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10: Competition - Frédéric Bastiat, Economic Harmonies (Boyers trans.) 
Economic Harmonies, trans by W. Hayden Boyers, ed. George B. de Huszar, introduction by Dean Russell (Irvington-on-Hudson: Foundation for Economic Education, 1996).
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There is no word in all the vocabulary of political economy that has so aroused the angry denunciations of the modern reformers as the word “competition,” to which, to add to the insult, they unfailingly apply the epithet “anarchistic.”
What does “anarchistic competition" mean? I do not know. What can replace it? I do not know that either.
Of course, I hear the cries of “Organization! Association!” But what does that mean? Once and for all we must come to an understanding. I really must know what kind of authority these authors propose to exert over me and over all men living on this earth of ours; for, in truth, the only authority I can grant them is the authority of reason, provided they can enlist reason on their side. Do they really propose to deprive me of the right to use my own judgment in a matter where my very existence is at stake? Do they hope to take from me my power to compare the services that I render with those that I receive? Do they mean that I should act under restraints that they will impose rather than according to the dictates of my own intelligence? If they leave me my liberty, competition also remains. If they wrest it from me, I become only their slave. The association will be free and voluntary, they say. Very well! But in that case every group with its associated members will be pitted against every other group, just as individuals are pitted against one another today, and we shall have competition. The association will be all-embracing, it is replied. This ceases to be a joking matter. Do you mean to say that anarchistic competition is wrecking our society right now, and to cure this malady we shall have to wait until all mankind, the French, the English, the Chinese, the Japanese, the Kafirs, the Hottentots, the Lapps, the Cossacks, the Patagonians, persuaded by your arguments, agree to unite for all time to come in one of the forms of association that you have contrived? But beware! This is simply to acknowledge that competition is indestructible; and do you have the presumption to claim that an indestructible, and therefore providential, phenomenon of society can be mischievous?
After all, what is competition? Is it something that exists and has a life of its own, like cholera? No. Competition is merely the absence of oppression. In things that concern me, I want to make my own choice, and I do not want another to make it for me without regard for my wishes; that is all. And if someone proposes to substitute his judgment for mine in matters that concern me, I shall demand to substitute my judgment for his in matters that concern him. What guarantee is there that this will make things go any better? It is evident that competition is freedom. To destroy freedom of action is to destroy the possibility, and consequently the power, of choosing, of judging, of comparing; it amounts to destroying reason, to destroying thought, to destroying man himself. Whatever their starting point, this is the ultimate conclusion our modern reformers always reach; for the sake of improving society they begin by destroying the individual, on the pretext that all evils come from him, as if all good things did not likewise come from him.
We have seen that services are exchanged for services. In the last analysis, each one of us comes into the world with the responsibility of providing his own satisfactions through his own efforts. Hence, if a man spares us pains, we are obligated to save him pains in return. His effort brings us a satisfaction; we must do as much for him.
But who is to make the comparison? For it is absolutely necessary that these efforts, these pains, these services that are to be exchanged, be compared so that an equivalence, a just rate, may be arrived at, unless injustice, inequality, chance, is to be our norm—which is another way of throwing the testimony of human reason out of court. There must be, therefore, one or more judges. Who will it be? Is it not natural that, in every particular case, wants should be judged by those who experience them, satisfactions by those who seek them, efforts by those who exchange them? Is it proposed in all seriousness to substitute for this eternal vigilance by the interested parties a social authority (even if it should be the reformer himself) charged with determining the intricate conditions affecting countless acts of exchange in all parts of the world? Is it not obvious that this would mean the establishment of the most fallible, the most far-reaching, the most arbitrary, the most inquisitorial, the most unbearable, the most short-sighted, and, fortunately, let us add, the most impossible of all despotisms ever conceived in the brain of an Oriental potentate?
We need only know that competition is merely the absence of any arbitrary authority set up as a judge over exchange, to realize that it cannot be eliminated. Illegitimate coercion can indeed restrain, counteract, impede the freedom of exchange, as it can the freedom of walking; but it cannot eliminate either of them without eliminating man himself. This being so, the only question that remains is whether competition tends toward the happiness or the misery of mankind—a question that amounts to this: Is mankind naturally inclined toward progress or fatally marked for decadence?
I do not hesitate to say that competition, which, indeed, we could call freedom—despite the aversion it inspires and the tirades directed against it—is essentially the law of democracy. It is the most progressive, the most egalitarian, the most universally leveling of all the laws to which Providence has entrusted the progress of human society. It is this law of competition that brings one by one within common reach the enjoyment of all those advantages that Nature seemed to have bestowed gratis on certain countries only. It is this law, also, that brings within common reach all the conquests of Nature that men of genius in every century pass on as a heritage to succeeding generations, leaving still to be performed only supplementary labors, which they exchange without succeeding in being remunerated, as they would like to be, for the co-operation of natural resources. And if, as always happens at the beginning, the value of this labor is not proportional to its intensity, it is once again competition that, by its imperceptible but constant action, restores a fairer and more accurate balance than could be arrived at by the fallible wisdom of any human officialdom. The accusation that competition tends toward inequality is far from true. On the contrary, all artificial inequality is due to the absence of competition; and if the distance separating a Grand Lama from a pariah is greater than that between the President and an artisan in the United States, the reason is that competition (or liberty) is suppressed in Asia, and not in America. Therefore, while the socialists find in competition the source of all evil, it is actually the attacks upon competition that are the disruptive elements working against all that is good. Although this great law has been misunderstood by the socialists and their partisans, although it is often harsh in its operation, there is no law that is richer in social harmonies, more beneficial in its general results; no law attests more strikingly to the immeasurable superiority of God's plans over man's futile contrivances.
I must at this point remind the reader of that curious but indisputable effect of the social order to which I have already called his attention,1 for too frequently the force of habit causes us to overlook it. It may be characterized thus: The total number of satisfactions that each member of society enjoys is far greater than the number that he could secure by his own efforts. In other words, there is an obvious disproportion between our consumption and our labor. This phenomenon, which we can all easily observe, if we merely look at our own situation for an instant, should, it seems to me, inspire in us some sense of gratitude toward the society to which we owe it.
We come into the world destitute in every way, tormented by countless wants, and provided with only our faculties to satisfy them. It would appear, a priori, that the most we could hope for would be to obtain satisfactions equal to our labors. If we possess more, infinitely more, to what do we owe the excess? Precisely to that natural order of society against which we are constantly railing, when we are not actually trying to destroy it.
The phenomenon, in itself, is truly extraordinary. It is quite understandable that certain men should consume more than they produce, if, in one way or another, they usurp the rights of others and receive services without rendering any in return. But how can this be true of all men simultaneously? How can it be that, after exchanging their services without coercion or plunder, on a footing of value for value, every man can truly say to himself: I use up in one day more than I could produce in a hundred years?
The reader realizes that the additional element that solves the problem is the increasingly effective participation of the forces of Nature in the work of production; it is the fact of more and more gratuitous utility coming within the common reach of all; it is the work of heat, of cold, of light, of gravitation, of natural affinity, of elasticity, progressively supplementing the labor of man and reducing the value of his services by making them easier to perform.
Certainly I must have explained the theory of value very badly indeed if the reader thinks that value declines immediately and automatically through the mere act of harnessing the forces of Nature and releasing the labor of man. No, such is not the case; for then we could say, as the English economists do: Value is in direct proportion to labor. The man who uses the help of a gratuitous force of Nature performs his services more easily; but he does not on that account voluntarily surrender any part whatsoever of what he has been accustomed to receive. To induce him to do so, some pressure from without—heavy, but not unjust—is necessary. This pressure is competition. As long as it does not intervene, as long as the man using a force of Nature remains master of his secret, that force of Nature is gratuitous, undoubtedly, but it is not yet common to all; the conquest of Nature has been achieved, but to the profit of only one man or one class. It is not yet of benefit to all mankind. Nothing has been changed in the world, except that one type of services, although partially relieved of its burden of pains, still brings the full price. We have, on the one hand, a man who asks the same amount of labor as before from his fellow men, while he offers them a reduced amount of his own labor; and, on the other, all mankind, still obliged to make the same sacrifices in time and toil to obtain a commodity that is now produced in part by Nature.
