Economic Harmonies

Disturbing Factors

18

Where would humanity now be if violence, guile, oppression, and fraud had never at any time or in any form left their ugly mark on man’s transactions?

Would justice and liberty have inevitably given rise to inequality and monopoly?

To learn the answer to these questions, it was necessary, it seemed to me, to study the essential nature of human transactions, their origin, their reason, their effects, and the effects arising from these effects on down to the final result; and, for the study to be valid, it was necessary to exclude the contingent disturbances that are produced by injustice, for it will be admitted that injustice does not form an integral part of free and voluntary transactions.

It can well be maintained that it was inevitable that injustice should come into the world, that society could not have escaped it; and, granted man’s nature, with his passions, his selfishness, his original ignorance and improvidence, I believe it. Hence, we shall also have to study the nature, origin, and effects of injustice.

But it is nonetheless true that the science of economics must begin by expounding the theory of human transactions on the assumption that they are completely free and voluntary, even as the physiologist expounds the nature and interrelation of our bodily organs without regard for the disturbing factors that modify these interrelations.

We believe that services are exchanged for services; we believe that the great desideratum is the equivalence of the services exchanged.

We believe that this equivalence is most likely to be established when transactions are voluntary and every man is allowed to judge for himself.

We know that men can be mistaken, but we also know that they can correct their errors; and we believe that the longer an error has persisted, the sooner we may expect to see it corrected.

We believe that whatever restricts liberty disturbs the equivalence of services, and that whatever disturbs the equivalence of services produces excessive inequality, the unmerited wealth of some, the no less undeserved poverty of others, a concomitant decrease in the general wealth, as well as hatred, discord, strife, and revolution.

We shall not go so far as to say that liberty—or the equivalence of services—produces absolute equality, for we do not believe in absolutes where man is concerned. But we do believe that liberty tends to bring all men closer together and to provide them with a constantly rising standard of living.

We believe that what inequality may remain, under a free system, is the result of fortuitous circumstances or the consequence of faults or vices, or is compensated for by nonmonetary advantages, and consequently cannot give rise to resentment.

In brief, we believe that
freedom is
harmony.

But in order to ascertain whether this harmony exists in reality or is a figment of our imagination, whether we actually observe it or merely long for it, it was necessary to subject free and voluntary transactions to the test of scientific inquiry; it was necessary to study the facts, their interrelations, and their consequences.

This is what we have done.

We have seen that, although countless obstacles stood between man’s wants and his satisfactions, so that in isolation he could not have survived, yet, by joint effort, by the division of labor—in a word, by exchange—he has been able to develop enough resources to overcome the first obstacles, to assault the second set and overcome them also, and so on, in ascending scale and more and more rapidly as increased population facilitated exchange.

We have seen that his intelligence places at his disposal means of action that are increasingly numerous, powerful and efficient; that, as capital is accumulated, its absolute share in production rises, but that its relative share falls, whereas for labor both the absolute and the relative shares rise constantly. This is the first, and a most potent, factor in our progress toward equality.

We have seen that the admirable instrument which we call land, that marvelous laboratory in which is prepared everything that serves to feed, clothe, and shelter men, was given them gratis by the Creator; that although nominally it was transformed into private property, yet its productive action could not be appropriated and has remained gratuitous throughout the whole range of human transactions.

We have seen that private property not only has the negative virtue of not encroaching on mankind’s common store of goods, but works positively and ceaselessly to increase it. This is the second source of equality, since the more abundant the common store, the more the inequality of private property is eliminated.

We have seen that under the influence of liberty services tend to acquire their normal value, that is, a value proportionate to labor. This is the third source of equality.

We have thus become convinced that a natural level tends to establish itself among men, not by pushing them back toward a lower state, or by keeping them stationary, but by inviting them to a constantly improving way of life.

Finally, we have seen that neither the laws of value, nor those of interest, nor those of rent, nor those of population, nor any other great natural law, can introduce, as has been alleged by those imperfectly grounded in the science of economics, an element of discord into the admirable order of a free society, since, on the contrary, harmony results from the operation of these laws.

On reaching this point, I seem to hear the reader cry out: “This is a good sample of the economists’ optimism! Despite the all too obvious presence of hardship, poverty, the condition of the working class, pauperism, deserted children, malnutrition, delinquency, rebellion, inequality, they keep on merrily singing of the harmony of social laws, and turn away their eyes so that the sight of the horrible reality may not disturb the pleasure they take in their system. They, too, like the utopians they censure, run away from the world of reality to take refuge in a dream-world. More illogical than the socialists or even the communists—who see the evil, feel it, decry it, abhor it, and are at fault only in that they propose ineffective, impractical, or visionary remedies—the economists either deny that the evil exists or are insensible of it, if indeed they do not cause it by crying out to our sick society: ‘
Laissez faire, laissez passer; everything is for the best in the best of all possible worlds.’ “

In the name of the science of political economy, I reject with all my strength such reproaches and such interpretations of our words. We perceive the evil as well as our adversaries. Like them we deplore it; like them we seek to understand the causes; like them we stand ready to combat them. But we formulate the question differently. Society, they say, such as it has been made by the system of free labor and free exchange, that is to say, by the free play of natural laws, is detestable. Hence, we must tear from the machine the offending cog, which is liberty (called by the socialists “competition” and even “anarchistic competition”), and substitute for it by force artificial cogs of our own invention.

