Front Page Titles (by Subject) 15: Peace and Freedom or the Republican Budget 1 - Collected Works of Bastiat. Vol. 2: The Law, The State, and Other Political Writings, 1843-1850
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15: Peace and Freedom or the Republican Budget 1 - Frédéric Bastiat, Collected Works of Bastiat. Vol. 2: The Law, The State, and Other Political Writings, 1843-1850 
The Collected Works of Frédéric Bastiat. Vol. 2: The Law, The State, and Other Political Writings, 1843-1850, Jacques de Guenin, General Editor. Translated from the French by Jane Willems and Michel Willems, with an introduction by Pascal Salin. Annotations and Glossaries by Jacques de Guenin, Jean-Claude Paul-Dejean, and David M. Hart. Translation Editor Dennis O’Keeffe. Academic Editor, David M. Hart (Indianapolis: Liberty Fund, 2012).
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Peace and Freedom or the Republican Budget1
[vol. 5, p. 407. “Paix et liberté ou le budget républicain.” February 1849. n.p.]
A program! A program! That is the cry that rises from all sides to the cabinet.2
How do you understand home affairs? What will your foreign policy be? Through what major measures do you mean to raise revenue? Are you undertaking to remove from us the triple plague that appears to be hovering over our heads: war, revolution, and bankruptcy? Will we at last be able to devote ourselves in some degree of security to work, enterprise, and major undertakings? What have you drawn up to ensure for us the tomorrow you promised to all citizens the day you took the helm of our affairs?
This is what everyone is asking, but alas! the minister makes no reply. What is worse, he appears to be systematically determined not to say anything.
What should we conclude from this? Either the cabinet has no plan, or, if it has one, it is hiding it.
Well then, I say that, in either case, the cabinet is failing in its duty. If it is hiding its plan, it is doing something it has no right to do, since a government plan does not belong to the government but to the public. We are the ones interested in the plan, since our well-being and security depend on it. We ought to be governed not according to the hidden intentions of the government but according to intentions that are known and approved. It is up to the cabinet to set out, propose, and take the initiative, up to us to judge it, accept or refuse it. But in order to judge, we need knowledge. He who climbs onto the driving seat and takes the reins is declaring by this very act that he knows or thinks he knows the destination to be reached and the route that must be taken. At the very least he should not keep destination and route a secret from the travelers when these travelers form the whole of a great nation.
If there is no plan,3 let him judge for himself what he must do. In all eras government calls for an idea, and this is especially true today. It is very clear that we can no longer follow the same old ruts, the ruts that have already overturned the coach in the mud three times. The status quo is impossible and tradition inadequate. Reforms are needed, and although the words have a hollow ring, I will say, “We need something new,” not something new that undermines, overturns, and terrifies, but something new that maintains, consolidates, reassures, and rallies.
Therefore, in my ardent desire to see a genuine republican budget appear, and discouraged by government silence, I remembered the old proverb, “If you want something done properly, do it yourself,” and to be sure of having a program I drew one up. I submit it to the public’s good sense.
And first of all, I have to tell you in what spirit it was conceived.
Like all political writers, even those from the monarchical school, including Chateaubriand among others, I believe that a republic is the natural form of normal government. The people, the king, and the aristocracy are three powers that can coexist only during their conflict. This conflict has armistices known as charters. Each power stipulates in these charters a part that relates to its victories. It is in vain that theoreticians have intervened and said, “The height of art is to settle the attributions of the three jousters in such a way that they counter each other mutually.” The nature of things ordains that during and because of the truce one of the three powers strengthens and grows in stature. The conflict starts once more and then comes lassitude resulting in a new charter, one that is slightly more democratic, and so on until the republican regime triumphs.
However, it may happen that once the people have achieved self-government they govern themselves badly. They suffer and long for a change. The exiled claimant takes advantage of the opportunity and reascends the throne. At this, the conflict, the truces, and the reign of the charters starts again, to terminate once more in a republic. How many times can this experiment be repeated? This is what I do not know. But what is certain is that it will be final only when the people have learned to govern themselves.
Now, on 24 February, like many others, I had grounds to fear that the nation was not prepared to govern itself. I was fearful, I admit, of the influence of Greek and Roman ideas, which are imposed on all of us by the university monopoly, ideas that radically exclude all justice, order, and freedom and that have become even more false in the authoritative theories of Montesquieu and Rousseau. I also feared the terror of weak souls and the blind admiration of others, inspired by the memory of the First Republic. I said to myself, “As long as these unfortunate associations of ideas last, the peaceful reign of democracy over itself is not assured.”
But events did not bear out these forecasts. The Republic was proclaimed; to return to a monarchy, there would have to be a revolution, perhaps two or three, since there are several claimants.6 What is more, these revolutions would be only the prelude to a new revolution, since the final triumph of the republican format is the necessary and inexorable law of social progress.
May heaven preserve us from such calamities! We are in a Republic, so let us remain there; let us remain there, since sooner or later it will return; let us remain there, since to extricate ourselves from it would be to return to the era of upheavals and civil wars.
However, for the Republic to be maintained, the people have to love it. It has to put down innumerable deep roots in the universal goodwill of the masses. Confidence needs to be born again, production must flourish, capital has to be built up, and earnings have to be increased; life must become easier, and the nation become proud of its work and show it off to the rest of Europe, resplendent in its genuine grandeur, justice, and moral dignity. Let us therefore inaugurate the policy of peace and freedom.
Peace and freedom! It is certainly not possible to aspire to two more-elevated objects in the social order. But what can they have in common with the cold, stark figures of a mere budget document?
In fact, the link is as close as it can possibly be. A war, the threat of war, or a negotiation that might lead to war, these come into being only by virtue of some small article inscribed in this weighty volume, the terror of the taxpayer. Similarly, I challenge you to imagine a form of oppression, a limitation of citizens’ freedom, or a chain around their arms or necks that is not born of a budget for state revenue and does not subsist because of it.
Show me a people who are fed on unjust ideas of their foreign domination, oppressive influence, preponderance, and irresistible power, who meddle in the affairs of neighboring nations, constantly menacing or being menaced, and I will show you a people bowed down with taxes.
Show me a people who have endowed themselves with institutions of such a nature that citizens cannot think, write, print, teach, work, trade, or assemble together without a mob of civil servants coming to hinder their movements, and I will show you a people bowed down with taxes.
For I can see quite clearly how it costs me nothing to live in peace with everyone. But I cannot conceive of what I would have to do to expose myself to continuous squabbles without being subject to enormous expenses either to attack or to defend myself.
And I also see quite clearly how it costs me nothing to be free, but I cannot understand how the state could take action against me in a way that is disastrous to my freedom if I had not begun by handing over to it, at my expense, the costly instruments of oppression.
Let us therefore seek economy in expenditure. Let us seek it because it is the only means to satisfy the people and make them like the Republic and keep a check on the spirit of turbulence and revolution through the goodwill of the masses. Let us seek economy, and peace and freedom will be given to us as a bonus.
Such economy is like personal interest. Both are vulgar motives, but they engender principles that are nobler than they.
The precise and current aim of financial reform is to restore the balance between revenue and expenditure. Its ulterior aim, or rather its effect, is to restore public credit. Last, another, more important aim that it has to achieve in order to merit the fine title of reform is to conciliate the people, make the institutional structure popular, and thus spare the country new political upheavals.
While I appreciate from these various points of view the systems that have been developed, I cannot prevent myself from considering them either very incomplete or illusory.
A word on two of these systems, one from practical-minded people and the other from utopians.
I begin by declaring that I have the most profound respect for the knowledge and experience of financiers. They have spent their lives studying the mechanisms of our financial systems, they know all their aspects; and if it were only a question of achieving the balance that is virtually the exclusive objective of their pursuit, perhaps there would be nothing better to do than to entrust them with this already very difficult task. By snipping away at our expenditure, by increasing our revenue a little, I would like to think that in three or four years’ time they would lead us into that longed-for haven known as a balanced budget.
However, it is clear that the basic thought that governs our financial mechanism would remain the same, short of a few improvements to the details. Now, the question I am asking is this: by remaining under the sway of this basic thought, by replastering our system of contributions, so profoundly shaken up by the February revolution, do we have the three or four years ahead of us that separate us from this famous balance? In other words, does our financial system, even stripped of a few abuses, carry within itself the conditions that ensure its longevity? Is it not Aeolus’s sack7 and does it not contain wind and tempests within it?
If it is precisely from this system that all the upheavals arose, what are we to expect from its simple restoration?
Financiers, and by this I mean those for whom the fine ideal of reestablishing things, except for a few details, as they were before February, these men, may I say, want to build on sand and go around in a vicious circle. They do not see that the old system they are advocating, far from basing an abundant flow of public revenue on the prosperity of the working classes, aims at swelling the budget by drying up the source that feeds it.
Apart from the fact that this is a radical vice from the financial point of view, it is also a frightful political danger. What! You have just seen what an almost mortal blow a revolution has given to our finances; you can have no doubt that one, if not the only, cause of this upheaval is the alienation of the people’s hearts generated by the weight of taxes, and the aim to which you are aspiring is to return us to our starting point and to drag the coach painfully to the summit of the fatal slope!
Even if a revolution had not taken place, even if it had not awoken in the masses new hopes and demands, I believe in all truth that your plans would be unachievable. But is it not the case that what would have been prudent before February has now become a necessity? Do you believe that your three or four years of effort devoted to the exclusive pursuit of balanced budgets can pass peacefully if the people see nothing on the horizon other than new taxes and if the Republic is visible to them only through the increased ruthlessness of tax collectors. And if, from the fruit of their work, increasingly less well paid, they have to hand over to the state and its agents an increasingly large part? No, do not expect this. A new upheaval will come and cut short your cold, pedantic work; and then, I ask you directly, what will happen to the balance and the credit that, in your eyes, are the apogee of the art and the end product of all intelligent effort?
I therefore believe that the practical men have completely lost sight of the third aim (and the first in importance) that I have assigned to financial reform, that is to say, to relieve taxpayers and ensure that the Republic is loved.
We had proof of this recently. The National Assembly reduced the salt tax and the tax on letters. Well, then! Not only do the financiers disapprove of these measures, they also cannot get it into their heads that the Assembly has acted in accordance with its own will. They still assume in all good faith that it was the victim of surprise and they detest it, so great is their repugnance for any notion of reform.
Please God, I do not wish to insinuate by that that the financiers’ cooperation should be rejected! Whatever new idea may emerge, it can scarcely be implemented other than with the assistance of their extremely useful experience. However, it is probable that it will not arise in their minds. They have lived too long with the vicissitudes of the past for that. If, before the campaigns in Italy, Napoléon had used thirty years of his life to study and apply all the combinations of the old strategy, do people believe that he would have been struck with the inspiration that caused a revolution in the art of war and gave such luster to French arms?
Next to this school so full of age and experience, one which will offer valuable resources in execution but which will never, I fear, produce the fertile idea that France is waiting for to achieve its salvation, glory, and security, there is another school or rather an almost infinite number of other schools, whose ideas, if they can be reproached in any respect, at least cannot be so for their lack of originality. I have no intention of examining all the systems that they have brought to light. I will limit myself to saying a few words about the thought that appeared to me to dominate in the manifesto of the so-called advanced republicans.
