Economic Sophisms

Something Else
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Second Series, Chapter 14

“What is restriction?”

“It is a partial interdiction.”

“What is interdiction?”

“It is an absolute restriction.”

“So that what is true of the one is true of the other?”

“Yes; the difference is only one of degree. The relation between them is the same as that between the arc of a circle and the circle itself.”

“Therefore, if interdiction is bad, restriction cannot be good?”

“No more than the arc of a circle can be anything but circular.”

“What is the generic name for both restriction and interdiction?”

“Protectionism.”

“What is the ultimate effect of protectionism?”

“To require that men expend
more labor for the same result.”

“Why are men so attached to the protectionist system?”

“Because, as free trade enables them to attain the same result
with less labor, this apparent diminution of labor terrifies them.”

“Why do you say
apparent?”

“Because all the labor that has been saved can be devoted to
something else.”

“What else?”

“That is what cannot be specified and does not need to be.”

“Why?”

“Because, if the total quantity of consumers’ goods enjoyed by the French people could be obtained with one-tenth less labor, no one can predict what new satisfactions they would try to obtain for themselves with the remaining available labor. One person would want to be better clothed; another, better fed; this one, better educated; that one, better entertained.”

“Explain to me the functioning and the effects of protectionism.”

“That is not so easy. Before considering the more complicated cases, one should study the simpler ones.”

“Take the simplest case you wish.”

“You remember how Robinson Crusoe managed to make a board when he had no saw?”
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“Yes. He cut down a tree; then, by trimming the trunk, first on one side and then on the other, with his axe, he reduced it to the thickness of a plank.”

“And that cost him a great deal of labor?”

“Two full weeks.”

“And what did he live on during that time?”

“On his provisions.”

“And what happened to the axe?”

“It became very dull as a result.”

“Quite right. But perhaps you do not know this: just as he was about to strike the first blow with his axe, Robinson Crusoe noticed a plank cast up on the beach by the waves.”

“Oh, what a lucky accident! He ran to pick it up?”

“That was his first impulse; but then he stopped and reasoned as follows:

” ‘If I go to get that plank, it will cost me only the exertion of carrying it, and the time needed to go down to the beach and climb back up the cliff.

” ‘But if I make a plank with my axe, first of all, I shall be assuring myself two weeks’ labor; then, my axe will become dull, which will provide me with the job of sharpening it; and I shall consume my provisions, making a third source of employment, since I shall have to replace them. Now,
labor is wealth. It is clear that I shall only be hurting my own interests if I go down to the beach to pick up that piece of driftwood. It is vital for me to protect my
personal labor, and, now that I think of it, I can even create additional labor for myself by going down and kicking that plank right back into the sea!’ “

“What an absurd line of reasoning!”

“That may be. It is nonetheless the same line of reasoning that is adopted by every nation that
protects itself by interdicting the entry of foreign goods. It kicks back the plank that is offered it in exchange for a little labor, in order to give itself more labor. There is no labor, even including that of the customs official, in which it does not see some profit. It is represented by the pains Robinson Crusoe took to return to the sea the present it was offering him. Consider the nation as a collective entity, and you will not find an iota of difference between its line of reasoning and that of Robinson Crusoe.”

“Did he not see that he could devote the time he could have saved to making
something else?”

“What
else?”

“As long as a person has wants to satisfy and time at his disposal, he always has
something to do. I am not obliged to specify the kind of work he could undertake to do.”

“I can certainly specify precisely the kind that probably escaped his attention.”

“And I maintain, for my part, that, with incredible blindness, he confused labor with its result, the end with the means, and I am going to prove it to you…..”

“You do not have to. The fact still remains that this is an illustration of the system of restriction or interdiction in its simplest form. If it seems absurd to you in this form, it is because the two functions of producer and consumer are here combined in the same individual.”

“Let us therefore proceed to a more complicated case.”

“Gladly. Some time later, after Robinson had met Friday, they pooled their resources and began to co-operate in common enterprises. In the morning, they hunted for six hours and brought back four baskets of game. In the evening, they worked in the garden for six hours and obtained four baskets of vegetables.

“One day a longboat landed on the Isle of Despair. A handsome foreigner
93* disembarked and was admitted to the table of our two recluses. He tasted and highly praised the products of the garden, and, before taking leave of his hosts, he addressed them in these words:

” ‘Generous islanders, I dwell in a land where game is much more plentiful than it is here, but where horticulture is unknown. It will be easy for me to bring you four baskets of game every evening, if you will give me in exchange only two baskets of vegetables.’

