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Principles of Politics Applicable to a all Governments, trans. Dennis O’Keeffe, ed. Etienne Hofmann, Introduction by Nicholas Capaldi (Indianapolis: Liberty Fund, 2003).

Author: Benjamin Constant
Editor: Etienne Hofmann
Translator: Dennis O’Keeffe
Introduction: Nicholas Capaldi

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BOOK XII

On Government Jurisdiction over Economic Activity and Population

Ch. 1. Preliminary observation. 227
Ch. 2. On legitimate political jurisdiction vis-à-vis economic activity. 228
Ch. 3. That there are two branches of government intervention with regard to economic activity. 228
Ch. 4. On privileges and prohibitions. 229
Ch. 5. On the general effect of prohibitions. 247
Ch. 6. On things which push governments in this mistaken direction. 248
Ch. 7. On the supports offered by government. 251
Ch. 8. On the equilibrium of production. 255
Ch. 9. A final example of the adverse effects of government intervention. 258
Ch. 10. Conclusions from the above reflections. 259
Ch. 11. On government measures in relation to population. 260

chapter one

Preliminary Observation

In the enumeration of inalienable individual rights at the beginning of this work,1 I did not include the freedom of economic activity. The most enlightened philosophers of the last century, however, have shown the whole evidential case against the injustice of the restrictions experienced by this freedom in almost all countries. They likewise showed, just as clearly in my view, that these restrictions were as pointless and misconceived as they were unfair.

This last point nevertheless still seems doubtful to many people. One would need volumes to clarify the case in a way that would seem satisfactory to them. The principles of economic freedom rest on a multitude of facts, and each fact which seems contrary to it demands, in order to give way to its correct perspective, a long and detailed discussion.2 Freedom of commerce is useful only when it is scrupulously observed. A single violation, spreading uncertainty through the whole system, destroys all its benefits, and governments then turn their very faults to advantage in order to justify their intervention. They argue from the imperfect, sometimes dire results of precarious and restricted freedom, against the invariably salutary results of full and well-established freedom. Consequently, I did not wish, although all questions of this kind are interlinked, to put commercial freedom and civil freedom at the same level, for fear that the men who would disagree about [276] the former might be just as likely to dispute the important principles on which the felicity of civil society and the security of citizens are based. Nevertheless, certain moral considerations struck me which return to the subject of this work and which in moral terms decide the issue in favor of freedom, as well as yet further observations and facts which also decide in the same way in the case of economic activity. I thought I ought not to hold these back. But I beg the reader not to forget, though, that this section is not a treatise in commercial economy and contains just some general reflections which I expressly separate from the rest of my research, so that my mistakes, if I have made any, or the disagreement my opinions in this matter might encounter, will not bear on the other questions I have discussed. I could be wrong in my claims about freedom of production and trade without my principles of religious, intellectual, and personal freedom being weakened by this.

chapter two

On Legitimate Political Jurisdiction vis-à-vis Economic Activity

Society having no political prerogatives over individuals except when these prevent them harming each other, likewise economic activity, unless taken to be injurious, is subject to no such jurisdiction. But one man’s economic activity cannot hurt his peers, as long as he does not invoke in favor of his own activity and against theirs, help of another sort. It is in the nature of business to struggle against rivals, by way of perfectly free competition and efforts to attain an intrinsic superiority. All other types of means it might try to use constitute not economic activity but oppression or fraud. Society would be in the right, indeed, even obliged, to stop this. From this right which society possesses, however, it follows not at all that it has the right to use against the economic activity of one person, in favor of another’s, means which it must forbid equally to all.

All the objections brought together in Book X against the obstacles put in the way of property’s being possessed or [277] transferred acquire a double force when they are applied to production. These objections are based for the most part on the ease with which prohibitive laws are eluded and on the corruption entailed by the opportunities men get to disobey the laws. Now, the nature of economic activity offers far more openings to secret and unpunished transgressions than the nature of landed property.

chapter three

That There Are Two Branches of Government Intervention with Regard to Economic Activity

Government intervention with regard to economic activity can be divided into two branches: prohibitions and supports. Privileges must not be separated from prohibitions, because necessarily they imply them.

Since we want to give examples here rather than examine all parts of the economic system, we will take at random some of the prohibitions most used by most governments, ones which consequently at least have in their favor the support of the governing class. We will not say anything about those whose absurdity, long denied, is now generally recognized.

chapter four

On Privileges and Prohibitions

What is a business privilege? It is the use of the power of political authority to pass to some men advantages which it is the aim of society to guarantee to everyone. England did this when before the union of Ireland with that kingdom, she banned the Irish from almost all forms of foreign trade. This is what she does today when she forbids all English people to set up in the Indies any trade [278] independent of the company which has seized that vast monopoly. This is what the Zurich bourgeoisie did, before the Swiss revolution, by forcing those in the surrounding countryside to sell, only to them, almost all their commodities and all their manufactures.

This is manifestly injustice in principle. Is there any value in the practice? If the privilege is extended only to a few, doubtless some value accrues to these few. It is value of the kind, however, which goes with all spoliation. This is not what we intend or not at least admit to intending. Does it have any value for the nation? Undoubtedly not, since in the first place the vast majority of the nation is excluded from the benefit. There is therefore uncompensated loss for this majority. In the second place, the branch of industry or trade which receives the privilege is being taken care of more negligently and less economically by those whose gains are secured by the simple effect of the monopoly than would be the case if competition obliged all the rivals to outdo each other in their application and skill. Thus the national wealth does not derive from this economic activity the whole benefit it could. Therefore there is relative loss for the whole nation. Finally, the means which government must use to keep the privilege going and forcibly keep people not privy to it from competing are inevitably oppressive and vexatious. Once again, therefore, the entire nation suffers a loss of freedom. Thus we have three real losses which this type of prohibition entails, and compensation for these losses is reserved for a mere handful of privileged people.

The trite excuse made for privileges is the inadequacy of individual resources and the value of encouraging combinations to make up for this. People make too much of this inadequacy, however, just as they do of this need.3 If individual resources are insufficient, perhaps some individuals will be ruined, but a small number of examples will enlighten all the citizens, and a few private misfortunes are much better than the incalculable mass of misfortune and public corruption which privileges bring in. If the State wished to oversee individuals in all the operations through which they might potentially harm each other, this would amount to restricting almost all freedom of action. Once [279] having set itself up as the citizens’ guardian, it would soon become their tyrant. If combinations are necessary for a vital branch of production or long-distance commerce, combinations will form and individuals will not struggle against them, but try to join them in order to share their advantages. If existing combinations refuse this, we will soon see new combinations forming, and the ensuing rival competition will be more active. Let government intervene only to maintain both combinations and individuals in their respective rights and within the limits of justice; freedom will see to the rest, and successfully at that.

It is a mistake, moreover, to look on commercial companies as beneficial by their very nature. Any powerful company, says an author well versed in this matter,4 even when it trades only in competition with individual enterprises, ruins them first of all by lowering the prices of merchandise; then, when they are ruined, this company, now the only one in business or almost such, ruins the country by raising prices. Afterward, its excessive profits leading its employees into negligence, it ruins itself. We see in Smith, Book V, ch. 1,5 through numerous incontestable examples, that the more English companies were exclusive and granted large privileges and the more they were rich and powerful, the more drawbacks marked their histories and the more they ended badly. By contrast, the only ones which succeeded or sustained themselves were companies limited to a modest capital, made up of a small group of individuals, employing only a few workers, that is to say, in their administration and resources coming as close as can be to small firms. The Abbé Morellet in 1780 counted fifty-five companies set up since 1600, invested with exclusive privileges in different European countries, which had all finished up bankrupt.6 Companies which are [280] too powerful are like all forces which are too strong, as with States which are too strong. They begin by devouring their neighbors and then their subjects, and then destroy themselves.

The only circumstance which justifies the establishment of a company is when individuals come together to set up, at their own peril and risk, a new branch of trade with distant and barbarous peoples. The State may then grant them, as compensation for the dangers they face, a few years of monopoly. Once the term expires, however, the monopoly must be abolished and free trade be reestablished.7

One can cite isolated facts in favor of privileges, and these facts seem all the more conclusive in that we never see what would have happened if these privileges had never existed. I affirm in the first place, however, that if we bring time into the reckoning—something which we seek vainly to dispense with—and do not give way to puerile impatience, freedom always ends up producing, uncontaminated by any evil, the same good we might strain to force into place by way of privileges bought at very harmful cost. Secondly, I declare that if there existed a branch of industry which could not be developed except by our bringing in privileges, then its drawbacks are such for the morals and freedom of the nation that no advantage would compensate for them.8

Too many writers before me have denounced wardenships, guild masters, and apprenticeships for me to enter into long detail on the subject. These institutions are privileges of the most iniquitous and absurd type, most iniquitous because the individual is permitted the work which keeps him from crime only at the good [281] pleasure of another; most absurd because under the pretext of the perfecting of crafts, obstacles are put in the way of competition, the surest spur to such perfecting. The interest of buyers is a much safer guarantee of the quality of production than arbitrary regulations, which, coming from a government which inevitably confuses everything, does not distinguish clearly between the various trades and prescribes apprenticeships as long for the easiest as for the most difficult. It is bizarre to imagine the public a bad judge of the workers it employs and to think that government, with so much else to do, will be better informed as to what dispositions must be made in order to appraise their merits. It has no choice save to rely on men who, forming an organized group within the State, have a different interest from the mass of the people and who, working on the one hand to reduce the number of producers and on the other to raise the price of the goods, render them at once more faulty and more expensive. Experience has everywhere pronounced against the alleged value of this mania for regulation. The English towns where trade is most active, which have experienced in a very short time the greatest growth and where production has been carried to the highest degree of perfection, are those which have no charters9 and where there exist no corporations.10

Even more outrageous and vexatious, because it is more [282] direct and undisguised, is the rigging11 of daily wages. Smith says this rigging is the sacrifice of the greater to the smaller party. I will add that it is the sacrifice of the poor to the rich party, of the hardworking party to the idle, at least comparatively, of the party which already suffers from society’s harsh laws, to the party which chance and social institutions have favored. One could not without pity take stock of this struggle of poverty against greed, where the poor man, already burdened with his needs and those of his family, having no hope save in his work, and unable to wait for an instant without his very life and the lives of his loved ones being threatened, meets the rich man, not only strong in his wealth and in his power to constrain his adversary by refusing him that work which is his only resource, but reinforced still further by oppressive laws, which fix earnings without regard to the circumstances, the skill or the zeal of the workman. And let no one think this rigging necessary to put down exorbitant claims and the rise in labor costs. Poverty has humble demands. Does not the workman have hunger pressing at his back, leaving him scarcely an instant to discuss his rights and disposing him all too readily to sell his time and effort below their worth? Does not competition settle the price of labor at the lowest level compatible with physical subsistence? In Athens, just as in France today, the journeyman’s wage was equivalent to four people’s food. Why impose regulations when the nature of things settles the case, without oppression or violence?

The rigging of the price of labor, so fatal to the individual, absolutely does not work to the public advantage. Between the public and the workman there stands a pitiless class, the masters. They pay as little and demand as much as possible and thereby profit uniquely at once from the needs of the workers and of the leisured class. What a strange complication in social institutions! There exists an abiding source of equilibrium between the price and the value of labor, one which acts without force, in such a way that all calculations are reasonable, and all interests happy. This source is competition. But it is thrust aside. Obstacles are put in competition’s way by unjust regulations. Then people want to restore equilibrium by equally unjust regulations, [283] ones which have to be maintained by punishments and harsh controls.

Governments resemble Molière’s doctors in almost everything they do. When they are told of what has been established and organized by nature, they endlessly reply: we have changed all that.12

The laws against products of foreign manufacture are designed to get or constrain the inhabitants of a country to make themselves what they would otherwise buy abroad. These laws are necessary therefore, in the actual understanding of the government which imposes them, only when such products could be acquired more cheaply abroad than they can be produced. For in the case of the opposite supposition, personal interest on its own suffices to ensure that individuals will manufacture themselves what would cost them more if they bought it ready-made. Even when prices are equal, a country’s own products have a great advantage. “Sale,” says an author of repute,13 “is a kind of prize for winning the race, and foreign goods start from further off.”

