of smugglers, in consequence of the prohibition, and the increase of price which the persons habituated to consume or otherwise use the now prohibited commodities, will determine to give, rather than forego the use of them.
This mischief is of a very complicated nature, and branches out into a variety of evil consequences pernicious to the moral feeling—pernicious to pecuniary interests.
Of the government functionaries, whose labour, previously to the prohibition, was employed in the collection of the tax paid on the introduction of the commodities in question, the labour will now be employed in securing the exclusion of them from the hands of the intruded purchasers—or in depriving such purchasers of them, should they have reached their hands.
Suppose them to be thus seized, what is to become of them? Are they to be destroyed? Here is dead and absolute loss to everybody. Are they to be sold for government account? The benefit intended for the home producers of the rival commodity is prevented from coming into their hands. If sold with permission to be employed at home (as has been usually the case in Spain,) then is suffering created to the amount of their value to the holder, and not an atom of benefit obtained for the home producer. If sold with an obligation to export (as is the practice in England,) the loss is diminished, but not less certain:—loss of the extra value given by the labour of smuggling—loss consequent on non-adaptation to other markets—and other contingent loss, unsusceptible of calculation. At all events, all loss attaches to your own people. The commodities having passed from the hands of the foreigner whose profits have been secured, into yours,—with you the risk of the adventure now lies.
Of a part of the people, whose labour antecedently to the prohibition may have been, and, until reason appear to the contrary, ought to be presumed to have been, employed in some profit-seeking and productive operation, that labour is now, under the temptation afforded by the expected increase of price obtainable for the prohibited commodities, employed in the endeavour to introduce them and convey them to the hands of the venders, in spite of the counter-exertions of the functionaries of government;—there too is the additional loss of the amount of that labour.
We have thus, under the prohibitory decree, two contending bodies, not to say armies, engaged in constant conflict;—the customhouse officers, having for the object of their exertions to give effect to the decree, and to prevent the introduction of the prohibited articles,—and the smugglers, having for their object to evade the decree, by promoting and effecting the introduction of those articles. The government functionaries are paid voluntarily by the government rulers, out of the contributions paid involuntarily by the people: the smugglers are paid voluntarily by the people.
In the course of this conflict, lives will be lost, and other bodily harm will be sustained on both sides. Destruction of property will also have place; particularly of such articles as are the subject of the contest thus set on foot.
Nor can the calculations under this head of mischief be closed, without reverting to another mischief procured by the giving execution—the enforcing submission to the prohibition-ordinance, as against those by whom that ordinance is disregarded;—i. e. by the execution of the law against, or upon, such delinquents.
Under this head must be considered two perfectly distinguishable masses of evil:—1. The evil of expense, attached to the officer created and paid, and to the other arrangements of all sorts, having for their objects the punishment of offenders, the prevention of the offence; 2. Evil of punishment, composed of the suffering of those in whom, whether justly or unjustly, under the supposition of delinquency on their parts, the punishment is caused to be inflicted.
And when—(it is a supposition due to all who have in any instance benefited by the lessons of experience, and from whom we have reason to hope that there will be no obstinate persisting in a system fraught with evil)—when erroneous views shall be succeeded by correct ones, and these prohibitory decrees be repealed accordingly,—these smugglers, what becomes of them? A return to honest labour is neither so agreeable nor so easy as, but for the improvident law, continuance in it would have been. Some by choice, some by necessity, the smugglers are transformed into free-booters. Corruption is thus spread over the morals of the people, and those who should have been the guardians are the corruptors.
Universally applicable as are the objections ranged under this head, to Spain they apply with a cogency little imagined by those who are unacquainted with the localities of the peninsula, and the long-established habits of its people. The immense extent of coast, the badness of the cross roads, the mountainous character of the country, are likely to be permanent auxiliaries to those immense bodies of organized smugglers, who from time immemorial have carried on a large proportion of the commerce of Spain. The adventurous and danger-defying character of the Spanish mountaineer, seems to have peculiarly fitted him for enterprises of this sort. Little reproach attaches to the profession of the smuggler; and the frequent representation of his bold feats on the stage, is witnessed generally with great interest, often with admiration, sometimes with envy. The popular song, “Yo soy un contrabandista,” which recounts some of his deeds of heroism, has been long a favourite at the court of Madrid, and especially a favourite of the monarch himself.
