About the Author
Frederic Bastiat (1801-1850) was a French economist, statesman, and author. He was the leader of the free-trade movement in France from its inception in 1840 until his untimely death in 1850. The first 45 years of his life were spent in preparation for five tremendously productive years writing in favor of freedom. Bastiat was the founder of the weekly newspaper, Le Libre Échange, a contributor to numerous periodicals, and the author of sundry pamphlets and speeches dealing with the pressing issues of his day. Most of his writing was done in the years directly before and after the Revolution of 1848—a time when France was rapidly embracing socialism. As a deputy in the Legislative Assembly, Bastiat fought valiantly for the private property order, but unfortunately the majority of his colleagues chose to ignore him. Frederic Bastiat remains one of the great champions of freedom whose writings retain their relevance as we continue to confront the old adversary.
Preface to the
|Distribution of Shares of Increased Production|
|To Owners||To Employees|
|Total Units||Per Cent||Units||Per Cent||Units|
|When total national product is||50||20||10||80||40|
|When total national product is||75||15||12||85||63|
|When total national product is||100||14||14||86||86|
That theory was offered to refute the gloomy "iron law of wages" advanced by Ricardo, as well as Malthus' equally horrible prediction that an increasing population must necessarily face starvation. Bastiat recognized the fact that, in this division of national income, the amounts and percentages going to capital and labor would, for a variety of reasons, vary widely from industry to industry, from country to country, and from time to time. But he was quite positive that the tendency would be in the direction indicated by his figures for the nation that encourages the private accumulation of capital.
This trend that Bastiat predicted in the division of the total production of the nation is just what did happen under increased capital formation in the United States and other countries that more or less follow the concepts of a market economy.
Bastiat arrived at his theory by observing that new tools and new methods are more productive than older tools and former methods, and that competition tends to cause most of the resulting benefits to be passed along in higher wages or lower prices, or both. In either instance, real wages are thereby increased. Like many of his predecessors, Bastiat also noted that interest on capital is likely to decline as capital becomes more plentiful. (History does not record the first person who discovered this primary law of supply and demand.) At any rate, the verdict of the Twentieth Century to date refutes the gloomy predictions of Ricardo, who argued that wages always tend toward the lowest level needed to sustain the required working force at a minimum standard of health. Bastiat's optimistic theory that real wages tend to rise constantly in a free market is more in accord with reality.
Thus, according to Bastiat, the interests of capital and labor are harmonious, not antagonistic. Each is dependent on the other. Both gain by working harmoniously together to increase both capital and production, even though the employees tend to get the lion's share of the increased production. Government interference in the long run will injure the interests of both owners and workers, but most especially the workers.
In his major work, Bastiat discussed the "harmony of capital" in almost every chapter, and from various viewpoints. His treatment of the subject is, by far, the most convincing part of his book. While it is doubtless correct to observe that Bastiat contributed nothing new to the actual theory of capital, it is perhaps equally correct to suggest that his presentation and development of several facets of the subject are superior to those of his predecessors and teachers—Smith, Say, and others.
We have already noted one of his "harmonies of capital" above. Here is another. If the market is free, said Bastiat, no one can accumulate capital (excluding gifts) unless he renders a service to someone else. The people who have the capital (including the person who has only one dollar) won't part with it unless they are offered a product or service that they value as highly as the capital. In reality, said Bastiat, capital is always put at the service of other people who do not own it, and it is always used to satisfy a desire (good or bad) that other people want satisfied. In that important sense, all capital is truly owned in common by the entire community—and the greater the accumulation of capital, the more its benefits are shared in common.
"Here is a worker whose daily wages is four francs. With two of them, he can purchase a pair of stockings. If he alone had to manufacture those stockings completely—from the growing of the cotton to the transporting of it to the factory and to the spinning of the threads into material of the proper quality and shape—I suspect that he would never accomplish the task in a lifetime." Bastiat offered several other similar stories and parables based on that same idea of the benefits that come to all from the increasing division of labor that automatically follows the accumulation of capital.
Contrary to most of his classical predecessors, Bastiat was almost totally concerned with the interests of the consumer. While he wished to render justice to the producer (the capitalist and the entrepreneur), he seemed concerned with him only in passing. Perhaps that can be explained by the fact that the socialists of Bastiat's day were in the ascendancy—and Bastiat desired to beat them at their own game by showing that the workers and consumers (rather than the owners of capital) are the chief beneficiaries of private ownership, competition, free trade, interest, profits, rent, capital accumulation, and so on.
The harmony that Bastiat found in all this was the same as that demonstrated by Adam Smith and the physiocrats: In serving his own selfish interests, the producer has no choice but to serve first the interests of the consumer, if the market is free. Each person may be working only to benefit himself but, doubtless unknown to himself, he is really working primarily to satisfy the needs and desires of others.
