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These articles first appeared in the Dictionnaire d’Économie Politique, ed. Guillaumin and Charles Coquelin (Paris: Guillaumin, 1852) and were translated into English and included in Lalor’s Cyclopedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (Chicago: M.B. Carey, 1899) in 3 vols.
The French political economists of the the 19th century, or “the economists” as they liked to call themselves, are less well known than the classical school which appeared in England at the same time. The French political economists differed from their English counterparts on a number of grounds: the radicalism of their support for free markets, the founding of their beliefs on doctrines of natural rights and natural law, and the intellectual debt they owed to Jean-Baptiste Say (1767-1832). Some of their leading figures were Say, Charles Comte, Charles Dunoyer, Frédéric Bastiat (1801-1850), Charles Coquelin, Joseph Garnier, Hippolyte Passy, Gustave de Molinari (1819-1912), and Léon Faucher.
Jean-Gustave Courcelle-Seneuil (1813-1892) studied law, worked in the metallurgy business, was an editor of the Journal des Économistes, served briefly as the Director of Education in Duclerc’s government during the 1848 revolution, before seeking a kind of voluntary exile after 1851 by accepting a professorship in political economy in Santiago, Chile from 1852-1862. He returned to France in 1863, became a Conseiller d’État in 1879, and worked at the École normale supérieure de Paris from 1881-1883. In 1882 was was elected to the Academy of Moral and Political Sciences. His scholarly interests included banking and credit, numerous works on economic theory, a constitutional investigation of the impact of the French Revolution, and translation into French of works by J.S. Mill, William Graham Sumner, and Adam Smith.
For additional reading see the following in the Library:
In the Forum:
John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 2 East India Co. - Nullification Chapter: FORTUNES, Private
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FORTUNES, Private. The private fortune of every person consists of the possessions whose management and enjoyment are attributed to him by the laws. At all periods the formation, growth and destruction of private fortunes have been intimately connected with the economic and political prosperity or decline of empires.
—Among the peoples of antiquity of whom we have record, private fortunes, consisted, especially at the beginning, of flocks and herds, and of land. The inequality of fortunes is noted in the book of Job. The partial inventory of Job's estate declares that he had 7,000 sheep, 3,000 camels, 500 yoke of oxen, 500 she-asses, and numerous slaves. At that remote period great fortunes were acquired by usurpation. Job speaks of people "who remove landmarks," rob the flocks of others, "take away the ass of the fatherless and the ox of the widow": and says that such people will reap the field of another and gather the vintage of those whom they oppress; and will take away the garments of the poor man and leave him naked and exposed to the rigorous cold and the mountain rains. Hence, some great fortunes were acquired by economy and labor, others by robbery and violence.
—The evil consequences of extreme inequality of fortunes had already become very great among the Jews, when they were remedied by the institution of the Sabbatical year and the jubilee. (See Leviticus, chap. xxv) Every seven years, debts were remitted; every fifty years, lands, whatever may have been the previous stipulations, reverted to their former owners. Houses in walled towns were the only exceptions to this law.
—All the legislators of antiquity prescribed regulations intended to prevent inequality of fortunes or to diminish it. According to the Mosaic law (so called), the lands divided among the tribes and families became inalienable. Minos in Crete, and Lycurgus in Sparta, had established similar laws. "In the time of Lycurgus," says Plutarch, "there existed so great an inequality between citizens, that most of them, being debarred from any settled occupation, and reduced to poverty, were a burden to the city; while all the wealth was in the hands of the smaller number * *. Lycurgus divided the lands of Laconia into 30,000 parts, which he distributed among the inhabitants of the rural districts; and he made 9,000 parts of the territory of Sparta, for as many citizens." At Athens Solon proceeded by the abolition of debts: he did not touch the lands, because among a commercial people landed property is only an accessory.
—At Rome we find that there was originally a partition of land which assigned to each citizen about one and one-fourth acres. Later, as conquest extended the national territory, the portion allotted was increased to three and a half times this amount. Confiscation of the lands followed closely every division. Then came laws fixing the rate of interest on debts, and agrarian laws limiting the quantity of land a citizen could possess. The laws of Licinius Stolo, which were operative at Rome for from two to three centuries, provided that no citizen, under any pretext whatever, should in future possess more than about 315 acres, and that the surplus should be gratuitously distributed or secured for a low price to the poor citizens; that in this division at least four acres apiece should be assigned to the citizens; that only a designated number of slaves should be allowed on these lands, to cultivate them; that the number of flocks and herds should be also limited and proportioned to the quantity of land a person occupied; that the richest persons should not send to the commons or public pastures more than 100 cattle and 500 sheep. At the same time that these laws were rigorously enforced, every agriculturist was placed under the direct surveillance of the censors, who took note of any one whose lands were neglected or badly cultivated. Under this strict regimen the Roman republic attained the highest degree of prosperity, and found itself able to maintain wars against the Latins, the Gauls, and Carthage. At that time, as Horace says, private fortunes were moderate, and the republic was opulent.
—The aim of the agrarian laws and of all the laws designed to restrict the inequality of fortunes, is evident. In all the states of antiquity the very defective organization of the judiciary made it unable to prevent confiscations, especially when war and pillage were the means most employed for the acquisition of property. Now, the inevitable and immediate effect of the concentration of property was to destroy the greater part of the free population, to dry up the sources from which the armies were recruited, and thus to prepare the way for the downfall of the state. In the interior the multiplication of indigent citizens, a result of the concentration of fortunes, was a perpetual danger to the constitution; these men, who considered all industrial labor as servile, had no other means of existence than the gratuities of the public treasury, and they incessantly conspired to elevate a tyrant over the heads of the rich. These motives acted with greater force among exclusively military people, such as the Spartans and Romans. Elsewhere, at Athens, for example, commerce, manufactures and free colonization diminished the extreme inequality of fortunes and its disadvantages.
—Whatever may have been the reason, the laws designed to maintain equality were everywhere powerless. Among the Hebrews, in the times of the kings, the difference in fortunes was notable. The prophets could not utter maledictions enough against the confiscations of the rich and against the luxurious habits introduced by foreigners, after the conquests of David and Solomon. At Sparta the treasures imported after the taking of Athens, and the right to make a will, which was introduced in spite of the laws of Lycurgus, led to the concentration of fortunes. In the time of Agis III. "there were," says Plutarch, "not more than 700 native Spartans, of whom scarcely 100 had preserved their inheritance; all the rest were only an indigent multitude, who, languishing at Sparta in opprobrium, and weakly defending themselves against enemies from without, were constantly spying for an opportunity for a change which should relieve them from a condition so despicable." Agis, when he attempted the restoration of the old laws, had immense patrimonial estates, to which he joined a sum of money estimated at about $600,000. The failure of his enterprise is well known.
—At Rome the Licinian laws also became obsolete, under the influence of the same causes that had overthrown the agrarian laws ascribed to Moses and to Lycurgus. "Macedonia having been subjugated," says Polybins. "people thought they should be able to live in entire security and enjoy tranquilly universal empire. The greater part lived at Rome in a strange bewilderment." The pillage of Africa and Greece profited only a small number; they employed the wealth acquired by war in destroying the constitution of their country. The tragic end of the Gracchi, who attempted to restore the Licinian laws, as Agis had attempted to restore the laws of Lycurgus, is well known. After their death the usurpations of the great had no longer any restraint. "The rich," says Appian, "caused the greater part of the undistributed lands to adjudged to be themselves, flattering themselves that long possession would prove an unassailable property right; they purchased or took by force the small inheritances of their poor neighbors, and thus made their fields vast domains. Military service drawing the free men away from agriculture, they employed slaves to take care of the flocks. These very slaves were most profitable property to them, because of their rapid multiplication, favored by exemption from military service. What happened in consequence? Powerful men enriched themselves beyond measure, and the fields were filled with slaves; the Italian race, worn out and impoverished, perished under the weight of poverty, imposts and war. If, perchance, the free man escaped these evils, he became ruined by idleness, because he possessed nothing of his own in a territory wholly invaded by the rich; and because there was no work for him on the land of another, in the midst of so great a number of slaves."
—Then arose at Rome the colossal fortunes of such men as Lucullus and Crassus, and in their train followed the civil wars and the establishment of the despotism. At the time when Cæsar took possession of the dictatorship, 2,000 rich men alone possessed almost everything, and 320,000 indigent heads of families participated in the gratuitous distributions made by the public treasury. The maintenance of such a condition of things was impossible. The imperial régime lived by the confiscation of these great fortunes, and it created others, those of the freedmen, the publicans and the courtesans. It encouraged, besides, manual labor, and enrolled everybody into a sort of administrative community: this régime, completed by the confiscations, was the agrarian law of the time, when the imperial domain absorbed most private fortunes.
—The middle ages had their great feudal fortunes founded on conquest and pillage, and their great ecclesiastical fortunes obtained by donations and testaments. In the twelfth century, in France and in England, the nobility and the clergy shared the soil in nearly equal portions. They likewise shared, in nearly equal portions, the serfs of the ancient imperial domain, which constituted the total laboring population.
—Italy and Germany had states where great fortunes arose from commerce and manufactures. Everywhere wealth consisting of personal property tended to break up the territorial monopolies: the conquest of America, by establishing in the new world landed estates like those of ancient Rome, reduced the influence of the ancient territorial fortunes. Later, the invention of machines and commerce created new fortunes, while the financial and political revolutions tended to level the old ones. If it be true that, since the time of Cæsar, there have been no more agrarian laws in the west, it is certain that the revolutions and confiscations, and the civil and foreign wars, have taken the place of them.
