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chapter four: On Privileges and Prohibitions - Benjamin Constant, Principles of Politics Applicable to All Governments [1815]

Edition used:

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

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Liberty Fund, Inc. is a private, educational foundation established to encourage the study of the ideal of a society of free and responsible individuals.


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.

[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.

[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

[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

[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.

[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

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

[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.