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15: Blows Directed Against Commerce: Obstacles to the Circulation of Grain, When the Government Wishes to Restore to Trade the Freedom It Took from It - 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.


15

Blows Directed Against Commerce: Obstacles to the Circulation of Grain, When the Government Wishes to Restore to Trade the Freedom It Took from It

Monopolists were always placing dearth, or at least high prices, somewhere, when in one of our monarchies this branch of administration was given to a minister who returned freedom to trade.

But when disorder has reached a certain point, a revolution, however good it may be, is never accomplished without causing violent shocks; and it is often necessary to take countless precautionary measures to restore order.

The new minister who wanted the public good, and whom even his enemies recognised as enlightened, took all the measures that prudence had suggested to him. But there was one thing which did not depend on him: that is the weather, and it was wanting.

In dealing with the circulation of cereals we have seen that it can only be carried out by a host of merchants spread everywhere. These merchants are so many canals through which the grain circulates. Now these canals had been broken and it was time to mend them.

Indeed, to succeed in any type of trade it is not enough to have the freedom to carry it on; one must, as we have already noted, have obtained contacts, and these contacts can only be the fruits of experience, which is often slow. One must also have capital, stores, carters, agents, correspondents: in a word one must have taken many precautions and many measures.

So the freedom returned to the grain trade was a benefit that could not be enjoyed the moment it was granted. A word from the monarch had been enough to wipe out this freedom; a word did not restore it, and there was high price a few months later.

“Look at what freedom produces.” That is how the common people reasoned, and they were almost the entire nation. They thought that the dearness was a result of freedom. People did not want to see that monopoly could not have fallen under the first blows directed at it, and that there could not be enough merchants yet to set cereals at their true price.

But, people were saying, we need bread every day. Now, because people are free to bring it to us, is it certain that they will bring it to us and will not put us in danger of doing without?

So they forgot the high prices and dearth that had occurred in turn in all the provinces, when the ministers took away all freedom on the pretext of not leaving the people’s subsistence to chance.

So they were counting on a small number of monopolists who could make a large profit by selling little, rather than on a large number of merchants who could only make a large profit by selling a great deal.

The merchants must have a wage: it is their due. But it is not for the sovereign or the people to set this wage: it is for competition, for competition alone. Now this wage will be smaller in proportion as competition is greater. Thus corn will be at a lower price when merchants multiply with freedom, than when their number is reduced by the police regulations. I add that one will be more assured of having it. For it will only be at a lower price because all the merchants, vying with each other, will offer it cheaply, and will be happy with a smaller profit.

They have as much need to sell as we to buy. Busy in anticipating where corn must go up in price, they will hurry all the more to come to our help, as those who arrive first are those who sell at the highest price. There is more cause to judge that they will bring us too much corn than to fear that they will not bring us enough.

These reasonings counted for nothing in the people’s mind. They thought that the one task of government was to procure them cheap bread. The police regulations seemed to have been issued for this purpose. In truth, they produced an opposite effect: but this was not known; and people wanted the police regulations, because they wanted cheap bread. So every time that it became dearer the people asked the government to have the price lowered.

There were only two ways to satisfy them. The government had to buy grain itself to sell again at a loss, or it had to force merchants to deliver their corn at the price it had fixed.

Of these two ways the first tended to ruin the state; the second was unjust and odious; and both accustomed the people to think that it was for the government to obtain cheap bread for them, whatever it cost either in money or in injustice.

From this another prejudice arose, even more opposed to the grain trade, if that is possible. That is, the people, who believed these violations just, since they were enacted for them, regarded the grain merchants as grasping men who took advantage of their needs. Once that opinion was rooted, a person could not engage in this trade if he cared for his reputation: it had to be left to those vile creatures who counted money for everything and honour for nothing.

It was the behaviour of the government that had produced these prejudices. They had so triumphed that often even those possessed of integrity, and what is called wit, were not shielded from them. No doubt we must respect the rights of property, said people whom one could not suspect of evil purpose; but we claim the rights of humanity for the people. From that they concluded that the government can, must even, regulate the price of corn and compel merchants to deliver it at the prices it has set.

The rights of humanity opposed to those of property! What gibberish! It was so decreed that one should say the most absurd things to oppose the operations of the new minister. But you, who believe you care for the people, would you like the strong-boxes of wealthy men to be broken open under the pretence of giving alms? Doubtless not: and you want the barns to be forced open! Are you also ignorant of the fact that cheapness is always, of necessity, followed by dearness; and that in consequence it is a calamity for the people, as much as for the merchant and the landowner? If you are unaware of this, I refer you back to what I have said.

It seemed that everyone was condemned to reason badly on this matter: poets, geometricians, philosophers, metaphysicians, in a word almost all literary men, and especially those whose trenchant tone hardly allows one to take their doubts for doubts, and who do not permit one to think differently from them. These men always saw excellent matter in the works which were written in favour of the grain police. These were, however, works in which, in place of clarity, exactitude and principles, one found only contradictions; and one could have proved that the author had written in favour of the freedom he wished to contest. The fact is that it is impossible to establish anything exact when people want to put limits on freedom to trade. Where indeed should one place these limits?

Deaf to all the suggestions, the new minister showed courage. He let them speak and write, and carried on with his initial moves. However, people were still very far from feeling the effects of freedom. Corn was dear in one province while it was cheap in another. The fact is that it did not circulate; there were not yet enough merchants. Besides, the people, who believed that export was necessarily the precursor of dearth, became alarmed at the sight of grain on the move. “There will be none left for us,” they said; and at that seditious cry [seditious is omitted in 1798], they rose in revolt. Then evil-minded men went round the markets, spread new alarms and caused riots. Such are the chief obstacles in the way of the re-establishment of freedom. Time will remove them if the government perseveres.