—To-day, in France, there are not many fortunes which much exceed the average, though there are many of moderate size. In England, Spain, Italy and Russia exceptional fortunes are more numerous, and the middling class less important. In England, in spite of the maintenance of feudal laws, and despite the concentration of landed estates brought about by Pitt, the middle class of society has acquired immense influence. It is this class, which, in our time, has created and possesses the largest fortunes, and these fortunes are enormous. In the United States there is a marked difference in the condition of society in the northern, the western and the southern states. In the northern and western states large fortunes have been created by trade and by mining industries; but there is in them nothing exclusive or oppressive; they are only the last step of a ladder of which all the intermediate rungs are filled.
—The most superficial examination suffices to make one perceive the fundamental difference between the private fortunes of ancient times and those of to-day. In the former times the wealth produced by manufacturing and trading people was a prey for warlike nations, and the latter, exposed to the brutalities of the military spirit, saw the confiscations of the great prepare the way, by the spoliation and corruption of the weak, for revolutions and civil wars. All the efforts of legislators proved powerless against that fatal consequence of the ideas which controlled ancient communities, ideas which were immoral, and radically contrary to the very foundation of property, labor.
—Among moderns, on the contrary, the theory of private property is founded on labor, and the security of property is an uncontested fundamental principle. Ownership being made more secure, colossal and rapid fortunes have become more rare: it has been easier for the poor person to defend his property against fraudulent and violent confiscations. Finally, France has in the civil code an agrarian law of sure effect in the institution of equal inheritance. In England and the United States the greater security of property, and a more complete freedom of capital and labor, have produced more advantageous economic results with a very different proportion in the distribution of fortunes. Among the ancients small farming, insecurity, and the imperfection of industrial processes rendered accumulations slow and difficult. Among moderns, on the contrary, the invention of machines and the improvements in industrial processes, a social organization less infected with a military spirit, a more secure condition of property, and especially better moral aims, have rendered legitimate accumulations more easy and more rapid. For the rest, political economy has singularly simplified the problems relative to the proportions of private fortunes. It is little concerned to know whether it is advantageous for fortunes to be equal or unequal, large or small: it is sufficient for it that they be created, as far as possible, by the labor of the one who possesses them. The greatest fortune that can be imagined, if it is the product of labor, without fraud or violence, is an increase of wealth and a benefit to society. Far from being injurious to the poor man, it furnishes him implements of labor, the means of building up, in his turn, a private fortune. The smallest fortune which is the result of fraud or violence, is a public scandal.
—One single point is important. It is, that laws, customs and tribunals should resist the establishment of private fortunes by other means than by labor. All the efforts of civilization should tend to this end: this would be real progress. As to the fortunes acquired and held, they are few in comparison with those which the movement of affairs constantly raises up, and they can henceforth never constitute a monopoly.
—Let capital and labor be free and secure: then there will arise few sudden fortunes, but there will arise a great number of fortunes. The number of great fortunes will increase, but the number of small and middling fortunes will increase still more rapidly. This rising movement of wealth will be slow and general; but its very slowness will prevent it from corrupting morals, and its generality will preserve the poor from oppression by the rich.
—Economic freedom is the only agrarian law adapted to modern society. It favors at the same time the increase of wealth, and a real equality, viz., that which makes fortunes proportional to industrial aptitudes. It will also do away with the attraction which great capital, and fortunes too large for the person who possesses them to administer well, now exercise. Let us never fear that human works will last too long, especially when the matter concerned is private fortunes.
E. J. L., Tr.
John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 2 East India Co. - Nullification Chapter: FOURIERISM
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FOURIERISM. François-Marie-Charles Fourier, the socialist, and founder of the phalansterian school, was born at Besançon, France, April 7, 1772, and died at Paris, Oct. 10, 1837.
—The family of Fourier was one of the oldest and most honorable commercial families of Besançon. His father, who died in 1781, left a fortune inventoried at 200,000 livres (over $38,200), after deducting liabilities and doubtful credits. He had, by will, made his son Charles heir of two-fifths, and each of his three daughters of one-fifth of his property.
—Fourier was brought up for commerce. After having received the usual school education, he worked as a clerk in several cities of France, notably at Rouen and Lyons. He traveled in that capacity in Germany, Holland, and inland. In 1793 he came into possession of his patrimonial fortune; and, wishing to do business on his own account, he invested nearly all of it in colonial goods, which were dispatched from Marseilles to Lyons about the time of the siege of the latter city. Fourier lost his fortune there, and incurred also the risk of life and liberty. About the same time he found himself included in the great requisition, and passed some time in the army. Having procured a discharge on account of illness, he obtained employment in a mercantile house, and was charged, in 1799, to throw into the sea a cargo of rice, which his house had allowed to spoil in consequence of not having been willing to sell it during a time of scarcity. In 1800 he became an unlicensed broker at Lyons.
—It was during this period of his life that he conceived his project of social reform, of which he gave the first formal statement in his "Theory of the Four Movements," published at Lyons, under the imprint of Leipzig, in 1808. A man of the eighteenth century, he had adopted its method and general scientific conceptions. He put aside all authority, traditional, moral, religious or political, and undertook to solve the problem of social destiny by a sort of scientific revolution. He treated society by the method of induction appropriate to the physical sciences, and maintained that the actions of men are controlled by one single, constant and universal law, to which he gave the name of passional attraction. In the "Theory of the Four Movements" this doctrine was not yet very clearly formulated, but its germ was there. This work contained a lively, spirited and sensible critique on the vices, defects and antagonisms which exist in our social state. From the time of the conception of this work Fourier had no other real occupation than to complete, publish and propagate his doctrine. Although he still kept in view, and, later, resumed, commercial occupations, all the live forces of his intellect were absorbed by this fixed idea. It was his constant companion in his various sojourns, in the bosom of his family, among his friends, in the country, at Besançon and at Paris, and when among his disciples.
—In 1822 he published at Paris his "Treatise on Domestic and Agricultural Association." Until that time Fourier had had scarcely more than the one disciple, M. Just Muiron; about 1825 he found himself at the head of a small school. In 1826 he took up his permanent residence at Paris, and there wrote his "New Industrial World," which appeared in 1829. From this time to his death Fourier was employed in the propagation of his ideas by speaking and writing, and in a continual struggle against the silence or the railleries of contemporary criticism. He directed a violent polemic against Owen and the Saint-Simonians, in a pamphlet entitled: "Snares and Quackeries of the two sects of St. Simon and Owen, which promise Association and Progress," (1831); and in a weekly publication, "The Phalanstery or Industrial Reform," (1832). An attempt at a phalansterian colony was undertaken at Condé-sur-Vesgre under his direction, but was soon abandoned. Finally, in 1835 and 1836, he published two volumes entitled: "False Industry."
—Fourier not only undertook to formulate an economic doctrine; he aspired also to make over morals; in a word, to change all the relations of men, and to determine in advance, in detail, the material with which society must operate. We borrow from a work by M. Auguste Ott a summary of Fourierite doctrine, especially in matters of political economy.
—"Fourier laid down as a fundamental principle that the end of man is happiness." In what consists this happiness? "True happiness consists only in satisfying one's passions. * * * The happiness about which people have reasoned, or rather failed to reason, so much, consists in having many passions and many means of satisfying them." Man should then follow only the natural attractions he finds in himself. "All those philosophic caprices, called duties, have no relation to nature; duty comes from men, attraction comes from God. We should study the attraction, nature alone, without any regard to duty. Consequently, if in present society, when men abandon themselves to their passions, there follow results which are disastrous (subversive, in the language of Fourier), this fact only proves that society is badly organized, that hitherto man has not taken account of the laws which govern him, with the laws of the material order."—"The problem being to find a social form in which all the attractions, all the passions of man, should be entirely and fully satisfied, the first thing to do is to analyze these attractions. This analysis demonstrates to Fourier that the passions of mankind may be reduced to twelve fundamentals: 1. Five appetites of the senses, which tend to the pleasure of the senses, to internal and external luxury: the passions of taste, touch, sight, hearing and smell. 2. Four passions of the affections, which bind mankind together and tend to form groups. These are friendship, ambition (tending to form corporations, communities), love and familism (the paternal feeling). 3. Three distributive or mechanizing passions, whose functions we will give, namely: the cabalistic, a passion which leads to intrigue, and makes one take pleasure in rivalries and cabals; the butterfly, a passion which incites to change, and to variation of pleasures; and the composite, a blind transport, an irresistible influence which carries away the senses and the soul. This arises from a combination of many pleasures.
