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7: Blows Directed Against Commerce: Privileged and Exclusive Companies - 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.


7

Blows Directed Against Commerce: Privileged and Exclusive Companies

The privileges accorded to guilds and corporations are iniquitous rights which only seem in order because we find them established. It is true that the competition of a large number of artisans and merchants places limits on the profit that guilds and corporations might draw from their monopoly. But it is no less true, according to what we have just shown, that these bodies take away comfort from many citizens, reduce others to beggary, make everything more expensive, and bring damage to agriculture as to trade.

However, once people became used to regarding monopoly as in the order of things in a large body, it was natural to see it again as in order when it was found in smaller bodies. An abuse which has passed into custom becomes a rule; and because one has judged badly at first, one carries on judging badly.

It was easy to foresee that the profits stemming from a privilege, which were great for each member in a large body, would be greater still as one reduced the number of members. It was no more than a matter of establishing this new monopoly and few obstacles were found in the way.

Salt, which is very common in our four monarchies, was, through free trade, at a price proportionate to the means of the less well-off citizens; and it was consumed on a large scale since it is necessary to men, to animals, and even to the land for which it is an excellent fertilizer.

There was thus bound to be great profit in exercising a salt monopoly. The project for it was made and to that end a privileged and exclusive company was created. The company gave the sovereign a considerable sum, and it gave the great men who protected it a share in its profit. Those who made up this company called themselves contractors because they had contracted with the king. They alone carried out, in his own name, the salt trade in the length and breadth of the kingdom. The first king who found this source of wealth caused the others’ eyes to open, and he was copied.

The price of salt rose suddenly from one to six, seven or eight; and yet the contractors, who alone had the right to buy it at source, paid so poorly for it that people ceased to work several salt pits.

Such was the abuse of this monopoly that the consumption of salt fell to the point where, to make this branch of trade pay, it was necessary to force each of the citizens to take a certain amount per head. Salt was thus a fertilizer taken away from the land: people stopped giving it to animals; and very many subjects only continued to consume it because people forced them not to do without a necessary substance.

The company of contractors cost the state a vast amount. How many employees spread throughout the provinces for the sale of salt! How many armed men to prevent contraband! How many searches to make sure that all the subjects had bought the required amount! How much vexation! How much expense in arrests, seizures, fines, confiscation! In a word, how many families reduced to beggary!

There you have the troubles that this privileged and exclusive company produced. However, it did not yield the king half what it took from the citizens. The greater part of the other half was consumed in expenses. The rest was divided among the contractors: and if they did not have enough profit, as indeed they never found they had enough, they were given ordinance upon ordinance to give them every day greater scope for their privileges; that is to say, to permit them to harry the people more and more.

Once the profit of this monopoly was known, it spread a spirit of greed and plundering. One would have said that it was essential for every branch of trade to be carried out exclusively by companies. They were formed every day: patrons begged for them, often with success. They sold their credit, and they did not hide it. Everyone thought he could permit himself what he saw happening. It was the monopoly of the great.

These companies always had as an excuse the good of the state; and they did not fail to demonstrate in the privileges they were given great advantages for the very trade. They were particularly successful when they proposed to set up new manufactures.

It is clear that new manufactures deserve to be given advantages, that is to say to be multiplied; and the more useful they can be, the more one should reward those to whom the manufactures are owed. But exclusive privileges were granted, and straight away luxury came out of these manufactures. The works which were sold there became costly and scarce, whereas they could have been cheap and plentiful. I return to the consequences I have already repeated: reduction in consumption, in production, in cultivation, in the population; and I add, birth of luxury, growth of misery.