The impracticability of carrying the prohibitory decrees of Spain into effect, is already pretty generally recognised there. As if nature had provided for its certain evasion, Gibraltar becomes the great depôt for the south, Lisbon and Oporto for the west, and the hundred passages of the Pyrenees will supply the northern and eastern provinces. Every merchant knows, that at the principal commercial ports of Spain a great part of the duties has been habitually evaded, and large portions of goods constantly introduced without the payment of any duty at all. Except on articles of considerable bulk, of peculiarly difficult transport, or of trifling value, the advance of price in consequence of the prohibition has been scarcely perceptible in any of the principal markets of Spain; and the idea is treated with ridicule, that, in case the system of prohibition should be persisted in, the enforcement of it to any considerable extent can be practicable. The amount of restrictive duties, in some cases not very high ones, was always deemed more than a sufficient price for the labour and risk of the smuggler: the harvest will now be extended, and the labourers will be abundant—the profits greater. The disbanded Guerillas will furnish recruits enough for the army of smugglers—recruits, too, who will require but little training. Even in the province (Catalonia) which it is intended particularly to favour by the interdicting system, there is scarcely a village without its contrabandista—scarcely a creek which does not daily witness the exploits of its smuggling adventurers—scarcely an animal which has not borne the unlawful merchandise—and scarcely an individual who does not wear part of it.
The frequent and bloody frays between the armed custom-house officers or the military, and the armed and desperate bodies of smugglers, in Spain, are notorious to every individual who has had the desire and the opportunity to obtain information on the subject. Every year numerous lives are lost; and the sympathy of the public is, where it ought not to be,—with the criminals, and not with the agents of public justice.
As to loss of liberty and comfort, the prisons under the old regime were always full even to overflowing. Of the poor mendicant abandoned children who solicited charity in the streets, the short tale of nine-tenths of them was, “I have no father.” “What! is your father dead?” “No: in prison; in prison for life!” “And why?” “Por el tabaco”—“For smuggling tobacco,”—was the constant answer.
Mischief VI. National discord: discord between the provinces for which the benefit is designed on the one part; and on the other, the provinces by which, while the burthen is sustained in its full weight, no share in the benefit will be received or can be looked for. Sufferers, the whole people, on the one part and on the other.
This mischief, too, bears most heavily on Spain. In the provinces of no country is the rivalry so strong—it might even be said, the enmity so active—as among the Spanish provinces. Different languages, different habits, different forms of local government, different provincial privileges; here, total exemption from taxation—there, excessive burthen of taxation; in some, feudality—in others, the proudest and most universal individual independence;—everything, in fact, seemed to demand from the Spanish legislator plans for general conciliation,—especially where the Constitution professed to level all the inhabitants of all the provinces to universal equality. But these prohibitions are introduced, it is avowed, solely or mainly for the benefit of Catalonia; a small part of Valencia may be perhaps included. The whole population of the former is 850,000; of the latter, 800,000; that of Spain, 10,500,000. But of the population of the two provinces referred to, a very small proportion is engaged in manufactures: the number engaged in the fabrication of piece goods, which the prohibition is principally meant to encourage, is probably not greater than a hundredth part of the whole population of the peninsula. And even though it be shown—but this cannot be shown—that the interest of every labouring manufacturer is encouraged or advanced by the prohibitory laws, we have a fearful account against the legislator;—for every individual’s interest protected, the interests of more than a hundred are sacrificed. And this is a government professing to have for its object “to preserve and protect, by wise and just laws, civil liberty, property, and all other legitimate rights, of all the individuals who compose it.”*
Mischief VII. Ill-will produced and directed towards you by foreign rulers and people, from the suffering or loss produced by the prohibition of their commodities, and the consequent deprivation of the sale for them.
The danger may not perhaps be great, that, by a measure which does not appear to have had for its cause any hostile affection, nor anything but a mistaken calculation of self-regarding interest, any affection decidedly unfriendly—any positive act of hostility—should be necessarily produced. Mischiefs short of positive hostility may still, with but too much probability, in every case be apprehended, from wounds inflicted in the course of the contest between self-regard on the one side, and self-regard on the other—wounds inflicted by the hands of mere self-regard though unattended with ill-will, especially where no reasonable cause for ill-will can be found. But if ill-will be kept off from a sense that no injury was intended, contempt will probably occupy its place in proportion as the impolicy of the system is manifest.
In most cases, however, the prohibitory system produces a retaliatory operation; and the power of retaliation possessed against Spain is unfortunately very great. What if other countries, whose wares are excluded from Spain, load with excessive taxation, or exclude by total prohibition, the surplus of her produce, for which she has no consumption at home? for this plan of retorting injury has been too long current. To Spain it would be a great calamity, whatever the result of the struggle might be, if the question of commercial policy should resolve itself into the question of politically weaker or stronger.
Mischief VIII. Ill-will on the part of your own people, exerted towards the ruling and influential few, by whom the burthens thus imposed have had their existence. Antecedently to the prohibition, in whom, as to the matter in question, did your people in general behold their friends? In the people of that nation, in those people—foreigners as they were and are—by whom, though not without reciprocal and equivalent benefits, such additions were made to their comfort: if not in point of affection their friends, at the least and at the worst their actual benefactors;—whether in intention or not, at any rate in effect.