Is it an advantage, however, for a nation to set up manufactures on its own territory which, in order to furnish it with a certain money income and quantity of production, absorb more funds than the purchase of these products would have required? We can reply in the affirmative only in supposing that if these funds were not thus employed, they would not be employed at all. Now, this supposition is clearly absurd. If these funds were not employed in this way, they would be employed in some other way and more advantageously. This is to say that with a portion of these resources one would buy products which the whole lot of them is now used in producing, while the remainder would be redirected to some other branch of production [284] which it would vitalize. Governments, in forcing their subjects to manufacture themselves things they would not voluntarily have manufactured, force them to employ their resources inefficiently. They diminish the output of their capital and their labor. They therefore diminish their wealth and thereby the national wealth.

Adam Smith’s ingenious comparison in this regard has often been cited.14 I cite it again, because the evidence with which he has enveloped this truth seems scarcely to have convinced those in charge of States. In Scotland, one could, he says, by using hothouses, forcing beds, and glass frames, make very good grapes grow, from which one could also make extremely good wine, thirty times dearer than one can buy from abroad. If that seems absurd, it is equally so to require the manufacture in a country of something that manufactured thus would cost twice as much again, as much again, or even half as much again, as the same thing coming from abroad. The absurdity seems stronger because the sum strikes us more; but the principle is equally insane.15

Is it feared that free importation of foreign merchandise may encourage a nation into laziness by relieving it from the necessity to work to procure what it needs? But what it does not procure for itself by direct work, it must obtain by an outlay of funds, and to acquire funds it must work. Only full freedom will permit it to choose the most profitable types of production and perfect itself therein, in dedicating itself to them more exclusively. For the division of labor has the same result for the products of nations as for those of individuals. The prohibition of foreign goods tends to deprive a people of the advantages of the division of labor. This people then resembles an individual who, far from devoting himself solely to a job which would make him rich, wishes on his own, and through his own work, to make his tools, fashion his clothes, prepare his food, build his house. Splitting himself thus between various jobs, in order to take away from the workers in each one of them the benefit they deserved, he would stay wretched and poor in the midst of his fruitless, interrupted efforts.

Among a people still in the infancy of civilization, [285] frequent recourse to manufactures from outside can retard the establishment of home manufactures. But since it is very probable that the government of such a people will itself be extremely ignorant, there is little to hope for from its efforts in support of business. One should resign oneself and wait. There is no case of a nation which was not industrious having been made forcibly so by government. There is a very good reason for this. The government which forces men toward any end whatsoever is an arbitrary and vicious government and can do nothing well.

As for industrious nations, it suffices to leave each individual perfectly free in the deployment of his capital and his labor. He will discern better than any government the best use he can make of them. If such economic activity is advantageous, he will not let foreigners reap its profits. If he does abandon some other comparable economic activity to them, this is because he has found a third which is more profitable.

Barriers against the importation of foreign goods are ill-advised for yet another reason. If you stop foreigners from selling to your subjects, with what do you expect them to buy from them? The richer a people are, the more the nation maintaining commercial relations with them gains by these relations. But to stop a people selling their products is to do all one can to impoverish them. It is therefore to do all one can to diminish the profits one could extract from trading with this people.

But when foreigners refuse to take our country’s products, must we, someone will say, allow the free importation of theirs? When a people close their territory to your goods, this is either to make them themselves, or to favor some other nation. In the first case, one of two things happens. Either they manufacture these goods more cheaply than they would buy them from you, and then the prohibition is without effect since your products would always be at a disadvantage, or they will manufacture them more expensively and pay more for goods of lower quality. Yours, better and cheaper, will be smuggled in. The nation which wanted to keep them out impoverishes itself because it diverts funds from profitable uses into manufacturing objects it would be better to buy elsewhere. It imposes on itself constraints which hurt it in a thousand ways. The State struggles vainly against a smuggling which frustrates all its efforts. Individuals suffer from the obstacles they encounter at almost every step. The vices of such a system soon make themselves felt; and if you have kept to one based on complete freedom, [286] beyond all doubt the nation which had deviated from this will find it in its interest to come back.

If this nation rejects your goods in favor of merchandise from another country, the question is once again almost the same. Either the products of the favored nation are better than yours, with the same outcome as would obtain without the prohibitions, or these productions are inferior and yours will prevail sooner or later.

The drawback to reciprocal action is that it engages people’s pride and in this way prolongs the stresses and the uneasiness. It no longer suffices that he who was first in error sees this and corrects himself. It calls for a coming together of two wills not able to agree in the swift succession of events. Injustice leads on to injustice; reciprocal prohibitions perpetuate prohibitions.

There are few questions on which governments talk as much nonsense as they do on reciprocity. The argument here constantly serves them in the maintaining of laws whose fatal consequences they cannot dispute. The law of aubaine16 is proof of this. Because neighboring countries have made a law preventing our fellow citizens from settling among them, we quickly make a law stopping our neighbors from settling among us.17 A marvelous vengeance this! If on the contrary we had not stupidly followed their example, we would gain from their bad law, since our fellow citizens, driven from their place, would stay with us, wealth and all. And we would profit even more from not having made a similar law, because our neighbors, welcomed by us, would freely bring us their business and their assets.

Be just with the just. You owe it them. But be just even to those who are unjust. It is the best way to get them to bear the pain of their injustice, while leaving them free to repair it.

[287] The same motives which have led governments to put barriers to the importation of foreign products have led them to ban the export of gold or silver specie. Just as a number of philosophers have taken words, the signs of ideas, for ideas themselves, administrators have mostly taken money, the sign of wealth, for wealth itself.

It would nevertheless be easy to show that specie is exported from a country only when this is advantageous to it. In fact, it is exported only when it provides a means of acquiring externally, by exchange, a greater value than the same volume of specie would purchase internally. Now, it is clear that by this operation one enriches the country into which this greater value is made to enter.18

When there is too little specie in a country, it is useless to prohibit its exportation. For the specie being worth more in this country than in any other, individuals have an interest in not having it exported. When, on the contrary, there is in a country more specie than the needs of commerce and circulation demand, it is fatal to forbid its exportation. What results from this is that all goods and activities cost proportionately more in this country than everywhere else. Then this State can only buy and never sell.19 It can buy because in buying it can tolerate the loss occasioned by the low value of its money. But it cannot sell, because it cannot find purchasers willing to resign themselves to tolerating that loss. In that way the enforced superabundance of the specie is fundamentally harmful to economic progress.

If we consider specie in the most usual way, that is, as a medium of exchange, its exportation must remain free. It will not be exported unprofitably, and if it is exported to advantage, the total of public wealth increasing by [288] the amount the individual gains, the whole nation will benefit. We can also, however, think of specie as a manufacture, and as such, as something whose exportation is worth encouraging.

Among almost all peoples, the manufacture of money not being costless, its exportation is as advantageous to the State which mints it as that of any other manufactured good. How singularly illogical are our statesmen-financiers! The trade in jewelry is regarded as lucrative, although it dispatches gold and silver abroad, and the exportation of money, whose production brings a return of the same kind, and which, therefore, is nothing other than a national manufacture, is envisaged as a calamity. It has to be said that governments, until now, have not had the first idea about the questions on which they have piled up law after law.

It must readily be acknowledged, however, that some governments find it convenient rigorously to prohibit the exportation of specie. These are governments so unjust, so arbitrary, that each man works secretly to escape their yoke. Then, no doubt, specie is exported without any advantage coming back to the country thus governed. It is exported at any price, even at loss, because everyone acts as if in a fire, randomly hurling the furniture he wants to save, far from the blaze, without troubling himself over the damage it will suffer from its fall, certain that he will conserve only what he has been able to get away from the devastating element. In this case, no doubt, frontiers must be watched, so individuals can be stripped of their sad and last possession. The exit of specie must be stopped, as must the exit of persons. Just so must the privacy of letters be violated, and in a word all the faculties, all the rights, all the freedoms of man be interfered with. All these faculties, freedoms, and rights are, unwittingly, in permanent conflict with oppression. And as everything in nature tends to free itself from despotism, despotism cannot permit anything, cannot leave anything free in nature.

[289] Governments have made two kinds of laws prohibiting commerce in grain. The first kind express their wish that the trade in this commodity be made directly between producer and consumer, without a group able to intervene between them, buying from the former and reselling to the latter. Hence the regulations against speculators. The second kind express the wish that no exportation of food products shall happen. Hence the severe penalties in some countries attaching to the export of grain.

The pretext for the first kind of laws was probably that a middleman class between consumer and producer, having to find a profit in the trade it was undertaking, tended to raise the price of the commodity, and being able easily to take advantage of circumstantial difficulties, had the dangerous ability to push prices disastrously high.

The reason for the second kind of laws was fear that undue exportation might entail famine.

In both cases the intentions of governments were praiseworthy; but in both cases they took wrong means and failed in their purposes.

All the advantages of the division of labor are found in the establishment of a middleman class, placed between the grain producer and the consumer. These middlemen have more funds than the producer and more resources for setting up warehouses. Dealing solely with this trade, they can study better the needs they undertake to meet. They free the farmer from having to get involved in speculations which absorb his time, divert his resources, and drive him into the middle of towns, where he loses his morals and dissipates his savings, a quadruple loss for agriculture. No doubt the middlemen have to be paid for their trouble. But the farmer himself has to be paid for this same trouble, which he takes less effectively and skillfully, since it is not his main activity, and at greater cost consequently. This extra expense comes back to the consumer, whom people thought they were helping. The middlemen who are proscribed as the cause of famine and high prices are precisely those who put obstacles in the [290] way of high prices becoming excessive. They buy corn in the years of overabundance and thereby prevent its falling too low in price, or its being squandered or frittered away.20 They withdraw it from the market when its oversupply, occasioning a disastrous price fall for the farmer, would discourage the latter and lead him to neglect or imprudently limit production the following year. When the need makes itself felt, they put back what they have amassed into the market. In this way they come to the help, at one time of the producer, in sustaining his commodity at a reasonable price, at another of the consumer, by reestablishing plentiful supply of this commodity at the point where its market price exceeds certain limits.21

They produce, in a word, the effect one hopes for from state-instituted warehouses, with the difference that warehouses managed and watched over by individuals, whose sole business they are, are sources neither of abuses nor waste, unlike everything which is publicly managed. They perform all this good out of personal interest, no doubt, but the fact is that under freedom’s dispensation, personal interest is the most enlightened, constant, and useful ally of the general interest.

The talk is of hoarding, of machinations, of coalitions between hoarders. Who cannot see, however, that freedom alone supplies the remedy to these ills? The remedy is competition. There would be no more hoarding if everyone had the right to hoard. Those who held back their commodities to get an excessive price for them would be victims of their calculation, as absurd as it is wicked, since others would reestablish a state of plenty, contenting themselves with a modest return. The laws remedy nothing, because they are eluded. Competition remedies everything, because personal interest cannot stop competition when the government allows it. But as laws lead to their authors being talked about, people always want them, and as competition is a thing which speaks for itself and no one sings its praises to governments, governments despise and misunderstand its advantages.

If there have been hoarding and monopolies, this is because the commerce in grain has always been hit with regulations and surrounded by fears. Therefore it has never been other than a suspect commerce, mostly a clandestine one. Now, in things commercial, everything which is suspect, everything clandestine, [291] becomes vicious; everything authorized, everything public, becomes honest again.

