Movimento Liberal Social

(1332 Tunis, Tunísia – 1406 Cairo, Egipto)

Ibn Khaldun, que recebeu uma educação alargada em árabe, interpretação do Corão, jurisprudência e poesia, serviu diversos governantes árabes em Tunis, Fez, Granada, Damasco e Cairo, como membro da corte, jurista e estadista. Como conselheiro político com uma panorâmica excepcionalmente abrangente dos diferentes países muçulmanos, ele desenvolveu capacidades extraordinárias de observação e análise dos desenvolvimentos económicos, políticos e sociais da sua época. O seu trabalho foi redescoberto a partir do início do século XIX por académicos árabes e europeus. Enquanto muitos árabes o vêem como fonte inspiradora de uma nova definição da sua identidade e das suas relações com o Ocidente, os europeus tendem a encarar Ibn Khaldun como um brilhante representante das tradições racionalistas islâmicas e um antecessor da teoria económica e sociológica.

Alguns estudiosos dizem que Ibn Khaldun é o verdadeiro ‘pai da economia’ ou ‘pai da ciência social moderna’ e alegam que as ideias dele foram mais ou menos reinventadas quatro séculos mais tarde por pensadores como Adam Smith ou David Ricardo, e mais tarde por Karl Marx ou John Maynard Keynes. Independentemente dessa difícil comparação, a profundidade e força analítica dos seus trabalhos é claramente impressionante. Em ‘Muqaddimah’, uma espécie de prólogo aos seus posteriores tratados historiográficos, Ibn Khaldun desenvolve uma teoria de trabalho onde inclui ideias muito interessantes acerca da divisão do trabalho, uma teoria de impostos e onde cobre muitas outras áreas que são vistas como bastante ‘modernas’.

O que torna Ibn Khaldun particularmente interessante para os liberais actualmente é a sua defesa empenhada de uma economia livre e de uma liberdade de escolha como as melhores bases para um país estável, forte pela coesão social e não apenas pelo poder político. Ele também inspira muitos liberais que, no mundo muçulmano, sofrem sob as restrições políticas e económicas que aí prevalecem.

Bibliografia:

• Rosenthal, F. – The Muqaddimah: An Introduction to History. Tradução em Inglês anotada, Nova Iorque, Pantheon, 1958

Links:

• Ibn Khaldun na Internet

Texto original de Wolfgang Sachsenröder, traduzido por Luís Humberto Teixeira

(7 Abril 1836, Birkin – 26 Março 1882, Oxford)

Thomas Hill Green foi um importante filósofo e político britânico, que fundou a escola do Idealismo Britânico. Ele foi pioneiro no questionar da tradicional antítese liberal entre o Estado e o indivíduo. As palestras de Green em Oxford no ano de 1879 – “Lectures on the Principles of Political Obligation” e “Prolegomena to Ethics” – são o começo da transformação do liberalismo inglês no sentido do liberalismo social.

Ao ler o trabalho de Green, reparamos na ênfase dada ao individualismo, que é muito forte em todo o pensamento liberal. No entanto, se o compararmos com os pensadores liberais que o precederam, podemos dizer que ele substituiu a anterior ênfase na autonomia do indivíduo por uma ênfase na sociedade “orgânica” e no valor do ethos da comunidade. Ele via o indivíduo como parte da sociedade e abordava as obrigações deste para com a comunidade. O desenvolvimento das suas ideias tem de ser visto no contexto das circunstâncias históricas em que ele viveu. Nessa época, a revolução industrial provocou consequências socio-económicas altamente desiguais. O súbito desenvolvimento económico foi acompanhado por fracas condições de saúde e de trabalho.

Estas condições levaram-no a criticar os fardos e as injustiças que o sistema de mercado impunha à classe trabalhadora e a exigir políticas que fornecessem uma igualdade de oportunidades e liberdades de facto e não apenas em teoria. O objectivo, segundo Green, era o desenvolvimento humano total e igual. Dado o estado extremo de alienação e as desigualdades sofridas por muitas pessoas nesta altura, Green frisava a necessidade de considerações éticas e morais e a obrigação que a sociedade como um todo tinha de assegurar a possibilidade de auto-realização de cada um.

Segundo ele, para melhorar as condições de vida e de trabalho era necessária uma abordagem política activa e um paradigma liberal alargado. Isto acontecia tanto por razões éticas como por motivos pragmáticos, dadas as crescentes fricções entre classes na Grã-Bretanha, que estavam a aumentar ainda mais na viragem do século. T. H. Green desempenhou um importante papel na mudança dos pressupostos liberais, ao passar de uma concepção ‘negativa’ da liberdade, i.e. liberdade a partir da acção de outros, para uma visão mais positiva, incluindo a liberdade de actuar de determinado modo.

O debate por ele iniciado foi seguido por outros pensadores liberais como David Ritchie, John Hobson e Leonard Hobhouse, e todos eles contribuíram para que o pensamento liberal se afastasse de uma abordagem de estrito laissez-faire e passasse a incorporar um papel para o Estado no bem-estar social. O seu contributo reside na tentativa de reconcicliar uma sociedade de mercado capitalista com o liberalismo num Estado democrático. Partilhando com o marxismo o ideal de uma sociedade sem classes, Green nunca se afastou da sua convicção de que tal poderia acontecer num sistema de mercado. De facto, ele partilhou com liberais como F. Hayek essa convicção de que só se poderia alcançar uma sociedade livre com uma economia de mercado. O seu espírito influenciou pensadores e pode ser apreciado na legislação social aprovada por governos liberais, que criou os alicerces do Estado-providência.

Bibliografia:

• Freeden, M. – The New Liberalism: An ideology of Social Reform, Oxford, Clarendon Press, 1978
• Greengarten, I.M. – Thomas Hill-Green and the Development of Liberal-Democratic Thought, University of Toronto Press, Toronto, 1981
• Nettleship, R.L. e Nicholson, P.P. (eds.) – Collected Works of T.H.Green, Bristol, Thommes, 1997

Texto original de Barbara Plank, traduzido por Luís Humberto Teixeira

(1839 Filadélfia, Estados Unidos – 1897 Nova Iorque, Estados Unidos)

Quando Henry George falava da pobreza, ele sabia do que falava. Isto porque passou a maior parte da sua vida na pobreza, como marinheiro mal pago ou como assistente de tipografia, antes de se tornar no mais bem sucedido economista da sua era. Em 1879, George – um autodidacta da economia – publicou o livro “Progress and Poverty”, que se tornou imediatamente num best-seller e foi traduzido para quase todas as línguas. Além disso, o livro despoletou movimentos de reforma social (“Georgistas”) por todo o mundo.

A ideia central do livro era que todos os tipos de imposto tendem a sufocar o crescimento e a prejudicar os interesses dos pobres. Um elevado imposto sobre os rendimentos, por exemplo, produziria desemprego. Como tal, apenas um imposto sobre a terra deveria ser cobrado, como “taxa única”. A posse de terra, argumentava George no espírito da economia ricardina, não era uma propriedade “normal”. A terra existia em quantidades limitadas, criava uma renda imerecida, fazia com que os proprietários de terra explorassem todos os outros e conduzia ao monopólio. Resumindo, era a causa real de toda a pobreza existente e como tal tinha de ser taxada de forma vigorosa.

Embora fosse um reformista social empenhado, George tinha muito pouco em comum com os socialistas e marxistas da época. Ele acreditava firmemente que os mercados livres eram a melhor maneira de retirar as massas da pobreza. Os seus princípios liberais tornaram-se evidentes em “Protection or Free-Trade” (1886), uma defesa bem-humorada do comércio livre. Ele acreditava que seria possível libertar o mercado de monopólios e grilhões artificiais se fosse introduzida uma “taxa única”. Para ele, um imposto sobre a terra seria “neutro” ou até benéfico para o mercado. Muitos economistas hoje encaram esta ideia com cepticismo. Uma taxa elevada sobre a terra não aproveitada pode muito bem distorcer a distribuição de terra num país, mas causa certamente menos distorções do que a maioria das taxas alternativas.

