Economic Sophisms

JACQUES BONHOMME: Oh, who will deliver me from this whirlwind of reforms! My head is splitting. People seem to be inventing them every day: educational reform, financial reform, sanitary reform, parliamentary reform, electoral reform, commercial reform, social reform, and now here comes
postal reform!

JOHN BULL: The last is so easy to carry out, and so useful, as we have discovered here, that I may venture to recommend it to you.

JACQUES: Still, they say that it turned out badly in England, and that it cost your Exchequer ten million.

JOHN: Which brought the public a hundred million.

JACQUES: Is that quite certain?

JOHN: Look at all the signs of public satisfaction. Observe how the whole nation, under the ministries of Peel and Russell, has given Mr. Rowland Hill,
71* in British fashion, tangible evidence of its gratitude. Look at the poor, mailing their letters only after showing their sentiments by an imprint of a seal bearing the device:
The people grateful for postal reform. Note the declaration made by the heads of the League
72* on the floor of Parliament that without it they would have needed thirty years to complete their great work of freeing the food of the poor from all customs restrictions. Look at the statement made by the officials of the Board of Trade deploring the fact that the English monetary system does not lend itself to an even greater reduction in the postal rate on letters. What more proof do you need?

JACQUES: Yes, but the treasury?

JOHN: Are not the treasury and the public in the same boat?

JACQUES: Not exactly. And besides, is it quite certain that our postal system needs reforming?

JOHN: That is precisely the question. Let us take a look at the way things are done. What happens to letters that are put in the mail?

JACQUES: Oh, the whole mechanism is wonderfully simple. The postmaster opens the mailbox at a certain hour and takes out, let us assume, a hundred letters.

JOHN: And then?

JACQUES: Then he examines them one after another. With the aid of a geographic table and a scale, he assigns each to its appropriate category on the basis of both its destination and weight. There are only eleven zones and a like number of weight classifications.

JOHN: That makes a good one hundred and twenty-one combinations for each letter.

JACQUES: Yes, and we must double this number, for the letter may or may not be posted for
rural delivery.

JOHN: This means, then, that the hundred letters will have to be scrutinized 24,200 times. Then what does the postmaster do?

JACQUES: He writes the weight in one corner and the amount of the postage due in the very middle of the address, in the form of a conventional symbol in use in the postal service.

JOHN: And then?

JACQUES: He postmarks them; he divides the letters into ten packets, according to the post offices to which they are to be sent; and he adds up the total postage for the ten packets.

JOHN: And then?

JACQUES: Next, he writes the ten sums down a column in one account book, and across the columns of another.

JOHN: And then?

JACQUES: Then he writes a letter to the postmaster at each of the ten points of destination in order to inform him of the accounting item that concerns him.

JOHN: Suppose the letters are prepaid?

JACQUES: Oh, then, I must admit, the service becomes a little complicated. The postmaster must receive the letter, weigh it and determine the distance it is to travel, as before, collect the postage due, and make change; choose from among thirty postmarks the one that applies; note on the letter its zone number, its weight, and the postage; transcribe the entire address first into one account book, then into a second, then into a third, then onto a separate slip; wrap the letter in the slip, send the whole well tied with string to the postmaster at the point of destination, and record each of these circumstances in a dozen columns of the fifty that line his ledger.

JOHN: And all that for just forty centimes!

JACQUES: Yes, on the average.

JOHN: I see that the
departure is really rather simple. Let us see how things go on the
arrival of the letter at its destination.
73*

JACQUES: The postmaster opens the mailbag.

JOHN: And after that?

JACQUES: He examines the ten bills from the postmasters at the points of origin.

JOHN: And after that?

JACQUES: He compares the total indicated on each bill with the total he gets by adding up the amounts in each packet of letters.

JOHN: And after that?

JACQUES: He computes the grand total to determine how much in all he will hold the postmen responsible for.

JOHN: And after that?

JACQUES: After that, with the aid of a table of distances and a scale, he verifies and corrects the postage on each letter.

JOHN: And after that?

JACQUES: He writes in one account book after another, in one column after another, depending upon innumerable circumstances, the
overcharges and the
undercharges.

JOHN: And after that?