To be sure, one has scarcely grounds for astonishment that an economic activity proscribed by government, stigmatized by an erroneous and violent public opinion, menaced by severe, unjust legal punishments, and yet further menaced by the rifling and pillaging of a mistaken populace has to this day been an activity undertaken only by stealth, by greedy and vile men, who, seeing society in arms against them, have made it pay, whenever they could, in times of crisis, for the ignominies and dangers with which it surrounded them. Access to a natural and vital activity has been closed to all merchants who care about their safety and honor. How could so mistaken a policy not have issued in a premium for adventurers and rogues? At the first sign of dearth, on the first suspicions of government, the warehouses were broken into, the grain was carried off and sold below market price, with confiscation and fines and with the death penalty pronounced against proprietors.22 Did not proprietors have to indemnify themselves against these obstacles, by pushing to excess all the profits they could extract by fraud, in the midst of the perpetual hostility exercised against them? With nothing assured in their legitimate profit, they had to turn to illegitimate kinds, by way of indemnity. Society had to pay the penalty for its folly and rage.23

The question of grain exports is even more delicate to deal with than that of the warehouses. Nothing is easier than painting a touching picture of the misfortune of the poor and the hardness of the rich, with a whole nation dying of hunger, while greedy speculators export grain, the fruit of their labor and sweat. There is a slight drawback to this way of considering things, namely that everything sayable about the danger of free exportation, which is only one of the functions of property, can be said with no less force and just as much foundation, against property itself. True, nonowners are in all respects at the mercy of owners. If one wants to assume that the latter have a strong interest in crushing, oppressing, and starving the former, an abundance of the most pathetic pictures will result from that supposition.

That is so true, that the opponents of freedom of exports have always been forced to offer some insults in passing to the [292] proprietors. Linguet called them monsters24 whose prey must be snatched from them, without our being upset by their howling; and the most enlightened, the most virtuous, and the most respectable of defenders of the prohibitive system ended by comparing proprietors and those who spoke in their favor to crocodiles.25

I would wish to envisage this matter from a point of view such as to push to one side all the ranting and thereby move forward on a principle all interests might adopt. Now, the principle is this, if I am not mistaken.

For wheat to be plentiful, there must be as much of it as possible. For there to be as much as possible, we must encourage production. Everything which encourages production of wheat favors abundance. Everything which discourages this production calls directly or indirectly to famine.

Now, if you wished to encourage production of a manufacture, what would you do? Would you reduce the number of buyers? Certainly not. You would increase them. The maker, sure of his sales, would increase his production, insofar as this increase were in his power. If, on the contrary, you diminish the number of buyers, the maker would cut his production. He would not wish it to exceed the amount he could get rid of. He would calculate, therefore, with scrupulous exactness, and as it would be much more annoying to him to have too few buyers than too many, he would cut his production in such a way that it fell short of rather than beyond the strict minimum.

Which is the country where most watches are made? I think it is the one where the watchmakers export the most. If you forbade the exportation of watches, do you think more would stay in the country? No; but there would be fewer made.

The case with grain, as to production, is the same as with other things. The mistake made by apologists for prohibitions [293] is to have considered grain as an object only of consumption, not production. They have said: the less is consumed, the more is left. False reasoning, in that grain is not a preexisting commodity. They ought to have seen that the more limited consumption is, the more production will be restrained, and that in consequence the latter will soon become insufficient for the former.

For grain production differs from that of ordinary manufactures in that it depends not solely on the manufacturer but also on the seasons. The producer, however, forced to limit his production, can calculate only on an average year basis. The result of his limiting his output to the strict minimum is that if the harvest falsifies his calculations, his output, thus limited, is inadequate. The majority of farmers, no doubt, do not limit their production deliberately. But these very people are put off by the idea that their work, should it be favored by nature, may not be profitable, that their commodity may not find buyers and therefore be a liability to them. Though they do not form any plan according to such considerations, they are more negligent in their cultivation. Earning less accordingly, they have fewer funds to put into their cultivation, and so production falls.

In preventing the export of wheat, therefore, you do not ensure that the surplus wheat necessary to the provisioning of a country stays in it, you ensure that it does not get produced. Now, since it can happen through the inclemency of nature that this surplus becomes necessary, you are ensuring that the minimum is missing.

To forbid exporting is to forbid selling, at least above a certain measure, since, once the home market is provided for, there are no buyers for the surplus. Now, to forbid selling is to forbid producing, since it takes away from the producer his reason for acting. Forbidding exports is therefore in other words forbidding production. Who could believe that this is the chosen way to keep production ever abundant?

I cannot leave this subject. Obstacles to exporting are an attack on property. Everybody agrees. Now, is it not clear that if property is less well respected, when it is associated with grain, than with any other commodity, then for purposes of sale people will prefer to hold a surplus of any other commodity rather than of grain?

If by turns you allow and forbid exportation as you please, [294] then your permission, never bearing except on existing production and always subject to your revocation, will never constitute a sufficient encouragement to future production.

I wish to reply to an objection. I said elsewhere26 that the high price of indispensable primary commodities seemed to me fatal to the people, because daily earnings did not rise proportionately. Will not the export of wheat, someone will say, bring about an increase in the price of the commodity? It will probably prevent the price falling very low. If, on the other hand, however, the prohibition of exports stops the grain from being produced, may not the price increase perhaps be more inevitable and excessive?

Do you think you can enforce the production of grain? I should like to see you try. You will prevent owners from taking their land out of wheat production. Straightaway this is another surveillance. But will you oversee how they cultivate too? Will you oblige them to arrange the funding, dress the soil, get hold of the requisite manures, and all to produce a commodity, which if it is abundant will be impossible for them to sell and costly even to keep? When a government wants its own way to be done in a single thing, it soon finds itself reduced to doing everything.

I have not put forward other reasons for free exportation because they have been developed a thousand times. If wheat is dear, people will not export it, since at the same price, it is better to sell it on the spot than to export it. People will export it, therefore, only when it is good to do so. You can suppose universal dearth, with famine in your own country or in neighboring ones. Then you will need singular laws for a singular disaster. An earthquake which threw all farm holdings into confusion would demand special legal arrangements for a new sharing out of real estate. One takes special measures for distributing subsistence food in a beseiged town. But to make habitual legislation for a calamity which has not taken place naturally once in two centuries is to turn legislation into a habitual calamity.

Nature is not reckless with her hardships. If we compared the number of dearths which have been caused by truly bad years with those caused by regulations, we would be pleased at how little ill comes to us from nature, and we would tremble at the ill which comes to us from men.

[295] I would have liked to take a middle course on this question. There is a certain credit for a moderation which it is pleasant to attribute to oneself and which it is not hard to acquire, provided one is not very sincere. One testifies in this way in one’s own favor for having properly looked at both sides of questions, turning one’s hesitation into a discovery. Instead of being right against a single view, one appears to be in the right against two. So I would have preferred to find as a result of my investigations that the government can be left the right to allow or forbid exportation. In trying to determine the rules according to which it should act, however, I felt I was plunging again into the chaos of prohibitions. How will the government judge, for each province, at a huge distance, and remote from others, circumstances which can change before knowledge of them gets to it? How will it stop fraud by its agents? How will it guard itself against the danger of taking a momentary blockage for a real dearth, or a local difficulty for a universal disaster? Lasting general arrangements based on brief and partial difficulties produce the ill we want to prevent.27 The men most lively in recommending this versatile legislation do not know how to go about it when it comes to the means of carrying it out.28

If there are drawbacks in everything, leave things be. At least the people’s suspicions and the injustices of government will not be joined with nature’s calamities. Out of three scourges you will have two less, and you will have moreover this advantage—that you will get men used to not regarding violation of property as a resource.29 Then they will seek and find other ones. If on the contrary they notice the former, they will always come back to it because it is the swiftest and the most convenient.

If you justify, as being in the public interest, the obligation imposed on owners to sell in a particular place, that is to say, to sell at a loss, given that they could sell better elsewhere, you will end up fixing the prices of their commodities. The one will be no more unjust than the other and will easily be represented as equally necessary.

Therefore I admit only very few exceptions to the complete freedom of [296] commerce in grain, as in any other commodity; and these exceptions are purely circumstantial.

The first is the situation of a small country, without territory, obliged to maintain its independence against powerful neighbors. This little country could establish warehouses so that others did not seek to subjugate it by starving it, and since the administration of such a country is like that of a family, the abuses of these warehouses would be largely avoided.

The second exception is a sudden and general famine, the effect of some unforeseen cause, natural or political. I have already spoken of this above.

The third is at once the most important and the most difficult to resign oneself to. Its necessity results from popular prejudices nourished and sacralized by the rooted habit of error. It is certain that in a country where the commerce in grain has never been free, sudden freedom produces a fatal disturbance. Opinion revolts, and its blind and violent action creates the ills which it fears. Therefore we need, I admit, to exercise great care to bring the people around on this subject to the principles closest to justice and truth. The shocks are painful, on the right road as well as the wrong; but the government which does this decent thing often only with regret does not devote much zeal to the prevention of these shocks, and educated men, when they succeed in dominating it by force of enlightenment, too often believe they are engaging it more by dragging it into precipitate measures. They are not aware that this is to furnish it with specious pretexts for retrogressing. This is what happened in France around the middle of the last century.

The question of the rate of interest is perhaps the one which for some time had been best argued. In our times, some men, probably tired of seeing people agreeing on this question, have begun considering it again from a theological viewpoint.30 I hardly feel inclined to see it in [297] this light. I will say, though, that even religiously the prohibition of all interest is an absurd precept, because it is an unjust and moreover inoperable one. Religion does not at all fault the owner of land for living on the income it yields. How can it forbid the owner of capital to live off its income? This would be ordering him to die of hunger.

If you then turn the precept into advice, this change will have only one advantage, that people will no longer think themselves so guilty for disobeying it. Lending without interest might be an act of charity, like almsgiving; but this can never be other than an individual act, and you cannot make it a habitual rule of human conduct. It is useful for society that funds be employed. It is therefore useful that those who do not use them themselves lend them to others to use them. But if funds do not yield any income when they are lent, people would rather bury them than lend them, since they avoid the dangers of the loan.

Government has only three things it can do in this regard. It must stop fraud, that is, prevent abuse of youth, inexperience, or ignorance, stop people lending to children, minors, and any whom the law regards as incapable of watching over their own interests. For this purpose it suffices that government does not recognize any contracts such persons may enter into.

Secondly, it must guarantee legitimate compacts and ensure their carrying out. The easier and more assured this is, the more the rate of interest will come down. For lenders always get themselves paid for the risks they incur.

Finally, government must determine a legal rate of interest just for the case where the debtor, depositary, holder of a sum does not make it good by the time and on the conditions agreed. This legal interest rate must be as high as possible, for if it were less than the ordinary rate of interest, the fraudulent debtor would find himself enjoying resources retained against all justice, more advantageously than the honest debtor who had borrowed it with its owner’s consent.31

All further intervention in this matter by government is iniquitous and off target. Restricting the charging of interest promotes usury. Capitalists need, on top of the natural rate of profit for the funds they lend, a “risk premium” against the laws they infringe. This rule of nature [298] has made itself respected in all eras, in spite of all regulations. Popular power in Rome, religious power among Christians and Moslems have equally failed against it.32

I find two errors on this subject in the work of two equally famous and estimable writers, Adam Smith and M. Necker.

The former says that the legal rate of interest33 must not be raised too high, or the bulk of the money lent will go to spendthrifts, only they being willing to pay so dear. In this way the country’s resources will be taken out of hardworking hands and passed over to men unable to do other than dissipate and destroy them.

This author forgets, however, that spendthrifts who dissipate the funds they borrow are rarely in shape to pay them back after they have dissipated them. Consequently the vast majority of lenders will always prefer to high but precarious returns, lower, safer ones. They will entrust their funds, therefore, to the hardworking, thrifty class who, borrowing only to engage in profitable speculation, can meet obligations by the due date.

M. Necker too34 approves of government fixing the legal rate of interest. “Lenders are in general,” he says, “only inactive proprietors. Borrowers, on the contrary, have a purpose, an activity from which society benefits in some way. So when there are conflicts over the rate of interest, the government ought to want the advantage to belong to them.” But if the advantage belongs to borrowers, when the rate of interest is disputed, lenders will have themselves compensated for the disadvantage to their side. The borrowers we believed we were helping will carry the burden. This is inevitable and will work against the purpose M. Necker wishes the government to have in mind. He feels this himself, since he adds: “since the relationships which determine the interest rate are more powerful than government, sovereigns can never hope to control it by way of imperious laws.”35 But how else other than by laws will government intervene in the contestations between lenders and borrowers? “The profits of agriculture,” he continues, “and those of all enterprises which [299] are not unique and privileged, cannot bear the expense of an interest rate above ordinary usages, and it is absolutely no help to production to favor the position of the lenders.”36 Is it not clear, however, that those who borrow for farming or industrial enterprises will not be tempted to pay an interest rate greater than their profits? And will those who borrow for dissipation be checked by laws which are easy to elude? Regulations are superfluous for the former, illusory for the latter.