—From the combined satisfaction of all these passions, arises unitism, the sentiment of universal affection, as white is the result of the combination of all the prismatic colors. The passions of the senses lead to enjoyments from the senses and to labors which tend to satisfy them. Thus the sense of taste is a coach with four wheels, which are, agriculture, conservation, cooking, and gastronomy. He who likes to eat cabbages, for example, will also find pleasure in cultivating them and having them cooked. These passions are then the mainsprings of pleasure and of labor. But if they acted without connection with other passions, labor and pleasure also would have few attractions. The quantity of attraction will be much more considerable if the passion of taste is at the same time accompanied by the satisfaction of the affectional passions. The passions will then combine men into groups, bound together by friendship, love, the spirit of association, and family feeling: and new energy will be given to human activity. But it is not everything to satisfy these passions. They are partially satisfied in the present state of civilization—very incompletely, it is true—and yet man is not happy. It is because the three essential passions have been misunderstood, disgraced and condemned; and these very passions are the fundamental springs of the social mechanism; they are the composite, the butterfly and the cabalistic. The composite tends to unite the small groups into numerous associations, in which the action of all may be combined, and where irresistible enthusiasm arises from the multitude of efforts. To give satisfaction to this passion, is then necessary that the groups be organized be series, each composed of a certain number of groups of the same kind, which devote themselves, to similar work; and that the series be co-ordinated among themselves. The cabalistic passion the passion for intrigue, rivalry, emulation, ought likewise to be satisfied. It is consequently necessary that the series and groups be brought into competition, that is, that they be so arranged that there may be rivalry, emulation, between the various groups of the same series, and between the various parts of the same group. The series of the pear-cultivators, for example, will be composed of a certain number of groups, each cultivating a different variety of pear. Rivalry will spring up between these groups; each will determine to give the best products, and labor will acquire an activity of which civilized people have no idea. Finally, the butterfly passion demands that one often vary his labor, and that he be subjected only to short sittings. It is then necessary that the groups and series be so fitted together that every individual may belong at the same time to several series and several groups; that he may be able, when any particular labor fatigues him, to leave this labor and the group devoted to it, and go to another kind of work in another group or series. Thus the monotony of labor is made to disappear: the series, being continually renewed, manifest always the same ardor, and the individual, passing constantly from one kind of labor to another, is ever experiencing a new charm.
—All these conditions would be realized by the following organization: The workers should be combined in associations (phalanxes) of about 1,800 members, men, women, and children of all ages. Each phalanx, organized by groups and series, should work in common a square league of land. The living should also be in common. Each phalanx should inhabit an immense building called a phalanstery, arranged in the most agreeable and most convenient manner, where, at the same time, the special branches of manufacturing industry would be brought together. Fourier estimates that the energy given to labor by the proposed organization, added to the economy resulting from the consumption in common, would immediately triple the present production. Great comfort and luxury will then be at once brought within reach of all. The total product will be distributed as follows: one-third will form the dividend on the capital, and will belong to the proprietors of the phalansterian establishment; five-twelfths will be assigned to labor; one-fourth to talent. (Fourier varied sometimes from these proportions.) The same individual will be able to share in the product, under these three heads, as capitalist, laborer and capacity. But a minimum of consumption will be guaranteed to simple laborers. This distribution will not require any exchange transactions. Each individual will participate in the consumption in proportion to the dividend to which he is entitled. There will be various classes of tables, lodging, and enjoyments of every kind: each one will consume according to his income, and a simple balance of account will be sufficient to determine his condition each year. Each phalanstery will cultivate the products best adapted to its soil and climate, and the phalansteries of the different parts of the world will interchange their products. There will, besides, be established industrial armies, which will travel over the globe and execute all the great labors of general utility. Thus will universal harmony be established. The mechanizing passions will harmonize the five springs of the senses with the four affectional springs, and man will be able to give free course to all his passions without there being any danger of conflict. On the contrary, everything which, in civilized life, is reproved as vicious inclination and condemned by moralists, becomes a means of emulation and a source of activity. The passions, brought into competition by the cabalistic passion, exalted by the composite, made to supplement each other by the butterfly, will inspire the individual to incessant labors and pleasures, so that people will be eager to rouse from their sleep to receive the increased enjoyment which every phalansterian day holds forth.
—Such is an outline of Fourier's system; and, it must be said, this system always remained in an outline condition, at least as to its whole. Nevertheless, as Fourier elaborated some parts of it, and as he attached great importance to the details of its execution, we should give our readers a nearer view of the details of the organization he proposed. He was chiefly possessed by two ideas: the first, for which we find no special term in this author, we call the idea of symmetry; the second, the idea of series. Symmetry, according to Fourier, constitutes one of the greatest laws of nature; it is also one of the fundamental laws of social organization, and all the groups and series of which we have spoken must be symmetrically disposed. This disposition consists in the formation of a centre and two extremities, two wings. Thus, in a group of seven persons, (the smallest number which can form a group), three persons form the centre, and two, each of the extremities. The centre will represent the general character of the group, the passion or the labor which constitutes it, (the dominant or the tonic); the extremities will represent the oppositions or contrasts which this general character will present. Between the extremities there will be rivalry, emulation; the centre will maintain the balance, and unity will be thus established between the differences. This arrangement may be applied in all the groups, whatever be the number of individuals of which they are composed, and like wise in the series of groups. Only, in the most numerous groups, new divisions and subdivisions are established, but always according to the same principle. Thus, each wing forms itself into a new centre and two new wings; the transitory characteristics hold between the centres and the wings, etc. Symmetry has an intimate connection with what Fourier calls series. It sometimes takes its name; for the word series in his theory has an altogether different sense from what it has in ordinary science. The idea of series, newly arisen in science, immediately played a great part there. It was in fact identical with growth, progress. In this sense it was the principle of progressive classifications in geology, botany and zoölogy. At the same time that it caused rapid advances to be made in these sciences, it demonstrated the progressive creation of the universe. In Fourier, wholly different series were treated of. Besides the progressive series, nature presented still others, like the series of musical tones, the series of colors. In general, all things which presented resemblances and differences could be ranged in series. But, hitherto, these relations, so tar as pertained to series, had given rise to no important scientific discovery, and there resulted from them only wholly secondary classifications. However, Fourier attributes to this principle of classification a wide significance, and by combining it with the principle of accord which musical sounds and the white light arising from the combination of the colors of the spectrum furnish him, he makes it the basis of his whole plan of organization.
—According to Fourier, then, every passion, as, in general, every object in nature, is presented under a series of manifestations, of modes, which, contrary to the real series of botany, geology, etc., goes on increasing at first, arrives at a maximum, and then decreases. The increase is marked by the increasing number of springs or motives which act in each mode. Several springs, in fact, may act in each passion; friendship, for example, depends either on the spiritual motive of affinities of character or on the material motive of affinities of industrial inclinations; love, on sexual attraction, or on spiritual affinity, the bond of the heart, which Fourier calls celadony. When one spring alone is in action, the manifestation is incomplete, mean and bare, good at most in civilization. Every passion, every enjoyment, every pleasure, ought to be composite, that is to say, the result of the play of several springs. Thus, the pleasures of the table are only complete when to the enjoyments of taste are added agreeable conversation and the charms of friendship; labor becomes a pleasure only when it is enhanced by the simultaneous satisfaction of other passions. The increase then in each series is determined by the increasing number of simultaneous enjoyments of which each passion is susceptible. Taking the musical scale for a type. Fourier consequently divides these series into eight principal modes. The first three (from 0 to 2) express the simplest satisfactions, those which civilization furnishes; the four following (3 to 6) offer complete enjoyments, harmonized, as the phalanstery will present them; the last ones do not exactly express a decrease; but they are rare and exceptional manifestations, endowed, moreover, with a high power in harmony. The eighth mode is the omnimodal harmony: it results from the organization and simultaneous play of the seven inferior modes. It corresponds with white in the scale of colors, or with the octave in the musical scale. It is the pivot which is in harmony with all the terms of the series. It is of itself divided into two: the direct harmony (corresponding to white), and the inverse harmony (corresponding to black). The three inferior modes are only secondary springs in harmony; the four subsequent modes will be the mainsprings, properly so called, of the organization of the phalanstery. The superior modes, the high, most puissant moduli, the infinitesimal moduli, will have for their function to establish a bond between the different phalansteries, and to bring about unity and universal harmony.
—Taking these hypotheses for a starting point, what was the problem Fourier propounded to himself? In virtue of his general principle, the social organization can not be perfect save on condition of not leaving one single human desire without satisfaction, or one single sentiment without complete development; and, moreover, the desires and passions are the necessary mainsprings of social organization; so that, if a single one of these springs were neglected, the organization itself could not arrive at its perfection. The problem laid down is then this: to create satisfaction of every kind in all the series at once, by the satisfaction given to each passion in all its modes without exception, and by the effect of a mechanism which embraces at the same time all these passions and all these modes. A mechanism which permits all the passions to be satisfied, and the necessity of giving free play to all the passions in order for this mechanism to be able to perform its functions: such are, then, the fundamental conceptions of the phalansterian organization. Such is, clearly, also the idea of Fourier. The organization must be integral; all the wheels of the mechanism should be put into operation simultaneously; otherwise there could be no progress. Moreover, he becomes indignant at the moralists, who, by condemning this or that human passion are breaking the mainsprings of his machine. He stands strongly against the ideas of equality which the revolutionists preach. The inequalities of every kind constitute one of the principal mainsprings of human activity: the differences of rank, power, influence and fortune, are indispensable stimuli to the phalansterian mechanism. 'The societary system is as incompatible with equality of fortunes as with uniformity of character.' This shows why Fourier expressly maintains that capital should have its due share in the distribution of the products; and those of his pupils who aimed to diminish or cut off that share completely failed to understand the fundamental idea of their master. The gratification of the passion of love, which Fourier, in his first work, represented as a bait which must infallibly seduce civilized people; which he preaches with less boldness in his second work, and of which he postpones the organization for 100 years in his later writings,—this passion of love, to which, nevertheless, he can not help continually reverting, and which his disciples wished to cover with a veil, forms one of the indispensable mainsprings of his system. 'The passions,' says he in his "Treatise on Domestic and Agricultural Association," 'are not a mechanism of which one can weigh separately any particular part, according to the caprices of each reader and the restrictions of each sophist. Their equilibrium must be integral and unitary; each of the parts there has a correspondence with the whole and if one falsifies the balance in love, it will be indirectly falsified more or less in the other branches of the societary mechanism.'