By both observation and reason, Bastiat was led to the conclusion that man tends to satisfy his wants with the least possible effort. That would seem self-evident, but Bastiat used that simple axiom to show that a popular way to satisfy one's wants with minimum effort is to vote for subsidies and protection. Bastiat pointed out the awkward fact that such a solution is contrary to the wants and actions of the persons who must pay the resulting higher taxes and higher prices. This government path to satisfying one's wants is antagonistic, rather than harmonious, and is thus self-defeating in the long run. It will result in less than maximum production by both those who must pay the subsidy and those who receive it. When the government interferes, said Bastiat, the natural harmony of the free and productive market is destroyed, and the people waste their energies in attempting to win political power in order to exploit each other. "Everybody wishes to live at the expense of the state, but they forget that the state lives at the expense of everybody." In another book, Bastiat also stated that idea in this way: "The state is the great fiction by which everybody tries to live at the expense of everybody else."
In his Harmonies, Bastiat felt that he had made a major contribution to political economy by his definition of value. He felt that his concept should reconcile the conflicting opinions of all economists—including even the socialists and communists! He introduced the subject by making a sharp distinction between utility and value. Under utility, he listed the sun, water, and undeveloped land. According to him, none of the gifts of Nature have any value—until human effort has been applied to them. While he specifically rejected the labor theory of value, he may well have endorsed it unknowingly under another name—service.
According to Bastiat, service is the source of all value, and any exchange implies equal value. Water has no value in its native state. But the building of a well and the hauling of the water to the consumers (services) have value. And the purchaser pays for it with equal services, even though it may be in the intermediate form of money that facilitates the transferring of past, present, and future services.
Bastiat felt compelled to defend the rightness and justice of every voluntary exchange. Thus, he was most happy with his idea that the service supplied by the man who accidentally discovers a valuable diamond is worth a large price (other services) because it saves the purchaser from the effort that is usually connected with the securing of such a gem.
Bastiat just ignored the fact that the value to the purchaser would be the same, whether the seller had found the diamond, inherited it, or worked for several years digging it out of the ground. Thus, the value of an article is clearly not directly related to the "service" supplied by the seller himself, and Bastiat's effort to reconcile that fact with his general theory led him completely astray in this area.
In his chapters on "Exchange" and "Value," Bastiat quoted two men who clearly (and perhaps first) saw the true relationship between exchange and value—and he then scoffed at both of them. The first was Étienne Bonnot de Condillac, 1714-1780: "From the very fact that an exchange is made, it follows that there must be a profit for each of the contracting parties; otherwise the exchange would not take place. Thus, each exchange represents two gains for humanity."
The second quotation cited by Bastiat was by Heinrich Friedrich von Storch, 1766-1835: "Our judgment enables us to discover the relation that exists between our wants and the utility of things. The determination that our judgment forms upon the utility of things also determines their value."
These two statements combined are perhaps the basic concepts of exchange and value later developed so brilliantly by the Austrian school of economists. That is, the value of a product or service is purely subjective on the part of the purchaser; neither seller nor buyer will make the exchange unless each values what he receives more than what he gives up; there is no automatic relationship between value and the labor or capital that goes into the product or service; no one can determine the value of any product or service for another person.
Thus, Bastiat had full opportunity to make a vital contribution to economic thought by developing these two ideas, with which he was obviously familiar. Most unfortunately, he missed the opportunity.
Even so, perhaps Bastiat supplies the connecting link between the English classicists, with their objective theory of value, and the Austrians, with their subjective theory based on the universal actions of men in real life. At least, the following series of quotations extracted from various pages of his Harmonies indicates clearly that he had advanced far beyond the former and was making excellent progress toward the latter.
"The subject of political economy is MAN.... [who is] endowed with the ability to compare, judge, choose, and act; which implies that men may form right and wrong judgments, and make good and bad choices..... This faculty, given to men and to men alone, to work for each other, to transmit their efforts, and to exchange their services through time and space, with all the infinite and varied combinations thereby involved, is precisely what constitutes economic science, identifies its origin, and determines its limits..... The objects of political economy [the actions of men in the exchange of their goods and services] cannot be weighed or measured..... Exchange is necessary in order to determine value..... Owing to ignorance, what one man values may be despised by another..... A man's happiness and well-being are not measured by his efforts, but by his satisfactions, and this also holds true for society at large..... It may happen, and frequently does, that the service we esteem highly is in reality harmful to us; value depends on the judgment we form of it..... In an exchange society, man seeks to realize value irrespective of utility. The commodity he produces is not intended to satisfy his own wants, and he has little interest in how useful it may be. It is for the purchaser to judge that. What concerns the producer is that it should have maximum value in the market..... It is in vain that we attempt to separate choice and responsibility."
In addition to the ideas expressed above, Bastiat also developed in great detail the theory that competition will cause all of the gifts of Nature to become widespread—including, of course, land and all other natural resources.