No entanto, o que tornou George num pensador liberal tão importante foi a sua busca sincera por uma reforma social que se pudesse conciliar com os imperativos do laissez faire e do liberalismo. Isto fê-lo destacar-se de muitos reformistas sociais posteriores (liberais apenas de nome) que estavam dispostos a sacrificar a liberdade no altar do Estado-providência intervencionista.

Bibliografia:

Todos os principais trabalhos de Henry George podem ser encomendados no sítio da Fundação Robert Schalkenbach, que também contém muita informação valiosa sobre o autor.

Texto original do Liberales Institute, traduzido por Luís Humberto Teixeira

(1802 Norwich, Reino Unido - 1876 Ambleside, Reino Unido)

Não foi apenas uma mulher que escreveu sobre a emancipação das mulheres; foi também uma mulher que colocou em prática o que escreveu. Em vez de aceitar um casamento arranjado pelo seu pai em 1829, Harriet Martineau decidiu tornar-se numa escritora independente e numa jornalista. Foi uma escolha corajosa, já que naquela época, o casamento ter-lhe-ia dado a segurança económica que lhe faltou posteriormente. Através da sua vida, Martineau promoveu o liberalismo. O seu livro mais famoso foi “A Sociedade na América” (1837), que publicou após uma viagem de dois anos através dos Estados Unidos, onde apresentou uma muito bem informada crítica ao sistema político americano. Para Martineau, esta jovem democracia não correspondia aos ideais que se vangloriava, principalmente devido à questão da existência da escravatura.

A sua enorme estatura intelectual tornou-se visível numa série de livros educativos sob o título de “Ilustrações de Economia Política” (1832-34). Pagas por um grupo de reformistas radicais, estas publicações fizeram dela uma das primeiras economistas de renome. Tendo como base o trabalho de David Ricardo e de Jane Marcet (uma outra economista), Martineu defendeu uma reforma tendo como base uma agenda liberal, dando ênfase a tópicos como o comércio livre e o “laissez faire”.

Martineu revia-se como uma educadora que seguia a tradição do iluminismo (tal como já o seu primeiro artigo “Sobre a Educação da Mulher” em 1823 mostrou). O progresso de uma sociedade, pensava ela, era baseado no progresso do indivíduo: “A progressão ou emancipação de qualquer classe, habitualmente, se não mesmo sempre, acontece através dos esforços individuais dessa mesma classe”.

Bibliografia:

A maior parte do trabalho de Harriet Martineau está apenas disponível via antiquários, dado que não existe ainda nenhuma versão moderna, completa, dos seus trabalhos. Entre os que estão disponíveis, os seguintes podem ser recomendados:

• Harriet Martineau: Society in America (várias edições)
• Harriet Martineau: Autobiography
• Harriet Martineau: Illustrations of Political Economy
• Claudia Orazem: Political Economy and Fiction in the Early Works of Harriet Martineau, Frankfurt/New York, 1999

(1881 Lviv, Ucrânia - 1973 Nova Iorque, Estados Unidos)

Ludwig Heinrich Edler von Mises foi influenciado fortemente e estimulado pela “Escola Austríaca de Economia” (Menger, Böhm-Bawerk, etc.), durante os seus estudos na Universidade de Viena. O seu primeiro grande feito científico foi a escrita da “Teoria do Dinheiro e do Crédito”. Neste trabalho mostrou que o “preço” do dinheiro, o seu poder de compra, é determinado pela oferta e procura e consequentemente mostrou que a banca deve ser tratada como qualquer outra indústria numa economia de mercado. Tão cedo como em 1922, conseguiu prever o falhanço das economias de planificação central, no seu livro “Die Gemeinwirtschaft” (“Socialismo”). O Socialismo não podia funcionar de uma forma eficiente, defendia, devido à sua falta de um sistema de preços de mercado que permitisse calcular os lucros e as perdas.

Mises também se opôs fortemente à ideia socialista do igualitarismo. No seu trabalho “Liberalismo” (1927), defendeu uma sociedade livre e uma economia de mercado como um conceito em oposição à ideologia estadista defendida maioritariamente pelos intelectuais e políticos nessa época. Nos Estados Unidos, onde viveu como um refugiado do fascismo deste 1940, analisou o crescimento das instituições do governo federal americano. Criticou, em “Burocracia” (1944) a ideia de uma economia mista e mostrou que todas as agencias reguladoras do governo tendem a crescer e não têm nenhum impacto positivo no crescimento e no bem estar. O seu maior trabalho, “Acção Humana”, uma versão expandida de “Nationalökonomie”, foi publicado em 1949.

Até à sua morte, Ludwig von Mises lutou contra o estatismo e a regulação governamental, e pela liberdade individual e a economia de mercado. Entre os seus discípulos encontram-se grandes economistas como F. A. Hayek, Israel Kirzner, Gottfried Haberler e Murray Rothbard.

Bibliografia

Todos os livros indicados acima estão disponíveis em Inglês e em edições online no site www.mises.org.

• Israel M. Kirzner Ludwig von Mises: The Man and His Economics. ISI Books 2001

Letters

to

Thomas Robert Malthus

on

Political Economy

and

Stagnation of Commerce

by

Jean Baptiste Say

Translated

London, 1821

ADVERTISEMENT

Mr. Malthus, Professor of Political Economy, at the East India Company's College, has raised himself very high in the literary world by his Essay on Population, which has been translated into all the languages of Europe. For these two years past he has informed us, that he is preparing new Principles of Political Economy, considered with respect to the practical Applications. This work, which was impatiently expected, appeared in London, a few months since. M. J. B. Say, who has rendered great services to this science in our Country, and whom we can proudly oppose to the most celebrated English names, has not waited for a French Translation of it⁽¹⁾ to combat those opinions which are in opposition to his.

This discussion, between two men who have proved themselves able, and which is at this moment interesting to all the Trading Interest in the world, has appeared to us worthy the attention of the public, not only under existing circumstances, but at all times.

It will further serve to make Mr. Malthus's work known to those who have not read it.

LETTER I.

Sir,

All those who cultivate the new and beautiful science of Political Economy desire to read the work with which you have just enriched that subject. You are not one of those authors who address the public without having something to inform them; and when to the celebrity of the writer is joined the importance of the subject, when the subject is of no less importance to society, than to inform them what are their means of existence and enjoyment, it is to be supposed that the reader's curiosity must be doubly excited.

I shall not undertake, Sir, to join my suffrage to that of the public, by pointing out every thing that is ingenious, and at the same time just, in your work; this would be too great a task. Nor shall I undertake to enter into a discussion with you, upon some points to which you seem to me to attach an importance that they scarcely appear to merit. I shall not here tire either the public or you by dull controversies. But, I say it with sorrow, that there are some fundamental principles discoverable in your doctrine, which, were they to be admitted on so powerful an authority as yours, might cause to retrograde a science, the progress of which you are so good as to assist by your extensive knowledge and talent.

And, in the first place, what fixes my attention, because all the interest of the moment is attached to it, is, from whence comes that general overstock of all the markets of the universe, to which goods are incessantly carried which sell at a loss? -- Whence comes it that in the interior of each state, with a want of action in unison with all the developments of industry, whence comes, I say, that universal difficulty that .is experienced in obtaining lucrative employ? And when the cause of this chronic malady is discovered, what are the means of cure? These are questions upon which the happiness and tranquillity of nations depend. Wherefore I cannot think a discussion tending to elucidate them will be unworthy your attention, and that of an enlightened public.

All those who, since Adam Smith, have turned their attention to Political Economy, agree that in reality we do not buy articles of consumption with money, the circulating medium with which we pay for them. We must in the first instance have bought this money itself by the sale of our produce.