If things were to remain in this state, every new invention would bring into the world a further source of ever spreading inequality. Not only could we not say that value is proportional to labor, but we could not even say that value tends to become proportional to labor. All that we have said in earlier chapters concerning gratuitous utility and the trend toward the enlargement of the communal domain would be illusory. It would not be true that services are exchanged for services in such a way that God's gifts are transmitted, free of charge, from person to person until they reach the ultimate consumer. Everyone who had once managed to exploit any part of the forces of Nature would for all time to come charge for it along with the cost of his labor; in a word, mankind would be organized on the principle of universal monopoly, instead of the principle of an expanding domain of gratuitous and common utilities.
But such is not the case. God has lavished on His creatures the gifts of heat, light, gravitation, air, water, the soil, the marvels of plant life, electricity, and many other blessings too numerous to mention. And even as He has implanted in each man's heart a feeling of self-interest, which, like a magnet draws all things to it; so has He, in the social order, provided another mainspring whose function it is to preserve His gifts as they were originally intended to be: gratis and common to all. This mainspring is competition.
Thus, self-interest is that indomitable individualistic force within us that urges us on to progress and discovery, but at the same time disposes us to monopolize our discoveries. Competition is that no less indomitable humanitarian force that wrests progress, as fast as it is made, from the hands of the individual and places it at the disposal of all mankind. These two forces, which may well be deplored when considered individually, work together to create our social harmony.
And, we may remark in passing, it is not surprising that individualism, as it finds expression in a man's self-interest when he is a producer, has always revolted against the idea of competition, has decried it, and sought to destroy it, calling to its aid force, guile, privilege, sophistry, monopoly, restriction, government controls, etc. The immorality of its means discloses clearly enough the immorality of its end. But the amazing, and unfortunate, thing is that political economy—that is, false political economy—propagated with such ardor by the socialist schools, has, in the name of love of humanity, equality, and fraternity, espoused the cause of individualism in its narrowest form and has abandoned the cause of humanity.
Let us now see how competition works.
Man, under the influence of self-interest, always and inevitably seeks out the conditions that will give his services their greatest value. He is quick to realize that there are three ways in which he may use the gifts of God to his own special advantage:2
In every one of these cases he gives little of his own labor in exchange for a great deal of others' labor. His services have great relative value, and we tend to assume that the excess value resides inherently in the natural resource. If this were so, this value could not be diminished. What proves that value is, instead, created by services is, as we shall see, the fact that competition simultaneously diminishes both value and services.
1. Natural resources, the gifts of God, are not uniformly distributed over the earth's surface. What an infinite range of plant life extends from the land of the pine to the land of the palm tree! Here the soil is more fertile, there the warmth of the sun more vivifying; stone is found in one place, lime in another; iron, copper, oil in yet others. Water power is not to be found everywhere; the action of the winds cannot everywhere be turned to our profit. The mere fact of the distance that separates us from things necessary to us can make an incalculable difference in the obstacles our efforts encounter; even man's faculties vary, to a certain extent, according to climate and race.
It is easy to see that, were it not for the law of competition, this inequality in the distribution of God's gifts would result in a corresponding difference in men's material prosperity.
Any person finding a natural advantage within reach would turn it to his own profit, but not to that of his fellow men. They would be allowed to share in what he possessed only as he distributed it and at an exorbitant price that he would set arbitrarily. He could place any value he pleased on his services. We have already seen that the two extremes between which value is set are the pains taken by the one performing the service and the pains spared the one receiving it. If it were not for competition, nothing would prevent the setting of the value at the upper limit. For example, the inhabitant of the tropics would say to the European: “Thanks to my sun, I can obtain a given amount of sugar, coffee, cocoa, or cotton for labor equal to ten, whereas you, who in your cold part of the world are obliged to resort to greenhouses, heaters, and storage barns, can produce them only for labor equal to a hundred. You ask me for my sugar, my coffee, my cotton, and you would not be at all disturbed if, in arriving at my price, I considered only the pains I took. But I, on the other hand, am particularly aware of the pains I save you, for I know they are what determine how much you will be willing to pay, and I set my demands accordingly. Since I can do for pains equal to ten what you in your country do for pains equal to a hundred, it is certain that you would refuse if I were to demand of you, in return for my sugar, a product that would cost you pains equal to a hundred and one; but I ask only for pains equal to ninety-nine. You may very well be upset about it for a while, but you will come around, for at that rate the exchange is still to your advantage. You find these terms unfair; but after all, it is to me, not you, that God has given a warm climate. I know that I am in a position where I can exploit this boon of Providence by refusing it to you unless you are willing to pay me a surcharge, for I have no competition. So, here are my sugar, my cocoa, my coffee, my cotton. Take them on my terms, produce them yourself, or go without them.”
It is true that the European could in his turn speak in like fashion to the inhabitant of the tropics: “Excavate your land, dig mines, look for iron and coal, and count yourself fortunate if you find them; for, if you don't, I am determined to raise my demands to the limit. God has given us both of these precious gifts. First, we take as much of them as we need; then, we forbid others to take any unless they pay us a special levy on our windfall.”
Even if transactions were carried on in this manner, it still would not be possible, from the strictly scientific point of view, to attribute to natural resources the value that resides essentially in services. But it would be understandable if this mistake were made, for the result would be the same. Services would still be exchanged for services, but would evidence no tendency to be measured by effort, by labor. The gifts of God would be personal privileges and not common blessings, and we could perhaps complain with some reason of having been treated by the Author of all things in so hopelessly unfair a manner. Would we, then, be brothers here below? Could we consider ourselves the children of a common Father? The absence of competition, that is, of liberty, would exclude any idea of fraternity. Nothing would be left of the republican motto of “Liberty, Equality, Fraternity.”
But let competition appear on the scene, and there will be no more of these one-sided transactions, of these seizures of the gifts of God, of this revolting exorbitance in the evaluation of services, of these inequalities in the exchange of efforts.
And let us note, first of all, that competition must necessarily intervene, called into being, as it is, by the very fact of these inequalities. Labor instinctively moves in the direction that promises it the best returns, and thus unfailingly brings to an end the abnormal advantage it enjoyed; so that inequality is merely a spur that, in spite of ourselves, drives us on toward equality. This is one of the finest examples of teleology in the social machine. Infinite goodness, which has distributed its blessings over the earth, has, it would seem, selected the greedy producer as its agent for effecting their equitable distribution among all mankind, and it certainly is a wonderful sight to see self-interest continually bringing about the very thing it always tries to prevent. Man, as a producer, is necessarily, irresistibly, attracted toward the largest possible rewards for his services, and by that very fact always brings them back into line. He pursues his own interest, and what does he promote, unwittingly, unwillingly, unintentionally? The general good.
Thus, to return to our example, the inhabitant of the tropics, by the very fact that he realizes exorbitant profits from exploiting the gifts of God, attracts competition. Human labor flocks there with an eagerness that, if I may so express myself, is proportional to the magnitude of the inequality, and is not content until the inequality has been eliminated. Through the effect of competition we see tropical labor equal to ten successively exchanged for European labor equal to eighty, then sixty, then fifty, then forty, then twenty, and finally ten. There is no reason, under the natural laws of society, why things should not reach this point, that is, why services exchanged should not be measured in terms of labor performed and pains taken, with the gifts of God being thrown in gratis by both parties. So, when things do reach this point, we must realize, with gratitude, how great a revolution has taken place. First, the pains taken by both parties are now equal, which should satisfy our desire for justice. Then, what has become of the gift of God? This deserves the reader's full attention. No one has been deprived of it. Let us not, in this matter, be taken in by the clamor raised by the tropical producer. In so far as he is himself a consumer of sugar, cotton, or coffee, the Brazilian still profits from the heat of the sun; for this beneficent body has not ceased to help him in the work of production. All that he has lost is his unfair power to levy a surcharge on the consumption of the inhabitants of Europe. The gift of Providence, because it was free of charge, had to, and did, become common to all; for what is free of charge and what is common to all are essentially one and the same.
God's gift has become—and I beg the reader not to forget that I am using a particular case to illustrate a universal phenomenon—common to all. This is not a flight of rhetoric, but the statement of a mathematical truth. Why has this wonderful fact not been understood? Because communal wealth is always achieved in the form of value that has been eliminated, and our minds have great difficulty in grasping what is expressed negatively. But, I ask, when, in order to get a certain amount of sugar, coffee, or cotton, I offer only a tenth of the pains I should have had to take in order to produce them myself, and for the reason that in Brazil the sun performs nine-tenths of the work, is it not true that I am exchanging labor for labor? And do I not, in a positive sense, receive, in addition to the Brazilian's labor, and into the bargain, the help that the tropical climate has contributed? Can I not state with complete accuracy that I, like all men, share in Nature's bounty in producing these things on the same terms as an Indian or a South American, that is, gratis?