JACQUES: He enters into correspondence with the ten postmasters to call their attention to errors amounting to ten or twenty centimes.

JOHN: And after that?

JACQUES: He sorts all the letters he has received in order to give them to the postmen.

JOHN: And after that?

JACQUES: He computes the total postage that each postman is charged with.

JOHN: And after that?

JACQUES: The postman verifies the charges; he and the postmaster discuss the meaning of the symbols. The postman pays the sum in advance, and leaves.

JOHN: Go on.
74*

JACQUES: The postman goes to the home of the addressee; he knocks at the door; a servant comes down and opens it. There are six letters for that address. The servant and the mailman add up the postage due, first independently, then together. They find it comes to two francs seventy centimes.

JOHN: Go on.

JACQUES: The servant goes to find his master; the latter proceeds to verify the symbols. He takes threes for twos, and nines for fours; he has doubts about the weights and the distances; in brief, the postman has to be summoned upstairs, and, while waiting for him, the master tries to guess who sent the letters, thinking it might be wise to refuse them.

JOHN: Go on.

JACQUES: The postman gets there and pleads the case for the postal administration. He and the master of the house discuss, examine, and weigh the letters, and calculate the distances; at last, the addressee accepts five letters and refuses to accept one.

JOHN: Go on.

JACQUES: Now the only question is that of payment. The servant runs to the grocer’s to get small change. Finally, after twenty minutes, the postman is free to leave, and he runs downstairs to begin anew the same ritual from one door to the next.

JOHN: Go on.

JACQUES: He returns to the post office. He and the postmaster go over his figures twice. He returns the letters refused and gets a refund of the money he has advanced. He recounts the objections of the addressees in regard to weights and distances.

JOHN: Go on.

JACQUES: The postmaster looks for the account books, the ledgers, and the special forms needed to make his accounting of the
letters refused.

JOHN: Go on, if you please.

JACQUES: Good heavens, I am not a postmaster. We might go on from here to the statements of the tenth, the twentieth, and the end of the month; to the methods devised, not only to set up, but also to audit, such detailed accounts for 50 million francs resulting from postal charges averaging 43 centimes and from 116 million letters, each one of which might belong to any of 242 categories.

JOHN: That certainly looks like, a rather complicated kind of simplicity. Surely the man who resolved this problem must have had a hundred times the genius of your M. Piron
75* or of our Rowland Hill.

JACQUES: You seem to be laughing at our system; suppose you explain yours.

JOHN: In England, the government has arranged for the sale of envelopes and paper wrappers at a penny apiece, at all places it deems appropriate.
76*

JACQUES: And after that?

JOHN: You write your letter, fold it in four, put it into one of these envelopes, and mail it.

JACQUES: And after that?

JOHN: And after that, there is nothing more to be said. That is all there is to it. There are no considerations of weight or distance, no
overcharges or
undercharges, no
letters refused, no forms to fill out, no account books or ledgers or columns to total, no bookkeeping or auditing to be done, no change to give or receive, no symbols to interpret, no compulsion, etc., etc.

JACQUES: I must say that does appear simple. But is it not too simple? A child could understand it. It is reforms like this that stifle the genius of great administrators. For my part, I prefer the French method. And then, your
uniform postal rate has the greatest of all defects. It is unjust.

JOHN: Why in the world do you say that?

JACQUES: Because it it unjust to make people pay as much for a letter carried to a neighbor as for one carried a hundred leagues away.

JOHN: In any case, you will admit that the extent of the injustice is limited to a penny.

JACQUES: What difference does that make? It is still an injustice.

JOHN: In fact, it is limited to just a halfpenny, for the other half goes to defray costs that are the same for all letters, regardless of the distance they are carried.

JACQUES: Penny or halfpenny, it is still unjust in principle.

JOHN: Finally, the injustice, which,
at most, is only a halfpenny in a particular case, is completely wiped out in the total correspondence of each citizen, since everyone writes sometimes to distant points and at other times to points in the neighborhood.

JACQUES: I still do not accept it. The injustice may, if you like, be infinitely attenuated and mitigated; it may be imperceptible, infinitesimal, innocuous, but it exists.

JOHN: Does the government make you pay more for the gram of tobacco you buy on the rue de Clichy than for that sold you on the Quai d’Orsay?
77*

JACQUES: What connection is there between the two objects being compared?

