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 the

representation of, the difference which exists between the price of an

article of home production and a similar article of foreign

production.... A protecting du y calculated upon such a basis does

nothing more than secure free competition; ... free competition can

only exist where there is an equality in the facilities of production.

In a horse-race the load which each horse carries is weighed and all

advantages equalized; otherwise there could be no competition. In

commerce, if one producer can undersell all others, he ceases to be a

competitor and becomes a monopolist.... Suppress the protection which

represents the difference of price according to each, and foreign

productions must immediately inundate and obtain the monopoly of our

market.



Every one ought to wish, for his own sake and for that of the

community, that the productions of the country should be protected

against foreign competition, whenever the latter may be able to

undersell the former.





This argument is constantly recurring in all writings of the

protectionist school. It is my intention to make a careful investigation

of its merits, and I must begin by soliciting the attention and the

patience of the reader. I will first examine into the inequalities which

depend upon natural causes, and afterwards into those which are caused

by diversity of taxes.



Here, as elsewhere, we find the theorists who favor protection, taking

part with the producer. Let us consider the case of the unfortunate

consumer, who seems to have entirely escaped their attention. They

compare the field of production to the turf. But on the turf, the race

is at once a means and an end. The public has no interest in the

struggle, independent of the struggle itself. When your horses are

started in the course with the single object of determining which is the

best runner, nothing is more natural than that their burdens should be

equalized. But if your object were to send an important and critical

piece of intelligence, could you without incongruity place obstacles to

the speed of that one whose fleetness would secure the best means of

attaining your end? And yet this is your course in relation to industry.

You forget the end aimed at, which is the well-being of the community.



But we cannot lead our opponents to look at things from our point of

view, let us now take theirs; let us examine the question as producers.



I will seek to prove



1. That equalizing the facilities of production is to attack the

foundations of all trade.



2. That it is not true that the labor of one country can be crushed by

the competition of more favored climates.



3. That, even were this the case, protective duties cannot equalize the

facilities of production.



4. That freedom of trade equalizes these conditions as much as possible;

and



5. That the countries which are the least favored by nature are those

which profit most by freedom of trade.



I. The equalizing of the facilities of production, is not only the

shackling of certain articles of commerce, but it is the attacking of

the system of mutual exchange in its very foundation principle. For this

system is based precisely upon the very diversities, or, if the

expression be preferred, upon the inequalities of fertility, climate,

temperature, capabilities, which the protectionists seek to render null.

If Guyenne sends its wines to Brittany, and Brittany sends corn to

Guyenne, it is because these two provinces are, from different

circumstances, induced to turn their attention to the production of

different articles. Is there any other rule for international exchanges?

Again, to bring against such exchanges the very inequalities of

condition which excite and explain them, is to attack them in their very

cause of being. The protective system, closely followed up, would bring

men to live like snails, in a state of complete isolation. In short,

there is not one of its Sophisms, which if carried through by vigorous

deductions, would not end in destruction and annihilation.



II. It is not true that the unequal facility of production, in two

similar branches of industry, should necessarily cause the destruction

of the one which is the least fortunate. On the turf, if one horse gains

the prize, the other loses it; but when two horses work to produce any

useful article, each produces in proportion to his strength; and because

the stronger is the more useful, it does not follow that the weaker is

good for nothing. Wheat is cultivated in every department of France,

although there are great differences in the degree of fertility existing

among them. If it happens that there be one which does not cultivate it,

it is because, even to itself, such cultivation is not useful. Analogy

will show us, that under the influence of an unshackled trade,

notwithstanding similar differences, wheat would be produced in every

kingdom of Europe; and if any one were induced to abandon entirely the

cultivation of it, this would only be, because it would be her

interest to employ otherwise her lands, her capital, and her labor. And

why does not the fertility of one department paralyze the agriculture of

a neighboring and less favored one? Because the phenomena of political

economy have a suppleness, an elasticity, and, so to speak, a

self-leveling power, which seems to escape the attention of the school

of protectionists. They accuse us of being theorists, but it is

themselves who are theorists to a supreme degree, if being theoretic

consists in building up systems upon the experience of a single fact,

instead of profiting by the experience of a series of facts. In the

above example, it is the difference in the value of lands, which

compensates for the difference in their fertility. Your field produces

three times as much as mine. Yes. But it has cost you three times as

much, and therefore I can still compete with you: this is the sole

mystery. And observe how the advantage on one point leads to

disadvantage on the other. Precisely because your soil is more fruitful,

it is more dear. It is not accidentally but necessarily that the

equilibrium is established, or at least inclines to establish itself;

and can it be denied that perfect freedom in exchanges is, of all the

systems, the one which favors this tendency?