England has an abundance of coal mines. This is, beyond doubt, of great local advantage, particularly if we assume, as I shall in order to simplify the illustration, that there is no coal on the Continent. As long as no exchange takes place, the advantage this gives to the English consists in the fact that they have more fuel than other nations and have it for less pains, for less expenditure of valuable time. As soon as exchange is introduced, taking no account of competition, their exclusive possession of the mines enables them to demand large sums in payment and thus to set a high price on their pains. Not being able to go to these pains ourselves, or to appeal elsewhere, we shall be obliged to submit. English labor engaged in this type of work will be very highly paid; in other words, coal will be expensive, and Nature's bounty can be considered to be lavished on one nation, and not on all mankind.
But this state of things cannot last; a great natural and social law is opposed to it, viz., competition. Precisely because this type of labor is highly paid in England, it will be in great demand there, for men are always in quest of high wages. The number of miners will increase, both through new recruits transferring from other industries and through the new generation of local miners' sons entering their fathers' trade. They will offer their services for less; they will be satisfied with a constantly decreasing rate, until it reaches the normal amount generally paid for similar work in the entire country. This means that the price of English coal will go down in France; that a given amount of French labor will obtain a greater and greater amount of English coal, or rather of English labor as it is represented in the coal; it means, in a word, and this is what I wish to point out, that the gift that Nature appeared to have conferred on England was in reality conferred on all mankind. Coal from Newcastle is bestowed gratis on all men. This is neither paradox nor exaggeration; the coal is bestowed without cost, like water from a rushing stream, provided only that men take the pains to get it or to compensate the pains of those who get it for them. When we buy coal, it is not the coal that we pay for, but the labor required to extract it and to transport it. All that we do is to offer what we consider as an equal amount of labor in wines or silks. So great has been Nature's bounty toward France that the amount of labor we offer in return is not more than we should have had to perform if the coal deposits had been located in France. Competition has put both nations on an equal footing as far as coal is concerned, except for the slight and unavoidable differences due to distance and transportation costs.
I have offered two illustrations, and, in order to make the phenomenon the more impressive by reason of its size, I have chosen international operations on a very large scale. For that reason I am afraid that I may have failed to make the reader realize that the same phenomenon constantly takes place all about us and in our most ordinary transactions. Let him, then, be good enough to pick out the most humble objects, a glass, a nail, a slice of bread, a piece of cloth, a book. I ask him to reflect a little on these unpretentious articles. Let him ask himself what an incalculable amount of gratuitous utility would, were it not for competition, have indeed remained free of charge for their producers, but would never have become free of charge for humanity; that is, would never have become common to all. He may well say to himself, as he buys his bread, that, thanks to competition, he pays nothing for what is done by the sun, the rain, the frost, the laws of vegetation, or even, despite all that is said, for what is done exclusively by the soil. He pays nothing for the law of gravitation set to work by the miller, nothing for the law of combustion set to work by the baker, nothing for the strength of the horses set to work by the deliveryman. Let him reflect that he pays only for services rendered, pains taken by human agents; that, were it not for competition, he would have had to pay an additional charge for all that is done by these natural resources; that this charge would have been limited only by the difficulty he would have experienced in producing the bread with his own hands; that, consequently, a whole lifetime of labor would not have been enough to meet the price he would have been asked to pay. Let him realize that there is not a single article he uses that might not give rise to the same reflection, and that this holds true for every person on the face of the earth; and then he will understand the flaw in the socialist theories, which, viewing only the surface of things, only society's outer shell, have so irresponsibly railed against competition, that is to say, against human freedom. Then he will understand that competition, which insures that the gifts of Nature so inequitably distributed over the globe will retain their double character of being free of charge and common to all, must be considered as the principle of a fair and natural equalization; that it must be admired as the force that holds in check selfish impulses, with which it combines so skillfully that competition serves as both a restraint on greed and a spur to the activity of self-interest. It deserves to be blessed as the most striking manifestation of God's impartial concern for all His creatures.
From the preceding discussion it is possible to arrive at the solution of one of the most controversial of questions: that of free trade among nations. If it is true, as seems to me incontestable, that the various nations of the world are led by competition to exchange with one another nothing but their labor, their efforts, which are gradually brought to a common level, and to include, into the bargain, the natural advantages each one enjoys; how blind and illogical, then, are those nations that by legislative action reject foreign goods on the grounds that they are cheap, that they have little value in proportion to their total utility, that is, for the very reason that they contain a high degree of gratuitous utility!
I have already said, and I repeat now, that a theory inspires me with confidence when I see that it agrees with universal practice. Now, it is certain that nations would carry on certain kinds of exchange with one another if they were not forcibly forbidden to do so. It takes the bayonet to prevent them; hence, it is wrong to prevent them.
2. Another factor that puts certain men in an exceptionally favorable position as regards remuneration is their exclusive knowledge of the techniques for utilizing the forces of Nature. What we call an invention is a conquest over Nature won by human genius. We must observe how these admirable and peaceful conquests, which originally are a source of wealth for those who make them, soon become, under the influence of competition, the gratuitous and common heritage of all mankind.
The forces of Nature do indeed belong to everyone. Gravitation, for example, is common property; it surrounds us, permeates us, rules over us. Nevertheless, if there were only one way to harness it for a given practical result, and if some man knew this way, he could set a very high price on his pains or refuse to take them at all unless a considerable amount were given in return. His demands in this respect would go as high as the point at which they would impose on the consumers a greater sacrifice than the old method would entail. He may have succeeded, for example, in eliminating nine-tenths of the labor required for producing article x. But at the present time x has a current market price that has been established by the pains it takes to produce it in the ordinary way. The inventor sells x at the market price; in other words, he is paid ten times more for his pains than are his competitors. This is the first phase of the invention.
Let us note, first of all, that this in no wise outrages justice. It is just that the man who reveals a new and useful process to the world should receive his reward: to each according to his ability.
Let us note further that up to this point mankind, the inventor excepted, has benefited only potentially, by anticipation so to speak, since, in order to obtain article x, everyone but him is still obliged to make the same sacrifices as before.
At this juncture, however, the invention enters its second phase, the phase of imitation. Excessive compensations by their very nature arouse covetousness. The new process spreads, the price of x steadily drops, and the remuneration also declines, more and more rapidly as the time interval between the invention and its imitations lengthens, that is, as it becomes easier and easier, and less and less risky, to copy the invention, and consequently less and less worth while. Certainly there is nothing in all this that could not be sanctioned by the most enlightened and impartial legislation.
At last the invention reaches its third and final phase, the phase of universal distribution, where it is common property, and free of charge to all. Its full cycle has been run once competition has brought the returns for the producers of article x into line with the prevailing and normal rate for similar types of labor. Then the nine-tenths of the pains that are eliminated by the hypothetical invention represent a conquest of Nature for the benefit of all mankind. The utility of article x remains the same; but nine-tenths of it have been supplied by gravitation, which was originally common to all in theory, and has now become common to all in fact in this special application. This is proved by the fact that all consumers on the face of the earth may now buy article x for one-tenth of what it once cost them. The rest of the cost has been eliminated by the new technique.
If the reader will stop to consider that every human invention has run this cycle, that x is here the algebraic sign for wheat, clothing, books, ships, for whose production an incalculable quantity of pains, or value, has been eliminated by the plow, the loom, the printing press, and the sail; that this observation applies to the humblest tool as well as to the most complex machinery, to the nail, the wedge, the lever, even as to the steam engine and the telegraph; he will understand, I hope, how this problem is solved within the human family, how a steadily greater and moreequitably distributed amount of utility or enjoyment becomes the return for a given amount of human labor.
3. I have already shown how competition brings into the gratuitous and common domain both the forces of Nature and the processes by which they are harnessed. It remains for me to show that it performs the same function for the implements by means of which these forces are put to work.
It is not enough that there should exist in Nature forces like heat, light, gravitation, electricity; it is not enough that human intelligence should be able to conceive of a way of utilizing them. There is still need for implements to make these concepts of the mind a reality and for provisions to support men while they are occupied with this task.