Like almost all economists of his time, Bastiat was obsessed with this problem of rent on land. If it could not be justified and harmonized, he said, then the question asked by the socialist Proudhon was correct: "Who is entitled to the rent on land? Why, of course, the one who made the land. Then who made it? God. In that case, would-be owner, get off."
Bastiat's defense of rent covers many pages, but it adds up to this: Land rent is justified because the owners of the land (current and past) have rendered a valuable service. They have cleared the land, drained it, and made it suitable for planting. They have paid taxes to have roads built to it. If the amount of labor and capital that has been expended on the agricultural lands of France were capitalized, Bastiat contended, the current return in the form of rent would be considered a most unattractive investment today. Therefore, the owners of land do not enjoy an unearned income—or, at least, they would not if the market were free. Bastiat argued that any "unearned" rent was, like protected prices for manufactured products, the result of government interference with domestic and foreign trade. On the subject of rent, Bastiat was a physiocrat, pure and simple. He also used this same idea to defend the necessity and justice of a return on capital in general; all current capital, he said, merely represents past labor that has been saved and is rendering a service today.
While Bastiat's arguments on land rent are most persuasive—and were doubtless true in the context presented—they were too carefully selected to prove any over-all principle. For it is undeniably true that land (like other products and services) can and does vary widely in price for a variety of reasons, and that the owner of the land can reap a profit (or suffer a loss) even though he has done no work at all on it. But, once again, it does not follow that Bastiat was wrong in imagining that harmony can be found in the private ownership of land and the charging of a free-market rent for its use.
Bastiat was particularly anxious to refute the gloomy theories of Ricardo and Malthus in regard to wages, rent, population, and starvation. He felt that his theory that labor receives an increasing share from additional capital accumulation was an answer to Ricardo on wages and to Malthus on starvation. He answered Ricardo directly on the subject of land and rent. Finally, he offered the opinion that if man were free—truly free—with God's help he would discover harmonious ways to keep the population from increasing beyond the ability of science to discover new ways to feed it.
Bastiat has no great standing among leading economists as an innovator or an original thinker in the field of economic theory. That verdict may be justified. But his development of his central idea of a universal harmony in all areas of human relationships led Gide and Rist to write, "The fundamental doctrines of [the liberal or optimistic school] were definitely formulated about the same time, though in very different fashion of course, in the Principles of Stuart Mill in England and the Harmonies of Bastiat in France."
Notes to "To the Youth of France"
Eagerness to learn, the need to believe in something, minds still immune to age-old prejudices, hearts untouched by hatred, zeal for worthy causes, ardent affections, unselfishness, loyalty, good faith, enthusiasm for all that is good, beautiful, sincere, great, wholesome, and spiritual—such are the priceless gifts of youth. That is why I dedicate this book to the youth of France. The seed that I now propose to sow must be sterile indeed if it fails to quicken into life upon soil as propitious as this.
My young friends, I had intended to present you with a finished painting; I give you instead only a rough sketch. Forgive me. For who in these times can complete a work of any great scope? Here is the outline. Seeing it, may some one of you exclaim, like the great artist: Anch'io son pittore,*3 and, taking up the brush, impart to my unfinished canvas color and flesh, light and shade, feeling and life.
You will think that the title of this work, Economic Harmonies, is very ambitious. Have I been presumptuous enough to propose to reveal the providential plan within the social order and the mechanism of all the forces with which Providence has endowed humanity to assure its progress?
Certainly not; but I have proposed to put you on the road to this truth: All men's impulses, when motivated by legitimate self-interest, fall into a harmonious social pattern. This is the central idea of this work, and its importance cannot be overemphasized.
It was fashionable, at one time, to laugh at what is called the social problem; and, it must be admitted, certain of the proposed solutions were only too deserving of derision. But there is surely nothing laughable about the problem itself; it haunts us like Banquo's ghost at Macbeth's banquet, except that, far from being silent, it cries aloud to terror-stricken society: Find a solution or die!
Now the nature of this solution, as you readily understand, will depend greatly upon whether men's interests are, in fact, harmonious or antagonistic to one another.
If they are harmonious, the answer to our problem is to be found in liberty; if they are antagonistic, in coercion. In the first case, it is enough not to interfere; in the second, we must, inevitably, interfere.
But liberty can assume only one form. When we are certain that each one of the molecules composing a liquid has within it everything that is needed to determine the general level, we conclude that the simplest and surest way to obtain this level is not to interfere with the molecules. All those who accept as their starting point the thesis that men's interests are harmonious will agree that the practical solution to the social problem is simply not to thwart these interests or to try to redirect them.
Coercion, on the other hand, can assume countless forms in response to countless points of view. Therefore, those schools of thought that start with the assumption that men's interests are antagonistic to one another have never yet done anything to solve the problem except to eliminate liberty. They are still trying to ascertain which, out of all the infinite forms that coercion can assume, is the right one, or indeed if there is any right one. And, if they ever do reach any agreement as to which form of coercion they prefer, there will still remain the final difficulty of getting all men everywhere to accept it freely.