—Fourier has then propounded a problem whose solution is not easy; but it must be said that its solution is not to be found in his writings. A mechanism so admirable was worth the trouble of being described in its smallest details: Fourier has not done it. His works are composed only of fragments, of detached notices. Particular parts are developed with a certain care, but the whole plan is nowhere found. We are told that the domestic characters are 810, neither more nor less, and that a phalanstery should be composed of 1,620 persons. We are given the division of the phalanstery into sixteen tribes, classified according to age. We are informed that the industrial functions are of seven kinds: domestic, agricultural, manufacturing, and commercial labor; teaching, study and the employment of the sciences; and the fine arts. But the enumeration and determination of the characters, the subdivision of the seven general functions and the determination of the series are completely lacking. The agreeable and comfortable arrangements of the phalanstery are carefully described. We are shown, by many examples, how indispensable the multiplicity of passions and of enjoyments is to the action of the mechanism. Thus, the refined tastes of the gourmand, by the variety of products they call for, are in exact accord with the necessity of introducing a great variety into the groups and series. Thus, vanity and pride are the most powerful stimulants to activity and emulation. It is known how Fourier turned to advantage the dirty habits of some children, to secure the accomplishment of certain disgusting labors; and the delicacy and conceit of certain others, to utilize them in ornamentation and articles of luxury. The phalansterian education is carefully described. Fourier shows how, by letting children walk around in the workshops, by, giving them practice in small labors, twenty industrial talents will be developed among them: how also the railleries of their comrades and their self-respect will impress them with an ardent love of work. Fourier quite often refers to what he calls rallying, that is to say, the means of harmonizing the natural antagonisms, such as those which exist between the rich and the poor, between youth and old age, between princes and subjects. He shows how the population will be reduced to 600 inhabitants a square league, by the extension of phanerogamous morals (harmony of the sixth), and of the enrollment of two-thirds of the women in the corporation of bacchanals, bayadères, etc. In a word, all the supposed results of phalansterian organization are described with much spirit and intelligence, and with a faith as real as blind, but nowhere have they been demonstrated." (Traité d'Economie Sociale, by Aug. Ott; Paris, 1854; Guillaumin, publisher.)
—It is evident that the doctrine of Fourier has a faulty basis. If, in fact, human society is subject, like inert matter, to constant and immutable laws, it is impossible for humanity to escape the control of these laws, and we can not say, with the phalansterian school, that "men have hitherto gone in the wrong path, and that the laws which they have made should be condemned and cast aside." The truths in the physical sciences, attraction among the rest, are truths only because facts constantly and invariably confirm them. If one single fact afforded an exception to the laws recognized by the physical sciences as general, these laws would be at once considered as untrue, and relegated among the more or less ingenious hypotheses which have often been hazarded on the phenomena of nature. For the rest, although Fourier constantly declared that he adopted the method of the natural sciences, that he enunciated the laws written by nature herself, he never employed the language and method appropriate to the sciences. In the place of proving and deducing, he affirmed, drawing his demonstrations from vague and remote analogies, the importance of which was over-estimated by his mind, overexcited as it was by continued labor. What could be more opposed to a scientific habit of mind than to pretend to know the past without regard to historic testimony, and to divine the future and reveal the whole of a cosmogony, without relying upon any constant fact? And yet this is what Fourier did. "The world," according to him, says M. Reybaud, "will have a duration of 80,000 years; 40,000 of rise, and 40,000 of decline. In this number are included 8,000 of apogee. The world is scarcely adult; it is 7,000 years old; it has hitherto had only the irregular, feeble, unreasoning existence of childhood; it is going to pass into the period of youth, then into maturity, the culmination of happiness, afterward to decline into decrepitude. Thus saith the law of analogy: the world, like man, like the animal, like the plant, must be born, develop and perish. The only difference is in the duration. In regard to the fact of creation, God made sixteen species of men, nine in the old world, seven in America, but all subject to the universal law of unity and analogy. Nevertheless, in creating the world, God reserved other successive creations to change its face: the creations will extend to eighteen. Every creation is brought about by the conjunction of the austral and the boreal fluid."
—In what pertains to economic matters, the affirmations of Fourier are not only barren of proof, but they are contradicted by the observation of every day. Labor is, to be sure, necessary to the contentment of man, and absolute idleness is suffering as well as a vice; but it does not follow from this that labor is attractive, that its attractiveness is sufficient to give rise to industrial activity. As M. Ott observed, Fourier, who so carefully analyzed the vicious inclinations and assigned to them a place in his phalanstery, forgot in his nomenclature the worst of vices, the most attractive and the most dangerous to his system, indolence. It has been said, it is true, that in a harmonious world indolence would not exist; but it is only a gratuitous affirmation, contrary to the experience of all human society up to this time. The same experience must inspire great mistrust of the glorification promised to the sensual appetites. Hitherto, the easy satisfaction of these appetites, far from being a stimulant to labor, has impelled men to idleness. Nothing less than a subversion of the ordinary laws of human nature would be necessary for the same cause to produce the opposite effects. These objections are taken from the standpoint of the Fourierites themselves. From a moral point of view, doctrines which are the negation of morality itself can be neither approved nor excused.
—Since Fourier's death, important modifications have been made in the ideas of his school. Without condemning the doctrines of the master, his disciples neglected the better part of them, and devoted themselves to various financial and economic problems. Thus, his school has sometimes, by the talent or personal consideration of some of its members, taken the appearance of an organized and powerful body. But, in reality, the Fourierites have produced nothing useful, in the economic line or in any other, except by departing from the school, and abandoning the fundamental ideas and the hypotheses of the master. For a long time the utopia of Fourier has been, to those acquainted with it, and to impartial men, only a rallying word, one number more in the long catalogue of human aberrations.
—BIBLIOGRAPHY. Théorie des quatre mouvements et des destinées générales, Leipzig (Lyons), 1808, 8vo, 425 pages; Traité de l'association domestique et agricole, Besançon and Paris, 1822, 2 vols., 8vo; Sommaire de la théorie d'association agricole, ou attraction industrielle. Besançon, 1828, 8vo; Le nouveau monde industriel, ou invention du procédé d'industrie attrayante et combinée, distribuée en séries passionnées, Paris, 1829, 4 vols., 8vo; Piéges et charlatanisme des deux sectes de Saint-Simon et d'Owen, qui promettent l'association et le progrès, Paris, 1831, 8vo, 80 pages; La fausse industrie morcelée, repugnante, mensongère, et l'antidote, l'industrie naturelle combinée, attrayante, véridique, donnant quadruple produit, Paris, 1835-6, 2 vols., 12mo. A second edition of the Théorie des quatre mouvements appeared in 1841 (1st vol. of the Complete Works); the Traité d'association domestique et agricole, in 1841, under the title of Théorie de l'unité universelle, in 4 volumes, forming II., III., IV., and V. of the Complete Works. The Nouveau monde industriel appeared in 1846 (vol. VI. of the Complete Works). The two volumes of Fausse industrie were not republished. A part of the manuscripts left by Fourier were printed in the Phalange, a monthly review which appeared from 1845 to 1849, 10 vols., gr. 8vo. Some volumes of these manuscripts were published in 18mo, under the title, Publication des manuscrits de Fourier. Fourier wrote, besides, a great number of articles in the Phalanstère, ou la Réforme Industrielle, a weekly, and, later, a monthly paper, which appeared from June, 1832, to February, 1834.
E. J. L., Tr.
John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 2 East India Co. - Nullification Chapter: LAND.
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LAND. Considered from an economic point of view, land appears in the first rank of natural wealth susceptible of appropriation. Land is at the same time the principal deposit of capital accumulated by the labor of the generations which have preceded us in civilized life; it is in some sort but a manufactured tool, which intelligent cultivation incessantly improves instead of using. We shall not dwell upon the great economic properties of land, which have been made the object of special articles, but we must briefly point out the well-known laws that regulate the value and price of land.
—Adam Smith long since observed the relation which exists between the value of landed property and the rate of interest. When interest is high, in time and space, the price of land is low; when, on the contrary, the rate of interest is lowered, the value of land increases. The reason of this is, that land, no matter what transformation it may undergo in the possession of its owner, is always and necessarily capital intended for reproduction. The owner may diminish and almost destroy this capital by neglecting to cultivate it or by cultivating it poorly, but he can never destroy it while society retains its influence. Thus, land is always acquired to be employed in reproduction, and it can only be exchanged for capital, which its owners intend for the purposes of reproduction. Now it is the scarcity or abundance of precisely this kind of capital which raises or lowers the rate of interest. The consequence of this is that, while the usefulness of landed property varies but very little, its value and price undergo frequent and considerable changes, according as available capital for reproduction is scarce or abundant in the market, and that the price of land always follows the fluctuations of the credit market. Another result of this fact is, that the avenues open to capital which is intended for reproduction directly tend, as far as investment is concerned, to lessen the value and price of landed property. Thus, for example, when Louis XIV. established rentes in order to obtain the funds necessary to build the palace of Versailles, he certainly diminished the market demand for landed property.
—In countries whose inhabitants make no savings, because of a defective social condition, land in a manner loses its market value. It is said that there are no buyers because each one prefers to keep his land rather than to exchange it for a sum which represents two or three times the amount of its revenue. We may add that in these countries, in which saving does not lead to the accumulation of movable wealth, the means of exchange are so limited that the revenue of the land is scarcely anything. Thus the market value, and the price of the land as well as the revenue which it produces, are in exact proportion to the saved movable property which can be offered in exchange for it. Both are dependent upon the force of the tendency of the owners of movable property to save and accumulate.