When interest is banned, it takes all sorts of forms. It disguises itself as capital. What else is selling dearer on credit than having oneself paid the interest on one’s money?

Except in the circumstance we spoke of above, that of capital illegally retained by a debtor, the rate of interest must not be fixed. The rate, like the price of all goods, should be regulated by demand. To fix the rate of interest is to fix the maximum price of capital, and a maximum price of capital has the same effect as one for commodities. It causes the flight of what can be placed elsewhere and makes what is sold in contravention of the law more expensive.

Without doubt there is a moral element in this question. But opinion alone can pronounce on this moral element, and it always does so wisely. Solon37 did not want to fix the interest rate in Athens. Those who demanded unreasonable rates of interest there, however, were regarded as infamous.

You fear the excesses of clandestine usury. Yet it is your prohibitions which bring it to this level. Let all transactions be out in the open. Public scrutiny will moderate them.

chapter five

On the General Effect of Prohibitions

Prohibitions in the matter of industry and commerce, like all other prohibitions and more than all the others, put individuals at odds with the government. They form one nursery [300] for men preparing for every kind of crime by accustoming themselves to violate the laws, and another for men familiarizing themselves with wickedness, by living off the misfortune of their fellows.38 Not only do commercial prohibitions create artificial crimes, but they encourage the committing of these crimes by the profit which they attach to the fraud which is successful in deceiving them. This is a drawback on top of those which other prohibitive laws have.39 They tend to be traps for the poor, that class already surrounded by irresistible temptations, of which it has rightly been said that all its actions are hasty,40 because want presses on it, its poverty robs it of any enlightenment, and obscurity frees it from the force of opinion.

I said at the start of Book XII that I did not place the same importance on freedom of production as on other types of freedom. Nevertheless, the restrictions obtaining here involve laws so cruel that all others feel their effects. Look at the riots in Portugal occasioned first by the privileged position of the Company of Wines, riots requiring barbarous punishments, whose spectacle discouraged commerce, riots leading finally to a succession of constraints and cruelties which brought a host of proprietors to tear up their vines themselves, destroying in their despair the source of their riches, so that these would no longer furnish a pretext for all kinds of harassment.41 Look at the severity in England, the violence and the despotic acts which the exclusive privileges of the East India Company42 entail to keep themselves going. Open up the statutes of this otherwise humane and liberal nation. There you will see the death penalty multiply for actions impossible to consider criminal.43 When we examine the history of English settlements in North America, we see, so to speak, every special privilege followed by the emigration of the nonprivileged. The colonists fled in the face of [301] commercial restrictions, leaving lands they had scarcely finished clearing, to regain their freedom in the forest, asking from a savage nature a refuge from the persecutions of society.44

If the system of prohibitions has not destroyed all the enterprise of the nations it harasses and torments, this is, as Smith remarks,45 because each individual’s natural effort to improve his lot is a repairing principle, which in many respects remedies the bad effects of administrative regulation, just as the life force struggles, often successfully, in the physical organization of man, against the illnesses which flow from his passions, intemperance, or laziness.

chapter six

On Things Which Push Governments in This Mistaken Direction

It is all the more important that these truths make some breakthrough in the outlooks of government, in that each category of proprietors, makers, and manufacturers endlessly begs the intervention of government against everything which diminishes its immediate profit, whether by useful discoveries or some kind of new production; and it has to be feared that the governors may take the interests of these groups to be those of society. These two sets of interest are, for all that, almost always mutually opposed.46

The demands addressed to government by those in trade, to prevent competition, the installation of equipment, improvement in communications, and proliferation of commodities, could be translated thus: allow us alone to buy or sell such and such an object, so that we can sell it to you dearer. [302] Is it not odd that such demands have been welcomed so often?

When profits fall, business people are inclined to complain of the decline of trade. The diminution in profits is, however, the natural effect of progressive prosperity. Business profits fall: 1. Because of competition. 2. Because earnings rise, as a result of competition which increases labor prices. 3. By the increased flow of capital into commerce, which lowers the rate of interest. Now, these three causes of the diminution in profits are three signs of prosperity. This, however, is when business people complain and appeal about it to government, for special intervention,47 such that in the event, business people call for the intervention of government against commercial prosperity.

When the commercial mind mingles with the administrative one and dominates it, a thousand errors and ills ensue. Nothing is more dangerous than the habit and means used by individual interest to attain its purposes [303] transported into the administration of public affairs. Doubtless, the general interest is only the joining of all private ones. It is the joining of all these interests, however, by the cutting off of that part of each one which hurts the others. Now, it is precisely this part to which each private interest attaches the most value, because this is what in each circumstance is the most profitable to it. It follows from this that the private interest, which is very enlightened when it reasons on what matters to it and on what it must do, is a very bad guide when people want to generalize its reasonings and make them the basis of an administrative system. We see an individual enriching himself through a monopoly, and without reflecting on the fact that this is at the nation’s expense, we establish monopolies precisely as a means of wealth for the nation in question, when the reality is that they impoverish and despoil it. This is because governments are ordinarily steered toward these stances by men imbued with mercantile prejudices; and by a singular contradiction, but one they do not notice, by basing their prohibitive measures on the blindness or harmful tendency of special interests, they constantly institutionalize the calculations of special interest, as rules of their public conduct.

What we say about the business outlook does not apply solely to the group which is called “business” to distinguish it from other groups. This outlook becomes common to all people in society who harvest, produce, or accumulate in order to sell. Thus farmers contract the business outlook when it comes to selling grain, and we see them drawn into the same errors as men involved in purely mercantile speculation. Did not the owners of vineyards in France ask the King’s Council in about 1731 to forbid the plantation of new vineyards?48 Did not landowners in counties near London petition the House of Commons, for no large roads to be opened to the more distant [304] areas, for fear that the wheat from these areas, arriving more easily in the capital, might lower the price of theirs?49 If rentiers dared, they would speak about falling interest rates the way business people do of falling profits. A rentier, having for long lent his money at ten percent and now finding he can place it only at five percent, would ask nothing better than to say that the country he lived in was going to ruin because he was finding himself less well off there. He would most readily solicit the government for measures to stop interest rates falling. It is nevertheless incontestable that a fall in interest rates proves the prosperity of a country and a rise proves its bad financial situation.

In industry, prohibitions are the type of arbitrary measure which some men can use against others; and just as in civil disagreements they seek to seize arbitrary power instead of destroying it, in the cause of trade they seek to seize control of arbitrary regulations. They almost never protest against prohibitions in general, but strive to have them put to their advantage. Following the introduction of silk manufacture, under Henry IV, the cloth manufacturers demanded these manufactures be banned.50 Following the introduction of cotton stuffs, the silk manufacturers called for a prohibitive law against them. Following the invention of prints, cotton manufacturers represented them as a frightful calamity.51 If all this pleading had been listened to, France would have neither silks, nor cottons, nor prints. Each manufacture, like each newborn religion, claims freedom. Each manufacture, like each established religion, preaches persecution.

What is most fatal in regulations is that motivated by necessity which does not exist, they sometimes create it. Men arrange their calculations and their habits according to regulations, which then become as dangerous to revoke as they are troublesome to maintain.52

M. de Montesquieu, as a judicious writer observes,53 had only very superficial ideas about political [305] economy. We must avoid taking him for a guide in this matter. Everything he explained as regards institutions he believed he justified; the discovery of the motive made him indulgent of the institution, because it made him pleased with himself. Speaking of the system of prohibitions in England, he said, “they obstruct the trader, but this is in favor of the trade”;54 he would have been more correct to say: they obstruct the trade in favor of some traders.55

chapter seven

On the Supports Offered by Government

A regime of subsidies and various supports has fewer disadvantages than one based on monopolies. It seems to me dangerous, though, in several respects.

First, one must fear that government, once it has arrogated to itself the right to intervene in the affairs of business, if only through supports, may soon be pushed, if the incentives are not enough, to have recourse to measures of constraint and harshness. Government rarely resigns itself to not taking revenge for failed policies. It runs after its money like some gambler. While the latter appeals to luck here, however, government often appeals to force.

Secondly, there is also the worry that government, by its unwonted incentives, may deflect funds from their natural usage, which is always the most profitable one. Funds move of their own accord to their most profitable employment. To attract them there, there is no need for supports. For those which would stand to lose, supports would be fatal. Any industry which cannot stand independently of government help finishes up second-rate.56 The government then pays individuals to work at a loss, and thus seems to be indemnifying them. Since the indemnity cannot be drawn other than from taxation, however, it is, in a word, private individuals who [306] bear the burden. Finally, government supports seriously attack the morality of the working classes. Morality is constructed from the natural sequence of causes and effects. To upset that sequence is to damage morality. Anything which brings chance among men corrupts them. Anything which is not the direct, necessary, and habitual effect of a cause, pertains more or less to hazard. What makes work the most efficacious cause of morality is the independence of other men in which the working man finds himself, and the way he depends on his own conduct, on the order, continuity, and regularity he puts in his life. Such is the real cause of the morality of those groups busy with routine work, and of the immorality so common among beggars and gamblers. These last are of all men the most immoral, since of all men they count the most on chance.

Supports and help for business by government are a kind of game. It is impossible to suppose that government never grants its help and its supports to men who do not deserve them nor never grants more of these than the objects of this favor deserve. A single mistake of this kind turns supports into a lottery. A single eventuality is enough to bring hazard into all calculations and therefore to destabilize them. The probability of the chance does not matter, since imagination trumps the calculation. Even the distant, uncertain hope of government help casts into the life and reckoning of the hardworking man an element quite different from the rest of his existence. His situation changes, his interests become complicated. His condition becomes open to a sort of speculation. This is not your peaceful merchant or manufacturer, who made his prosperity depend on the wisdom of his speculations, on the quality of his products and the approval of his fellow citizens, accorded for the regularity of his conduct and in recognition of his sobriety. This is a man whose immediate interest and pressing desire is to attract government attention to himself. The nature of things, for the good of the human race, once put an almost insurmountable barrier between the great mass of peoples and those who held power. Only a small number of men were condemned to run hither and thither in the political sphere, to speculate in favor, to grow rich on corruption. The rest followed their road peacefully, asking government only to guarantee their peace, and the exercise of their faculties. If government, however, discontented with this salutary function and committed through generosity or promises made in the presence of all, provokes hopes and creates passions which did not exist before, then everything is [307] turned upside down. Without doubt this will spread a new activism among the business class. This is a vicious activism, though, one more concerned with the external effect it produces than with the solid basis of its own work, which pursues publicity rather than success, because success is seen as possible even from a meretricious publicity, an activism which in short turns the whole nation reckless, restless, greedy, rather than thrifty and hardworking as it would have been.

And do not imagine that in substituting for financial incentives, motives drawn from vanity, you will be acting less harmfully. Only too often governments number charlatanism among their means. It is easy for them to believe that their mere presence, like that of the sun, vivifies the whole of nature. So they display themselves, they talk and smile, and in their view their performance should be honored for centuries. This is once again, however, to take those who must work for their livelihood away from their natural employment. It is to give them the need for credit. It is to inspire in them the desire to exchange their commercial relationships for supple ones, those of a clientele. They will learn courtly vices without at the same time the elegance which at least veils them.

The two hypothetical situations most favorable to a regime of government incentives or supports are, without question, on the one hand when one is establishing a branch of production as yet unknown in a country, one demanding large prior investments, on the other the help which has to be given to certain business or farming classes, when unforeseen calamities have considerably diminished their resources.

I am not sure, however, whether even in these two cases, except perhaps for some very rare circumstances, for which it is impossible to establish fixed rules, government intervention is not more harmful than advantageous.