But, if we accept the hypothesis that men's interests are by their very nature inevitably bound to clash, that this conflict can be averted only by the capricious invention of an artificial social order, then the condition of mankind is indeed precarious, and we must fearfully ask ourselves:
1. Shall we be able to find someone who has invented a satisfactory form of coercion?
2. Will this man be able to win over to his plan the countless schools of thought that have conceived of other forms?
3. Will mankind submit to this form, which, according to our hypothesis, must run counter to every man's self-interest?
4. Assuming that humanity will consent to being trigged out in this garment, what will happen if another inventor arrives with a better garment? Are men to preserve a bad social order, knowing that it is bad; or are they to change their social order every morning, according to the whims of fashion and the ingeniousness of the inventors?
5. Will not all the inventors whose plans have been rejected now unite against the accepted plan with all the better chance of destroying it because, by its very nature and design, it runs counter to every man's self-interest?
6. And, in the last analysis, is there any one human force capable of overcoming the fundamental antagonism which is assumed to be characteristic of all human forces?
I could go on indefinitely asking such questions and could, for example, bring up this difficulty: If you consider individual self-interest as antagonistic to the general interest, where do you propose to establish the acting principle of coercion? Where will you put its fulcrum? Will it be outside of humanity? It would have to be, in order to escape the consequences of your law. For if you entrust men with arbitrary power, you must first prove that these men are molded of a different clay from the rest of us; that they, unlike us, will never be moved by the inevitable principle of self-interest; and that when they are placed in a situation where there can be no possible restraint upon them or any resistance to them, their minds will be exempt from error, their hands from greed, and their hearts from covetousness.
What makes the various socialist schools (I mean here those schools that look to an artificial social order for the solution of the social problem) radically different from the economist*4 school is not some minor detail in viewpoint or in preferred form of government; it is to be found in their respective points of departure, in their answers to this primary and central question: Are men's interests, when left to themselves, harmonious or antagonistic?
It is evident that the socialists set out in quest of an artificial social order only because they deemed the natural order to be either bad or inadequate; and they deemed it bad or inadequate only because they felt that men's interests are fundamentally antagonistic, for otherwise they would not have had recourse to coercion. It is not necesary to force into harmony things that are inherently harmonious.
Therefore they have found fundamental antagonisms everywhere:
Between the property owner and the worker.
Between capital and labor.
Between the common people and the bourgeoisie.
Between agriculture and industry.
Between the farmer and the city-dweller.
Between the native-born and the foreigner.
Between the producer and the consumer.
Between civilization and the social order.
And, to sum it all up in a single phrase:
Between personal liberty and a harmonious social order.
And this explains how it happens that, although they have a kind of sentimental love for humanity in their hearts, hate flows from their lips. Each of them reserves all his love for the society that he has dreamed up; but the natural society in which it is our lot to live cannot be destroyed soon enough to suit them, so that from its ruins may rise the New Jerusalem.
I have already stated that the economist school, on the contrary, starting from the assumption that there is a natural harmony among men's interests, reaches a conclusion in favor of personal liberty.
Still, I must admit, if economists, generally speaking, do advocate personal liberty, it is not, unfortunately, equally true that their principles firmly establish their initial premise that men's interests are harmonious.
Before going further, and in order to forewarn you against the conclusions that will inevitably be drawn from this admission, I must say a word regarding the respective positions of the socialists and the political economists.
It would be senseless for me to say that the socialists have never discovered truth, and that the political economists have never fallen into error.
What makes the great division between the two schools is the difference in their methods. Socialism, like astrology and alchemy, proceeds by way of the imagination; political economy, like astronomy and chemistry, proceeds by way of observation.
Two astronomers observing the same phenomenon may not reach the same conclusion. Despite this temporary disagreement they feel the bond of a common method that sooner or later will bring them together. They recognize that they belong to the same communion. But between the astronomer who observes and the astrologer who imagines, there stretches an unbridgeable gulf, although at times some common understanding may perchance be reached.
The same is true of political economy and socialism.
The economists observe man, the laws of his nature and the social relations that derive from these laws. The socialists conjure up a society out of their imagination and then conceive of a human heart to fit this society.
Now, if science cannot be wrong, scientists can be. I therefore do not deny that the economists can make faulty observations, and I shall even add that in the beginning they inevitably did.