I have cited an agricultural example; I might as easily have taken one

from any trade. There are tailors at Quimper, but that does not prevent

tailors from being in Paris also, although the latter have to pay a much

higher rent, as well as higher price for furniture, workmen, and food.

But their customers are sufficiently numerous not only to re-establish

the balance, but also to make it lean on their side.



When therefore the question is about equalizing the advantages of labor,

it would be well to consider whether the natural freedom of exchange is

not the best umpire.



This self-leveling faculty of political phenomena is so important, and

at the same time so well calculated to cause us to admire the

providential wisdom which presides over the equalizing government of

society, that I must ask permission a little longer, to turn to it the

attention of the reader.



The protectionists say, Such a nation has the advantage over us, in

being able to procure cheaply, coal, iron, machinery, capital; it is

impossible for us to compete with it.



We must examine the proposition under other aspects. For the present, I

stop at the question, whether, when an advantage and a disadvantage are

placed in juxtaposition, they do not bear in themselves, the former a

descending, the latter an ascending power, which must end by placing

them in a just equilibrium.



Let us suppose the countries A and B. A has every advantage over B; you

thence conclude that labor will be concentrated upon A, while B must be

abandoned. A, you say, sells much more than it buys; B buys more than it

sells. I might dispute this, but I will meet you upon your own ground.



In the hypothesis, labor, being in great demand in A, soon rises in

value; while labor, iron, coal, lands, food, capital, all being little

sought after in B, soon fall in price.



Again: A being always selling and B always buying, cash passes from B to

A. It is abundant in A--very scarce in B.



But where there is abundance of cash, it follows that in all purchases a

large proportion of it will be needed. Then in A, real dearness, which

proceeds from a very active demand, is added to nominal dearness, the

consequence of a superabundance of the precious metals.



Scarcity of money implies that little is necessary for each purchase.

Then in B, a nominal cheapness is combined with real cheapness.



Under these circumstances, industry will have the strongest possible

motives for deserting A, to establish itself in B.



Now, to return to what would be the true course of things. As the

progress of such events is always gradual, industry from its nature

being opposed to sudden transits, let us suppose that, without waiting

the extreme point, it will have gradually divided itself between A and

B, according to the laws of supply and demand; that is to say, according

to the laws of justice and usefulness.





I do not advance an empty hypothesis when I say, that were it possible

that industry should concentrate itself upon a single point, there must,

from its nature, arise spontaneously, and in its midst, an irresistible

power of decentralization.



We will quote the words of a manufacturer to the Chamber of Commerce at

Manchester (the figures brought into his demonstration are suppressed):



Formerly we exported goods; this exportation gave way to that of thread

for the manufacture of goods; later, instead of thread, we exported

machinery for the making of thread; then capital for the construction

of machinery; and lastly, workmen and talent, which are the source of

capital. All these elements of labor have, one after the other,

transferred themselves to other points, where their profits were

increased, and where the means of subsistence being less difficult to

obtain, life is maintained at a less cost. There are at present to be

seen in Prussia, Austria, Saxony, Switzerland, and Italy, immense

manufacturing establishments, founded entirely by English capital,

worked by English labor, and directed by English talent.



We may here perceive, that Nature, or rather Providence, with more

wisdom and foresight than the narrow rigid system of the protectionists

can suppose, does not permit the concentration of labor, the monopoly of

advantages, from which they draw their arguments as from an absolute and

irremediable fact. It has, by means as simple as they are infallible,

provided for dispersion, diffusion, mutual dependence, and simultaneous

progress; all of which, your restrictive laws paralyze as much as is in

their power, by their tendency towards the isolation of nations. By this

means they render much more decided the differences existing in the

conditions of production; they check the self-leveling power of

industry, prevent fusion of interests, and fence in each nation within

its own peculiar advantages and disadvantages.