Subsequently to the prohibitory system, in whom, in consequence of it, will they behold, though not their intended, yet not the less their real adversaries—the authors of their sufferings—of all the sources of suffering above enumerated?—in whom but in their rulers, these—for so it is hoped it may by this time be allowable to call them—these their misguided rulers?
At the same time, still looking at home, in whom will the people behold, in addition to their foreign friends as above, a set of domestic ones? Even in the smugglers—in those men by whose industry and intrepidity they will have been preserved (in so far as they will have been preserved) in the enjoyment of those comforts, of which, had the endeavours of their rulers been effectual, they would have been deprived.
Thus, while on the one side they will be beholding in the character of adversaries and injurers a comparatively small portion of their fellow-subjects in confederacy with their rulers; on the other side they will see in the character of friends a nation of foreigners and a body of malefactors—friends linked to them by community of interest—friends, in whose good offices they behold their only resource against the ill offices done to them by those who should have been their friends.
Upon Spain the eyes of the world have been fixed full of hope: already they begin to turn away, full of disappointment. Not new authorities for error, not fresh instances of the reckless abandonment of the interests of the greater number to the usurpations of the lesser number, did we anticipate from that land of promise. Alas! we have been deceived.
A circumstance from which the evil connected with the encouragement of smugglers is liable to receive peculiar aggravation, is the state of the system of judicial procedures. Decision being always tardy and often unobtainable, and, from the want of publicity on the part of the evidence, the grounds of it never known, and therefore never satisfactory, the connexion between delinquency and punishment is wholly broken. For the benefit of the lawyers, official and professional together, persons suspected of being malefactors—justly and unjustly suspected—are apprehended and mingled together in jail: jails are filled with them; when they can hold no more, they are emptied of necessity. In this state of things, what is done is done not by the hand of justice outstretched from her elevated station to give execution to the law upon offenders; not so much in the way of judicial procedure, by the exercise of authority by superiors over inferiors,—but in the way of warfare between contending armies; one army composed of revenue officers and their privates—the other composed of smugglers and their auxiliaries. If in the course of a battle smugglers are taken prisoners, it is only as prisoners that they suffer,—a sort of prisoners of war; not as malefactors. Infamy-attaching punishment at the bar of public opinion is not their portion; infamy is more generally attached to the function of the revenue officer than to the function of the defrauder of the revenue. In every country, the obtainment of good from the administration of the law depends on the excellence of the law itself. In Spain, nothing can be worse: to Spain, then, the foregoing observations specially apply.
Thus much as to the mischiefs attendant on such a state of things. Is there any percontra good?
The greater and more manifest the sum of mischief produced to all others, the less will be the benefit to those on whom it is sought to confer that benefit: the greater the mischief, the more surely manifest; and the more surely manifest, the greater the security for the removal of the mischief-producing ordinances; which if removed, the benefit for the sake of which the mischief was introduced will be removed with them. Thus on the part of the individuals for whom the favour was intended, prudence will interdict all expensive arrangements for taking the benefit of it: it will interdict the acceptance of a favour—a favour only to be obtained by perilous pecuniary adventure, whose continuance depends solely on the continuance of human blindness; the loss of which will accordingly be an assured consequence following the removal of the film of error.
But as great expectations may be excited by the promise of the exclusive benefits to be given to the home-producer as opposed to the rival-foreigner, it may be found that many will be so misguided as to stake their hopes and fortunes on the expected advantages. What wonder, then, if the influx of competition produce a further diminution of the promised benefit? If the legislating body, who are engaged by such powerful motives to take an accurate view of the situation in which they stand—if the legislating body deceive themselves, and err under the influence of their self-deception, what wonder that others less well-informed—less intellectually distinguished—fall into the same or similar errors?
Before the tribunal of public opinion, the prohibition-system in question having nothing but misrepresentation for its support,—misrepresentation in all imaginable shapes is accordingly sure to be employed.
The sort of misrepresentation most trusted to is that by which the whole question is stated to be altogether and merely a question between natives and foreigners—between national and anti-national interests: the notion sought to be conveyed being, that whatever suffering is produced, it is by foreigners, and only by foreigners, that it is sustained—that whatever benefit is produced, it is byy natives, and by natives alone, that it is reaped and enjoyed. Then comes the interrogation which is meant to impose silence:—Will you sacrifice your own interests to the interests of these foreigners? who therefore are represented to view in as unfavourable a light as can be found for them; and thereupon comes the parade of patriotism displayed, at a cheap rate,—at the expense of only a few pompous words.
But the truth has been already sufficiently unveiled—the truth, of universal application, and in an unanswerable form.
In the case of Spain, the benefit of it has been shown to be little—next to nothing: the mischief great—and greater, much greater, to Spaniards themselves, than to those whom they would call foreigners.