But note what happens. If men's interests are actually harmonious, it follows that any observation that would lead logically to the opposite conclusion—namely, that they are antagonistic—has been faulty. What then are the socialists' tactics? They collect a few faulty observations from the economists' works, deduce all the conclusions to be derived from them, and then prove that they are disastrous. Up to this point they are within their rights. Next, they raise their voices in protest against the observer—Malthus*5 or Ricardo,*6 for example. They are still within their rights. But they do not stop here. They turn against the science of political economy itself; they accuse it of being heartless and of desiring evil. In so doing, they go against reason and justice; for science is not responsible for the scientist's faulty observations. Finally, they go even farther yet. They even accuse society itself and threaten to destroy it and remake it. And why? Because, they say, science proves that our present society is on the road to disaster. In this they outrage good sense; for, either science is not mistaken—and in that case why attack it?—or else it is mistaken, and in that case they had best leave society alone, since it is in no danger.
But these tactics, however illogical, can nonetheless be most harmful to the science of political economy, particularly should those who espouse it give way to the understandable but unfortunate impulse of blindly supporting the opinions of one another and of their predecessors on all points. Science is a queen whose court etiquette should be based on a free and easy give-and-take. An atmosphere of bias and partisanship is fatal to it.
As I have already said, in political economy every erroneous proposition unfailingly leads to the conclusion that there are antagonistic elements in the social order. On the other hand, the numerous writings of the economists, including even the most eminent, cannot fail to contain a few false propositions. In the interest of our science and of society it is our duty to point these out and to correct them. To continue obstinately to defend them for the sake of preserving the prestige of the whole school would mean exposing not only ourselves, which is unimportant, but the truth itself, which is of greater consequence, to the attacks of the socialists.
To continue, then: I state that the political economists advocate liberty. But for the idea of liberty to win men's minds and hearts, it must be firmly based on the premise that men's interests, when left to themselves, tend to form harmonious combinations and to work together for progress and the general good.
Now, some of the economists, and among them some who carry considerable authority, have advanced propositions that step by step lead logically to the opposite conclusion, that absolute evil exists, that injustice is inevitable, that inequality will necessarily increase, that pauperism is unavoidable, etc.
For example, there are, to my knowledge, very few political economists who have not attributed value to natural resources, to the gifts that God has lavished without cost on his creature, man. The word "value" implies that we surrender the things possessing it only in return for payment. Therefore, we see men, especially the landowners, selling God's bounty in return for other men's toil, and receiving payment for utilities, that is, for the means of satisfying human wants, without contributing any of their own labor in return—an obvious, but necessary, injustice, say these writers.
Then there is the famous theory of Ricardo. It can be summarized in this fashion: The price of foodstuffs is based on the amount of labor required to produce them on the poorest soils under cultivation. Now, as population increases, it is necessary to turn to less and less fertile soils. Hence, all humanity (except the landowner) is forced to exchange a constantly increasing amount of labor for the same quantity of foodstuffs; or, what comes to the same thing, to receive a constantly decreasing quantity of foodstuffs for the same amount of labor; whereas the owners of the soil see their income rising with each new acre of inferior land that is put into cultivation. Conclusion: increasing wealth for the leisure classes; increasing poverty for the laborers: or, inevitable inequality.
Then there is the even more famous theory of Malthus. Population tends to increase more rapidly than the means of subsistence, and this trend is to be observed at any given moment in the history of mankind. Now, men cannot live in peace and happiness unless they have enough to eat. There are only two checks to this constant threat of excess population: a decrease in the birth rate or an increase in the mortality rate, with all its attendant horrors. Moral restraint, in order to be effective, must be observed everywhere, which is more than can be expected. There remains, then, only the positive check of vice, poverty, war, pestilence, famine, and death; that is, inevitable pauperism.
I shall not mention other systems of less general import that also lead to desperately discouraging conclusions. For example, M. de Tocqueville*7 and many others like him declare that if we admit the right of primogeniture, we end with a very small and rigid aristocracy; if we do not admit it, we end with the country divided into tiny, unproductive individual holdings.
And the remarkable thing is that these four melancholy theories do not in any way come into direct conflict with one another. If they did, we could find consolation in the fact that they are mutually destructive. But such is not the case; they agree, they fit into the same general theory, which, supported by numerous and plausible facts, apparently explains the convulsive state of modern society and, since it is endorsed by a number of eminent authorities, presents itself to our discouraged and bewildered minds with terrifying conviction.
It remains to be seen how the exponents of this gloomy theory have at the same time been able to maintain the harmony of men's interests as their premise and deduce personal liberty as their conclusion. For certainly, if humanity is inevitably impelled toward injustice by the laws of value, toward inequality by the laws of rent, toward poverty by the laws of population, and toward sterilization by the laws of heredity, we cannot say that God's handiwork is harmonious in the social order, as it is in the physical universe; we must instead admit, with heads bowed in grief, that He has seen fit to establish His social order on revolting and irremediable discord.
