Molinari - Revised Chapters 1, 3, 6, 11
Introduction to the Revised Chapters
The following chapters have been revised and corrected for use in the conference on Molinari. The endnotes can be found at the end of each chapter.
- The First Evening [edit 2]
- The Third Evening [edit 2]
- The Sixth Evening [edit 2]
- The Eleventh Evening [edit 2]
Evenings[1] on Saint Lazarus Street[2]: The First Evening [edit 2]
[Editorial matters][3]
[p. 5]
SUMMARY : Attitudes to the problem of society. – That society is governed by natural, immutable and absolute laws. – That property is the foundation of the natural organization of society. – Property defined. – Listing the attacks mounted today on the principle of property.
[SPEAKERS:[4] A conservative.- A socialist.- An economist.[5]]
THE CONSERVATIVE.Let us debate among ourselves, calmly, the formidable problems thrown up in these last few years. You [the Socialist], who wage a bitter war against present institutions, and you [the Economist], who defend them with certain reservations, what are you actually seeking?
THE SOCIALIST.We want to reconstruct society.
THE ECONOMIST.We want to reform it.
THE CONSERVATIVE.Oh you dreamers, my good friends, I would ask for nothing better [p. 6] myself, were it possible. But you are chasing chimeras.
THE SOCIALIST.What? To want the reign of force and fraud[6] to yield to that of justice; to wish that the poor were no longer exploited by the rich; to want everyone rewarded according to his labor – is all this to pursue a chimera, then?
THE CONSERVATIVE.This ideal, which all the Utopians[7] have put forward since the world began, unfortunately cannot be realized on this earth. It is not given to men to attain it.
THE SOCIALIST.I believe quite the opposite. We have lived till now in a corrupt and imperfect society. Why should we not be permitted to change it? As Louis Blanc said,[8] if society is badly constructed, can we not rebuild it? Are the laws on which this society rests, a society gangrenous to the very marrow of its bones, eternal and unchangeable? We have endured them thus far. Are we condemned to do so forever?
THE CONSERVATIVE.God has willed it thus.
THE ECONOMIST.Beware of taking God’s name in vain.[9] Are you sure that the ills of society really stem from the laws on which society is based?
THE SOCIALIST.[p. 7] Where then do they come from?
THE ECONOMIST.Could it not be that these ills have their origin in the attacks made on the fundamental laws of society?
THE SOCIALIST.A likely story that such laws exist!
THE ECONOMIST.There are economic laws which govern society just as there are physical laws which govern the material world. Utility and Justice are the essence of these laws. This means that by observing them absolutely, we are sure to act usefully and fairly for ourselves and for others.
THE CONSERVATIVE.Are you not exaggerating a little? Are there really principles at work in the economic and moral sciences, ones absolutely applicable in all ages and places? I have never believed, I am bound to say, in absolute principles.[10]
THE ECONOMIST.What principles do you believe in, then?
THE CONSERVATIVE.My goodness, I believe, along with all the other men who have looked closely at the things of this world, that the laws of justice and the rules of utility are essentially shifting and variable. I believe, accordingly, that we cannot base any universal and absolute system on these laws. M. Joseph de Maistre [11] was wont to say: everywhere I have seen men, but nowhere have I seen Man.[12] Well, I believe that one can say likewise, that there are societies, having particular laws, appropriate to [p. 8] their nature, but that there is no Society governed by general laws.
THE SOCIALIST.Perhaps so, but we want to establish this unitary and universal society.
THE CONSERVATIVE.I still believe with M. de Maistre that the laws spring from circumstances, and have nothing fixed about them…Do you not know that a law considered just in one society, is often regard as iniquitous in another? Theft was permitted in certain conditions in Sparta; polygamy is allowed in the Orient and castration tolerated too. Would you say, therefore, that the Spartans were shameless thieves and that Asians are despicable debaucherers? No! If you consider things rationally, you will conclude that the Spartans in permitting theft, were obeying particular exigencies of their situation, while Asians, in authorizing polygamy and tolerating castration, are subject to the influence of their climate. Read Montesquieu again![13] This will persuade you that moral law does not take the same form in all places and at all times. You will agree with him that justice has nothing absolute about it. Truth this side of the Pyrenees, error the other side, said Pascal. Read Pascal again![14]
What is true of the just is no less true of the useful. You speak of the laws of utility as if they were universal and permanent. Your error is truly profound! Do you not know that economic laws have varied, and vary still, endlessly, as do moral laws?...Will your counter-argument be that nations fail to recognize their [p. 9] true interests when they adopt diverse and flexible economic legislation? You have against you, however, centuries of experience. Is it not proven, for example, that England owed her wealth to protectionism? Was it not Cromwell’s famous Navigation Act[15] which was the starting point for her maritime and colonial greatness? She has recently abandoned this protectionism, however. Why? Because it has ceased to be useful to her, because it would spell her ruin after having made her rich. A century ago free trade would have been fatal to England; today it gives a new lease of life to English commerce. That is how much circumstances have changed!
In the domain of the Just and the Useful, all is mobility and diversity. To believe as you seem to do, in the existence of absolute principles, is to go astray lamentably, to misunderstand the very conditions for the existence of societies.
THE ECONOMIST.So you think that there are no absolute principles, either in morality or in political economy; you think everything is shifting, variable and diverse in the sphere of the Just and in the sphere of the Useful; you think that Justice and Utility depend on place, time and circumstance. Well, the Socialists have the same opinion as you. What do they say? They say that new laws are needed for new times. That the time has come to change the old moral and economic laws which govern human societies.
THE CONSERVATIVE.Criminal folly! [p. 10]
THE SOCIALIST.Why? Until now you have governed the world. Why should it not be our turn to govern it? Are you made of superior stuff to us? Or can you really affirm that no one is more fit than you to govern men? We put it to the vote of everyone. Ask the opinion of the wretched souls who languish at the bottom of society, ask whether they are satisfied with the fate which your lawmakers have left them. Ask them if they think they have obtained a fair share of the world’s goods. As to your laws, if you had not framed them according to the selfish interests of your class, would your class be the only one to prosper? So, what would be criminal about our establishing laws which advantaged everybody equally?
You accuse us of attacking the eternal and unchanging principles on which society rests: religion, family and property. On your own admission, however, there are no eternal and unchanging principles.
Perhaps you might cite property, but in the eyes of your jurists, what is property in fact? It is a purely human institution which men have founded and decreed and which they are consequently in a position to abolish. Have they not, moreover, incessantly recast it? Does property today resemble ancient Egyptian or Roman property or even that of the Middle Ages? The appropriation and exploitation of man by man used to be accepted. You no longer accept this today, or anyway not in law. In most ancient societies the ownership of land was reserved to the State; you have rendered landed property accessible to everyone. [p. 11] You have, on the other hand, refused to give full recognition to certain kinds of property; you have denied the inventor the absolute title to his invention, and to the man of letters the absolute ownership of his writings.[16] You also came to understand that society had to be protected against the excesses of individual ownership of property and for the general good you passed the law of expropriation.[17]
Well, what are we doing now? We are limiting property a bit more; we are subjecting it to more numerous restrictions, and to heavier burdens, in the public interest. So are we so guilty? Was it not you who marked out the direction we now follow?
As to the family, you admit that it has legitimately been able to assume in other eras and other countries, a different organization from that which prevails today with us. Why then, should we be forbidden to modify it again? Cannot man unmake everything he has made?
Then there is religion! Have not your lawmakers, however, always arranged it as they saw fit? Did they not begin by authorizing the Catholic religion to the exclusion of the others? Did they not finish by permitting all faiths and by funding some of them?[18] If they were able to regulate the manifestation of religious feeling, why should it be forbidden to us to regulate it in our turn?
Property, family, religion – you are soft wax which so many lawmakers have marked with their successive imprints – why should we not mark you also with ours? Why should we abstain from touching things which others have so often touched? Why should we respect relics [p. 12] whose guardians themselves have felt no scruple in profaning?
THE ECONOMIST.The lecture is deserved. You Conservatives, who admit no absolute, pre-existing and eternal principle in morality, any more than in political economy, no principle equally applicable to all eras and places, look where your doctrines lead! People throw them back at you. After having heard your moralists and your jurists deny the eternal laws of the just and the useful, only to put in their place this or that fleeting expedient, adventurous and committed minds, substituting their ideas for yours, wish to rule the world after you and differently from you. And if you conservatives are right, when you insist that no fixed and absolute rule governs the moral and material arrangement of human affairs, can one condemn these reorganizers of society?[19] The human mind is not infallible. Your lawmakers were perhaps wrong. Why should it not be given to other lawmakers to do better?
When Fourier,[20] drunk with pride, said: All the legislators before me were wrong, and their books are fit only to be burned, might he not, according to your own judgment, have been right? If the laws of the Just and the Useful come from men, and if it falls to men to modify them according to time, place and circumstance, was not Fourier justified in saying, with his eyes on history, that long martyrology of the nations, that the social legislation of the Ancients had been conceived within a false system and that the organization of a new social state was called for? In your insistence that no absolute and superhuman principle governs [p. 13] societies, have you not opened the floodgates to the Utopian torrent? Have you not authorized the firstcomer to refashion these societies you claim to have made? Does not socialism flow from your own doctrines?
THE CONSERVATIVE.What can we do about it? We are well aware, please believe me, of the chink in our armor. Therefore we have never denied socialism absolutely. What words do we use, for the most part, for socialists? We tell them: between you and us the difference is only a matter of time. You are wrong today, but perhaps in three hundred years, you will be right. Just wait!
THE SOCIALIST.And if we do not want to wait?
THE CONSERVATIVE.In that case, so much the worse for you! Since without prejudice to the future of your theories, we regard them as immoral and subversive for the present, we will hound them to our utmost ability. We will cut them down as the scythe cuts down tares[21]…We will dispatch you to our prisons and to penal servitude, there to attack the present institutions of religion, family and property.[22]
THE SOCIALIST.So much the better. We rely on persecution to advance our doctrines.[23] The finest platform one can give to an idea is the scaffold or the stake. Fine us, imprison us, deport us… we ask nothing better. If you could reestablish the Inquisition against socialists we would be assured of the triumph of our cause. [p. 14]
THE CONSERVATIVE.We are still in a position not to need this extreme remedy. The Majority and Power are on our side.
THE SOCIALIST.Until the Majority and Power turn in our direction.
THE CONSERVATIVE.Oh I am quite aware that the danger is immense; still we will resist until the end.
THE ECONOMIST.And you will lose the contest. You conservatives are powerless to conserve society.
THE CONSERVATIVE.That is a very categorical statement.
THE ECONOMIST.We will see if it is well-founded or not. If you do not believe in absolute principles, you must – is it not the case? – consider nations as artificial aggregations, successively constituted and perfected by the hand of man. These aggregations may have similar principles and interests, but they can also have opposing principles and interests. That which is just for one, may not be just for the other. What is useful for this one, may be harmful to that one. What is the necessary result, however, of this antagonism in principles and interests? War. If it be true that the world is not governed by universal and permanent laws, if it is true that each nation has principles and interests which are special to it, interests and principles essentially variable according to circumstances and the [p. 15] times, is war not in the nature of things?
THE CONSERVATIVE.Obviously we have never dreamed the dream of perpetual peace like the noble Abbé de Saint-Pierre.[24] M. Joseph de Maistre has anyway shown beyond doubt that war is inevitable and necessary.
THE ECONOMIST.You admit then, and in effect you cannot not admit, that the world is eternally condemned to war?
THE CONSERVATIVE.War occurred in the past, we have it in the present, so why should it cease to be in the future?
THE ECONOMIST.Yes, but in the past in all societies the vast majority of the population were slaves or serfs.[25] Well, slaves and serfs did not read newspapers or frequent political clubs and knew nothing of socialism. Take the serfs of Russia! Are they not such stuff as despotism can mould at will? Does it not make of them, just as it pleases, mere drudges or cannon-fodder?
THE CONSERVATIVE.Yet it is clear that there was good in serfdom.
THE ECONOMIST.Unfortunately, there is no longer any way of reestablishing it among us. There are no longer slaves nor serfs. There are the needy masses to whom you cannot deny the free communication of ideas, to whom indeed you are constantly requested all the time to make [p. 16] the realm of general knowledge more accessible. Would you prevent these masses, who are today sovereign, from drinking from the poisoned well of socialist writings? Would you prevent their listening to the dreamers who tell them that a society where the masses work hard and earn little, while above them lives a class of men who earn a lot while working very little, is a flawed society and one in need of change? No! You can proscribe socialist theories as much as you like, but you will not stop their being produced and propagating themselves. The press will defy your prohibitions.
THE CONSERVATIVE.Ah, the press, that monumental poisoner. [26]
THE ECONOMIST.You can muzzle it and proscribe it for all you are worth. You will never be done with slaying it. It is a Hydra whose millions of heads would defeat even the strength of Hercules.
THE CONSERVATIVE.If we had a decent absolute monarchy…
THE ECONOMIST.The press would kill an absolute monarchy just as it killed the constitutional monarchy, and failing the press, books, pamphlets and conversation would do the trick.
Today, to speak only of the press, that powerful catapult is no longer directed solely against the government, but against society too.
THE SOCIALIST.Yes, for some years the press has been on the march, thank God!
THE ECONOMIST.Once it stirred up revolutions in order to change [p. 17] the type of government; it stirs them up today to change society itself. Why should it not succeed with this plan as it did with the other? If nations were fully guaranteed against foreign conflicts, perhaps we could succeed in bringing to heel for good the violent and anarchic factions which operate domestically. You yourself agree, however, that foreign war is inevitable, since principles and interests are changeable and diverse and no one can claim in response that war, harmful today to certain countries, will not be useful to them tomorrow. Well, if you have no faith in anything save sheer Force to put socialism down, how are you going to succeed in containing it, when you are obliged to concentrate that Force, your final resort, on the foreign enemy? If war is inevitable, is not the coming of revolutionary socialism inevitable too?
THE CONSERVATIVE.That, alas, is what I am truly afraid of. This is why I have always thought of society as marching briskly towards its ruin. We are the Byzantine Greeks and the barbarians are at the gates.
THE ECONOMIST.Is that the position you have reached? You despair of the fate of civilization and you watch the rise of barbarism, waiting for that final moment when it comes pouring over your battlements. You really are so many Byzantine Greeks... Well if that is how it is, let the barbarians in. Better still, go out to meet them and hand the keys to the sacred city over to them, humbly. Perhaps you will succeed in assuaging their fury. [p. 18] Beware, however, of redoubling and pointlessly prolonging your resistance. Does not history record that Constantinople was sacked and that the Bosphorus was full of blood and corpses for four days?[27] You Greeks of the new Byzantium, be fearful of the fate of your ancestors and please spare us the agony of a hopeless resistance and the horrors of being taken by storm. If Byzantium cannot be saved, make speed to hand it over.
THE SOCIALIST.So are you acknowledging that the future belongs to us?
THE ECONOMIST.God forbid! I do think, however, that your enemies are wrong to resist you if they have despaired of defeating you, and I imagine that in not attaching themselves to any fixed and immutable principle, they have ceased to expect to be victorious. Conservatives are powerless to conserve society, that is all I wanted to demonstrate. Now, however, I will tell you other organizers, that you too would be powerless to organize it. You could take Byzantium and sack it; but you would not be able to govern it.
THE SOCIALIST.What do you know about it? Have we not ten organizations for your one?[28]
THE ECONOMIST.You have just put your finger on it. Which socialist sect do you belong to? Please tell me. Are you a Saint-Simonian?[29]
THE SOCIALIST.No? Saint-Simonianism is old hat. To begin with, it was an aspiration rather than a program… And the disciples have ruined the aspiration without finding the program. [p. 19]
THE ECONOMIST.Are you a Phalansterian? [30]
THE SOCIALIST.It’s an attractive idea but the morality of Fourierism is quite risqué.[31]
THE ECONOMIST.Are you a Cabetist?
THE SOCIALIST.Cabet is a brilliant mind but uncultured.[32] He understands nothing, for example, about art. Imagine if you will, the people in Icaria painting statues. The faces of Curtius - that is the ideal of Icarian art. What a barbarian![33]
THE ECONOMIST.Are you a follower of Proudhon?[34]
THE SOCIALIST.Proudhon, is he not a fine destroyer for you? How well he demolishes things! Up to now however all he has managed to set up is his exchange bank and that is not enough.[35]
THE ECONOMIST.So, not Saint-Simon, not Fouriér, nor Cabét, nor Proudhon. So what are you then?
THE SOCIALIST.I am a socialist.
THE ECONOMIST.Tell us more though. To what type of socialism do you subscribe?[36]
THE SOCIALIST.To my own. I am convinced that the great problem of the organization of labour has not yet been resolved. We have cleared the ground, we have laid the foundations, but we have not built the structure. Why should I not seek like [p. 20] anyone else to build it? Am I not driven by the pure love of humanity? Have I not studied science and meditated for a long time on the problem? And I think I can say that…well not yet actually…there are certain points which are not completely clear ( pointing to his forehead) but the idea is there…and you will see it later on.
THE ECONOMIST.This is to say that you too are looking for your version of the organization of labor. You are an independent socialist. You have your own particular bible. In fact, why not? Why should you not receive like anyone else the spirit of the Lord? Then again, why should it not come to others as much as to you? So we have lots of different approaches to the organization of labor.
THE SOCIALIST.So much the better. The people will be able to choose.
THE ECONOMIST.Right by a majority vote. But what will the minority do?
THE SOCIALIST.It will give in to the majority.
THE ECONOMIST.And if it resists? I admit of course that it will submit willingly or by force. I admit that the organization favored by the majority of voters will be installed. What will happen if someone – you, me or someone else- discovers a superior arrangement?
THE SOCIALIST.That is not probable.
THE ECONOMIST.On the contrary, it is very probable. Do you not believe in the dogma of indefinite perfectibility? [p. 21]
THE SOCIALIST.Most certainly. I believe that humanity will cease to progress only if it ceases to exist.
THE ECONOMIST.Well, whence comes the progress of humanity in the main? If one is to believe your learned men, it is society which makes man. When social organization is bad, man either stagnates or retrogresses. When it is good, man grows and progresses…
THE SOCIALIST.What could be more true?
THE ECONOMIST.Could there be anything more desirable in the world, then, than securing the progress of our organization of society? If this is to happen, what will the constant preoccupation of the friends of humanity have to be? Will it not be to invent and plan more and more perfect organizations?
THE SOCIALIST.Yes, probably. What do you see as wrong about that?
THE ECONOMIST.In my view this means permanent anarchy. A way of organizing society has just been set up and it functions, more or less well or badly, because it is not perfect…
THE SOCIALIST.Why not?
THE ECONOMIST.Does not the doctrine of indefinite perfectibility exclude perfection? What is more I have just cited you half a dozen versions of socialism and you were not satisfied with any of them. [p. 22]
THE SOCIALIST.That proves nothing against the ones which will appear later. And so I have the strong conviction that the one I favor…
THE ECONOMIST.Fourier worked out his perfect arrangements and yet you do not want them. Likewise you will run up against people who do not like yours. Some sort of system is in operation, whether good or bad. Most people like it, but a minority do not. From this springs conflict and struggle. Take note, moreover, that future arrangements possess an enormous advantage over present ones. People have not yet noticed their shortcomings. In all probability the new system will carry the day… until such time as it too is replaced by a third system. But do you really believe that a society can change its arrangements on a daily basis, without danger? Look what an appalling crisis a simple change of government has entailed for us.[37] What would it be like with a with a change in the whole of society?
THE CONSERVATIVE.The mere thought of it makes me shiver. What a frightful mess! Well, is that not the spirit of innovation for you?
THE ECONOMIST.Try as you might, you will not stop it. The spirit of innovation is a fact. ..
THE CONSERVATIVE.To the world’s misfortune.
THE ECONOMIST.Not so. Without the spirit of innovation, men would still be eating acorns or [p. 23] or nibbling grass. Without the spirit of innovation, you would be an uncouth savage, dwelling under the trees, rather than a worthy man of property with a dwelling place in town and another in the country, well fed, well-clad and well-housed.
THE CONSERVATIVE.Why has not the spirit of innovation stayed within its proper limits?
THE SOCIALIST.Selfish fellow!
THE ECONOMIST.The spirit of innovation in man has no limits and will perish only when man himself perishes. It will modify perpetually everything men have set up, and if, as you assert, the laws which regulate human societies are of human origin, the spirit of innovation will not be checked in the face of these laws. It will modify them, change them and overthrow them for as long as the human sojourn on earth continues. The world is given to incessant revolutions, to endless strife, unless…
THE CONSERVATIVE.Unless…
THE ECONOMIST.Unless, in fact, there are absolute principles, unless the laws which govern the moral and economic world, are pre-established laws like those which govern the physical world. If it were thus, if societies had been set up by the hand of Providence, would one not have to take pity on the pygmy, swollen with pride, who tried to substitute his work for that of the Creator? Would it not be just as puerile [p. 24] to want to change the foundations on which society rests as to change the orbit of the earth?[38]
THE SOCIALIST.Without any doubt. Do they exist, though, these providential laws, and even supposing they do, are Justice and Utility among their key features?
THE CONSERVATIVE.That is grossly impious. If God has organized the various societies Himself, if He made the laws which regulate them, it is obvious that these laws are in their essence just and useful and that the sufferings of mankind flow from our not observing them.
THE ECONOMIST.Well said, but are you not in your turn obliged to admit that these laws are irreversible and unchangeable?
THE SOCIALIST.Well, why do you not reply then? Are you unaware, therefore, that nature proceeds only by universal and unchangeable laws? I also ask whether nature could proceed otherwise. If natural laws were partial, would they not come into conflict with each other constantly? If they were variable, would they not leave the world exposed to endless disruption? I can no more conceive that a natural law might not be universal and unchanging than you can conceive that a law emanating from God might not have Justice and Utility at its core. The only thing is, I doubt whether God was involved in the organization of human societies. Do you know why I am skeptical about this? Because your societies have detestable arrangements, because the history of humanity until now has been no more [p. 25] than a deplorable, hideous tale of crime and poverty. To attribute to God Himself the arrangements of these societies, vile and poverty-stricken as they are – would this not be to hold Him responsible for evil? Would this not be to justify the reproaches of those who accuse Him of injustice and cruelty?
THE ECONOMIST.May I be permitted to suggest that from the fact that these providential laws exist, it does not necessarily follow that mankind must prosper? Men are not mere bodies, lacking life and will, like the spheres one sees moving in an eternal order under the governance of physical laws. Men are active and free beings; they can obey or not obey the laws that God has given them. The only thing is, when they do not follow them they are rendered criminal and wretched.[39]
THE SOCIALIST.If it were indeed thus, they would always obey them.
THE ECONOMIST.Yes, if they were familiar with them, and being thus familiar, knew that non-compliance with these laws must inevitably do them harm. That, however, is precisely what they do not know.
THE SOCIALIST.So are you asserting that all the ills of humanity have their origin in the non-observation of the moral and economic laws which govern society?
THE ECONOMIST.I am saying that if humanity had always obeyed these laws, the sum total of our ills would likewise always have been the smallest conceivable. Does that answer you sufficiently? [p. 26]
THE SOCIALIST.Absolutely. I would very much like to know, however, precisely what these miraculous laws are.
THE ECONOMIST.The fundamental law on which rests all social organization, and from which flow all the other laws, is PROPERTY.[40]
THE SOCIALIST.Property? Come off it! Surely it is precisely property from which flow all the evils of humankind.