—When a country has little or no foreign commerce, the accumulation of movable capital and the price of land advance very slowly, but in parallel lines. It is otherwise when the products of a country are absorbed by foreign commerce, as is the case in the Danubian provinces and southern Russia; then the revenue from the land increases, without any increase in its price, and without it being possible to insure the revenue to a farmer, because there is no security either for a farmer or for a purchaser.
—As the price of land in civilized countries is affected by the fluctuations of the credit market, it is temporarily reduced by commercial crises: it depends upon the movement of an amount of capital always very moderate, if we compare it with the total of the land in a country; a fact which causes results that seem strange at first sight, and not proportioned to their causes. By reason of this intimate relation between the price of land and the credit market, it was once possible in France to say that the country had been made poorer by twenty thousand millions, and subsequently that it had grown richer by an equal amount; overlooking the fact that, while the fortune of a private individual is specially affected by the phenomena of exchange, the wealth of a country depends above all upon the utility of the objects which it possesses.
—It has been sometimes asked if the numerous investments represented by titles which are for individuals, thanks to exchange, movable capital, tend to raise or lower the price of landed property. Considered as an investment, it is certain that the sale of titles which carry with them the right to the enjoyment of an income is a competition with land; but the judicious employment of the money obtained by this sale may have the effect of adding to the wealth of the country, that is, to its means of saving, to such an extent as to add more to the value of the land than the investment took from it.
—Adam Smith seems to suppose that the price of land is in proportion to the rate of interest, in this sense, that land would produce the same revenue for its owner as an investment in movable property. This is not exactly correct: landed property nearly always produces a revenue less than fiduciary investments, or, in other words, land is always, on an average, dearer than the titles of these investments.
—Land is, of all species of property, that whose lot is intimately united to the lot of society, considered as a collective living being, capable of enjoyment and privation, of wealth and poverty. It is in some sort the great savings bank in which is laid up the greater part of the capital which the present generation leaves to that which is to follow after it.
John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 2 East India Co. - Nullification Chapter: LAW’S SYSTEM
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LAW'S SYSTEM. This is the name given to the great financial experiment made in France by the government of the duke of Orleans under the direction of John Law.
—Had John Law's financial operations been only a series of expedients devised from day to day to tide over a condition of embarrassment, they would not merit a place in a scientific work. History gives us many examples of means and abuses similar to those adopted or produced in France at the beginning of the past century. But Law's operations were distinguished in more than one way from ordinary expedients: first, they were entered upon as the practical application of a preconceived theory, and in the aggregate they form a system; second, they were the signal for a revolution in the manners and habits of the French, third, they afforded a magnificent example of the combinations and effects of stock-jobbing. On these accounts they are pre-eminently deserving of the consideration of the economist, and it may be useful, while exposing them, to make some little comment upon them also.
—At his death Louis XIV. left the finances of France in a most deplorable condition. The debt in a thousand different forms, payable on demand, made a sum of 785,000,000 livres; 64,000,000 of annuities, perpetual or redeemable at a fixed date and drawn from every branch of the revenue, represented a principal sum of 460,000,000; and finally, the creation of offices, increase of salaries, etc., had involved the state to the extent of about 800,000,000. The public debt amounted thus to a principal sum of about 2,000,000,000 livres, of which about 785,000,000 were payable on demand. "When the king died," says Bailly, "not more than four or five millions could be anticipated from the last three months of the year; and the revenues of the succeeding years were more than half consumed." Complete disorder reigned, besides, in every department of the financial administration, so much so that no one could give, or even know, till much later, the balance-sheet figures of the situation.
—By different measures of a sufficiently suspicious nature the regent's government reduced the debt payable on demand, and embodied it in bonds of uniform description, giving them the name of billets d'état. These were issued to an amount of 250,000,000, and bore interest at the rate of 4 per cent. They were receivable for arrears of taxes, and were to be destroyed as they came in; but as the promises of the state then inspired no confidence, these billets were at a discount of no less than about 80 per cent. of their nominal value. However, some method was introduced into the collection of taxes and the financial administration in general, judicial investigation instituted against the farmers of the revenue, and an alteration of the coinage furnished some little funds, dishonorably obtained and dearly bought. It was at this crisis that Law submitted to the finance council a first scheme which was not adopted; and in order to cause his ideas to prevail he was obliged to adopt indirect means—Letters patent of May 2, 1716, gave to John Law the privilege of establishing a bank. It was constituted under the name of the Banque Générale, with a capital of 6,000,000 livres, in 1,200 shares, of 5,000 livres each, payable in four installments, one-fourth in specie and the remainder in billets d'état. The functions of this bank, which to all appearance was independent of the government, were to be, according to its by-laws, the same as those now fulfilled by the bank of France.
—This establishment was very well received by public opinion. Banks of issue were in all the first vigor of youth. The bank of England had only been in existence since 1694, and that of Scotland since 1695, and they were both giving good results. Commerce highly appreciated an establishment which gave a price current to discount, and which caused its rate to decline, at first to 6 and finally to 4 per cent. It appreciated still more highly the current accounts and the bank credits based on a currency whose weight and standard never varied, however great the alteration undergone by the current coin. It was the first introduction into France on a large scale, or at least with great pretensions of two excellent commercial undertakings, the bank of deposit and the bank of issue. But no one had any definite knowledge of the theory of its working, and the start of the new bank was regarded with that distrust which is so common in France and so closely akin to the blindest credulity.
—The Banque Générale prospered, but it developed but slowly in an environment in which credit had received some rude shocks and in which there was but little business done. Besides, the establishment's own capital was very small: of the 1,500,000 livres payable by the shareholders in specie, one-fourth only, that is to say, less than 400,000 livres, had been paid up. As for the billets d'état they were still at a discount of 70 per cent., and it was impossible, in the then condition of affairs, to derive any advantage from them.
—The secret connection which existed between the Banque Générale and the government was brought to light April 10, 1717. On that date, a decree of the council ordered the receivers of the public revenue, not merely to accept the bank's notes in payment of taxes of all descriptions, but even to pay the value of these notes in hard cash, when asked to do so and if they had the money at their disposal. It does not appear, however, that these privileges had the effect of extending much the circulation of the notes, which, concentrated in Paris and some other large cities, never exceeded 12,000,000. Evidently it was not with such trifling resources that a credit could be obtained sufficient to liquidate the public debt. This was only the first story of the great edifice called the Système.
—Toward the end of August, 1717, a celebrated merchant named Crozat, who had obtained a monopoly of the Louisiana trade, ceded this privilege to a company floated by Law under the name of the Compagnie de l'Occident. The letters patent authorizing the formation of this company gave it a monopoly of the commerce with Louisiana for twenty-five years, and of the trade in furs, arms, munitions and ships in Canada. The privileges given to the company were somewhat justified by the way in which its capital was obtained; it was in amount 100,000,000 livres, in shares of 500 livres, payable in billets d'état, which the government assimilated to life annuities, and the interest of which it guaranteed at the rate of 4 per cent. But it was not necessary to have great experience in business to be able to understand that a capital thus formed could not furnish the necessary resources for commencing an undertaking so vast as the colonization of Louisiana, that is to say, of a tract of country which included the valleys of the Mississippi and the Missouri, and which extended northwest as far as the Pacific ocean. At first, then, the credit of the Compagnie de l'Occident languished. Public opinion was opposed to it, and capitalists hesitated to invest in shares. Affairs were in this condition when, on May 11, 1718, an edict was published ordering the recoining of the coinage. The silver marc had already been carried from twenty-seven to forty livres; the edict of May carried it from forty to sixty livres. "From the order to recoin all money," says Eugène Daire, "arose the obligation to take all the old money to the mints; but it was permitted to join to one's silver two-fifths in billets d'état. It happened, therefore, that when, in the words of the law, a man disseized himself in favor of the fisc of eight écus of five livres each, or, altogether, forty livres, that is, a marc of silver, it was optional with him to add to them sixteen livres in billets d'état, the effect of which was the delivery of fifty-six livres to the profit of the treasury. When the latter had received this value, it returned in exchange nine and one-third of the new écus, denominated six-livre pieces, which also made fifty-six livres. But the intrinsic value of those fifty-six livres, the weight of silver which they contained, was less by one-fifteenth than the weight of silver previously paid into the treasury, and thus the person paying lost, first, that amount of his silver, and, secondly, gave up his paper, his billets d'état, for nothing. In brief, the state gained by this honest operation 6 2/8 per cent. in silver and 26 2/8 per cent. in paper; in all, 33 1/8 per cent. on all sums paid into the mints." Parliament resisted this operation in vain.
—Was the edict of recoinage Law's work? It has been believed to be so, since it had the effect of raising bank silver in the public estimation, that being money of fixed weight and standard, and of encouraging the use of paper among the people. Several writers, on the contrary, have attributed this edict to the minister d'Argenson who had succeeded the council on finance, and is supposed to have devised this simple and summary means of extinguishing the billets d'état, solely with the view of proving himself a financier of greater powers than Law.
—Be that as it may, this minister gave soon a clear proof of the ill-will be bore the Scotchman, by farming out the taxes to the brothers Paris, skillful bankers who had introduced some order into the administration of the finances, on terms usually considered advantageous. With their contract in relation to the taxes as a basis, the brothers Paris established a company of limited liability in June, 1716, with a capital of 100,000,000 livres, in 100,000 shares of 1,000 livres each, payable in rentes or bills. This operation had a much more solid basis than the Compagnie d'Occident, for it was much more probable that the brothers Paris would gain by their contract of the farming of the taxes than it was that the Compagnie d'Occident would gain by the commerce of Louisiana. The shares of the latter company met with a formidable competition in the market when they were brought in collision with the shares of the association gotten up by the Paris brothers, which was called the "Anti-System."