In the first case, the new branch of production, protected thus, will undoubtedly establish itself sooner and more widely; but resting more on the help of government than on calculated management by individuals, its foundations will be weaker. The individuals involved, indemnified in advance for potential losses, will not bring the same zeal and care as if they had been left to their own devices and could not expect any success save what they deserved. They will rightly flatter themselves that the government, in a way committed by the first sacrifices it has agreed to, will come to their help once more, if they fail, so as not to lose the fruits of its sacrifices; and this [308] lurking thought, different in nature from that which must act as a spur to business, will always more or less damage their activity and efforts in a perceptible way.

Moreover, in countries used to the meretricious help of government, it is assumed much too readily that such and such an enterprise exceeds individual means. This is a second cause of the slackening off of the particular industry. It waits for the government to supply the stimulus, because it is used to the government’s making the first move.

In England scarcely does a discovery become known before numerous subscriptions provide the inventors with all the means of development and application. The whole point is that these subscribers examine the promised advantages much more carefully than a government could, since the interest of all those in business on their own account is not to let themselves be deceived, while that of most of those who bank speculatively on government help is to deceive the government. Work and success are the only means open to the former. Exaggeration or patronage are for the latter a much more certain and above all swifter way. Systematic reliance on supports is immoral in principle in this respect too.

True, individual effort, deprived of all outside help, sometimes comes to a halt in the face of obstacles. But first it will turn to other projects and secondly it will assuredly regroup its resources to return to the attack, sooner or later, and overcome the difficulty. Now, my assertion is that this partial and short-lived difficulty will be nothing like as disadvantageous as the general disorder and discontinuity which any artificial aid brings into ideas and calculations.

Almost identical reasoning applies in the case of the second hypothesis, which at first glance seems even more legitimate and favorable. In coming to the help of the business or farming classes, their resources depleted by unforeseen and inevitable calamities, the government first of all weakens in them the feeling which gives most energy and morality to man: that of total obligation to oneself and of putting hope only in one’s own resources. Secondly, the hope of such help encourages classes in distress to exaggerate their losses and conceal their resources, in this way giving them an interest in lying. I agree that this help may be distributed prudently and parsimoniously. But what may not hold for its effect on people’s affluence may hold for the effect on their morals. The government [309] will nonetheless have taught them to rely on others instead of on themselves alone. It will go on to disappoint their hopes; but their work will still have slackened as a result of all this, and their veracity will still have suffered a change. If they do not get government help, this will be because they have not learned a sufficiently skillful deception. Finally, government runs the risk of finding itself deceived by unreliable agents. It cannot follow in detail the carrying out of its orders, and cunning is always more skillful than surveillance. Frederick the Great and Catherine II used a system of supports for agriculture and industry. They frequently visited in person the provinces they thought they had helped. Well-dressed, well-fed men were put along their route, in apparent proof of the affluence resulting from their generosity, but assembled to this effect by the distributors of their grace, while the true inhabitants of these regions were groaning in the depths of their huts, in their age-old poverty, ignorant even of the intentions of the monarchs who thought themselves their benefactors.

In countries with free constitutions, the question of a regime of incentives and supports can moreover be considered from another point of view. Is it salutary that the government should attach to itself certain groups of those it governs by handouts which even were they wisely distributed are intrinsically arbitrary? Is it not to be feared that these groups, seduced by immediate and positive advantage, might become indifferent to violations of individual freedom or justice? One would then be right to think of them as suborned by government.

chapter eight

On the Equilibrium of Production

To read a number of writers, you would be tempted to think that nothing could be more stupid, less enlightened, or more careless than individual interest. They gravely inform us sometimes that if the government does not promote agriculture then all labor will turn [310] toward manufacturing and the fields will lie fallow, sometimes that if the government does not promote manufactures, then all labor will stay in the countryside, that the product of the land will be far more than is needed, and that the country will languish without trade or industry.57 As if it were not clear on the one hand that agriculture will always take account of a people’s needs, since artisans and manufacturers must always have the means of feeding themselves, while on the other that manufactures will always increase as soon as agricultural products are sufficiently plentiful, since individual interest will push people into applying themselves to something more lucrative than increasing commodity production, where quantity will reduce price. Governments can change nothing with respect to men’s physical needs. The output and prices of products, of whatever sort, always comply with the demands arising from these needs. It is absurd to believe that when those who take up a line of work find it useful, this will not itself suffice to increase the scale of production. If there is more labor than is needed to release the fertility of the soil, the people will naturally turn their labor to other branches of production. They will feel, without the government warning them about it, that beyond a certain point competition destroys the advantages of the job. Individual interest will by its very nature be sufficiently stirred, without government support, to seek out some more profitable job. If the nature of the terrain requires a large number of cultivators, artisans and manufacturers will not become more numerous, because a people’s first need is to subsist. A people never neglects its subsistence. Moreover, the farming sector being more crucial, it will for that very reason be more lucrative than any other. When there is no improper privilege such as may invert the natural order, the value of a line of work always comprises its absolute usefulness and its relative scarcity. The real stimulus for all types of work is how much they are needed. Freedom in itself suffices to keep them all in a salutary and accurate balance.

Outputs always tend to move to the level of needs, without government getting involved.58 When one kind of product is scarce, its price rises. With price rising, production, being better paid, attracts to itself activity and funds. The [311] result is that supply becomes more plentiful. With supply increasing, price falls. With price falling, some activity and some funds go elsewhere. Then with production shrinking, price rises again and activity returns, until output and price have attained a perfect equilibrium.

What misleads many writers is their being struck by the listlessness or malaise which the nation’s working classes experience under despotic governments. They do not go back to the cause of the evil, but delude themselves that it could be remedied by a direct action by the government in favor of the afflicted classes. Thus in the case of farming, for example, when unjust and oppressive institutions expose farmers to harassment by the privileged classes, country areas are soon fallow because they are depopulated. The farming classes flock as fast as they can to the towns to escape from their servitude and humiliation. Then idiotic theorizers recommend positive and preferential supports for farmers. They do not see that everything is interconnected in human societies. Rural depopulation results from bad political organization. Neither help to a few individuals, nor any other artificial and fleeting palliative, will cure it. Our only resource is in freedom and justice. Why do we always delay seizing it as long as possible?

Sometimes it is said that we should ennoble agriculture, lift it up again, render it honorable as the source of the prosperity of nations. Rather enlightened men have developed this idea. One of the most penetrating but most bizarre minds of the last century, the marquis de Mirabeau, repeated it endlessly. Others have said as much for manufacturing. But ennobling is done only by way of distinctions, if indeed ennobling happens at all, by way of distinctions thus deliberately contrived. Now, if work is useful, since it will be profitable, many will pursue it. What distinction do you want to accord to something commonplace? Moreover, the necessary work is always simple. Now, it does not lie within government discretion to influence opinion such that it will attach special merit to what everyone can do equally well.

The only truly imposing distinctions are those which indicate power, because they are real, and the power they embellish can act for good or ill. Distinctions based [312] on merit are always contested by opinion, because opinion always reserves to itself alone the right to decide what merit is. Power it must recognize, like it or not. Merit, however, it can deny. This is why the cordon bleu commanded respect.59 It established that whoever bore it was a great lord, government being very well able to judge that this or that man is a great lord. The cordon noir on the contrary was ridiculous. It declared the man decorated with it a man of letters, a distinguished artist.60 Now, governments cannot pronounce on writers and artists.

Honorary distinctions for farmers, artisans, and manufacturers are even more illusory. These groups want to reach affluence or wealth through work and peace of mind by the rule of law. They want none of your artificial distinctions, or if they do aspire to them, it is because you have perverted their intelligence by filling their heads with meretricious ideas. Leave them to enjoy in peace the fruits of their labors, the equality of rights, and the freedom of action which belong to them. You will serve them much better by not showering them either with favors or injustices, than in harassing them on the one hand or seeking on the other to honor them.

chapter nine

A Final Example of the Adverse Effects of Government Intervention

I want to finish by showing that government intervention in questions of production is equally harmful whether it orders something or forbids the same thing. The example I use is the division of labor.

The division of labor has immense advantages. It facilitates increased output of all products, it economizes greatly on time and labor, it leads man to a perfection he cannot attain without it. It gives the businessman’s speculations a clarity, a precision and accuracy which simplify his operations and make his calculations more confident. It is therefore [313] certain that government does harm when it opposes the division of labor with prohibitive laws. This is what it did, as we explained earlier,61 with the commerce in grains, in forbidding the farmer to sell his wheat in bulk to those who wanted to hold it in warehouses. This resulted in countless difficulties for this trade, difficulties which often led to real famines or false alarms as troublesome as real famines.

If you conclude from this, however, that government, far from putting obstacles or limits to the division of labor, must actually prescribe it, what will happen? Along with its advantages, the division of labor has great drawbacks. It circumscribes and thereby narrows the intellectual faculties. It reduces man to the level of a simple machine. He can resign himself to this when his interest dictates this voluntarily. He would be hurt, however, by government action which, seeming to him against his interest, would appear gratuitously offensive and degrading. Nothing could be more unjust than preventing a skillful workman who can successfully combine two jobs from doing both or passing freely between them. It is clear, therefore, that the government does wrong to drive the division of labor by its regulations. This is what it did with the system of guild leaders and master craftsmen,62 which condemns the individuals in this or that job to follow no other. Everywhere we have seen these institutions harm the economy, encourage fraud, and even retard the progress of jobs whose perfecting they proposed to promote.

What must government do then? Stay out of it. The division of labor must limit and maintain itself spontaneously. When any division of labor is advantageous, it establishes itself naturally. When men in specialized jobs revert to combining two types of work, it is because this combination suits them better.

This example shows that government can do harm not only by acting in a certain way but also by acting in the opposite way. There are numerous circumstances when it can do good only by not acting at all. [314]

chapter ten

Conclusions from the Above Reflections

As I said at the start of the foregoing reflections, I am absolutely not presenting a complete case for the very least interference by government in economic activity. A thousand arguments and facts crowd around me, all tending to supply ever stronger evidence for this principle. I am putting them aside, because I feel it is impossible to expound them on a satisfactory scale. Each fact in isolation may furnish an exception and it would require verification, that is, giving oneself over to local investigations, historical, geographical, and even political, to show either that the exception is not upheld or that it does not weaken the principle. In this treatise I cannot take on this workload. I think I have said enough, nevertheless, to show that the effect of government intervention in matters of production, though sometimes necessary perhaps, is never positively advantageous. We can resign ourselves to it as an inevitable ill; but we should always strive to limit this ill as closely as possible.

My views will probably encounter many opponents. This will not make me think them any less correct. In a country where the government hands out assistance and compensation, many hopes are awakened. Until such time as they have been disappointed, men are bound to be unhappy with a system which replaces favoritism only by freedom. Freedom creates, so to speak, a negative good, although a gradual and general one. Favoritism brings positive, immediate, personal advantages. Selfishness and short-term views will always be against freedom and for favoritism.

chapter eleven

On Government Measures in Relation to Population

If governments have wanted to influence economic activity, they have similarly wanted to influence population and—who would believe it?—they have passed [315] coercive laws to force man to satisfy the sweetest penchant of his nature.

They thought they had an obvious interest in interfering with population. It constitutes their most concrete force. They did not know that their very bringing their power to bear on it could only harm it.

They were not short of a pretext. Domestic affections are the best guarantee of morality.

Celibacy favors disorder and selfishness. Marriage inspires in man more need for stability. What good reasons for coming down hard on celibacy and encouraging marriage!

It is a pity that a number of governments, in proscribing celibacy by law, reduce marriage to sterility by way of harassment and poverty.

Two kinds of causes can impede the population’s growth and make it smaller. Some influence population directly. These include epidemics, floods, earthquakes, emigrations, and lastly war, considered, not in its political aspect, but in terms of its immediate effect of devastating part of a country’s population. Others exert a mediate influence, institutional vices and government harassment being examples. The former destroy living people. The latter prevent the birth of those who would be born.