“At these words, Robinson and Friday withdrew to confer, and the debate they had is too interesting for me not to report it here in full.

“Friday: Friend, what do you think of it?

“Robinson: If we accept, we are ruined.

“F.: Are you quite sure of that? Let us reckon up what it comes to.

“R.: It has all been reckoned up, and there can be no doubt about the outcome. This competition will simply mean the end of our hunting industry.

“F.: What difference does that make if we have the game?

“R.: You are just theorizing! It will no longer be the product of our labor.

“F.: No matter, since in order to get it we shall have to part with some vegetables!

“R.: Then what shall we gain?

“F.: The four baskets of game cost us six hours of labor. The foreigner gives them to us in exchange for two baskets of vegetables, which take us only three hours to produce. Therefore, this puts three hours at our disposal.

“R.: You ought rather to say that they are subtracted from our productive activity. That is the exact amount of our loss.
Labor is wealth, and if we lose one-fourth of our working time, we shall be one-fourth less wealthy.

“F.: Friend, you are making an enormous mistake. We shall have the same amount of game, the same quantity of vegetables, and—into the bargain—three more hours at our disposal. That is what I call progress, or there is no such thing in this world.

“R.: You are talking in generalities! What shall we do with these three hours?

“F.: We shall do
something else.

“R.: Ah! I have you there. You are unable to mention anything in particular.
Something else, something else—that is very easy to say.

“F.: We can fish; we can decorate our cabin; we can read the Bible.

“R.: Utopia! Who knows which of these things we shall do, or whether we shall do any of them?

“F.: Well, if we have no wants to satisfy, we shall take a rest. Is not rest good for something?

“R.: But when people lie around doing nothing, they die of hunger.

“F.: My friend, you are caught in a vicious circle. I am talking about a kind of rest that will subtract nothing from our supply of game and vegetables. You keep forgetting that by means of our foreign trade, nine hours of labor will provide us with as much food as twelve do today.

“R.: It is very clear that you were not brought up in Europe. Had you ever read the
Moniteur industriel, it would have taught you this: ‘All time saved is a dead loss. What counts is not consumption, but production. All that we consume, if it is not the direct product of our labor, counts for nothing. Do you want to know whether you are rich? Do not measure the extent of your satisfactions, but of your exertion.’ This is what the
Moniteur industriel would have taught you. As for myself, being no theorist, all I see is the loss of our hunting.

“F.: What an extraordinary inversion of ideas! But . . . .

“R.: But me no buts. Moreover, there are political reasons for rejecting the selfish offers of the perfidious foreigner.

“F.: Political reasons!

“R.: Yes. First, he is making us these offers only because they are advantageous to him.

“F.: So much the better, since they are so for us too.

“R.: Then, by this traffic, we shall make ourselves dependent upon him.

“F.: And he will make himself dependent on us. We shall have need of his game; and he, of our vegetables; and we shall all live in great friendship.

“R.: You are just following some abstract system! Do you want me to shut you up for good?

“F.: Go on and try. I am still waiting for a good reason.

“R.: Suppose the foreigner learns to cultivate a garden, and that his island is more fertile than ours. Do you see the consequence?

“F.: Yes. Our relations with the foreigner will be severed. He will no longer take our vegetables, since he will have them at home with less labor. He will no longer bring us game, since we shall have nothing to give him in exchange, and we shall then be in precisely the same situation that you want us to be in today.

“R.: Improvident savage! You do not see that after destroying our hunting industry by flooding us with game, he will destroy our gardening industry by flooding us with vegetables.

“F.: But this will happen only so long as we shall be in a position to give him
something else, that is to say, so long as we shall be able to find
something else to produce with a saving in labor for ourselves.

“R.:
Something else, something else! You always come back to that. You are up in the clouds, my friend; there is nothing practical in your ideas.

“The dispute went on for a long time and left each one, as often happens, unchanged in his convictions. However, since Robinson had great influence over Friday, he made his view prevail; and when the foreigner came to learn how his offer had been received, Robinson said to him:

” ‘Foreigner, in order for us to accept your proposal, we must be very sure about two things:

” ‘First, that game is not more plentiful on your island than on ours; for we want to fight only
on equal terms.

” ‘Second, that you will lose by this bargain. For, as in every exchange there is necessarily a gainer and a loser, we should be victimized if you were not the loser. What do you say?’