THE ECONOMIST.I assert the contrary. I assert that the wretchedness and the iniquities from which men have never ceased to suffer, do not come from property. I maintain that they come from transgressions, by individuals or society itself, temporary or permanent ones, legal or illegal, committed against the principle of property. I am saying that had property been faithfully respected from the beginning of the world, humanity would continually have enjoyed, in every era, the maximum welfare consistent with the degree of advancement of the arts and sciences, along with complete justice.
THE SOCIALIST.What a lot of assertions! And it would seem that you are in a position to substantiate your claims.
THE ECONOMIST.I would think so.
THE SOCIALIST.All right, so substantiate them then!
THE ECONOMIST.I ask nothing better. [p. 27]
THE SOCIALIST.First of all, please be so good as to define “property”.
THE ECONOMIST.I will do better than that; I will start by defining man himself, at least from the economic point of view.
Man is a combination of physical, moral and intellectual powers. These various powers need to be constantly exercised, constantly restored by the acquisition of other similar powers. When they are not so restored, they perish. This is as true of intellectual and moral powers as it is of physical ones.
Man is thus perpetually obliged to assimilate new powers. How is he made aware of this need? By pain and sorrow. Any loss of powers is painful. Any acquisition of powers, any achievement is accompanied, on the other hand, by enjoyment. Driven by this double spur, man takes care endlessly to exercise or augment the set of physical, intellectual and moral powers which constitute his being. This is the reason for his activity.
When this activity occurs, when man acts[41] with a view to repairing or increasing his powers, we say that he is working. If the elements from which man extracts the potential advantages he assimilates, were always within his reach, and nature had prepared them for his use, his work would be reduced to a negligible level. That, however, [p. 28] is not how things are. Nature has not done everything for man; she has left him much to do. She supplies him liberally with the raw material for all the things he needs to perfect himself, but she obliges him to give a host of diverse forms to this raw material in order to make it usable for him.
The preparation of things necessary to consumption is called production.
How is production effected? By the action of the powers or faculties of man on the elements with which nature supplies him.
Before he can consume, man is therefore obliged to produce. All production implying some expenditure of powers, also implies pain and effort. One undergoes this effort and suffers this pain with a view to gaining some enjoyment, or, and this comes to the same thing, sparing oneself some worse suffering. One gains this pleasure or avoids this suffering by means of consumption. To produce and consume, to endure and enjoy, that is human life in a nutshell.
THE CONSERVATIVE.Are you so bold as to say that in your view Pleasure ought to be the sole purpose man should aim at on this earth?
THE ECONOMIST.Do not forget that this involves moral and intellectual enjoyment as well as the physical kind. Do not forget that man is a physical, moral and intellectual being. The whole question is: will he develop in these three respects or will he degenerate? If he neglects his moral and intellectual needs entirely, in favor of his physical appetites, he will degenerate morally and [p. 29] intellectually. If he neglects his physical needs so as to increase his intellectual and moral ones, he will degenerate physically. In both eventualities he will suffer in the one direction, while enjoying himself to excess in the other. Wisdom consists in maintaining the balance between the faculties with which one has been endowed, or in producing such a balance when it does not exist. Political economy, however, does not have to concern itself, or not directly anyway, with this inner ordering of our human faculties. Political economy is concerned only with the general laws governing the production and consumption of wealth. The way in which each individual should deploy the restorative powers of his being, concerns morality.
To suffer as little as possible, physically, morally and intellectually, and to enjoy as much as possible, from this triple point of view – this is what constitutes, in the final analysis, the great motivating principle in human life, the pivot around which all our lives move. This motive or pivot is known as self-interest.
THE SOCIALIST.You regard self-interest as the sole motive of human action and you say that it consists in sparing oneself pain and obtaining gratification. But is there not any more noble motive to which one might appeal? Might one not find the more elevated stimulus of the love of humanity more exciting than the ignoble lure of personal pleasure? Instead of yielding to self-interest, might one not obey the imperative of devotion to others? [p. 30]
THE ECONOMIST.Devotion to others is no more than one of the constituent parts of self-interest.
THE CONSERVATIVE.What does that mean? Are you forgetting that devotion implies sacrifice and that sacrifice involves suffering?
THE ECONOMIST.Yes, sacrifice and suffering on one side, but satisfaction and enjoyment on another. When one sacrifices oneself for one’s neighbor, one condemns oneself, usually at least, to some material privation, but one experiences in exchange, moral satisfaction. If the effort involved outweighed the satisfaction derived from it, one would not sacrifice oneself for someone else.
THE CONSERVATIVE.What about the martyrs?
THE ECONOMIST.The martyrs themselves could supply me with witnesses in support of my case. In them, the moral sentiments of religion outweighed the physical instinct of self-preservation. In exchange for their bodily suffering they experienced moral pleasure of a more intense kind. When one is not armed to a high degree with religious feeling, one does not expose oneself, at least not willingly, to martyrdom. Why is this? It is because moral satisfaction derived is weak and one finds it too dearly purchased in terms of physical suffering.
THE CONSERVATIVE.But if that is the way of it, the men in whom physical appetite predominates, will always sacrifice the satisfaction of their more lofty aspirations, to that of their [p. 31] lower ones. Their interest will always be to wallow in the gutter…
THE ECONOMIST.This would be so if human existence were limited to this earth. The individuals in whom physical appetites predominate would, in such a case, have no interest in repressing them. Man is not, however, or does not believe himself to be, a creature of a mere day. He has faith in a future life and strives to perfect himself, in order to ascend to a better world rather than descend to a worse one. If he foregoes certain pleasures in this life, it is in order to acquire superior ones in another life.
If he has no faith in these future satisfactions, or reckons them inferior to those present satisfactions which religion and morality command him to give up in order to obtain them, he will not agree to this sacrifice.
Whether the satisfaction is present or future, however, whether it is located in this world or another, it is always the end which man selects for himself, the constant and unchanging motive behind his actions.
THE SOCIALIST.When it is elaborated like this, one can, I think, accept self-interest as the sole motive of man’s actions.
THE ECONOMIST.Driven by his own self-interest, as he sees it, man acts and works. It is the role of religion and morality to teach him how best to invest his effort…
Man therefore strives incessantly to reduce the sum of his sorrows and increase that of his joys. How can he achieve this double outcome? By [p. 32] obtaining, in exchange for less work, more things suitable for consumption, or, which comes to the same thing, by perfecting his labor.
How can man perfect his labor? How can he obtain a maximum of satisfaction in exchange for a minimum of effort?
He can do it by managing efficiently the powers he possesses, by carrying out the work which best suits his abilities and by accomplishing the task in the best possible way.
Now experience proves that this result can be secured only through the most perfect division of labor.
Men’s best interests naturally lie therefore in the division of labor. The division of labor, however, implies a bringing-together of individuals, societies and exchanges.
If men remain isolated, if they satisfy all their needs individually, they will expend the maximum effort to obtain a minimum of satisfaction.[42]
Even so, this interest which men have in uniting, with a view to reducing their labor and increasing their economic satisfaction, would perhaps not have been sufficient to bring them together, had they not been first of all drawn to each other by the natural stimulus of certain needs which cannot be met in isolation, plus the need to defend – what shall we call it? – their property.
THE CONSERVATIVE.What? Are you saying property exists in isolation? According to those learned in law, it is society which institutes it. [p. 33]
THE ECONOMIST.If society institutes it, then society can abolish it too, a consideration which would make the Socialists who demand its abolition less egregiously guilty. Society did not, however, institute property, it being rather the case that property instituted society.
What is property?[43]
Property derives from a natural instinct with which the whole human species is endowed. This instinct reveals to man, prior to any reflection, that he is master of his own person and may use as he chooses all the potential attributes constituting his person, whether they remain part of him, or he has in fact separated himself from them.[44]
THE SOCIALIST.Separated? What does this mean?
THE ECONOMIST.Man has to produce if he wants to consume. In producing he expends, separates from himself, a certain part of his physical, moral and intellectual powers. Products contain the effort expended by those who made them. Man does not cease to own, however, these efforts he has alienated from himself under the pressure of necessity. Human understanding is not deceived and will condemn, without distinction, attacks made on internal and external property.[45]
When man is denied the right to own the [p. 34] part of his powers which he separates from himself when he is working, when the right to dispose of it is allocated to others, what happens? That separation, that using up of his powers, implies some degree of pain, and the man thus ceases working unless someone forces him to.
To abolish the rights of man to the ownership of the fruits of his labor, is to prevent the creation of the products concerned.
To seize control of a part of these products is likewise to discourage their creation; it is to slow down man’s activity by weakening the motive impelling him to act.
In the same way, to threaten internal property; to oblige an active and free being to undertake work he would not personally undertake, or to bar him from [p. 35] certain branches of work, that is to deflect his faculties away from the use he would naturally select, is to diminish that man’s productive power.
Any assault on property, internal or external, alienated or not, is contrary to Utility as well as to Justice.
How comes it, then, that assaults have been made against property, in every period of history?
Given that any work entails an expenditure of effort, and any expenditure of effort a degree of pain, some men have wished to spare themselves the latter, whilst claiming for themselves the satisfaction it procures. They have consequently made a speciality of stealing the fruits of other men’s labor, either by [p. 36] depriving them of their external property, or reducing them to slavery. They have gone on to construct societies organized to protect them and the fruits of their pillaging against their slaves or against other predators. This lies at the origin of most societies.
This quite unwarranted usurpation by the strong of the property of the weak, however, has been successively repeated. From the very beginnings of society an endless struggle has obtained between the oppressors and the oppressed, the plunderers and the plundered; from the very beginning of societies, the human race has constantly sought the emancipation of property. History abounds with this struggle. On the one hand you see the oppressors defending the privileges [p. 37] they have allotted themselves on the basis of the property of others; on the other we see the oppressed, demanding the abolition of these iniquitous and odious privileges.[46]
The struggle goes on and will not cease until property is fully emancipated.
THE CONSERVATIVE.But there are no more privileges!
THE SOCIALIST.But property has all too many freedoms!
THE ECONOMIST.Property is scarcely freer today than it was before 1789. It may even be less free. Only, there is a difference: before 1789, the restrictions placed on property rights were advantageous to some people: today, for the most part, no one benefits, without these restrictions being any the less harmful, however, to all of us.[47]
THE CONSERVATIVE.Where, though, do you see these pernicious restrictions?
THE ECONOMIST.I am going to enumerate the main ones…
THE SOCIALIST.One further observation. I readily accept property as supremely equitable and useful in the state of isolation. A man lives and works alone. It is entirely fair that this man should have sole enjoyment of the fruits of his labor. It is equally useful that he be assured of holding on to his property. Can this regime of individual property be maintained fairly and usefully, however, in the social state? [p.38]
I am also happy to admit that Justice and Utility prescribe, in this common state as much as in the other, that the entire property of each individual and that portion of his powers that he has alienated from his person by working, be recognized as his. Would individuals really, however, be able to enjoy these two forms of property, if society were not organized in such a way as to guarantee them this satisfaction? If this indispensable organization did not exist; if by some mechanism or other, society did not distribute to each person the equivalent of his labor, would not the weak man find himself at the mercy of the strong, would not some people’s property be perpetually intruded on by the property of others? And if we were so imprudent as to emancipate property fully, before society was fully empowered with this distributive mechanism, would we not be witness to increasing encroachments of the strong on the property of the weak? Would not the complete freeing up of property aggravate the ill rather than correcting it?[48]
THE ECONOMIST.If the objection were sound, if it were necessary to construct a mechanism for the distribution to each person of the equivalent of his labor, then clearly socialism would clearly have its raison d’être and I like you would be a socialist. In fact, this mechanism you wish to establish artificially, exists naturally and it works. Society has been organized: the evil which you attribute to its lack of organization, derives from obstacles preventing the free play of that organization.
THE SOCIALIST.Are you so bold as to claim that, by allowing all men to manage their property as they see fit, in the social circumstances [p. .39] we live in, we would find things working out by themselves in such a way as to render each man’s labor as productive as possible, and the distribution of the fruits of the labor of all, fully equitable? …
THE ECONOMIST.I am bold enough to claim this.
THE SOCIALIST.So you think it would become unnecessary, leaving aside production, to plan at least distribution and exchange, to free up circulation...
THE ECONOMIST.I am sure of it. Let property owners freely go about their business. Let property circulate and everything will work out for the best.[49]
In fact, property owners have never been left to go freely about their business and property has never been allowed to circulate freely.
Judge for yourself.
Is it a matter of the property rights of the individual man; of the right he has to use his abilities freely, insofar as he causes no damage to the property of others? In the present society, the highest posts and the most lucrative professions are not open; one cannot practice freely as a solicitor, a priest, a judge, bailiff, money-changer, broker, doctor, lawyer or professor. Nor can one straightforwardly be a printer, a butcher, baker or undertaker.[50] We are not free to set up a commercial organization, a bank, an insurance company,[51] or a large transport company, nor free to build a road or establish a charity, nor to sell tobacco or gunpowder, or saltpeter, nor to carry [p. .40] mail, or print money,[52] nor to meet freely with other workers to establish the price of labor.[53] The property a man holds in himself, his internal property, is in every detail shackled.
Man’s ownership of the fruits of his labor, his external property, is equally impeded. Literary and artistic property and the ownership of inventions are recognized and guaranteed only for a short period. Material property is generally recognized in perpetuity, but it is subject to a multitude of restrictions and charges. Gifts, inheritance and loans are restricted too. Trade is heavily encumbered as much by capital transfer taxes, registration charges and stamp duty, by licensing and by customs duties, as by the privileges granted to agents working as intermediaries in certain markets. Sometimes, in addition, trade is completely prohibited outside certain limits. Finally, the law of expropriation on grounds of public utility, endlessly threatens such weaqk remnants of Property as the other restrictions have spared.
THE CONSERVATIVE.All the restrictions you have just listed were established in the interests of society.
THE ECONOMIST.That may be true. Those who brought them in, however, brought about a pernicious result, for all these restrictions act, in different degrees, and some with considerable impact, as causes of injustice and harm to society.
THE CONSERVATIVE.So that by destroying them we would come to enjoy a veritable paradise on earth. [p. .41]
THE ECONOMIST.I do not say that. What I do say is that society would find itself in the best possible situation, in terms of the present state of development in the arts and science.
THE SOCIALIST.And you are setting out to prove it?
THE ECONOMIST.Yes.
THE CONSERVATIVE. AND THE SOCIALIST.Now there is a utopian for you![54]
Molinari’s Long Footnote about External propertyOne of our most distinguished economists, M. L. Leclerc,[55] has recently put forward a theory on the origin of external property, very like the one above. The differences are in form rather than in substance. Instead of an alienation of internal powers, M. Leclerc sees in external property a consumption of life and bodily organs. I quote:
The phenomenon of the gradual consumption and of the extinction, not of the individual self, which is immortal, but of life; this unthinkable breakdown of the faculties and organs, when it takes place as a result of the useful effort called work, seems to me very worthy of attention; for although this outcome [this breakdown] is unavoidable, either to maintain the productive effort itself, or to supplement what may still be in working order or perhaps replace what can no longer work, it is quite clear that such an outcome is painfully achieved. Its real costs include the amount of time it took, and if we may put it thus, the call it made on the faculties and bodily organs irrevocably used up to obtain it. This part of my life and my strength is gone forever. I can never recover it. Here it is, invested as it were, in the result of my efforts. It alone represents what I used legitimately to possess and no longer have. I did not use only my natural right in practising this substitution. I followed my conservative instinct; I submitted myself to the most imperious of necessities. My property rights are there! Work is therefore the certain foundation, the pure source, the holy origin of the rights of property. Otherwise the self is not primordial and original property, and the faculties, an expansion of the self and the organs put to its service, do not belong to it, which would be intolerable.
“To make use of one’s time”, “to waste it”, “to use it well or badly”; “to work oneself to death in order to live”; “to devote an hour or a day”: these are familiar phrases used for centuries, integral parts of any human language, which itself is thought made manifest. The self is therefore perfectly aware of foolish or wise, useful or unproductive deployment of its powers, and as it also knows that these powers belong to it, it readily infers from this a potential and exclusive claim on the useful outcomes of this inevitable extinction, when it has been laboriously and fruitfully achieved. Public awareness upholds, directly and spontaneously, these serious principles, these strikingly obvious truths, apparently without engaging in the long disquisitions which we intellectuals regard as obligatory.
Yes, my life belongs to me, as does the right to make of it, freely, a generous sacrifice to humankind, to my country, to my fellow-man, to my friend, my wife, my child. My life is mine, I devote a part of it to what may serve to prolong it. What I have obtained is therefore mine and I can also devote it entirely to those who are dear to my affections. If the effort is successful, religion explains this in terms of divine favor; if it is skilful, the Economist can attribute it to the improved operation of my faculties; if by chance the output exceeds my needs, it is quite obvious that the surplus [p. 36] again belongs to me. I therefore have a right to use it to add other satisfactions to that of living. I have a right to keep it aside for the child whom I might father, or against that terrible time of powerlessness, old age. Whether or not I convert the surplus, or trade it, utility for utility, value for value, it is still mine, since, as cannot be emphasised too much, it remains always the clear representation of a part of my life, of my faculties and my bodily parts, expended in work, which produces this surplus. Have I not committed part of the time given to me to live on Earth, so as to possess, honorably and legitimately, something which, when I close my eyes for the last time, I bequeath to those I love – clothes, furniture, goods, a house, land, contracts, money, and so on. Am I not, in reality, leaving my life and my faculties to those whom I love? I might have spared myself some effort or rendered that effort less painful, or increased my personal consumption. How much sweeter it is, however, to me, to transfer to my loved ones what was mine by right! This is a warm and consoling thought, which bolsters up courage, charms the heart, inspires and safeguards virtue, inclines us to noble commitments, holds different generations together and results in an improvement of our human lot, by the gradual growth of wealth. [Leclerc. – “Some Simple Observations on the Rights of Property”– Journal des Économistes, issue of 15 October, 1848.[56]]
Endnotes
[1] DMH - “Soirées”might be translated as “evenings,”“conversations,”or “dialogues”. It suggests a meeting of people with different viewpoints who gather for conversation and discussion on various topics. The reviewer of the book in the JDÉ (a journal very sympathetic to Molinari’s free market views) was puzzled by the title and suggested that “entretiens” (or “discussions”) would have been a better description of the book’s contents. [See the glossary entry on “Soirées.”]
[2] DMH - Saint Lazarus Street in Paris got its name from the religious order of Saint Lazarus which ran a leprosy hospital before the Revolution. It later became the site for one of the major railway stations in Paris. The home of the young liberal journalist Hippolyte Castille (1820-1886) was on the rue Saint-Lazare. It had been at one stage the official residence of residence of Cardinal Fesch (1763-1839) but was now the meeting place for a small group of liberals which included Bastiat, Molinari, Garnier, Fonteyraud, and Coquelin who met regularly between 1844 and early 1848 to discuss political and economic matters. It was thus Castille’s home which supplied the name for Molinari’s book, Les Soirées de la rue Saint-Lazare (1849). See Gérard Minart, Gustave de Molinari (1819-1912), pour un gouvernement à bon marché dans un milieu libre (Paris: Institut Charles Coqueline, 2012).p. 80.[See the glossary entry on “Rue Saint-Lazare”.]
[3] The authors of the footnotes are indicated as follows: GdM = Gustave de
Molinari; DOK = Dennis O’Keeffe, translator; DMH = David Hart, editor.
This
chapter is also available online at <> at
The Forum : Liberty Matters.
Abbreviations used: JDÉ = Journal des Économistes; DEP = Dictionnaire
de l’économie politique (1852); Bastiat, Collected Works = The
Collected Works of Frédéric Bastiat (Liberty Fund ed. 2011); AEPS = Annuaire
de l’économie politique et de la statistique.
[p. 1] This refers to the
original page numbering in the French edition.
[4] DMH - Molinari uses the word “interlocuteurs”which might be translated as “interlocutors” (which has an archaic sense to it), “discussants”, “speakers”, or “debaters”. We have chosen “speakers”.
[5] DMH - Molinari was criticized by the reviewer of his book in the JDE for misrepresenting the views of the mainstream Economists by using the name “The Economist”to express views which were those of Molinari alone, especially his ideas on the private “production of security” in the 11th Soirée, although this may well have been the young and radical Molinari’s sly implication (he was 30 when the book was published). Yet, it can be seen here that Molinari lists the speakers as “a” conservative, “a” socialist, and “an” economist” and thus it might be argued that he did not necessarily mean “all” socialists or “all”economists.
[6] DMH - Molinari uses the term “la ruse” here which was a key term used by Bastiat in his theory of “sophisms”. Bastiat thought that vested interests who wished to get privileges from the state cloaked their naked self interest by using deception, trickery, or fraud (“la ruse”) in order to confuse and distract the people at whose expence these privileges were granted.
[7] DMH - By “Utopian” Molinari hand in mind socialist utopian thinkers such as Fourier or Cabet. Ironically, Molinari was also accused by his economist colleagues of “utopianism” especially over his ideas of the private “production of security” which he advocated in an article in the JDE and in the “11th Soirée”of this book. He seems to anticipate this in his remarks in the preface. Also note that he referred to himself as “le rêveur” (the dreamer) in an anonymous article published in the JDE on the eve of the June Days uprising in Paris in 1848 in which he appealed to socialists to support each other since they shared some ideas on exploitation and injustice. See footnote below, p. ??? [See glossary entry on “Utopia”.]
[8] DMH - Louis Blanc was a journalist and historian who was active in the socialist movement. During the 1848 Revolution he became a member of the government, promoted the National Workshops, and supported “right to work” legislation. [See glossary entry on “Blanc”.]
[9] Unlike the Conservative, Molinari was probably not a practicing Catholic. He uses the word "Dieu” (God) 28 times in the book but most of these are exclamations like "God forbid!” or similar; the word "Providence” 10 times, and the word "Créateur” (Creator) 8 times. Since he does not mention the sacraments or any doctrinal matter it is most likely that he was a deist of some kind who believed that an "ordonnateur des choses” (the organizer of things) created the world and the laws which governed its operation (see note 305, p. 269 in Soirée 10). Molinari also believed in the afterlife and thought it was an essential incentive to forgo immediate pleasures in this life in order to achieve “superior” pleasures in the next. This was especially important when it came to the issue of controlling the size of one’s family. Molinari thought the solution to the Malthusian population growth problem was the voluntary exercise of “moral restraint” (he uses the English phrase) in a society where complete “liberty of reproduction” existed. What made moral restraint possible was a moral code where religious values played a key role. In the Introduction to the Cours d'économie politique (2nd ed. 1864), vol. 1 Molinari states that "Therefore, political economy is an essentially religious science in that it shows more than any other the intelligence and the goodness of Providence at work in the superior government of human affairs. Political economy is an essentially moral science in that it shows that what is useful is always in accord in fact with what is just. Political economy is an essentially conservative science in that it exposes the inanity and folly of those theories which tend to overturn social organization in order to create an imaginary one. But the beneficial influence of political economy doesn't stop there. Political economy does not only come to the aid of the religion, the morality, or the political conservation of societies, but it acts even more directly to improve the situation of the human race.” [Gustave de Molinari, Cours d’Economie Politique (Paris: Guillaumin, 1863). 2 vols. 2nd revised edition. Vol. 1. Chapter: INTRODUCTION. </title/818/104201/2217867>.] Nevertheless, Molinari was very critical of organized religion, especially the monopoly of religion which had emerged in Europe, the political privileges of religious corporations, and any form of compulsory religion. He shared the views of his friend and colleague Frédéric Bastiat who argued that "theocratic plunder” was one of the main forms of political and economic injustice before the Revolution. [See, Frédéric Bastiat, Economic Sophisms, trans. Arthur Goddard, introduction by Henry Hazlitt (Irvington-on-Hudson: Foundation for Economic Education, 1996). Second Series, Chapter 1: The Physiology of Plunder. </title/276/23376/1573922>. Or, Bastiat’s Collected Works (Liberty Fund),pp. ??? forthcoming.] Molinari returned to the issue of religion 40 years later in a book length historical and sociological analysis of the overall benefits of religion to human progress. [See, Molinari, Religion (Paris: Guillaumin, 1892) which was translated into English by Walter K. Firminger (London: Swan Sonnenschein, 1894). Two years later he wrote another on Science et religion (Paris: Guillaumin, 1894).]
