Balance Of Trade
Our adversaries have adopted a system of tactics, which embarrasses us
not a little. Do we prove our doctrine? They admit the truth of it in
the most respectful manner. Do we attack their principles? They abandon
them with the best possible grace. They only ask that our doctrine,
which they acknowledge to be true, should be confined to books; and that
their principles, which they allow to be false, should be established in
will leave us triumphant in the domain of theory.
Assuredly, said Mr. Gauthier de Roumilly, lately, assuredly no one
wishes to call up from their graves the defunct theories of the balance
of trade. And yet Mr. Gauthier, after giving this passing blow to
error, goes on immediately afterwards, and for two hours consecutively,
to reason as though this error were a truth.
Give me Mr. Lestiboudois. Here we have a consistent reasoner! a logical
arguer! There is nothing in his conclusions which cannot be found in his
premises. He asks nothing in practice which he does not justify in
theory. His principles may perchance be false, and this is the point in
question. But he has a principle. He believes, he proclaims aloud, that
if France gives ten to receive fifteen, she loses five; and surely, with
such a belief, nothing is more natural than that he should make laws
consistent with it.
He says: What it is important to remark, is, that constantly the amount
of importation is augmenting, and surpassing that of exportation. Every
year France buys more foreign produce, and sells less of its own
produce. This can be proved by figures. In 1842, we see the importation
exceed the exportation by two hundred millions. This appears to me to
prove, in the clearest manner, that national labor is not sufficiently
protected, that we are provided by foreign labor, and that the
competition of our rivals oppresses our industry. The law in question,
appears to me to be a consecration of the fact, that our political
economists have assumed a false position in declaring, that in
proportion to produce bought, there is always a corresponding quantity
sold. It is evident that purchases may be made, not with the habitual
productions of a country, not with its revenue, not with the results of
actual labor, but with its capital, with the accumulated savings which
should serve for reproduction. A country may spend, dissipate its
profits and savings, may impoverish itself, and by the consumption of
its national capital, progress gradually to its ruin. This is
precisely what we are doing. We give, every year, two hundred millions
to foreign nations.
Well! here, at least, is a man whom we can understand. There is no
hypocrisy in this language. The balance of trade is here clearly
maintained and defended. France imports two hundred millions more than
she exports. Then France loses two hundred millions yearly. And the
remedy? It is to check importation. The conclusion is perfectly
consistent.
It is, then, with Mr. Lestiboudois that we will argue, for how is it
possible to do so with Mr. Gauthier? If you say to the latter, the
balance of trade is a mistake, he will answer, So I have declared it in
my exordium. If you exclaim, But it is a truth, he will say, Thus I have
classed it in my conclusions.
Political economists may blame me for arguing with Mr. Lestiboudois. To
combat the balance of trade, is, they say, neither more nor less than to
fight against a windmill.
But let us be on our guard. The balance of trade is neither so old, nor
so sick, nor so dead, as Mr. Gauthier is pleased to imagine; for all the
legislature, Mr. Gauthier himself included, are associated by their
votes with the theory of Mr. Lestiboudois.
However, not to fatigue the reader, I will not seek to investigate too
closely this theory, but will content myself with subjecting it to the
experience of facts.
It is constantly alleged in opposition to our principles, that they are
good only in theory. But, gentlemen, do you believe that merchants'
books are good in practice? It does appear to me that if there is any
thing which can have a practical authority, when the object is to prove
profit and loss, that this must be commercial accounts. We cannot
suppose that all the merchants of the world, for centuries back, should
have so little understood their own affairs, as to have kept their books
in such a manner as to represent gains as losses, and losses as gains.
Truly it would be easier to believe that Mr. Lestiboudois is a bad
political economist.
A merchant, one of my friends, having had two business transactions,
with very different results, I have been curious to compare on this
subject the accounts of the counter with those of the custom-house,
interpreted by Mr. Lestiboudois with the sanction of our six hundred
legislators.