This manifesto appears to me to be based on a vicious circularity even more blatant than that of the financiers. To tell the truth, it is simply a perpetual and puerile contradiction to tell the people “The republic is going to perform a miracle for you. It will free you from all of this heavy responsibility that burdens the human condition. It will take charge of you in the cradle, and after leading you, at its expense, from the nursery to the infant school, from the infant school to primary school, from primary school to secondary and special schools, from there to the workshop, and from the workshop to the almshouse, it will take you to your grave without your having needed, in a word, to take care of yourself. Do you need credit? Do you lack the tools of your trade or work? Do you want education? Has an accident occurred in your field or your workshop? The state is there, like an opulent and generous father, to provide and fix everything. What is more, it will extend its solicitude to the entire world by virtue of the dogma of solidarity, and should you take the fancy to go and sow your ideas and political views far and wide it will always maintain a great army ready to enter the campaign. That is its mission—it is a vast one—and the state asks nothing from you to accomplish it. Salt, wines and spirits, the post office, city tolls, contributions of all sorts, it will renounce everything. A good father gives to his children but asks nothing of them. If the state does not follow this example, if it does not fulfill the double and contradictory duty that we are pointing out to you, it will have betrayed its mission, and all you will need to do is to overthrow it.”
It is true that to hide these glaring impossibilities, they add, “Taxes will be transformed; they will be taken from the excess wealth of the rich.”
But the people have to know that this is just one more illusion. To impose on the state exorbitant attributions and persuade the public that it can meet these with the money taken from the surplus wealth of the rich is to give vain hope to that public. How many rich people are there in France? When it was necessary to pay two hundred francs to have the right to vote, the number of electors was two hundred thousand, and of this number perhaps half did not have this surplus wealth. And people now wish to assert that the state can fulfill the immense mission it has been given by limiting itself to taxing the rich! It will be enough for two hundred thousand families to hand over to the government the surplus part of their wealth for it to lavish all sorts of benefits on eight million families that are less well off. However, people do not see one thing, which is that a tax system thus constituted would yield scarcely enough to provide for its own collection.
The truth is, and the people should never lose sight of this, that public contributions will always and of necessity be directed toward the most general objects of consumption, that is to say, the most popular. This is precisely the reason that should incite the people, if they are prudent, to restrict public expenditure, that is to say, the action, attributions, and responsibilities of the government. They should not expect the state to provide for them since they are the ones that provide for the state.8
Others place great hopes in the discovery of other sources of taxation. I am far from claiming that there is nothing to be gained from this avenue, but I submit the following observations to the reader:
1. All previous governments were passionately fond of taking a great deal from the public in order to be able to spend a great deal. It is scarcely probable that, where taxes are concerned, any valuable mine that is easy to exploit would have escaped the genius of the tax department. If it has been restrained by something, it can have been only the fear of national rejection.
2. If new sources of taxes cannot be found without upsetting habits and arousing discontent, would the moment be well chosen, after a revolution, to try this type of experiment? Would it not compromise the Republic? Let us work out the effect produced on taxpayers by this news: the National Assembly has just made you subject to taxes hitherto unknown to you and before which the monarchy retreated!
3. From the current and practical points of view, looking for and discovering new taxes is a certain means of doing nothing and neglecting the body for its shadow. The National Assembly has only two or three months to live. In the meantime, it has to produce the budget. I leave it to the reader to draw his own conclusions.
After having referred to the most fashionable and the most unacceptable approaches, it remains for me to point out the one I would like to see triumph.
Let us first of all set out the financial situation we have to face.
We are in a situation of deficit (for the word shortage now falls short). I will not seek the exact figure of this deficit. I do not know how our accounts are kept; what I do know is that never, ever, do two official sets of figures for the same item agree. Be that as it may, the disease is serious in the extreme. The last budget (volume 1, page 62) contains this item of information:
This is the result of past budgets. Thus, the damage will constantly increase in the future if we do not succeed either in increasing revenue or in decreasing expenditure, not only in order to align them but also to find surplus revenue to absorb the previous overdraft s gradually.
It is no use hiding this from oneself; any other way leads to bankruptcy and its consequences.
And what makes the situation more difficult is the consideration that I have already indicated and that I stress with all my strength, namely, if a remedy is wholly or partially sought in a tax increase, which is what comes naturally to mind, this will generate a revolution. Well, although the financial effect of revolutions, to mention only these, is to increase expenditure and dry up the sources of revenue (I will refrain from a demonstration), instead of avoiding a catastrophe this procedure is likely only to precipitate it.
I will go further. The difficulty is even greater, since I assert (or at least this is my deepest conviction) that even all the existing taxes cannot be maintained without setting up the most terrible odds against us. A revolution has been achieved; it has proclaimed itself to be democratic and the democracy wants to experience the benefits. It may be right or wrong, but that is the way things are. Woe to the government, woe to the country if this idea is not constantly present in the minds of the people’s representatives!
Now that the problem has been set out, what ought we to do?
For on the other hand, if expenditure can be reduced, there are limits to these reductions. They should not go so far as to disorganize services, as this would cause revolutions to occur from the other end of the financial spectrum.
What, then, ought we to do?
This is what I think. I set out my thought in all its naïveté at the risk of raising the hackles of all financiers and practitioners.
Reduce taxes. Reduce expenditure in an even greater proportion.
And, to clad this financial thought in its political formula, I add:
Liberty within. Peace without.
This is the entire plan.
You protest! “It is as contradictory,” you say, “as the Montagnards’ manifesto.9 It encompasses a vicious circle that is at least as obvious as those you have previously pointed out in the alternative measures.”
I deny this; I grant you only that the attempt is bold. But first, if the gravity of the situation has been clearly established and second, if it has been proved that traditional means will not extricate us, it seems to me that my thought has at least some right to be considered by my colleagues.
May I therefore be allowed to examine my two proposals, and would the reader be so good as to suspend his judgment and perhaps his verdict, remembering that these proposals form an indivisible whole?
First of all, there is a truth that should be remembered, since it is not sufficiently taken into account: it is that, because of the nature of our tax system, which is based predominantly on indirect taxation, that is to say, consumption taxes, there is a very close connection, an intimate relationship, between general prosperity and the prosperity of public finances.
This leads us to the following conclusion: it is not strictly accurate to say that relieving taxpayers will inevitably undermine revenue.
If, for example, in a country like ours the government, driven by an excess of fiscal zeal, raised taxes to the point of destroying consumers’ purchasing power, if it doubled or tripled the market price of essentials, if it made the materials and tools of the trade even more expensive, if, as a result, a considerable section of the population was reduced to depriving itself of everything and living on chestnuts, potatoes, buckwheat, and corn, it is clear that the drastic shortfall in revenue might be attributed with some reason to the sharply increased taxation itself.
And in such circumstances it is also clear that the real means, the rational means of making public finances flourish, would not be to deal further blows to general wealth but on the contrary to allow it to grow; this would not be to tighten taxation but to relax it.
In theoretical terms, I do not believe that this can be queried. Through successive increases, taxation may reach the point at which what is added to its rate is bound to reduce its yield. When this point is reached, it is as vain, as crazy, and as contradictory to look for an increase in revenue by an increase in taxes as it would be to wish to raise the liquid in a manometer by means whose result would be to reduce the heat in the boiler.10
This having been said, we have to know whether, in fact, our country has not reached this point.
If I examine the principal objects of universal consumption from which the state exacts its revenue, I find them burdened with such exorbitant taxes that the acquiescence of taxpayers can be explained only by force of habit.
To say that a few of these taxes are tantamount to confiscation would be to understate the case.
First of all, take sugar and coffee. We could procure these at a low cost if we were free to seek them in the markets to which our interests direct us. However, in the clearly defined aim of closing off trade with the world to us, the tax authorities subject us to a heavy fine when we commit the crime of trading with India, Havana, or Brazil. If we, docilely bowing to its will, limit our trade to what three small rocks lost in the midst of the oceans are able to supply, we then pay, it is true, much more for sugar and coffee, but the mollified tax authorities take from us only approximately 100 percent of their value in the form of taxes.
This is called profound political economy. Note that acquiring the small rocks has cost us rivers of blood and tons of gold, interest on which will burden us for eternity. As compensation, we also pay tons of gold to keep them.
In France there is a product that is quintessentially national and whose use is inseparable from popular habits. To restore the strength of workers, nature has given meat to the English and wine to the French; this wine can be procured everywhere at eight or ten francs a hectoliter, but the tax authorities intervene and tax you at the rate of fifteen francs.
I will say nothing about the tax on tobacco, which public opinion is ready to accept. It is no less true that this substance is taxed at several times its value.
The state spends five centimes or ten at the most to carry a letter from one point in the territory to another. Until recently, it obliged you to rely upon it; subsequently, when it had you in its grip, it made you pay eighty centimes, one franc, and one franc twenty for what cost it five centimes.
Shall I mention salt? It has been clearly established in a recent debate that salt can be produced in unlimited quantities in the southeast of France for fifty centimes. The tax authorities inflicted a duty of thirty francs on it. Sixty times the value of the product! And you call that a tax! I contribute at a rate of sixty because I possess one! I would earn 6,000 percent by abandoning my property to the government!
It would be worse if I mentioned the customs. Here the government has two clearly defined aims: the first, to raise the price of goods, to deny industry the materials it needs, and to increase the hardships of life; the second to amalgamate and increase taxes to such an extent that the tax authorities do not receive anything, recalling the following remark from a dandy to his tailor on the subject of a pair of breeches: “If I can get into them, I will not take them.”
Last, the exorbitantly high level of these taxes cannot fail to stimulate a spirit of fraud. When this happens, the government is obliged to surround itself with several armies of civil servants, to arouse suspicion in the entire nation and invent all sorts of interventions and procedures, which all paralyze production and drain the budget.
This is our tax system. We have no means of expressing its consequences in figures. But when, on the one hand, we study this mechanism and on the other we note that it is impossible for a major section of the population to become consumers, can we not ask ourselves whether these two facts are in a cause and effect relationship? Can we not ask ourselves whether we will set this country and its finances on their feet again by continuing down the same path, assuming that public disaffection leaves us the time? Truly, I consider that we are a little like a man who, having painfully emerged from an abyss into which his foolhardiness has plunged him several times, can think of nothing better than to put himself on the same spot from which he started and to follow the same rut with a little more determination.
In theory, everyone will agree that taxes may be raised to such an inordinate degree that it is impossible to add anything to them without freezing general wealth creation so that it compromises the public treasury itself. This theoretical possibility has in fact made itself felt in such a striking way in a neighboring country that I ask to be able to use this example, since if the phenomenon was not acknowledged to be possible, my entire dissertation and all my subsequent conclusions would be worthless and without effect. I know that in France those who seek lessons from British experiments are not very welcome; we prefer to carry out experiments at a cost to ourselves. But I beg the reader to admit for an instant that, on both sides of the Channel, two and two make four.