” ‘Nothing,’ said the foreigner. And, bursting into laughter, he re-embarked in his longboat.”

“The story would not be so bad if Robinson were not so absurd.”

“He is no more so than the committee of the rue Hauteville.”
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“Oh, their case is very different. In the hypothetical cases you cited, first, one man was living by himself, and then (what amounts to the same thing), two men were living in a state of common ownership. That is far from being the picture presented by the world in which we are living today; the division of labor and the intervention of tradesmen and money change the picture considerably.”

“These conditions do, in fact, make transactions more complicated, but they do not change their essential nature.”

“What! You want to compare modern commerce to simple barter?”

“Commerce is nothing but barter on a grand scale; barter and commerce are essentially identical in nature, just as labor on a small scale is of essentially the same nature as labor on a large scale, or as the force of gravitation that moves an atom is of essentially the same nature as the force of gravitation that moves a planet.”

“Then, as you see it, these arguments, which are so clearly untenable when advanced by Robinson Crusoe, are no less so when advanced by our protectionists?”

“No less; the only reason the error is less evident is that the circumstances are more complicated.”

“In that case, why not give us an example taken from conditions as they are at present?”

“Very well. In France, owing to custom and the demands of the climate, cloth is a useful item. Is the essential thing to
make it or to
have it?”

“A fine question! In order to have it, you must first make it.”

“Not necessarily. In order to have it, someone must make it, no doubt; but it is not necessary that the person or the country that consumes it should also produce it. You did not make the fabric that clothes you so well, nor did France produce the coffee on which her inhabitants breakfast.”

“But I bought my cloth, and France its coffee.”

“Precisely, and with what?”

“With money.”

“But you did not produce the metal for your money, nor did France either.”

“We bought it.”

“With what?”

“With the products we sent to Peru.”

“Thus, in reality, it is your labor that is exchanged for cloth, and French labor that is exchanged for coffee.”

“Undoubtedly.”

“Hence, it is not absolutely necessary that you produce what you consume?”

“Not if we produce
something else that we give in exchange.”

“In other words, France has two ways of providing itself with a given quantity of cloth. The first is to manufacture it herself; the second is to make
something else, and to exchange
that something else with foreigners for cloth. Of these two ways, which is the better?”

“I hardly know.”

“Is it not that which,
for a given amount of labor, yields a larger amount of cloth?”

“It would seem so.”

“And which is better for a nation, to be free to choose between these two ways of getting cloth, or to have a law interdicting one of them, on the chance of stumbling on the better of the two?”

“It seems to me that it is better for a nation to be free to choose, all the more so since in such matters it always chooses wisely.”

“The law that bans foreign cloth thus determines that if France wants to have cloth, she must make it herself, and prohibits her from making that
something else with which she could buy foreign cloth.”

“True.”

“And since the law compels the making of cloth and forbids the making of
something else, precisely because that something else would require less labor (for otherwise there would be no need for the law to interfere), it thus virtually decrees that for a given quantity of labor France shall have but one meter of cloth by making it herself, whereas for the same amount of labor she would have had two meters by making
something else.”

“But what else, for goodness’ sake?”

“For goodness’ sake, what difference does it make? Once given freedom of choice, she will make
something else only in so far as there is
something else to be made.”

“That is possible; but I keep being haunted by the idea that foreigners may send us cloth and not take the
something else from us in return, in which case we should be thoroughly victimized. In any case, this is the objection, even from your point of view. You do agree, do you not, that France will make this
something else to exchange for cloth with less labor than if she had made the cloth itself?”

“Without a doubt.”

“Therefore, there will be a certain quantity of her available labor supply that will be disemployed.”

“Yes, but without her being any the less well clothed—a little circumstance that makes all the difference in the world. It was this that Robinson lost sight of, and that our protectionists either do not see or pretend not to see. The piece of driftwood also disemployed Robinson’s labor for two weeks, at least in so far as it might have been applied to making a plank, but it did not deprive him of its use. We must, therefore, distinguish between two senses in which labor may be disemployed: that in which the effect is
privation, and that in which the cause is
satisfaction. They are worlds apart, and if you regard them as alike, your reasoning is no better than Robinson’s. In the most complicated cases, as well as in the simplest, the sophism consists in
judging the utility of labor by its duration and intensity, and not by its results; which leads to the economic policy of
reducing the results of labor with the aim of increasing its duration and intensity.”
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