[10] DMH - Molinari's close friend and colleague Frédéric Bastiat regarded the argument that free market ideas were correct in theory but impractical to apply, and that there were no "absolute principles" which should guide government policies, as one of the major fallacies he had to refute in his collection of Economic Sophisms which he wrote between 1845 and 1850. See in particular "There are no Absolute Principles" in Series I (1846), in Bastiat's Collected Works, vol. 3 (Liberty Fund, forthcoming).
[11] DMH - Joseph de Maistre (1753-1821) was a conservative political thinker who supported the Old Regime notion of “throne and altar”. [See the glossary entry on “Maistre.”]
[12] DMH - "The Constitution of 1795, like all the previous ones, was made for man. Now, there no man in the world. In my lifetime I have seen Frenchmen, Italians, Russians, and so on; I even know, thanks to Montesquieu, that one can be Persian. But as for man, I declare not to have met one in my life. If he exists, it is certainly unknown to me.” In Oeuvres du comte J. de Maistre. Tome Premier: Considérations sue la France, Essais sue le Principe générateur des Constitutions politiques (Lyon: J.-B. Pelagaud, 1851). Nouvelles Édition, p. 88.
[13] DMH - See Charles Louis de Secondat, Baron de Montesquieu, The Complete Works of M. de Montesquieu (London: T. Evans, 1777), 4 vols. Vol. 1. BOOK XIV.: OF LAWS AS RELATIVE TO THE NATURE OF THE CLIMATE. </title/837/71526>.
[14] DMH - “That is droll justice which is bounded by a stream! Truth on this side of the Pyrenees, error on that.” “Of Justice, Customs and Prejudices”in The Thoughts of Blaise Pascal, translated from the text of M. Auguste Molinier by C. Kegan Paul (London: George Bell and Sons, 1901). < /title/2407/227498/3882180 >.
[15] The Navigation Acts were a lynch pin of the British policy of mercantilism from its introduction in 1651 to its abolition in 1849. They were designed to protect British merchant shipping from competition by third parties, in particular the Dutch and the French. The repeal of the Corn Laws in 1846 and the Navigation Acts in 1849 were vital for the development of a policy of free trade in Britain. See the glossary entries on "The Navigation Acts" and "The Anti-Corn Law League."
[16] DMH - Molinari discusses this at greater length in Soirée no. 2 below.
[17] DMH - The right to a legally determined, prior compensation for property confiscated by the state was enshrined in the Declaration of Rights of Man and the Citizen in June 1791 (Article 19) and in the Civil Code of 1804 (articles 544 and 545). The Law of 8 March 1810 established tribunals for the purpose of determining the amount of compensation payments. The Law of 7 July 1833 (and amended by the Law of 6 May 1841) created special juries of local landowners which would determine the level of compensation for confiscated land. [See, A. Legoyt, "Expropriation pour cause d'utilité publique,” DEP, vol. 1, pp. 751-53.]
[18] DMH - In the 1848 Budget a total of fr. 39.6 million was set aside for expenditure by the state on religion. Of this 38 million went to the Catholic Church, 1.3 million went to Protestant churches, and 122,883 went to Jewish groups. See the Appendix on the 1848 and 1849 Budgets.
[19] DMH - Molinari uses the phrase "réorganisateurs de la société" and has in mind the arguments of the socialists Louis Blanc, Charles Fourier, and their followers. The words "organisation" and "association" were two of the key slogans used by the socialists in February 1848. "L'organisation" meant to them the organisation of labor and industry by the state for the benefit of the workers; and “l’association” meant cooperative living and working arrangements as opposed to private property and exchange on the free market. What the classical liberal economists found very frustrating was the fact that supporters of the free market were also firm believers in “organization” and “association” but only if they resulted from voluntary actions by individuals and were not the result of government coercion and legislation. See Louis Blanc's highly influential book L’Organisation du travail (1839) which was reprinted many times.
[20] DMH - Charles Fourier (1772-1837) was a utopian socialist thinker who founded a school of thought which advocated the idea that people should live together as one family and hold property in common. [See glossary entries on “Fourier”and “Phalanstery”.]
[21] DMH - A biblical word used for weeds. See “the parable of the tares of the field”in Matthew 13: 36.
[22] DMH - The Conservative is referring to the declaration of a state of siege (martial law) on 24 June under General Cavaignac following the attempted coup in May by Louis Blanqui and the rioting of protesters during the June Days in protest at the closure of the National Workshops. Many hundreds of rioters were killed by the troops and some 15,000 were arrested, of which about 4,000 were transported to Algeria. The Political Clubs of Paris and the radical press were also shut down.
[23] DMH - The socialists were not the only ones to have set up political clubs during the Revolution to discuss radical ideas. The classical liberal economists also had a Club, "le club de la liberté du travail", which was set up by Charles Coquelin on 31 March 1848 specifically to combat socialist ideas about the "right to work." One of its best public speakers was Alcide Fonteyraud (1822-1849) who died in the cholera epidemic which swept France in 1849. Molinari visited many of the political clubs with Coquelin to hear first hand what was being discussed and possibly also to engage the speakers in open debate. He did exactly the same thing during the Revolution of 1870 which resulted in an vivid account of "les Clubs rouges" (the socialist Clubs). Molinari's account of the 1848 Revolution and the coming to power of Napoleon can be found in Les Révolutions et le despotisme envisagés au point de vue des intérêts matériel. (Brussels: Meline, 1852). See also Molinari, Les Clubs rouges pendant le siège de Paris (Paris: Garnier Freres, 1871) and, Le Mouvement socialiste et les réunions publiques avant la révolution du 4 septembre 1870 (Paris: Garnier Freres, 1872). See Minart, p. 74.
[24] DMH - But Molinari had. He wrote an article on “Saint-Pierre” and “Peace” for the DEP, vol. 2, pp. 565-66, pp. 307-14, and a book on Saint-Pierre’s ideas, Gustave de Molinari, L'abbé de Saint-Pierre, membre exclu de l'Académie française, sa vie et ses oeuvres (Paris: Guillaumin, 1857). Charles Irénée Castel, Abbé de Saint-Pierre (1658-1743) was a French cleric and reformer who advocated a plan to create a pan-European tribunal to adjudicate international disputes instead of waging war: Projet pour render la paid perpétuelle en Europe (1713-17). His writings influenced Rousseau and predated Kant’s thinking on perpetual peace. [See glossary entry on “Saint-Pierre.”]
[25] DMH - The issue of slavery and serfdom was one to which Molinari gave considerable attention in the 1840s. He published on the abolition of slavery in the French colonies in 1846, he wrote the long bibliographic article on slavery in the DEP, “Esclavage,”vol. 1, pp. 712-31 as well as a shorter article on serfdom, “Servage”, DEP, vol. 2, pp. 610-13. In the latter he concluded that serfdom was “a vestige of a barbarous epoch” and that it would inevitably disappear. [See Études économiques. L'Organisation de la liberté industrielle et l'abolition de l'esclavage (1846).] Given his deep interest in slavery and serfdom Molinari leapt at the chance to visit Russia at the invitation of Alexander II to give some lectures on political economy. Molinari spent 4 months traveling in Russia from February to July 1860, on the eve of the emancipation of the serfs in February 1861. [See, Molinari, Lettres sur la Russie (Bruxelles: A. Lacroix, Verboeckhoven et Cie, 1861. Second edition Paris: E. Dentu, 1877).]
[26] DMH - [See the glossary entries for “Press (Conservative),” “Press (Liberal),” and “Press (Socialist)”.]
[27] DMH - The capital of the Byzantine Empire, Constantinople, was besieged for 4 days as part of the 4th Crusade in 1204. After the city fell it was looted by the Christian Crusaders. Among many other things, the great Imperial Library was destroyed.
[28] DMH - The Socialist is making fun of the fact that the Economists had only the Political Economy Society, the Journal des Économistes, and the Guillaumin publishing firm which were all organized by the same small number of individuals. Whereas the socialists had many organisations and journals which had emerged during the 1830s and 1840s. [See the glossary entries on these organizations.]
[29] DMH - Henri Saint-Simon developed a theory of social and economic organization in the late 1810s and 1820s which advocated rule by a technocratic elite of “industrialists”and managers. This differed from similar liberal ideas about “industry”which emerged at the same time by Thierry and Dunoyer in that the liberals advocated no government regulation, whereas the Saint-Simonian view verged on being a form of state directed socialism. [See the glossary entry on “Saint-Simon,” “Industry”, and “Thierry”.]
[30] DMH - The socialist Charles Fourier (1772-1837) believed that a more just and productive society would be one which was based on the common ownership of property and the communal organization of all productive activity. The organization base of his new society was the “Phalanstery” which was the name of the specially designed building which would house 1,600 people. Some utopian communities based on his idea were established in North America. [See the glossary entries on “Fourier”and “Phalanstery.”]
[31] DMH - The socialist probably has in mind Fourier’s views on marriage. Charles Fourier believed that marriage was a form of oppression for women and advocated an end to "le mariage exclusif" (marriage to one person) and "le mariage permanent" (indissoluble marriage) in favour of either no marriage at all or what he referred to as "la corporation amoureux" which today might mean something like an open marriage. See Oeuvres complètes de Charles Fourier, tome 1. Théorie des quatres mouvements, 3rd ed. (Paris: La Librairie Sociétaire, 1846), p. 89..
[32] DMH - Étienne Cabet was a lawyer and utopian socialist who coined the word "communism.”He advocated a society in which the elected representatives controlled all property that was owned in common by the community. In 1848 Cabet left France in order to create such a community (called “Icarie”) in Texas and then at Nauvoo, Illinois, but these efforts ended in failure. [See the glossary entry on “Cabet.”]
[33] DMH - Philippe Mathé-Curtz ("Curtius") (1737-1794) was a Swiss doctor and sculptor who created wax figures for anatomical study. He later began creating portraits of famous people after he moved to Paris in 1765, when his figure of Madame du Barry (the mistress of King Louis XV) caused a sensation. Curtius opened a museum to the public in 1770 which was moved to the Palais-Royal in 1776. In the late 1770s he made figures of people like Voltaire, Rousseau, and Benjamin Franklin. In 1794 he bequeathed his collection of wax figures to the daughter of his housekeeper, Marie, who in 1795 married M. Tussaud.
[34] DMH - Pierre-Joseph Proudhon was a political theorist considered to be the father of anarchism. He is best known for writing Qu’est-ce que la propriété? (1841) (his answer was that “property is theft”). He engaged in a spirited debate with Bastiat on the justice of credit and charging interest. [See the glossary entry on “Proudhon.”] The liberal publishing firm Guillaumin published two books by Proudhon which seems a little odd given the fact that he was a left-anarchist. A two volume work appeared in 1846 called Système des contradictions économiques, ou, Philosophie de la misère, 2 vols. (System of economic contradictions, or the philosophy of misery) and another in 1850 (which is more understandable as Bastiat was one of the authors) Gratuité du crédit, discussion entre M. Fr. Bastiat et M. Proudhon (Free Credit: A discussion between Bastiat and Proudhon).
[35] DMH - Proudhon opposed the charging of interest and advocated a system of Exchange Banks (Banques d'échange) or People's Banks which would offer low interest rate loans to workers. After the February Revolution of 1848 broke out Proudhon attempted to set up such a bank. He applied for an act of incorporation in January 1849 but was not able to raise the capital of fr. 50,000 it needed. Proudhon and Bastiat had a famous debate on "Free Credit" in October 1849 to March 1850. See Bastiat, Collected Works, vol. 4 (Liberty Fund, forthcoming) and Gratuité du crédit. Discussion entre M. Fr. Bastiat et M. Proudhon [Free Credit. A Discussion between M. Fr. Bastiat and M. Proudhon] (Paris: Guillaumin, 1850). [See the glossary entry on "Proudhon."]
[36] DMH - See the long and very detailed entry by Louis Reybaud, "Socialistes, Socialisme,” in DEP, vol. 2, pp. 629-41. He provides a comprehensive examination of the different schools of French socialist thought and an excellent bibliography of their writings. Reybaud also wrote a 2 volume work on modern socialism which first appeared in 1840 and was in its 6th edition by 1849. [See, Louis Reybaud, Études sur les réformateurs ou socialistes modernes. 6e édition, précédée du rapport de M. Jay et de celui de M. Villemain, (Paris: Guillaumin, 1849). Glossary entry “Press (Socialist)”.]
[37] DMH - Molinari is referring to the February Revolution of 1848 which overthrew the July Monarchy of Louis Philippe and introduced the Second Republic. [See the glossary entry on the “Revolution of 1848.”]
[38] DMH - On Molinari’s view of the natural laws which govern economics, see note 3 of the preface.
[39] DMH - The issue of whether or not men are “free and active beings” or more like reactive “plants and animals” was debated vigorously when it came to the question of population growth and Malthusian limits to such growth. [See, Soirée 10, footnote 311, p. 274.]
[40] DMH - One of the key beliefs which distinguishes the French school of political economy from the English school is the grounds they had for believing in property. The English were strongly utilitarian in that they thought the institution of property was generally beneficial to human progress and prosperity but that the government might be justified in sometimes limiting property "rights” of individuals for the benefit of the broader society. The French Economists believed in property rights on the grounds of natural law and were more doctrinaire in defending individual property rights against encroachments by the state. [See, Léon Faucher, "Propriété,” DEP, vol. 2, pp. 460-73 for an overview of the thinking of the Economists on property; and Charles Comte’s Traité de la propriété (1834) which was very influential on their thinking.] Molinari wrote a much longer treatment of his ideas on property in Lesson 4 "Value and Property” in the second and revised edition of the Cours d'économie politique (1863), pp. 107-31. Here he categorizes property into 6 major types, each of which has its own corresponding kind of liberty. [See, the glossary entry on “Molinari’s 6 Major Categories of Property and their Corresponding Type of Liberty”.]
[41] DMH - Several times in this section Molinari describes man as an “active and free being”, a person who “acts” in order to achieve the goals he sets himself. It seems Molinari is trying to generalize about economic behaviour and is toying with what in the 20th century would become known as the Austrian theory of “human action” which was developed by the Austrian economist Ludwig von Mises (1881-1973) in Human Action (1949). [See, Ludwig von Mises, Human Action: A Treatise on Economics, in 4 vols., ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2007). <oll2.libertyfund.org/titles/1892>.
[42] DMH - In early 1847 Frédéric Bastiat used the character of Robinson Crusoe marooned on his island as part of a thought experiment to explore in a very abstract way how individuals went about making their economic plans and choices in the face of scarcity. In a couple of essays in Economic Sophisms (1846, 1848) and in his unfinished magnum opus Economic Harmonies (1850) Bastiat became the first economist to do this kind of quite modern economic analysis. Molinari was no doubt aware of this new approach to thinking about economics and hints about it here and uses it explicitly a bit later in a chapter on “L’Échange et la valeur” (Exchange and Value) in the 1st edition of Cours d'économie politique (1855), vol. 1, pp. 89-92. He also repeats the example in the expanded chapter "La Valeur et le prix” in the 2nd edition of Cours d'économie politique (1863). [See, Frédéric Bastiat, Economic Sophisms, trans. Arthur Goddard, introduction by Henry Hazlitt (Irvington-on-Hudson: Foundation for Economic Education, 1996). Second Series, Chapter 14: Something Else. </title/276/23402> also in Collected Works, vol. 3 (Liberty Fund, forthcoming); and Gustave de Molinari, Cours d’Economie Politique (Paris: Guillaumin, 1863). 2 vols. 2nd revised edition. Vol. 1. TROISIÈME LEÇON: la valeur et le prix. </title/818/104207>, pp. 86-88 in the printed edition.]
[43] DMH - In the original French Molinari uses exactly the same phrasing as the title to Proudhon’s book, Qu’est-ce que la propriété? (What is Property?) (1841), but of course comes to the opposite position in his answer.
[44] DMH - Molinari uses the word "séparé" (separated from one's self) which might be translated as "alienated" but as this has a strong Marxist connotation we have avoided using it in this context.
[45] DMH - See Molinari’s long extract by Leclerc on external property at the end of the chapter [from Journal des Économistes, 15 October, 1848]. Molinari makes a distinction between two different kinds of property here - "la propriété intérieure” (internal or personal property) and "la propriété extérieure” (external property, i.e. property which lies outside or is external to one's body): “The first consists in the right every man has to dispose of his physical, moral and intellectual faculties, as well as of the body which both houses those faculties and serves them as a tool. The second inheres in the right every man has over that portion of his faculties which he has deemed fit to separate from himself and to apply to external objects.” [Les Soirées, p. ???, Economist’s opening remark at the beginning of Soirée 2].
[46] DMH - Molinari gives here a good summary of the French classical liberal theory of class and exploitation which had been developed by J.B Say, Charles Comte, Charles Dunoyer, and Augustin Thierry in the 1810s and 1820s. It is also known as the "industrialist theory of history” as the productive class (or "industriels") who produce and exchange with others on a voluntary basis are exploited (or "plundered") by a parasitic, non-productive class who use violence to take the property of others. The nature of the exploitation changes over time as the main method of production changes from hunter gatherer societies, to agriculture, to slavery, to serfdom, to mercantilism, and then to a final stage of untrammeled free market "industrialism". These early formulations were taken up by Bastiat in the mid-1840s who was planning "A History of Plunder” before he died in 1850. [See, the entry on "Industry” in the glossary.]
[47] DMH - Molinari might have in mind the definition of the State his colleague Frédéric Bastiat developed during the June Days of the 1848 Revolution when they co-edited a small magazine called Jacques Bonhomme. Early drafts were gradually turned into the pamphlet The State which was published in September 1848. Here Bastiat defined the state as “THE STATE is the great fiction by which EVERYONE endeavors to live at the expense of EVERYONE ELSE.” See “The State” in Bastiat, Collected Works, vol. 2, pp. 97. [See the glossary entry on “Jacques Bonhomme.”]
[48] DMH - The Socialist exposes a major weakness in the Economist's argument here. Since the classical economists largely accepted the Ricardian idea that a tradeable commodity embodies a certain amount of labour which gives it "value” (the labour theory of value), then it seems hard to deny the worker who undertook the labour the full product of his labour. This went to the heart of the socialist critique of profit, interest, and rent as unjust takings and their argument that the state should step in to ensure that workers got the "full value of their labour". Several Economists tried to find a way out of this dilemma. J.B. Say developed the idea that even non-material goods (or services) were valuable and Bastiat argued that individuals valued things differently according to their circumstances and that all exchanges were an exchange of "service for service.” Nevertheless, he still believed that labour was the ultimate source of value. [See, H. Passy, “Valeur” (Value), DEP, vol. 2, pp. 806-15; Frédéric Bastiat, Economic Harmonies, trans by W. Hayden Boyers, ed. George B. de Huszar, introduction by Dean Russell (Irvington-on-Hudson: Foundation for Economic Education, 1996). Chapter: 5: On Value. </title/79/35510> as well as Collected Works, vol. 5 (forthcoming); Molinari, Cours d’économie politique (1st ed. 1855), vol.1, 4th Lesson “L’Échange et la valeur,” pp. 73-92.]
[49] DMH - Molinari uses here the phrases "laissez faire” and "laissez passer” which have special significance for the Economistes: "Laissez faire les propriétaires, laissez passer les propriétés". The phrase "laissez-faire” was coined by the Physiocrats to describe the economic policy they recommended the state adopt, namely "do not govern us too much” or as Garnier prefers “laissez-faire” could mean “laissez travailler” (leave us free to work as we wish) and “laissez passer” could mean “laissez échanger” (leave us free to trade as we wish). Molinari uses the phrase 4 times in Les Soirées and we will indicate it when he does. [See, Joseph Garnier, "Laissez faire, laissez passer,” DEP, vol. 2, p. 19; and "Laissez-faire” in the glossary.]
[50] DMH - These were all highly regulated professions and trades which required a government license in order to practice them.
[51] DMH - Napoleon’s Commercial Code of 1807 strictly limited the kinds of business organizations which could be set up. This is discussed in more detail below.
[52] DMH - The manufacture and sale of tobacco, gunpowder, saltpeter, mail delivery, and the coining of money were all government monopolies.
[53] DMH - Article 2 of the Le Chapelier Law of June 1791 states that: "Citizens of the same occupation or profession, entrepreneurs, those who maintain open shop, workers, and journeymen of any craft whatsoever may not, when they are together, name either president, secretaries, or trustees, keep accounts, pass decrees or resolutions, or draft regulations concerning their alleged common interests.” [See, "The "Chapelier” Law. 14 June, 1791” in Stewart, A Documentary Survey of the French Revolution, pp. 165-66. In French: Collection complète des lois, décrets ordonnances, réglemens et avis du Conseil d'État: de 1788 à 1824 inclusivemen, par ordre chronologique: suivie d'une table analytique et raisonné des matières, Volume 3, ed. J.B. Duvergier (Paris: A. Guyot et scribe, 1824), pp. 25-26.] See the discussion of this in Soirée 6.
[54] [See the footnote about Molinari’s utopianism in the preface, p. ???]
[55] DMH - Louis Leclerc (1799-?) was a founding member of the Free Trade Association, a member of the Société d'Économie Politique, an editor of the Journal des Économistes and the Journal d’agriculture, the director of a independent private school called "l'école néopédique” between 1836 and 1848, secretary of the Chamber of Commerce of Paris, and a member of the jury at the London Trade Exhibition in 1851. Leclerc had a special interest in agricultural economics (wine and silk production) on which he wrote many articles for the Journal des Économistes. [See the glossary entry on “Leclerc”.]
[56] DMH - Louis Leclerc, “Simple observation sur le droit de propriété,”Journal des Économistes, vol. 21, no. 90, 15 October 1848, pp. 304-305. Leclerc is commenting upon a quotation by Victor Cousin: “Le moi, voilà la propriété primordiale et originelle”[Me, there is the primordial and original property] from Justice et Charité. Petits traités publiés par l’Académie des sciences morales et politiques (Paris: Pagnerre, 1848).
The Third Evening [edit 2]
[Editorial matters][57]
[p. 70]
SUMMARY – Continuation on the attacks made on external property. – The law of compulsory acquisition for reasons of public utility. – Legislation relating to mines. – The public domain, property belonging to the State, departments and communes. – Forests. – Roads. – Canals. – Waterways. – Mineral waters.
THE ECONOMIST.We have noted that property rights with respect to works of the intellect are very badly treated under the present regime. Material property is more favored in the sense that it is guaranteed in perpetuity. This recognition and guarantee, however, are in no sense absolute. An owner can have his property confiscated under the law of expropriation for reasons of public utility.