A few years ago, England found herself financially speaking in a very similar situation to the one we are in. For several consecutive years, each budget ended in a deficit, to such an extent that daring and drastic means had to be envisaged. The first one that occurred to financiers was—you can guess—to increase taxes. The Whig cabinet did not spend much time on invention. It limited itself purely and simply to deciding that a surtax of 5 percent would be added to taxes. Its reasoning was this: “If 100 shillings of tax provide us with 100 shillings of revenue, 105 shillings of tax will provide us with 105 shillings of revenue, or at least 104 or 104½ shillings, since we have to allow for a slight drop in consumption.” Nothing seemed more mathematically assured. However, at the end of one year, they were astonished to have gathered, not 105 or 104 and not even 100, but only 96 or 97.
It was then that this cry of pain escaped from aristocratic breasts: “It is finished. We can no longer add even a farthing to our civil list. We have reached the limit of profitable taxation.11 We have no further resources since taxing more is to receive less.”
The Whig cabinet was overturned immediately. Other competent means had to be tried out. Sir Robert Peel stood forward. He was certainly a practical financier. This did not stop him from producing the sort of reasoning which, pronounced by a novice like me, seemed subtle and perhaps absurd. “Since taxation has created the destitution of the masses and since in turn the destitution of the masses has limited the yield of taxation, it is a strict consequence, although one that appears paradoxical, that to make revenue prosper taxes have to be reduced. Let us try, therefore, to see whether the tax authorities, which have lost out by being too greedy, will not gain by being generous.” Generosity in the tax authorities! That would certainly be a new experience! It would be one well worth examining. Would the financiers not be happy to discover that generosity itself could sometimes be lucrative? It is true that in this case, generosity ought to be called interest properly understood. So be it. Let us not bicker over words.
Sir Robert Peel therefore began to cut taxes repeatedly. He allowed wheat, cattle, wool, and butter to be imported in spite of the clamors of the landlords, thinking with apparent reason that the people are never better fed than when there is a great deal of food in the country, a proposition that elsewhere is considered to be seditious. Soap, paper, swill, sugar, coffee, cotton, dyes, salt, the post, glass or steel, everything workers use or consume was subjected to reform.
However, Sir Robert, who is not a hothead, was perfectly aware that although a system like this had to react favorably on the exchequer by stimulating public prosperity, it could do so only in the long term. On the other hand, the deficits, shortfalls, or overdraft s, whatever you want to call them, were current and pressing. To abandon, even provisionally, part of the revenue would have made the situation worse and undermined credit. A difficult period had to be endured, made even more so by the enterprise itself. Thus, reducing taxes was just half of Sir Robert’s system, as it is just half of the one I am putting forward in all humility. It has been seen that the essential complement of mine12 consists in reducing expenditure in an even greater proportion. The complement of the Peel system was closer to financial and fiscal traditions. He thought of how to find another source of revenue, and income tax was decreed.
Thus, in the face of deficits, the first thought had been to make taxes heavier and the second was to transform them, to ask payment from those able to pay. This was progress. Why should I not have the pleasant idea that reducing expenditure would be even more decisive progress?
I am obliged, in spite of the slowness it imposes on me, to examine the following question briefly: Has the British experiment been successful? I must do this, for what would be the use of an example that has failed, if not to avoid imitating it? This is certainly not the conclusion to which I wished to lead the reader. However, many people claim that Sir Robert Peel’s enterprise was disastrous, and their claim is all the more seemingly plausible since, precisely from the day that tax reform was inaugurated, a long and terrible commercial and financial crisis occurred to afflict Great Britain.
But first of all, I must point out that even if the recent economic disasters might be attributed at least in part to Sir Robert Peel’s reform, people should not be able to argue against the one I am proposing, since these two reforms differ signally. What they have in common is this: they seek the ulterior increase of revenue in the prosperity of the masses, that is to say, in the reduction of taxes as far as levels are concerned. How they differ is in this: Sir Robert Peel arranged the resources for facing up to the difficulties of transition through the establishment of a new tax. The resources I am calling for come through a steep reduction in expenditure. Sir Robert was so far from orienting his ideas in this direction that, in the very document in which he set out his financial plan before an attentive England, he was requesting a considerable increase in subsidies for the development of military and naval forces.
However, since the first part of these two systems merge in that they aim to establish the ample funding of the public treasury over the long term by relieving the working classes, is it not obvious that a reduction in expenditure or the pure and simple abolition of taxes is more in harmony with this thinking than shifting the tax?
I cannot help thinking that the second element of Peel’s plan was such as to contradict the first. Doubtless it did a great deal of good to spread the tax burden better. But when all is said and done, when you know a little about this subject, when you have studied the natural mechanism of taxes, their rebounds and repercussions, you know full well that what the tax authorities require from one class is paid for the most part by another. It is not possible for English workers not to have been affected, either directly or indirectly, by income tax. Thus, though they were relieved on the one hand, they were to a certain extent afflicted on the other.
But let us leave these considerations aside and examine whether, in the face of the clear facts that explain the English crisis so naturally, it is possible to attribute it to the reform. The eternal false reasoning of those who are determined to incriminate something involves them in attributing to it all the evils that happen in the world. Post hoc, ergo propter hoc.13 The preconceived idea is and always will be the scourge of reason since, by its very nature, it flees the truth when it has the misfortune of glimpsing it.
England has had other commercial crises than the one it has just gone through. All have been explained by obvious causes. Once she was seized by a fever of ill-conceived speculation. Immense amounts of capital deserted production and went down the road of American loans and the mining of precious metal. The result was great upheaval in industry and finance. On another occasion, the harvest failed and the consequences are easy to imagine. When a considerable portion of the work of an entire nation has been directed toward the creation of its own subsistence, when the people have ploughed, harrowed, sown, and watered the earth with sweat for a year to make the harvest grow, if, at the time it is due to be gathered in, it is destroyed by a plague, they are faced with two alternatives: either to die of hunger or to import unexpectedly and rapidly huge amounts of food products. All the ordinary operations of production have to be interrupted in order for the capital involved in them to be freed to meet this gigantic and unexpected operation that cannot be postponed. What a waste of energy! What a loss of assets! And how can a crisis not result? This also happens when the cotton crop fails in the United States, for the simple reason that the factories cannot be as active in operation when they lack cotton as when they have it and it is never with impunity that stagnation spreads to the manufacturing districts of Great Britain. Insurrections in Ireland and unrest on the continent that disrupt British trade and reduce consumer power in its customers are also obvious causes of financial hindrance, difficulty, and disturbance.
The economic history of England teaches us that just one of these causes has always been enough to trigger a crisis in that country.
Well, it so happened that just at the moment when Sir Robert Peel introduced the reform, all these plagues occurred to afflict England at the same time and with a degree of intensity that had hitherto been unknown.
The result was great suffering for the people and the immediate broad-casting of the preconceived idea: You see! It is the reform that is crushing the people!
However, I put the question: Was it really the financial and commercial reform that led to two successive losses of harvest in 1845 and 1846 and forced England to spend two billion to replace the wheat lost?
Was it really the financial and commercial reform that caused the destruction of the potato harvest in Ireland for four years and forced England to feed a starving people at its own expense?
Was it really the financial and commercial reform that ruined the cotton crop in two successive years in America, and do people believe that maintaining import taxes would have been an effective remedy?
Was it really the financial and commercial reform that gave rise to and developed railway mania14 and suddenly removed two or three billion from productive and customary work to throw them into enterprises that could not be completed, a folly that, according to all observers, has done more current harm than all the other plagues combined?
Was it really the financial and commercial reform that lit the fires of revolution on the continent and reduced the absorption of all sorts of British products?
Ah, when I think of the unheard-of alliance of destructive agents working together in a common direction, this tightly woven fabric of disasters of all sorts, accumulated by a fate without precedent in a limited space of time, I cannot help thinking, contrary to the preconceived idea: “What would have become of England, its power, its greatness, and its wealth, if Providence had not raised up a man at this precise and solemn moment? Would not everything have been swept away in a terrible convulsion?” Yes, I sincerely believe that the reform, blamed for the misfortunes in England, neutralized part of them. And the English people understand this, since although the most sensitive part of this reform, free trade, has been subjected right from its inception to the most difficult and unexpected tests, popular faith in it has not been shaken, and at the time I am writing this the work begun is continuing and progressing toward its glorious fulfillment.
Let us therefore return from across the strait, and may confidence accompany us; there is no need to leave it on the other side of the Channel.
We are facing the revenue budget. The Assembly has already lowered the tax on salt and the carriage of letters. In my opinion, it should do the same for wines and spirits. Under this heading, I consider that the state should agree to lose fifty million. As far as possible it should spread the remaining tax over the whole of the wine consumed. People will understand that thirty to forty million spread over forty-five million hectoliters will be much easier to pay than one hundred million concentrated on a quantity three times less. The expenses and above all the hindrances resulting from the current collection system will also have to be reduced.
The state should also agree to reduce duties on sugar and coffee considerably. Increased consumption will solve the fiscal and colonial questions simultaneously.
Another great and popular measure would be the abolition of city tolls.15 On this subject, I have been struck by the advantage that might be drawn from an opinion put forward by M. Guichard. Everyone acknowledges that an income tax would be just and in accordance with proper principles. If people hesitate, it is because of the problems of executing it. There is great fear, which I think is justified, of the heavy responsibility that the importunate investigations essential for this tax would bring to bear on the state. It is not a good thing for a republican government to appear to taxpayers to be an avid inquisitor. In local districts, wealth is known about. It can be assessed within the family and if its holders were given the choice of establishing income tax with the specific aim of replacing city tolls, it is likely that this transformation, based on justice, would be received favorably. In the long run, France would thus be preparing a register of wealth held in movable assets and the means of leading its tax system down the path of truth. I do not think that a measure of this sort, which would also have the advantage of triggering decentralization, would be beyond the means of a clever statesman. It would certainly not have made Napoléon retreat.
I am obliged to say something about the customs; and to shelter myself from the prejudices that I can see arising from here, I will consider them only from the fiscal point of view, since in any case it is just a question of the budget. It is not that I am not strongly tempted to make a sortie toward freedom of exchange, but will I not be compared to the brave general who was famous for his predilection for the care of horses? Wherever on the intellectual horizon you place the point of departure of the conversation, whether on chemistry, physics, astronomy, music, or the navy, you will see him rapidly mounting the saddle horse and you will be obliged to mount it behind him. We all have our pet subjects, our hobbyhorses in a Shandyan16 style. My pet subject, and why should I not admit it, is freedom, and if it so happens that I defend freedom to trade in particular, it is because, of all the freedoms, it is the one most misunderstood and most compromised.
Let us therefore examine the customs services from the fiscal point of view; and may the reader pardon me if, escaping tangentially, I touch a little on the questions of right, property, and freedom.
One of the most sincere and clever protectionists in this country, M. Ferrier,17 admitted that, if one wished to retain a fiscal character for the customs, it would be possible to draw twice the revenue for the treasury. It raises about one hundred million; therefore, independently of the charge imposed on us as consumers by protectionism, it makes us lose one hundred million as taxpayers. For it is perfectly clear that what the tax authorities refuse to recover by means of the customs services, it has to raise through other taxes. This mechanism is worth the trouble of examination.