You must not believe, my young friends, that the socialists have refuted and rejected the theory that, in order to avoid offending anyone, I shall call the theory of discord. On the contrary: despite their protests, they have accepted it as true; and, for the very reason that they accept it as true, they propose to substitute coercion for freedom, an artificial social order for the natural social order, and a work of their own contrivance for the handiwork of God. They say to their opponents (than whom, in this respect, I am not sure that they are not more logical): If, as you have declared, men's interests when left to themselves did tend to combine harmoniously, we could only welcome and extol freedom as you do. But you have proved irrefutably that these interests, if allowed to develop freely, lead mankind toward injustice, inequality, pauperism, and sterility. Therefore, we react against your theory precisely because it is true. We wish to destroy society as it now is precisely because it does obey the inevitable laws that you have described; we wish to try what we can do, since God's power has failed.
Thus, there is agreement in regard to the premises. Only in regard to the conclusion is there disagreement.
The economists to whom I have referred say: The great laws of Providence are hastening society along the road to disaster; but we must be careful not to interfere with their action, for they are fortunately counteracted by other secondary laws that postpone the final catastrophe, and any arbitrary interference on our part would only weaken the dike without lowering the great tidal wave that will eventually engulf us.
The socialists say: The great laws of Providence are hastening society along the road to disaster; we must abolish them and choose in their place other laws from our inexhaustible arsenal.
The Catholics say: The great laws of Providence are hastening society along the road to disaster; we must escape them by renouncing worldly desires, taking refuge in self-abnegation, sacrifice, asceticism, and resignation.
And, amid the tumult, the cries of anguish and distress, the appeals to revolt or to the resignation of despair, I raise my voice to make men hear these words, which, if true, must silence all protesting voices: It is not true that the great laws of Providence are hastening society along the road to disaster.
Thus, while all schools stand divided on the conclusions they draw from their common premise, I deny their premise. Is not this the best means of ending the division and the controversy?
The central idea of this work, the harmony of men's interests, is a simple one. And is not simplicity the touchstone of truth? The laws governing light, sound, motion, seem to us all the more true because they are simple. Why should the same thing not be true of the law of men's interests?
It is conciliatory. For what can be more conciliatory than to point out the ties that bind together industries, classes, nations, and even doctrines?
It is reassuring, since it exposes what is false in those systems that would have us believe that evil must spread and increase.
It is religious, for it tells us that it is not only the celestial but also the social mechanism that reveals the wisdom and declares the glory of God.
It is practical, for certainly no maxim is easier to put into practice than this: Let men labor, exchange, learn, band together, act, and react upon one another, since in this way, according to the laws of Providence, there can result from their free and intelligent activity only order, harmony, progress, and all things that are good, and increasingly good, and still better, and better yet, to infinite degree.
Now there, you will say, is the optimism of the economists for you! They are so completely the slaves of their own systems that they shut their eyes to the facts for fear of seeing them. In the face of all the poverty, injustice, and oppression that desolate the human race, they go on imperturbably denying the existence of evil. The smell of the gunpowder burned in insurrections does not reach their indifferent senses; for them the barricades in the streets are mute; and though society should crumble and fall, they will continue to repeat: "All is for the best in the best of all possible worlds."
Certainly not. We do not think that all is for the best.
I have complete faith in the wisdom of the laws of Providence, and for that reason I have faith in liberty.
The question is whether or not we have liberty.
The question to determine is whether these laws act with full force, or whether their action is not profoundly disrupted by the contrary action of institutions of human origin.
Deny evil! Deny pain! Who could? We should have to forget that we are talking about mankind. We should have to forget that we ourselves are men. For the laws of Providence to be considered as harmonious, it is not necessary that they exclude evil. It is enough that evil have its explanation and purpose, that it be self-limiting, and that every pain be the means of preventing greater pain by eliminating whatever causes it.
Society is composed of men, and every man is a free agent. Since man is free, he can choose; since he can choose, he can err; since he can err, he can suffer.
I go further: He must err and he must suffer; for his starting point is ignorance, and in his ignorance he sees before him an infinite number of unknown roads, all of which save one lead to error.
Now, all error breeds suffering. And this suffering either falls upon the one who has erred, in which case it sets in operation the law of responsibility; or else it strikes innocent parties, in which case it sets in motion the marvelous reagent that is the law of solidarity.
The action of these laws, combined with the ability that has been given us of seeing the connection between cause and effect, must bring us back, by the very fact of suffering, to the path of righteousness and truth.
Thus, we not only do not deny that evil exists; we recognize that it has its purpose in the social order even as in the physical universe.
But if evil is to fulfill this purpose, the law of solidarity must not be made to encroach artificially upon the law of responsibility; in other words, the freedom of the individual must be respected.
Now, if man-made institutions intervene in these matters to nullify divine law, evil nonetheless follows upon error, but it falls upon the wrong person. It strikes him whom it should not strike; it no longer serves as a warning or a lesson; it is no longer self-limiting; it is no longer destroyed by its own action; it persists, it grows worse, as would happen in the biological world if the imprudent acts and excesses committed by the inhabitants of one hemisphere took their toll only upon the inhabitants of the other hemisphere.