THE CONSERVATIVE.What? Do you wish to abolish that tutelary law without which no undertaking on the grounds of public utility would be possible?
THE ECONOMIST.What do you understand by an undertaking on the grounds of public utility?
THE CONSERVATIVE.An undertaking on grounds of public utility is…an undertaking
[p71] useful to everybody, a railway, for example.[58]
THE ECONOMIST.Oh, and is not a farm which produces food for everybody not an undertaking also useful to all? Is not the need to eat at the very least as universal and necessary as the need to travel?
THE CONSERVATIVE.No doubt, but a farm is a rather limited individual enterprise.
THE ECONOMIST.Not always. In England there are immense farms. In the colonies there are farms which belong to numerous and powerful companies. Anyway, what does it matter? The usefulness of an enterprise is not always a function of the space it occupies and the law does not investigate whether an enterprise known as “a public utility” is owned by a company or isolated individual.
THE CONSERVATIVE.We could not establish any analogy between a farm and plantation and a railway. The development of a railway is subject to certain natural exigencies; the slightest deviation in the route, for example, can entail a large increase in costs. Who will pay for this increase? The public. Well, I ask you, must the interest of the public, the interest of society be sacrificed to the stubbornness and greed of some landowner?
THE SOCIALIST.Ah, Mr Conservative. These are words which reconcile me to you. You are a fine fellow. Let us shake on it.
THE ECONOMIST.There are in the Sologne vast stretches of extremely poor land.[59] The poverty stricken peasants who farm there receive only a meager return for the most laborious efforts. Yet close to their wretched hovels rise magnificent chateaux with immense lawns where wheat would grow in abundance. If the peasants of the Sologne demanded that these good lands be expropriated and transformed into fields of wheat, would not the public interest require that this be granted them?
THE CONSERVATIVE.You go too far. If the law of expropriation[60] were used in the cause of public utility to transform lawns and pleasure gardens into fields of wheat, what would happen to the security of property? Who would want to manicure a lawn, lay out a park, decorate a chateau?
THE SOCIALIST.Expropriation always entails an indemnity.
THE CONSERVATIVE.But the indemnity is not always big enough. There are things for which no indemnity could compensate. Can you pay for the roof which has sheltered generations, the hearth around which they have lived, the great trees which witnessed their births and their deaths? Is there not something of the sacred in these centuries old abodes, in which the traditions of the ancestors live on, [p. 73] in which so to speak the very soul of the family breathes? Is not the expulsion of a family forever from its ancient patrimony, the commission of a deeply immoral assault?
THE ECONOMIST.Except, of course, when it is a question of building a railway.[61]
THE CONSERVATIVE.Everything depends on the extent to which the undertaking is useful.
THE SOCIALIST.But is anything more useful than farming devoted to the people’s subsistence? For my part I strongly hope that the law of expropriation for reasons of public utility will soon be given enlarged scope. The Convention had potatoes grown in the Tuileries gardens. What a sublime example! May our legislative Assemblies keep it forever in mind! How many thousands of hectares lie unproductive around the luxurious residences of the lords of the earth? How many mouths could we feed , how much work could we distribute by handing over these fine lands to workers ready to farm them? Oh you rich aristos,[62] one day we will plant potatoes in your sumptuous flowerbeds; we will sow turnips and carrots in place of your dahlias and your Bengal rose bushes! We will expropriate you for the sake of public utility.
THE CONSERVATIVE.Fortunately the expropriation panels[63] will not give permission for these barbarous projects.
THE SOCIALIST.Why not? If Public Utility demands that your chateaux [p74] with their lawns and parklands be replaced by fields of potatoes why should the panels not agree to the expropriation? If some grant it happily when it is a question of turning farmlands into railways, will not others agree to it with all the more reason when it is a question of replacing luxurious parklands with farming? Will you cite in your reply to me the actual composition of expropriation panels? They are made up of big landlords, a fact of which I am not unaware, but this latter kind of panel will not escape the law of universal suffrage any more than the former will. We will have small owners and workers coming on to them, and then my word… big property will dance a merry tune.
THE CONSERVATIVE.That is a subversive proposal of the first order.
THE ECONOMIST.What do you expect? A law you established yourself is being enlarged and its application generalized on grounds of Social Utility. Your work is being completed. Can you complain about it?
THE CONSERVATIVE.I know very well that expropriation in the service of public utility has its dangers, especially since that accursed revolution… Is it not however indispensable? Are not private interests perpetually at war with public interests?
Moreover does not this law contain an implicit recognition of property? If the State did not respect property rights, would it have gone to the trouble of demanding a law of expropriation from the Legislative Chambers? Would simple ordinances not have sufficed?[p75] Does the law of expropriation on the grounds of public utility not subsume an implicit recognition of property?
THE ECONOMIST.Yes, in the way that rape subsumes an implicit recognition of virginity.
THE CONSERVATIVE.What about the indemnity?
THE ECONOMIST.Do you think any indemnity could compensate for a rape? Now if I do not want to hand over my property to you and by using your superior strength you rob me of it, are you not committing a serious crime? [64] The indemnity will not efface this assault made against my rights. But, you will object, the public interest may require the sacrifice of certain private interests, and this necessity must be provided for. And this is you, a conservative who is speaking to me in these terms? Is it really you denouncing for my benefit the antagonism between the public interest and private interests? Do take care, are you not talking socialism?
THE SOCIALIST.Probably. To each his own.[65] We have denounced and were the first to do so, this lamentable idea of an opposition between the public interest and private interests.
THE CONSERVATIVE.Yes but how can you put an end to it?
THE SOCIALIST.That is very simple. We get rid of private interests. We bring about the return of the wealth of each to the domain of All. We apply on an immense scale [p76] the law of expropriation in the cause of public utility.
THE ECONOMIST.And if there truly is antagonism between the interest of each person and the interest of all, you are acting very wisely and your adversary is in error in not following you all the way.
THE SOCIALIST.You are being sarcastic! Do you happen to believe that private interests naturally coincide of themselves with public interest?
THE ECONOMIST.If I were not convinced of it, I would have become a socialist a long time ago. I would wage, as you do, perpetual war against private interests, I would demand a tightly knit association, a community, and who knows what else. I would not wish at any price to maintain a social order where no one would prosper save on the condition of hurting other people. Thank God, however, that society is not constructed thus. The various interests are naturally in agreement. The interest of each person coincides naturally with the interest of all.[66] Why therefore make laws which put the former at the mercy of the latter? Either these laws are pointless, or as the Socialists claim, society needs remaking.
THE CONSERVATIVE.You argue as if all men had an accurate understanding of what is in their own interest. Well, this is false. Men frequently mistake what is in their interest.
THE ECONOMIST.I know perfectly well that men are not infallible; I also know, however, that each man is the best judge of his own interest.
[p77]
THE CONSERVATIVE.Perhaps you are right in principle, but in practice some people are truly obstinate and stupid.
THE ECONOMIST.Not so obstinate and not so stupid when their interests are in question. I admit, however, that people of that type can ruin some useful enterprises. Do you think that the present law does not cause more harm than they would be able to? Does it not compromise the security of present property and does it not menace it in the future too?
THE CONSERVATIVE.It is quite certain that socialism would make a truly deplorable use of the law of expropriation in the cause of public utility.
THE ECONOMIST.And you conservatives who passed that law, would you willingly oppose its application? Is this not a dangerous weapon which you have forged for your enemies’ use? By declaring that some majority or other has the right to seize an individual’s property when the public interest demands it, have you not supplied socialism in advance with a justification for such expropriation and a legal means of carrying it out?
THE CONSERVATIVE.Alas! But who could foresee that infernal revolution?
THE ECONOMIST.When one engages in law making, one has to foresee everything.
Along with this law which threatens property right down [p78] to its roots, our Code includes other laws involving partial attacks on certain property; mining legislation for example.[67] Like the works of the intellect, mines end up outside the common law.
THE CONSERVATIVE.Is this not a special kind of property and ought it not therefore to be subject to special laws?
THE SOCIALIST.What does today’s legislation with regard to the mines say?
THE ECONOMIST.French legislation on the mines has for a century undergone very diverse modifications. Under the Ancien Régime the mines were considered as belonging to the royal domain. The king granted mining licences as seemed to him appropriate, to the finder, to the owner of the land or to any other, in exchange for a tenth of the annual output. When the Revolution liberated property and labour, people must have hoped that this advantage would be extended to mining property; unfortunately it did not turn out that way. The law makers refused to grant subterranean property its charter of liberation.
Three opinions emerged on the issue of this kind of property. Some said that underground property was simply attached to surface property; according to others it belonged to the whole community; according to a third group it reverted to the finders. In this last view, the only equitable one, the only one consistent with law, the owners of the land could demand only a simple indemnity for those parts of the surface of the land which were necessary for exploiting the mineral deposits, and the government[p79] likewise could not demand anything save a tax for the legal protection granted to the miners.[68]
THE SOCIALIST.According to you then, the ownership of mines ought therefore to be classed in the same category as property rights over inventions?[69]
THE ECONOMIST.Precisely. Let us suppose you are a gold prospector. After a lot of searching you have managed to find a seam of this precious metal. You have the sole right to exploit this seam that you alone have discovered.
THE SOCIALIST.On this reckoning the whole of America should have belonged to Christopher Columbus who had discovered it.
THE ECONOMIST.You are forgetting that America was already to a great extent ownered at the time of Christopher Columbus’s discovery.[70] Moreover, it is a rule of the law of nations that uninhabited land belongs to the first to discover it.
THE SOCIALIST.If however, after having discovered it, these first comers decide that it is not appropriate to exploit it, their property rights die. How do you explain this demise of property rights?
THE ECONOMIST.The right of property does not die. One ceases to possess only when one renounces that possession. If I have discovered a mine I will exploit it or I will cede it to someone who will exploit it. The case will be the same if I have discovered land: I will exploit it or sell it. [p. 80]
THE SOCIALIST.What if you keep it without exploiting it?
THE ECONOMIST.It will be my right but not in my interest. Looking after anything is costly: you have to pay for the security of property. If therefore I do not want to develop the land or mineral deposit which I have discovered, and if no one wants to buy it from me I will soon give up on looking after it; for it will incur losses rather than profits for me. So there is, you see, no draw back in leaving to the finder the full disposition of whatever he has discovered.
THE CONSERVATIVE.The discoverer of a deposit possesses a right to it; that seems to me quite legitimate. It is right that his work of discovery be remunerated. Do not society and those who own the surface of the land, however, also have some rights on what is underground? Society protects those who work the mines and it supplies them with the means to work them. As for the owners of the surface of the land, do they not have a claim on the ground below by the very fact of occupying the surface? Where is the boundary between the two properties?
THE SOCIALIST.Yes, where is the boundary?
THE ECONOMIST.Neither society nor the owners of the land can claim the least right to what is underground. I have already demonstrated to you in respect of inventions, that society has no right to the fruits of the work of individuals. There is no point going over this again. As [p81] for the owners of the surface land, Mirabeau[71] has clearly refuted their claims to the ownership of the sub-soil: “The idea that being the owner of a stream or river makes one the owner of the ground below our fields seems to me as absurd as the idea of preventing the passage of a hot air balloon because it passes over the property of a particular landowner.”[72] Why is this absurd? Because the ownership of the fields lies solely in the value which work has given to the surface of the land and the owners of the land have contributed nothing of value to what lies below the soil, just as they have contributed nothing to the air above it. Search out who has worked or is working and you will always know who possesses or ought to possess a thing.
THE CONSERVATIVE.But is it possible to discover a mine and to exploit it without the agreement of those who own the surface land?
THE ECONOMIST.What happens is this. You ask the owners of the land for permission to explore the ground, at the same time undertaking to give them a payment or part ownership of the mine by way of compensation for the damage which may be caused to them. Once the mine is opened up, you divide up the potential profits and set to work on it. If the exploitation of what lies under the ground is such as to harm the surface property, the owners of that property obviously have the right to oppose this or to claim a further indemnity. Their choice will be the indemnity, since the opening of a mine, by providing a new market for their products, directly or indirectly increases their incomes. In this way, interests which appear opposed, are naturally reconciled. [p. 82]
Unfortunately, the Constituent Assembly and Mirabeau himself, did not understand that the ownership of mineral resources could without any drawbacks, be left unregulated. They attributed the ownership of mines to the nation. They produced a form of underground Communism. The law of 1791 put the government in charge of allocating the ownership of mineral deposits, and it limited the tenure of licences to fifty years. Moreover the government was given the power to withdraw these licences if the mines were not maintained in good shape or if they stopped operating for a while.[73]
Undoubtedly the most destructive clause in this legislation was the one limiting the length of leases. Given the huge capital investments mining demands and the preparatory work sometimes stretching over several years, it was important above all that entrepreneurs be assured as to the future; to limit their enjoyments of their rights was to force them to limit their efforts to invest; it was to place an almost insurmountable obstacle in the way of their developing the mining of minerals.
The government’s prerogative to withdraw licences in certain specified circumstances also entailed very serious drawbacks. It is not easy to determine whether a mine is being well or badly managed. Opinions can be divided on the most appropriate means of exploitation. It was argued against wholly unrestricted exploitation, for example, that the managements extracted the richest seams first of all and neglected the others. Were they not, however, in taking such a decision, merely acting in the most rational way? Was it not obvious one should start with the most productive [p. 83] parts of the mining project? In starting with developing the less rich seams, would not the licencees have damaged their infant enterprise? Nor could it easily be decided with any greater certainty whether a developer was right or wrong to abandon all or part of his project for a while. His personal interest, which was to keep it all going constantly, was in this respect an insufficient guarantee. Unless demand slowed down, in which case the partial or total cessation of extracting minerals would of course be justified, what interest could he have in interrupting work?
THE CONSERVATIVE.They reformed that bad law.
THE ECONOMIST.They reformed it very incompletely. The law of 21 April, 1810, which replaced it, gave the government the right to grant or withdraw licences. The difference, however, is that licences ceased to be limited to fifty years. Even so, in other ways the situation of mine owners has been worsened. The 1810 law forbade them to sell in lots or to split up their mines without a prior authorization from the government, and it subjected their mining to a surveillance system created for this purpose. Furthermore, it maintained the alleged rights of surface landowners, and entrusted the Council of State with the task of determining the amounts of compensation to be granted them. Mining found itself, in this way, closely regulated and heavily burdened.
So what was the result of this law? It was to [p. 84] reduce to the minimum the mining of minerals.[74] Who would want today to be a discoverer of mines? Who would want to specialize in finding new deposits of various minerals? Before a discovery can be exploited, does one not have to lobby for a licence for long years (the licence to a property which one created by one’s own work), and having obtained it, submit oneself to an irksome surveillance and brutish directions from the administration of mining? What would happen to our agriculture, I ask you, if our farmers could not remove a shovelful of earth without the approval of some official from the Ministry of Agriculture? If they could not sell the merest parcel of land without the say-so of government? If in a word the government took it upon itself the right to take their property from them, at will? Would not this be the death of our farming? Would not investable funds soon turn away from so detestably oppressed an industry? …Well in fact investment capital has been turned away from mining ventures. It has been necessary to grant them special privileges to attract it back. It has been necessary to keep out foreign competition, and there has thus been facilitated on the domestic front the establishment of an immense monopoly, to persuade investment funds to venture to participate in an industry subservient to the government’s good pleasure. It has been necessary to burden consumers of mineral products with some of the damage inflicted on the ownership of mines. Is this not barbarous?
Let us suppose on the contrary that in 1789 the oppressive right which monarchs had taken upon themselves to cede the ownership of mines at will, had simply been abolished; [p. 85] let us suppose further that this ownership had been freely given and guaranteed to those who had created it. Would not the production of mines have developed to the maximum, without there having been any need to protect it? Might not that source of production which still yields only scant output flow copiously in the long run?
THE CONSERVATIVE.Yes, ownership is a marvelous thing. One works with such ardor when one is always sure of possessing the fruits of one’s labor, and of being able to dispose of it at will – consuming it, giving it away, lending it, or selling it, all without hindrance, harassment or irritation. Property! That is the real California. Long live property![75]
THE SOCIALIST.Long live labor!
THE ECONOMIST.Labor and property go together, since it is work which creates property and property which calls out for labor. So long live labor and property!
Government harms the development of production, not only by hampering individual ownership, but also by claiming certain properties for itself. Alongside the property of individuals there is, as you know, the public domain or common property. The State, the departments and the communes, own considerable wealth: fields, meadows, forests, canals, roads and buildings and the like.[76] Do not these diverse properties, which are managed in [p85] society’s name, constitute a genuine case of communism?
THE CONSERVATIVE.Yes, to a certain extent. Could things be arranged otherwise, however? Does not the government have to have certain kinds of property at its disposal? It is set up to provide certain services to society…
THE ECONOMIST.What services?
THE CONSERVATIVE.The government must…govern.
THE SOCIALIST.Govern, by Jove! What do you mean by that, however? Is it not to manage various interests and harmonize them?
THE ECONOMIST.There is no need for interests to be managed or harmonized. They manage and harmonize themselves quite well without anyone interfering.
THE SOCIALIST.If that is how it is, what must government do?[77]
THE ECONOMIST.It must guarantee for each individual his freedom of activity, the security of his person and the conservation of his property. To exercise this particular function, to render this special service to society, government has to have access to certain resources. Anything more it possesses is unnecessary.
THE CONSERVATIVE.But if it provides other services to society, if it supplies education, if it finances religion, if it contributes [p87] to the transport of men or merchandise by land or by water, if it makes tobacco or porcelain, or carpets, or gunpowder or saltpeter…[78]
THE ECONOMIST.In a word if it is communist! Well it does not need to be communist. Like any entrepreneur[79] the government must do one thing and one only, or risk doing what it does very badly. All governments have as their main function the production of security.[80] Let them confine themselves to that.
THE CONSERVATIVE.You have just given us a very rigorous application of the principle of the division of labor. What you would like to see then is the disappearance of the public sector, with the State selling the greater part of its property, and with all production becoming, in a word, specialized.
THE ECONOMIST.I would like this for a better development of production. In England there was recently an inquiry into the management of public property.[81] Nothing could be more instructive than the results thrown up by this research. In England the public domain consists of ancient fiefdoms of the crown, which have now become public property. These properties are huge as well as magnificent. In the hands of individuals, they would yield a worthwhile output. Controlled by the State they yield almost nothing.
If you will allow I will give you a single instance.
The main wealth of this domain consists in the four forests of New Forest, Walham, Whittlewood and Whychwood.[82] These forests are entrusted to guardians who [p88] administer them. These are the Dukes of Cambridge and Grafton, Lord Mornington and Lord Churchill. The guardians receive no formal payment but are allotted a very sizeable payment in kind, including game, timber etc. The annual income from the New Forest adds up on average to £56,000 or £57,000 sterling, approximately Fr 1, 500,000. The Treasury has never garnered more than £1000 of this income, while the maintenance of the forest between 1841 and 1847 cost the State more than £2000.[83]
THE CONSERVATIVE.This is a flagrant abuse. Do not forget, though, that this is happening in aristocratic England.
THE ECONOMIST.Plenty of other abuses happen in our democratic France. It has long been known, in France and in England, that the management of state property is dreadful.
THE CONSERVATIVE.That is only too true. There are types of property that obviously must remain in the hands of the State, the roads for example.[84]
THE ECONOMIST.In England the roads are owned by individuals, and nowhere does one see them so well maintained.
THE CONSERVATIVE.What about the tolls then? Traffic is not free in England as it is in France.
THE ECONOMIST.Excuse me, but it is much freer in Great Britain, [p. 89] for road communications are much more numerous. And do you know why? Quite simply because the government has left it to individuals to build roads and has not got involved in building them itself.[85]
THE CONSERVATIVE.But I ask once more, what about the tolls?
THE ECONOMIST.Oh, do you think then that the roads in France are built and maintained for nothing? Do you think that the public does not pay for their construction and maintenance as happens in England? Only, here is the difference. In England road construction and costs are paid for by those who use them; in France they are paid by the taxpayers, including the goatherds of the Pyrenees and the peasants of the Landes[86] who do not set foot twice a year on a national highway. In England it is the user of such means of transport who pays for them in the form of tolls; in France the whole community pays in the shape of taxes, often of a most excessive and irksome kind. Which is preferable? [87]
THE CONSERVATIVE.And the canals, is it not appropriate for them to be left in the public domain?
THE ECONOMIST.No more so than the roads. In which countries are the canals the most numerous, the best constructed and the best maintained? Is it in the countries where they are in the hands of the state? No! It is in England and [p. 90] in the United States where that have been built and are used by private groupings of private individuals.[88]
THE SOCIALIST.Would not roads and canals constitute oppressive monopolies if they were privately owned ?
THE ECONOMIST.You forget that they engage in mutual competition. I will show you later on[89] that in any enterprise subject to the free regime of free competition[90], price must necessarily fall to the level of real costs of production or use and that the owners of a canal or road cannot receive anything in excess of the equitable remuneration of their capital and their labour. This is an economic law as positive and exact as a law of physics.
Most natural waterways, which require a certain amount of management and maintenance work, could with advantage be privately owned in the same way. You know to what inextricable difficulties the common ownership of waterways gives rise today. The dams lead to countless legal cases, and irrigation systems are obstructed everywhere. It would be different if each lake or waterway had its owners against whom those living beside the water could have recourse in case of damage, and who would have responsibility for providing artificial waterfalls and establishing irrigation canals where need arose. [91]
The State is still the owner of most sources of mineral water. So these are very badly run, though not lacking in administrators and inspectors. Moreover, under the pretext that artificial mineral waters serve as medicaments, their fabrication has been [p. 91] put under government surveillance. Yet more administrators and inspectors!
THE CONSERVATIVE.Ah, government is our great running sore![92]
THE ECONOMIST.There is only way to heal that particular sore, and that is by governing less.
Endnotes
[57] The authors of the footnotes are indicated as follows: GdM = Gustave de Molinari; DOK = Dennis O’Keeffe, translator; DMH = David Hart, editor.
This chapter is also available online at <> at The Forum : Liberty Matters.
Abbreviations used: JDE = Journal des Économistes; DEP = Dictionnaire de l’économie politique (1852); Bastiat, Collected Works = The Collected Works of Frédéric Bastiat (Liberty Fund ed. 2011); AEPS = Annuaire de l’économie politique et de la statistique.
[p. 1] This refers to the original page numbering in the French edition.
[58] DMH - In a lengthy article Michel Chevalier captures the excitement which was stimulated by the construction of railways, both concerning the new technology and the possibilities of drastic reductions in the cost of transport. Buried among the mass of technical information are a number of matters of concern to the economists: that the cost of building the network was increased by tariffs on imported iron rails; that the lowered costs of shipping goods across international borders strengthened the peaceful economic bonds between people, but also made it easier for States to move troops to the border; that railways provided much needed competition with the canal system, which some considered to be a “natural monopoly”; that attempts by the government to impose lower rates on railways was “a very serious attack on the spirit of association ... [and] the freedom of industry”; and that economic liberty had within itself the means to correct any excesses or abuses in pricing or investment. [See Michel Chevalier, “Chemins de fer”in JDE, vol. 1, pp. 337-362.]
[59] DMH - La Sologne is a heavily forested region in central France between the Loire and Cher rivers.