—New financial operations had to be resorted to to impart value to the shares of the Compagnie d'Occident. On Sept 4, 1718, it farmed out the tobacco monopoly; its shares rose a little, for public opinion rightly viewed with favor speculation in the state revenues. But the rise was slow and slight.
—On Dec. 4, 1718, a royal edict changed the Banqus Générale into the Banque Royale. The 1,200 shares of the Banque Générale, only the fourth part of which had been paid in, were bought at a price of 5,000 livres, their nominal value, and were redeemable in écus. Never had shareholders made so much in so short a time. What might not be the intrinsic value of an enterprise that the public treasury, completely involved in debt as it was, thought fit to purchase at that price. Men's imaginations were possessed, and little attention was paid to the radical changes that the by-laws of the bank underwent.
—The notes of the Banque Générale were payable in bank money, the weight and standard of which were defined; those of the Banque Royale were payable in livres of tours currency (livres tournois), that is to say, in nominal money the weight and standard of which was not exactly settled. The notes of the Banque Générale could not be made and issued except against securities in hand; an order in council was sufficient to authorize the Banque Royale to issue notes to the profit of the government. The Banque Royale had branches in which were exchanged notes for écus and écus for notes, and in the cities in which they were established the use of specie was restricted to payments of 600 livres and under. It was clear that liberty was distrusted and that there was an intention of outraging public opinion; in short, on April 22, 1719, a decree of the council forbade all transport of coin by private persons into the cities where the bank had offices; it ordered the public officers in those cities to keep their cash in notes, under penalty of bearing the loss on specie in the event of a depreciation of the currency; it authorized creditors in these cities to refuse as worthless the offers of their debtors, unless made in notes, and only to receive the precious metals in payment of small change. It was attempted to demonetize, as far as possible, the precious metals, and to give the paper of the Banque Royale the properties of money. However, those measures decreed by a government which had already made a bad use of its paper, could not inspire much confidence; it was necessary to captivate men's minds by a bold stroke which should disarm suspicion, upset all calculations and raise the value of the shares of the Compagnie d'Occident, then at a discount of about 40 per cent. Law bought 200 shares at par, at six months date, paying 40,000 livres on the price of the 100,000 livres which those shares represented, with the stipulation that he should lose the 40,000 livres if the shares did not reach at least par. The premium market was then unknown in France and the confidence felt in Law's personal ability was so great that in a short time the shares of the Compagnie d'Occident rose to par. Rumors skillfully set afloat, all tending to enhance the idea of the company's probable future prosperity, also contributed to this result.
—The most difficult step had been taken: however little observation may have been bestowed on the course of such speculations, it is well known that it is sufficient to establish an upward movement in the price of shares in order even with moderate ability to push that advance in due course to a considerable extent. Now Law's ability was very great; he was backed by all the power of public authority; and he dealt in titles whose intrinsic value was little known, and was therefore all the more easily exaggerated. What golden dreams was it not easy to have about the resources afforded by the commerce of an immense, new, unknown and uninhabited country. For the rest, Law did not leave men's imaginations idle; like a skillful gambler, he caused frequent changes of luck. In May, 1719, all the great commercial companies which still existed, were acquired by the Compagnie d'Occident. It took the name of the Compagnie des Indes and was authorized to issue 25,000 new shares of 300 livres each, payable in specie and by twentieths (vingtiémes) monthly: only fifty livres had to be paid immediately, and a decree of June 20, 1719, permitted only those to subscribe for the new certificates who already possessed an amount four times greater of the old certificates. Already fortunes had been made by the rise in the first certificates; they were in still greater demand as soon as it became necessary to possess a certain amount of them in order to obtain the new shares, which on this account were called the "filles" (daughters), and rose rapidly.
—This rise was maintained by new schemes. On June 25 the state ceded to the Compagnie des Indes all the profit it might make by the coinage of money, in consideration of a sum of 50,000,000, payable monthly in fifteen equal sums. The company issued 25,000 new shares at a nominal value of 500 livres, but at an actual price of 1,000 livres, at which the first shares were selling. It was necessary, before being permitted to subscribe for the new certificates, to qualify by holding five shares of the old to obtain one share of the last issue. These were named the "petites filles" (grand-daughters) and had the same success as the preceding ones. The company had guaranteed its shareholders a dividend of 12 per cent., dating from Jan. 1, 1720. At the beginning of September all the shares were placed and were selling at a price of 5,000 livres, those which had been subscribed for in billets d'état, as well as those the amount of which had been furnished in specie.
—On Sept. 2 the Compagnie des Indes undertook a new enterprise, which was in some sort the crowning of all. It had secured the rescision of the contract with the brothers Paris for the farming of the taxes; it took upon itself the collection of the taxes at 52,000,000, and in addition the payment of 1,500,000,000 of the king's debts. The creditors of the state were paid by orders on the cashier of the Compagnie des Indes, payable in notes or specie. In order to provide the funds needed for the repayment, the company was authorized to issue transferable shares bearing 3 per cent. interest, payable half yearly; it was itself to receive 3 per cent. on the 1,500,000,000 which it furnished to the government.
—In reality there was nothing more in this transaction than a conversion of annuities. The state, instead of paying 4 per cent. now only paid 3 per cent., thereby making an annual saving of 15,000,000. The company borrowing and lending at 3 per cent. seemed to be performing a disinterested speculation; but it is easy to comprehend that in a transfer of 1,500,000,000 of capital for the repayment of which the choice was given between a bond of definite amount and the shares of a company whose brilliant success was everywhere prophesied, many capitalists would choose the shares. The company issued 324,000 shares, nominally for 500 livres, payable in tenths monthly, but which, if sold at the market price of the day, would bring it a gain of 1,620,000,000, with which sum it could easily meet all its requirements.
—The "Systéme" was complete. Law, sharing a delusion which still finds defenders, confounded price with value; he believed that it was sufficient to raise prices to increase a nation's capital; he attributed to the augmented quantity of paper money, of the "sign," to use the language of the time, the property of creating value, which belongs only to labor. It was with this object that several decrees had been issued with the view of discouraging the use of metallic currency and that stock-jobbing was over-stimulated. A decree of Sept. 26 having settled that the company's shares could only be paid in notes, gold and silver lost in a moment 10 per cent. in exchange with paper. The shares sold in the open market were bought up eagerly, and their price rose constantly for several months. There is no need to seek far for the cause of this rise; foreseeing that the payment of the second tenth would embarrass the holders and would occasion a fall, an order of the council made the payments quarterly, and postponed till the month of December, 1719, the payment which fell due at the end of October, the following till March, and the third till June, 1720. On the other hand, the Banque Royale, which, in accordance with the decree of Dec. 4, 1718, was forbidden to issue notes for a greater amount than 100,000,000 livres, had issued them to the extent of 520,000,000 at the end of October, 1719; of 640,000,000 at the end of November, and on Dec. 29 it was decided that the amount of notes should be raised to 1,000,000,000. The sophism on which Law's system was founded became a gigantic illusion. But this illusion created facts which were very real. Specie in its two common uses was replaced by paper. The sums amassed and hoarded up for future consumption took the shape of shares; the sum for present use became bank notes.
—What was the nature of the real values represented by the shares of the Compagnie des Indes and the billets or notes of the Banque Royale and what was the disposable capital operated with? We do not know exactly what the operations of the bank were, but it is likely that discounting commercial paper was the least important. Perhaps it made advances on shares deposited with it; probably it simply met the financial wants of the government by its notes, so that its paper was based upon no actual value; it was merely a state debt bearing no interest.
—The paper issued in the shape of shares by the Compagnie des Indes amounted to a nominal principal sum of 312,000,000, issued at a price of 1,797,000,000. But, out of this enormous amount what had been the real payments into the company's treasury? The official documents do not give it exactly, and besides they are not particularly worthy of credence. The company's resources in revenue may be better estimated. They were, first, 49,000,000, due annually by the state; second, the company's profit on the tobacco monopoly, on the tax farming, on the rentes and salt tax of Alsace, and on the coinage of money; and third, the gain on the commercial profits of the company, estimated at 8,000,000. The estimate of the company's profits was singularly exaggerated; for it is at least doubtful if a commercial company constituted without real capital, or, if it be preferred, with a capital of 50,000,000, could realize immediate and considerable profits by the commerce and colonization of Louisiana and Canada, and even by that of the coast of Africa and China. Besides, all its income consisted of an annuity due by the state, the profits on the farming of the public revenue, and the very uncertain gain to be obtained from a monopoly granted by the state. Finally, admitting that the company's revenues reached the exaggerated total of 82,000,000, it could only pay a very moderate interest on a capital of 1,797,000,000, ill calculated to keep up the inflated price of the shares, whatever might be the depreciation of the currency owing to the multiplication of bank notes, since, after all, this depreciation would also reduce the real value of the revenue. It is evident, then, that Law's system could not live, not only on account of the faulty constitution of the bank, but also of that of the Compagnie des Indes itself. By exhausting all the resources of stock jobbing, an edifice of opinion and credit, whose lease of life could not be a long one, had been erected on very slender foundations. It remained to be seen who should be the victim of the illusion, who should give solid and real value in exchange for new paper.