Possession of capital is a third factor that, as respects remuneration, is favorable to a man or a class of men. He who has at his disposal the tool the worker needs, the raw materials on which the labor is to be performed, and the means of subsistence during the operation, is in a position to demand a remuneration; the principle involved is certainly just, for capital merely represents pains previously taken and not yet rewarded. The capitalist is in a good position to lay down the law, true enough; yet let us note that, even when he faces no competition, there is a limit beyond which he may not press his claims. This limit is the point at which his payment would eat up all the advantages that his service would provide. Hence, there is no excuse for talking, as people often do, about the tyranny of capital, since never, even in the most extreme cases, can its presence be more harmful to the worker's lot than its absence. The capitalist, like the man from the tropics who has at his disposal a certain degree of heat that Nature has denied other men, like the inventor who possesses the secret of a process unknown to his fellow men, can do no more than say: “Do you desire the use of my labor? I set a given price on it. If you find it too high, do as you have done heretofore: go without it.”
But competition intervenes among the capitalists. Implements, raw materials, and provisions can help to create utility only if they are put to work; hence, there is rivalry among capitalists to find a use for their capital. Since the amount by which this rivalry forces them to reduce their claims below the maximum limits that I have just determined brings about a reduction in the price of the product, this amount represents, therefore, a net profit, a gratuitous gain for the consumer, that is, for mankind!
It is evident here that cost can never be completely eliminated; since all capital represents some pains that have been taken, the principle of remuneration is always implied.
Transactions involving capital are subject to the universal law of all exchange, which is never carried out unless it is to the mutual advantage of the two contracting parties. This advantage, although it tends to be equal on both sides, may accidentally be greater for one than for the other. The return on capital is subject to a limit beyond which no one will consent to borrow; this limit is zero service for the borrower. Likewise, there is a limit below which no one will consent to make a loan; this limit is zero return for the lender. This is self-evident. If the demands of either party are raised to the point of zero advantage for the other, the loan becomes impossible. The return on capital fluctuates between these two extremes, raised toward the upper limit by competition among borrowers, brought back toward the lower limit by competition among lenders; so that, through a necessity that is in harmony with justice, it rises when capital is scarce and falls when capital is abundant.
Many economists believe that the number of borrowers increases more rapidly than capital can be formed, and hence that the natural trend of interest is upwards. The facts are conclusive in favor of the contrary opinion, and we observe that the effect of civilization everywhere is to lower the rate on the hire of capital. This rate, it is said, was 30 or 40 per cent in Rome; it is still 20 per cent in Brazil, 10 per cent in Algiers, 8 per cent in Spain, 6 per cent in Italy, 5 per cent in Germany, 4 per cent in France, 3 per cent in England, and even less in Holland. Now, all this amount by which, through progress, the interest on capital has been reduced, though lost to the capitalist, is not lost to mankind. If the rate of interest, starting at 40, falls to 2 per cent, it means a drop of 38 out of 40 parts for this item in the cost of production of all commodities. They will reach the consumer freed from this charge in the proportion of nineteen-twentieths; this force, then, like the forces of Nature, like more efficient techniques, results in abundance, equalization, and, ultimately, a general rise in the standard of living for the human race.
I still have to say a few words about the competition that labor creates for itself, a subject that has recently inspired so much sentimental rhetoric. But is it really necessary? Has the subject not been exhaustively treated, for the careful reader, by all that has already been said? I have proved that, thanks to competition, men cannot for long receive an abnormal return for the co-operation of the forces of Nature, for knowing special techniques, or for possessing the instruments whereby these forces are put to work. To do this is to prove that efforts tend to be exchanged on an equal footing, or, in other words, that value tends to be proportional to labor. This being so, I do not really understand what is meant by competition among workers. I understand even less how it could be harmful to their situation, since, in this respect workers are also consumers; the laboring class includes everybody, and in fact itself comprises the great community that in the last analysis reaps the rewards of competition and the benefits accruing from the steady elimination of value resulting from progress.
The course of development is as follows: Services are exchanged for services, or value for value. When a man (or a group of men) appropriates a natural resource or acquires a new technique, he bases his charges, not on the pains he takes, but on those he spares others. He raises his demands to the highest possible limit, without ever being able thereby to injure the welfare of others. He assigns the greatest possible value to his services. But gradually, through the effect of competition, this value tends to correspond to the pains he has taken; so that the full course has been run when his pains are exchanged for equal pains, every one of which represents the means of transmitting a growing amount of gratuitous utility, beneficial to the entire community. Such being the case, it would be a glaring inconsistency to say that competition hurts the workers.
And yet this is constantly being said, and it is even widely accepted. Why? Because this word “worker” is used to mean one particular class, not the great community of all those who work. This community is divided into two groups. On one side are placed all those who have capital, who live entirely or in part on previous labor or on intellectual labor or on the proceeds of taxation; on the other are placed those who have only their hands and their wages, those who, to use the time-honored expression, form the proletariat. The relations of these two classes with each other are observed, and the question is asked whether, in view of the nature of these relations, the competition carried on by the wage earners among themselves is not harmful to their interests.
The situation of these men, it is said, is essentially precarious. Since they receive their wages daily, they live from day to day. During the bargaining that, in every free system, goes on before terms are reached, they are unable to wait; they must, no matter what, find work for the morrow or die. If this is not entirely true of all of them, it is at least true of many of them, of enough of them to depress the entire class; for the most hard-pressed, the most wretchedly poor, are the ones who capitulate first, and they set the general wage scale. In consequence, wages tend to be set at the lowest rate compatible with bare subsistence; and in this state of things the least bit of added competition among the workers is a veritable calamity, since for them it is not a question of a lower standard of living, but of not being able to live at all.
Certainly there is much truth, too much truth, in actual fact, in this allegation. To deny the sufferings and the miserable conditions prevailing among this class of men who perform the physical labor of the work of production would be shutting our eyes to the truth. The fact is that what we rightly term the social problem is related to the deplorable state of a great number of our fellow men, for, although other classes of society are not immune to many anxieties, many sufferings, economic reverses, crises, and upheavals, it is, nevertheless, true that freedom would be considered as the solution to the problem, if freedom did not appear helpless in curing this running sore that we call pauperism.
And since it is with this question that the social problem is most concerned, the reader will understand that I cannot analyze it here. Would to God that its solution might be the outcome of this whole book of mine, but obviously it cannot come from a single chapter!
I am now concerned with setting forth certain general laws that I believe to be harmonious, and I am confident that the reader also has become aware that these laws exist, that they tend toward the common sharing of all things and consequently toward equality. But I have not tried to deny that their action has been greatly hindered by disturbing factors. If, then, at the present moment we encounter any shocking fact of inequality, how can we interpret it until we know both the normal laws of the social order and the disturbing factors?
On the other hand, I have not sought to deny the existence of evil or its mission. I have felt entitled to state that, since man has been given free will, the term “harmony” need not be confined to a total system from which evil would be excluded; for free will implies error, at least as a possibility, and error is evil. Social harmony, like everything else that involves man, is relative; evil constitutes a necessary part of the machinery designed to conquer error, ignorance, and injustice, by bringing into play two great laws of our nature; responsibility and solidarity.
Since pauperism is an existing fact, must its existence be imputed to the natural laws that govern the social order or rather to human institutions that perhaps work contrary to these laws or, finally, to the victims themselves, who by their own errors and mistakes must have called down upon their heads so severe a punishment?
In other words: Does pauperism exist by divine plan or, on the contrary, because of some artificial element still remaining in our political order or as individual retribution? Fate, injustice, individual responsibility? To which of these three causes must this frightful sore be attributed?
I do not hesitate to say that it cannot be the result of the natural laws that have been the object of our study throughout this book, since these laws all tend toward equality under improved conditions, that is, toward bringing all men closer together in their enjoyment of a constantly rising standard of living. Hence, this is not the place to delve into the problem of poverty.
For the moment, if we wish to consider separately that class of workers who carry out the more physical part of the work of production, and who, without sharing, generally speaking, in its profits, live on fixed earnings that we call “wages,” the question that we must ask is this: Without taking into account either the goodness or the badness of our economic institutions or the woes that the members of the proletariat may have brought upon themselves, what is, as far as they are concerned, the effect of competition?