[60] DMH - The right to a legally determined, prior compensation for property confiscated by the state was enshrined in the Declaration of Rights of Man and the Citizen in June 1791 (Article 19) and in the Civil Code of 1804 (articles 544 and 545). The Law of 8 March 1810 established tribunals for the purpose of determining the amount of compensation payments. The Law of 7 July 1833 (and amended by the Law of 6 May 1841) created special juries of local landowners which would determine the level of compensation for confiscated land. [See, A. Legoyt, "Expropriation pour cause d'utilité publique,” DEP, vol. 1, pp. 751-53.]
[61] Under the Railway Law of 11 June 1842 the government ruled that 5 main railways would be built radiating out of Paris which would be built in cooperation with private industry. The government would build and own the right of way, bridges, tunnels and railway stations, while private industry would lay the tracks, and build and maintain the rolling stock and the lines. The government would also set rates and regulate safety. The first railway concessions were issued by the government in 1844-45 triggering a wave of speculation and attempts to secure concessions. The first major line was the "chemin de fer du Nord" (June 1846) followed by the "chemin de fer d'Amiens à Boulogne" (May 1848).
[62] DMH - Molinari uses the word “aristos”in the original. It is short for “aristocrats”and has a negative connotation.
[63] DMH - The “jurys d’expropriation” (or Compensation Juries) were established by the law of 7 July 1833 to determine the amount of compensation the state would pay to land owners who had their property confiscated to build public works such as roads and railways, A “jury”of 16 property owners were called together to assess the value of the confiscated property. It is similar to the eminent domain laws in the United States. [See the article by A. Legoyt on “Expropriation pour cause d’utility publique,” DEP, vol. 1, pp. 751-53.]
[64] DMH - Throughout this conversation Molinari uses the word “viol”which means rape. In this sentence he continues to use the language of rape to describe other kinds of violations of private property. Thus, here we have translated “ravir” (ravish) and “viol” (rape) as “rob”and “serious crime”.
[65] DMH - Molinari uses the Latin phrase “Suum cuique”which was used by many authors in the ancient world. It is most commonly associated with the jurist Ulpian who contributed to Justinian’s codification of Roman law (c. 530). In 1.1.10 there is “Iustitia est constans et perpetua voluntas ius suum cuique tribuendi”and “Iuris praecepta sunt haec: honeste vivere, alterum non laedere, suum cuique tribuere”which can be translated as "Justice is the constant and perpetual wish to render to every man his due”and “The principles of the law are these: to live honorably, to harm no one, to give to each his own”respectively. See Institutes de l'empereur Justinien: traduites en français avec le texte en regard, suivies d'un choix de textes juridiques relatifs à l'histoire externe du droit romain et au droit privé antéjustinien, recueil publié par M. Blondeau (Paris: Videcoq, 1838), 2 vols. See vol. 1, p. 11.
[66] DMH - Molinari is referring to a key aspect of Bastiat’s economic thinking here, namely the idea of “the harmony of interests”. Bastiat developed these ideas at length in his unfinished magnum opus Economic Harmonies (1850). Later in “Les Soirées” Molinari does use the word “harmony” but here he uses words such as “coincider”or “accorder”. A good summary of the topic is provided by Charles Coquelin, the editor of the DEP, in “Harmonie industrielle,” DEP, vol. 1, pp. 851-55. He notes the concurrent emergence of the term “harmony” in France and the U.S. at roughly the same time: Bastiat’s Economic Harmonies in 1850 and Henry Carey’s The Harmony of Interests in 1851. Carey accused Bastiat of plagiarising the idea but this charge was later withdrawn.
[67] DMH - The Law of 21 April, 1810 regulated the mining industry in France. See A. Legoyt, “Mines, minières et carrières,” DEP, vol. 2, pp. 178-88.
[68] DMH - Molinari takes sides here in a debate which had divided the economists since before the Revolution. The Physiocrat Turgot argued in the 1770s that first use and occupancy by an individual bestowed a property right to the resource which was owned by that individual. Liberal revolutionaries like Mirabeau and post-revolutionary liberals like Charles Comte believed that ownership of mineral resources resided with the Nation which could sell or license them at will. Other post-revolutionary liberals like Charles Dunoyer believed that owners of surface land also owned the mineral rights to the resources under their land. Molinari clearly sided with Turgot in arguing that the first user or occupant was the just owner of the property. [See the glossary entry on “Property Rights in Mineral Resources.”]
[69] DMH - This topic is discussed in the 2nd Soireé.
[70] DMH - The standard account for the Economists of the original and just acquisition of private property in land out of a state of communal tribal ownership is provided by Charles Comte, Traité de la Propriété, 2 vols. (Paris: Chamerot, 1834), vol. 1, chap. X "De la conversion du territorie national en propriétés privées,” pp. 139-61. Comte believes it was a near universal phenomenon that communally owned land eventually was transformed into private ownership as soon as an individual was able through the self denial of immediate consumption to save enough to survive long enough to engage in the more protracted process of cultivating a plot of land until the harvest. This resulted in dramatically higher output than hunting and gathering or other communal activities. Comte believes this process of privatization was a just one for two reasons: firstly, the private farmer needed much less land than previously in order to create a greater output and the land he no longer needed was left for the other members of the tribe to use; secondly, by creating a more productive resource he unintentionally increased the value of the surrounding land and thereby gave to the community much more than he had taken in privatizing his parcel of land. Thus, Comte concludes, no "usurpation” was committed in this original act of privatization of the land (pp. 150-51). Although neither Molinari nor Comte mentions John Locke by name there is an obvious parallel here to the Lockean proviso concerning the end of the state of nature - that "enough, and as good, left in common for others.” [See, John Locke, Two Treatises of Government, ed. Thomas Hollis (London: A. Millar et al., 1764). CHAP. V. (para. 27) Of PROPERTY. </title/222/16269/704358>.] A similar set of arguments in defence of the legitimacy of the first user of a piece of land to having ownership of that land can be found in Pierre-Louis Roederer's "Lectures on the Right of property" which he gave to the Lycée in December 1800. [See, Pierre-Louis Roederer, Discours sur le droit de propriété, lus aux Lycée, les 9 décembre 1800 et 18 janvier 1801, (Paris, Didot, 1839). “Premiere discours sur let droit du propriété, lu au Lycée, le 9 décembre 1800,” pp. 7-24. It is quite likely that Roederer, Comte and Molinari knew of the 18th century natural law writings of theorists like Burlamaqui. The Swiss natural law theorist Jean-Jacques Burlamaqui (1694-1748) has a similar notion of a Lockean Proviso in Élémens du droit naturel (1774) which is: ".. in taking part of this (commonly owned) land, one should not deprive others of anything; (that) there remain enough for all (il en restait assex pour tous).” [See, Part III, chap. VIII "De l'origine et de la nature de la propriété,” pp. 135 in Elémens du droit naturel, par Burlamaqui; et Devoirs de l'homme et du citoyen, tels qu'ilsw lui sont prescits par la loi naturelle; traduits du latin de Pufendorf par Barbeyrac, avec les notes du traducteur et le jugement de Leibnitz. Nouvelle édition (Paris: Janet et Cotelle, 1820).]
[71] DMH - Mirabeau (1749-91) was a journalist and politician who made a name for himself as one of the leading orators during the French Revolution. He was a supporter of constitutional monarchy and wrote on economics and banking. [See the glossary entry on "Mirabeau".]
[72] DMH - Mirabeau, Speech in the National Assembly, 21 March, 1791 “Sur la question de savoir si les mines pouveaient être considérées comme propriété publiques.” Honoré-Gabriel Riqueti, comte de Mirabeau, Oeuvres de Mirabeau, précédées d'une notice sur sa vie et ses ouvrages, par M. Merilhou (Paris: Lecointe et Pougin, 1834), 3 vols. Vol. 3. Discours et opinions, p. 110.
[73] DMH - Mines could not be owned as private property but could only be licenced from the state for fixed periods upon an annual payment of royalties to the state. [See the discussion of the changing laws concerning mining in A. Legoyt, “Mines, minières et carrières,” DEP, vol. 2, pp. 178-88 - the Law of 12 July 1791, the Law of 21 April 1810, and the Law of 27 April 1838.]
[74] DMH - Mining was administered by the Ministry of the Interior. The number of new mining licences issued between 1811 and 1848 was 760 which returned to the Treasury royalties of fr. 227,652 in 1835, fr. 533,391 in 1847, and fr. 397,202 in 1848 which were very low amounts compared to other sectors of the economy. [See, "Statistique de l'industrie minérale,” in AEPS (1850), pp. 170-71. See also the Budget for 1848 in the Appendix.]
[75] DMH - Mining rights and land ownership issues in California would have been very much on Molinari’s mind at this time. The California gold rush had began with the discovery of gold at Sutter’s Mill in January 1848 and the hundreds of thousands of gold seekers who flocked to the gold fields were known as the “forty niners” (1849). At this time California was not yet a state in the Union (it was admitted in September 1850) and was occupied by the U.S. following the Mexican-American War 1846-1848. The treaty which ended the war and which ceded California to the U.S. was signed in February 1848. Land ownership, especially mining rights, were in a state of flux. For the time being, Mexican mining law continued to apply whereby the first to stake a claim to mining land created “ownership”of it as far as later arrivals were concerned. Molinari was fascinated by the U.S. and travelled there extensively in the 1870s writing a series of articles for the Journal des Débats which were published as book: Lettres sur les États-Unis et le Canada addressés au Journal des débats à l'occasion de l'Exposition Universelle de Philadelphie (Paris: Hachette, 1876).
[76] DMH - State owned property ("la domaine public") was considerable in France and included property and real estate. Under "meubles" (property) was the following: the national printing service, the contents of the National Libraries, the contents of the National Archives, the contents of the art galleries, museums, and scientific laboratories, the arms held by the armed forces and navy, the furnishings and equipment of the government administration, and the contents of all government owned factories and workshops. The complete value of this property of the state is not known as it was not officially assessed at the time. However, the armed forces did give a figure for the value of the fire arms it owned (fr. 1.12 million) and its ships (fr. 120 million). Under "immeubles” (real estate) was the following: public buildings, forges, founderies, workshops, land, forests, national roads, railways, canal tow paths, lakes. The value of the latter was estimated in January 1850 to be worth fr. 1.3 billion. The earnings from government owned property was estimated in 1850 to have been fr. 221 million, or 6.4% of total government income. [See, A. Legoyt, "Domaine public", DEP, vol. 1, pp. 573-77.]
[77] DMH - The Economist gives a more detailed answer to this question in the 11th Soirée.
[78] DMH - The Conservative lists the industries in which the French state either ran government owned factories or had an outright monopoly. Ambroise Clément lists under the category of "privileged” or "legal monopolies” the manufacture and sale of tobacco products, gunpowder, the delivery of mail, the issuing of money, education, and public works. He also lists numerous areas of economic activity which can only be practiced with a government issued license such as mines, legal notaries, lawyers, bailiffs, money changers, brokers, printers, book sellers, bakers, butchers, and porters. Ambroise Clément, "Monopole,” in DEP vol. 2, pp. 219-25.
[79] DMH - Molinari uses the word “entrepreneur” here. He uses this word throughout Les Soirées (37 times) and identifies 12 specific kinds of entrepreneurial activity. There are the usual "entrepreneurs d'industrie" (industrial or manufacturing entrepreneurs) but also some unusual ones such as "entrepreneurs d'education" (entrepreneurs in the education business), "le laborieux entrepreneur, naguère ouvrier" (entrepreneurs who have emerged from the working class), "entrepreneurs de pompes funèbres" (entrepreneurs in the funeral business), and even "entrepreneurs de prostitution" (entrepreneurs in the prostitution business). See the glossary entry “Entrepreneurs, Undertakers, and Adventurers.”
[80] DMH - Molinari caused a furore in the Political Economy Society when he published an article using this very phrase as its title on the private provision of security services in the February 1849 issue of the JDE (“The Production of Security”) which he then followed up with the 11th Soirée of his book published later in the year. This provoked a hostile reaction at a meeting of the Political Economy Society in September and a very critical review of his book Les Soirées by Coquelin in the October 1849 issue of the JDE. See Molinari, "De la production de la sécurité,”in JDE, Vol. XXII, no. 95, 15 February, 1849, pp. 277-90.
[81] DMH - The British Parliament held an inquiry into revenue from Crown Lands in late 1847 and 1848 which issued a Report: Report, Evidence, and Appendix, on the Woods, Forests, and Land Revenues of the Crown, Reports from Committees: Eighteen Volumes. Session 18 November 1847 - 5 September 1848. Vol. XXIV. Parts I and II (1847-8).
[82] DMH - New Forest is in Hampshire, England and was created as a royal forest by William I in 1071; Walham is north of Gloucester near the River Severn; Whittlewood Forest is in Northamptonshire; Wychwood Forest is is Oxfordshire.
[83] DMH - The English Radical John Wade has a section in his Extraordinary Black Book (1832) on crown land and those who benefited from privileged access to them (what he called “jobbing the crown-lands”) (p. 196 ff.). The body to administer Crown Forests was created in 1810 called The Commissioners of Woods, Forests, and Land Revenues.
[84] DMH - Dupuit in his article on “Voies de communication” DEP, vol. 2, pp. 846-54, argues that there are three alternatives when it comes to the provision of communication routes (railways, roads, canals): there is either a private monopoly, a State monopoly, or competition between private companies. He dismisses the first two categories on the grounds of justice and economic incentive problems and supports the third on the grounds that “unlimited competition” and “complete liberty” will overcome the disadvantages of the first two.
[85] Info on British toll system????
[86] DMH - The Département des Landes (des Gascognes) is in South West France and is the birthplace of Molinari’s friend and colleague Frédéric Bastiat.
[87] DMH - Although Adam Smith believed roads were a public good which should be provided by the state because it was not in the interest of any particular individual or group to build and maintain them, he believed that they should not be paid for out of general revenue but by those who used the roads via a toll [ Wealth of Nations, Book V, Chap. 1, Part C, paragraphs 1 & 2]. This view was challenged by J.-B. Say in the Cours complet (1828) who thought that roads were so vital to a nation’s economy that they should be paid for out of general revenue and not tolls on users. [Cours complet (1840), vol. 2, Chap. XXIII “Dépense des voies de communication, et particulièrement des routes,” pp. 306-8]. By 1852 Molinari and the Economists had returned to Smith’s view that it was “just and rational” that users of roads be charged according to how much they made use of them. See J. Dupuit, “Routes et chemins, DEP, vol. 2, pp. 555-60.
[88] DMH - Michel Chevalier notes that the privately owned canals in Britain are more efficiently built and run than the state owned canals in France. Concerning the latter he states “State owned canals are poorly maintained; and furthermore, for the most part, they have not even finished building them, and God knows when they will be; and the administration of them is well below mediocre.”The state owned or licensed canals in America, on the other hand, were more quickly and efficiently built than in France, but the process of getting their construction approved and funded were highly politicised and the strong political incentives which existed sometimes meant too many licences were granted. See Michel Chevalier, “Canaux de navigation,” DEP, vol. 1, pp. 264-72.
[89] DMH - Molinari discusses how free competition forces the cost of production to fall in Soirées 5, 6, and 7.
[90] DMH - Molinari uses the phrase “le régime de libre concurrence” (the regime of free competition) several times in Les Soirées but this is the only time he has a double emphasis on the word freedom: “le libre régime de la libre concurrence” (the free regime of free competition).
[91] DMH - There is a fascinating discussion of the private provision of water in cities like London and Paris by Dupuit in “Eau,” DEP, vol. 1, pp. 629-37. Dupuit contrasts the free and competitive provision of water (and gas) in London with the government monopoly in Paris. Although he has some qualms about rival companies tearing up the streets to service their different sets of customers, he is impressed with the better quality of filtered London water and the more rational method of pricing. The low government fixed price of water in Paris was only “apparently free” as the costs of supplying it had to be borne by somebody and there was no incentive for the providers of water to innovate or for the consumers of water to economise on their use of it.
[92] DMH - Molinari uses the word “plaie”or “wound/sore”several times in Les Soirées to describe the government and its actions. He goes a step further in his article “Nation” in DEP, vol. 2, pp. 259-62 where he describes governments which overstep the boundaries of their proper sphere of activity as “ulcerous”and the economist as the surgeon who must cut out the cancerous flesh from the social body. [See the glossary entry on “Ulcerous Government”.]
The Sixth Evening [edit 2]
[Editorial matters][93]
[p. 142]
SUMMARY: The right of exchange. – On the exchange of labor. –Laws on unions. – Articles 414 and 415 of the Penal Code – The Union of Paris Carpenters, 1845. – Proof of the law which makes the price of things gravitate towards their production costs. – Its application to labor. – That the worker can sometimes dictate to the employer. – An example from the British West Indies. – The natural organization of the sale of labor.
THE ECONOMISTExchange is even more hindered than lending and borrowing. The exchange of labor is subject to legislation on passports and workbooks[94] and to union law;[95] buying and selling of real-estate is subject to costly and oppressive formalities; the trade in goods is burdened, domestically, by various indirect taxes, notably by licensing duties, and externally by customs. These different infringements on the property of those who engage in exchange, result invariably in reducing output and disrupting the equitable distribution of wealth.
Let us consider first of all the obstacles placed in the way of the free exchange of labor.[96]
THE SOCIALISTOught we not, before that, finish examining the various aspects of external property? [p. 143]
THE ECONOMISTWe can think of labor as external property. The entrepreneur who buys labor does not buy all the worker’s faculties and productive powers; he buys the portion of these which the worker separates from himself by the act of working. The exchange is not really concluded or closed until the worker, who has separated from himself a part of his intellectual and moral capabilities, has received in exchange, products (most commonly precious metals) likewise containing a certain quantity of labor. This is truly, therefore, an exchange of two external properties.
To be equitable, all exchange must be perfectly free. Are not two men who effect an exchange the best judges of their interest? Can a third party legitimately intervene and oblige one of the two contracting parties to give more or receive less than he would have given or received had the exchange been a free one? If one or the other reckons that the thing he is being offered is too dear, he will not buy it.
THE SOCIALISTWhat if he is forced to buy it in order to live? What if a worker, pressured by hunger, is obliged to relinquish a considerable amount of labor in exchange for a very low wage?
THE ECONOMISTThis is an objection which will oblige us to follow a very long, roundabout route.
THE SOCIALISTAdmit, though, that the objection is a very strong one…it really contains the whole socialist case. The socialists have [p. 144] recognized, confirmed, that there is not and cannot be equality under the present arrangement for the exchange of labor; that the employer is in the nature of things stronger than the worker, so that he can always lay down the law to the latter and does so. Having clearly asserted this manifest inequality, they have sought the means of eliminating it. They have found two of these: the intervention of the state between seller and buyer of labor; and the Association of Workers which cuts out the private sale of labor.[97]
THE ECONOMISTAre you quite sure that the inequality of which you speak exists?
THE SOCIALISTAm I sure of it? But the masters of political economy themselves have recognized this inequality. If I had the works of Adam Smith to hand…..
THE CONSERVATIVEHere they are in my library.
THE ECONOMISTHere is the page.
THE SOCIALISTGive me your attention please:
THE ECONOMISTWhat are the common wages of labour, says Adam Smith, depends every where upon the contract usually made between those two parties, whose interests are by no means the same. The workmen desire to get as much, the masters to give as little as possible. The former are disposed to combine in order to raise, the latter in order to lower the wages of labour.
It is not, however, difficult to foresee which of the two parties must, upon all ordinary occasions, have the advantage in the dispute, and force the other into a compliance with their terms. The masters, being fewer in number, can combine much more easily; and the law, besides, authorises, or at least does not prohibit their combinations, while it prohibits those of the workmen. We have no acts of parliament against combining to lower the price of work; but many against combining to raise it. In all such disputes the masters can hold out much longer. A landlord, a farmer, a master manufacturer, or merchant, though they did not employ a single workman, could generally live a year or two upon the stocks which they have already acquired. Many workmen could not subsist a week, few could subsist a month, and scarce any a year without employment. In the long–run the workman may be as necessary to his master as his master is to him; but the necessity is not so immediate.
Please listen to this, too:
We rarely hear, it has been said, of the combinations of masters; though frequently of those of workmen. But whoever imagines, upon this account, that masters rarely combine, is as ignorant of the world as of the subject. Masters are always and every where in a sort of tacit, but constant and uniform combination, not to raise the wages of labour above their actual rate. To violate this combination is every where a most unpopular action, and a sort of reproach to a master among his neighbours and equals. We seldom, indeed, hear of this combination, because it is the usual, and one may say, the natural state of things which nobody ever hears of [p. 146] Masters too sometimes enter into particular combinations to sink the wages of labour even below this rate. These are always conducted with the utmost silence and secrecy, till the moment of execution, and when the workmen yield, as they sometimes do, without resistance, though severely felt by them, they are never heard of by other people. Such combinations, however, are frequently resisted by a contrary defensive combination of the workmen; who sometimes too, without any provocation of this kind, combine of their own accord to raise the price of their labour. Their usual pretences are, sometimes the high price of provisions; sometimes the great profit which their masters make by their work. But whether their combinations be offensive or defensive, they are always abundantly heard of. In order to bring the point to a speedy decision, they have always recourse to the loudest clamour, and sometimes to the most shocking violence and outrage. They are desperate, and act with the folly and extravagance of desperate men, who must either starve, or frighten their masters into an immediate compliance with their demands. The masters upon these occasions are just as clamorous upon the other side, and never cease to call aloud for the assistance of the civil magistrate, and the rigorous execution of those laws which have been enacted with so much severity against the combinations of servants, labourers, and journeymen. The workmen, accordingly, very seldom derive any advantage from the violence of those tumultuous combinations, which, partly from the interposition of the civil magistrate, partly from the superior steadiness of the masters, partly from the necessity which the greater part of the workmen are under of submitting for the sake of present subsistence, generally end in nothing, but the punishment or ruin of the ringleaders.[98] [p. 147]
So there you have, is it not true, an eloquent condemnation of your system of free competition, from the pen of the very master of economic science? In the arguments over earnings, the employer is stronger than the worker – Adam Smith himself confirms it! After this admission by the master himself, what ought his disciples to have done? If they had truly possessed any love of justice and humanity, ought they not to have searched for ways to establish equality in the relations of employers and workers? Have they fulfilled this duty?...With what have they proposed to replace the wage earners, that ultimate embodiment of servitude, as M. de Châteaubriand has so aptly put it?[99] What do they propose in place of this iniquitous and primitive laissez-faire[100] which builds the prosperity of the master on the ruin of the workers? What have they proposed, I ask you?
Nothing.
THE SOCIALISTIn fact they said they could do nothing against the natural laws which govern society; they have shamefully confessed their powerlessness to come to the aid of the workers. This duty of justice and humanity, which they have failed to recognize, has been fulfilled, however, by us socialists. In replacing the wage earners by Associations of Workers[101] we have put an end to the exploitation of man by man and to the tyranny of capital.
THE ECONOMISTI…um! [p. 148]
THE CONSERVATIVEAllow me first of all to make a simple observation. In the passage from Adam Smith which has just been cited, the subject is laws which repress unequally the employers’ coalitions and those of the workers. Thank God, we do not have anything like this in France. Our laws treat all equally. There are no longer inequalities in France.
THE ECONOMISTYou are wrong. On the contrary, French law has established a flagrant inequality between employer and worker. To prove this to you it will be enough for me to read articles 414 and 415 of the Penal Code.[102]
Art.414. Any coalition between those who give the workers employment, which is aimed at forcing down wages, unjustly and improperly, followed by an attempt at carrying this out or actually beginning to do so, will be punished by an imprisonment of from six days to a month, and a fine ranging from two hundred to three thousand francs.