The marquis de Mirabeau, one of the most original minds of the last century, who in a singular mixture brought together very philanthropic ideas with a very despotic character, and a very sincere love of freedom with all the prejudices of the nobility and even of feudalism, showed very clearly in The Friend of Men that direct causes have a brief effect only, on population. “They say,” he says, with astonishment, “that after a time of trouble or calamity, a state is just as populous as it was before, while the buildings and roads, in a word, everything which indicates apparent prosperity, shrinks visibly because of the interruption to order and justice.”63 Indirect causes, seemingly less harmful, have much more extensive and lasting effects. This is because [316] they attack the population at its very root, that is to say, its means of subsistence. The peasant labors, builds, and gets married on fields turned topsy-turvy by earthquakes, after an epidemic or in the wake of an army which has ransacked his property, because he hopes the earthquake will not return, he sees that the epidemic has ceased, and because peace having been made, he thinks he is sure the ravaging army has moved away forever. But he works, builds, or marries only with anxiety under an oppressive government, which snatches from him the means of subsistence necessary to feed and raise his family.

Man very quickly gets over calamities which seem temporary to him. The dead leave the living better off and put more means of subsistence at their disposal. The latter multiply on account of the vacant places and the resources they find for living. Nature has placed the remedy alongside all the ills which come from her. She has endowed man with a faculty which seems like carelessness or improvidence but in reality is rational. He senses that natural misfortunes recur only at periods very distant from each other, while those born of the whims of fellow men weigh on him at every moment.

The vices of government prolong some causes of depopulation which, absent these vices, would be only short-lived. These causes should therefore be considered under two aspects, as harming the population directly and then harming them again insofar as they are multiplied by government errors. For example, the expulsion of the Jews and the Moors contributed to the depopulation of Spain only because that expulsion resulted from an oppressive and persecutory administrative system. For the same reason, the settlers who left that country for the New World have never been replaced, while a free nation can send numerous settlers abroad without its depopulating. In a free nation, everything which brings about a social vacuum, at the same time encourages all those who remain to fill it. The direct ill which causes war is soon corrected. When a government, however, can restart or prolong the war at will, this supposes a despotic will in this government, one which is a quite separate scourge from the war itself, one which, bearing down on the means of subsistence, prevents the population from growing and from filling the gaps which the war has occasioned.

[317] It is the same with celibacy. If some individuals do not marry and reproduce, there are others who will. But when celibacy results either from poverty or the absurdity of institutions, the evil is irreparable in a totally different sense. I will cite the marquis de Mirabeau again. He shows clearly that clerical celibacy in itself is in no way harmful to population.64 On the contrary, whenever a certain number of individuals manage by coming together to live from the product of a smaller section of land than would be needed for the subsistence of the same number of individuals in isolation, this coming together is favorable to the numerical growth of the species. The individuals who come together draw closer voluntarily and leave more space to others. It is never the population which is lacking, but space, that is, land, and above all the means of subsistence. Priestly celibacy, however, implies a more superstitious state of things, and therefore worse government. Such influences spread to everything. It is not because priests do not marry that the country becomes depopulated but because a government which consecrates priestly celibacy is an ignorant government. Now, ignorant government is always oppressive. It harasses men who marry, takes away their means of subsistence, pushes them into despondency, thereby prevents them from multiplying or, if they do multiply, causes their children to die from destitution or want.

The more populous and flourishing condition of the Protestant countries is attributed to the suppression of the celibate orders. It should have been attributed to the diminution of prejudices and the growth of civil freedom which the Reformation introduced into these countries.

It is not because a certain number of individuals have married that a population has increased, but rather that there have been a few more possibilities for scrutiny and a bit more enlightenment, first on one question and then, since all ideas are linked, on all the others. There follows a more just regime, less oppression, less poverty, and better subsistence. This leads me to regard as truly wretched the calculation by some governments which, not content with declaring the celibacy of priests purely voluntary, have sought to force into marriage men who thought themselves bound by conscience and the holiest of oaths to abstain from it. As if the marriage of a few religious would have been a truly efficacious means of population growth, and as if the birth [318] of a few more children were preferable to the refinements of honor and the virtues of scruple, which, whether rightly or wrongly founded, is still a virtue, in a word, as if man were an ignoble and pliant creature, cast on this earth only to obey and propagate.

When men have the wherewithal for subsistence, for them and their children, population increases. When they do not, either they do not marry or they have fewer children, or if they have children, most of these die young. The population always reaches the level of subsistence. In America the population doubles in twenty or twenty-five years. This is because work is so well paid that a large family, instead of being a burden, is a source of opulence and prosperity. “A young widow with four or five children” would hardly find a second husband in Europe “in the middle or lower classes.” In America, “this is a person sought after like a kind of treasure.” Smith, Book I, ch. 8.65 Writers have long talked the most bizarre nonsense about population. They have noticed isolated truths which they have not known how to reconcile nor to define clearly, and on the basis of a single inaccurate observation, they have aimed at constructing a set of laws. Governments which cannot have other than superficial ideas on anything, because they do not have time to check it out for themselves, have adopted now this set of laws, now that one, always on trust, which is a sure way of deriving no advantage, even from the truth.

It has been recognized that in a certain way poverty favored population growth. Beggars have many children. But the distinction between two kinds of poverty, that of the beggars and that of the laboring classes, has not been made. Vagabonds with absolutely nothing have many children, says Montesquieu. “It costs the father nothing to teach his art to his children, who are even, in being born, instruments of that art.”66 The people who are poor, however, only because they live under a harsh government, have few children. They do not have enough food for themselves. How could they dream of sharing it? If they live on little, this is not because they need little, but because they do not have what they need. Just as the little bit they need favors population growth among the beggars, so the little which the working classes possess goes against [319] growth in their numbers. Writers and governments have seen on the backs of beggar women, or round their huts, a crowd of wretched children. They have not lifted their gaze a year beyond, a time before which three-quarters of that unhappy generation were cut off by hunger. They have thus envisaged only half the question, and yet on the question considered in this way, the most inhuman system has been based.

The poorer people are, it has been said, the larger families are. A sophism, exclaims Montesquieu, “which has always ruined kingdoms and always will.”67 Population growth born of poverty has an evident limit, namely the death of that population because of this selfsame poverty which seemed at first to favor it. From another viewpoint it was clear that affluence favored population growth. It was thought that the luxury of the rich classes was a cause of affluence for the poor classes. There were two errors in this way of reasoning, however. First, the affluence which luxury produces is very uncertain and artificial. Luxury doubles consumption expenditures, soon rendering them disproportionate with the population. Neither the rich nor the poor multiply: the rich because they fear the privations a large family entails; the poor because of the suffering they undergo. Secondly, even true affluence favors population growth only to a certain degree. On the one hand, it makes numbers grow more, on the other it makes consumption expenditures grow. Now, the more consumption expenditures a country has, the less it can feed its inhabitants. To get the sums right, one would have to be able simultaneously to add to the means of subsistence and prevent the people from consuming more of them: an impossible task. An author who in recent years has been ridiculously mistaken about the principles of population is Sir Francis d’Ivernois in his Historical and Political Survey of the Losses Sustained by the French Nation. He has put the loss of life caused by the revolution at two million souls.68 And since according to Buffon’s calculations,69 [320] a marriage must produce six children to get two of them to the normal age of a man in replacement of father and mother, you therefore have, according to him, twelve million people less for the next generation. It is a pity, as Garnier observes,70 that he stopped after such a good start and did not push this learned reckoning one or two generations further. If he had, he would have found, from the second generation, a loss for France of seventy-two million inhabitants. Governments have no direct measure to take in relation to population. They must respect the natural course of things. Let people be happy, that is, let everyone be free to seek his own happiness, without hurting other people’s, and the population will be adequate.

All detailed legislation, the prohibition on celibacy, the stigmatizing, the penalties, the rewards for getting married—none of these artificial means ever achieves the purpose envisaged, and insofar as such means interfere with freedom, they are far removed from it. The laws enforcing marriage cannot enforce population growth. Since the law of Papia Poppaea71 forbade those who were not married to receive anything from strangers, either by the institution of inheritance or bequest, and those who being married had no children to receive more than half a legacy or bequest, the Romans contrived to repudiate their wives or make them abort after having a single child. Let us add that most of the governments which make laws against celibacy are like the Chinese scholars and mandarins who make long sermons [321] exhorting people to engage in farming, but who let their nails grow to preserve them from the very suspicion of being farmers.

What misleads superficial observers is that we sometimes see a flourishing of population in certain countries and simultaneously positive laws which encouraged the unmarried to wed. It was certainly not because of these positive laws, however, that the population flourished, but on account of other circumstances, all of which can be expressed in one word: freedom. What proves this is that in the same countries, these circumstances having changed, the population fell, although the laws remained the same or became even more severe. Consider the time of Augustus and the vain efforts of that emperor. When the vices of government do not put obstacles in the way of population, laws are superfluous. When they do, laws are bootless. The basis of population growth is growth in the means of subsistence. The basis of growth in the means of subsistence is security and calm. The basis of security and calm is justice and freedom.

CONSTANT’S NOTES

[1. ]In Book II, Ch. 6 On Individual Rights When Political Authority Is Thus Restricted.

[2. ]See Constant’s Note A at the end of Book XII.

[3. ]See Constant’s Note B at the end of Book XII.

[4. ]We do not know whom Constant means—perhaps the Abbé Morellet, who appears a bit later.

[5. ]Adam Smith, op. cit., t. IV, Ch. 1.

[6. ]This example is taken from Adam Smith, op. cit., t. IV, p. 143. Smith says the distiguished French economist, the Abbé Morellet, had listed fifty-five joint-stock companies in various parts of Europe which had failed since 1600 despite the exclusive privileges they enjoyed, because their administration was poor.

[7. ]See Constant’s Note C at the end of Book XII.

[8. ]See Constant’s Note D at the end of Book XII.

[9. ]See Constant’s Note E at the end of Book XII.

[10. ]See Constant’s Note F at the end of Book XII. [Constant here, and in the previous note, is referring to premodern economic and legal forms, the charters and corporations of medieval origin. Translator’s note]

[11. ][The French noun “fixation” could be translated by the more neutral “determination” or “setting.” Translator’s note]

[12. ]Reply by Sganarelle to Géronte in Le médecin malgré lui, Acte II, Scene IV.

[13. ]See Constant’s Note G at the end of Book XII.

[14. ]In particular by Jean-Baptiste Say, op. cit., t. I, p. 163.

[15. ]See Constant’s Note H at the end of Book XII.

[16. ][The right of aubaine enabled French monarchs to claim the property of nonnaturalized persons dying in France. It was finally abolished in 1819. Translator’s note]

[17. ]This reference seems aimed at exposing the motives presented to the Conseil d’Etat on 3 March 1803, by Jean-Baptiste Treilhard with regard to the Civil Code. This is where Treilhard justifies the partial reestablishment of the right of aubaine, abolished in 1789. Procès-verbaux du Conseil d’Etat contenant la discussion du projet du Code civil, t. II, Paris, 1803, pp. 444–447. [The key idea was that a foreigner who died in France would have his goods confiscated unless a Frenchman living in that foreigner’s country had the right to leave his wealth to his heirs. Translator’s note]

[18. ]See Constant’s Note I at the end of Book XII.

[19. ]See Constant’s Note J at the end of Book XII.

[20. ]See Constant’s Note K at the end of Book XII.

[21. ]See Constant’s Note L at the end of Book XII.

[22. ]See Constant’s Note M at the end of Book XII.

[23. ]See Constant’s Note N at the end of Book XII.

[24. ]The only place Hofmann has identified where Linguet calls owners monsters is in the conclusion of his Théorie des lois civiles; having accused philosophy of bringing no remedies to the pains of the human condition, but only consolations, Linguet exclaims: “How much wiser would be the terrible but sincere voice willing to tell me: ‘Suffer and die in chains; such is your lot. . . . Be content with your portion, since you can hope for no other. And even when the monster whose fodder you must be devours you, submit to your fate with resignation, since you cannot change it.’” Simon Nicholas Henri Linguet, Théorie des lois civiles ou principes fondamentaux de la société, London, 1767, t. II, p. 519.

[25. ]See Constant’s Note O at the end of Book XII.

[26. ]A little earlier in this same Book XII.

[27. ]See Constant’s Note P at the end of Book XII.