To a proprietor of a mine, the silver money is a produce with which he buys what he has occasion for. To all those through whose hands this silver afterwards passes, it is only the price of the produce which they themselves have raised by means of their property in land, their capitals, or their industry. In selling them they in the first place exchange them for money, and afterwards they exchange the money for articles of consumption. It is therefore really and absolutely with their produce that they make their purchases: therefore it is impossible for them to purchase any articles whatever, to a greater amount than those they have produced, either by themselves or through the means of their capital or their land.

From these premises I have drawn a conclusion which appears to me evident,l but the consequences of which appear to have alarmed you. I had said -- As no one can purchase the produce of another except with his own produce, as the amount for which we can buy is equal to that which we can produce, the.more we can produce the more we can purchase. From whence proceeds this other conclusion, which you refuse to admit -- That if certain commodities do not sell, it is because others are not produced, and that it is the raising produce alone which opens a market for the sale of produce.

I know that this proposition has a paradoxical complexion, which creates a prejudice against it. I know that one has much greater reason to expect to be supported by vulgar prejudices, when one asserts that the cause of too much produce is because all the world is employed in raising it.-- That instead of continually producing, one ought to mutiply barren consumptions, and expend the old capital instead of accumulating new. This doctrine has, indeed, probability on its side; it can be supported by arguments, facts may be interpreted in its favor. But, Sir, when Copernieus and Galileo taught, for the first time, that the sun, although we see it rise every morning in the east, magnificently pass over our heads at noon, and precipitate itself towards the west in the evening, still does not move from its place, they had also universal prejudice against them, the opinions of the Ancients, and the evidence of the senses. Ought they on that account to relinquish those demonstrations which were produced by a
sound judgment? I should do you an injustice to doubt your answer.

Besides, when I assert that produce opens a vent for produce; that the means of industry, whatever they may be, left to themselves, always incline themselves to those articles which are the most necessary to nations, and that these necessary articles create at the same time fresh populations, and fresh enjoyments for those populations, all probability is not against me.

Let us go back only two hundred years, and suppose that a merchant had taken a rich cargo to the sites on which the present cities of New York and Philadelphia stand -- Would he have sold it? Suppose that, without failing a victim to the natives, he had succeeded in laying the foundation of an agricultural or a manufactural establishment: Would he have sold there any one of his articles? Most certainly not. He would have been obliged to consume them all himself. Why do we see it so different in our days? Why, as soon as goods arrive, or are manufactured at Philadelphia or New York, are we sure to sell them at the course of exchange? It appears evident to me that it is because the farmers, the merchants, and at present the manufacturers, even of New York and Philadelphia, and of the surrounding provinces, produce, and import produce, by the means of which they acquire that which is offered to them by others.

What is true as regards a new State, it will be said is not so of an old one. There was room in America for more producers and more consumers; but in a country where there were already more producers than were necessary, consumers only were wanted. Allow me to answer, that the only real consumers are those who produce on their part, because they alone can buy the produce of others, and that barren consumers can buy nothing except by the means of value created by producers.

It is probable that in the time of the reign of Queen Elizabeth, when England had not half the population of the present day, they had then discovered that there were more laborers than work. I desire no other proof of this than that very law which was then passed in favor of the poor, the result of which is one of the banes of England. Its principal object is to furnish work for the unfortunate who can find no employ. There was no employ in a country which since then has been able to furnish enough for a double and triple number of laborers. Whence comes it, Sir, whence comes it, however unfortunate may be the situation of Great Britain? Are more of divers articles sold in it, than in the days of Elizabeth? What can be the cause of this, if not that more is produced? One produces one thing, which he exchanges with his neighbour who produces another. Having more than enough for use, the population is increased, and still everybody has been better supplied.

It is the capability of production which makes the difference between a country and a desert. And the more a country produces, the more it is advanced, the more populous it is, and is the better provided.

This observation, which is self-evident, probably is not denied by you, but you complain of the conclusions I draw from it.

I have asserted that if there is an overstock, a superabundance of many kinds of goods, it is because other goods are not produced in sufficient quantities to be exchanged with the first. That if the producers of them could produce more, or others, the first would find the vent which now fails; in a word, that there is only too much produce of certain kinds because there is not enough of others, and you pretend that there may be a superabundance of all kinds at the same time, citing at the same time facts in your favor. M. de Sismondi had already opposed my doctrine, and I am very glad to quote here his most forcible expressions, in order not to deprive you, Sir, of any advantage that belongs to you, and that my answers may serve for both.

"Europe," says this ingenious author, "is arrived at a point to have, in all its parts, an industry and a manufacture superior to its wants." He adds, that "the incumbrance which results from it begins to be felt in the rest of the world." "Examine the reports of commerce, the newspapers, rand the accounts of travellers, and every where will be seen proofs of that super-abundance of production beyond the consumption, of that manufacture, proportionate, not to the demand, but to the capital employed; of that activity of merchants which induces them to go in crowds to every new settlement, and which exposes them by turns to ruinous losses in every trade in which they expected profit. We have seen merchandise of all kinds, but particularly that of England, the great manufacturing power, abound in all the markets of Italy, in a proportion so far beyond the demand, as to compel the merchants, in order to realise part of their funds, to sell their goods at a loss of a
quarter, or a third, instead of at a profit.

The tide of commerce turned away from Italy, found its way into Germany, Russia, and the Brazils, and very soon met with the same obstacles there.

"The last advices inform us of similar losses in new countries. In the month of August, 1818, complaints were made at the Cape of Good Hope, that all the warehouses were filled with European goods, which were offered at a lower price than in Europe, but without finding a sale. In the month of June, at Calcutta, the complaints of commerce were of the same nature. A strange phenomenon at first appeared -- England sending cotton goods to India, and consequently succeeding in working at a lower price than the half-naked inhabitants of Hindostan, and reducing its workmen to a still more miserable state.

"But this whimsical turn giver to commerce did not last long. At present British productions arc cheaper in India than in England itself. In the month of May they were obliged to re-export from New-Holland, European goods which had been sent there in too great abundance. Buenos Ayres, New Grenada, and Chili, are already returning goods in the same way.

"Mr. Fearon's voyage to the United States, completed only in the spring of 1818, presents this spectacle in a still more striking point of view. From one extremity to the other, of this vast and prosperous continent, there is not a city, nor a town, in which the quantity of goods offered for sale is not infinitely greater than the means of the buyers, notwithstanding the merchants endeavour to induce them, by very long credit, and every kind of facility in the payments, which they take in bills or in provisions of all kinds.

"No fact presents itself to us in a greater number of places, or under more varied shapes, than the disproportion of the means of consumption with the production -- than the impossibility which producers find to give up their industry because it is declining, -- and the certainty that their ranks are never thinned but by failures. How is it that philosophers will not see that which is evident to every vulgar eye?

"The error into which they have fallen is entirely owing to this false principle -- that the production is the same thing as the revenue. Mr. Ricardo, according to M. Say, repeats and affirms it. 'M. Say has proved in the most satisfactory manner,' says he, that there is no capital, however large, that cannot be employed, because the demand for produce is only bounded by production.' No person produces but with the intention of consuming or selling the article he produces, and no one sells but with the intention of buying some other production, which may be of immediate use, or contribute to future production.

"The producer becomes therefore consumer of his produce, or buyer and consumer of the produce of some other person. "Upon this principle," continues M. de Sismondi, "it becomes absolutely impossible to comprehend or explain the best demonstrated fact in all the history of commerce, viz. the choaking up the markets."⁽²⁾

I shall first of all observe, to those persons to whom the facts about which M. de Sismondi afflicts himself with some reason, appear conclusive, that they are in effect conclusive; but that conclusion is against himself.

There are too many English goods offered in Italy and elsewhere, because there are not a sufficient quantity of Italian goods suited to England. A country buys only what it can pay for; for if it did not pay, others would soon cease to sell to it. Now with what do the Italians pay the English? With oil, silks, and raisins; besides these articles and a few others, if they want more English productions, with what would they pay for them? With money! But they must obtain the money wherewith to pay for the English productions. You see clearly, Sir, that in order to obtain productions, a nation, as well as an individual, must have recourse to its own productions.