Mr. T... despatched from Havre a vessel, freighted, for the United
States, with French merchandise, principally Parisian articles, valued
at 200,000 francs. Such was the amount entered at the custom-house. The
cargo, on its arrival at New Orleans, had paid ten per cent. expenses,
and was liable to thirty per cent. duties; which raised its value to
280,000 francs. It was sold at twenty per cent. profit on its original
value, which being 40,000 francs, the price of sale was 320,000 francs,
which the assignee converted into cotton. This cotton, again, had to
pay for expenses of transportation, insurance, commissions, etc., ten
per cent.: so that when the return cargo arrived at Havre, its value had
risen to 352,000 francs, and it was thus entered at the custom-house.
Finally, Mr. T... realized again on this return cargo twenty per cent.
profits; amounting to 70,400 francs. The cotton thus sold for the sum of
422,400 francs.
If Mr. Lestiboudois requires it, I will send him an extract from the
books of Mr. T... He will there see, credited to the account of
profit and loss, that is to say, set down as gained, two sums; the one
of 40,000, the other of 70,000 francs, and Mr. T ... feels perfectly
certain that as regards these, there is no mistake in his accounts.
Now what conclusion does Mr. Lestiboudois draw from the sums entered
into the custom-house, in this operation? He thence learns that France
has exported 200,000 francs, and imported 352,000; from whence the
honorable deputy concludes that she has spent, dissipated the profits
of her previous savings; that she is impoverishing herself and
progressing to her ruin; and that she has squandered on a foreign
nation 152,000 francs of her capital.
Some time after this transaction, Mr. T... despatched another vessel,
again freighted with domestic produce, to the amount of 200,000 francs.
But the vessel foundered after leaving the port, and Mr. T ... had only
farther to inscribe on his books two little items, thus worded:
Sundries due to X, 200,000 francs, for purchase of divers articles
despatched by vessel N.
Profit and loss due to sundries, 200,000 francs, for final and total
loss of cargo.
In the meantime the custom-house inscribed 200,000 francs upon its list
of exportations, and as there can of course be nothing to balance this
entry on the list of importations, it hence follows that Mr.
Lestiboudois and the Chamber must see in this wreck a clear profit to
France of 200,000 francs.
We may draw hence yet another conclusion, viz.: that according to the
Balance of Trade theory, France has an exceedingly simple manner of
constantly doubling her capital. It is only necessary, to accomplish
this, that she should, after entering into the custom-house her articles
for exportation, cause them to be thrown into the sea. By this course,
her exportations can speedily be made to equal her capital; importations
will be nothing, and our gain will be, all which the ocean will have
swallowed up.
You are joking, the protectionists will reply. You know that it is
impossible that we should utter such absurdities. Nevertheless, I
answer, you do utter them, and what is more, you give them life, you
exercise them practically upon your fellow citizens, as much, at least,
as is in your power to do.
The truth is, that the theory of the Balance of Trade should be
precisely reversed. The profits accruing to the nation from any
foreign commerce should be calculated by the overplus of the
importation above the exportation. This overplus, after the deduction of
expenses, is the real gain. Here we have the true theory, and it is one
which leads directly to freedom in trade. I now, gentlemen, abandon you
this theory, as I have done all those of the preceding chapters. Do with
it as you please, exaggerate it as you will; it has nothing to fear.
Push it to the farthest extreme; imagine, if it so please you, that
foreign nations should inundate us with useful produce of every
description, and ask nothing in return; that our importations should be
infinite, and our exportations nothing. Imagine all this, and still
I defy you to prove that we will be the poorer in consequence.