Let us suppose that the treasury requires one hundred. Let us also suppose that, if foreign iron could enter on payment of a reasonable duty, it would provide the revenue with five. However, a sector of industrialists claims that it would be to its advantage for foreign iron not to be admitted. Taking their side, the law decrees prohibition, or what amounts to the same thing, a prohibitive duty. Consequently, any opportunity to raise a tax is deliberately sacrificed. The five do not come in and the treasury is left with only ninety-five. But since we have accepted that it needs one hundred, we have to agree to its taking five from us in some other way, on salt, the post, or tobacco.
And what happens for iron also happens for all imaginable forms of consumer products.
In the face of this strange dispensation, what is the situation of the consumer-taxpayer?
It is this:
1. He pays considerable taxes, which are intended to maintain a huge army of employees at the frontier, an army that is established there on the instigation of and for the account and benefit of ironmasters or any other privileged person whose business it is furthering.
2. He pays a higher than market price for iron.
3. He is forbidden to make the thing in exchange for which the foreigner would have delivered his iron, for to prevent an asset from being imported is also to prevent by the same measure another asset from being exported.
4. He pays a tax to fill the void at the treasury, for to prevent an import from entering is to prevent tax being collected, and since the needs of the tax authorities are established, should a tax fail to be collected, it has to be replaced by another.
This certainly is a strange position for a consumer-taxpayer to be in. Is it more unfortunate than ridiculous or more ridiculous than unfortunate? It might be a problem to answer this.
And what is the reason for all of this? For an ironmaster to reap from his work and capital no extraordinary profit but only to enable him to experience even greater difficulties in production!
When then will decisions be taken in matters like this in consideration of the majority and not the minority? The interest of the majority, this is the economic rule that never goes wrong since it merges with justice.
One thing has to be clearly agreed upon, which is that in order for protection to be just without ceasing to be disastrous, it would need at least to be equal for all. However, is this possible, even in the abstract?
Men trade products with each other, or products in return for services, or services for services. It may even be asserted that, as products have value only because of the services they generate, everything is reduced to the mutuality of services.
Well, the customs service can obviously protect only the types of service whose value is incorporated in material products that can be stopped or seized at the frontier. It is radically incapable of protecting the direct services provided by doctors, lawyers, priests, magistrates, soldiers, traders, men of letters, artists, or artisans, who already constitute a considerable part of the population, by raising the value of the services. It is equally powerless to protect men who let out their work, since they do not sell products, but provide services. Here then we have all workers or journeymen excluded from the alleged benefits of protectionism. But while protection is of no benefit to them, it damages them, and here we have to identify clearly the counterblow that those protected should feel themselves.
The only two classes protected, and to a very unequal degree, are manufacturers and farmers. These two classes see the customs as providential, and nevertheless we are witnesses to the fact that they never cease to bewail their distress. It must be that protection is not as effective for them as they had hoped. Who would dare to say that agriculture and manufacturing are more prosperous in those countries most protected, such as France, Spain, or the Roman states, than in those nations that have held their freedom less cheap, such as the Swiss, the English, the Belgians, the Dutch, and the Tuscans?
What is happening with regard to protection is something similar or rather identical to what we have confirmed just now in connection with taxes. In the same way that there is a limit to profitable taxation, there is a limit to profitable protection. This limit is the complete destruction of the ability to consume, a destruction that protection tends to bring, like taxes. The tax authorities prosper with the prosperity of taxpayers. In the same way, the value of an industry is based only on the wealth of its customers. From that it follows that, when the tax authorities or a monopoly seek to develop themselves by means whose inevitable effect is to ruin consumers, both enter the same vicious circle. There comes a time when the more they increase the level of tax, the more they reduce the yield. Those who are protected cannot assess the state of depression that weighs upon their industry, in spite of the favors of the protectionist dispensation. As in the case of the tax authorities, they seek a remedy in making these arrangements even more extreme. In the end they should ask themselves whether it is not the favors themselves that are oppressing them. They should contemplate the half or two-thirds of the population that is reduced, as a result of these unjust favors, to doing without iron, meat, cloth, or wheat, building carts with branches of willow, clothing themselves in homespun, eating millet like birds or chestnuts like less poetic creatures!18
Since I have let myself be drawn into this discussion, allow me to end it with a sort of apologue.
In a royal park, there was a host of small ponds, all communicating with one another through underground conduits, so that the water had the invincible tendency to reach a uniform level. These reservoirs were supplied by a large canal. One of them, slightly more ambitious, wanted to attract to itself a major part of the supply intended for all. This should not have caused much of a problem in view of the inevitable leveling that would have followed the attempt, if the means thought up by the greedy and reckless reservoir had not led to an inevitable loss of liquid in the supply canal. We can guess what happened. The level decreased everywhere, even in the favored reservoir. It said to itself, since in apologues, there is nothing that does not speak, even reservoirs: “It is very strange, I draw to myself more water than before; I succeed for a fleeting moment in raising myself above the level of my peers and yet I see with distress that we are all moving, I along with the rest, toward total desiccation.” This reservoir, doubtless as ignorant of hydraulics as it was of morals, closed its eyes to two circumstances: the first being the underground communication of all the reservoirs with each other, an invincible obstacle to its being able to benefit exclusively and permanently from its injustice; the other being the general loss of liquid inherent in the means it had thought up, which was to lead inevitably to a general and continuous lowering of the level.
Well, I say that the social order also exhibits these two circumstances and that those who do not take them into account are reasoning incorrectly. First of all, between all forms of production, there are hidden communications, transmissions of work and capital, which do not allow one of them to raise its normal level above the rest indefinitely. Second, in the means thought up to carry out the injustice, that is to say, in protectionism, there is the radical ill that it generates an unredeemable loss of total wealth; and from these two circumstances, it follows that the level of well-being decreases everywhere, even within the industries that are protected, like the level of the water in the greedy and stupid reservoir.
I was fully aware that free trade would divert me from my path. Obsessions! Obsessions! Your sway is irresistible! But let us return to the tax authorities.
I will say to those who support protectionism: In view of the pressing needs of the Republic, will you not agree to set a limit to your greed? What! When the treasury is in desperate straits, when bankruptcy threatens to engulf your wealth and security, when the customs service offers a truly providential means of rescue by being able to fill the public coffers without causing harm to the masses, but on the contrary, relieving them of the weight oppressing them, will you remain inflexible in your selfishness? On your own initiative, at this solemn and decisive moment, you ought to make the sacrifice, as you call it and which you sincerely believe it to be, of part of your privileges on the altar of the fatherland. You would be rewarded by public esteem and, I dare to forecast this, what is more you will also gain by way of material prosperity.
Therefore, is it too much to ask you to substitute duties of 20 to 30 percent for prohibition, which has become incompatible with our constitutional law? A reduction by half of the duties on iron and steel, those sinews of production; on coal, on which industry, so to speak, feeds; on wool, flax, and cotton, the materials used by labor; and on wheat and meat, the basis of strength and life?
But I see that you are becoming reasonable,19 you welcome my humble request, and we can now cast a glance, both morally and financially, at our now properly rectified budget.
First of all, here are many things that have at last come within the reach of the hands or lips of the people: salt, letter post, wines and spirits, sugar, coffee, iron, steel, fuel, wool, flax, cotton, meat, and bread! If we add to this list the abolition of city tolls and the profound modification if not the total abolition of the terrible law of recruitment, a terror and plague in our countryside, I ask you, will the Republic not have sunk its roots in all the fibers of popular adhesion? Will it be easy to shake? Will it require five hundred thousand bayonets to be the terror of the parties . . . or their hope? Shall we not be protected from these terrible upheavals with which, it seems, the very air is charged right now? Might we not conceive the justified hope that a feeling of well-being and the awareness that the power has at last firmly entered into the path of justice will regenerate production, confidence, security, and credit? Is it an illusion to think that these beneficial causes will react on our finances more surely than a surfeit of taxes and hindrances might?
And, as for our current, immediate financial situation, let us see how it will be affected.
Here are the reductions that will result from the proposed system:
——A loss that should decrease, by its very nature, from year to year.
To decrease taxes (which does not always mean decreasing revenue), this is then the first half of the financial program of the Republic. You will say: “This is very bold, faced with the deficit.” And I will reply: “No, this is not boldness, it is prudence. What is bold, what is reckless and senseless is to continue down the path that brings us closer to the abyss. See where you are! You have made no secret of it, indirect taxes are causing you worry, and as for direct taxes themselves, you count on collecting them only if you employ a militia. Are we in the world of taking aim and military sallies? How could things have reached this stage? Here are one hundred men; they all pay a subscription to set up, for their security, an apparatus of enforcement, a common force of their own. Little by little, this common force is diverted from its purposes and it is made responsible for a host of unreasonable functions. Because of this, the number of men who live off this subscription increases, the subscription itself increases, and the number of those paying it decreases. Discontent and disaffection arise and what will be done? Return the common force to its original purpose? That would be too commonplace and, people say, too bold. Our statesmen are cleverer; they think of decreasing still further the number of those paying to increase the number of those being paid. We need new taxes, they say, to maintain the military and new militias to collect the new taxes! And people do not see a vicious circle in this! We thus reach the fine situation in which half of the citizens will be occupied in repressing and holding the other half to ransom. This is what is known as wise and practical policies. All the rest is just utopia. Give us a few years more, say the financiers; allow us to push the system to its limits and you will see that we will at last achieve the famous balanced budget that we have been pursuing for so long and that has been upset precisely by the procedures that we have been following for the last twenty years.
It is therefore not as paradoxical as it appears at first glance to take an opposite course and to seek a balance through the reduction of taxes. Will such balance be less worthy of its name because instead of seeking it at 1.5 billion we achieve it at 1.2?
But this first part of the republican program makes a commanding appeal to its essential complement: a reduction in expenditure. Without this complement, the system is utopian, I agree. With this complement, I challenge anyone, other than those involved, to dare to say that it does not go right to the heart of the matter, and by the path that holds the least danger.
I add that the reduction in expenditure must be greater than the revenue; without this, we would be pursuing the leveling in vain.
Finally, it has to be said, a group of measures like these cannot provide all the results we have the right to expect of them in a single financial year.
We have seen, with regard to revenue, that to instill in it this force for growth whose basis lies in general prosperity, we had to begin by reducing it. This means that time is needed to develop this force.
This is equally true for expenditure; its reduction can be only gradual. Here is one reason for this, among others.
When a government has raised its expenditure to a level that is swollen and burdensome, this means in other words that many lives depend on its prodigality and feed on it. The idea of achieving savings without upsetting anyone carries a contradiction within it. To use sufferings as an argument against reform, which of necessity implies these sufferings, is to totally reject any act of reparation and to say: “Because an injustice has been introduced into the world, it is proper for it to be perpetuated forever.” This is an eternal sophism of those who idolize abuse.
However, from the truth that individual suffering is the necessary consequence of any reform, it does not follow that it is not the legislator’s duty to alleviate it as far as he can. For my part, I am not one of those who hold that, when a member of society has been attracted by society to a career, when he has grown old in it and made it his specialty, when he is incapable of earning his living from another occupation, society should be able to cast him out, with neither hearth nor home. Any loss of particular employment therefore imposes on society a temporary responsibility on grounds of humanity and, in my view, of strict justice.