It is said that the English sell at a loss in those places which they inundate with their goods, which I readily believe. They multiply the goods offered, which depreciates it; and they take specie in payment as much as they can, which consequently makes more scarce and more valuable.-- Being become more precious, a less quantity is given in each exchange. This is the reason they are obliged to sell at a loss. But suppose for a moment, that the Italians had more capital -- that they employed their land and their industrious powers better -- in a word, that they produced more; and suppose, at the same time, that the English laws, instead of having been framed upon the absurd idea of the balance pf commerce, had admitted, on moderate terms, every thing that the Italians could have produced, in payment for English productions; can you imagine that English goods would then incumber the Italian ports, or doubt that a still greater quantity of goods would find a ready sale?

The Brazils, a vast country, highly favored by nature, could consume a hundred times the English goods which accumulate there, and don't sell; but it would be necessary that Brazil should produce all that it is capable of producing; and how is this poor Brazil to succeed in this? All the efforts of her citizens are paralised by her Administration. If any branch of industry appears likely to yield a profit, the executive power seizes and destroys it. If any one finds a precious stone, it is taken away from him. Great encouragement to seek for more wherewith to buy European goods!!

The English Government rejects, on its part, by means of its Custom Houses and Importation Duties, the production which the English might bring from abroad, in exchange for their goods, and even the necessary provisions, of which their manufacturers stand so much in need; and this because it is necessary that the English farmers should sell their wheat at above eighty shillings per quarter, in order to enable them to pay the enormous taxes. All these nations complain of the sufferings to which they have reduced themselves by their own fault. This puts me in mind of invalids who are out of temper with their sufferings, but who will not correct themselves of those excesses which are the primary cause of them. I know that an oak is not so easily grubbed up as a pernicious weed. I know that old barriers are not taken away, however rotten they may be, when they are supported by the dirt which has collected around them. I know that certain corrupt and corrupting governments stand in
need of monopolies and custom-duties, to pay for the vote of the honorable majorities who pretend to be the representatives of nations. I am not sufficiently unjust to desire that one should govern with a view to the general interest, in order to obtain all the votes without paying for them; but at the same time, why should I be surprised that deplorable consequences should be the result of so many vicious systems?

You will readily admit with me, Sir, at least I presume so, the mischief which nations do to each other by their jealousies, their sordid interest, or by the ignorance of those who set themselves up as their organisers; but you maintain that, even supposing they have had more liberal institutions, the commodities produced may exceed the wants of consumers. Well, Sir, I am ready to defend myself on this ground.

Let us pass over the war which nations carry on against each other with their "douaniers," let us consider each people in their relations with themselves, and let us understand, once for all, whether we are beyond the reach of consuming what we are capable of producing.

"M. Say, 'Mr. Mill, and Mr. Ricardo, whom you call the principal authors of the new doctrine of profit, appear to me t.o have fallen into fundamental errors on that subject. In the first place they have looked upon merchandise as though it were an algebraic character instead of being an article of consumption, which must necessarily have reference to the number of consumers, and to the nature of their wants."⁽³⁾

I don't know, Sir, at least as far as regards myself, upon what you found that accusation. I have considered this idea in all its shapes -- that the value of things (the only quality which makes them riches) is rounded on their utility, on the aptitude they possess to satisfy our wants.

"The need we have of things, I said,⁽⁴⁾ depends upon the moral and physical nature of man, the climate he lives in, and on the manners and legislation of his country. He has wants of the body, wants of the mind, and of the soul; wants for himself, others for his family, others still as a member of society. The skin of a bear, and a rein-deer, are articles of the first necessity to a Laplander, whilst the very name of them is unknown to the Lazzaroni of Naples. The latter for his part can do without every thing, provided he can obtain macaroni. In the stone manner the Courts of Judicature in Europe are considered as one of the strongest bonds of the social body, whilst the indigent people of America, the Arabs, and the Tartars, do very well without them.

"Of these wrests, some are satisfied by the use we make of certain things, with which Nature furnishes us gratuitously, such as the air, water, and the light of the sun. We may call these things natural riches, because Nature alone pays the cost of them. As she gives them indiscriminately to all, no one has occasion to acquire them by means of any sacrifice whatever; therefore, they have no exchangeable value.

"Other wants can only be satisfied by the use we make of certain things, to which the use they are of could only, be given them by causing them to undergo a modification, by having effected a change in their state, and by having for that purpose surmounted some difficulty or other. Such are the things which we can only obtain by agricultural process, by commerce, or the arts. These are the only property that has an exchangeable value. The reason of which is evident -- they are, by the simple fact of their production, the result of an exchange in which the producer has given his productive services for the purpose of receiving this produce. From that time they cannot be obtained from him, except by virtue of another exchange -- by giving him another production which he may estimate at as much as his own.

"These things may be called social riches, because no exchange can take place without social intercourse, and because it is only in society that the right of exclusively possessing what has been obtained by production, or exchange, can be guaranteed."

I add; "Let us observe, at the same time, that social riches are, as riches, the only ones which can become the object of a scientific study; 1st. because they are the only ones which are appreciable, or at least whose appreciation is not arbitrary; 2nd. because they are the only ones which are obtained, distributed, and destroyed, agreeably to the laws which we may make."

Is this considering productions as algebraic characters, by abstracting the number of consumers, and the nature of their wants? Does not this doctrine establish, on the contrary, that our wants alone compel us to make sacrifices by means whereof we obtain productions?

These sacrifices are the price we pay to obtain them. You call these sacrifices, according to Smith, by the name of labor, which is an insufficient expression, for they include the concurrence of land and capital.

I call them productive service. They have every where a price current; as soon as this price exceeds the value of the thing produced, a disadvantageous exchange is the result, in which a greater value has been consumed than has been produced.

As soon as a produce has been created, which is equivalent to services, the services are paid by the produce, the value of which, by being distributed amongst the producers, forms their revenue. You see therefore that this revenue only exists in proportion to the exchangeable value of the produce, and that it can only have that value in consequence of the demand for it, in the present state of society. I do not therefore separate this want, nor do I give it an arbitrary valuation. I take it for what it is -- for what the consumers will have it to be. I could quote, if it were necessary, the whole of my book iii. which details the different modes of consuming, their causes and effects; but 1 will not intrude upon your time and attention. Let, us proceed.

You say "It is by no means true; in fact, that commodities are always bartered for commodities. The greatest part of commodities are directly exchanged for labor, productive or unproductive, and it is evident that this mass of commodities altogether, compared to the labor for which they are to be exchanged, may depreciate in value on account of its superabundance, the same as a single article, in particular, may by its superabundance fall in value in respect to labor or money."⁽⁵⁾

Allow me to observe, in the first place, that I did not say that commodities are always bartered for commodities, but rather that productions are only bought with productions.

In the second place, that those who admit this expression, commodity, might reply to you, that when commodities are given in payment of labor, these commodities are in effect exchanged for other commodities, that is to say for those which are produced by the labor that is paid for. But this answer. is not sufficient for those who take a more extended and complete view of the phenomenon of the production of our riches. Allow me to lay before you a striking figure; the public, by whom we are judged, will I hope find great facilities in it, in weighing the merit of your objections and my answers.

For the purpose of showing the operation of industry, capital, and land, in the work of production, I personify them; and I find that each one of these persons sells his services, (which I call productive services,) to an enterpriser who is a merchant, a manufacturer, or rather a farmer. This enterpriser having bought the services of a parcel of land, by paying a rent to the proprietor, the services of a capital by paying interest to a capitalist, and the industrious services of laborers, clerks, or agents of any kind, by paying them a salary, consumes and annihilates all these productive services; and from this consumption, a produce of a certain value emanates.

'The value of the produce, provided it be equal to the costs of production, that is to say, to the price which it has been necessary. to advance for all the productive services, is sufficient to pay the profits of all those who have contributed, directly or indirectly, to this production

The profit of the enterpriser, on whose account the operation has been made, by deducting the interest of the capital that has been employed, represents the salary for his time and talent, that is to say, his own services productive to himself.