More
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A Chinese Story
They exclaim against the greed and the selfishness of the age! Open the thousand books, the thousand papers, the thousand pamphlets, which the Parisian presses throw out every day on the country; is not all this the work of little saints? Wha... A Negative Railroad
I have already remarked that when the observer has unfortunately taken his point of view from the position of producer, he cannot fail in his conclusions to clash with the general interest, because the producer, as such, must desire the existence ... Absolute Prices
If we wish to judge between freedom of trade and protection, to calculate the probable effect of any political phenomenon, we should notice how far its influence tends to the production of abundance or scarcity, and not simply of cheapness or dear... Abundance Scarcity
Which is the best for man or for society, abundance or scarcity? How, it may be exclaimed, can such a question be asked? Has it ever been pretended, is it possible to maintain, that scarcity can be the basis of a man's happiness? Yes; this ha... Appendix
We published an article entitled Dearness-Cheapness, which gained for us the two following letters. We publish them, with the answers: DEAR MR. EDITOR:--You upset all my ideas. I preached in favor of free trade, and found it very convenient ... Balance Of Trade
Our adversaries have adopted a system of tactics, which embarrasses us not a little. Do we prove our doctrine? They admit the truth of it in the most respectful manner. Do we attack their principles? They abandon them with the best possible grace.... Capital And Interest
My object in this treatise is to examine into the real nature of the Interest of Capital, for the purpose of proving that it is lawful, and explaining why it should be perpetual. This may appear singular, and yet, I confess, I am more afraid of be... Capital And Interest
I address this treatise to the workmen of Paris, more especially to those who have enrolled themselves under the banner of Socialist democracy. I proceed to consider these two questions: 1st. Is it consistent with the nature of things, and with ju... Commentary
If this little book were destined to live three or four thousand years, to be read and re-read, pondered and studied, phrase by phrase, word by word, and letter by letter, from generation to generation, like a new Koran; if it were to fill the libra... Conclusion
All the Sophisms which I have so far combated, relate to the restrictive policy; and some even on this subject, and those of the most remarkable, I have, in pity to the reader, passed over: acquired rights; unsuitableness; exhaustion of money, etc... Conflicting Principles
There is one thing which embarrasses me not a little; and it is this: Sincere men, taking upon the subject of political economy the point of view of producers, have arrived at this double formula: A government should dispose of consumers subje... Dearness Cheapness
I consider it my duty to say a few words in regard to the delusion caused by the words dear and cheap. At the first glance, I am aware, you may be disposed to find these remarks somewhat subtile, but whether subtile or not, the question is whether... Discriminating Duties
A poor laborer of Gironde had raised, with the greatest possible care and attention, a nursery of vines, from which, after much labor, he at last succeeded in producing a pipe of wine, and forgot, in the joy of his success, that each drop of this ... Does Protection Raise The Rate Of Wages?
Workmen, your situation is singular! you are robbed, as I will presently prove to you.... But no; I retract the word; we must avoid an expression which is violent; perhaps indeed incorrect; inasmuch as this spoliation, wrapped in the sophisms whic... Effort Result
We have seen that between our wants and their gratification many obstacles are interposed. We conquer or weaken these by the employment of our faculties. It may be said, in general terms, that industry is an effort followed by a result. But by ... Equalizing Of The Facilities Of Production
It is said ... but, for fear of being accused of manufacturing Sophisms for the mouths of the protectionists, I will allow one of their most able reasoners to speak for himself. It is our belief that protection should correspond to, should be th... Fourth Tableau
The Agitation. Jacques Bonhomme. Parisians, let us demand the reform of the octroi; let it be put back to what it was. Let every citizen be FREE to buy wood, butter and meat where it seems good to him. The People. Hurrah for LIBERTY! Pierre.... Human Labor National Labor
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What! You have the assurance to demand for every citizen the right to buy, sell, trade, exchange, and to render service for service according to his own discretion, on the sole condition that he will conduct himself honestly, and not defraud the r... Introduction