It follows from this that the modifications made to the expenditure budget cannot produce results immediately, any more than those made to the revenue budget. They are germs whose nature is to develop, and the overall scheme involves a decrease of expenditure from year to year by way of specific reductions and revenue that increases from year to year in parallel with general prosperity, so that the final result ought to be a balanced budget or a surplus.
As for the alleged disaffection that might reveal itself in the very numerous sector of public servants, I have to confess that, with the gradual changes that I have just mentioned, I am not afraid of this. Besides, this scruple is strange. As far as I know, it has never stopped massive destitutions after each revolution. And yet, what a difference there is! To dismiss an employee in order to give his job to another is more than upsetting his interest, it is wounding his dignity and his acute sense of right. But when the abolition of an occupation, fairly managed, results in the loss of jobs, it may cause harm but will not enrage. The wound is less sharp, and the person affected by it is consoled by consideration of the public good.
I needed to put these reflections before the reader when speaking about deep reforms, which would of necessity lead to the laying off of many of our fellow citizens.
I will not review all the articles of expenditure that I consider it to be useful and good policy to cut. The budget reflects nothing but politics. It swells or decreases depending on whether public opinion requires more or less from the state. What good would it do to show that the elimination of such and such a government department would lead to this or that major saving if the taxpayer himself prefers the department to the saving? There are reforms that have to be preceded by lengthy debates and a slow preparation of public opinion, and I do not see why I should go down a path in which it is clear that public opinion would not follow me. This very day the National Assembly took the decision to draw up the first budget of the Republic. It has a short and very limited time only in which to do this. With a view to setting out a reform that is immediately practicable, I have to turn away from the general and philosophical considerations that I first thought of putting before the reader. I will limit myself to indicating them.
What postpones any radical financial reform to a far distant future is that in France people do not like freedom. They do not like feeling responsible for themselves and have no confidence in their own dynamism; they feel reassured only when they feel the pressure of government pulling strings on all sides, and it is precisely these pullings of strings that are so expensive.
If, for example, people had faith in the freedom of education, what would need to be done other than abolishing the public education budget?
If people really valued freedom of conscience, how would they achieve it other than by abolishing the budget for religious practice?20
If people understood that farming is improved by farmers and trade by traders, they would come to the conclusion that the budget for agriculture and commerce is superfluous and is something that the most advanced nations are careful not to inflict on themselves.
If, on a few points, like surveillance, the state needs to intervene with regard to education, religious practice, or commerce, an extra division in the ministry of the interior would be enough; we do not need three ministries to do this.
Thus, freedom is the first and most fertile source and spring of savings.
However, this spring is not made for our lips. Why? Solely because public opinion rejects it.21
Our children will therefore continue, under the monopoly of the university, to quench their thirst on false Greek and Roman ideas, to be imbued with the warlike and revolutionary spirit of Latin authors, to scan the licentious verses of Horace, and to become unsuited to modern life in society. We will continue not to be free and as a result to pay for our servitude, since peoples can be held in servitude only at great expense.
We will continue to see farming and commerce languish and succumb under the yoke of our restrictive laws and, what is more, pay the cost of this torpor, for all the hindrances, regulations, and useless formalities can be carried out only by agents of government enforcement, and the agents of the state can live only through the budget.
And, it must be repeated, the harm is without a remedy that can currently be applied, since public opinion attributes to oppression all the intellectual and industrial development that this oppression has not succeeded in stifling.
An idea that is as strange as it is disastrous has taken hold of people’s minds. When it is a question of politics, people assume that the social engine, if I can call it this, is in accordance with individual interest and opinion. We cling to Rousseau’s axiom, “The general will cannot err.” And on this basis, we decree universal suffrage with enthusiasm.
However, from all other points of view, we adopt exactly the opposite hypothesis. We do not accept that the driving force of progress lies in individuality, in its natural yearning for well-being, a yearning that is increasingly enlightened by intelligence and guided by experience. No. We start off from the concept that mankind is divided into two: first, there are individuals who are inert and deprived of any dynamism or stimulus to progress or who obey depraved impulses which, left to themselves, reduce them to absolute evil; and second, there is a collective being, a common force, the government in short, to which is attributed inborn knowledge, a natural passion for good, and the mission to change the direction of individual tendencies. We assume that, if they were free, men would avoid all forms of education, religion, or production or, what is worse, that they would seek out education to attain error, religion to end up in atheism, and work to consummate their ruin. This being so, it is necessary for individuals to be subject to the regulatory action of the collective being, which, however, is none other than the coming together of these individuals themselves. Well, I ask you, if the natural inclinations of all the fractions tend toward evil, how will the natural inclinations of the whole tend toward good? If all the innate forces of man are directed toward nothingness, on what will the government, made up of men, take its point of support in order to change this direction?22
Be that as it may, as long as this strange theory remains in force, we will have to give up freedom and the convenient economies that it brings. We ought to pay for our chains when we love them, given that the state never gives us anything for nothing, not even irons.
The budget is not only the whole of politics, it is also in many respects the moral code of the people. It is the mirror in which, like Renaud, we might see the image and punishment of our preconceived ideas, our vices, and our wild pretensions. Here again, there are torrents of wrong expenditure that we are reduced to leaving to run, since they are caused by leanings which we are not ready to abandon; what would be more unreal than to wish to neutralize an effect while the cause continues to exist? I will mention, among other things, what I do not fear to call, even if the word sounds harsh, the spirit of begging, which has spread to all classes, the rich as much as the poor.23
Certainly, in the circle of private relations, the French character does not fear comparison with regard to independence and pride. God forbid that I should cast a slur on my own country and even less that I should calumniate it! However, I do not know how it has happened that the same men who, even when pressed by distress, would blush to hold out a hand to their fellow men, lose all their scruples when the state intervenes and averts the gaze of their consciences from the contemptibility of such action. As soon as the request is not addressed to individual largesse, as soon as the state is the intermediary of the work, it appears that the dignity of the supplicant is spared, that begging is no longer shameful nor plunder an injustice. Farmers, manufacturers, traders, shipowners, artists, singers, dancers, men of letters, civil servants of all sorts, entrepreneurs, suppliers, or bankers, everyone in France wants something, and everyone expects the budget to provide. And soon the whole nation en masse has joined in. One person wants positions, another pensions, a third premiums, a fourth subsidies, a fifth inducements, a sixth restrictions, a seventh credit, and an eighth work. The whole of society is rising up to snatch a share of the budget in one form or another, and in its Californian fever it forgets that the budget is not a Sacramento where nature has deposited gold; the budget contains only what this mendicant society has itself put into it. Society forgets that the generosity of the government can never equal its avidity since, on the basis of this largesse, it has to keep back enough to pay for the twin services of tax collection and distribution.
In order to give these rather abject arrangements the authority and appearance of regularity, they have been attached to what is known as the principle of solidarity, a word that, used in this way, means nothing other than the effort of all the citizens to despoil each other through the costly intervention of the state. However, it can be understood that once the spirit of mendacity becomes systematized and almost an administrative science, imagination knows no bounds with regard to ruinous institutions.
But, I agree, we can do nothing at the moment in this respect and I end with this question: When the spirit of begging is taken to the point at which it incites the entire nation to plunder the budget, do people not think that it compromises political security even more than public resources?
For the same reason, another considerable saving is still insuperably forbidden to us. I refer to Algeria. We have to yield and pay until the nation has understood that to transport one hundred men to a colony and at the same time transport ten times the capital that would maintain them in France is to relieve nobody and to tax everyone.
Let us therefore seek our means of salvation elsewhere.
The reader will acknowledge that, for a utopian, I am easy to deal with when it comes to retrenchment. There are many more and even better examples that I could mention. Restrictions to our most precious freedoms, the mania for seeking special treatment, an infatuation with a disastrous conquest: in all this I have given way to public opinion. Let it now allow me to take my revenge and to be slightly radical with regard to foreign policy.
For finally, if public opinion intends to close the door to any reform, if it has decided in advance to keep everything that exists and to allow for no change whatever in anything that relates to our expenditure, my whole argument will crumble and all financial plans will be powerless; all that remains to us is to leave the people to bow down under the weight of taxes and walk with lowered heads toward bankruptcy, revolution, disorganization, and social conflict.
In talking about our foreign policy, I will start by clearly establishing the following two proposals, outside of which I make so bold as to say there is no salvation.
As a consequence of these two proposals there arises a third, which is:
We have to disarm on land and sea as quickly as possible.
False patriots! Enjoy yourselves to the full. There was a day on which you called me a traitor because I demanded freedom; what will happen now that I am invoking peace?24
Here again, public opinion is an obstacle to the first item. It has been saturated by the following words: national greatness, power, influence, preponderance, and dominance. France is repeatedly told that she must not retreat from the rank that she occupies among the nations; her pride having been addressed, it is now time to turn to her interest. She is told that she must show evidence of strength to support useful negotiations, that the French flag must be displayed on every ocean to protect our trade and control distant markets.
What is all of that? An inflated balloon that a pinprick will be enough to deflate.
Where is influence today? Is it at the mouths of cannon or the points of bayonets? No, it is in ideas, institutions, and the sight of their success.
Peoples affect each other through the arts, literature, philosophy, journalism, trading transactions, and above all by example, and if they also act on occasion through constraint and threats, I cannot believe that this type of influence is likely to develop the principles that encourage humanity to progress.
The rebirth of literature and the arts in Italy, the revolution of 1688 in England, and the Declaration of Independence in the United States have doubtless contributed to the outburst of generosity that enabled our fathers to accomplish such great things in 1789. In all this, where do we see the hand of brute force?
People say: “The triumph of French arms at the turn of this century has broadcast our ideas everywhere and left the imprint of our politics on the entire surface of Europe.”
But do we know, can we know what would have happened in other circumstances? If France had not been attacked, if the revolution pushed to the brink by resistance had not slipped into a bloodbath, if it had not ended up in military despotism, if, instead of grieving, terrifying, and disrupting Europe, it had shown it the sublime sight of a great people peacefully accomplishing its destiny, with rational and beneficial institutions ensuring the good fortune of its citizens, is there anyone who would assert that an example like this would not have aroused the ardor of the oppressed and weakened the aversions of oppressors in our vicinity? Is there anyone who would say that the triumph of democracy in Europe would not now be further advanced? Let us calculate therefore all the waste of time, just ideas, wealth, and genuine force that these major wars have cost democracy and take account of the doubts they have raised for a quarter of a century about popular rights and about political truth!
And then, how is it that there is not enough impartiality in the depths of our national conscience to understand how much our pretensions to impose an idea by force wound the hearts of our brothers abroad? What! We, the most sensitive people in Europe, we who, rightly, would not allow the intervention of an English regiment even if it were to erect a statue to freedom on the soil of our country and teach us social perfection itself! When we all, up to the old rubble of Koblenz,25 are in agreement on this point, that we would need to unite to break the grip of the foreign hand that comes bearing arms to interfere in our sorry debates, it is we who constantly have this irritating word on our lips: preponderance, and we do not know how to show freedom to our brothers other than with a sword in our hand aimed at their breasts! How have we come to imagine that the human heart is not the same everywhere, that it does not everywhere have the same pride or the same horror of dependence?
