The full paragraph from which this quotation was taken can be be viewed below (front page quote in bold):
There has been long a prevalent notion, that the values, paid by the community
for the public service, return to it again in some shape or other; in the vulgar
phrase, that what government and its agents receive, is refunded again by their
expenditure. This is a gross fallacy; but one that has been productive of infinite
mischief, inasmuch as it has been the pretext for a great deal of shameless
waste and dilapidation. The value paid to government by the tax-payer is given
without equivalent or return: it is expended by the government in the purchase
of personal service, of objects of consumption; in one word, of products of
equivalent value, which are actually transferred. Purchase or exchange is a
very different thing from restitution.
Turn it which way you will, this operation, though often very complex in the
execution, must always be reducible by analysis to this plain statement. A
product consumed must always be a product lost, be the consumer who he may;
lost without return, whenever no value or advantage is received in return;
but, to the tax-payer, the advantage derived from the services of the public
functionary, or from the consumption effected in the prosecution of public
objects, is a positive return.
If, then, public and private expenditure affect social wealth in the same
manner, the principles of economy, by which it should be regulated, must be
the same in both cases. There are not two kinds of economy, any more than two
kinds of honesty, or of morality. If a government or an individual consume
in such a way, as to give birth to a product larger than that consumed, a successful
effort of productive industry will be made. If no product result from the act
of consumption, there is a loss of value, whether to the state or to the individual;
yet, probably, that loss of value may have been productive of all the good
anticipated. Military stores and supplies, and the time and labour of civil
and military functionaries, engaged in the effectual defence of the state,
are well bestowed, though consumed and annihilated; it is the same with them,
as with the commodities and personal service, that have been consumed in a
private establishment. The sole benefit resulting in the latter case is, the
satisfaction of a want; if the want had no existence, the expense or consumption
is a positive mischief, incurred without an object. So likewise of the public
consumption; consumption for the mere purpose of consumption, systematic profusion,
the creation of an office for the sole purpose of giving a salary, the destruction
of an article for the mere pleasure of paying for it, are acts of extravagance
either in a government or an individual, in a small state or a large one, a
republic or a monarchy. Nay, there is more criminality in public, than in private
extravagance and profusion; inasmuch as the individual squanders only what
belongs to him; but the government has nothing of its own to squander, being,
in fact, a mere trustee of the public treasure.
What, then, are we to think of the principles laid down by those writers,
who have laboured to draw an essential distinction between public and private
wealth; to show, that economy is the way to increase private fortune, but,
on the contrary, that public wealth increases with the increase of public consumption:
inferring thence this false and dangerous conclusion, that the rules of conduct
in the management of private fortune and of public treasure, are not only different,
but in direct opposition?
If such principles were to be found only in books, and had never crept into
practice, one might suffer them without care or regret to swell the monstrous
heap of printed absurdity; but it must excite our compassion and indignation
to hear them professed by men of eminent rank, talents, and intelligence; and
still more to see them reduced into practice by the agents of public authority,
who can enforce error and absurdity at the point of the bayonet or mouth of
the cannon.
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