Now, this is exactly the tendency not only of most of our governmental institutions but also and to an even greater degree of those institutions that are designed to serve as remedies for the evils that afflict us. Under the philanthropic pretext of fostering among men an artificial kind of solidarity, the individual's sense of responsibility becomes more and more apathetic and ineffectual. Through improper use of the public apparatus of law enforcement, the relation between labor and wages is impaired, the operation of the laws of industry and exchange is disturbed, the natural development of education is distorted, capital and manpower are misdirected, minds are warped, absurd demands are inflamed, wild hopes are dangled before men's eyes, unheard of quantities of human energy are wasted, centers of population are relocated, experience itself is made ineffective; in brief, all interests are given artificial foundations, they clash, and the people cry: You see, all men's interests are antagonistic. Personal liberty causes all the trouble. Let us execrate and stifle personal liberty.
And so, since liberty is still a sacred word and still has the power to stir men's hearts, her enemies would strip her of her name and her prestige and, rechristening her competition, would lead her forth to sacrifice while the applauding multitudes extend their hands to receive their chains of slavery.
It is not enough, then, to set forth the natural laws of the social order in all their majestic harmony; it is also necessary to show the disturbing factors that nullify their action. That is the task I have undertaken in the second part of this work.
I have tried to avoid controversy. In so doing, I have undoubtedly missed the opportunity of presenting my principles with the comprehensiveness that comes from thorough discussion. But by drawing the reader's attention to the many details of my digressions, would I not have run the risk of confusing his view of the whole? If I present the edifice as it actually is, what does it matter how it has appeared to others, even to those who taught me how to view it?
And now I confidently appeal to those men of all persuasions who place justice, truth, and the general welfare above their own particular systems.
Economists, my conclusion, like yours, is in favor of individual liberty; and if I undermine some of the premises that have saddened your generous hearts, yet you will perhaps discover in my work additional reason for loving and serving our sacred cause.
Socialists,*8 you place your faith in association. I call upon you, after you have read this work, to say whether the present social order, freed from its abuses and the obstacles that have been put in its way—enjoying, in other words, the condition of freedom—is not the most admirable, the most complete, the most lasting, the most universal, and the most equitable of all associations.
Egalitarians,*9 you recognize only one principle, the reciprocity of services. Let human transactions once be free, and I declare that they are, or can be, nothing more nor less than a reciprocal exchange of services, constantly decreasing in cost, or value, constantly increasing in utility.
Communists,*10 you desire that men, as brothers, may enjoy in common the benefits that Providence has lavished upon them all. I propose to demonstrate that the present social order has only to achieve freedom in order to realize and go beyond your fondest hopes and prayers; for in this social order all things are common to all, provided only that every man either himself go to the trouble to gather in God's gifts (which is only natural), or else that he render equivalent service to those who go to this trouble for him (which is only just).
Christians of all communions, unless you alone of all mankind doubt the divine wisdom as manifested in the most magnificent of God's works that it is given us to know, you will not find one word in this book that contravenes the strictest tenet of your moral code or the most mystical of your dogmas.
Property owners, however vast may be your possessions, if I prove that your rights, which people today so vehemently contest, are confined, as are those of the simplest manual worker, to receiving services in return for real services performed by you or your forefathers, then these rights of yours will henceforth be beyond challenge.
Workers, I promise to prove that you do enjoy the fruits of the land that you do not own, and with less pain and effort on your part than you could cultivate them by your own labor on land given you in its original state, unimproved by other men's labor.
Capitalists and laborers, I believe that I can establish this law: "In proportion as capital accumulates, the absolute share of capital in the total returns of production increases, and its relative share decreases; labor also finds that its relative share increases and that its absolute share increases even more sharply. The opposite effect is observed when capital is frittered away."**1 If this law can be established, it is clear that we may conclude that the interests of workers and employers are harmonious.
Disciples of Malthus, sincere but misjudged lovers of your fellow man, you whose only fault is your desire to protect humanity against the fatal effects of a law that you consider inevitable, I have a more reassuring law to offer you in its place: "Other things being equal, increased population means increased efficiency in the means of production." If such is the case, you will certainly not be the ones to complain that the crown of thorns has dropped from the brow of our beloved science.
Predatory men, you who, by force or fraud, in spite of the law or through the agency of the law, grow fat on the people's substance; you who live by the errors you disseminate, by the ignorance you foster, by the wars you foment, by the restraints you impose on trade; you who tax the labor you have made unproductive, making it lose even more than you snatch away; you who charge for the obstacles you set up, so as to charge again for those you subsequently take down; you who are the living embodiment of selfishness in its bad sense; parasitical excrescences of faulty policies, prepare the corrosive ink of your critique: to you alone I can make no appeal, for the purpose of this book is to eliminate you, or rather to eliminate your unjust claims. However much we may admire compromise, there are two principles between which there can be no compromise: liberty and coercion.