If his capacity was great, and his calculations well made, his profit is considerable. If instead of talent, he has shown ignorance in his business, he will have gained nothing; he will have lost. It is the enterpriser who takes all the risk; but it is he, on the other hand, who benefits by every favorable result.

All the productions which daily come before us, and all those which our imaginations tan conceive, have been formed by operations, every one of which forms part of those I have just explained, but combined in an infinity of different ways. What some enterprisers do to obtain certain productions, others do to obtain other productions. Now it is these various productions, which being exchanged against each other, open a reciprocal vent each to the other.. The greater or less want there is of one of these productions, compared with others, determines an exchange at a greater or less price; that is, for a greater or less quantity of any other production. Money is nothing more in this matter than a passing agent, which, the exchange once complete, has nothing more to do with it, but is employed in other exchanges.

It is with the rent of the land, the interest, and the salaries, which form the profits resulting from this production, that the producers purchase the articles of their consumption. Producers are at the same time consumers; and the nature of their wants, having an influence, in different degrees, on the demand for different productions, always favors, when liberty exists, the production of that which is most necessary, because, being the most in demand, it immediately becomes the article which yields the greatest profit to enterprisers.

I have said, that for the purpose of better showing how industry. capital, and land, act in productive operations, I would personify them, and mark the services they render. But this is not a mere fiction: they are facts. Industry is represented by the industrious of all classes, capital by the capitalists, and land by the proprietors. It is these three classes of persons who sell the productive action of their commodity, and who affix the price to it.

My mode of expressing myself may be censured; but then it will be necessary to produce a better, for it cannot be denied that things take place as I have asserted. I have described the facts. The mode of description may be censured; but don't let any one flatter himself that he can controvert the facts; there they are, and will defend themselves.

Let us now resume your accusation --You say, Sir, that many commodities are bought with labor; and I go further than you do, I say that they must all be so bought; extending this expression, labor, to the service rendered by capital and land,⁽⁶⁾ I say that they cannot be bought in any other way; that it is invariably by such services that use and value are given to things; and that ultimately two things present themselves to us, one of consuming ourselves the utility and consequently the value we have produced, the other to employ it in purchasing the utility and value produced by others; that in both eases we purchase commodities with productive services, and that the greater portion of productive service we employ, the more we can buy.

You pretend that there is no such thing as immaterial produce. Ah! Sir, originally there was no other. A field itself furnished nothing towards the production but its service, which is an immaterial produce. It serves as a crucible in which minerals are put, and from whence tome out metal and dross. Is there any part of the crucible in these productions? No; the crucible serves for a new productive operation. Is there any part of the field in the harvest which it produces? I answer the same: No; for if a fund of land exhausted itself, it would finish at the end of a certain number of years, by being entirely annihilated. A fund of land only returns what is put into it; but this is after an elaboration which I call the productive service of the field. I may be criticised about the word, but I fear not any criticism on the subject, because the thing is, and will be, and wherever political economy is studied this will be found to be the fact, whatever name may be thought proper to be given to it.
The service which a capital renders, in whatever enterprise it is employed, whether commercial, agricultural, or manufactural, is the same -- an immaterial produce. He who expends a capital unproductively destroys the capital itself; he who expends it productively expends the material capital, and the service of this capital besides, which is an immaterial produce. When a dyer puts one thousand francs' worth of indigo into his cauldron he consumes a thousand francs' worth of indigo, immaterial produce, and he consumes, besides, the time his capital is employed, that is its interest. The dye he obtains returns him the value of the material capital which he has employed, and the value of the immaterial service of this same capital besides.

The service of the workman is also an immaterial produce. The workman leaves his manufactory, in the evening, just as he went into it in the morning. He has left nothing material in his workshop, therefore it is an immaterial service which he has furnished to a productive operation. This service is the daily and annual produce of a fund which I call his industrious powers, and which constitutes his wealth; a poor wealth! particularly in England, and I know the cause of it.

All these things constitute immaterial produce; call. them by whatever name you please, they will be no other than immaterial produce, which will exchange one against the other, or for material produce, and which in all these exchanges will form their regulated price-current, like all other price-currents in the world, on the proportion between the supply and the demand.

All these services, of industry, capital, and land, which are productions independent of all matter, form the revenue of all mankind. What! all our revenues are immaterial!! Yes, Sir, all: otherwise it would be necessary that the mass of matter of which the Globe is composed should be augmented every year. This would be necessary in order that every year we might have a fresh material revenue. We neither create nor destroy a single atom. We confine ourselves to changing its combinations, and every thing we employ in it is immaterial. It is of value; and it is that value, also immaterial, which we consume daily and yearly, and which keeps us alive; for consumption is a change of form given to matter, or, if you prefer it, a derangement of form, as production is the arrangement of it. If you find any thing paradoxical in all these propositions, look at the things they express, and I have no doubt they will appear very simple and very reasonable to you.

Without this analysis I defy you to explain the entire facts; to explain, for example, how the same capital is consumed twice, productively by an enterpriser, and unproductively by his workman. By help of the preceding analysis it will be seen, that the workman supplies his labor, the produce of his capacity, which he sells to the enterpriser -- takes home his salary, which forms his revenue, and consumes it unproductively. The enterpriser, (who has bought the labor of the workman) on his part, by devoting a part of his capital to it, consumes it productively, the same as the dyer productively consumes the indigo he throws into his cauldron. These values, having been reproductively destroyed, reappear in the produce which comes out of the hands of the enterpriser. It is not the enterpriser's capital which forms the workman's revenue, as M. Sismondi pretends. It is in the workshops, and not in the workman's dwelling, that the enterpriser's capital is consumed. The value consumed at the
workman's house has another source, it is the produce of his industrious powers. The enterpriser devotes a part of his capital to the purchase of this labor.

Having bought it, he consumes it; and the workman on his part consumes the value he has obtained in exchange for his labor. Wherever there is an exchange, there are two values. created and bartered; and where ever two values are created, there can be and there is in fact two consumptions.⁽⁷⁾

It is the same with productive service yielded by the capital. The capitalist who lends it sells the service, the labor of his commodity, and the daily or yearly price, which an enterpriser pays him for it, is called interest. The two terms of exchange are, the one service ate capital, the other interest.

The enterpriser, at the same time that he productively consumes the capital, also productively consumes the service of the capital. The lender, on his part, who has sold the service of his capital, unproductively consumes the interest of it, which is a material value, given in exchange for the immaterial service of the capital. It is astonishing that there is a double consumption: that of the enterpriser to make his produce, and that of the capitalist to satisfy his wants, since there are the two terms of one exchange, two values proceeding from two different funds, bartered, and both consumable?

You say, Sir, that the distinction between productive and unproductive labor is the earner stone of Adam Smith's work, and that to call, as I have done, that labor productive which is not fixed in any material object, is to overthrow his work from top to bottom. No, Sir, this is not the earner stone of Adam Smith's work, since, that stone being shaken, the edifice is imperfect without being less stable. What will eternally support that excellent work is, that it proclaims in all its pages, that the changeable value of things is the foundation of all wealth. It is from that time that political economy is become a positive science; for the price-current of each thing is a determined quantity, the elements of which may be analised, the causes assigned, the bearings studied, and the changes foreseen. By taking away from the definition of wealth this essential character, allow me to inform you, Sir, we replunge the science into the surge, and drive it back.

Far from undermining the celebrated inquiries into the Wealth of Nations, I support them in all their essential parts; but at the stone time, I think Adam Smith has misconceived real exchangeable value, by forgetting that which is attached to productive service, which leaves no trace behind, because the whole of it is consumed. I think he has also forgotten real services, which even leave traces behind them, in material productions such as service of capital, consumed, independently of the capital itself. I think he has got into infinite obscurity, for want of having distinguished the consumption of the industrious services of an enterpriser, from the services of his capital -- a distinction so real, however, that there is scarcely any commercial house that does not keep these accounts under distinct heads.