But last, where is this illiberal preponderance that we pursue so blindly and, in my view, with such great injustice, and have we ever seized hold of it? I can see the efforts clearly but not the results. I can see clearly that for a long time we have had a huge army and naval power that crush the people, ruin workers, generate disaffection, and drive us to bankruptcy. They threaten us with terrible calamities on which the very eyes of imagination tremble to gaze. I see all of this, but I cannot see preponderance anywhere, and if we have any weight in the destiny of Europe it is not through brute force but in spite of it. Proud of our prodigious military state, we have quarreled with the United States26 and we yielded; we have had arguments relating to Egypt and we yielded; from year to year we have made promises to Poland and Italy and not kept them. Why? Because the deployment of our forces has provoked a similar deployment throughout Europe. Once this happened, we could no longer doubt that the slightest combat concerning the most futile cause might threaten to take on the proportions of a world war, and humanity as well as prudence has enjoined statesmen to decline any such responsibility.
What is remarkable and very instructive is that the people who have pushed this pretentious and cantankerous policy the furthest, the English, who have led us on by their example and perhaps made it a hard necessity for us, have reaped the same disappointments from it. No nation has gone so far as they in laying exclusive claim to regulate the balance of power in Europe, and this balance has been compromised ten times without their moving. The English arrogated to themselves the monopoly of colonies, and we have taken Algiers and the Marquise Islands without their moving. It is true that in this they may have been suspected of having, with apparent ill humor but secret joy, seen us attach two balls and chains to our feet. They claimed to be the owners of Oregon and the patron of Texas, and the United States have taken Oregon, Texas, and part of Mexico to cap it all, without their reacting. All this proves to us that, while the minds of governments are full of war, those of the governed are full of peace, and as for me, I do not see why we should have carried out a democratic revolution if not to ensure the triumph of a spirit of democracy, the working democracy which indeed pays the costs of a military system but can only ever draw from it ruin, danger, and oppression.
I therefore believe that the time has come when the entire genius of the French Revolution must come together, make its presence felt, and glorify itself solemnly through one of these acts of greatness, loyalty, progress, self-belief, and confidence in its strength, on the likes of which the sun has never shone. I believe that the time has come when France should resolutely declare that it sees the solidarity of peoples in the linking of their interests and the communication of their ideas and not in the interjection of brute force. And to give this declaration irresistible weight—for what is a mere manifesto, however eloquent it is?—I believe that the time has come for it to dissolve this brute force itself.
If our beloved and glorious country took the initiative in Europe of carrying out this revolution, what would its consequences be?
First of all, to enter into my subject, here at one fell swoop our finances would be in balance. Here is the first part of my reform immediately put into practice. Taxes would be relieved. Work, confidence, well-being, credit, and consumption would reach down to the masses. The republic would be loved, admired, and consolidated through the strength given to institutions by public support. The threatening ghost of bankruptcy would be banished from people’s thoughts. Political upheavals would be a thing of the past. At last, France would be happy and glorious among nations, with the irresistible force of her example shining all around her.
Not only would the achievement of the democratic task inflame hearts abroad at the sight of this spectacle, but the spectacle itself would also certainly make that achievement easier. Elsewhere, as in our country, it is difficult to make people love revolutions that result in new taxes. Elsewhere, as in our country, people feel the need to break out of this circle. Our threatening attitude is, for foreign governments, a continuing reason or pretext for extracting money from their people and for raising a soldiery. How much easier would the work of regeneration be made all over Europe if it could be accomplished under the influence of tax reforms, which are fundamentally questions of approval and disapproval and questions of life and death for new institutions!
What are the objections to this?
National dignity. I have already indicated the reply to this. Is it to benefit their dignity that France and England, after being crushed by taxes to finance their military might, have always refused to do what they have announced they would? In this manner of understanding national dignity, there is a trace of our Roman education. At the time when peoples lived from plunder, it was important for them to inspire terror far and wide at the sight of their mighty armies. Is this also true for those who base their progress on work? The American people are reproached for a lack of dignity. If this is true, it is at least not so in American foreign policy, to which a tradition of peace and nonintervention gives such an imposing character of justice and grandeur.
Everyone at home, everyone for himself is the policy of selfishness, that is what people will say. A terrible objection if it had any common sense. Yes, everyone at home, when it comes to brute force, but let the influence of moral strength, intellectual and economic, emanating from each national center freely mingle and their contact give out light and fraternity for the benefit of the human race. It is very strange that we are accused of selfishness, we who always support expansion against restriction. Our code is this: “The least possible contact between governments, the most contact possible between peoples.” Why? Because contact between governments compromises peace, whereas contact between peoples guarantees it.
Security abroad. Yes, I agree that there is an interlocutory question to be resolved. Are we or are we not threatened with invasion? There are some who sincerely believe that there is danger. Other kings, they say, are too interested in extinguishing the revolutionary flame in France not to flood it with their soldiers if France disarms. Those who think this way are right to demand that our forces be maintained. However, they have to accept the consequences. If we maintain our forces, we cannot reduce our expenditure significantly and we should not reduce taxes; it would even be our duty to increase them, since budgets are settled in deficit each year. If we increase our taxes there is one thing of which we are not sure, and that is that we will increase our revenue; one thing, however, on which there is no possible doubt is that we will generate disaffection, hatred, and resistance in this country, and we will have ensured security abroad only at the expense of security at home.
For my part, I would not hesitate to vote in favor of disarmament, since I do not believe there will be invasions. Where will they come from? Spain? Italy? Prussia? Austria? That is impossible. There remain England and Russia. England! She has already tried the experiment, and twenty-two billion of debt on which workers are still paying the interest is a lesson that cannot be lost. Russia! That is just an illusion. Contact with France is not what she is seeking but rather what she is avoiding. And if Emperor Nicholas thought of sending two hundred thousand Muscovites to us, I sincerely believe that what it would be best for us to do would be to welcome them, have them taste the sweetness of our wines, show them our streets, our shops, our museums, the happiness of our people, and the gentleness and equitableness of our penal laws, following which we would say to them: “Retrace your path to your steppes as quickly as possible and tell your fellow men what you have seen.”
Protection for trade. People say, “Do we not need a powerful navy to open out new routes for our trade and control distant markets?” Truly the ways of government toward trade are strange. They start by hindering it, hampering it, restricting it, and stifling it at huge expense. Then if a fraction of it escapes, that same government becomes deeply attached to such few crumbs as have succeeded in passing through the nets of the customs service. We want to protect traders, they say, and to do this we will seize 250 million from the public in order to cover the oceans with ships and cannon. But first of all, 99 percent of French trade is carried out with countries in which our flag has never appeared nor will ever appear. Have we got trading posts in England, the United States, Belgium, Spain, the Zollverein, or Russia? This must therefore concern Mayotte and Nosibé;27 that is to say, more is being taken away from us in taxes in francs than we are receiving in centimes through this trade.
And then, what is controlling the markets? Just one thing: low prices. Send products that cost five sous more than similar products from England or Switzerland anywhere you like and ships and cannon will not ensure that you sell them. Send products that cost five sous less there and you will not need cannon or ships to sell them. Do we not know that Switzerland, which does not have a single boat, unless there are some on its lakes, has even ousted from Gibraltar some English fabrics, in spite of the guard that is on watch at its gates? If, therefore, low prices are the true protectors of trade, how does our government go about achieving them? First of all, it raises the cost of raw materials, all tools of the trade, and all consumer products through customs duties; then, to compensate, it burdens us with taxes on the pretext of sending its navy to seek outlets. This is barbarism, the most barbaric barbarism, and it will not be long before people say: “The French in the nineteenth century had very strange trading systems; they ought at least to have refrained from considering themselves to be in the century of enlightenment.”
Balance of power in Europe. We need an army to keep a watch on the balance of power in Europe. The English say the same, and balance becomes what the wind of revolution makes it. The subject is too wide-ranging for me to tackle it here. I will say just a little about it. “Let us mistrust metaphor,” said Paul-Louis,28 and he was very right. Here it is, as presented to us on three occasions in the form of balances. First of all, we have the balance of the European powers, then the balance of powers, and finally the balance of trade. Volumes would be needed to list the evils that have resulted from these alleged balances, and I am just writing an article.
Internal security. The worst enemy of logic, after metaphor, is the vicious circle. Well, here we are encountering one vicious in the highest degree. “Let us crush the taxpayers in order to have a great army, and then let us have a great army to contain the taxpayers.” Is this not the position we are in? What internal security can we expect from a financial system whose effect is to generate general disaffection and whose result is bankruptcy and its political consequences? I myself believe that if we allowed the workers to breathe, if they had the feeling that all that could be done for them was being done, the disruptors of public peace would have very few grounds for disturbance at their disposal. Certainly the National Guard, the police, and the gendarmerie would be enough to contain them. And last, we have to take account of the terrors that are specific to the age in which we are living. They are very natural and very justified. Let us strike a bargain with them and allocate two hundred thousand men to them until times improve. You can see that my devotion to my point of view does not make me either absolutist or stubborn.
Let us now sum up the situation.
We have formulated our program thus: “reduce taxes—reduce expenditure in a greater proportion.”
This is a program that is bound to lead to balance, not via the path of distress, but via that of general prosperity.
In the initial part of this article, we have proposed to abolish various taxes, thus involving a loss of one hundred million in revenue, compared with the budget presented by the cabinet. Our program will therefore be fulfilled if the preceding considerations result in a reduction of expenditure in excess of a hundred million.
However, apart from the cuts that would be manageable in various services if only we had a little faith in freedom, cuts that I am not requesting out of respect for a misguided public opinion, we have the following items:
1.The costs of collection. As soon as indirect taxes are reduced, the incitement to fraud will be blunted. Fewer hindrances will be needed, fewer annoying formalities, less inquisitorial surveillance, in a word, fewer employees. What can be done in this respect just in the Customs Service alone is huge—let us say, ten million.
2.The administrative costs of criminal justice. In the entire physical universe, there are no two facts that are more closely connected than destitution and crime. If the effect of the implementation of our plan has the necessary result of increasing the well-being and work of the people, it is inevitable that the costs of pursuing, repressing, and punishing miscreants will be reduced.—For the record.
3.Assistance. The same must be said for assistance, which should decrease because of the increase in well-being.—For the record.
4.Foreign affairs. The policy of nonintervention, the one our fathers acclaimed in 1789, the one that Lamartine would have inaugurated were it not for the pressure of circumstances beyond his control, the one that Cavaignac would have been proud to carry out, this policy leads to the abolition of all the embassies. This is little from the financial point of view. It is a great deal from the political and moral point of view.—For the record.
5.The army. We have allowed two hundred thousand men for the contingencies of the moment. That makes two hundred million. Let us add fifty million for unforeseen events, withdrawals, payments for being on call, etc. Compared with the official budget, the savings are one hundred million.
6.The navy. One hundred thirty million are being requested. Let us allow eighty million and return fifty million to the taxpayers. Trade will be all the more prosperous.
7.Public works. I am not a great partisan, I admit, of savings whose result is the slumbering or death of committed capital. However, we must bow to necessity. We are being asked for 194 million. Let us remove thirty million.