If the laws of Providence are harmonious, they can be so only when they operate under conditions of freedom, for otherwise harmony is lacking. Therefore, when we perceive something inharmonious in the world, it cannot fail to correspond to some lack of freedom or justice. Oppressors, plunderers, you who hold justice in contempt, you cannot take your place in the universal harmony, for you are the ones who disrupt it.
Does this mean that the effect of this book would be to weaken the power of government, endanger its stability, lessen its authority? The goal I have in view is precisely the opposite. But let us understand one another.
The function of political science is to determine what should and what should not fall under government control; and in making this important distinction, we must not lose sight of the fact that the state always acts through the instrumentality of force. Both the services it renders us and those it makes us render in return are imposed upon us in the form of taxes.
The question then amounts to this: What are the things that men have the right to impose upon one another by force? Now, I know of only one, and that is justice. I have no right to force anyone to be religious, charitable, well educated, or industrious; but I have the right to force him to be just: this is a case of legitimate self-defense.
Now, there cannot exist for a group of individuals any new rights over and above those that they already possessed as individuals. If, therefore, the use of force by the individual is justified solely on grounds of legitimate self-defense, we need only recognize that government action always takes the form of force to conclude that by its very nature it can be exerted solely for the maintenance of order, security, and justice.
All government action beyond this limit is an encroachment upon the individual's conscience, intelligence, and industry—in a word, upon human liberty.
Accordingly, we must set ourselves unceasingly and relentlessly to the task of freeing the whole domain of private activity from the encroachments of government. Only on this condition shall we succeed in winning our liberty or assuring the free play of the harmonious laws that God has decreed for the development and progress of the human race.
Will the power of government be weakened by these restrictions? Will it lose stability as it loses some of its vastness? Will it have less authority because it will have fewer functions? Will it be the object of less respect because it will be the object of fewer grievances? Will it become more the puppet of special interests when it has reduced the enormous budgets and the coveted patronage that are the special interests' lure? Will it be exposed to greater dangers when it has less responsibility?
On the contrary: it seems evident to me that to restrict the public police force to its one and only rightful function, but a function that is essential, unchallenged, constructive, desired and accepted by all, is the way to win it universal respect and co-operation. Once this is accomplished, I cannot see from what source could come all our present ills of systematic obstructionism, parliamentary bickering, street insurrections, revolutions, crises, factions, wild notions, demands advanced by all men to govern under all possible forms, new systems, as dangerous as they are absurd, which teach the people to look to the government for everything. We should have an end also to compromising diplomacy, to the constant threat of war, and the armed peace that is nearly as disastrous, to crushing and inevitably inequitable taxation, to the ever increasing and unnatural meddling of politics in all things, and to that large-scale and wholly artificial redistribution of capital and labor which is the source of needless irritation, of constant ups and downs, of economic crises and setbacks. All these and a thousand other causes of disturbances, friction, disaffection, envy, and disorder would no longer exist; and those entrusted with the responsibility of governing would work together for, and not against, the universal harmony. Harmony does not exclude evil, but it reduces evil to the smaller and smaller area left open to it by the ignorance and perversity of our human frailty, which it is the function of harmony to prevent or chastise.
Young men, in these times when a lamentable skepticism appears to be the effect and the punishment of our intellectual anarchy, I should deem myself happy if the reading of this book would stir you to utter those reassuring words, so sweet to the lips, which are not only a refuge from despair but a positive force, strong enough, we are told, to remove mountains, those words that begin the Christian's profession of faith: I believe. I believe, not with blind and submissive faith, for we are not here concerned with the mysteries of revelation; but with reasoned scientific faith, as is proper in matters left to man's own inquiry and investigation. I believe that He who designed the physical world has not seen fit to remain a stranger to the social world. I believe that His wisdom extends to human agents possessed of free will, that He has been able to bring them together and cause them to move in harmony, even as He has done with inert molecules. I believe that His providence shines forth at least as clearly in the laws to which men's wills and men's interests are subject as in the laws that He has decreed for mass or velocity. I believe that everything in society, even that which inflicts pain, is a source of improvement and progress. I believe that evil ends in good and hastens its coming, whereas the good can never end in evil, and therefore must eventually triumph. I believe that the inevitable trend of society is toward a constantly rising physical, intellectual, and moral level shared by all mankind. I believe, if only man can win back his freedom of action and be allowed to follow his natural bent without interference, that his gradual, peaceful development is assured. I believe these things, not because I desire them or because they satisfy the longings of my heart, but because after mature reflection my intellect gives them its full consent.
Ah! if ever you utter these words, I believe, you will be eager to carry them to others, and the social problem will soon be solved, for despite all that is said, its solution is simple. Men's interests are harmonious; therefore, the answer lies entirely in this one word: freedom.
|Capital's Share||Labor's Share||Total|
Of course, these ratios are intended to serve only as an illustration.
NOTES TO CHAPTER 1
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