For this class of people, as for all others, the effect of competition is twofold. They are aware of it both as buyers and as sellers of services. The error of all those who write on this subject is that they never see more than one side of the question, like physicists who, if they understood only the law of centrifugal force, would believe and constantly predict that all is lost. Provide them with incorrect data, and you will see with what flawless logic they will lead you to their conclusions of doom. The same may be said of the lamentations that the socialists base on their exclusive preoccupation with the phenomenon of centrifugal competition, if I may use such an expression. They forget that there is also centripetal competition, and that is enough to reduce their theories to childish rantings. They forget that the worker, when he goes to market with the wages he has earned, is the center toward which countless industries are directed, and that he then profits from the universal competition of which the industries all complain in their turn.
It is true that the members of the proletariat, when they consider themselves as producers, as suppliers of labor or services, also complain of competition. Let us admit, then, that competition is to their advantage on the one hand, and to their disadvantage on the other; the question is to determine whether the balance is favorable or unfavorable, or whether there are compensating factors.
Unless I have expressed myself very badly, the reader now realizes that in this wonderful mechanism the interplay of various aspects of competition, apparently so antagonistic, brings about, as its singular and reassuring result, a balance that is favorable to all simultaneously, because of the gratuitous utility that steadily enlarges the circle of production and constantly falls within the communal domain. Now, what becomes free of charge and common to all is advantageous to all and harmful to none; we can even add, and with mathematical certainty, that it is advantageous to everyone in direct proportion to his previous state of poverty. This part of gratuitous utility, which competition has forced to become common to all, makes value tend to correspond to labor, to the obvious benefit of the worker. This, too, provides the basis for the solution of the social problem that I have tried to keep constantly before the reader, and which only the veil of misconceptions born of habit can prevent him from seeing, namely, that for a given amount of labor each one receives a sum of satisfactions whose tendency is to increase and to be distributed equally.
Furthermore, the condition of the worker is the result, not of one economic law, but of all of them. To understand his condition, to discover what is in store for him, what his future holds, is the one and only function of political economy; for, from its point of view, what else can there be in the world except workers? I am wrong, for there are also plunderers. What gives services their just value? Freedom. What deprives them of their just value? Oppression. Such is the cycle that we have still to traverse.
As for the fate of the working class, which carries out the more immediate work of production, we can evaluate it only when we are in a position to know how the law of competition combines with those of wages and of population and also the disrupting effects of unjust taxation and monopoly.
I shall add only a few more words on competition. It is quite clear that a decrease in the sum total of satisfactions distributed among men is a result that would be foreign to the nature of competition. Does it tend to make this distribution unequal? Nothing on earth is clearer than that competition, after attaching, so to speak, a greater proportion of utility to every service, to every value, works unceasingly to level the services themselves, to make them proportional to efforts. Is competition not the spur that turns men toward productive and away from unproductive careers? Its natural action is, therefore, to assure greater equality and at the same time a higher and higher social level.
Let us, however, understand what we mean by equality. It does not imply identical rewards for all men, but rewards in keeping with the quantity and quality of their efforts.
A host of circumstances contributes to making the remuneration of labor unequal (I am speaking now of free labor subject to the laws of competition). On close examination we discover that this alleged inequality, nearly always just and necessary, is in reality nothing else than actual equality.
All other things being equal, more profit can be had from dangerous labor than from labor that is not; from trades that require a long apprenticeship and outlays that remain unproductive for a long time, implying on the part of the family the long-sustained exercise of certain virtues, than from those in which physical strength alone is necessary; from the professions that demand trained minds and refined tastes, than from trades where nothing is needed beyond one's two hands. Is all this not just? Now, competition necessarily establishes these distinctions; society does not need Fourier or M. Louis Blanc to decide the matter.
Among these various factors the one most generally decisive is inequality of training; and here, as everywhere else, we see competition exerting its twofold influence, leveling classes and raising the general standard of society.
If we think of society as being composed of two strata placed one above the other, with intelligence predominant in the one, and brute force predominant in the other, and if we study the natural relations of these two strata with each other, we shall readily notice that the first one possesses a power of attraction, while in the second there is a force of aspiration, and these two work together to form the two strata into one. The very inequality of rewards inspires the lower stratum with a burning desire to reach the higher regions of well-being and leisure, and this desire is encouraged by gleams from the light that illuminates the upper classes. Teaching methods are improved; books cost less; instruction is acquired more rapidly and cheaply; learning, which had been monopolized by a single class or even caste, veiled in a dead language or in hieroglyphics, is written and printed in the vernacular, permeates the atmosphere, so to speak, and is breathed in like the air.
Nor is this all. Even while more universal and more equal education is working to bring the two social strata together, very important economic factors that are connected with the great law of competition accelerate their fusion. Progress in the knowledge of the laws of mechanics constantly decreases the proportion of brute labor in any operation. The division of labor, by simplifying and isolating each one of the operations that contribute to turning out the finished product, places within the reach of all new industries that previously were open only to a few. Moreover, a complex of various types of labor that originally required highly diversified skills becomes, with the mere passing of time, simple routine and is performed by the least skillful, as has happened in agriculture. Agricultural techniques, which, in antiquity, earned for their discoverers honors approaching deification, are today so completely the heritage and almost the monopoly of the most brutish sort of men, that this most important branch of human industry has become almost taboo, so to speak, for the well-bred. It is possible to draw false conclusions from all this and to say: “We do indeed observe that competition lowers remunerations in all countries, in all trades and professions, in all ranks of society, that it levels them downwards; but this means that the wages for unskilled labor, for mere physical exertion, will become the norm, the standard for all remuneration.”
The reader has misunderstood me if he does not perceive that competition, which tends to bring all excessive remunerations into line with a more or less uniform average, necessarily raises this average. This is galling, I admit, to men in their capacity as producers; but it results in improving the general lot of the human race in the only respects in which improvement may reasonably be expected: in well-being, in financial security, in increased leisure, in moral and intellectual development, and, in a word, in respect to all that relates to consumption.
Will the objection be made that mankind has not made the progress that this theory would seem to imply?
I shall reply, in the first place, that competition in modern society is far from playing its natural role. Our laws inhibit it at least as much as they encourage it; and to answer the question whether inequality is due to the presence or the absence of competition, we need only observe who the men are who occupy the limelight and dazzle us with their scandalous fortunes, to assure ourselves that inequality, in so far as it is artificial and unjust, is based on conquest, monopolies, restrictions, privileged positions, high government posts and influence, administrative deals, loans from the public funds—with all of which competition has no connection.
Secondly, I believe that we fail to appreciate the very real progress that has been made since the very recent times from which we must date the partial emancipation of labor. It has been said with much truth that it takes a great deal of scientific insight to observe the facts that are constantly before our eyes. The present level of consumption enjoyed by an honest and industrious working-class family does not surprise us because habit has familiarized us with this strange situation. If, however, we were to compare the standard of living that this family has attained with the one that would be its lot in a hypothetical social order from which competition had been excluded; if statisticians could measure with precision instruments, as with a dynamometer, its labor in relation to its satisfactions at two different periods; we should realize that freedom, despite all still-existing restrictions on it, has wrought a miracle so enduring that for that very reason we fail to be aware of it. The total proportion of human effort that has been eliminated in achieving any given result is truly incalculable. There was a time when the day's work of an artisan would not have bought him the crudest sort of almanac. Today for five centimes, or the fiftieth part of his daily wage, he can buy a paper containing enough printed matter for a volume. I could say the same thing for clothing, transportation, shipping, illumination, and a host of satisfactions. To what are these results due? To the fact that a tremendous proportion of human labor, which must be paid for, has been replaced by the gratuitous forces of Nature. This represents value that has been eliminated, that no longer requires payment. It has been replaced, through the action of competition, by gratuitous and common utility; and, let us note, when, through progress, the cost of a given commodity happens to drop, the labor required to pay for it that is saved the poor man is always proportionately greater than that saved the wealthy man, as can be demonstrated mathematically.
Finally, this constantly growing flood of utility, poured forth by labor and pumped through all the veins of the social body by competition, is not to be measured entirely in terms of present material comforts. Much of it is absorbed into the rising tide of ever increasing new generations; it is diffused over an increased population, in accordance with the laws, closely related to our present subject, which will be set forth in another chapter.
Let us pause a moment to look back over the road we have just traveled.