[28. ]See Constant’s Note Q at the end of Book XII.

[29. ]See Constant’s Note R at the end of Book XII.

[30. ]Hofmann has not been able to identify these men.

[31. ]See Constant’s Note S at the end of Book XII.

[32. ]See Constant’s Note T at the end of Book XII.

[33. ]See Constant’s Note U at the end of Book XII.

[34. ]See Constant’s Note V at the end of Book XII.

[35. ]Jacques Necker, De l’administration . . . , op. cit., t. III, p. 239.

[36. ]Ibid., p. 240.

[37. ]See Constant’s Note W at the end of Book XII.

[38. ]See Constant’s Note X at the end of Book XII.

[39. ]See Constant’s Note Y at the end of Book XII.

[40. ]See Constant’s Note Z at the end of Book XII.

[41. ]See Constant’s Note AA at the end of Book XII.

[42. ]See Constant’s Note BB at the end of Book XII.

[43. ]See Constant’s Note CC at the end of Book XII.

[44. ]See Constant’s Note DD at the end of Book XII.

[45. ]See Constant’s Note EE at the end of Book XII.

[46. ]See Constant’s Note FF at the end of Book XII.

[47. ]See Constant’s Note GG at the end of Book XII.

[48. ]Constant found the example of this decree of 1731 in Adam Smith, op. cit., t. I, p. 332.

[49. ]See Constant’s Note HH at the end of Book XII.

[50. ]See Constant’s Note II at the end of Book XII.

[51. ]See Constant’s Note JJ at the end of Book XII.

[52. ]See Constant’s Note KK at the end of Book XII.

[53. ]See Constant’s Note LL at the end of Book XII.

[54. ]See Constant’s Note MM at the end of Book XII.

[55. ]See Constant’s Note NN at the end of Book XII.

[56. ]See Constant’s Note OO at the end of Book XII.

[57. ]See Constant’s Note PP at the end of Book XII.

[58. ]See Constant’s Note QQ at the end of Book XII.

[59. ]Decoration of the Order of the Holy Spirit, created in 1578 by Henry III and abolished under the Revolution.

[60. ]Decoration of the Order of St. Michael, created in 1469 by Louis XI and abolished under the Revolution.

[61. ]Earlier in this same Book XII.

[62. ][We would speak more easily today of the guild system. “Jurandes” (guild leaders) is a fifteenth-century term; “maîtrises” (master craftsmen) is thirteenth century, and the phrase “jurandes et maîtrises,” which Constant uses here, is itself fifteenth century. Translator’s note]

[63. ]Victor Riqueti, marquis de Mirabeau, L’Ami des hommes ou traité de la population, Hambourg, Chrétien Hérold, 3e éd., 1758, t. I, p. 28.

[64. ]Constant in fact merely refers to rather than quotes the marquis de Mirabeau’s book, L’Ami des hommes, op. cit., t. I, pp. 31–33.

[65. ]Adam Smith, op. cit., t. I, p. 142. [The sections within quotation marks are from the 1802 French translation by Garnier, here translated back into English. Translator’s note]

[66. ]Montesquieu, De l’esprit des lois, Livre XXIII, Ch. 11.

[67. ]The whole passage reads: “It is condescending talk and feeble analysis which have led to its being said that the poorer people were, the larger the families would be, while the more burdened with taxes we are, the more we will equip ourselves to pay them: two sophisms which have always ruined kingdoms and always will.” Ed. cit., p. 689.

[68. ]Sir Francis d’Ivernois, Tableau historique et politique des pertes que la Révolution et la guerre ont causées au peuple français, dans sa population, son agriculture, ses colonies, ses manufactures et son commerce, London, Impr. de Baylis, 1799, t. I, p. 18: “All I have managed to put together from witness and conjecture leads me to conclude that the scythe of Revolution and war killed between two and three million French people. It is true that I lack the documents and official papers to lend this figure evidential proof.”

[69. ]George Louis Leclerc, comte de Buffon, Histoire naturelle générale et particulière, t. XI, Histoire naturelle des animaux et de l’homme, t. II, nouvelle éd., Lausanne, J.-P. Heubach; Berne, Nouvelle Societé typographique, 1785, pp. 207–208.

[70. ]Germain Garnier, Notes du traducteur, in Adam Smith, op. cit., t. V, pp. 284–286, Note XXX De ce que la guerre dernière a coûté à la population de la France. What Constant presents as an observation by Garnier does not in any case figure in this note. Garnier is actually quarrelling with Buffon’s calculations but not in the terms Constant cites and not in the same figures.

[71. ]This law is discussed at length by Montesquieu in De l’esprit des lois, Livre XXIII, Ch. 21, and by Gaëtano Filangieri, La science de la législation, éd. cit., t. II, pp. 26–27.

[A. [Refers to page 227.]]The judicious Say observes that “a particular fact is not enough to destroy a general one, since we cannot be sure that some unknown circumstance has not produced the difference we see between the results of the one or the other. . . . How few particular facts are completely established! How few are observed in all their circumstances.” Economie politique. Preface.72

[B. [Refers to page 229.]]People have endlessly said that the trade with India could not be done without a company. For more than a century, however, the Portuguese undertook this commerce without a company, with more success than any other nation.73

[[322] C. [Refers to page 231.]]Smith, V, 1.74

[D. [Refers to page 231.]]I think it necessary to add, to prevent a finicky objection, but one which would appear justified, that I certainly do not include the technical patents we use among the set of privileges. These patents are contracts with society and accordingly legitimate. Moreover, the task of watching over the execution of these contracts falls only on the interested parties and does not therefore require any immoral or vexatious inquisition on the part of the government.

[E. [Refers to page 232.]]For Birmingham and Manchester see Baert-Duholant.75

[F. [Refers to page 232.]]“The most sacred and most inviolable of properties is that of one’s own industry, because it is the original source of all other property. The poor man’s patrimony is in the strength and skill of his hands, and to prevent his using that strength and skill in the way he reckons most appropriate, as long as he hurts no one, is a manifest violation of that elemental property. It is a flagrant encroachment on legitimate freedom, as much of the workman as of those disposed to give him work. At a stroke it prevents one party from working at what he thinks opportune and the other from employing whoever seems good to him. One can quite safely trust in the good sense of him who employs a workman, to judge whether this workman deserves the job, since his interest is involved. That solicitude which the lawmaker affects, [323] for stopping one from employing incapable people, is obviously as absurd as it is oppressive.”76 See also Bentham, Principes du code civil, Partie III, Ch. 1.77

[G. [Refers to page 233.]]Say, Economie politique, Livre I, Ch. 35.78

[H. [Refers to page 234.]]Smith, Richesse des nations, Livre IV, Ch. 2.79

[I. [Refers to page 236.]]Smith, Livre IV, Ch. 1.80

[J. [Refers to page 237.]]Sismondi, Richesse commerciale, pp. 139–151.81

[K. [Refers to page 238.]]“A tillage farmer who cannot sell his corn profitably, seeks to have it consumed to avoid the costs and losses he will undergo by keeping it. All the more grain is given to the fowls and animals if its value is down. Now, this is what is lost to human sustenance. It is not in the place where or the year when this wastefulness occurs that the consumers have to regret it. But this grain [324] would have filled a gap in some famine-stricken provinces or in a year of dearth. It would have saved the lives of whole families and prevented excessively high prices, if free trade by presenting it with an ever open outlet, had given the owner in former times a great interest in conserving it and in not prostituting it in usages for which one could employ less valuable grains.” Septième lettre de M. Turgot à l’abbé Terray, pp. 62–63.82

[L. [Refers to page 239.]]Smith has admirably shown that the interests of the merchant who works in the inland corn trade and those of the mass of the people, seemingly at odds, are precisely the same in the years when prices are highest. Smith, Livre IV, Ch. 5.83

[M. [Refers to page 240.]]Decree of the High Judicial Court of Paris, 2 December 1626.84

[N. [Refers to page 240.]]See for further developments Smith, Livre IV, Ch. 5.85 Morellet, Représentations aux magistrats, 1769.86

[[325] O. [Refers to page 240.]]Sur la législation et le commerce des grains, p. 180.87

[P. [Refers to page 243.]]One can find all these difficulties fully developed by the Abbé Galiani, in his Dialogues sur le commerce des blés, London, 1770.88 I like to refer the reader to this author, though he has written in too light a tone for so serious a matter. But since he is the first and one of the most redoubtable foes of the dispensation based on freedom, his avowals of the drawbacks of political intervention in this respect must carry great weight.

[Q. [Refers to page 243.]]See the work of M. Necker, Sur la législation et le commerce des grains. He has examined in a remarkably sagacious way all the restrictions, rules, and measures which make up what is known as the policy for grains, and although his purpose was to show that constant action by the government was necessary, he has been forced to condemn all the measures which have been tried.

[R. [Refers to page 244.]]See Lettres de M. Turgot to l’abbé Terray.

[S. [Refers to page 245.]]See Garnier, Notes on Smith, Note XXII.89 An estimable author [326] bases a completely opposite teaching on this point, but one which seems quite inadmissible to me. “It is appropriate,” he says, “that the law should fix an interest rate for all those cases where it is due, in the absence of prior agreement, as when a judgment orders the restitution of a sum with the interest outstanding. This rate must be fixed at the lowest level of interest rates paid in the society, because the lowest rate is the one for the least risky uses. Now, the law may well want the borrower of capital to return it and even with interest. In order for him to return it, however, the law must assume he still has it. This can be assumed only insofar as he has made it profitable in the least hazardous way, earning therefore the lowest possible returns.” Say, Economie politique, Livre IV, Ch. 15.90

1. Fixing at the lowest level the rate of interest on a wrongfully unrepaid loan rewards the borrower. An honest man, who will wish to borrow only by mutual agreement, will pay a higher rate of interest, and he who has borrowed, so to speak, coercively, that is, stolen the use of what does not belong to him, will pay a lower one. 2. It is not because society supposes a borrower in a condition to repay that it constrains him to do this, but because it is right that he repay. 3. Society’s supposition cannot change the facts. If the debtor is not in a position to repay, however low the interest rate he is condemned to, he will not repay. 4. A withholder deserves a punishment. A high rate of interest is the most natural one and repairs in some degree the harm he has done. 5. In sum, according to this teaching, it would be an excellent move to seize in one way or another all the funds one could get control of short of a criminal prosecution, and lend them to others. As a withholder one would pay the lowest possible interest. As a lender one would get a higher rate.

[T. [Refers to page 246.]]See Say, Economie Politique IV, Ch. 14 and Ch. 15.91 Montesquieu, Esprit des lois, XXII, Ch. 19, Ch. 20, Ch. 21, Ch. 22.

[U. [Refers to page 246.]]Richesse des nations, II, 4.92

[[327] V. [Refers to page 246.]]Jacques Necker, De l’administration des finances, III, pp. 239–240.

[W. [Refers to page 247.]]Lysias against Theomnestes; Demosthenes against Lacrites.93

[X. [Refers to page 247.]]The numbers of smugglers arrested in France under the Monarchy was in an ordinary year some 10,700 individuals, of whom 2,300 were men, 1,800 women, and 6,600 children. [Necker] Administration des finances, II, 57. The detachment of men charged with their pursuit was more than 2,300 men and the expense between eight and nine million. Ibid., 82.

[Y. [Refers to page 247.]]Smith, Tome V, Garnier’s translation.94

[Z. [Refers to page 247.]]Administration des finances, II, 98.