I revere Adam Smith, -- he is my master. At the commencement of my career in Political Economy, whilst yet tottering, and driven on the one hand by the Doctors of the Balance of Trade, and on the other by the Doctors of Net Proceeds, I stumbled at every step, he showed me the fight road. Leaning upon his Wealth of Nations, which at the same time discovers to us the wealth of his genius, I learned to go alone. Now I no longer belong to any school, and shall not share the ridicule of the Reverend Jesuit Fathers who translated Newton's Elements, with notes. They felt that the laws of natural philosophy did not well accord with those of Loyola; they also took care to inform the public by an Advertisement, that although they had apparently shown the motion of the Earth, in order to complete the development of celestial philosophy, they were not less under subjection to the decrees of the Pope, who did not admit this motion. I am only under the subjection of the decrees of eternal
Reason, and I am not afraid to say so. Adam Smith has not embraced the whole of the phenomenon of the production and consumption of wealth, but he has done so much that we ought to feel grateful to him. Thanks to him, the most vague, the most obscure of sciences will soon become the most precise, and that which of all others will leave the fewest points unexplained.

Let us figure to ourselves, producers (and under this name I comprise as well the possessors of capitals and lands, as the possessors of industrious powers,) let us fancy them advancing, to meet each other with their productive services, or the profit which has resulted from them (an immaterial quality). This profit is their produce. Sometimes it is fixed on an immaterial object, which is transmitted with the immaterial produce, but which in itself is of no importance, is nothing, in political Economy: for matter, dispossessed of value, is not wealth. Sometimes it is transmitted, is sold by one, and bought by another, without being fixed in any matter. It is the advice of the Doctor or the Lawyer, the service of the Soldier or the public Officer. Every one exchanges the utility he produces against that which is produced by others, and in every one of these exchanges, which are carried to account in a book of competition, as the utility offered by Paul is more or less in demand than that offered
by Jacques, it sells dearer or cheaper -- that is to say, that it obtains in exchange more or less of the utility offered by the latter. It is in this sense that the influence of the demand and supply must be understood.⁽⁸⁾

This, Sir, is not a doctrine advanced by way of afterthought; it is to be found in sundry parts of my Treatise on Political Economy;⁽⁹⁾ and by the help of my Epitome its coincidence with every other principle of the science, and with all the facts which serve for its basis, is fundamentally the same. It is already professed in many parts of Europe; but I earnestly desire that it may succeed in convincing you, and that it may appear to you to be worthy of being introduced into the chair, which you fill with so much eclat.

After these necessary explanations, you will not accuse me of finesse if I rest upon those laws which I have shown to be rounded on the nature of things and on the facts which issue from them.

Commodities, you say, are only exchanged for commodities: they are also exchanged for labor. If this labor be a produce that some persons sell, that others buy, and that the latter consume, it will cost me very little to call it a Commodity, and it will cost vou very little more to assimilate other commodities to it, for they are also produce.. Then comprising both under the generic name of Produce, you may perhaps admit that produce is bought only with produce.

LETTER THE SECOND.

SIR,

I think I have proved in my first letter that Produce can only be bought with Produce. I still see no eause to abandon this doctrine, that it is produetion which opens a market for production. It is true that I have taken as produce, all the services which proceed from our personal capacities, from our capitals, and our property in land, whieh has put me under the necessity of sketching afresh, and in other terms, the Doctrine of Production, which Smith evidently has neither understood, nor entirely described.

However, Sir, on reading again the 3rd section of your chapter 7,⁽¹⁰⁾ I feel that there is still one point in which you do not agree with me. You will perhaps confess that produce is bought onlv with other produce, but you persist in maintaining that men can, putting all productions together, produce a cluantitv more than equal to their wants, and consequently -- thief there will be no employ for a part of these productions -- that there may be a superabundance and glut of all kinds at the same time. For the purpose of presenting your objection in all its force, I will transform it into a figure, and will say, M. Malthus readily admits that one hundred sacks of wheat will purchase a hundred pieces of cloth, in a partnership which has occasion for this quantity of cloth and wheat to clothe and feed themselves, but that if the same company should produce two hundred sacks of wheat and two hundred pieces of cloth, it would be in vain that these two commodities could be
exchanged the one for the other: he will maintain that a part of' them woukl find no buyers. I must therefore, Sir, prove in the first place, that whatever be the quantity produced, and the consequent depreciation of its price, a quantity produced of one kind is always sufficient to enable the producer to acquire the quantity produced of another kind; and after having proved that the possibility of acquiring exists, I must enquire how those productions which superabound give rise to wants to consume them.

The farmer who produces wheat, after having bought the productive services of the land, of the capital he employs, and of his servants, and having added his oxrn labour to it, has consumed all these values to convert them into sacks of wheat, and each sack, including his own labour, that is to say his profit, we will suppose returns him 30 francs. On the other hand the manufacturer who produces flaxen, woollen, or cotton cloth, no matter which, -- the manufacturer in fact after having in the same manner consumed the services of his capital, his own services, and those of his men, has manufactured pieces of cloth, each of which also returns him 30 francs. If you will allow me to come at once to the main point of the question, I will confess to you that my cloth-merchant represents in my mind the producers of all manufactured produce, and my wheat-merchant the producers of all the provisions of life and raw materials. The question is, whether the whole of their two productions, to whatever extent they may
be multiplied, and whatever mav be the consequent depression in their price, can be bought by their producers, who are at the same time their consumers, and how the want continually increases in proportion to the quantity produced.

We will first examine what takes place in the hypothesis of a perfect liberty, which allows the indefinite multiplication of all productions, and afterwards we will examine into the obstacles which the nature of things or the imperfections of society oppose to this indefinite liberty of production. But you will say that the hypothesis of an indefinite production is more favorable to your cause, because it is more difficult to dispose of an unlimited than of a circumscribed production, and that the hypothesis of a circumscribed production, sometimes from one cause sometimes another, is more favorable to mine, which establishes, that it is these very restrictions which, by preventing certain productions, injure the purchase that might be made of those productions which can only be indefinitely multiplied.

In the hypothesis of perfect liberty, the producer of wheat arrives at market with a sack which yields him, including his profit, 30 francs; and the producer of cloth with a piece which brings him the same price: and consequently with two productions which exchange equally:⁽¹¹⁾ that which sells above its cost of production, will induce a part of the producers of the other commodity to turn to the production of this until the productive services are equally paid by both. This is an effect generally admitted.

It is right to observe that in this hypothesis the producers of the piece of cloth altogether have gained sufficient to buy in the whole piece or any other production of equal value. -- If it amounts for example to 30 francs, including every thing even the manufacturer's profit at the rate at which competition has fixed it, this sum is found distributed amongst the producers of the piece of cloth, but in unequal parts, according to the kind and quantity of services rendered to produce it.

If the piece contains ten ells, he who has gained 6 francs can buy two ells of it, he who has gained 30 sons can only buy half an ell, but it is still clear that all of them together can buy the whole piece. That, if instead of buying cloth they wish to buy wheat, they can also buy the whole quantity, because like the cloth it is only worth 30 francs, the same as they can buy indifferently according to their wants, either a portion of the piece of cloth or an equivalent part of the sack of wheat.

He who has gained by either of these productions six francs, may employ three francs in a tenth of the piece of cloth, and three francs in a tenth of the wheat, still it is true that all the producers together can acquire the. whole of the productions.

It is here, Sir, that you ground your objections.-- If productions increase, you say, or wants diminish, the productions will fall to too low a price to pay for the labour necessary to their production.⁽¹²⁾ Before I reply to you, Sir, I inform you that, if out of politeness I make use of your word labour, which, according to the explanation given in my preceding letter, is incomplete,

I shall comprise under that term, not only the productive service of a workman and his master, but also the productive services rendered by the capital and the land, services which have their 'price, as well as personal labor, and so real a price that the capitalist and the landholder live upon it.