Man has wants that know no limits; he experiences desires that are insatiable. To satisfy them he has raw materials and forces that are supplied him by Nature, faculties, implements—all the things that his labor can put into operation. Labor is the resource most widely distributed among all men. Every man seeks instinctively, inevitably, to bring to his aid all the forces of Nature, all the natural or acquired talent, all the capital that he can, in order that all this co-operation may bring him more utility or, what amounts to the same thing, more satisfactions. Thus, the more and more active participation of natural resources, the constant development of his intellectual faculties, the progressive increase of capital, all give rise to this phenomenon, surprising, at first sight: that a given amount of labor furnishes a constantly growing sum of utility, and that everyone may, without taking away from anyone else, enjoy a number of consumers' satisfactions far out of proportion to the ability of his own efforts to produce them.
But this phenomenon, the result of the divine harmony that Providence has implanted in the social structure, would have turned against society itself, by introducing the seeds of constantly increasing inequality, if it were not combined with another and no less admirable harmony, competition, which is one of the branches of the great law of human solidarity.
In fact, if it were possible for the individual, family, class, or nation that finds certain natural advantages within reach or makes an important discovery in industry or acquires through thrift instruments of production, to be permanently exempt from the law of competition, it is obvious that this individual, family, or nation would retain the monopoly of its exceptional remuneration for all time to come, at the expense of mankind. Where would we be if the inhabitants of the tropics, free from all competition among themselves, were able, in exchange for their sugar, coffee, cotton, and spices, to demand from us, not amounts of labor equal to theirs, but pains equal to those we ourselves would have to take in order to raise these commodities in our rugged climate? By what an immeasurable distance would the various social strata of mankind be separated if only the race of Cadmus∗ could read; if no one could handle a plow unless he could prove that he was a direct descendant of Triptolemus;† if only Gutenberg's descendants could print, Arkwright's sons could operate a loom, Watt's progeny could set the funnel of a locomotive to smoking? But Providence has not willed that these things should be, for it has placed within the social machinery a spring as amazingly powerful as it is simple. Thanks to its action every productive force, every improved technique, every advantage, in a word, other than one's own labor, slips through the hands of its producer, remaining there only long enough to excite his zeal with a brief taste of exceptional returns, and then moves on ultimately to swell the gratuitous and common heritage of all mankind. All these discoveries and advantages are diffused into larger and larger portions of individual satisfactions, which are more and more equally distributed. Such is the action of competition. We have already noted its economic effects; it remains for us to glance at a few of its political and moral consequences. I shall confine myself to pointing out the most important.
Some superficial commentators have accused competition of creating antagonisms among men. This is true and inevitable as long as men are considered solely as producers; but consider them as consumers, and you will see that competition binds individuals, families, classes, nations, and races together in the bonds of universal brotherhood.
Since the riches that originally appear to be the exclusive possession of a few become, through the admirable decree of divine bounty, the common patrimony of all; since the natural advantages resulting from location, fertility, temperature, mineral deposits, and even industrial aptitude, merely slip through the hands of their producers because of the competition they engage in with one another, and turn exclusively to the profit of the consumer; it follows that there is no country that does not have a selfish interest in the advancement of every other country. Every step of progress that is made in the Orient represents potential wealth for the Occident. Fuel discovered in the south of France means warmer homes for the men of the north. Let Great Britain make all the progress she can with her spinning mills. Her capitalists will not be the ones to reap the benefit, for the interest on money will not rise; nor will it be her workers, for their wages will remain the same; but, in the long run, the Russian, the Frenchman, the Spaniard, all mankind, in a word, will obtain equal satisfactions for less pains, or, what amounts to the same thing, greater satisfactions for equal pains.
I have spoken only of the benefits; I could have said as much for the ills that afflict certain peoples or certain regions. The peculiar action of competition is to make general what was once particular. It acts on exactly the same principle as insurance. If a scourge of Nature ravages the farmers' lands, the consumers of bread are the ones who suffer. If an unjust tax is levied on the vineyards of France, it is translated into high wine prices for all the wine-drinkers on earth. Thus, both advantages and disadvantages of any degree of permanence merely slip through the hands of individuals, classes, and peoples; their ultimate destiny, as ordained by Providence, is to affect all humanity and to raise or lower its standard of living. Hence, to envy any people whatsoever the fertility of its soil or the beauty of its ports and its rivers or the warmth of its sun is to fail to understand the benefits that we are invited to share. It is to disdain the abundance that is offered us; it is to deplore the toil that we are spared. Hence, national jealousies are not only perverse sentiments; they are absurd. To harm others is to harm ourselves; to spread obstacles, tariffs, coalitions, or wars along the path of others is to obstruct our own progress. Consequently, evil passions have their punishment even as noble sentiments have their reward. With all the moral authority that it commands, the principle of complete justice for all speaks to our self-interest, enlightens public opinion, proclaims and must eventually make prevail among men this eternally true proposition: The useful is one of the aspects of justice; liberty is the most beautiful of social harmonies; equity is the best policy.
Christianity gave to the world the great principle of the brotherhood of man. It speaks to our hearts, to our sentiments, to our noblest instincts. Political economy proclaims the same principle in the name of cold reason, and, by showing the interrelation of cause and effect, reconciles, in reassuring accord, the calculations of the most wary self-interest with the inspiration of the most sublime morality.
A second conclusion to be derived from this doctrine is that society is a true common association. Messrs. Owen and Cabet may save themselves the trouble of seeking the solution to the great communist problem; it has already been found. It is derived, not from their despotic contrivances, but from the organization that God has given to man and to society. The forces of Nature, efficient techniques, tools of production—everything is available in common to all men or tends to become so, everything, I say, except the individual's pains, labor, and effort. There is, there can be, among men, only one inequality, which even the most uncompromising communists admit: the inequality that comes from that of men's efforts.
Efforts alone are exchanged for other efforts according to terms discussed and agreed upon. All the utility imparted to commodities by Nature, by the genius of past centuries, and by human foresight are obtained gratis, into the bargain. The reciprocal remunerations established are related only to respective efforts, whether performed in the present under the name of labor or prepared in the past under the name of capital. The system is therefore a commonwealth in the most literal and rigorously accurate sense of the word, unless one wishes to assert that each person's share in the satisfactions should be equal, although his participation in the labor is not, a situation that certainly would produce the most unjust and monstrous of inequalities—and the most disastrous, for it would not destroy competition, but would merely reverse its direction: men would still compete, but they would compete to excel in idleness, stupidity, and improvidence.
Finally, this doctrine that we have just elaborated, so simple, and yet, as we believe, so true, lifts the great principle of human perfectibility out of the realm of mere oratory and establishes it as a demonstrable fact. From this inner drive, which never rests within man's heart and always prompts him to improve his lot, is born progress in the arts, which is nothing more nor less than the co-operation of forces that are by their very nature incompatible with any remuneration. From competition comes the process that transfers into the communal realm advantages originally held by certain individuals only. The amount of effort once required for a given result grows constantly less, to the benefit of the entire human race, which thus finds that its circle of satisfactions and leisure grows larger from generation to generation, and that its physical, intellectual, and moral level rises. By virtue of this arrangement, so deserving of our study and everlasting admiration, we clearly discern mankind moving upward from the state to which it had fallen.
Let no one misconstrue my words. I do not say that brotherhood, community, and perfectibility are contained in their entirety in the idea of competition. I do say that it is allied and combined with these three great social dogmas, that it is part of them, that it reveals them, and that it is one of the most powerful agents for effecting their realization.
I have set myself the task of describing the general and, consequently, beneficial effects of competition, for it would be sacrilege to assume that any great law of Nature could be permanently harmful in its effect, but I am far from denying that its action may be accompanied by much hardship and suffering. It even seems to me that the theory that I have just advanced explains both this suffering and the inevitable complaints to which it gives rise. Since the function of competition is to level, it must necessarily work against anyone who raises his proud head above the level. We understand how every producer, in order to set the highest price on his labor, tries to hold on for as long as possible to the exclusive use of a resource, a technique, or a tool of production. Now, since competition quite properly has as its mission and result the taking away from the individual of this exclusive enjoyment and making it common property, it is inevitable that all men, in so far as they are producers, should join in a chorus of imprecations against competition. They can become reconciled to it only when they take into account their interests as consumers; when they look upon themselves, not as members of a special group or corporation, but as men.