Without much effort, we will thus obtain, in round figures, two hundred million of savings in expenditure, against one hundred million in revenue. We are thus on the path to balance, and my task is fulfilled.
That of the cabinet and the National Assembly, however, is just beginning. And here, in closing, I will spell out my entire thinking.
I believe that the proposed plan, or any other based on the same principles, can on its own save the Republic, the country, and society. All the parts of this plan are linked together. If you take only the first, to reduce taxes, you will be advancing toward revolution through bankruptcy. If you take just the second, to reduce expenditure, you will be advancing toward revolution through destitution. By adopting the plan in its entirety, you will simultaneously avoid bankruptcy, destitution, and revolutions, and on top of this, you will do the people good. It therefore forms a complete system, which has to stand or fall in its entirety.
However, I fear that a unitary and methodical plan cannot spring from nine hundred brains. Nine hundred projects may well emerge, which will clash with each other, but not one project that will triumph.
In spite of the goodwill of the National Assembly, the opportunity will be missed and the country lost if the cabinet does not take the initiative vigorously.
However, the cabinet is rejecting this initiative. They presented their budget, which does nothing for the taxpayer and leads to a frightful deficit. They then said: “We do not have to issue an overall view, and we will discuss the details when the time comes.” In other words, “We are handing over the destiny of France to chance or rather to probabilities that are as terrifying as they are certain.”
And why is this when the cabinet is made up of competent men, patriots and financiers? It is doubtful whether any other government could have accomplished the work of common salvation better.
They are not even trying. Why? Because they have entered office with a preconceived idea. A preconceived idea! I should have placed you, as the scourge of all reasoning and conduct, far ahead of the metaphor and the vicious circle!
The government has said to itself, “We cannot do anything with this Assembly, since we will not have a majority!”
I will not examine all the disastrous consequences of this preconceived idea here.
When it is believed that an Assembly is an obstacle, the wish to dissolve it is very close.
When one wishes to dissolve an Assembly, one is very close to taking steps to achieve this purpose.
In this way, great efforts have been made to do harm just at the time when it was so urgent to devote them to doing good.
Time and strength have been worn out in a deplorable conflict. And, I say this with my hand on my heart, in this conflict the cabinet was in the wrong.
For after all, to base their action or rather their inertia on the premise “We will not have a majority,” they needed at least to put forward something useful and then wait for a refusal to cooperate.
The president of the Republic traced a wiser path when he said on the day of his installation, “I have no reason to believe that I will not agree with the National Assembly.”
On what, therefore, did the cabinet base themselves when they set the point of departure of their policy in an opposing direction in advance? On the fact that the National Assembly had shown sympathy for the candidature of General Cavaignac.
However, the cabinet members have thus not understood that there is one thing that the Assembly places a hundred and a thousand times above General Cavaignac! That is the will of the people, expressed through universal suffrage, by virtue of a constitution formulated by the will of the people itself.
For my part, I say that, to express its respect for the will of the people and the constitution, our twin anchors of salvation, the Assembly might have been easier with Bonaparte than with Cavaignac himself.
Yes, if the government, instead of starting by promoting the conflict, had come to the Assembly to say, “The election of 20 December29 puts an end to the period of agitation of our revolution, and now let us concentrate in concert on the good of the people and administrative and financial reform,” I say with certainty that the Assembly would have followed them enthusiastically since it has a passion for good and cannot have any other.
Now the opportunity has been lost, and if we do not secure its rebirth, woe to our finances and woe to the country for centuries to come.
Well then! I believe that if each person forgets his complaints and represses his bitterness, France can still be saved.
Ministers of the Republic, do not say: “We will act later; we will look for reforms with another Assembly.” Do not make such statements, for France is on the brink of an abyss. She does not have the time to wait for you.
A government frozen, made rigid by inertia! That has never been seen before. And what a time you have chosen to present us with this sight! It is true that the country—ruined, wounded, and bruised—does not blame you for its suffering. All its prejudices are turned against the National Assembly; this is certainly a circumstance that is as convenient as it is rare for a cabinet. But do you not know that any false prejudice is fleeting? If, through a vigorous initiative, you had formally warned the Assembly and it refused to follow you, you would have been justified and the country would have been right. But you did not do this. Sooner or later, its eyes will inevitably be opened, and if you continue to put nothing forward, try nothing, and direct nothing and later the state of our finances becomes irreparable, the prejudice of the day may well absolve you, but history will never absolve you.
It has now been decided that the National Assembly will produce the budget. But will an assembly of nine hundred members, left to its own devices, be able to accomplish such a complex work, one that requires such a high degree of agreement between all its parts and components? From the parliamentary tumult there may well emerge a few fumblings, impulses, and aspirations; a financial plan will not emerge.
This at least is my conviction. If it enters the mind of the cabinet to leave the reins loose at the mercy of chance, reins that have assuredly not been entrusted to it for this purpose, if its members are resolved to remain impassive and indifferent spectators of the vain efforts of the Assembly, the Assembly should refrain from undertaking a work that it cannot accomplish alone and should decline any responsibility for a situation that it has not caused.
But this will not happen. No, France will not have to go through this disaster too. The cabinet will take the initiative incumbent on it energetically, with no mental reservations and in a spirit of selflessness. It will present a plan for financial reform based on this twin principle: reduce taxes—reduce expenditures in an even greater proportion. And the Assembly will vote for it with enthusiasm, without dragging matters out and becoming bogged down in the details.
To relieve the people, make the Republic loved, base security on popular approval, make good the deficit, raise confidence, breathe new life into work, restore credit, diminish deprivation, reassure Europe, bring about justice, freedom, and peace, and offer the world the sight of a great people who have never been better governed than when they are governed by themselves: is there nothing in this to awaken the noble ambition of a government and arouse the soul of the man who carries the heritage of the name Napoléon! A heritage that, in spite of the glory surrounding it, has two jewels that shine by their absence, peace and freedom!
Consequences of the Reduction of the Salt Tax (Le Journal des débats, 1 January 1849)
The immediate reduction of the salt tax has disoriented the cabinet in one respect, with good reason. It is being said that we are seeking new taxes to fill the gap. Is this really what the Assembly wanted? Reductions would be only a game and one of these unfortunate games in which everyone loses. What is the meaning of their vote, then? It is this: expenditure is constantly rising; there is just one means of forcing the state to reduce expenditure, and that is to make it absolutely impossible for the state to do otherwise.
The means the Assembly has adopted is heroic, we must agree. What is still more serious is that the reform of the salt tax was preceded by the reform of the postal services and will probably be followed by the reform of wines and spirits.
The government is disoriented. Well then! For my part, I say that the Assembly could not put it in a better position. This is a wonderful, and one might say providential, opportunity to go down a new path, to put an end to false philanthropy and warlike passions and, converting its failure into triumph, to deliver security, confidence, credit, and prosperity from a vote that appeared to compromise it and at last to found a republican politics on these two great principles, peace and freedom.
Following the resolution from the Assembly, I was expecting, I must admit, the president of the Council to ascend the rostrum and make a speech along these lines:
“Your vote yesterday has shown us a new path; more than this, it obliges us to go down it.
“You know how much the February revolution aroused illusory hopes and dangerous theorizing. These hopes and systems, clad in the false colors of philanthropy and entering this chamber in the form of draft laws, were directed at nothing less than destroying freedom and swallowing up the public wealth. We did not know which way to turn. Rejecting all these projects was to upset public opinion in a temporary state of exaltation; accepting them was to compromise the future, violate all rights, and distort the attributions of the state. What were we to do? Procrastinate, compromise, accommodate error, give partial satisfaction to the utopians, enlighten the people through the hard lesson of experience, and create administrative departments with the ulterior purpose of abolishing them later, which is not easy to do. Now, thanks to the Assembly, we are at ease. Do not come any longer to ask us to monopolize education or credit, finance agriculture, favor certain industries, and turn charitable giving into a system. We have finished with the harmful tail of socialism. Your vote has delivered the death blow to its dreaming. We no longer even have to discuss it, for where would discussion lead, since you have removed from us the means to carry out these dangerous experiments? If someone knows the secret of carrying out official philanthropy with no money, let him come forward; here are our portfolios, we will hand them over to him with joy. As long as they remain in our hands, in the new situation that has been established for us, it remains for us only to proclaim freedom as the basis of our domestic policy, freedom for the arts, sciences, agriculture, industry, work, trade, the press, and teaching, for freedom is the only system compatible with a reduced budget. The state needs money to regulate and oppress. No money, no regulation. Our role, with very little expenditure, will henceforward be limited to repressing abuses, that is to say, preventing one citizen’s freedom from being exercised at the expense of another’s.
“Our foreign policy is no less clearly marked and obligatory. We were making compromises and we were still fumbling; now we are irrevocably directed, not only by choice but also by necessity. Happy, a thousand times happy that this necessity imposes on us exactly the policy that we would have adopted by choice. We are resolved to reduce our military posture. You should clearly note that there is nothing to discuss in this regard; we have to act, for we have the choice of disarmament or bankruptcy. It is said that one should choose the lesser of two evils. Here, according to us, the only choice is between an immense good and a terrible evil and, in spite of this, even yesterday the choice was not an easy one for us. False philanthropy and warlike passions stood in our way, and we had to take them into consideration. Today they have forcibly been reduced to silence, for whatever people say about passion failing to reason, it nevertheless cannot lack reason to the point of demanding that we wage war with no money. We have therefore come to this rostrum to proclaim disarmament as a fact, and consequently that nonintervention is the basis of our foreign policy. Let nobody speak to us any longer of preponderance and dominance; let nobody point to Hungary, Italy, and Poland as fields of glory and carnage. We know what can be said for or against armed propaganda when we have the choice. But you will not disagree that when you no longer have it, controversy is superfluous. The army will be reduced to what is necessary to guarantee the independence of the country, and at the same time all nations may henceforward count on their independence as far as we are concerned. Let them carry out their reforms as they will; let them undertake only that which they can accomplish. We will let them know loudly and clearly that none of the parties that divide them can count on the support of our bayonets. What am I saying? They do not even need our protestations, since these bayonets will be returned to their sheaths or rather, for added security, they will be converted into ploughshares.
“I can hear interruptions coming down from these benches; you are saying: ‘This is the policy of everyone at home, everyone for himself.’ Even yesterday we might have discussed the value of this policy, since we were free to adopt another. Yesterday, I would have quoted reasons. I would have said, ‘Yes, everyone at home, everyone for himself, as long as it is a matter of brute force.’ This is not to say that the links between peoples will be broken. Let us have philosophical, scientific, artistic, literary, and trade relations with everyone. Through this, humanity will become enlightened and make progress. However, I do not want relations at the point of a sword and the barrel of a gun. It is a strange abuse of words to say that families that get on well with one another conduct their lives according to the principle “Every man’s home is his castle” simply because they don’t visit each other armed to the teeth.30 Besides, what would we say if, to end our differences, Lord Palmerston sent us English regiments? Would not our cheeks flush with indignation? How is it therefore that we refuse to believe that other peoples also cherish their dignity and independence? This is what I would have said yesterday, for when there is a choice between two policies, the one that is preferred has to be justified by the giving of reasons. Today, I am merely invoking necessity, since we no longer have any option. The majority, who have refused us the revenue in order to oblige us to reduce expenditure, would not be so inconsistent as to impose a ruinous policy on us. If anyone, knowing that the taxes on the post, salt, and wines and spirits are going to be reduced considerably, knowing that we are facing a deficit of five hundred million, still has the temerity to proclaim the clear need for armed propaganda, or who, threatening Europe, obliges us, even in peacetime, to undertake ruinous efforts, let him stand up and take this portfolio. As for us, we will not assume the shame of such puerility. Therefore, from today onward, the policy of nonintervention is proclaimed. From today onward, measures will be taken to dismiss part of the army. From today onward, orders will go out to abolish useless embassies.
