chapter nine: A Final Example of the Adverse Effects of Government Intervention - Benjamin Constant, Principles of Politics Applicable to All Governments [1815]
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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).
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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, 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, 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]
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