JOHN: The fact that, in one case as in the other, someone must pay the costs of transportation. It would be just; mathematically, if each pinch of tobacco cost a millionth of a centime more on the rue de Clichy than on the Quai d’Orsay.

JACQUES: True enough. After all, one should not demand the impossible.

JOHN: To say nothing of the fact that your postal system is just only in appearance. Two houses are situated side by side, but one is outside the zone and the other is inside. The first will have to pay ten centimes more than the second, which is as much as the entire cost of posting the letter in England. You can see quite readily that, in spite of appearances, injustice occurs in your country on a far greater scale.

JACQUES: That seems quite true. My objection is of no great importance, but there is still the revenue loss.

Here I stopped listening to the two interlocutors. It seems, however, that Jacques Bonhomme was entirely converted; for, a few days later, after the report of M. de Vuitry
78* had appeared, he wrote the distinguished legislator the following letter:

“Sir:

“Although I am not unaware of the extreme disapprobation that one runs the risk of incurring when one takes one’s stand on the basis of an
absolute theory, I do not believe I ought to abandon the cause of a
uniform postal rate no higher than the amount needed merely to reimburse the government for the service rendered.

“I am well aware that in writing to you I am putting myself at a disadvantage, for I do nothing more than underline the contrast between us. On the one hand, a hothead, a doctrinaire reformer, who talks of suddenly overthrowing a whole system without providing for any period of transition; a dreamer who perhaps has never set eyes on that mountain of laws, administrative decrees, tables, addenda, and statistics that accompany your report; in a word, a
theorist! On the other, a sober, judicious, and temperate legislator, who weighs everything carefully and compares one proposal with another, who gives due consideration to all the different interests that may be affected, and who rejects all
systems, or, what amounts to the same thing, forms one of his own out of what he borrows from all the others. Surely there can be no doubt concerning the outcome of a struggle so unequal.

“Nevertheless, while the question is pending, a person has the right to state his convictions. I know that mine are sufficiently plain to evoke a smile of derision on the lips of the reader. All that I dare expect from him is that he bestow it on me, if there be occasion for it, after, and not before, hearing my reasons.

“For after all, I too can invoke
experience. A great nation has put it to the test. What is their opinion of it? No one denies that they are expert in these matters, and their opinion should carry some weight.

“Well, there is not a single voice in England that does not bless the
postal reform. Witness the subscription fund raised in honor of Mr. Rowland Hill; witness the original way in which the people, according to what John Bull tells me, are expressing their gratitude; witness this oft-repeated acknowledgement by the League: ‘Never, without
penny postage, would we have developed the public opinion that is turning against the protectionist system.’ Witness the following statement, which I find in a work emanating from an official source:

“The postal rate on letters ought to be set, not in consideration of a fiscal goal, but with the sole purpose of covering the costs.

“To which Mr. MacGregor
79* adds:

“It is true that since the postal rate has been reduced to the level of our coins of lowest denomination, it is not possible to lower it further, although it still produces some net revenue. But this net revenue, which will go on increasing, should be devoted to improving the service and to extending our system of packet boats on every ocean.
80*

“This leads me to examine the fundamental idea on which the committee bases its reasoning, namely, that, on the contrary, the postage on letters ought to be a source of revenue for the government.

“This idea dominates your whole report, and I have to admit that, as long as such a preconception had any influence, you could not accomplish anything great or produce anything finished; you would be fortunate if, in trying to reconcile all systems, you did not combine their various disadvantages.

“The fundamental question that confronts us, then, is this: Is correspondence between private individuals a fit
subject for taxation?

“I shall not revert to abstract principles. I shall refrain from mentioning that, since society exists only by virtue of the communication of ideas, the object of all government should be to encourage and not to hamper that communication.

“I shall simply examine the facts of the situation.

“The total length of the national, departmental, and connecting roads is about 1,000,000 kilometers. Assuming that each kilometer cost 100,000 francs, that makes a capital expenditure of 100 billions by the state in order to facilitate the movement of men and things.