“Peace and freedom! This is the policy that we would have adopted by conviction. We would thank the Assembly for having made it an absolute and clear necessity for us. It will ensure the salvation, glory, and prosperity of the republic and will ensure that history will retain our names.”
Here, it seems to me, is what the current cabinet ought to have said. Its words would have received the unanimous approval of the Assembly, France, and Europe.
[1. ](Paillottet’s note) A pamphlet published in February 1849. One month earlier in Le Journal des débats, the author had written an article that we are copying at the end of Peace and Freedom because it is on the same subject.
[2. ]On the very day of his election as president of the Republic, Louis-Napoléon Bonaparte appointed a cabinet. It was headed by Odilon Barrot and included a number of outstanding personalities, among them two well-known liberals, Hyppolite Passy (finance) and Léon Faucher (public works and the interior).
[3. ]There is a misprint in Paillottet’s edition, where “plan” is printed as “pain” (bread). We have checked it against the original pamphlet, “Paix et liberté ou le budget républicain” (Paris: Guillaumin, 1849), p. 6.
[4. ](Paillottet’s note) On the political views of the author, see in vol. 1 his articles and political manifestos published on the occasion of the elections (OC, vol. 1, p. 506, “Profession de foi électorale de 1848,” and p. 507, “Profession de foi électorale de 1849.”)
[5. ]Revolution of 1848.
[6. ]After the revolution of 1848, there were a number of claimants to ruling France: on the royalist side was the grandson of Charles X, the duc de Bordeaux, who later become comte de Chambord; and the grandson of Louis-Philippe, comte de Paris. Then, of course, there was also Louis-Napoléon Bonaparte, the nephew of Napoléon Bonaparte, who would eventually become emperor in 1851.
[7. ]Aeolus is a Greek mythical figure who is mentioned in Homer’s Odyssey as the guardian of the winds. Aeolus gives the hero Odysseus the favorable winds he will need in order to sail safely back to Ithaca. He also gives Odysseus a tightly sealed leather bag containing “the adverse winds,” which would hinder his journey.
[8. ](Paillottet’s note) See the pamphlet, The State, vol. 4, page 327. (OC, vol. 4, p. 327, “L’État.”) [See also “The State,” p. 93 in this volume.]
[9. ]See the entry for “La Montagne” in the Glossary of Subjects and Terms.
[10. ]Here and on the following pages, Bastiat describes, then justifies through the English experience, the phenomenon known today as the Laffer Curve. The idea behind the so-called Laffer Curve (named after the economist Arthur Laffer) is that a cut in tax rates will lead to greater economic output, which over time increases the overall size of the tax base.
[11. ](Bastiat’s note) We have got [reached] the bounds of profitable taxation. (Peel) [This note is in English in the original.]
[12. ](Bastiat’s note) I say mine to keep things short, but I must not pose as its inventor. The editor in chief of La Presse has published several times the basic idea that I am echoing here. What is more, he has produced its application successfully. Suum cuique [“to each his own”].
[13. ]“After this, therefore because of this.”
[14. ]Railway mania refers to an investment bubble in the mid 1840s for the building of railways in England. The Bank of England lowered interest rates, thus stimulating a boom in railway investment by private companies. Hundreds of acts of Parliament were passed authorizing such companies to build new railway lines. When the Bank of England raised interest rates in late 1845, the speculative nature and economic unsoundness of these investments were exposed, which led to a crash in the market in 1846.
[15. ]Many cities, bridges, and rivers in the medieval and early-modern period imposed tolls, or péage, on travelers and the goods they were transporting for sale. By the eighteenth century the tolls had became so onerous that they impeded the free flow of goods within a state like France. The physiocrats advocated their abolition as a means of creating free trade, and this was partially achieved during the French Revolution as part of the policy of rationalizing and centralizing the nation state. Bastiat is referring here to those local and city tolls that still remained.
[16. ]Bastiat is probably making a reference to the novel The Life and Opinions of Tristram Shandy, by Laurence Sterne, published in 1759.
[18. ](Paillottet’s note) See the chapter titled “Expensive, Cheap” in vol. 4, p. 163, Economic Sophisms, second series. (OC, vol. 4, p. 163, “Cherté, bon marché.”)
[19. ](Paillottet’s note) In the pamphlet titled Plunder and Law [see “Plunder and Law,” p. 266 in this volume], we have seen that the author was not slow to acknowledge how far he was mistaken in imagining that the protectionists had become reasonable. However, it is true that, at the start of 1849, they showed themselves to be much more amenable than they were one year later.
[20. ](Bastiat’s note) The treaty passed between our fathers and the clergy is an obstacle to this very welcome reform. Justice above all.
[21. ](Paillottet’s note) This blindness of public opinion saddened the author for a long time, and as soon as an attempt to consolidate the blindfold over the eyes of our fellow citizens came to his attention, he felt the need to combat it. However, in his retreat in Mugron, he lacked the means to publish his writing. The following letter, therefore, written by him many years ago has remained unpublished to the present day.
To M. SaulnierEditor of La Revue britannique
You have instilled transports of joy in all those who find the word economics absurd, ridiculous, unacceptable, bourgeois, and shift y. Le Journal des débats extols you, the president of the council quotes you, and the favors of government are waiting for you. However, what have you done, sir, to merit so much applause? You have established through figures (and everyone knows that figures never lie) that it costs the citizens of the United States more than the subjects of France to be governed. This gives rise to the rigorous consequence (rigorous for the people in effect) that it is absurd to wish to place limits on the lavishness of power in France.
But, sir, and I ask your pardon and that of the economic research centers, your figures, assuming they are correct, do not seem to me to be unfavorable to the American government.
In the first place, to establish that one government spends more than another does not give any information on their relative goodness. If one of them, for example, is administering a nascent nation that has all its roads to build, all its canals to dig out, all its towns to pave, and all its public establishments to create, it is natural that it spends more than one that has scarcely more to do than maintain its existing establishments. Well, you know as well as I do, sir, that spending that way is to save and capitalize. If it were done by a farmer, would you be confusing the investments that an initial establishment requires with his annual expenditure?
However, this major difference in situation leads, according to your figures, to an additional expenditure of only three francs for each citizen of the union. Is this excess genuine? No, according to your own data. This may surprise you, since you have set at thirty-six francs the contribution by each American and thirty-three francs that of each Frenchman. Well, 36 = 33 + 3 is good arithmetic.——Yes, but in political economy, thirty-three is oft en worth more than thirty-six. See for yourself. Money, in comparison with labor and goods, is not as valuable in the United States as it is in France. You yourself set a day’s pay at four francs fifty centimes in the United States and at one franc fifty centimes in France. The result, I believe, is that an American pays thirty-six francs with eight days’ work, whereas a Frenchman needs twenty-two days’ work to pay thirty-three francs. It is true that you say that people buy forced labor from each other in the United States for three francs and that consequently the price of a day’s work ought to be set at three francs there.——There are two answers to this. Forced labor is bought in France for one franc (for we also have forced labor, about which you do not speak) and then, if a day’s work in the United States is worth only three francs the Americans no longer pay thirty-six francs since, to reach this figure, you have raised to four francs fifty centimes all the days that these citizens devote to fulfilling their military obligations, their forced labor, their jury service, etc.
This is not the only subtle difference you have used to raise the annual contribution of each American to thirty-six francs.
You impute to the government of the United States expenses that it is not concerned with in the slightest. To justify this strange method of proceeding, you say that these expenses are no less borne by the citizens. But is it not a question of determining which are the voluntary expenses of the citizens and which are the expenditures of the government?
A government is instituted to fulfill certain functions. When it exceeds its attributions, it has to appeal to the citizens’ purses and thus reduce the portion of revenue that was freely at their disposition. It becomes simultaneously a plunderer and oppressor.
A nation that is wise enough to oblige its government to limit itself to guaranteeing security to each person and that spends only what is absolutely essential to this consumes the remainder of its revenue in accordance with its particular talents, its needs, and its inclinations.
But in a nation in which the government interferes in everything, nothing is spent by itself and for its own benefit, but it is spent by the government and for the government, and if the French public thinks as you do, sir, if it cares little that its wealth goes through the hands of functionaries, I do not lose the hope that one day we will all be lodged, fed, and clothed at the state’s expense. These are things that cost us something and, according to you, it is of little importance whether we procure them through taxation or through direct purchase. The importance that our ministers give this opinion convinces me that we will soon have clothes produced by them, just as we have priests, lawyers, teachers, doctors, horses, and tobacco of their fashioning.
Yours, etc.Frédéric Bastiat
[22. ](Paillottet’s note) See, in vol. 4, the pamphlet titled The Law, in particular the passage on pages 381 to 386. (OC, vol. 4, “La Loi,” pp. 381–86.) [See also “The Law,” p. 107 in this volume.]
[23. ](Paillottet’s note) Among the author’s manuscripts we find the following thought, which refers to the particular subject he is dealing with here: “Why are our finances in a mess?”“Because, for the representatives, there is nothing easier than to vote for an item of expenditure and nothing harder than to vote for an item of revenue.”“If you prefer it, because salaries are very pleasant and taxes very hard.”“I know another reason.”“Everyone wants to live at the state’s expense, and we forget that the state lives at the expense of everyone.”
[24. ](Paillottet’s note) An allusion to the inept accusation made against the free traders that they had sold themselves to England.
[25. ]German city to which some aristocrats had emigrated after 1790. They had tried to organize a counterrevolutionary army under the prince de Condé. See also the entry for “Bourbon, Louis Joseph de,” in the Glossary of Persons.
[26. ]Some American vessels were seized irregularly between 1806 and 1812. In July 1831, the French government agreed to pay twenty-five million francs to the United States. In April 1834, the parliament had not yet ratified the agreement! Following a complaint by President Jackson and a mediation by Great Britain, a new agreement was signed in 1834.
[27. ]Mayotte is part of French overseas territory and belongs to the Comoro Islands, off the northwest coast of Madagascar. Nosibé is a town on the northern side of Madagascar.
[28. ]Paul-Louis Cornier.
[29. ]A slight mistake: the election took place on 10 December.
[30. ]It is not clear what Bastiat is saying here. He uses part of a French proverb, “chacun chez soi et les vaches seront bien gardées” (each in their own home and the cows will be well guarded). One might compare it to the English idea of “good fences make good neighbors,” but we have used the proverb “every man’s home is his castle” to be closer to Bastiat’s idea about the role of force and coercion in disrupting social bonds.