Front Page Titles (by Subject) chapter seven: On the Supports Offered by Government - Principles of Politics Applicable to All Governments
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chapter seven: On the Supports Offered by Government - Benjamin Constant, Principles of Politics Applicable to All Governments 
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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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  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  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  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  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.
Adam Smith, op. cit., t. III, pp. 525–526. Constant summarizes rather than quotes here.