III. To say that by a protective law the conditions of production are

equalized, is to disguise an error under false terms. It is not true

that an import duty equalizes the conditions of production. These remain

after the imposition of the duty just as they were before. The most that

the law can do is to equalize the conditions of sale. If it should be

said that I am playing upon words, I retort the accusation upon my

adversaries. It is for them to prove that production and sale are

synonymous terms, which if they cannot do, I have a right to accuse

them, if not of playing upon words, at least of confounding them.



Let me be permitted to exemplify my idea.



Suppose that several Parisian speculators should determine to devote

themselves to the production of oranges. They know that the oranges of

Portugal can be sold in Paris at ten centimes, whilst on account of the

boxes, hot-houses, etc., which are necessary to ward against the

severity of our climate, it is impossible to raise them at less than a

franc apiece. They accordingly demand a duty of ninety centimes upon

Portugal oranges. With the help of this duty, say they, the conditions

of production will be equalized. The legislative body, yielding as

usual to this argument, imposes a duty of ninety centimes on each

foreign orange.



Now I say that the relative conditions of production are in no wise

changed. The law can take nothing from the heat of the sun in Lisbon,

nor from the severity of the frosts in Paris. Oranges continuing to

mature themselves naturally on the banks of the Tagus, and

artificially upon those of the Seine, must continue to require for their

production much more labor on the latter than the former. The law can

only equalize the conditions of sale. It is evident that while the

Portuguese sell their oranges at a franc apiece, the ninety centimes

which go to pay the tax are taken from the French consumer. Now look at

the whimsicality of the result. Upon each Portuguese orange, the country

loses nothing; for the ninety centimes which the consumer pays to



satisfy the tax, enter into the treasury. There is improper

distribution, but no loss. Upon each French orange consumed, there will

be about ninety centimes lost; for while the buyer very certainly loses

them, the seller just as certainly does not gain them, for even

according to the hypothesis, he will receive only the price of

production. I will leave it to the protectionists to draw their

conclusion.



IV. I have laid some stress upon this distinction between the conditions

of production and those of sale, which perhaps the prohibitionists may

consider as paradoxical, because it leads me on to what they will

consider as a still stranger paradox. This is: If you really wish to

equalize the facilities of production, leave trade free.



This may surprise the protectionists; but let me entreat them to

listen, if it be only through curiosity, to the end of my argument. It

shall not be long. I will now take it up where we left off.



If we suppose for the moment, that the common and daily profits of each

Frenchman amount to one franc, it will indisputably follow that to

produce an orange by direct labor in France, one day's work, or its

equivalent, will be requisite; whilst to produce the cost of a

Portuguese orange, only one-tenth of this day's labor is required; which

means simply this, that the sun does at Lisbon what labor does at Paris.

Now is it not evident, that if I can produce an orange, or, what is the

same thing, the means of buying it, with one-tenth of a day's labor, I

am placed exactly in the same condition as the Portuguese producer

himself, excepting the expense of the transportation? It is then certain

that freedom of commerce equalizes the conditions of production direct

or indirect, as much as it is possible to equalize them; for it leaves

but the one inevitable difference, that of transportation.



I will add that free trade equalizes also the facilities for attaining

enjoyments, comforts, and general consumption; the last an object which

is, it would seem, quite forgotten, and which is nevertheless all

important; since consumption is the main object of all our industrial

efforts. Thanks to freedom of trade, we would enjoy here the results of

the Portuguese sun, as well as Portugal itself; and the inhabitants of

Havre, would have in their reach, as well as those of London, and with

the same facilities, the advantages which nature has in a mineralogical

point of view conferred upon Newcastle.



The protectionists may suppose me in a paradoxical humor, for I go

farther still. I say, and I sincerely believe, that if any two countries

are placed in unequal circumstances as to advantages of production,

that one of the two which is the least favored by nature, will gain

most by freedom of commerce. To prove this, I shall be obliged to turn

somewhat aside from the form of reasoning which belongs to this work. I

will do so, however; first, because the question in discussion turns

upon this point; and again, because it will give me the opportunity of

exhibiting a law of political economy of the highest importance, and

which, well understood, seems to me to be destined to lead back to this

science all those sects which, in our days, are seeking in the land of

chimeras that social harmony which they have been unable to discover in

nature. I speak of the law of consumption, which the majority of

political economists may well be reproached with having too much

neglected.