—It is well known that the success of Law's system was beyond all expectation. The factitious fortunes made by the rise in value of the first shares had fired men's imaginations; all who had any disposable capital hurried to the market with it. Those who had not, sold lands, houses, government bonds, etc., and stock-jobbing soon raised the price of the different securities issued by Law to the enormous sum of 12,000,000,000. Certainly if the style of reasoning employed by the publicists of our day be adopted, such signs of prosperity had never before been seen, and, to use the language of the present, business was never as brisk as it was then. The documents of the day are filled with incredible stories of the magnificence of the houses, the furniture and the retinues of the nouveaux riches of that time and the court people, who, in that ephemeral prosperity, had the chief share after the lackeys. The state was not less munificent than private persons; it remitted 80,000,000 of taxes in arrear, did away with vexations burdens, studied new systems of imposts, and even brought to a successful close a short war with Spain without increasing the burdens which pressed on the people. Every one was intoxicated with his dream of wealth. What was the real cause of all this wealth? The consumption in a few months of almost the entire value of the metallic money of the country, both that which had for long been kept as a treasure or reserve and that which served for the purposes of exchange and circulation. The same phenomena were produced as would have been produced had a treasure trove of two or three thousand millions suddenly been discovered and spout productively or unproductively in a few months.
—It was not the Compagnie des Indes itself which gathered the fruit of this movement; nor was it the creditors of the state, for but a small number of them had been paid in time to convert their bonds into shares; it was the people of the court, with the regent himself at their head, who benefited equally by the unlimited issue of the bank's notes and the jobbing in shares. If stock-jobbing was not the sole object of Law's system, it can not be denied that it filled a very large place in it, and it is difficult to understand in what other interest the decrees of the council postponed the payment of the amounts about to fall due on the shares. Would this have been done if the genuine success of the unique commercial monopoly which had been created had been the only end in view? Certainly not. Besides, without having recourse to conjecture, it is sufficient to glance at the documents of the day to see that Law had imported into France or brought to light every means by which a factitious price may be given to securities of doubtful and uncertain value. Since that time the art of appropriating another's property by stock gambling has made no advance; there is but a repetition of the same tricks.
—A catastrophe was inevitable, but Law did not see it. He was fully persuaded that it was possible to sustain the currency of money which was wholly imaginary, by exchanging it for securities whose value was hypothetical; and when the crisis overtook him, he did not even have recourse to the means which might have lessened the effect of the catastrophe. It must be recognized, too, that the want of morality in the government of the time and the extravagant habits which Law himself had encouraged, would scarcely have permitted him to use the means suitable, even had he himself wished to do so.
—Toward the end of December, 1719, discerning foreigners, and those of the French who had a calculating turn of mind, saw that it was time to withdraw from the speculation. After having themselves operated a rise in which the shares reached the value for a moment of 20,000 livres, they sold out, and, with the price obtained, bought real estate, bullion, merchandise—in a word, real wealth. This was called realizing. It will be understood that the sale of a number of the shares soon ran down the price. At the same time the presentation of notes to be exchanged depleted the bank of specie, even although an edict forbade the use of silver in payments of above forty livres, and of gold in payments of over 300 livres, and although, on Jan. 28, 1740, another edict gave compulsory circulation to the notes throughout France, and the edict ordering the reminting of money was carried out vigorously. In February it became necessary to forbid private persons, under pain of confiscation, to have in their possession more than 500 livres in specie, and in March gold and silver were demonetized completely. On Feb. 22, with an end in view which it is not easy to determine, the Banque Royale was united to the Compagnie des Indes. The value of shares was at that time far above the price of issue. A declaration of March 11 fixed the exchange between notes and shares at a settled rate of 9,000 livres the share. Law imagined that by this means he could control the issue of notes; but to succeed it would have been necessary that one of the two objects exchanged should have possessed some intrinsic value. Now the value of the share was not much more real than that of the note, and, however it might be counted, it was impossible to maintain the share at a price of 9,000 livres. On May 21, then, the share was reduced to 5,000 livres. The rate of exchange established by the declaration of March 1 only served to increase still more the issue of notes, which was, according to report, carried to three thousand millions. It is well known that the destruction of notes which had come back, promised by edict, was not honestly carried out, and that M. de Trudaine, provost of the merchants' guild, was removed from office because he refused to become a party to the government's frauds—It is useless to recall the events which marked the fall of Law's system: the creation of annuities payable in billets de banque, the repeated edicts which altered continually the metallic currency, the indictments filed, the confiscations made; how the bank was besieged and reduced to the redemption of one note only of ten livres for each person; the want of specie for the purposes of exchange; the reduction of wages, the engrossing of merchandise, the riots, and the terrible distress which succeeded one of the most extraordinary revolutions of fortunes which history tells of. After having, in the space of six months, promulgated about forty financial edicts, the government was reduced to yielding to public opinion and the force of circumstances. On Nov. 1, 1720, it declared that the notes should be receivable according to private agreement, and as, in spite of the compulsory circulation, they were at a discount of about 90 per cent., they ceased to possess any sort of value. Some time previous to this. Law had been obliged to escape by flight the vengeance of those whom his system had ruined. About two years were needed to prepare the system, and about the same length of time sufficed to develop it and to see its fall. In his speculations, founded on an erroneous conception of the creation of wealth, Law had succeeded, at first, by the importation into France of new and good commercial processes; and because of circumstances entirely unconnected with his theory, from the moment that his ideas were confronted with facts, Law's system crumbled.
—It was not, as has been said and repeated often, because Law's system was carried to excess that it failed. If operations had been confined to the Banque Générale, if that had been allowed to develop within the limits of its by-laws without resorting to rash or adventurous speculations, it might have rendered great services; but this bank was only a decoy, meant to accustom the people to the use of paper; it was in no way a part of the system; Law's writings and the edicts leave no doubt of this. His theories on the subject of paper money were like a story in the Arabian Nights, and the system was only the practical application of those theories.
—In spite of the financial difficulties resulting from the downfall of Law's system, it would have been easy to reap some advantage from the impulse imparted to business and from the state of men's minds at the time, from the custom of the association of small amounts of capital into one whole to accomplish any great purpose, and from the bank of issue. Nothing of the kind was done: the winding up of the affairs of the system, which was confided to Law's bitterest enemies, was conducted with a fury of reaction too frequent in France. The object seemed to be to destroy every trace of the great financial events that had just taken place, in such a way as to leave nothing of them but their ruins. All Barême's arithmetic was put under contribution to prove that Law had been a spendthrift and a knave, who had not only ruined private persons, but involved the state in debt, and people affected to speak with horror of paper. The system became the object of the declamations of philosophers and the epigrams of wits.
—The history of Law's experiments, not yet completed from an economic point of view, would be a curious and very instructive study in examining the theories based on paper money and stock-jobbing. All that has been dreamed of or tried of this kind since 1720 had been conceived and tried by the fertile genius of Law. The study of the system would be the more curious inasmuch as the author of it had at his disposal, at least with respect to the mass of the people, absolute power, that he used this power to its utmost extent, and that he lived in a society accustomed to this power, as to all other monopolies. After this great lesson which confirms so thoroughly the teaching of science, the demonstration of the sterility of paper money and stock jobbing is complete.
John Joseph Lalor, Cyclopaedia of Political Science, Political Economy, and of the Political History of the United States by the best American and European Authors, ed. John J. Lalor (New York: Maynard, Merrill, & Co., 1899). Vol 2 East India Co. - Nullification Chapter: LAWS, Sumptuary
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LAWS, Sumptuary, laws designed to repress or moderate the expenditures of private citizens. Such laws existed in almost all the ancient republics and in most of the modern states.
—The ancient republics were based, as we know, on equality of conditions.48 As soon as that equality was in a certain measure changed, the very existence of the state was in peril. Legislators, then, to avert the danger, had recourse to agrarian laws, sumptuary laws, laws to favor marriages, and laws ordering the employment of free men in field labor. All these laws, so diverse in the nature of the subjects to which they applied, were inspired by one single idea and tended to the same end, to prevent the extinction of the free population, from which the national armies were recruited. These laws, which to-day seem strange to us, show how the ideas of the ancients on liberty different from ours, and how different was their social condition from that which exists among us.—"The Romans," says Plutarch, "thought the liberty ought not to be left to each private citizen to marry at will, to have children, to choose his manner of life, to make feasts; in short, to follow his desires and his tastes, without being subject to the judgment and supervision of any one. Convinced that the deeds of men are manifest in these private actions, rather than in public and political conduct, they had created two magistrates charged with keeping guard over morals, and reforming and correcting them, so that no one should allow himself to be enticed from the path of virtue into that of voluptuousness, or should abandon the ancient institutions and established usages."
—But the censure instituted at Rome was only one particular form given to the exercise of a right which all antiquity recognized in the state. They thought that by prohibiting the use of articles of luxury, they would repress the avidity of the great and diminish the general consumption of society, that impoverishment would be retarded; that men of the middle class would be prevented from falling into indigence, from which they could emerge only by labor; for we must remember the fundamental principle of the military republics, that labor was dishonorable. Public opinion excused the Roman patrician for having poisoned and assassinated; it would not have pardoned him for engaging in commerce or working at a trade: hence a whole economic system that was artificial and against nature.
—At Rome, we find sumptuary tendencies in even the law of the Twelve Tables. "Do not carve the wood which is to serve for a funeral pile. Have no weeping women who tear their cheeks, no gold, no coronets." People never regarded these prohibitions. The Oppian law. passed almost immediately after the establishment of the tribunate, forbade matrons to have more than a half ounce of gold, to wear clothing of diversified colors, or to use carriages in Rome. Soon, in the year 195 before our era, the abrogation of that law was demanded, and the demand supported by a revolt of women, as described by Titus Livy. In spite of the opposition of Cato, who, in his speech, showed the intimate relation of that law to the agrarian laws, its abrogation was decreed.