This point being understood, I reply, in the first place, that productions by diminishing in price do not disenable the producers to purchase the labor which has created them, or any other equivalent labor. In our hypothesis the producers of corn, by a more skilful process, will produce a double quantity of corn, and the producers of cloth a double quantity of cloth, and the corn as well as the cloth will be diminished one half, in price. What does this mean? The producers of corn will have two sacks for their services, which together will be worth what a single sack was worth, and the producers of cloth will have two pieces, which together will be worth what one was worth. In the exchange called production the same services will have obtained, each in their place, a double quantity of production, but these two double quantities may be obtained one by the other as heretofore, and as easily so, that without laying out more in productive services, a nation in which this productive power begins to
unfold itself, will have double the quantity of articles to consume, either wheat, or cloth, or any thing else, since we have agreed to represent by wheat and cloth every thing the human species may want for its support. The productions in such an exchange are opposed in value to productive services. Now, as in every exchange one of the two articles is of greater value, in proportion to the quantity it obtains of the other, it follows, that productive services are the more valuable in proportion as productions are multiplied, and at lower price.⁽¹³⁾

This is the reason why the diminution in the price of productions, by augmenting the value of the productive funds of a nation, and the revenues resulting therefrom, increases the national wealth. This demonstration, which is detailed in the 3rd Chapter of the 2d. Book of my Treatise on Political Economy (4th edition), has I think rendered some service to the science by explaining that which up to that period had been felt but not explained. Which is, that although wealth is a changeable value, general wealth has accrued by the low price of commodities and every kind of production.⁽¹⁴⁾

Never perhaps has an increase of double in the productive power of labor taken place all at once, and in all productions at the same time, but it is indisputable that it has taken place gradually in many productions, and in very varied proportions. A purple cloak amongst the ancients, of the same quality and size, of the same solidity and beauty of color, cost no doubt double what it costs now. And I have no doubt that wheat, paid in labor, is diminished one half at least since the unknown epocha of the invention of the plough. All these productions costing less labor, have been, in consequence of competition, given for what they cost, without any one being a loser by it, and all the world has gained in revenue.

But we must return to the first part of your objection. The producers of wheat and the producers of cloth will then produce more wheat and cloth than either the one or the other can consume. Ah! Sir, after having proved that notwithstanding a reduction of more than half the value of the productions the same labor could buy the whole of them, and thereby procure double the means of existence and enjoyment, shall I be reduced to the necessity of proving to the justly celebrated author of the Essay on Population that everything that can be produced may find consumers, and that amongst the enjoyments which the quantity of productions of which mankind can dispose, procure, the comforts of home and the increase of children are not the least? After having written three justly admired volumes to prove that the population always rises to the level of the means of existence, can you admit the case of a great increase of productions, with a stationary number of consumers, and wants reduced by
parsimony? (page 355.)

Either the Author of the Essay on Population or the author of the Principles of Political Economy must be wrong. But every thing proves to us that it is not the author of the Essay on Population who is wrong. Experience as well as reason shows that a production, a thing necessary or agreeable to man, is only despised when one has not the means of buying it. These means of buying it are precisely what establish the demand for the production, which set a price to it. Not to want a useful thing is not to have wherewith to pay for it. And how is it we have not wherewith to pay for it? It is because we are deprived of that which constitutes wealth, deprived of either industry, land, or capital.

When men are once provided with the means of producing, they appropriate their productions to their wants, for the production itself is an exchange in which the productive means are supplied, and in which the article we most want is demanded in return. To create a thing, the want of which does not exist, is to create a thing without value: this would not be production. Now from the moment it has a value, the producer can find means to exchange it for those articles he wants.

This power of exchange, peculiar to man amongst all the animals, appropriates all productions to all wants, and allows him to calculate for his existence not on the species of production (he will exchange it as soon as he likes if it has a value but on the value.

The difficulty, you will say, is to create articles which are worth the expences of their production; in my next letter you will see what I think on this subject. But in the hypothesis in which we still are, of the liberty of industry, you will allow me to observe that there is no difficulty experienced in creating articles which are worth the expences of their production, except the high demands of suppliers of productive services. Now the high price of productive services denotes that what we seek for exists, that is to say, that there is a mode of employing them so as to make the produce sufficient to repay what they cost.

You reproach those who subscribe to my opinion with "having no regard to the influence so general and so important of man's disposition to indolence and laziness" (page 358). You suppose a case, in which men after having produced wherewith to satisfy their most necessary wants would prefer to do nothing more, the love of ease being predominant in their minds over that of pleasure. This supposition, allow me to say, proves in my favor and against vou. What more shall I say than that we only sell to those who produce? Why are not articles of luxury sold to a farmer who likes to lead a rustic life? Because he had rather be idle than produce wherewith to purchase them. Whatever be the cause that circumscribes production, whether the want of capital, of population, of diligence, or liberty, the effect in my mind is the same: the articles which are offered on the one hand are not sold because too few are produced on the other.

You look upon indolence that will not produce as directly against a vent, and I am entirely of your opinion. But then, how can you consider as you do (ch. 7 sec. 9) the indolence of what you call unproductive consumers as favorable to this same vent. It is absolutely necessary you say (page 463) that a country which has great means of production should posses a numerous body of unproductive consumers. How can it be that that indolence which refuses to produce, should overate against a vent in the first ease, and be favorable to it in the second.

If I must speak plain, this indolence is against it in both eases. Who do you mean by this numerous body of unproductive consumers so necessary in your opinion to producers? Are they the proprietors of land and capitals? Doubtless they do not produce directly, but their property produces for them. They consume the value, to the creation of which their lands and capitals have contributed. They contribute therefore to the production, and can only purchase what they do, in consequence of that contribution. If they further contribute by their labor, and join to their profit as proprietors and capitalists other profit as laborers, thereby producing more, they can consume more, but it is not in their character of non-producers that they augment the vent of producers.

Do you mean public functionaries, soldiers, and state pensioners? Neither is it in their character of non-producers that they favor a vent. I am far from contesting the legitimacy of the emoluments they receive, but I cannot think that those who pay taxes would be at a loss what to do with their money if the collector did not come to their assistance either their wants would be more amply satisfied, or they would employ the same money in a reproductive manner. In either ease, the money would be spent and would favor the vent of some productions equal in value to what is now purchased by those you call unproductive consumers. Confess therefore, Sir, that it is not by unproductive consumers that the vent is favored, but rather by those who help to keep them, and that in ease the unproductive consumers should happen to disappear, which God forbid, the vent would not be injured the value of a single halfpenny.

I know no better on what principle you decide (page 856) that production cannot go on if the value of commodities only pays a little more than the labor they have cost. It is by no means necessary that the produce should yield more than the cost of production, to enable the producers to go on. When an enterprise begins with a capital of a hundred thousand francs, it is sufficient if it yield a produce or a hundred thousand francs, to enable it to recommence its operation. And where, you ask, are the producer's profits? The whole capital has served to pay them.⁽¹⁵⁾ And it is the price that has been paid for it which forms the revenue of all the producers. If the produce resulting from it is worth only a hundred thousand francs, the same capital is re-established and all the producers are paid.⁽¹⁶⁾

I am therefore not afraid of maldng your objection stronger than you have done by expressing it thus: "Although each commodity may have cost in its production the same quantity of labor and capital, and the one may be equivalent to the other, still they may both be so abundant, as not to purchase more labor than they cost. In this case, can production go on? certainly not." No? why not, I beseech you? Why cannot the farmers and manufacturers, who make together 60 francs worth of wheat and cloth, who I have shown would be in a situation to purchase this entire quantity of commodity, sufficient for their wants, why can they not after having bought and consumed it, begin again? They would have the same land, the same capital, the stone industry as before, they would be precisely where they were when they began, and they would have lived, and supported themselves upon their income from the sale of their productive services. What more is necessary for the preservation of society ? This great
phenomenon Production being analysed and shewn in its true colors explains every thing.

After the apprehension you are under, Sir, that the productions of society should outstep in quantity what it can and will consume, it is natural you should behold these capitals increased by parsimony, with terror, for the capitals which seek employment, occasion an increase of production and fresh means of accumulation, from whence arise productions: in fact you seem to me to be afraid that we shall be stifled under a mass of wealth, which fear I confess to you by no means troubles me.