[AA. [Refers to page 248.]]The memoires of the marquis de Pombal. The Portuguese government stationed soldiers to prevent the owners from pulling up their vines. This is nothing other than a dispensation forcing government to uphold property in the face of its owners’ despair.95

[[328] BB. [Refers to page 248.]]Baert-Duholant.96

[CC. [Refers to page 248.]]“By the statute of the eighth year of the reign of Elizabeth, Ch. 3, anyone who exported ewes, lambs, or rams had to undergo on the first offense confiscation in perpetuity of all his possessions and a year in prison, after which time on a market day in a town his left hand was cut off and left nailed up. Acts of the thirteenth and fourteenth years of the reign of Charles II declared the export of wool a capital offense.” Smith, Livre IV, Ch. 8.97

[DD. [Refers to page 248.]]Mémoires sur les Etats-Unis.98

[EE. [Refers to page 248.]]Richesse des Nations, Livre IV, Ch. 9.99

[FF. [Refers to page 249.]]See Smith, Livre I, Ch. 11.100

[[329] GG. [Refers to page 249.]]Smith, Livre I.101

[HH. [Refers to page 250.]]Some details of the obstacles placed in the way of work in England by the laws on domicile in the parishes.102

[II. [Refers to page 250.]]Sully’s Mémoires.103

[JJ. [Refers to page 250.]]Say, Livre I, Ch. 30.104

[KK. [Refers to page 251.]]Smith, Livre IV, Ch. 7.105 Say, I, Ch. 36.106

[LL. [Refers to page 251.]]Garnier, Notes on Smith.107

[MM. [Refers to page 251.]]Esprit des lois, XX, 12.

[[330] NN. [Refers to page 251.]]When one allows oneself to censure one of M. Montesquieu’s opinions, one is in duty bound to give good reasons. The one I will cite will show that this great man, so superior writing on political questions, sometimes did not apply himself to commercial questions. “Whaling,” he says, Esprit des lois, XX, 6, “almost never recoups its costs; but those who have been employed in building the vessel, those who have supplied the gear, the tackle, the provisions, are also those who take the greatest interest in this whaling. If they lose on the whaling, they have earned on the supplying.”108 But if they are at once in the business of fishing [sic] and supplying, from whom do they earn on the supplying what they lose on the fishing? To listen to M. de Montesquieu, one would think that they indemnified themselves against their own losses. A strange kind of profit!

[OO. [Refers to page 252.]]Smith, Livre IV, Ch. 9.109

[PP. [Refers to page 255.]]See Filangieri and many others.110

[QQ. [Refers to page 256.]]See Smith, Livre I, Ch. 7111 and Say, Economie politique.112

[[322] C. [Refers to page 231.]]Smith, V, 1.74

[E. [Refers to page 232.]]For Birmingham and Manchester see Baert-Duholant.75

[G. [Refers to page 233.]]Say, Economie politique, Livre I, Ch. 35.78

[H. [Refers to page 234.]]Smith, Richesse des nations, Livre IV, Ch. 2.79

[I. [Refers to page 236.]]Smith, Livre IV, Ch. 1.80

[J. [Refers to page 237.]]Sismondi, Richesse commerciale, pp. 139–151.81

[M. [Refers to page 240.]]Decree of the High Judicial Court of Paris, 2 December 1626.84

[N. [Refers to page 240.]]See for further developments Smith, Livre IV, Ch. 5.85 Morellet, Représentations aux magistrats, 1769.86

[[325] O. [Refers to page 240.]]Sur la législation et le commerce des grains, p. 180.87

[T. [Refers to page 246.]]See Say, Economie Politique IV, Ch. 14 and Ch. 15.91 Montesquieu, Esprit des lois, XXII, Ch. 19, Ch. 20, Ch. 21, Ch. 22.

[U. [Refers to page 246.]]Richesse des nations, II, 4.92

[W. [Refers to page 247.]]Lysias against Theomnestes; Demosthenes against Lacrites.93

[Y. [Refers to page 247.]]Smith, Tome V, Garnier’s translation.94

[[328] BB. [Refers to page 248.]]Baert-Duholant.96

[DD. [Refers to page 248.]]Mémoires sur les Etats-Unis.98

[EE. [Refers to page 248.]]Richesse des Nations, Livre IV, Ch. 9.99

[FF. [Refers to page 249.]]See Smith, Livre I, Ch. 11.100

[[329] GG. [Refers to page 249.]]Smith, Livre I.101

[HH. [Refers to page 250.]]Some details of the obstacles placed in the way of work in England by the laws on domicile in the parishes.102

[II. [Refers to page 250.]]Sully’s Mémoires.103

[JJ. [Refers to page 250.]]Say, Livre I, Ch. 30.104

[KK. [Refers to page 251.]]Smith, Livre IV, Ch. 7.105 Say, I, Ch. 36.106

[LL. [Refers to page 251.]]Garnier, Notes on Smith.107

[OO. [Refers to page 252.]]Smith, Livre IV, Ch. 9.109

[PP. [Refers to page 255.]]See Filangieri and many others.110

[QQ. [Refers to page 256.]]See Smith, Livre I, Ch. 7111 and Say, Economie politique.112

[72]Jean-Baptiste Say, op. cit., t. I, Discours préliminaire, pp. viii–ix.

[73]Say, op. cit., t. I, p. 193: “It should not be carelessly assumed that a certain commerce can absolutely not be done other than with a company. This has very often been said of the trade with India, and yet for more than a century the Portuguese did it without a company, better than any other nation.”

[74]Adam Smith, op. cit., t. IV, pp. 130–131: “When a society of merchants undertakes, at its own expense and risk, to establish some new branch of commerce with distant and uncivilized people, it may be reasonable to incorporate it as a joint-stock bank, and to grant it if successful, the monopoly of this trade for a certain number of years.”

[75]Alexandre-Balthazar de Paule, baron de Baert-Duholant, Tableau de la Grande-Bretagne, de l’Irlande et des possessions anglaises dans les quatre parties du monde, Paris, Maradan, an X, 1802, t. I, pp. 90–93 on Birmingham and pp. 105–108 on Manchester.

[76]Adam Smith, op. cit., t. I, pp. 252–253.

[77]Jeremy Bentham, op. cit., t. II, pp. 176–178.

[78]Jean-Baptiste Say, op. cit., Livre I, Ch. 35, p. 290.

[79]Adam Smith, op. cit., Livre IV, Ch. 2, t. III, pp. 64–65. Constant is inspired by Smith’s text rather than reproducing it faithfully.

[80]Ibid., t. III, pp. 3–52.

[81]Jean-Charles-Léonard Sismondi, op. cit., t. I, pp. 119–157.

[82]Anne-Robert-Jacques Turgot, Lettres sur les grains, écrites à M. l’abbé Terray, contrôleur général, par M. Turgot, intendant de Limoges, s.l.n.d. [1788].

[83]Adam Smith, op. cit., t. III, p. 207.

[84]This decree forbade all persons, on pain of death, to engage in the exportation of wheat, grains, and vegetables or to construct warehouses for these commodities.

[85]Adam Smith, op. cit., t. III, p. 216: “However, the popular hatred to which this occupation is exposed in famine years, the only years when it can be lucrative, puts off all the people with wealth and position in the society.”

[86]There is a confusion over the author here: the work quoted is by Pierre-Joseph-André Roubaud, Représentations aux magistrats contenant l’exposition raisonnée des faits relatifs à la liberté du commerce des grains et les résultats respectifs des règlements de la liberté, s.l., 1769. The Abbé Morellet was also an expert on the grain trade, since he had written a Réfutation de l’ouvrage qui a pour titre: Dialogue sur le commerce des blés [of the Abbé Ferdinando Galiani], London, 1770; and an Analyse de l’ouvrage intitulé: De la législation et du commerce des grains [by Jacques Necker], Paris, Pissot, 1775.

[87]Jacques Necker, Sur la législation et le commerce des grains, Paris, Pissot, 1776, p. 180: “This is an evil practice, this making compassion for the people serve to fortify proprietors’ rights; it is almost to imitate the art of those terrible animals who, on the banks of the rivers of Asia, take on the voices of children in order to eat grown-ups.”

[88]Ferdinando Galiani, Dialogues sur le commerce des blés, London, 1770.

[89]Germain Garnier, Notes du traducteur, in Adam Smith, op. cit., t. V, pp. 204–208 Du taux de l’intérêt de l’argent.

[90]Jean-Baptiste Say, op. cit., t. II, pp. 366–367.

[91]Ibid., pp. 275–303; Ch. 14 is on lending at interest and Ch. 15 on the legal rate of interest.

[92]Adam Smith, op. cit., t. II, pp. 366–367: “It has to be said that if the legal rate of interest must be something above the current market rate, it still must not be too much above it. If, for example, in England the legal rate were fixed at eight or ten percent, the greater part of the money would go to spendthrifts or schemers, the only group of people willing to pay so dearly for money.”

[93]The references to the two Greek orators were furnished to Constant by Cornelius de Pauw, Recherches philosophiques sur les Grecs, op. cit., t. I, p. 372.

[94]Germain Garnier, Notes du traducteur, in Adam Smith, op. cit., t. V, pp. 214–233.

[95]Sebastien-Joseph de Carvalho e Melo, marquis de Pombal, Mémoires, s.l., 1784, t. I, pp. 118–124.

[96]Alexandre-Balthazar de Paule, baron de Baert-Duholant, Tableau de la Grande-Bretagne . . . , op. cit., t. IV, pp. 91–120.

[97]Adam Smith, op. cit., t. III, p. 473. Hofmann says Constant takes liberties with the text, but retains the meaning. [Critics of modernity rarely draw attention to the sheer savagery of economic regulation in premodern times. Translator’s note]

[98]Probably a reference to Charles Pictet de Rochemont, Tableau de la situation actuelle des Etats-Unis d’Amérique, Paris, Du Pont, 1795.

[99]Adam Smith, op. cit., t. III, p. 529: “If a nation could not prosper without the enjoyment of perfect freedom and justice, there is no nation in the world which would ever have been able to prosper. Fortunately, nature in her wisdom has placed in the body politic many protections proper to remedying most of the bad effects of human folly and injustice, just as she has put them in the human body to remedy those of intemperance and sloth.”

[100]Adam Smith, op. cit., Livre I, Ch. 11, t. II, pp. 164–165: “However, the particular interest of those who follow a particular branch of commerce or manufacturing is always in some respects different and even contrary to that of the public.”

[101]Ibid., t. I, pp. 179–201, in Ch. 9 Des profits des capitaux.

[102]These details are brought together at the beginning of A Few Additional Points, p. 529.

[103]This reference to Sully’s Mémoires comes from Charles Ganilh, op. cit., t. I, pp. 315–316, n. 1, the text being as follows: “Sully, who did not see the benefits of manufacturing and trade, opposed the edict favoring navigation, and constantly found fault with Henry IV’s provisions for establishing the manufacture of Flemish-style tapestries in France and Dutch-style linens, as well as for setting up colonies in Canada, and trading establishments in the Indies.” See on this point Mémoires de Maximilien de Béthune, duc de Sully, Liège, F.-J. Desoer, 1788, t. V, pp. 63–72 (Livre XVI, 1603).

[104]Jean-Baptiste Say, op. cit., t. I, p. 247.

[105]Rather than Ch. 7 it is Ch. 5, Digression sur le commerce des blés et sur les lois y relatives, to which Constant seems to be referring; Adam Smith, op. cit., t. II, pp. 206–249. The precise idea that the regulations create an imaginary necessity is not, however, explicit in this chapter.

[106]Jean-Baptiste Say, op. cit., t. I, pp. 293–311; Ch. 36 is called Du commerce des grains and, just as in Smith, it does not feature the idea put forward by Constant.

[107]Germain Garnier, Notes du traducteur, in: Adam Smith, op. cit., t. V, pp. 202–204, Note XXI Des erreurs de Montesquieu en économie politique.

[108]This critique of Montesquieu comes directly from Say, op. cit., Livre I, Ch. 23.

[109]Adam Smith, op. cit., t. III, pp. 525–526. Constant summarizes rather than quotes here.

[110]Gaëtano Filangieri, La science de la législation, Livre II, Ch. 15 and 16, éd. cit., t. II, pp. 186–215. By “many others” Constant certainly means the physiocrats, Quesnay, Gournet, Le Mercier de la Rivière, etc.

[111]Adam Smith, op. cit., t. I, pp. 110–128; we read, for example: “The quantity of each product brought to market naturally adjusts itself to the effective demand.”

[112]Jean-Baptiste Say, op. cit., t. I, pp. 241–251, Livre I, Ch. 30 Si le gouvernement doit prescrire la nature des productions, p. 241. Here one reads: “Truth to say, no government action has any influence on production.”