Art.415. Any coalition, either attempted or initiated, on the part of the workers, which is aimed at bringing all work to a halt simultaneously, forbidding activity in a workshop, preventing people going there or staying there before or after certain hours, and in general, stopping, preventing or making production more expensive, will be punished by an imprisonment of at least one month and no more than three months. The ringleaders or instigators will be punished with an imprisonment of two to five years.
As you see, the employers can be prosecuted only when there is an unjust or improper move on their part to force earnings down; the workers are prosecuted [p. 149] purely and simply for attempting to form coalitions; moreover the punishments are monstrously unequal.[103]
THE CONSERVATIVEHas not the National Assembly reformed these two articles?[104]
THE SOCIALISTIt would perhaps have reformed them were it not for the opposition of an economist.[105] In the meantime these articles remain in force and God knows what disastrous influence they exert on the price of labor. Remember the union of Parisian carpenters in 1845. The workers formed a union to obtain a rise of one franc on their wage, which at that time stood at four francs. The management combined to resist.
THE CONSERVATIVEThe union was never established.
THE SOCIALISTOn the contrary it was fully established. At that time when associations were explicitly forbidden, the master carpenters had obtained authorization for the setting up a trade association for the improvement of their industry; but in this hotbed of improvement there was more concern with wages than with anything else.[106]
THE CONSERVATIVESo what do you know about it?[107]
THE SOCIALISTThe discussions during the legal proceedings have clearly established the facts. The representatives of the workers addressed their remarks to the chairman of the carpenters’ trade association in order to gain an increase in wages. The chairman turned this down after a long deliberation among the participants. The employers, however, were not [p150] prosecuted and in reality they could hardly be so. They had combined, truth to tell, but not to lower wages “unjustly and improperly”; they had combined to prevent wages rising.
THE ECONOMISTWhich came down to exactly the same thing.
THE SOCIALISTBut the legislators under the Empire had not understood it thus. The employers were sent away absolved. The leaders of the workers’ union were condemned, some to five years, others to three years of imprisonment.
THE ECONOMISTYes, this was one of the most deplorable condemnations which the annals of justice record.
THE CONSERVATIVEIf I am not mistaken the union resorted to blatant ill treatment. Certain workers ill treated fellow workers who had not wanted to go along with the union. But your theory of laissez-faire[108] perhaps authorizes such procedures.
THE ECONOMISTMuch less than your theory does. When people say unlimited freedom, they mean equal freedom for everybody, equal respect for the rights of one and all. Now when a worker prevents another worker from working, by intimidation or violence, he is making an assault on a right, he is violating property, he is a tyrant and a plunderer and ought to be sternly punished as such. The workers who had committed this kind of offence in the case of the carpenters, were in no way excusable and it was right [p. 151] and proper to condemn them. But not all of them had been involved. The union chiefs had neither carried out nor ordered any violence. They were however more severely punished than the others.
THE CONSERVATIVEThe law will be reformed.
THE ECONOMISTAs long as it remains it will be an iniquitous law.
THE CONSERVATIVEWhat? Even though it no longer upheld any difference between masters and workers?
THE ECONOMISTYes. What does Adam Smith say? He says the employers can make agreements with much greater ease than the workers and that the law can get them much less easily. Now if the law strikes at four trades unions for every one association of the employers, is the law just?
In practice, the effect of this law is disastrous for the workers. The employers, knowing that the law restrains them only with difficulty, while it restrains the workers easily, are encouraged to raise and submit exploitative claims in the management of labor prices. Any law with respect to these unions, however equal we make it, therefore constitutes an intervention by society in favor of the employer. In the end, people were convinced of this in England and this law relating to unions, which had incurred the just condemnations of Adam Smith, was duly abolished.
THE CONSERVATIVELet us see though! Are unions legitimate or are they not? Do they constitute a fraudulent agreement or a proper one? That is the question. Well, on this question [p. 152] the opinion of our General Assemblies has never been in doubt. The members of our first Constituent Assembly and of the Convention itself, set their faces unanimously against any union, any agreement either on the part of the entrepreneurs or the workers. Chapelier,[109] a member of the National Convention, in one of his reports wrote the following sentence which has become famous: “It is absolutely necessary to stop both entrepreneurs and workers from combining over their alleged common interests”.[110] What do you think of that?
THE ECONOMISTI think the most discerning specialist in criminal law would be hard put to find anything criminal in the action of two or more men coming to an understanding in order to secure an increase in the price of their merchandise; I think that in issuing laws in order to suppress this alleged crime, we encroach unjustly and harmfully on the property rights of producers[111] and workers.
I go further. In forbidding unions we are preventing agreements which are often crucial.
THE SOCIALISTHave not the economists always regarded unions as harmful or at least as pointless?
THE ECONOMISTThat depends on the circumstances and on the way combinations are led. In order to have you see clearly, however, those circumstances in which a union can be useful, and how it must be led to yield good results, I am obliged to return to the fundamentals of the debate. You have asserted that no justice is possible under [p. 153] the wage-system; that the employer, being naturally stronger than the worker, must therefore naturally oppress him.
THE CONSERVATIVEThat outcome is not inevitable. There are philanthropic sentiments which moderate the excessive sharpness which private interests may display.
THE ECONOMISTNot at all. I accept the outcome as inevitable and believe it to be such. We do not pursue philanthropy in the domain of business, and rightly so, for philanthropy would be out of place there. We will return to this issue later….
So you are of the opinion that the employer can always dictate to the worker and that therefore the wage system precludes justice.
THE SOCIALISTI share Adam Smith’s opinion.
THE ECONOMISTAdam Smith said that the employer can oppress the worker more easily than the worker can oppress the employer; he does not say that the employer always finds himself necessarily in a position to lay down the law to the worker.
THE SOCIALISTHe identified a natural inequality which exists in favor of the employer.
THE ECONOMISTYes but this inequality can be absent. The situation may be such that the worker is stronger than the employer.
THE SOCIALISTIf the workers form a union? [p. 154]
THE ECONOMISTNo, without their combining. I will give you an example in a moment. Now, if inequality does not always come about may it not be the case that it never does ?
THE SOCIALISTGood! You are coming over to the idea of the organization of labor.[112]
THE ECONOMISTGod preserve me from that!
On my way here I passed by Fossin’s boutique.[113] There were, in the display window, very beautiful sets of diamonds. On the pavement opposite an orange-seller was offering her wares. She had oranges of two or three grades and on one corner of her stall a packet of over ripe oranges which she was selling at a cut price.
THE CONSERVATIVEWhat is this riddle about?
THE ECONOMISTI would ask you to observe the difference between the two industries. Fossin sells diamonds, an essentially durable product. Whether or not a purchaser comes, the diamond merchant can wait without fearing that his merchandise will undergo the least deterioration. If the orange-seller, however, does not succeed in getting rid of her wares, she will soon be left without a single sound orange. She will be forced to throw her merchandise on to the waste heap. There is, certainly, a striking difference between the two kinds of industry. Fossin can wait a long time for buyers without worrying that his products will spoil, but the orange seller cannot. Does this mean that the orange-seller [p. 155] is more exposed than Fossin to purchasers laying down the law?
THE SOCIALISTThat depends. If the orange-seller does not take care to match exactly the quantity of her goods to the number of her buyers, she will be obliged to cut her prices or waste some of her oranges.
THE CONSERVATIVEWell she will be doing very bad business.
THE ECONOMISTSo, will any orange seller who knows her trade carefully avoid loading herself with goods that she may not sell at a profitable price?
THE CONSERVATIVEWhat do you understand by profitable price?
THE ECONOMISTI understand by it the price which covers the production costs of the good including the natural profit[114] for the merchant.
THE SOCIALISTYou are not resolving the difficulty. In a year in which the orange harvest is superabundant, what will one do with the surplus if the traders demand no more than usual? Will the superabundant oranges have to be left to rot?
THE ECONOMISTIf more oranges are harvested, more will be supplied and price will fall. With falling price, demand will increase and the harvest surplus will thus find buyers. [p. 156]
THE SOCIALISTBy what proportion will it fall?
THE ECONOMISTAccording to all the research gathered so far, we can assert the following:
When supply exceeds demand in arithmetic progression, price falls in geometric progression, and similarly when demand exceeds supply in arithmetic progression, price rises geometrically.[115]
You will not be slow to spot the beneficial results of this economic law.[116]
THE SOCIALISTIf such a law exists, must it not have on the contrary, essentially dire results? Suppose for example that the proprietor of orange groves normally harvests five hundred thousand oranges a year and can sell them at two centimes a piece. This gives him a sum of ten thousand francs with which he pays his workers and his own labor as director of the farm, covering in a word his production costs. A year of abundance comes along. Instead of five hundred thousand oranges he harvests a million. As a result he supplies twice as many oranges to the market. In line with your economic law, the price falls from two centimes to half a centime, and the unfortunate owner, victim of abundance, receives only five thousand francs for a million oranges, when in the previous year he had received ten thousand francs for half that number. [p. 157]
THE CONSERVATIVECertainly a super abundance of goods is sometimes harmful. We had better ask our farmers if they prefer a year of abundance or an average year, a year where corn is at twenty two francs or a year when it falls to ten francs.[117]
THE ECONOMISTThese are economic phenomena that can be explained only by the law which we have just formulated. It does not follow at all from that law, however, that the doubling of a harvest must lead to a three quarters fall in price, since demand always grows more or less insofar as price falls. Let us go back to the example of the owner of orange groves. At two centimes a piece this owner would cover the production costs of five hundred thousand oranges. If the harvest were to double, production costs would not increase in the same proportion. Nevertheless they would increase. You need more labor to gather a million oranges than to gather five hundred thousand. Moreover the owners will be forced to pay this labor more because wages always rise when the demand for labor increases. The costs of production will therefore rise by half perhaps. They will climb from ten thousand to fifteen thousand francs. To cover this last sum, which represents his production costs, the proprietor will have to sell his harvest of oranges at a rate of one and a half centimes each.
The question is whether, even if he succeeded in selling five hundred thousand oranges at two centimes each, he would succeed in selling a million at a centime and a half. Would a lowering of price by half [p. 158] a centime be enough to bring about a doubling of demand?
If the reduction in price is not sufficient, our proprietor will have to lower his price further for fear of not selling some of his merchandise. This, however, will mean he faces losses. If he sells only nine hundred thousand oranges at a centime and a half, he will not cover his costs; if he sells a million at a centime and a quarter, he will lose even more.
Experience is the only guide in this case. A given drop in price does not increase the demand for all goods equally. A fall by half in the price of sugar, for example, can double consumption. A fall by half in the price of oats or buckwheat will occasion only a weak expansion in demand for these two products. In a year when the harvest exceeds customary expectations, it is therefore hard to know whether it is better to increase supply in line with the increase in the harvest, or to hold back part of the output in order to maintain the price.
THE SOCIALISTAnd if the commodity is not conservable, it will be advantageous to let it go to waste, therefore.
THE ECONOMISTYes, or what comes to the same thing economically, to distribute it gratis to people who could not have bought it at any price. There are very few goods, however, that one cannot conserve in one form or another.
If you still have some doubt about the economic law I have just indicated, look at what happened recently in the grain trade. In 1847 our grain harvest was in deficit; instead of [p. 159] gathering sixty million hectoliters of wheat we harvested only about fifty million.[118]
You know what effect this harvest deficit had commercially. From twenty or twenty two francs, its normal price level, wheat rose to forty or fifty francs. The following year, on the contrary, the harvest was abundant, yielding ten or twelve million hectoliters more than usual. From forty or fifty francs, price fell then by successive stages to fifteen francs, and in certain areas as low as ten francs. In the first of these two years, a fall in supply of a quarter led rapidly to a doubling of price; in the second a rise in supply of a quarter drove price successively down to a half of its normal level. [119]
The same law regulates the price of all goods. The only thing is, we must always take good note when we are studying this law, of the increase in demand which results from a fall in price and vice versa.
THE SOCIALISTIf a slight fall in supply can lead to such a sizeable increase in price, I am beginning to understand a fact that until now had remained very obscure to me. At the end of the last century there was a famine in Marseille. The price of wheat had risen very high… but not high enough for the liking of certain merchants who undertook to make it rise further still. Consequently they thought about throwing part of their supplies into the sea. This happy idea was hugely profitable for them. But a child had witnessed their impious and criminal action. His young soul reacted [p. 160] with profound indignation. He wondered what this society could be in which it proved useful to some to starve others, and he declared everlasting war on a civilization which gave birth to such abominable excesses. He devoted his life to putting together a new form of Organisation… This child, this reformer, was, as you know, Fourier.[120]
THE ECONOMISTThe anecdote may be true since this happens often in years of famine as also in years of plenty; but for me this proves only one thing: that Fourier was a very bad observer.
THE SOCIALISTGoodness me!
THE ECONOMISTFourier saw the effect but he did not see the cause. At that time purchases of foreign wheat were encumbered by the difficulty of communication and also by the Customs regulations.[121] So the domestic suppliers of wheat enjoyed an effective monopoly. To render this monopoly more fruitful still, they did not put on to the market, did not put on sale, more than a part of their output. If the law had not interfered in their activities, they would have kept the rest in the warehouse, for wheat is one of those goods which can be stored for a very long time. Unfortunately there were at that time laws against monopolists. These laws forbad merchants to keep in store more than a certain quantity of foodstuffs. Faced with the alternative of putting all their wheat on the market, or destroying some of it, they often found it more advantageous to [p. 161] to adopt the latter option. It was barbarous, it was odious if you will, but whose fault was it?
Under a regime of complete economic liberty nothing like this could happen. Under this regime, the price of all goods tends naturally to fall to the lowest level possible. Indeed the very fact that a small difference between the two levels of supply and demand, leads to a sizeable difference in price, means that equilibrium must necessarily establish itself. As soon as the supply of a commodity is not sufficient in respect of demand, price rises with such rapidity, that it is soon found very profitable to bring an additional amount of that commodity to the market. Now men being naturally on the lookout for all business which yields them some advantage, the various competitors combine to fill the gap.
As soon as the deficit is closed and equilibrium re-established, the flows stop of their own accord; for prices tending to fall progressively as supplies increase, it does not take long for suppliers to be making losses.
Thus if producers or merchants are left completely free to take their goods where the need for them is felt, supplies will also always be as closely proportionate as possible to the requirements of consumption; if on the contrary, in one way or another there are attacks on freedom of communication,[122] if merchants are harassed during the free exercise of their industry, it will take a long time for equilibrium to be reached, and in the interval the leading producers in the market will be able to realize huge returns, at the expense of the unfortunate consumers. [p. 162]
Let us note again that returns increase all the more with people’s increasing inability to go without the commodity. Let us suppose that a company gains a monopoly over the sale of oranges in a country. If this company takes advantage of its monopoly in order to reduce by a half the quantity of oranges supplied compared to previously, in the hope of increasing the price fourfold, demand will likewise decrease. The gap between supply and demand still remaining in consequence very small, the market price of oranges will not be able to rise much above the natural price.
It will be different if a company manages to grab a monopoly of the production or sales of cereals. Wheat being a commodity of primary necessity, a diminution of a half in supply, and consequently a progressive rise in price will occasion only a slight contraction in demand. Such a fall in supply which would make the price of oranges rise only very little would result in a doubling or tripling of the price of wheat.
When a commodity is an absolutely prime necessity like wheat, demand shrinks only with the loss of part of the population or the draining away of its resources.
In brief, in certain circumstances a given commodity whose price could not rise very high in ordinary circumstances, suddenly acquires uncommon value. For example, let’s transport an orange seller into the midst of a caravan which is crossing the desert. At first, [p163] she has to sell her merchandise at a modest price for fear of not selling anything. But, water becomes scarce and immediately the demand for oranges doubles, trebles, quadruples. The price rises progressively as demand increases. It is not long before it exceeds the resources of the less affluent travellers and threatens the resources of the richest travelers: in a few hours the worth of an orange can climb in this way a million times. If the orange seller, herself suffering from thirst, reduces her supply as her own need becomes more urgent, a point will come when the price of oranges exceeds all the available resources of her companions in the caravan, be they all nabobs.
By observing carefully this economic law you will be explaining to yourself a host of phenomena which until now probably have eluded you. You will know precisely why producers, in certain areas, have always aimed at obtaining exclusive privilege or monopoly with the respect to the sale of their products; why above all they show themselves very keen on monopolies which affect goods of primary necessity; why in a word these monopolies have been immemorially the terror of populations.
I now return to my orange seller and to Fossin.
THE CONSERVATIVEAt last!
THE ECONOMISTThanks to the special nature of his merchandise which is durable, Fossin can, without too much inconvenience, augment [p. 164] his supply of precious stones beyond the needs of the moment. Nothing forces him to release the surplus immediately. The orange seller finds herself in a very different situation. If she has bought more oranges than she can sell at a worthwhile price, she lacks the ability to hold the surplus indefinitely in reserve, since these oranges are subject to decay. By putting her whole stock on sale, however, she is at risk of lowering the price of oranges to the point of losing even the value of this surplus. What will she do therefore? Will she destroy this surplus with which she has unwisely burdened herself? No! She will sell it outside its normal market, or perhaps wait for some of her oranges to be slightly spoiled so that she can sell them to a particular group of purchasers, in such a way as not to compete with the rest of her supply. This explains those little piles of semi-spoiled oranges on the corner of the sellers’ stalls.
THE CONSERVATIVEWhat does it matter to us?
THE ECONOMISTYou will soon see. These piles of fruit are more in evidence the less the merchants understand their business, or when the consumption of oranges is subject to stronger fluctuations. We would see fewer of them encumbering the stalls, however, if the sellers knew exactly how to proportion their purchases to their sales, and also if consumption were never subject to sudden variations. If conditions were like that, the orange sellers would always be able, like Fossin, to [p165] balance their supply to demand, without experiencing losses; they would stop selling part of their output at a loss for fear that the surplus would spoil, or wait until that surplus is ruined to sell it off dirt cheap.
THE CONSERVATIVENo doubt.
THE ECONOMISTWell, if you examine closely the situation of workers with respect to the entrepreneurs of industry, you will find it perfectly analogous to that of orange-sellers with respect to their buyers.
If you examine likewise the situation of entrepreneurs with respect to workers, you will find it absolutely the same as Fossin’s with respect to their clientele.
Labor indeed is an essentially perishable commodity, in the sense that the worker, quite lacking in resources, risks perishing in a short space of time if he does not succeed in selling his goods. Thus the price of labor can fall to an excessively low level at times when the supply of labor is sizeable and when the demand for it is weak.
Fortunately charity intervenes at this point by removing from the market in order to feed them for nothing, a section of the workers who are offering their labor unsuccessfully. If the charity is insufficient the price of labor continues to fall until part of the labor unsuccessfully offered, perishes. Then equilibrium starts to establish itself again.
The entrepreneur who offers wages to the workers [p. 166] is not obliged, at least usually, to hurry himself up to the same degree. When labor is scarce on the market, the entrepreneur can hold in reserve some of these wages, and like Fossin, proportion his supply to demand.
There are, however, exceptions to this rule. It sometimes happens that entrepreneurs have to accept lower profits, to concede to paying high wages in exchange for a smaller supply of labour, or, if I may use the common expression, to find the workers laying down the law to the management. This happens when they have a need for more labor than currently available on the market.
This is what happened in the British West Indies at the time of emancipation.[123] When slavery kept the workers on the plantations, the owners had enough ready labor to keep their holdings more or less profitable. When slavery had been abolished, however, a great number of slaves began to work on their own account. The numbers who continued to work in the production of sugar-cane proved insufficient. At the same time the laws of supply and demand made their influence felt on the price of labor. In Jamaica, where the daily work of a slave yielded scarcely 1 fr. in revenue, the same quantity of free labor was sold for 3, 5, 10 or even as much as 15 or 16 fr.[124]This absorbed the greater part of the indemnity paid to the planters. Soon, however, after very many owners had abandoned their plantations, because they were unable to pay these exorbitant wages, demand [p. 167] fell, while on the other hand, the appeal of these wages having drawn in labor from every country, even from China, supply increased. Thanks to this double movement which ceaselessly and irresistibly realigned supply and demand, the price of labor in the British West Indies has today reverted more or less to its natural level.
THE SOCIALISTWhat do you mean by the natural wage level?
THE ECONOMISTI mean by this, the sum necessary to cover the production costs of the labor. I will give you a fuller explanation of the situation in a subsequent discussion.[125]
You see, in short, that entrepreneurs cannot escape the laws of supply and demand any more than the workers themselves can. When the equilibrium between them is adversely disturbed, when the balance of labor is in favor of the workers, the entrepreneurs can doubtless keep in reserve – usually at least – some portion of the wages they pay, and thereby prevent the wage climbing too high. They can imitate the jewelers who hang on to their jewels and precious stones rather than sell them unprofitably. In the end, however, a point comes when under threat of going bankrupt or of giving up their business they are forced to put the wages they have available onto the market.
When equilibrium moves against the workers, when the balance of labor favors the entrepreneurs, the workers are, even so, commonly forced to sell their labor, unless charity comes to their aid, or they succeed, one way or [p. 168] another in withdrawing the excess labor from the market. The situation is then worse than that of the employers when the latter are short of labor, because they are like the orange traders in that they sell a not very durable commodity, one which perishes easily or is easily destroyed.
If, however, well aware of the nature of their commodity, they had exercised sufficient prudence never to overload the market, and always to proportion their supply of it to demand, would not they, too, like the orange sellers who know their business, always sell their wares at a worthwhile price?
THE SOCIALISTIs it indeed always possible to align supply and demand? Do the workers have the power to prevent crises from overturning industry? Can they also easily shift excess labor from one place to another, the way bales of merchandise are transported? This equilibrium, which would allow workers to sell their labor at a decent price, must it not, in the very nature of things, be incessantly disrupted to their disadvantage? And in this case, will not the price of labor, like that of any other perishable good, drop in the most frightful way?
THE ECONOMISTThe obstacles which you attribute to nature are more often than not artificial. If you study industrial crises more closely, you will see that they almost always have their origin in the restrictions which hamper production and the circulation of wealth, at various points around the world.[126] Look more closely also for the causes of [p. 169] the difficulties workers encounter in aligning their supply to the level of demand. You will find that these difficulties arise, in the main, either from the institutions of state charity, which encourage workers to increase in number constantly, or from the obstacles put in the way both of workers’ easily associating with each other, and of the free circulation of labor, obstacles such as economic legislation on unionization, on apprenticeships, or labor workbooks and passports. Then there is civil legislation refusing foreigners equal rights with those of nationals. However weak the action of these artificial obstacles on the behavior of supply and demand may be, they are registered very substantially, even enormously, on the movement of prices, since the arithmetic progression on one hand, engenders a geometric progression on the other.
I have already shown you that the laws against unionization must necessarily and inevitably strengthen the employers’ side in wage discussions. In the absence of these dire laws, moreover, the workers would always have ways – lacking to them today – to secure the prompt alignment of the supply of labor to the demand for it. Let me explain.
I return to the example of the seller of oranges, assuming that she sells some hundred oranges every day. One day the demand falls by half; no more than fifty are now purchased. If she persists on this particular day with her wish to sell a hundred, she will have to drop the price sharply and will experience a marked loss. It will be better for her to remove the excess fifty oranges from the market, even if the fruit set aside might perish during the day.