Political economy, it must be admitted, has not yet done enough to dispel this disastrous fallacy, which has been the source of so many hatreds, calamities, resentments, and wars. Instead, it has expended its efforts, with little scientific justification, in analyzing the phenomena of production. Even its terminology, convenient as it is, is not in keeping with its object of study. “Agriculture,” “manufacture,” “commerce,” make excellent classifications, perhaps, when the intention is to describe the techniques followed in these arts; but this description, though ideally suited for technology, hardly contributes to an understanding of social economy. I may add that it is positively dangerous. When we have classified men as farmers, manufacturers, and businessmen, what can we talk to them about except their special class interests, which are made antagonistic by competition and are in conflict with the general welfare? Agriculture does not exist for the sake of the farmers, manufacturing for the manufacturers, or trade for the businessmen, but in order that all men may have at their disposal the greatest possible number of commodities of all descriptions. The laws of consumption, what is good for it and makes it equitable and moral—these are the really important matters from the social and humanitarian point of view; these are the real objects of the science of political economy; these are the questions on which the clear light of its understanding needs to be focused, for therein lies the bond between classes, nations, and races, the principle and the explanation of the brotherhood of man. It is, therefore, with regret that we see economists expending their great talents and lavishing their wisdom on the problem of production, while they reserve a little space at the end of their books, in the supplementary chapters, for a few brief commonplaces on the phenomena of consumption. Recently a justly celebrated professor was known to have entirely suppressed this aspect of our science, to have concerned himself with the means to the exclusion of the ends, and to have banished from his course all reference to the consumption of wealth, on the ground, he said, that this was a subject that belonged to ethics and not to political economy! Can we be surprised that the general public is more concerned with the disadvantages of competition than with its advantages, since the former affect the public from the particular point of view of production, which is always being talked about, and the latter only from the general point of view of consumption, which is never mentioned?
As for the rest—I repeat—I do not deny, I recognize and deplore as much as others, the suffering that competition has inflicted on men; but is this a reason for shutting our eyes to the good that it accomplishes? It is all the more reassuring to perceive this good because I believe that competition, like the other great laws of Nature, can never be eliminated. If it could be destroyed, it undoubtedly would have succumbed in the face of the universal opposition of all men who ever competed in the production of any commodity since the beginning of the world, and particularly under the impact of the mass uprising of all the modern reformers. But if they have been mad enough to try to destroy it, they have not been strong enough to do so.
And what element of progress is there in the world whose beneficial action has not been marred, particularly at the beginning, by much suffering and hardship? Our great urban masses of human beings stimulate bold flights of thought, but they often deprive individuals in their private life of the corrective of public opinion and serve to shelter debauchery and crime. Wealth combined with leisure favors the cultivation of the mind, but it also nurtures ostentation and snobbishness among the great and resentment and envy among the lowly. Printing brings enlightenment and truth to all strata of society, but it also brings nagging doubt and subversive error. Political liberty has let loose enough tempests and revolutions upon the earth and has sufficiently modified the simple and naive customs of primitive peoples to make serious thinkers wonder whether they would not prefer tranquillity under the shadow of despotism. Christianity itself has sown the great seed of love and charity upon ground soaked in the blood of the martyrs.
Why has it entered into the plans of infinite Goodness and Justice that the happiness of one region or one age should be purchased by the sufferings of another age or another region? What is the divine purpose hidden under this great and irrefutable law of solidarity, of which competition is merely one of the mysterious aspects? Human wisdom does not know the answer, but human wisdom does know that good is constantly spreading and evil diminishing. Beginning with the social order as it had been made by conquest, where there were only masters and slaves, and where the inequality within society was extreme, the work of competition in bringing ever closer together men of different rank, fortune, and intelligence could not be accomplished without inflicting individual hardships that, as the work has progressed, have continually become less, like the vibrations of a sound or the oscillations of a pendulum. Against the sufferings still in store for it, humanity is daily learning how to oppose two powerful remedies, foresight, born of experience and enlightenment, and social co-operation, which is organized foresight.
Conclusion to the Original Edition
In the first part of this work—alas, all too hastily written!—I have tried to fix the reader's attention on the line of demarcation, always shifting, but always distinct, that separates the two regions of the economic world: Nature's collaboration and man's labor, the liberality of God and the handiwork of man, what is gratuitous and what is onerous, what is paid for in exchange and what is donated without charge, total utility and the partial and supplementary utility that constitutes value, absolute wealth and relative wealth, the contribution of chemical or mechanical forces brought to the aid of production by the instruments that render them serviceable and the just returns due the labor that has created these instruments, common wealth and private property.
It was not enough to point out these two orders of phenomena, so fundamentally different in nature; it was also necessary to describe their relations, and, if I may so express it, their harmonious evolution. I have tried to explain how it was the function of private property to seize hold of utility for the human race, to transfer it to the communal domain, and then to fly away to new conquests, so that each given effort (and, consequently, the sum total of all efforts) constantly renders available to mankind an increasing number of satisfactions. Progress consists in the fact that human services, when exchanged, while keeping their relative value, act as a vehicle to convey a larger and larger proportion of utility which is free of charge, and therefore common to all. Thus, the possessors of value, of any kind whatsoever, far from usurping and monopolizing God's gifts, actually multiply them, but do not on that account make them any the less gratuitous to all—which was the intent of Providence.
In proportion as satisfactions (for which progress makes Nature foot the bill) fall, by reason of that very fact, within the communal domain, they become equal, since inequality can be conceived only in the realm of men's services, which are compared, appraised, and evaluated for exchange. Hence, it follows that equality is necessarily progressive. It is also progressive in another respect, for the inevitable result of competition is to equalize services themselves and to make their rewards correspond more and more closely with their true worth.
Let us now glance over the ground remaining for us to cover.
In the light of the theory that we have set forth in this volume, we still have to examine more closely the following subjects:
Man's relations, both as producer and as consumer, with economic phenomena.
The law of rent on landed property.
The law of wages.
The law of credit.
The law of taxation, which, introducing us to what is, strictly speaking, the subject of government, will lead us to the comparison of private and voluntary services with public and compulsory services.
The law of population.
We shall then be in a position to solve a number of practical problems that are still subjects of controversy: free trade, automation, luxury, leisure, association, organization of labor, etc.
Anticipating our findings in this study, I do not hesitate to say that they may be expressed in the following terms: A steady approach by all men toward a continually rising standard of living—in other words: improvement and equalization—in a single word: harmony.
Such is the final result of the providential plan, of the great laws of Nature, when they act without impediment, when we consider them in themselves, apart from the disturbance to which their action has been subjected by error and violence. At the sight of this harmony the economist may well cry out, as does the astronomer on beholding the movement of the planets, or the physiologist when he contemplates the structure of our human organs: Digitus Dei est hic!∗
But man is a free agent, and consequently fallible. He is subject to ignorance and passion. His will, which can err, enters as an element into the workings of economic laws; he can misunderstand them, he can nullify them, he can divert them from their purpose. Just as the physiologist, after admiring the infinite wisdom that has gone into the creation and arrangement of each one of our organs and vital parts, also studies them in their abnormal state, when they are sickly and diseased; so we too shall have to enter a new world, the world of social disturbances.
We shall introduce this new study with a few observations on man himself. It would be impossible for us to evaluate the ills of society, their origin, their effects, their function, the ever narrowing limits within which their own action compresses them (a phenomenon that constitutes what I would almost dare to call a harmonious discord), if we did not examine the necessary consequences of free will, the aberrations due to self-interest, which always entail retribution, and the great laws of human responsibility and solidarity.
We have seen that all the social harmonies are contained in germ in these two principles: property and liberty. We shall see that all the social discords are merely the extension of these two contrary principles: plunder and oppression.
And, indeed, the words “property” and “liberty” merely express two aspects of the same fundamental notion. From the economic point of view, liberty is connected with the act of production, property with the thing produced. And, since value has its origin in human activity, we can say that liberty implies and includes property. The same holds true of oppresson as related to plunder.
Liberty! Therein, in the last analysis, lies the source of harmony. Oppression! Therein lies the source of discord. The struggle between these two forces fills the annals of history.
And since oppression has as its aim the unjust seizure of property, since it is transformed into and merges its identity with plunder, it is plunder that I shall show in action.
Man comes into this world bound to the yoke of want, which is pain.
He can escape only by subjecting himself to the yoke of toil, which is also pain.
He has, then, only a choice between two kinds of pain, and he hates pain.
For this reason he looks about him, and if he sees that his fellow man has accumulated wealth, he conceives the idea of making it his own. Hence, property unjustly acquired, or plunder!