Consumption is the end, the final cause, of all the phenomena of

political economy, and, consequently, in it is found their final

solution.



No effect, whether favorable or unfavorable, can be arrested permanently

upon the producer. The advantages and the disadvantages, which, from

his relations to nature and to society, are his, both equally pass

gradually from him, with an almost insensible tendency to be absorbed

and fused into the community at large; the community considered as

consumers. This is an admirable law, alike in its cause and its effects,

and he who shall succeed in making it well understood, will have a right

to say, I have not, in my passage through the world, forgotten to pay

my tribute to society.



Every circumstance which favors the work of production is of course

hailed with joy by the producer, for its immediate effect is to enable

him to render greater services to the community, and to exact from it a

greater remuneration. Every circumstance which injures production, must

equally be the source of uneasiness to him; for its immediate effect

is to diminish his services, and consequently his remuneration. This is

a fortunate and necessary law of nature. The immediate good or evil of

favorable or unfavorable circumstances must fall upon the producer, in

order to influence him invincibly to seek the one and to avoid the

other.



Again, when a workman succeeds in his labor, the immediate benefit of

this success is received by him. This again is necessary, to determine

him to devote his attention to it. It is also just; because it is just

that an effort crowned with success should bring its own reward.



But these effects, good and bad, although permanent in themselves, are

not so as regards the producer. If they had been so, a principle of

progressive and consequently infinite inequality would have been

introduced among men. This good, and this evil, both therefore pass on,

to become absorbed in the general destinies of humanity.



How does this come about? I will try to make it understood by some

examples.



Let us go back to the thirteenth century. Men who gave themselves up to

the business of copying, received for this service a remuneration

regulated by the general rate of profits. Among them is found one, who

seeks and finds the means of multiplying rapidly copies of the same

work. He invents printing. The first effect of this is, that the

individual is enriched, while many more are impoverished. At the first

view, wonderful as the discovery is, one hesitates in deciding whether

it is not more injurious than useful. It seems to have introduced into

the world, as I said above, an element of infinite inequality.

Guttenberg makes large profits by this invention, and perfects the

invention by the profits, until all other copyists are ruined. As for

the public,--the consumer,--it gains but little, for Guttenberg takes

care to lower the price of books only just so much as is necessary to

undersell all rivals.



But the great Mind which put harmony into the movements of celestial

bodies, could also give it to the internal mechanism of society. We will

see the advantages of this invention escaping from the individual, to

become forever the common patrimony of mankind.



The process finally becomes known. Guttenberg is no longer alone in his

art; others imitate him. Their profits are at first considerable. They

are recompensed for being the first who make the effort to imitate the

processes of the newly invented art. This again was necessary, in order

that they might be induced to the effort, and thus forward the great and

final result to which we approach. They gain much; but they gain less

than the inventor, for competition has commenced its work. The price

of books now continually decreases. The gains of the imitators diminish

in proportion as the invention becomes older; and in the same proportion

imitation becomes less meritorious. Soon the new object of industry

attains its normal condition; in other words, the remuneration of

printers is no longer an exception to the general rules of remuneration,

and, like that of copyists formerly, it is only regulated by the

general rate of profits. Here then the producer, as such, holds only

the old position. The discovery, however, has been made; the saving of

time, labor, effort, for a fixed result, for a certain number of

volumes, is realized. But in what is this manifested? In the cheap price

of books. For the good of whom? For the good of the consumer,--of

society,--of humanity. Printers, having no longer any peculiar merit,

receive no longer a peculiar remuneration. As men,--as consumers,--they

no doubt participate in the advantages which the invention confers upon

the community; but that is all. As printers, as producers, they are

placed upon the ordinary footing of all other producers. Society pays

them for their labor, and not for the usefulness of the invention.

That has become a gratuitous benefit, a common heritage to mankind.