“Now, I ask you, if one of your distinguished colleagues were to propose in the Chamber a law phrased in this manner:

“On and after January 1, 1847, the state shall levy on all travelers a tax calculated not only to cover the costs of the roads but also to secure the return, into its general funds, of four or five times the total of these costs…..

would you not find such a proposal socially destructive and intrinsically abominable?

“How does it happen that this notion of
profit—what am I saying?—of simple
remuneration, is never entertained when the circulation of things is in question, yet appears so natural to you when it is a question of the movement of ideas?

“I dare say that this is the result of habit. If what was in question were the
creation of the postal service, certainly it would appear abominable to base it on the
fiscal principle.

“And please observe that in this case the compulsion is more clearly marked.

“When the state opens a road, it does not force anyone to use it. (It would no doubt do so if the use of the road were taxed.) But when once a national postal service is established, nobody can send a letter, even to his mother, by any other means.

“Thus, in principle, the postal rate on letters should be no more than what is required to render it
remunerative, and, for that reason,
uniform.

“Now, if one begins with this idea, how can one fail to be struck by the beauty and simplicity of the reform and by the ease with which it can be carried out?

“Here it is in its entirety, and, save for editing, drafted in the form of a bill:

“Art. 1. On and after January 1, 1847, there shall be placed on sale, wherever the government deems it useful, stamped envelopes and stamped wrappers at the price of five (or ten) centimes.

“Art. 2. Every letter placed in one of these envelopes and not exceeding fifteen grams in weight, every newspaper or piece of printed matter enclosed in one of these wrappers and not exceeding…. grams, shall be carried and delivered, without charge, to its address.

“Art. 3. The accounting division of the postal service is entirely abolished.

“Art. 4. All criminal and penal laws on the subject of the postage are repealed.

“This is very simple, I admit—much too simple—and I anticipate a storm of objections.

“But, granting that this system has its disadvantages, these are not in question; the question is whether your system does not have still greater ones.

“And in all honesty, can it in any respect whatsoever (except for revenue) stand a moment’s comparison with the system I am proposing?

“Examine the two of them; compare them in terms of ease, convenience, speed, simplicity, orderliness, economy, justice, equality, the promotion of business, emotional satisfactions, intellectual and moral development, and cultural impact; and tell me, in all good conscience, whether it is possible to hesitate for one moment.

“I shall refrain from expatiating on any of these considerations. I content myself merely with mentioning the headings of a dozen chapters, and I leave the rest blank, convinced that no one is more competent than you to fill them in.

“But, since there is only one objection, the
revenue, I really must say a word about that.

“You have made a chart showing that a uniform postal rate, even at twenty centimes, would involve a loss of twenty-two millions for the treasury.

“At ten centimes, the loss would be twenty-eight millions; at five centimes, thirty-three millions—hypotheses so terrifying that you did not even formulate them.

“But permit me to call your attention to the fact that these figures in your report are a little too much subject to variation to be allowed to pass unchallenged. In all your charts, in all your calculations, you tacitly presuppose the words
‘other things being equal.’ You assume that a simple administrative system will cost the same as a complicated one, and that the same number of letters will be mailed when the average rate is forty-three centimes as when there is a uniform rate of twenty centimes. You limit yourself to the rule of three, thus: Eighty-seven million letters at forty-two and one-half centimes yield so much. Hence, at twenty centimes they would yield so much; conceding, however, some variations—when they are adverse to the cause of reform.

“In order to compute the real sacrifice that the treasury would have to make, it would be necessary to know, first, what would be saved in the operation of the postal service; and then, to what extent the volume of mail would increase. Let us take into account only the latter datum, because we can assume that the savings realized in the costs of operation would amount to no more than the economies effected by having the existing personnel handle an increased volume of mail.

“No doubt it is impossible to anticipate in precise numerical terms the amount of this increase in the volume of mail. But, in these matters, a reasonable basis of approximation has always been considered acceptable.

“You yourself say that in England a reduction of seven-eighths in the postal rate led to an increase of 360% in the total volume of mail.

“In our country, lowering the postal rate, which presently averages forty-three centimes, to five centimes would likewise constitute a reduction of seven-eighths. It is therefore reasonable to expect the same result, that is to say, 417 million letters instead of 116 million.

“But let us calculate on the basis of 300 million.

