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9: Of Wealth from Land and Movable Wealth - Étienne Bonnot, Abbé de Condillac, Commerce and Government Considered in their Mutual Relationship [1776]

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Commerce and Government Considered in their Mutual Relationship, translated by Shelagh Eltis, with an Introduction to His Life and Contribution to Economics by Shelagh Eltis and Walter Eltis (Indianapolis: Liberty Fund, 2008).

About Liberty Fund:

Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


9

Of Wealth from Land and Movable Wealth

We separate the land’s production into food and prime materials. The foodstuffs are the produce which meets our subsistence and that of the animals we raise. Raw materials are the products which can take different forms, and hence be adapted to various uses.

Products considered as food or as raw materials are called landed wealth, because they are the product of the land’s soil.

Raw materials, fashioned, manufactured, worked up, are called movable wealth; because the shapes they are given turn them into movable goods which serve our needs.

If there were no landed wealth, there would be no movable wealth; or, which comes to the same thing, if there were no raw materials, there would be no worked-up materials.

So landed wealth constitutes wealth of the first order, or wealth without which there would be no other wealth.

Movable wealth is only of the second order, as it presupposes landed wealth. But it is none the less wealth. The forms which convey utility to raw materials give them a value.

To speak with precision, the settler produces nothing; he simply prepares the earth to produce.

The artisan in contrast produces value, since there is value in the forms he gives the prime material. Indeed, production is giving new shapes to matter; since the earth does not make anything different when it produces.

But since the land left to itself would often leave us without the most essential products, we can regard all that he gathers in the fields he has cultivated as being the settler’s product.

I shall therefore say that the settler produces landed wealth, and the artisan produces movable wealth. If the first did not work, we should lack products; and if the second did not work, we should lack movable goods.

We have seen that value, based on need, grows in scarcity and diminishes in abundance.

Works of art therefore have greater value when they are of a kind that can only be made by a small number of artisans, since then they are rarer; and they have less value when they are of a kind that can be made by many artisans, as then they are more common.

Their value is the actual value of the prime material plus the value of their form.

The form’s value can only be the value of the work which produces it. It is the wage owed to the craftsman.

If we paid this wage in products, we would give the craftsman as many as he had the right to consume, during the whole period of his work.

When the work is complete, the value of its form is thus equal to the value of the products which the craftsman is deemed to have consumed.

These products no longer exist. But if one considers they have been replaced by others, one can judge that the quantity of landed wealth is the same, in normal years.

Landed wealth only replaces itself to the extent that it destroys itself. Produced to be consumed, it only replaces itself by reason of consumption; and the quantity consumed is set by need, a need which has limits.

Movable wealth does more than replace itself, it accumulates. Since it is intended to obtain for us all the pleasures which we have made a matter of habit, it multiplies like our artificial needs, and they can multiply without limit. In addition movable wealth is in general of a lasting material which often keeps almost without waste.

Value builds up through the artisan’s work, but he has consumed equivalent values in products; and so it follows that movable wealth only multiplies with the aid of landed wealth.

The settler produces more than he consumes. It is with his surplus that he gives subsistence to those who do not till the land. But, as we have said, he does not pile up value on value; he only replaces products, at the rate that they are destroyed; and, through his work [landed: 1798] wealth and the products are always in proportion to the amount of them consumed. The artisan, in contrast, adds to the mass of wealth values equivalent to the value of the products he has consumed, and by his work movable wealth accumulates.

[Additional pages inserted at the beginning of Chapter 9 in 1798

When the land is covered with products of every kind, there is no other matter than that which existed before: there are only new forms, and it is in these forms that the whole wealth of nature consists. Natural riches are therefore only different transformations.

In these transformations we find the products that nature has prepared for our subsistence, and the products she has prepared to be the raw material for the arts.

Now the arts make this raw material take different forms which are more or less useful. They thus make it suitable for new uses; they give it a new value.

Consequently, just as there is natural wealth, so there is artificial wealth: and both are equally true wealth, since the transformations of art produce values as do the transformations of nature.

It would often be easier to make a new language than to give precision to an existing language. Either the terms were originally badly chosen, or people forget both the original sense of the words and the analogy which has caused them to pass from one sense to another. If the main idea fits, which is not always the case, people add additional meanings or remove meanings, and we end up by not understanding each other any more. As we are drawn to use the same words, every time we think we see some resemblance between ideas, we imperceptibly multiply their meanings; and, because it would be difficult or even absurd to keep on analysing to explain what we want to say, it seems quicker to follow usage blindly, that is to say, to speak badly following each other’s example; and we seem to limit the art of speech to the mechanical art of pronouncing words.

We think to remedy this abuse by definitions, as though it were possible to make known all the meanings of a word by a definition. So everyone defines in his own way: we dispute, we divide, we subdivide, we distinguish; and the more we write the more we confuse all notions.

I am making these observations on encountering landed wealth and movable wealth, terms which do not seem to me to have been well chosen, and ones from which people make ideas which lack clarity.

To refer to etymology, the term landed [foncières] comes from the way one has perceived wealth as pertaining to the land [fonds] which has produced it, or as being the land itself; and the name movable [mobilières] comes from our having seen wealth as mobile or transportable.

We wanted to make two classes of wealth: therefore we had to distinguish them; and yet we have chosen names which confuse them with each other.

Indeed, if a field is landed wealth, what will the corn it produces be? Will it be landed wealth before the harvest, because it adheres to the ground and is not yet transportable? And will it become movable wealth after the harvest, because it has been carried to a barn, and from there it can be carried to the market?

But a house, in which class should we place it? It is not landed wealth, because it is not a product of the ground on which it is raised; and it is only in fairyland that it can be movable wealth. There is something to trouble the legal experts.

People have seemed to see the defect of these categories, and looked for others. But because we have become used to the word movable, we have said that all wealth is movable or fixed, that is to say, portable effects or fixed effects. So a house has become a fixture.

Yet, because we cannot include in the class of immovables all that one would like to include, people have made up for that by a definition, and they have said, An immovable good is land, or what stands for it.

Or what stands for it! There’s a definition for you, and that is how people make them. But how do we decide, for instance, if notes drawn on tax farmers represent land or not? Also we have seen more than one lawsuit where the judges did not know if an effect was a movable or an immovable.

Without bothering about etymology, I shall put all the products of nature in the class of immovables, or landed wealth, and I shall put all the products of the arts in that of movables, or mobile wealth. That is to say, in using the customary terms I shall hold to the distinction I have made of wealth into natural wealth and artificial wealth. So, just as a field is landed wealth, so shall the corn be, even when it has been carried into barns: a house on the other hand will be movable wealth, and we shall place in the same category all public paper, although these effects, being for the most part products of an art which tends to destruction, are normally the wealth of a people that is ruining itself. I anticipate that this distinction will not do for the legal experts, whose language will always be chaos; but it will do for my purposes. Need I warn that by products one must understand natural products every time the word is used on its own.]