Thus, as towards foreigners in general—towards all the inhabitants of the globe with the few exceptions of those we call our fellow-countrymen, antipathy is excited and propagated; a foolish and degrading antipathy, not less adverse to the dictates of self-regarding prudence, than to those of benevolence and beneficence. And what is the result—the melancholy result? Every effort which a man makes to excite his countrymen to hate foreigners, is an effort made, whether designedly or not, to excite foreigners to hate them: by every attempt in which he thus labours to bring down upon his countrymen the fruits of the enmity of these foreigners, he more effectually and certainly labours to deprive his countrymen of those fruits of good-will which they might otherwise have enjoyed.
The enmity which cannot but be produced on the part of those foreigners, even by the calm pursuit of their own interests—the enmity necessarily produced by the frequent and unavoidable competition of interests—is surely quite enough, without making any new and needless addition; without exerting and letting loose the angry passions in any other direction, and giving to ill-will—already too active and too prevalent—auxiliaries at once so unnecessary and so dangerous.
When, for the purpose of encouraging home-industry, a prohibition is imposed on the produce of foreign industry when directed to the same object, the branch thus meant to be encouraged is either a new one or an old-established one.
It is in the former case that the impolicy and absurdity of the measure is at its maximum: it is as if, a tax being imposed, the produce of it—the whole produce of it—should be thrown into the deep. If left to itself, personal interest would direct both labour and capital to their most profitable occupation: if the new favoured occupation be the most profitable, it needs not this artificial support—if it be not the most favourable, the effect, if any, of the prohibition, is to call capital and labour from a more profitable to a less profitable employment. At all events, the consequence of the prohibition is this: it leads to nothing, or it leads to detriment; if not useless, it is calamitous.
In vain would it be said; Aye, but it is only intended to apply this extra-encouragement to the new occupation while in its infancy; it is only in its infancy that it will stand in need of it: the time of probation past, and its time of maturity arrived, the wealth that will then be added to the wealth of the nation will, and for ever, be greater than the wealth which for a time it is proposed to subtract from it.
By no such statement can the prohibitory measure be justified. In the infancy of any such employment, it is only by actual wealth, in the shape of additional capital, that any effectual assistance can be given to a new branch of industry. By removal of competition, increase may indeed be given to the rate of profit, if profit be the result of the newly directed labour: but it is only by the employment of capital, which must necessarily be taken from other sources, that this result can be obtained; the prohibition of existing rival establishments will not create that capital.
The case in which the impolicy is less glaring, and the intervention most excusable and plausible, is that of an old-established branch of industry; the object being, not to bestow on it factitious encouragement, and on those concerned in it factitious prosperity,—but only to preserve it from decline, and those connected with it from being destitute of the means of subsistence.
But still the former objections irresistibly apply. If the establishment be prosperous, factitious encouragement is needless: if it be unprosperous, encouragement is baneful, serving only to give misdirection to capital and labour—to give permanent misdirection; since without that factitious encouragement, interest and common sense would correct the mistakes of miscalculation as soon as discovered.
In the next place comes the objection, that if in this shape encouragement be given to any particular occupation, it must, if impartial justice be done, be in like circumstances afforded to every other. In whatsoever instance, therefore, a branch of industry should be going on in a prosperous state, any rival branch of industry, that found itself in a declining or less prosperous state, would have right to claim the interposition of the prohibitory principle—the diminution or destruction of that rival’s prosperity. On this supposition, a great part of the business of government would be to watch over the whole field of productive labour, for the purpose—not the ultimate purpose, but still the purpose—of lessening the value of the produce; diminishing prosperousness, for the relief of unprosperousness; preventing A from selling cheap goods, in order that B may be enabled to sell dear ones; prohibiting A from producing superior articles, for the purpose of helping B to get rid of his inferior articles.
Here, then, is a vast proportion of the time and labour of the constituted authorities employed to no better purpose, in no higher aim, than to check prosperity as it proceeds—to sacrifice success to the want of success—to diminish the mass of habitual wealth, instead of increasing it.
Whatever be the effect of accident in this or that particular instance, operating against the general principle, the general principle may be safely assumed and laid down, that the prosperity of every branch of industry will increase and decrease in the ratio of the degree of aptitude—of moral, intellectual, and active aptitude—on the part of the persons engaged in it; on the degree, absolute and comparative, of prudence, vigilance, exertion, appropriate information, and industrious talent, possessed by them. Among the effects of the mode of supposed encouragement in question, will be its operating in the character of a prohibition on superior appropriate aptitude, and giving to inferior appropriate aptitude the advantage over it.
It is, in a word, a contrivance for causing everything to be done as badly as possible—for giving to evil the encouragements due to good.
[* ]The ways and means for 1820-21 were thus calculated:—
[* ]Cap. I. art. 4. of the Spanish Constitution.