“After the postal reform in England, the per capita number of letters increased to thirteen. Are we going too far, then, in assuming that, if our postal rate is reduced to one-half that of the English, our per capita volume of mail will increase to eight?

“Now, should not the state, which makes a
positive sacrifice of 800 millions each year in order to facilitate the
free movement of persons, make a
negative sacrifice of seventeen millions in order
not to profit on the movement of ideas?

“But, after all, the Treasury has, I know, become used to taking certain things for granted; and just as it easily falls into the habit of seeing receipts increase, so it accustoms itself only with difficulty to seeing them diminished by a centime. It is as if it were equipped with those wonderful valves which allow our blood to flow in one direction but prevent it from flowing in the other. So be it. The treasury is a little too old for us to be able to change its ways. Therefore, let us not entertain any hopes of persuading it to give up any of its accustomed revenue. But what would it say if I, Jacques Bonhomme, were to call, its attention to a simple, easy, convenient, essentially practical way of conferring a great boon upon the country that would not cost it a centime?

“Well, set the postage on letters at the uniform rate of five centimes.

“Lower the tax on salt to ten francs per quintal, as the Chamber has voted.

“Give me authority to modify tariff rates by
formally prohibiting me to raise any duty, but permitting me to lower duties as I see fit.

“And I, Jacques Bonhomme, guarantee you, not 280, but 300 millions. Two hundred French bankers will be my security. All I ask for myself is what the three taxes will produce above and beyond 300 millions.

“Now, do I need to enumerate the advantages of my proposal?

“1. The nation will reap all the benefits of
cheapness in the price of an article of prime necessity, viz., salt.

“2. Fathers will be able to write to their sons, and mothers to their daughters. Feelings of affection, demonstrations of love and friendship will not, as today, be suppressed within the depths of men’s hearts by the hand of the treasury.

“3. Carrying a letter from one friend to another will not be proscribed in our laws as a criminal act.

“4. Commerce will flourish anew, along with free trade; our merchant marine will recover from its humiliating condition.

“5. The treasury will gain, at first,
twenty millions; and after that, all that will flow into other channels of taxation through the savings realized by each citizen on salt, on letters, and on the commodities on which the customs duties have been lowered.

“If my proposal is not accepted, what conclusion should I draw? Assuming that the group of bankers whom I find to sponsor it offer sufficient guarantees, under what pretext could my offer be rejected? Certainly not the need for a
balanced budget. It will indeed be unbalanced, but unbalanced in such a way that receipts will exceed expenditures. What is at issue here is not a theory, a system, a set of statistics, a probability, a conjecture; you are being made an offer, an offer like that of a company seeking the concession for a railroad. The treasury lets me know what it receives from the postal system, from the salt tax, and from the tariff. I offer to give it
more. Hence, the objection cannot come from the treasury. I offer to reduce the salt tax, postal rates, and customs duties; I give my pledge not to raise them; hence, the objection cannot come from the taxpayers. Where, then, could it come from? The monopolists? It remains to be seen whether their voice is to drown out that of the French government and the French people. To protect us from that, I urge you to transmit my proposal to the Council of Ministers.

“P.S. Here is the text of my offer:

“I, Jacques Bonhomme, representing a group of bankers and businessmen, prepared to give all assurances and to post all the necessary bonds;

“Having learned that the state obtains only 280 millions from the tariff, the postal system, and the salt tax, at the rates presently fixed;

“Offer to give it 300 millions of gross revenue from these three sources;

“Even after it has reduced the salt tax from thirty francs to ten francs;

“Even after it has reduced the postal rate on letters from an average of forty-two and one-half centimes to a single, uniform rate of from five to ten centimes;

“On the sole condition that I be permitted, not to
raise customs duties (which I shall be expressly forbidden to do), but to
lower them as much as I choose.

“But you are mad,” I told Jacques Bonhomme, when he showed his letter to me; “you never have been able to do anything in moderation. Only the other day you yourself were protesting against the
whirlwind of reforms, and here you are, demanding three of them, making one the condition of the other two. You will ruin yourself.”

“Set your mind at ease,” he said. “I have taken everything into account. Would to heaven my proposal were accepted! But it will not be.”

Thereupon we parted company, his head full of figures, and mine filled with reflections that I spare the reader.