Plunder! Here is a new element in the economy of society.
From the day when plunder first appeared on earth, until that day, if it ever comes, when plunder will have completely disappeared, this element has had and will have a profound effect on the entire social mechanism; it will disturb, to the point of making them unrecognizable, the operation of the harmonious laws that we have worked to discover and describe.
Our task, then, will not be done until we have given a complete account of plunder.
Perhaps it will be thought that it is only an accidental, abnormal phenomenon, a sore that will soon heal, unworthy of scientific investigation.
But let us beware. Plunder occupies, in the traditions of families, in the history of nations, in the occupations of individuals, in the physical and intellectual energies of all classes, in the arrangements of society, in the precautions of governments, almost as important a place as property itself.
No, plunder is not a passing scourge, accidentally affecting the social mechanism, and the science of economics may not exclude it from consideration.
In the beginning this sentence was pronounced on man: In the sweat of thy face shalt thou eat bread. Hence, it appears that effort and satisfaction are indissolubly joined, and that the one can never exist unless paid for by the other. Yet everywhere we see man revolting against this law, and saying to his brother: Yours be the toil; mine, the fruit of that toil.
Enter the hut of the savage hunter or the tent of the nomadic shepherd. What sight meets your eyes? The wife, thin, disfigured, terrified, faded before her time, bears all the burden of the household chores, while the husband lolls in idleness. What idea can we form here of family harmony? It has disappeared, because force has laid upon the defenceless the burden of toil. And how many centuries of civilization will it take before woman will be raised from this frightful degradation?
Plunder, in its most brutal form, brandishing torch and sword, fills the annals of history. What are the names that make up history? Cyrus, Sesostris,∗ Alexander, Scipio, Caesar, Attila, Tamerlane, Mohammed, Pizarro, William the Conqueror—outright plunder by means of conquest. To it go the laurel wreaths, the monuments, the statues, the triumphal arches, the songs of the poets, the heady admiration of women!
Soon the conqueror thinks of a better way of dealing with the conquered than to kill them, and slavery covers the earth. Almost down to our own day, all over the world, it was the accepted way of life, leaving in its wake hatred, resistance, civil strife, and revolution. And what is slavery except organized oppression with plunder as its object?
If plunder arms the strong against the weak, it no less lets loose the intelligent upon the credulous. What industrious peoples are there on earth who have escaped exploitation at the hand of sacerdotal theocracies, Egyptian priests, Greek oracles, Roman augurs, Gallic druids, brahmins, muftis, ulemas,† bonzes, monks, ministers, mountebanks, sorcerers, soothsayers, plunderers of all garbs and denominations? It is the genius of plunderers of this ilk to place their fulcrum in heaven and to glory in a sacrilegious complicity with God! They put in chains, not men's bodies alone, but their minds as well. They put the brand of servitude as much upon the conscience of a Seid‡ as upon the brow of a Spartacus, thus achieving what would seem to be impossible: the enslavement of the mind.
Enslavement of the mind! What a frightful association of words! O liberty! We have seen thee hunted from country to country, crushed by conquest, nigh unto death in servitude, jeered at in the courts of the mighty, driven from the schools, mocked in the drawing room, misinterpreted in the studio, anathematized in the temple. It would seem that in thought thou shouldst find an inviolable refuge. But if thou shouldst surrender in this last haven, what becomes of the hope of the ages and of the dignity of man?
Yet in the long run (so man's forward-looking nature wills it) plunder generates, in the very places where it holds sway, opposition that paralyzes its power, and knowledge that unmasks its impostures. It does not yield on that account, however; it merely becomes more cunning, and wrapping itself in forms of government and alignments, playing one faction against another, turns to political scheming, so long a fertile source of illicit power. Then we see plunder usurping the citizens' liberty in order the more readily to exploit their wealth, and draining off their substance the better to conquer their liberty. Private enterprise becomes public enterprise. Everything is done by government functionaries; a stupid and vexatious bureaucracy swarms over the land. The public treasury becomes a vast reservoir into which those who work pour their earnings, so that the henchmen of the government may tap them as they will. Transactions are no longer regulated by free bargaining, and nothing can establish or preserve the principle of service for service.
In this state of things the true notion of property is effaced, and every man appeals to the law to give his services an artificial and arbitrary value.
Thus, we enter the era of privilege. Plunder, becoming more and more subtle, establishes itself in monopolies and hides behind restrictions; it diverts the natural course of exchange and forces capital, and after it, labor and the whole population, into artificial channels. It produces laboriously in the north what could be produced easily in the south; it creates precarious industries and livelihoods; it substitutes for the gratuitous forces of Nature the onerous drudgery of human labor; it supports business concerns that cannot survive against competition, and then invokes the use of force against their competitors; it arouses international jealousies, encourages nationalistic sentiments, and invents ingenious theories that make allies of its own dupes; it always has impending industrial panics and bankruptcies; it undermines in the minds of the citizens all confidence in the future, all faith in liberty, and even their sense of justice. And then, when science exposes these misdeeds, Plunder stirs up even its victims against science, with the battle cry: Onward to utopia! Indeed, it repudiates not only the science that stands in its way, but even the idea that science can be applied to these areas, declaring with crowning cynicism: There are no absolute principles!
Nevertheless, spurred on by their suffering, the working-class masses revolt and topple over everything above them. Government, taxation, legislation, everything is at their mercy, and you believe perhaps that Plunder's reign is at an end; you believe that the principle of service for service will be established on the only foundation possible or imaginable, that of liberty. Undeceive yourself. Alas! This pernicious idea has infiltrated the masses: property has no origin, sanction, legitimacy, or justification other than the law, and thereupon the masses institute legislation to plunder one another. Suffering from the wounds inflicted upon them, they undertake to heal everyone of their number by giving to each the right to oppress his neighbor. This is called solidarity, brotherhood: “You have produced; I have not; we are comrades; let us share.” “You own something; I own nothing; we are brothers; let us share.”
We must therefore examine the abuses perpetrated in recent years in the name of “association,” “organization of labor,” “interest-free credit,” etc. We shall have to subject them to this acid test: Are they in harmony with the principle of liberty or of oppression? In other words: Are they in conformity with the great economic laws, or do they constitute a disturbance of their operation?∗
Plunder is too universal, too persistent, to be considered a purely accidental phenomenon. In this case, as in so many others, it is impossible to separate the study of natural laws from the study of the things that disturb their operation.
But, it will be said, if plunder necessarily enters into the workings of the social mechanism as a discord, how do you dare affirm the harmony of economic laws?
I shall repeat here what I have said elsewhere: In everything that concerns man, a being who is perfectible only because he is imperfect, harmony does not consist in the complete absence of evil, but in its gradual reduction. The social body, like the physical body, is possessed of a curative force, vis medicatrix, whose laws and unfailing power cannot be studied without again eliciting the words: Digitus Dei est hic.1
[∗][Legendary founder of Thebes, supposed to have brought the Phoenician alphabet to Greece. He is best known to mythology, of course, as the famous sower of the dragon's teeth.—Translator.]
[†][Legendary king of Eleusis, supposed to have invented the plow and to have taught agriculture to Attica.—Translator.]
[∗][“The hand (literally, the finger) of God is here.”—Translator.]
[∗][Mythical king of Egypt, often confused with Rameses and other pharaohs of his dynasty.—Translator.]
[†][A body composed of the hierarchy of the Moslems.—Translator.]
[‡][The slave of Mohammed, the first person to accept Mohammed's declaration that he was the special Prophet of Allah. Voltaire uses Seid (Gallicized to Séïde) as the symbol of blind fanatical devotion in his tragedy, Mahomet, ou le fanatisme.—Translator.]
[∗][Bastiat here refers to the ill-fated projects like the national workshops, interest-free credit, and the unemployment compensation laws set up by the socialists after the 1848 Revolution. Designed to aid the industrial workers, their costs were met by increased taxation, which fell heavily upon the rest of the nation, particularly the peasants.—Translator.]
[1.]Chap. 1, pp. 3 ff.
[2.]See chap. 5, note 1.
[1.][Here ends the original edition of Economic Harmonies. We reproduce here the list of chapters, found in the author's handwriting, intended to complete the book. It indicates the writings he had planned and also the order that we have followed for the chapters, fragments, and outlines that were entrusted to us. The asterisks indicate subjects on which we have found no material.—Editor.]