My object in this little volume has been to refute some of the arguments usually advanced against Free Trade. I am not seeking a combat with the protectionists. I merely advance a principle which I am anxious to present clearly to the minds of s... Metaphors
A Sophism will sometimes expand and extend itself through the whole tissue of a long and tedious theory. Oftener it contracts into a principle, and hides itself in one word. Heaven preserve us, said Paul Louis, from the Devil and from the spiri... National Independence
Among the arguments advanced in favor of a restrictive system, we must not forget that which is drawn from the plea of national independence. What will we do, it is asked, in case of war, if we are at the mercy of England for our iron and coal? ... Natural History Of Spoliation
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The obstacle mistaken for the cause--scarcity mistaken for abundance. The sophism is the same. It is well to study it under every aspect. Man naturally is in a state of entire destitution. Between this state and the satisfying of his wants, th... Obstructed Rivers Pleading For The Prohibitionists
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This is but a new wording of the last Sophism. The demand made is, that the foreign article should be taxed, in order to neutralize the effects of the tax, which weighs down national produce. It is still then but the question of equalizing the fac... Petition From The Manufacturers Of Candles
To the Honorable the Members of the Chamber of Deputies: GENTLEMEN,--You are in the right way: you reject abstract theories; abundance, cheapness, concerns you little. You are entirely occupied with the interest of the producer, whom you are anx... Post Hoc Ergo Propter Hoc
After this, therefore on account of this. The most common and the most false of arguments. Real suffering exists in England. This occurrence follows two others: First. The reduction of the tariff. Second. The loss of two consecutive harv... Raw Material
It is said that no commerce is so advantageous as that in which manufactured articles are exchanged for raw material; because the latter furnishes aliment for national labor. And it is hence concluded: That the best regulation of duties, woul... Reciprocity
We have just seen that all which renders transportation difficult, acts in the same manner as protection; or, if the expression be preferred, that protection tends towards the same result as obstacles to transportation. A tariff may then be tru... Reciprocity Again
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They find my little book of Sophisms too theoretical, scientific, and metaphysical. Very well. Let us try a trivial, commonplace, and, if necessary, coarse style. Convinced that the public is duped in the matter of protection, I have desired to pr... Salt Postage And Customs
[This chapter is an amusing dialogue relating principally to English Postal Reform. Being inapplicable to any condition of things existing in the United States, it is omitted.--Translator.] ... Something Else
--What is restriction? --A partial prohibition. --What is prohibition? --An absolute restriction. --So that what is said of one is true of the other? --Yes, comparatively. They bear the same relation to each other that the arc of the ... Spoliation And Law
[Footnote 16: On the 27th of April, 1850, after a very curious discussion, which was reproduced in the Moniteur, the General Council of Agriculture, Manufactures and Commerce issued the following order: Political economy shall be taught by the g... Supremacy By Labor
As in a time of war, supremacy is attained by superiority in arms, can, in a time of peace, supremacy be secured by superiority in labor? This question is of the greatest interest at a time when no one seems to doubt that in the field of industr... The House
Mondor had a house. In building it, he had extorted nothing from any one whatever. He owed it to his own personal labor, or, which is the same thing, to labor justly rewarded. His first care was to make a bargain with an architect, in virtue of whic... The Little Arsenal Of The Free Trader
--If they say to you: There are no absolute principles; prohibition may be bad, and restriction good-- Reply: Restriction prohibits all that it keeps from coming in. --If they say to you: Agriculture is the nursing mother of the country-- R... The Plane
A very long time ago there lived, in a poor village, a joiner, who was a philosopher, as all my heroes are, in their way. James worked from morning till night with his two strong arms, but his brain was not idle, for all that. He was fond of reviewi... The Right And The Left Hand
[Report to the King.] SIRE--When we see these men of the Libre Echange audaciously disseminating their doctrines, and maintaining that the right of buying and selling is implied by that of ownership (a piece of insolence that M. Billault has cr... The Sack Of Corn
Mathurin, in other respects as poor as Job, and obliged to earn his bread by day-labor, became, nevertheless, by some inheritance, the owner of a fine piece of uncultivated land. He was exceedingly anxious to cultivate it. Alas! said he, to make dit...