Was it for you, Sir, to stir up popular prejudices against those who do not spend their income in articles of luxury? You admit (page 351) that no permanent increase of wealth can take place without a previous augmentation of capital! you admit (page 352) that those who work are consumers as well as those who are idle, and still you fear that if we are always accumulating we cannot consume the quantity (continually increasing) of commodities produced by these new laborers. (page 353.)

Your vain fears must be destroyed, but first of all allow me to make a reflexion on the object of modern Political Economy, of a nature to direct us in our course.

What is it that distinguishes us from the Economists of the school of Quesnay? It is the pains we take to observe the connexion of the facts which regard wealth, the rigorous exactitude we impose upon ourselves in the description of them. Now to comprehend well, and describe well, we must as much as possible remain passive spectators. Not that we cannot nor ought sometimes to sigh at those gross operations, of the unhappy consequences of which we are often the sorrowful and helpless witnesses. Is the philanthropic historian interdicted from those sorrowful reflexions which the iniquities of policy sometimes draw from him? But a reproach, a thought, an advice are not history, and I am bold to say, are not Political Economy. What we owe to the public is to tell them how and why such a fact is the consequence of such other fact; whether they court or dread the consequence, that is sufficient for them, they know what they have to do, but no exhortations.

It consequently appears to me that I ought no more to preach, saving after the example of Adam Smith, than you ought to cry up dissipation after that of my Lord Lauderdale. Let us therefore confine ourselves to the observing how things follow and are linked together in the accumulation of capital.

In the first place I remark the major part of accumulations are necessarily slow. All the world, whatever income they may have, must live before they accumulate, and what I here call life is in general more expensive in proportion as we are rich. In most trades and professions, the maintenance and establishment of a family require the whole of the income and oftentimes the capital, and although something yearly may be saved, it is generally very disproportionate to the capital actually employed. An enterpriser who has a hundred thousand francs and industry, gains in ordinary eases and in a moderate time from twelve to fifteen thousand francs. Now with such a capital, and industry which is worth as much, that is to say a fortune of two hundred thousand francs, he is economical if he spends only ten thousand, in which ease he would only save yearly five thousand francs or the twentieth part of his capital.

If you divide this fortune as is often the ease between persons, one of whom furnishes the industry, the other the capital, the saving is then much less, because in that ease two families instead of one have to be maintained from the united profits of the capital and industry.⁽¹⁷⁾ At all events it is only very great fortunes that can make great savings, and very large fortunes are rare in all countries. Capitals cannot therefore increase with a rapidity capable of producing the overthrow of industry.

I cannot subscribe to the fears which make you express, in page 357, "That a country is always more exposed to the rapid increase of the funds destined for the support of the laboring class than of the laboring class itself." Nor mn I frightened at the enormous increase of production which may result from an augmenration (so slow in its nature) of capital. I see on the contrary these new capitals and the incomes they produce distribute themselves in the most favorable manner amongst producers. In the first place the capitalist in augnnenting his capital sees his income increase, which induces greater enjoyments. A capital increased one year buys the following year a little more industrious service. These services being more in demand are paid a little better. A greater number of industrious persons find employ and the reward of their facultics. They work and unproductively consume the produce of their labor, so that if there are more productions created in consequence of this increase of
capital there arc also more productions consumed. Now what is this but an increase of prosperity?

You say (pages 352 and 360) that if the savings have no other object than the increase of capital, "if the capitalists do not increase their enjoyments with their income, they have not a sufficient motive for saving: for men do not save for a philanthropy sake, and merely to make industry prosper." That is true. But what conclusion will you draw from it? If they save, I say they encourage industry and production, and this increase of production distributes itself in a manner very advantageous to the public. If they do not save I know not what to say. But you cannot conclude from that, that producers will be benefitted by it, for what the capitalists would have saved, would still have been spent. By spending it unproductively, the expenditure is not made greater. As to sums accumulated without being productively consumed, for instance, those hoarded up in the miser's coffer, neither Smith, myself, nor any one undertakes to defend this, but they alarm us but little in the first
place, because they are very inconsiderable in comparison to the productive capitals of a Nation, and in the second place because their consumption is no more than suspended. There are no treasures that have not some time or other been spent either productively or unproductively.

I do not know upon what principle you consider reproductive expences, such as for digging canals, agricultural buildings, constructing machines, and paying artists and artisans, as more favorable to producers than improductive expenses such as those which are only for the personal gratification of the prodigal. "So long," you say (page 363,) "as cultivators are disposed to consume the articles of luxury created by the manufacturers, and the manufacturers the articles of luxury created by the cultivators, all is well. But if either class were disposed to economise with a view of bettering their condition and of providing for the establishment of their families, the case would be quite different," (that is to say apparently, that everything would go ill).

"The farmer instead of allowing his wife ribbons, laces, and velvets, would be content with plainer clothing for her, but his economy would take away from the manufacturer the power of purchasing so great a quantity of his produce, and he would no longer find a vent for the produce of land upon which nothing had been spared in labor and amendment. If the manufacturer on his part instead of gratifying his desires by the consumption of sugar, plumbs, and tobacco, wishes to lay up for the future, he cannot succeed, thanks to the parsimony of the farmer, and to the want of demand for the productions of manufacture.

And a little further on (page 365) "The population necessary to furnish clothing for such a society by the help of machines would be reduced to a trifling number, and would absorb but a small part of the excess of a rich and well cultivated territory. There would evidently be a general falling off in the demand, either for productions or population. And whilst it is certain that a proper passion for consumption (unproductive) would preserve a just proportion between the supply and demand, whatever may be the power of production, it: does not appear less clear that an inclination to save must inevitably lead to a production of commodities exceeding what the organisation and habits of such a society would permit them to consume."

You go so far as to ask what would become of the commodities, if every kind of consumption, bread and water excepted, were suspended only for six months⁽¹⁸⁾ and, it is to me in the first instance that you address this question.

In this and the preceding passage you implicitly rest upon the fact, that a produce saved is withdrawn from every kind of consumption, whilst in all the discussions in all the works you attack, in those of Adam Smith, Mr. Ricardo, mine, and even your own,⁽¹⁹⁾ it is established that a produce saved is a value withdrawn from an unproductive consumption to add it to the capital, that is, to that value which we consume, or cause to be consumed reproductively. What would become of the commodities, if every kind, of consumption, bread and water excepted, were suspended for six months? why, Sir, they would sell for the stone amount, for at length what would thereby be added to the amount of the capitals would buy meat, beer, clothes, shirts, shoes and furniture for that class of producers which the sums saved would set to work. But if we lived on bread and water and did not employ our savings? That is, you suppose we should impose upon ourselves generally an
extravagant fast for pleasure and without an object.

What answer, Sir, would you give to him who amongst the number of strange events which may happen in society, should include the ease of the moon's falling upon the earth. A ease not physically impossible. Her rencontre with a suspended comet, or the-mere stoppage of this star in its orbit would be sufficient. Nevertheless I suspect you will think this question rather impertinent, and I confess to you that you will not be altogether wrong.

I admit that this is a method which philosophy does not disown, to push principles to the greatest possible extremity for the purpose of exaggerating them and discovering their errors, but this exaggeration itself is an error when the nature of things alone presents obstacles continually increasing to the excess we imagine, thereby rendering the supposition inadmissible. You oppose to all those who think with Adam Smith that saving is a good, the inconvenience of an excessive saving; but here the excess carries its remedy along with it. Where the capitals become too abundant, the interest which the capitalists derive from them become too low to balance the privations they impose upon themselves by their savings. Safe employment for capital will be difficult to be found; capitals are employed abroad. The common course of nature puts a stop to many accumulations. A great part of those which take place in families in easy circumstances, cease the moment it becomes necessary to provide for the
settlement of the children. The income of the fathers, being reduced by this circumstance, they lose the means of accumulation, at the same time that they lose a part of the motives they had for a