—Fourteen years later, under the inspiration of the same Cato, the Orchian law, limiting table expenses, was promulgated. Twenty years later the Faunian law was passed for the same end. It fixed the expense of the table at about ten cents for each individual on ordinary days, and at less than thirty-one cents for the days of festivals and games. It was prohibited to admit to one's table more than three outside guests, except three times a month, on fair and market days; prohibited to serve at repasts any bird, were it merely a fatted chicken; prohibited to consume more than fifteen pounds of smoked meat per year, etc. Soon the luxury of the table passed these narrow bounds, and Sylla, Crassus, Cæsar and Antony, in succession, caused now decrees to be issued against gluttony.
—It is true that, by a singular coincidence, most of these men who made laws against luxury at the table, were conspicuous in history for their excesses. The infamy of the feasts of Sylla, Crassus and Antony has come down to us through all these centuries; and if Cæsar was less addicted to gluttony than these famous personages, he introduced no less luxury at his repasts. This circumstance likewise proves clearly that all these statesmen, whatever course they followed themselves and whatever were their personal tastes, considered sumptuary laws a political remedy in some sort applicable to a people in a bad condition. It was not through regard for morals, for private integrity, that they had recourse to sumptuary laws; it was to preserve, if it was still possible, the Italian race, which was rapidly disappearing under the two-fold action of pauperism and civil wars. But private expenses can not be regulated either by laws disregarded by the very persons who make them, or by physical means; the change must be effected through public opinion, religion and morals. When public opinion is so corrupt as to honor theft and despise labor; when all religion is destroyed; when it is honorable among the great to eat and drink immoderately, and to vomit in order to eat again, laws can have no efficacy. Sumptuous banqueting also, incredible as it may seem, increased under the emperors. The emperors then also made sumptuary laws at the same time that they were presenting the spectacle of the most scandalous excesses. Some of them, however, gave what was better than laws, grand examples of abstinence and sobriety, but without result, without power to arrest society on the declivity down which it was precipitating itself. It is as impossible to regulate the employment of wealth acquired by conquest and robbery as that of wealth acquired by gaming.
—The sumptuary laws in all ancient countries were of no avail. Sometimes evaded, sometimes openly despised, they did not arrest the increase of luxury, and did not retard the downfall of the military republics founded upon equality. It seems to us, however, that J. B. Say has treated them with a little too much disdain in the following passage, where he has, however, clearly brought out the difference between the sumptuary laws of antiquity and those of modern states: "Sumptuary laws have been made, to limit the expenditures of private individuals, among ancient and modern peoples, and under republican and monarchical governments. The prosperity of the state was not at all the object in view; for people did not know and could not yet know whether such laws had any influence on the general wealth. * * The pretext given was, public morality, starting with the premise that luxury corrupts morals; but that was scarcely ever the real motive. In the republics the sumptuary laws were enacted to gratify the poorer classes, who did not like to be humiliated by the luxury of the rich. Such was evidently the motive for that law of the Locrians which did not permit a woman to have more than one slave accompany her on the street. Such was also that of the Orchian law at Rome, a law demanded by a tribune of the people, and which limited the number of guests one could admit to his table. During the monarchy, on the contrary, sumptuary laws were the work of the great, who were not willing to be eclipsed by the middle classes. Such was, doubtless, the cause of that edict by Henry II., which prohibited garments and shoes of silk to any others than princes and bishops."
—There were, in ancient times, other motives for the enactment of sumptuary laws than desire to gratify the poorer classes, and in feudal monarchies the laws originated in other causes than a jealousy of the great: These monarchies were also an artificial creation, founded "on ancient institutions and received usages"; these institutions, these usages, tended to entail property in some families, and to settle rank permanently; and if antiquity had its agrarian laws, which meant equality, feudal society, we must not forget, had its own, which meant inequality and hierarchy.
—The advent of movable wealth and of luxury profoundly disturbed feudal society, where all was founded on the pre-eminence of that property considered especially noble, viz., real estate. A system of agriculture which had become fixed by tradition did not allow the nobility to increase their revenues, while the profits of commerce, navigation and the industries, and the possession of movable capital, elevated the middle class. The luxury of this class, who were eager to imitate the style of the great, disturbed the harmony of society: it deranged a hierarchy without which people saw only disorder. Hence arose sumptuary laws, which distinguished classes by their garb, as the grades in an army are distinguished by the uniforms.
—The vanity of the great, perhaps, called for the sumptuary laws of modern nations, as the jealousy of the lower classes had welcomed those of the ancient republics. But, in antiquity as in feudal monarchies, the legislator was inspired by state considerations, by a desire to prevent innovations which he considered as fatal. From the time when the plebeians came into competition with the luxury of the nobles, from the moment that they were their rivals, it was evident that, if the way was left open for such competition, wealth would finally gain the victory over birth in the opinion of the people, i.e., over the nobility themselves. Now, as feudal monarchies were founded on the right of race, everything that could diminish the authority of this right, tended to subvert the constitution of the state. Even those who did not clearly perceive the import of the luxury of the bourgeois, and who, bourgeois themselves, could not be wronged by it, nevertheless felt that this luxury disturbed the established order, and they supported the sumptuary laws.
—These laws, then, were at all times inspired by the desire of arresting an irresistible movement resulting from the very force of things, from the development, disordered perhaps, but logical, of human activity. They were, moreover, powerless, and were always evaded by a sort of tacit and general conspiracy of all the citizens, without any one daring or being able to find fault with the principle, without any one thinking of contesting the power of the legislator on this point in the very least. In fact, we must remember that in monarchies in modern times, the law-making power was scarcely less extended than in antiquity. People did not recognize the right of every man to work, and still less, the right to work when he pleased; and, what was of much more consequence, they professed that the king held a strict control over his kingdom, and would not allow one class to encroach on the rights of another, or to change the rank assigned to it by ancient custom. "The said lord the king," we read in an ordinance of 1577, "being duly informed that the great superfluity of meat at weddings, feasts and banquets, brings about the high price of fowls and game, wills and decrees that the ordinance on this subject be renewed and kept; and for the continuance of the same, that those who make such feasts as well as the stewards who prepare and conduct them, and the cooks who serve them, be punished with the penalties hereunto affixed. That every sort of fowl and game brought to the markets shall be seen and visited by the poulterer-wardens, in the presence of the officers of the police and bourgeois clerks to the aforesaid, who shall be present at the said markets, and shall cause a report to be made to the police by the said wardens, etc. The poulterers shall not be allowed to dress and lard meats, and to expose the same for sale, etc. The public shall be likewise bound to live according to the ordinance of the king, without exceeding the limit, under penalty of such pecuniary fines as are herein set forth against the innkeeper, so that neither by private understanding nor common consent shall the ordinance be violated."
—The world to-day lives in a different order of ideas, and when we read the ordinances of French kings, we find them no less strange than the ancient laws: they seem to us to apply to a social condition in which each laborer was a civil officer, as in the empire of Constantine. These ordinances are nevertheless the history of but yesterday, the history of the eve of the French revolution, and we are still dragging heavy fragments of the chain under which our fathers groaned. But ideas and sentiments have gone far in advance of facts: we have difficulty in comprehending the intervention of the government in the domestic affairs of families, and in contracts which concern only private individuals. As to luxury, it can not disturb classes, in a society where all are on a level, and it can not do much harm if the law of labor is respected, if rapine can not become a means of acquiring property.
—Since the revolution, no sumptuary law has been enacted in France, and yet the luxury of attire which formerly distinguished the nobility has disappeared. A duke dresses like anybody else, and he would be ridiculed if he sought to distinguish himself by a manner of dress different from others. Such is sumptuary law in our time. Any one who should try to make himself singular by particular garments or an exceptional mode of life, would be immediately noted, not as a dangerous citizen, but as a ridiculous fellow. Opinion has undergone an entire revolution. Private expenses are meanwhile increasing, and this increase, too, is pretty rapid. They can not, however, depart far from uniformity vain prodigalities can not be a title to glory in a society where the law of labor is recognized, and the one who will surrender himself to them, however rich he may be, is forced by public opinion to wear a certain modesty, even in his greatest excesses. Sumptuary laws can no longer be proposed. We need not think the honor of the change is due to our wisdom, to our pretended superiority to the ancients; let us simply recognize, (and it is in this that progress consists), that the essential principle of society has changed: the world moves on another basis.
—When the Roman people had, in despite of the observations of Cato, abrogated the Oppian law against the luxury of women, Cato, who had become censor, attempted to have it revived in another form. He included in the census, that is, in the valuation of the wealth of the citizens, jewels, carriages, the ornaments of women and of young slaves, for a sum ten times their cost, and imposed a duty on them of 3/1000 or 3/100 of the real price. He substituted a sumptuary tax for a sumptuary law. The moderns have done as did Cato. After the sumptuary laws had become a dead letter, they imposed taxes on the consumption of luxuries. England has taxes on carriages, on servants, on armorial bearings and on toilet powder. So far as political economy is concerned, these taxes are irreproachable; but they bring little into the treasury, and have scarcely any influence on consumption or on morals.
[48.]The error of this statement appears from the writings of Aristotle. Vids Blanqui's Hist. of Polit. Econ., chap. ii., p. 10.—E. J. L.
Footnotes for MECKLENBURG