What has been said of printing can be extended to every agent for the

advancement of labor; from the nail and the mallet, up to the locomotive

and the electric telegraph. Society enjoys all, by the abundance of its

use, its consumption; and it enjoys all gratuitously. For as their

effect is to diminish prices, it is evident that just so much of the

price as is taken off by their intervention, renders the production in

so far gratuitous. There only remains the actual labor of man to be

paid for; and the remainder, which is the result of the invention, is

subtracted; at least after the invention has run through the cycle which

I have just described as its destined course. I send for a workman; he

brings a saw with him; I pay him two francs for his day's labor, and he

saws me twenty-five boards. If the saw had not been invented, he would

perhaps not have been able to make one board, and I would have paid him

the same for his day's labor. The usefulness then of the saw, is for

me a gratuitous gift of nature, or rather it is a portion of the

inheritance which, in common with my brother men, I have received from

the genius of my ancestors. I have two workmen in my field; the one

directs the handle of a plough, the other that of a spade. The result of

their day's labor is very different, but the price is the same, because

the remuneration is proportioned, not to the usefulness of the result,

but to the effort, the labor given to attain it.



I invoke the patience of the reader, and beg him to believe, that I have

not lost sight of free trade: I entreat him only to remember the

conclusion at which I have arrived: Remuneration is not proportioned to

the usefulness of the articles brought by the producer into the market,

but to the labor.[11]



[Footnote 11: It is true that labor does not receive a uniform

remuneration; because labor is more or less intense, dangerous,

skillful, etc. Competition establishes for each category a price

current; and it is of this variable price that I speak.]



I have so far taken my examples from human inventions, but will now go

on to speak of natural advantages.



In every article of production, nature and man must concur. But the

portion of nature is always gratuitous. Only so much of the usefulness

of an article as is the result of human labor becomes the object of

mutual exchange, and consequently of remuneration. The remuneration

varies much, no doubt, in proportion to the intensity of the labor, of

the skill which it requires, of its being a propos to the demand of

the day, of the need which exists for it, of the momentary absence of

competition, etc. But it is not the less true in principle, that the

assistance received from natural laws, which belongs to all, counts for

nothing in the price.



We do not pay for the air we breathe, although so useful to us, that we

could not live two minutes without it. We do not pay for it, because

Nature furnishes it without the intervention of man's labor. But if we

wish to separate one of the gases which compose it, for instance, to

fill a balloon, we must take some trouble and labor; or if another takes

it for us, we must give him an equivalent in something which will have

cost us the trouble of production. From which we see that the exchange

is between troubles, efforts, labors. It is certainly not for hydrogen

gas that I pay, for this is every where at my disposal, but for the work

that it has been necessary to accomplish in order to disengage it; work

which I have been spared, and which I must refund. If I am told that

there are other things to pay for; as expense, materials, apparatus; I

answer, that still in these things it is the work that I pay for. The

price of the coal employed is only the representation of the labor

necessary to dig and transport it.



We do not pay for the light of the sun, because Nature alone gives it to

us. But we pay for the light of gas, tallow, oil, wax, because here is

labor to be remunerated;--and remark, that it is so entirely labor and

not utility to which remuneration is proportioned, that it may well

happen that one of these means of lighting, while it may be much more

effective than another, may still cost less. To cause this, it is only

necessary that less human labor should be required to furnish it.



When the water-carrier comes to supply my house, were I to pay him in

proportion to the absolute utility of the water, my whole fortune

would not be sufficient. But I pay him only for the trouble he has

taken. If he requires more, I can get others to furnish it, or finally

go and get it myself. The water itself is not the subject of our

bargain; but the labor taken to get the water. This point of view is so

important, and the consequences that I am going to draw from it so

clear, as regards the freedom of international exchanges, that I will

still elucidate my idea by a few more examples.



The alimentary substance contained in potatoes does not cost us very

dear, because a great deal of it is attainable with little work. We pay

more for wheat, because, to produce it Nature requires more labor from

man. It is evident that if Nature did for the latter what she does for

the former, their prices would tend to the same level. It is impossible

that the producer of wheat should permanently gain more than the

producer of potatoes. The law of competition cannot allow it.