Well, the situation is exactly the same for those sellers of labor, the workers. [p. 170]
THE CONSERVATIVEI would like to see this, but who will volunteer to play the part of the oranges destined to rot in the shop?
THE ECONOMISTNo one, individually! If the workers are intelligent, however, and if the law does not prevent their coming to agreement amongst themselves, do you know what they will do? Instead of letting wages fall progressively as demand falls, they will remove from the market that surplus whose presence generates that fall.
THE CONSERVATIVEBut here again, who will agree to being withdrawn from the market?
THE ECONOMISTProbably no one will do so, unless the workers as a whole compensate those who will be withdrawn; but there will be competition to quit the market if the mass of workers allots compensation to the withdrawn workers equal to the wages they were receiving at work.
THE CONSERVATIVEDo you believe the workers remaining in employment will regard this scheme as in their interests?
THE ECONOMISTI think so. Let’s take an example. One hundred workers receive a wage of four francs a day. Demand happens to fall by a tenth. If our hundred workers nevertheless persist in offering their labor, by how much will the wage fall? It will fall not by a tenth but by close to a fifth, (it would be exactly a fifth if the fall in the price of the commodity did not always increase demand by some small amount); it will fall to 3 fr. 20. The total sum of wages will fall from 400 fr. To 320 fr. But if the workers [p. 171] in concert withdraw from the market the ten surplus workers, granting them compensation equal to the wage, perhaps 40 fr in total, instead of receiving no more than 320 fr. ( 100 x 3 fr. 20), they will receive 360 fr. (90 x 4). Instead of losing 80 fr., they will lose only 40 fr.
You see that unions can have their usefulness, that they are required, perhaps accidentally, by the very nature of the goods which workers bring to the market. To ban them is therefore, with regard to the great mass of workers, to commit a real act of plunder.
If trades unions were legal, while at the same time the laws on labor workbooks and passports did not harass the movements of workers, you would see the mobility of labor developing rapidly on an immense scale. Adam Smith, looking into the extremely low level of wages in certain localities said: “After all that has been said of the levity and inconstancy of human nature, it appears evidently from experience that a man is of all sorts of luggage the most difficult to be transported.”[127] The means of communication however have been very much improved today compared with what they were in Adam Smith’s time. With the railways and the aid of the electric telegraph, we can rapidly and cheaply transport a great mass of workers from one place, where labor abounds, to another where it is in short supply.
You will understand, nevertheless, that this commerce in labor[128] could not undergo the development of which it is capable, while the law continued to shackle it.
THE SOCIALISTThe government should go so far as to guide the workers [p. 172] in their searching. It ought to indicate to them the places where labor is abundant and where it is scarce.
THE ECONOMISTLet private industry be free to go about its business[129] and it will serve the workers much better than the government could. Give full freedom of movement and association to the workers[130] and they will be perfectly able to seek out the places where the sale of labor operates most advantageously; active and shrewd intermediaries will help them at the lowest possible price ( provided that no one takes it upon himself to limit the number of these intermediaries, nor to regulate their activities). The supply of and demand for labor, which spontaneously move one towards the other, will in these circumstances, come to equilibrium without difficulty.
Let the workers be free to go about their business,[131] allow the free movement of labour, that is the solution to the problem of the wage earners.
Appendix: Molinari’s Plan for a Labor Exchange
Struck, some years ago, by the difficulties workers experience in finding the places where they can obtain a good market for that type of merchandise we call labor, I called for the establishment of a labor exchange,[132] along with publicity for the current rates, on the lines of what is done for capital and consumer goods.[133]
Later I tried to put flesh on this idea, and in the Courrier français, edited at that time by M. X. Durrieu, I addressed the following appeal to the workers of Paris:
For a long time the capitalists, producers and merchants, have been taking advantage of the publicity that the press offers them, for placing their capital or selling their merchandise most advantageously. All the newspapers regularly publish a bulletin of the Stock Exchange. All have also opened their columns to industrial and commercial advertising.
If such publicity renders to capitalists and merchants, services whose importance today no one could deny, why [p. 173] should they not also be put within the reach of the workers? Why not use it to light the way for workers in search of employment, as it already helps capitalists looking for markets for their funds and merchants seeking to place their merchandise? Is not the worker who lives by the sweat of his brow or the use of his intelligence, at least as keen to know which places attract the most advantageous wages, as the capitalist or trader can be to know the markets where their funds or goods will fetch the highest rewards? His physical strength and his brain are his personal capital: it is by exploiting them, making them work, and exchanging their output for the output of other workers like himself, that he manages to subsist.
…It is the press which publishes the industrial bulletins. It would also be the press that would publish an employment bulletin.
So we propose to all government bodies in Paris,[134] to publish each week, free of charge, an employment bulletin, indicating the level of earnings and the disposition of supply and demand. We would divide this government bulletin by the different days of the week, in such a way that each trade had its publication on a fixed day.
If our suggestion is accepted by the government, we will ask our colleagues in the various départements (regions) to publish employment bulletins for their localities, as we will publish the one for Paris. Each week we will bring them all together and create from them a general bulletin. In this way, every week, all the workers in France will be able to have in front of them, a picture of the employment circumstances in the various parts of the country.
We will be aiming above all at the workers employed by the government in Paris. They are already organized. They already have official Labor Exchanges. Nothing would be easier than for them to advertise the bulletin of their daily transactions. Nothing would be easier than for them to provide France with publicity for the labor-force.” (Courrier français 26th July 1846).
Following this appeal, I got in touch with some of the Parisian guilds, among others with the Stonemasons, who introduced me to one of their comrades, surnamed Parisien la Douceur, one of the most intelligent workers whom [p. 174] I have met. Parisien la Douceur liked my plan very much and promised to explain it to the Stonemasons’ Guild. Unfortunately, the Guild did not share its delegate’s opinion. Fearing that the publication of wage data in Paris might attract a considerable increase in the number of workers in this great centre of population, it refused to collaborate with me. Nor were my attempts elsewhere more successful.
After the February Revolution, I tried to launch this idea again. I wrote to M. Flocon, at that time Minister of Agriculture and Commerce,[135] to enlist his support, if not for building a Labor Exchange in Paris, at least for putting the already established Stock Exchange at the service of the workers. Businessmen go to the Stock Exchange in the afternoon; could not the workers go there in the morning? Such is the question which I put to M. Flocon; but M. Flocon, busy with lots of other things did not reply to me.
The same idea was taken up again some time later, and a plan for a Labor Exchange was even presented to the Chief of Police, M. Ducoux, by an architect, M. Leuiller. M. Emile de Girardin[136] gave his support to this initiative and he even offered to devote part of page 4 of La Presse to publicizing labor business.
In order to give the reader an idea of how far this very necessary publicity might extend, and of the services it could render to the workers in their capacity as traders in labor,[137] with the help of the electric telegraph and the railways, I reproduce here an extract from a brochure in which I developed this idea at some length:[138]
Let us examine how the electric telegraph should be set up in such a way as to give workers in all countries the means of ascertaining instantly the places where labor is demanded on the most advantageous conditions.
The telegraph lines have been established alongside the railways.
In every one of the great states of Europe, the main railway lines gravitate towards the Capital as to a common center. They link all the secondary towns to the metropolis. The secondary towns, in their turn, serve as centers for other means of communication which terminate in population centers of the third rank.
Suppose that in France, for example, there are established in twenty secondary towns, markets and Labor Exchanges, dealing both with the sale of labor and the placement of capital and [p. 175] goods. Let us also suppose that the morning is given over to labor transactions and the afternoon to those of capitalists and merchants. Let us see next how the labor market works.
On the day of the opening of twenty Exchanges, workers who lack employment and directors of industrial firms who need labor, go to the market, the former to sell, the latter to purchase, labor. Note is made of the number of transactions effected, and at what price, and of the relative proportions of jobs offered and jobs demanded. The market bulletin, drawn up at the end of the session, is sent by telegraph to the central Stock Exchange. Twenty bulletins arrive at the same time at this central gathering point, where a general bulletin is composed. This latter, which is dispatched immediately, either by rail or by telegraph, to each of the twenty Secondary Exchanges, can be published everywhere before the Exchange opens the next day.
Informed by the general labor bulletin, as to the situation in the various labor markets of the country, the workers available in certain centers of production, can send their supply details to those where there are jobs available. Let us suppose, for example, that three carpenters are without work in Rouen, while in Lyon the same number of workers in the same trade are in demand at a wage of 4 fr. Having consulted the labor bulletin published in the morning paper, the Rouen carpenters go to the exchange, where the telegraph line comes in, and they send a message to Lyons along these lines:
Rouen ––– Rouen 3 carpenters at fr. 4.50 ––– Lyon
The message goes to Paris and from there to Lyon. If the wage asked by the Rouen carpenters is acceptable to the employers in Lyon, the latter respond immediately with an agreed sign of acceptance. If they think the wage asked too high, negotiations takes place between the two parties. If eventual agreement is reached, the carpenters, bearing the message of agreement stamped by the employee at the telegraph, make their way immediately to Lyon by railway. The transaction has been concluded as rapidly as it could be in the Rouen exchange.
Let us now assume that Frankfurt is the central point on which converge all the telegraph lines connecting with the various central Stock Exchanges of Europe. It is to Frankfurt that all the general bulletins of [p. 176] each country come, there also that a general European bulletin is put together and sent to all the Central exchanges, whence it is transmitted to all the secondary ones. Thanks to this publicity mechanism, the number of jobs and the numbers of workers available, along with the wages on offer or asked for, are made known to us, almost instantly, everywhere in Europe.
Suppose, then, that an unemployed seaman in Marseilles, looking at the European bulletin of labor, learns that there is a shortage of sailors in Riga and that a decent wage is being offered in that port.
He goes to the Exchange and sends Riga a telegram offering his services. From Marseilles his message goes to Paris, in two or three stages, depending on the power of the transmission. From Paris the message is sent to Frankfurt, from Frankfort it goes to Moscow, the Central Exchange in Russia, and from Moscow to Riga. This distance, in the region of 4000 kilometers, is covered in two or three minutes. The reply is transmitted in the same way. If telegrams are priced at the rate of five centimes per hundred kilometers, our seaman will pay about fr. 4 for the telegraph messages sent and received. If his demands are agreed to, he will take the train and arrive in Riga in five days. On the supposition that his fare will be set at the lowest price possible, say, ½ centime per kilometer, his costs of moving, including the telegrams, will add up to some fr. 24.
Thus Europe becomes one huge market, where labor transactions are carried out as rapidly and easily as in a city market-place. The Exchanges of Europe correspond with those of Africa and Asia by way of Constantinople.
Thus steam locomotion and the electric telegraph are, in a sense, the material instruments of the liberty of labor. By giving individuals the means of freely arranging their affairs and of always making their way to countries where life is easier and more agreeable, these vehicles of providence push societies irresistibly in the direction of progress.
Endnotes
[93] The authors of the footnotes are indicated as follows: GdM = Gustave de Molinari; DOK = Dennis O’Keeffe, translator; DMH = David Hart, editor.
This chapter is also available online at <> at The Forum : Liberty Matters.
Abbreviations used: JDE = Journal des Économistes; DEP = Dictionnaire de l’économie politique (1852); Bastiat, Collected Works = The Collected Works of Frédéric Bastiat (Liberty Fund ed. 2011); AEPS = Annuaire de l’économie politique et de la statistique.
[p. 1] This refers to the original page numbering in the French edition.
[94] DMH - The “livrets d’ouvriers”or workbooks were documents used by the police to regulate or “domesticate the nomadism”of workers. Workers had to have them signed by the police or the mayor of the towns in which they worked and their employment details filled out by their employer. If they were found without the workbooks in their possession, workers could be imprisoned for vagrancy. The workbooks were introduced in 1781, were abolished during the Revolution, and then reinstated under Napoleon in 1803. Although they were often ignored in practice they were a significant regulation of labor and were not abolished until 1890. See “Livrets d’ouvriers”by “C.S.”in DEP, vol. 2, pp. 83-84.
[95] DMH - Note on the translation: Molinari uses the French word “coalition”which we have translated as “union;” “ouvrier”as “worker;” “maître”as “employer;” “salariat”as “wage earner;” however “entrepreneur” remains “entrepreneur” and not “adventurer” as the American translator of Say’s Treatise of Political Economy, C. R. Prinsep, translated it in 1821. [See the Translator’s Note.]
[96] DMH - Molinari wrote the article on “Travail” (Labor) in the DEP, vol. 2, pp. 761-64. Joseph Garnier wrote the article on “Liberté du travail” (Freedom of working), DEP, vol. 2, pp. 63-66. The work which dominated the thinking of the economists at this time was the 3 volume work on this topic by Charles Dunoyer, De la liberté du travail; ou, Simple exposé des conditions dans lesquelles les forces humaines s'exercent avec le plus de puissance. Paris: Guillaumin, 1845, 3 vols. Dunoyer defined freedom as follows: "What I call liberty, in this book, is the power which men acquire in order to use their strength more easily, to the degree to which they are freed from the obstacles which originally hindered them in its exercise. I also say that a man is all the more free to the extent that he is able to rid himself of the things which prevent him from making use of his strength, to the extent to which he is able to remove these impediments from his presence, to the extent that he is able to expand and unblock his sphere of action” (vol. 1, p. 24).
[97] DMH - The Socialist here uses the word “Association”which is capitalized in the French and which we have translated as “Association of Workers.”This is a technical term for socialists like Fourier which has a special meaning in their economic and social theory, namely the communal and anti-market organization of labor and production which they hoped wold replace the free market. The Socialist is also being provocative as the economists had a very different idea of “association” (which they did not capitalize) which was much broader, namely that free people formed many types of free and voluntary associations in order to achieve their goals. As Ambroise Clément notes in his article “Association” in the DEP, vol. 1, pp. 78-85 there are many meanings of the word (he discusses 10 different types of association) and the specialized use of the word by socialists like Fourier was only the 10th one on his list.
[98] DMH - Adam Smith, Wealth of Nations, vol. 1, I.viii.11 “Of the Wages of Labor”. .
[99] DMH - Chateaubriand. François René, vicomte de Chateaubriand (1768-1848). Chateaubriand was a novelist, philosopher, and minister of foreign affairs from December 28, 1822 to June 6, 1824. This reference is most likely to the concluding section of Chateaubriand’s Mémoires d’Outre-tombe from the chapter entitled "Saint-Simoniens (etc)” where he discusses workers associations, wage labor, and "absolute equality", warning that "this equality will lead to not only servitude of the body but to slavery of the spirit” (p. 476). A few sentences later he states that "Absolute equality, which presupposes the complete submission to this equality, would reproduce the harshest form of slavery; it would turn the human individual into a beast of burden which was subject to the power which restrains it and forced to walk without end along the same path” (p. 477). Mémoires d’Outre-tombe, vol. 11 (Paris: Eugène et Victor Penaud, 1850).
[100] DMH - This is one of the half dozen or so references in the Soirées to the doctrine of “laissez-faire” or the idea that there should be no government intervention in economic matters whatsoever. [See the glossary entry on “Laissez-faire” and Molinari’s use of this expression throughout Les Soirées.]
[101] DMH - The Socialist uses the term “Association”which we have translated as “workers’ associations.”As Ambroise Clément notes in his article “Association”in the DEP, vol. 1, pp. 78-85 there are many meanings of the word (he discusses 10 different types of association) but the socialists of his day had capitalized the word “Association”and used it to mean the form of economic and social cooperation advocated by Fourier and others.
[102] DMH - Molinari accurately quotes Articles 414 and 415 of the French Penal Code. See A.J. Rogron, Code pénal expliqué par ses motifs, par des examples, par la jurisprudence (Bruxelles: Société typographique belge, 1838), pp. 108-9.
[103] DMH - Molinari took a great interest in labour unions on the mid-1840s partly because he saw them as just another example of a voluntary association between free individuals to achieve shared goals, and partly because he objected to the unequal punishment meted out to labour unions vis-à-vis employers associations. Both were banned under the Civil Code but punishments were heavier and more often enforced against labour unions than employers associations. It seems Molinari was active in labour matters in 1845-46 when he intervened in a court case against striking Parisian carpenters (see note below) and gave an address to Parisian workers in 1846 on the need for a "Bulletin du travail” (Labour Market Report) which would provide information to workers on prices and availability of jobs much like the "Bulletin de la Bourse” (Stock Market Report) provided prices and availability of stocks and bonds to investors. This he thought would even up the balance of power between employees and employers. [See, the long quote at the end of this chapter where Molinari summarizes his scheme for a fully fledged "Bourse du travail” (Labour Exchange). Also, the address "Aux Ouvriers” which was published in the Courrier français on 20 July 1846 and reprinted in Questions d'économie politique, vol. I (1861), pp. 183-94.] Molinari returned to this critique of Articles 414, 415, 416 of the Penal Code in a Petition to the Belgian Chamber of Representatives in 1857 with a thousand signatures in support. He criticised the "deplorable inequality” which these Articles created between workers and their employers and reminded the legislators that "if you accept the idea that the regime of the liberty of labour is beneficial, it is on the condition that this liberty is a real one; that it is on the condition that the same rights which are granted to industrial entrepreneurs vis-à-vis the workers are also granted to the workers vis-à-vis the entrepreneurs” (p. 201). [ See "Les Coalitions des ourvriers” originally published in the Bourse du travail, 14 March, 1857 and reprinted in Questions d'économie politique, vol. I (1861), pp. 199-205.]
[104] DMH - In 1849 the law was slightly amended regarding articles 414, 415, and 416 in order to make them somewhat less unequal, but the civil penalties still remained in force. See A. E. Cherbuliez, “Coalitions”in DEP, vol. 1, p. 382.
[105] DMH - I wonder which one???
[106] DMH - Molinari is making a play on words here. He uses the phrase “chambre syndicale” (literally, “union chamber” which we have translated as “trade association”) and then the dismissive phrase “chambre de perfectionnement” (which we have translated as “hotbed of improvement” (“chambre”also means “bedroom”) in order to preserve the linguistic link).
[107] DMH - Both Molinari and Bastiat were supporters of the right of workers to form unions. Bastiat gave a speech in the Chamber of Deputies on 17 November, 1849 defending unions on the grounds that they were just another form of voluntary association which should be protected under the law. [See, “Coalitions industrielles” (The Repression of Industrial Unions) in Oeuvres complètes, vol. 5, p. 494. Also in Bastiat, Collected Works, vol. 2, pp. 348-61.] Molinari tells us some 52 years later that he had assisted the Parisian Carpenters Union in their trial in 1845. He does not say how he assisted them but he states that "in spite of the eloquent plea made on their behalf by M. Berryer the leaders of the union were condemned to 5 years in prison” for asking for a wage increase. He sadly notes that the crack down by the government on the workers and their unions provoked a reaction against the government and the principle of individual liberty: "(Because of the government's action there was) a reaction against the new regime which was even accused of worsening the condition of the working class by removing the guarantees which they had under the old regime. The socialists blamed liberty for the evils which arose precisely from the obstacles which their exercise of liberty encountered and they bent over backwards to invent new theories of social reorganization which, upon closer examination, were nothing more than a retrogression to the ancient regime of servitude” (pp. 63-64). [See, Moinari, "La production et le commerce du travail” originally published in JDE, November 1901, T. 48, pp. 161-81 and reprinted in Questions économiques à l'ordre du jour (Paris: Guillaumin, 1906), pp. 37-184.]
[108] DMH - This is one of the half dozen or so references in the Soirées to the doctrine of “laissez-faire” or the idea that there should be no government intervention in economic matters whatsoever. [See the glossary entry on “Laissez-faire” and Molinari’s use of this expression throughout Les Soirées.]
[109] DMH - Jean Le Chapelier (1754-1794) was a lawyer and politician during the early phase of the French Revolution. He was elected to the Estates General in 1789 and was a founder of the radical Jacobin Club. He is most famous for introducing the "Le Chapelier Law” which was enacted on 14 June, 1791. The Assembly had abolished the privileged corporations of masters and occupations of the old regime in March and the Le Chapelier Law was designed to do the same thing to organizations of both entrepreneurs and their workers. The law effectively banned guilds and trade unions (as well as the right to strike) until the law was altered in 1864.
[110] DMH - Article 2 of the Le Chapelier Law of June 1791 states that: "Citizens of the same occupation or profession, entrepreneurs, those who maintain open shop, workers, and journeymen of any craft whatsoever may not, when they are together, name either president, secretaries, or trustees, keep accounts, pass decrees or resolutions, or draft regulations concerning their alleged common interests.” [See, "The "Chapelier” Law. 14 June, 1791” in Stewart, A Documentary Survey of the French Revolution, pp. 165-66. In French: Collection complète des lois, décrets ordonnances, réglemens et avis du Conseil d'État: de 1788 à 1824 inclusivemen, par ordre chronologique: suivie d'une table analytique et raisonné des matières, Volume 3, ed. J.B. Duvergier (Paris: A. Guyot et scribe, 1824), pp. 25-26.]
[111] DMH - Molinari has the Economist use the term “industriels” which we have translated as “producers”. [See glossary on “Industry”.]
[112] DMH - The “organization of labor”was another phrase used by the socialists to describe their plan for non-market alternatives to wage labor.
[113] DMH - Jean Baptiste Fossin (1786-1848) and his son Jules (1808-1869) owned the most fashionable jewelers in Paris during the July Monarchy with clientele drawn from the ruling elite. Business slowed dramatically after the 1848 Revolution but picked up again during the Second Empire (after 1852). The Fossin jewelers was in business from 1815 to 1862 when it was taken over by Prosper Morel who ran the business until 1885.
[114] DMH - The word used here is “le bénéfice naturel.”
[115] DMH - Molinari is asserting a kind of Malthusian law of prices here. Malthus developed a similar progression when describing the inevitable pressures on the food supply by a growing population: he believed that population increased geometrically while agricultural output could only increase arithmetically, thus inevitably leading to famine and the decline of surplus population through starvation. Forty years after Les Soirées appeared Molinari introduced and edited for the Guillaumin publishing firm an edition of Mathus' Principle of Population: T.R. Malthus, Essai sur le principe de population. Introduction par G. de Molinari. (Paris: Guillaumin, 1889).
[116] DMH - Molinari is here grappling with the notion of the “elasticity of demand”which is defined by David Henderson as follows: "The elasticity of demand is the percentage change in quantity demanded divided by the percentage change in price. The greater the absolute value of this ratio, the greater is the elasticity of demand.”The Concise Encyclopedia of Economics <https://www.econlib.org/library/Enc/Demand.html>.
[117] DMH - The average price of wheat in France was 18 fr. 93 c. per hectolitre in in 1845; which rose to 23 fr. 84 c. in 1846 (which had a poor harvest). Prices were even higher in the last half of 1846 and the first half of 1847 when the shortage was most accutely felt. In December 1846 it rose to 28 fr. 41 c; and reached a maximum of 37 fr. 98 c. in May 1847. The average price for the period 1832-1846 had been 19 fr. 5 c. per hectolitre. The lowest average price reached between 1800 and 1846 was 14 fr. 72 c. in 1834. See AEPS, pour 1848 (Paris: Guillaumin, 1848), pp. 179-80.
[118] DMH - Moreau de Jonnès gives the total production of wheat in France in 1848 as 69.7 million hectolitres (p. 161) which compares to 39.1 million in the U.K., 29.4 million in Austria, 17.8 million in Spain, and 7.4 million in Prussia (p. 173) in AEPS (1848).