Thereupon, millions of social inventions are put forward. This is only natural, for there is endless room for imagination to run its course.

But what we, after studying the providential laws that govern the social order, declare is this: These laws are harmonious. They admit of the existence of evil, for they are set in operation by men, that is, by beings subject to error and pain. But in this mechanism evil too has its mission, which brings about its own limitation and eventual elimination by furnishing man warnings, corrections, experience, enlightenment—all things which can be summed up in the word “progress.”

We add: It is not true that freedom prevails among men; it is not true that the laws of Providence operate to their fullest extent, or at least if they do act, their action has been limited to repairing gradually, painfully, the disturbing effects of ignorance and error. Do not accuse us, therefore, when we say
laissez faire; for we do not mean by this to let men do as they will, even when they do wrong. We mean: Study the laws of Providence, marvel at them, and
allow them to operate. Remove the obstacles that they meet in the form of abuses arising from violence and fraud, and you will discern among mankind this double mark of progress: greater equality and better living conditions.

For, in the end, it is one thing or the other: either men’s interests are harmonious, or they are fundamentally antagonistic to one another. Men gravitate toward their own self-interest irresistibly; otherwise it would not be self-interest. And if they gravitated toward something else, this something else would have to be self-interest. Therefore, if men’s interests are harmonious, they need only be understood, and harmony and the good life will be achieved, for men naturally pursue their own interest. This is what we maintain, and that is why we say: Make men understand, and
laissez faire, i.e., let them alone. If men’s interests are mutually antagonistic by nature, then you are right; there is no other means of achieving harmony than by forcing, frustrating, and thwarting the interests of all men. Yet it is a strange kind of harmony that can be achieved only by an external and despotic act that runs contrary to the interests of all! For you can well realize that men will not passively submit to being frustrated; and, in order to make them submit to your plans and arrangements, you must first be stronger than all of them together, or else you must succeed in deceiving them regarding their true interests. In fact, if men’s interests are indeed mutually antagonistic by nature, the happiest solution would be for men to be in error on this point.

Force and fraud, then, are your two resources, I defy you to find any others, except to agree that men’s interests are harmonious; and if you agree, you belong with us, and like us you must say: Permit the laws of Providence to act.

Now, you do not want that. Then we must repeat: You start with the idea that men’s interests are mutually antagonistic; that is why you are unwilling to permit them to reach any mutual understanding or agreement; that is why you want nothing to do with freedom, why you desire arbitrary arrangements. You are consistent.

But take care. The battle lines will not be drawn solely between you and humanity. That conflict you accept, since your avowed aim is to thwart men’s interests. But the conflict will also be waged among yourselves—you, the inventors, the organizers of societies; for you are a thousand, and will soon be ten thousand, all with different views. What will you do? I see exactly what you will try to do. You will try to seize control of the government, for it possesses the only force capable of overcoming all resistance. Will one of you succeed? While he is busy frustrating the desires of the governed, he will find himself attacked by all the other social planners, as eager as he is to seize the apparatus of government. Their chances of success will be all the better because the public’s disaffection will come to their aid, since—let us not forget—the man in power will have injured everybody’s interests. Here we are, then, launched upon a sea of never-ending revolution, all to answer this question: How and by whom will the interests of mankind be thwarted?

Do not accuse me of exaggeration. All this is inevitable if men’s interests are mutually antagonistic; for on that hypothesis you will never find your way out of this dilemma: either men’s interests must be left to their own devices, and disorder will ensue; or there must be found someone strong enough to thwart them, and in that case there will still be disorder.

It is true that there is a third way, which I have already indicated. It consists in deceiving men as to their true interests; and, since this is no easy thing for a mere mortal to do, the quickest course is to make oneself God. This is a role the utopians do not fail to play, when they dare, while biding their time until they can become ministers of state. Mystical language always predominates in their writings; it is a trial balloon to test the public’s credulity. Unfortunately, this method can hardly be expected to work in the nineteenth century.

Let us, then, admit it frankly: in order to avoid inextricable difficulties, it is preferable for us, after studying human interests, to conclude that they are harmonious. Then the task of writers, like that of governments, becomes reasonable and easy.

Since man is often mistaken regarding his own interests, our role as writers is to explain them, to describe them, to make them understandable, for we may be sure that, once man comprehends them, he will follow them. Since the man who errs in regard to his own interests hurts the general interest (for this is a consequence of the harmony of men’s interests), the government will be responsible for bringing the minority of dissidents, the violators of the providential laws, back to the path of justice and the common good. In other words, the sole mission of government will be to promote the reign of justice. True harmony springs spontaneously from man’s nature and will persist unless destroyed by government action. To achieve it, government is not required to strain painfully or to spend great sums, encroaching the while on individual liberty.

It is evident from what we have said here that we are not such fanatical admirers of social harmony as to refuse to admit that it can be and often is disturbed. I must even say that, in my opinion, the disturbances that are introduced into this admirable order by blind passions, by ignorance and error, are infinitely greater and more prolonged than might be imagined. These are the disturbing factors that we are about to study.