If by a happy miracle the fertility of all arable lands were to be

increased, it would not be the agriculturist, but the consumer, who

would profit by this phenomenon; for the result of it would be,

abundance and cheapness. There would be less labor incorporated into an

acre of grain, and the agriculturist would be therefore obliged to

exchange it for a less labor incorporated into some other article. If,

on the contrary, the fertility of the soil were suddenly to deteriorate,

the share of Nature in production would be less, that of labor greater,

and the result would be higher prices. I am right then in saying that it

is in consumption, in mankind, that at length all political phenomena

find their solution. As long as we fail to follow their effects to this

point, and look only at immediate effects, which act but upon

individual men or classes of men as producers, we know nothing more of

political economy than the quack does of medicine, when, instead of

following the effects of a prescription in its action upon the whole

system, he satisfies himself with knowing how it affects the palate and

the throat.



The tropical regions are very favorable to the production of sugar and

coffee; that is to say, Nature does most of the business and leaves but

little for labor to accomplish. But who reaps the advantage of this

liberality of Nature? Not these regions, for they are forced by

competition to receive simply remuneration for their labor. It is

mankind who is the gainer; for the result of this liberality is

cheapness, and cheapness belongs to the world.



Here in the temperate zone, we find coal and iron ore, on the surface of

the soil; we have but to stoop and take them. At first, I grant, the

immediate inhabitants profit by this fortunate circumstance. But soon

comes competition, and the price of coal and iron falls, until this gift

of Nature becomes gratuitous to all, and human labor is only paid

according to the general rate of profits.



Thus natural advantages, like improvements in the process of production,

are, or have a constant tendency to become, under the law of

competition, the common and gratuitous patrimony of consumers, of

society, of mankind. Countries therefore which do not enjoy these

advantages, must gain by commerce with those which do; because the

exchanges of commerce are between labor and labor; subtraction being

made of all the natural advantages which are combined with these labors;

and it is evidently the most favored countries which can incorporate

into a given labor the largest proportion of these natural advantages.

Their produce representing less labor, receives less recompense; in

other words, is cheaper. If then all the liberality of Nature results

in cheapness, it is evidently not the producing, but the consuming

country, which profits by her benefits.



Hence we may see the enormous absurdity of the consuming country, which

rejects produce precisely because it is cheap. It is as though we should

say: We will have nothing of that which Nature gives you. You ask of

us an effort equal to two, in order to furnish ourselves with articles

only attainable at home by an effort equal to four. You can do it

because with you Nature does half the work. But we will have nothing to

do with it; we will wait till your climate, becoming more inclement,

forces you to ask of us a labor equal to four, and then we can treat

with you upon an equal footing.



A is a favored country; B is maltreated by Nature. Mutual traffic then

is advantageous to both, but principally to B, because the exchange is

not between utility and utility, but between value and value.

Now A furnishes a greater utility in a similar value, because the

utility of any article includes at once what Nature and what labor

have done; whereas the value of it only corresponds to the portion

accomplished by labor. B then makes an entirely advantageous bargain;

for by simply paying the producer from A for his labor, it receives in

return not only the results of that labor, but in addition there is

thrown in whatever may have accrued from the superior bounty of Nature.



We will lay down the general rule.



Traffic is an exchange of values; and as value is reduced by

competition to the simple representation of labor, traffic is the

exchange of equal labors. Whatever Nature has done towards the

production of the articles exchanged, is given on both sides

gratuitously; from whence it necessarily follows, that the most

advantageous commerce is transacted with those countries which are the

most favored by Nature.



* * * * *



The theory of which I have attempted, in this chapter, to trace the

outlines, would require great developments. But perhaps the attentive

reader will have perceived in it the fruitful seed which is destined in

its future growth to smother Protection, at once with Fourierism, Saint

Simonism, Commonism, and the various other schools whose object is to

exclude the law of COMPETITION from the government of the world.

Competition, no doubt, considering man as producer, must often interfere

with his individual and immediate interests. But if we consider the

great object of all labor, the universal good, in a word, Consumption,

we cannot fail to find that Competition is to the moral world what the

law of equilibrium is to the material one. It is the foundation of true

Commonism, of true Socialism, of the equality of comforts and condition,

so much sought after in our day; and if so many sincere reformers, so

many earnest friends to the public rights, seek to reach their end by

commercial legislation, it is only because they do not yet understand

commercial freedom.