[119] DMH - The following statistics about French agriculture come from the work of Alexandre Moreau de Jonnès (1770-1870) who was appointed head of the General Statistics Office of the French government in 1851, and reports published in the AEPS. The average price of wheat in France in 1844 was 19 fr. 73 c.; in 1845 - 19 fr. 75 c.; in 1846 - 24 fr. 03 c; in 1847 - 29 fr. 01 c.; in 1848 - 16 fr. 63 c.; in 1849 - 14 fr. 13. The years when prices were highest were (in descending order of price) 1817 (36.46 fr.), 1812 (34.34), 1816 (28.31), 1811 (26.13), 1818 (24.65), 1801 (24.39), 1802 (24.16), 1846 (24.03). The poor harvest and high prices in 1846 were thus the worst since the Napoleonic Wars and their immediate aftermath. [See, Alexandre Moreau de Jonnès, Statistique de l'agriculture de la France (Paris: Guillaumin, 1848), Part I, Chap. I "Céréales en masse,” pp. 1-74; Molinari, "Céréales,” DEP, vol. 1, pp. 301-26; Moreau de Jonnès, "Statistique de l'agriculture de la France (extraits),” AEPS. 1848., pp. 158-79; AEPS. 1851, "Prix moyen du blé en France, de 1772-1848, pp. 186-87. See also, the entry on "Moreau de Jonnès” in the glossary.]
[120] DMH - Charles Fourier (1772-1837) was a utopian socialist who wanted to start model communities in which groups of people of about 1,800 persons would form "phalansteries” where they would live together as one family and hold property in common. [See the glossary entry on "Fourier."]. I have not been able to locate an account of this story by Fourier in his own words. There is a version published in the Fourier magazine La Phalange (21 November 1841, Series 3, vol. IV, p.579) by one of his followers. The story was taken up and repeated by many, such as Courcelle Seneuil's article on "Fourier” in DEP, vol. pp. 802-07.
[121] DMH - Molinari wrote article on "Céréales,” DEP, vol. 1, pp. 301-26 and a 2 vol. History of tariffs (1847) , volume 2 of which was about cereals. The Economists, especially Frédéric Bastiat, watched with great interest as Richard Cobden organized a successful popular movement to abolish restrictions on the grain trade in England with his Anti-Corn Law League. The abolition of the Corn Laws in June 1846 inspired Bastiat to try to replicate that effort with a Free Trade Association in France, but his efforts were not successful when the free traders were defeated in the Chamber in 1847 by a better organized protectionist lobby group. [See the glossary entries on “Cobden”, the “Anti-Corn Law League,” “Bastiat,” and the French “Free Trade Association.”]
[122] DMH - Molinari uses the broader expression “liberté des communications” instead of “liberté de l’échange” (free trade, or freedom of exchange) which might have been expected in this context. Thus, he seems to be suggesting that both the free flow of goods and information about prices are necessary for this equilibrium to be re-established.
[123] DMH - France had a tumultuous path on the road towards the abolition of slavery. It was first abolished by the Convention with the law of 4 February, 1794. Napoleon reintroduced it with the law of 20 May 1802 and send a naval force to Haiti in order to enforce it, thus triggering the Haitian revolution and its eventual independence in 1804. Slavery was abolished in France a second time during the Second republic with the law of 27 April, 1848 written by Victor Schoelcher. In the British Empire the first step towards abolition came with the Abolition of the Slave Trade in 1808. After a slave revolt in Jamaica in 1831 Parliament passed the Slavery Abolition Act on 28 August 1833. This was not an immediate emancipation as the slaves were forcibly apprenticed to their former owners. The apprentice system ended in two stages, the first on 1 August 1838 and the second on 1 August 1840. Molinari had been a vocal opponent of slavery, writing a several articles and books on the topic such as Études économiques. L'Organisation de la liberté industrielle et l'abolition de l'esclavage (Paris: Capelle, 1846) and the long article on "Esclavage” (Slavery) in DEP, vol. 1, pp. 712-31.
[124] GdM - Report given by M. Jules Lechevalier to M. le duc de Broglie on colonial questions. Jules Lechevalier Saint-André, Rapport sur les questions coloniales adressé à M. le duc de Broglie président de la Commission coloniale à la suite d'un voyage fait aux Antilles et aux Guyanes pendant les années 1838 et 1839 (Imprimerie royale, 1843). DMH - The Budget for 1848 set aside the following amounts for Colonial affairs: fr. 22.86 million (for Martinique, Guadelooupe, Guyane française, Bourbon). Fr. 305.6 million was set aside for the Ministry of War and fr. 120.2 million for the combined Naval and Colonial Service. [See, "Budget de 1848" in AEPS (1848), p. 38; also see the Appendix on the Budgets of 1848 and 1849].
[125] DMH - In Soirée 10 Molinari discusses his theory of population and how this influences the level of wages.
[126] DMH - The Economists in the 1840s were beginning to develop a theory about the periodic commercial crises which afflicted the economy. A leader in this was Charles Coquelin (1802-1852) who became the editor of the DEP (1852-53). In his theory the central bank with its government monopoly in the issuing of money was the key to understanding the problem. Its manipulation of the money supply distorted the economy which led to the need for "corrections” which were manifested as commercial or industrial crises. After writing several articles on the topic in the mid 1840s Coquelin published a book on Du Crédit et des Banques (On Credit and the Banks) the year before Molinari published Les Soirées. He also wrote the article on “Banque” and "Crises commerciales” for the DEP. Coquelin died very young in 1852 and Molinari wrote a biography of him for the expanded the second edition of Du Crédit et des Banques (1859). [See, Charles Coquelin, “Banque”, DEP, vol. 1, pp. 107-45; Charles Coquelin, "Crises commerciales,” DEP, vol. 1, pp. 526-34; Charles Coquelin, Du Crédit et des Banques (Paris: Guillaumin, 1848, 1st edition), and Charles Coquelin, Du Crédit et des Banques. 2e Édition, revue, annotée, augmentée d'une Introduction par J.-G. Courcelle-Seneuil. Et une Notice Biographique par M. G. de Molinari (Paris: Guillaumin, 1859).]
[127] DMH - Smith, Wealth of Nations, I.viii.31 .
[128] DMH - Molinari uses the phrase “ce commerce de travail”.
[129] DMH - Molinari uses the phrase “Laissez faire l’industrie privée.” [See the glossary entry on “Laissez-faire” and Molinari’s use of this expression throughout Les Soirées.]
[130] DMH - Molinari uses the phrase “donnez pleine liberté de mouvement et d’accord aux ouvriers” (with the word “d’accord” in itallic suggesting it is colloquial) which we have translated as “give full freedom of movement and association to the workers.”
[131] DMH - Molinari uses the phrase “Laissez faire les travailleurs, laissez passer le travail.” [See the glossary entry on “Laissez-faire” and Molinari’s use of this expression throughout Les Soirées.]
[132] DMH - “Bourse du travail”. Molinari was to develop this idea at greater length much later in his life in Les Bourses du Travail (Paris: Guillaumin, 1893) for which he received some international attention. [See the glossary entry on “Labour Exchanges”].
[133] See “Des Moyens d’améliorer le sort des classes laborieuses” (Means of improving the lot of the working classes) in the journal La Nation, 23rd July, 1843, later published as a brochure in February 1844.
[134] DMH - Molinari uses the phrase “tous les corps d’état de la ville de Paris.”
[135] DMH - Ferdinand Flocon (1800-1866) was a liberal republican journalist, author, and politician. He was active in the radical Carbonari movement which opposed the restored Bourbon monarchy during the early 1820s. He wrote for the liberal Courrier français and then the left republican journal La Réforme where he was editor (1843-1848) and published works by Proudhon and Marx. During the 1848 Revolution he was part of the Provisional Government and was named minister of agriculture and commerce. During the June Days riots of 1848 he supported the repressive policies of Cavaignac. After Louis Napoleon came to power he was exiled from France and lived in Lausanne, Switzerland.
[136] DMH - Emile de Girardin (1806-1881). Girardin was the first successful press baron of the mid-19th century in France. He began in 1836 with the popular mass circulation La Presse which had sales of over 20,000 by 1845. One reason for his success was the introduction of serial novels which proved very popular with readers. Girardin gradually turned against the July Monarchy on the grounds it was corrupt. In the 1848 Revolution he played a significant role in advising Louis Philippe to abdicate in February and then opposing General Cavaignac's repressive actions during the June Days riots. For the latter Girardin was imprisoned and his journal shut down. During the election campaign for the presidency he supported Louis Napoleon but ran afoul of him soon afterwards. He sold his shares in La Presse in 1856.
[137] Molinari is suggesting that the workers consider themselves to be “marchands de travail” (merchants or traders of labour) not just wage earners.
[138] See Part 4 of “De l’organisation de la liberté industrielle,”in Études économiques (Paris: Capelle, 1846), pp. 56-59.
The Eleventh Evening [edit 2]
[Editorial matters][139]
[p. 303]
SUMMARY: On government and its function[140] – Monopoly governments and communist governments. – On the liberty of government. – On divine right. – That divine right is identical to the right to work. – The vices of monopoly government. – War is the inevitable consequence of this system. – On the sovereignty of the people. – How we lose our sovereignty. – How we can retrieve it. – The liberal solution. – The communist solution. – Communist governments. – Their vices. – Centralization and decentralization. – On the administration of justice. – On its former organisation. – On its current organisation. – On the inadequacy of the jury system. – How the administration of security and of justice could be made free. – The advantages of free governments. – How nationality should be understood.
THE CONSERVATIVE.Under your system of absolute property rights and of full economic freedom, what is the function of government? [p. 304]
THE ECONOMIST.The function of the government consists solely in assuring everyone of the security of his property.
THE SOCIALIST.Right, this is the “State-as-Policeman”of Jean-Baptiste Say.[141]
But I in turn have a question to put to you:
There are in the world today two kinds of government: the former trace their origin to an alleged divine right.....
THE CONSERVATIVE.Alleged? Alleged? Meaning what?
THE SOCIALIST.The others spring from popular sovereignty. Which of them do you prefer?
THE ECONOMIST.I want neither one nor the other. The former are monopoly governments and the latter are communist governments. In the name of the principle of property, in the name of the right I possess to provide myself with security, or to buy it from whomever seems appropriate to me, I demand free governments. [p. 305]
THE CONSERVATIVE.Which means?
THE ECONOMIST.It means governments whose services I may accept or refuse according to my own free will.
THE CONSERVATIVE.Are you speaking seriously?[142]
THE ECONOMIST.You will soon see. You are a partisan of divine right,[143] are you not?
THE CONSERVATIVE.Since we have been living in a republic, I have rather inclined to that persuasion, I confess.
THE ECONOMIST.And you regard yourself as an opponent of the right to work?[144]
THE CONSERVATIVE.Regard myself? Why, I am quite sure of it. I attest.....
THE ECONOMIST.Bear witness to nothing, for you are a declared supporter of the right to work.
THE CONSERVATIVE.But once again, I.....
THE ECONOMIST.You are a supporter of divine right. Well, the principle of divine right is absolutely identical with that of the right to work.
What is divine right? It is the right which certain families possess to the government of the people. Who conferred it on them? God himself.
Just read [p. 306] M. Joseph de Maistre’s Considerations on France (Considérations sur la France) and his pamphlet The Generating Principle of Political Constitutions (Principe générateur des Constitutions politiques):[145]
“Man cannot create a sovereign, says M. De Maistre. At most he can serve as an instrument for dispossessing a sovereign and delivering his estates into the hands of another sovereign, himself a prince by birth. Moreover, there has never been a sovereign family whose origin could be identified as plebeian. If such a phenomenon were to appear, it would be a new era for the world.
“......It is written: It is I who make the kings. This is not a statement made by the Church, nor a preacher’s metaphor; it is the literal, simple and palpable truth. It is a law of the political world. God makes kings, quite literally so. He prepares royal families. He nourishes them within a cloud which hides their origin. They next appear, crowned with glory and honor. They assume their place.”[146]
All of which signifies that God has invested certain families with the right to govern men and that nobody can deprive them of the exercise of this right.
Now if you recognise that certain families have the exclusive right to carry out that special form of industry which we call government, if furthermore you agree with most of the theorists of divine right, that the people are obliged to supply, either subjects to be governed, or funds, in the form of unemployment benefits to members of these families – all this down through the centuries – are you then properly justified in rejecting [p. 307] the Right to work? Between this oppressive demand that society supply the workers with work which suits them, or with a sufficient benefit in lieu thereof, and this other oppressive that society supply the workers of royal families with work appropriate to their abilities and to their dignity, namely the work of government, or else with a Salary at least to meet minimum subsistence, where is the difference?
THE SOCIALIST.In truth there is none.
THE CONSERVATIVE.What does it matter if the recognition of divine right is indispensable to the maintenance of society?
THE ECONOMIST.Could not the Socialists reply to you that the recognition of the right to work is no less necessary to the maintenance of society? If you accept the right to work for some, must you not accept them for everyone? Is the right to work anything other than an extension of divine right?
You say that the recognition of divine right is indispensable to the maintenance of society. How then does it happen that all nations aspire to rid themselves of these monarchies by divine right? How does it happen that old monopoly governments are either ruined or on the edge of ruin?
THE CONSERVATIVE.The people are in the throes of vertigo.
THE ECONOMIST.That is a widespread vertigo. Believe me, however, the people have good reasons for liberating themselves from [p. 308] their old despots. Monopoly government is no better than any other. One does not govern well and above all one does not govern cheaply, when there is no competition to be feared, when the governed are deprived of the right to choose their rulers freely. Grant a grocer the exclusive right to supply a particular part of town, forbid the inhabitants of that district to buy any commodities from neighboring grocers or even to provide themselves with their own groceries, and you will see what trash the privileged grocer will end up selling and at what price. You will see how he lines his pockets at the expense of the unfortunate consumers, what regal splendour he will display for the greater glory of the neighbourhood. .. Well, what is true for the smallest services is no less true for the greatest ones. A monopoly government is certainly worth more than that of a grocery shop. The production of security[147] inevitably becomes expensive and of poor quality when it is organized as a monopoly.
The monopoly of security is the main cause of the wars which up until our own day have caused such distress to the human race.
THE CONSERVATIVE.How should that be so?
THE ECONOMIST.What is the natural inclination of any producer, privileged or otherwise? It is to raise the numbers of his clients in order to increase his profits. Well, under a regime of monopoly, what means can producers of security employ to increase their clientele? [p. 309]
Since the people do not count in such a regime, since they are simply the legitimate domain over which the Lord’s anointed can hold sway, no one can call upon their assent in order to acquire the right to administer them. Sovereigns are therefore obliged to resort to the following measures to increase the number of their subjects: first they may simply buy provinces and realms with cash; secondly they marry heiresses, either bringing kingdoms as their dowries or in line to inherit them later; or thirdly by naked force to conquer their neighbours’ lands. This is the first cause of war!
On the other hand when peoples revolt sometimes against their legitimate sovereigns, as happened recently in Italy and in Hungary, the Lord’s anointed are naturally obliged to force back their rebellious herd into obedience. For this purpose they construct a Holy Alliance[148] and they carry out a great slaughter of their revolutionary subjects, until they have put down their rebellion.[149] If the rebels are in league with other peoples, however, the latter get involved in the struggle, and the conflagration becomes general. A second cause of war!
I do not need to add that the consumers of security, pawns in the war, also pay the costs.
Such are the advantages of monopoly governments.
THE SOCIALIST.Therefore you prefer governments based on the sovereignty of the people. You rank democratic republics higher than monarchies or aristocracies. About time!
THE ECONOMIST.Let us be clear, please. I prefer governments [p. 310] which spring from the sovereignty of the people. But the republics which you call “democratic”are not in the least the true expression of the sovereignty of the people. These governments are extended monopolies, forms of communism. Well, the sovereignty of the people is incompatible with monopoly or communism.
THE SOCIALIST.So what is the sovereignty of the people, in your view?
THE ECONOMIST.It is the right which every man possesses to use freely his person and his goods as he pleases, the right to govern himself.
If the sovereign individual has the right to use his person and his goods, as master thereof, he naturally also has the right to defend them. He possesses the right of free defence.
Can each person exercise this right, however, in isolation? Can everyone be his own policeman or soldier?
No! No more than the same man can be his own ploughman, baker, tailor, grocer, doctor or priest.
It is an economic law that man cannot fruitfully engage in several jobs at the same time. Thus, we see from the very beginning of human society, all industries becoming specialised, and the various members of society turning to occupations for which their natural abilities best equip them. They gain their subsistence by exchanging the products of their particular occupation for the various things necessary to the satisfaction of their needs.
Man in isolation is, incontestably, fully master of his [p. 311] sovereignty. The trouble is this sovereign person, obliged to perform himself all the tasks which provide the necessities of life, finds himself in a wretched condition.
When man lives in society, he can preserve his sovereignty or lose it.
How does he come to lose it?
He loses it, in whole or in part, directly or indirectly, when he ceases being able to use as he chooses, his person or his goods.
Man remains completely sovereign only under a regime of full freedom. Any monopoly or special privilege is an attack launched against his sovereignty.
Under the ancien régime, with no one having the right freely to employ his person or use his goods, and no one having the right to engage freely in any industry he liked, sovereignty was narrowly confined.
Under the present régime, attacks on sovereignty, by a host of monopolies and privileges restrictive of the free activities of individuals, have not ceased. Man has still not fully recovered his sovereignty.
How can he recover it?
There are two opposing schools, which offer quite opposite solutions to this problem: the liberal school and the communist school.
The liberal school says: eliminate monopolies and privileges, give man back his natural right to carry out freely any work he chooses, and he will have full exercise of his sovereignty.
The communist school says to the contrary: be careful not to allow everyone the right to produce freely anything [p. 312] he chooses. This will lead to oppression and anarchy! Grant this right to the community and exclude individuals from it. Let all individuals unite and organize production communistically. Let the state be the sole producer and the sole distributer of wealth.
What is there behind this doctrine? It has often been said: slavery. It is the absorption and cancellation of individual will by the collective will. It is the destruction of individual sovereignty.
The most important of the industries organised in common is the one whose purpose is to protect and defend the ownership of persons and things, against all aggression.
How are the communities formed in which this activity takes place, namely the nation and communes?
Most nations have been successively enlarged by the alliances of owners of slaves or serfs as well as by their conquests. France, for example, is the product of successive alliances and conquests. By marriage, by force or fraud,[150] the rulers of the Île de France successively extended their authority over the different parts of ancient Gaul. The twenty monopolistic governments which occupied the land area of France at that time, gave way to a single monopolistic government. The kings of Provence, the dukes of Aquitaine, Brittany, Burgundy and Lorraine, the counts of Flanders etc., gave way to the King of France.
The King of France was given charge of the internal and external defence of the State. He did not, however, [p. 313] manage internal defence and civil administration on his own.
Originally, each feudal lord managed the policing[151] of his domain; each commune, freed by the use of force or by buying their way out from the onerous tutelage of his lord, handled the policing of his recognised area.
Communes and feudal lords contributed to some extent to the general defence of the realm.
We can say that the King of France had a monopoly of the general defense and the feudal lords and the burghers of the cities and towns had a monopoly of local defense.
In certain communes, policing was under the direction of an administration elected by city burghers, as in Flanders, for example. Elsewhere, policing was set up as a privileged corporation such as the bakers, butchers, and shoe makers, or in other words like all the other industries.
In England this latter form of the production of security has persisted until modern times. In the City of London, for example, policing was until not long ago still in the hands of a privileged corporation. And what was extraordinarily strange, this corporation refused to come to any agreement with the police of other districts, to such an extent that the City became a veritable place of refuge for criminals. This anomaly was not removed until the era of Sir Robert Peel’s reforms.[152]
What did the French Revolution do? It took from the king of France the monopoly of the general defence; but it did not destroy this monopoly. It put it in the hands [p. 314] of the nation, organised henceforth like one immense commune.
The little communes into which the former kingdom of France was divided, continued to exist. Their number was even considerably increased. The government of the large commune had the monopoly of general defence, while the governments of the small communes, under the surveillance of the central government, exercised the monopoly of local defence.
This, however, was not the end of it. Both at general commune level and at individual commune level, other industries were organised, notably education, religion and transport, etc., and citizens were variously taxed to defray the costs of these industries which were organised communally.
Later, the Socialists, poor observers of what was going on if ever there were any, not noticing that the industries which were organized in the general commune or the individual communes, functioned both more expensively and less efficiently than the industries which remained free, demanded the communal organization of all branches of production. They wanted the general commune and the individual communes no longer to limit themselves to policing, to building schools, constructing roads, paying the salaries of priests, opening libraries, subsidising theaters, maintaining stud farms, manufacturing tobacco, carpets, porcelain, etc., but rather to set about producing everything.
The public’s sound common sense was shocked by this most distasteful Utopia, but it did not react further. People understood well enough that it would be disastrous to produce everything in common. What they [p. 315] did not understand was that it was also ruinous to produce certain specific things in this way. They continued therefore to engage in partial communism, while despising the Socialists calling at the top of their voices for full communism.
The Conservatives, however, supporters of partial communism and opponents of full communism, today find themselves divided on an important issue.
Some of them want partial communism to continue to operate mainly in the general commune; they support centralisation.
The others, on the other hand, demand a much larger allocation of resources for the small communes. They want the latter to be able to engage in diverse industries such as founding schools, constructing roads, building churches, subsidising theatres, etc., without needing to get the authorization of the central government. They demand decentralization.
Experience has revealed the faults of centralisation.[153] It has shown that industries run by the large commune, by the State, supply dearer goods and ones of lower quality than those produced by free industry.
Is it the case, however, that decentralization is superior? Is the implication that it is more useful to free the communes, or – and this comes down to the same thing – allow them freely to set up schools and charitable institutions, to build theaters, subsidize religion, or even also engage freely in other industries?
What do communes need to meet the expenses of the services of which they charged with? They need capital. Where can they get access to it? In [p. 316] private individuals’ pockets and nowhere else. Consequently they have to levy various taxes on the people who live in the communes.
These taxes consist for the most part today, in the extra centimes added to the taxes paid to the State. Certain communes, however, have also received authorisation to set up around their boundaries a small customs office to exact tolls. This system of customs, which applies to most of the industries which have remained free, naturally increases the resources of the commune considerably. So the authorisation for setting up tolls is frequently sought from the central government. The latter rarely grants it[154] and, in this, is acting wisely; on the other hand it quite often permits the communes to exert their authority in an extra-ordinary manner, or to put it another way, it permits the majority of the administrators of the commune to set up an extraordinary tax which all the people they administer are obliged to pay.
Let the communes be emancipated, permit the majority of the inhabitants in each locality to have the right to set up as many industries as they please, and force the minority to contribute to the expenses of these industries organised communally, then let the majority be authorised to establish freely every kind of local tax, and you will soon see as many small, various and separate States being set up in France as one can count communes. You will see in succession, forty four thousand internal customs created in order to meet the local tax bill, under the title tolls; you will see in a word the reconstitution of the Middle Ages.
Under this regime, free trade and the liberty of working[155] [p. 317] will be under assault, both by the monopolies which the communes will grant to certain branches of production, and by the taxes which they will levy on certain other branches of production to support the industries operated communally. The property of all will be exposed to the mercy of majorities.
I ask you, in the communes where socialist ideas predominate, what will happen to property? Not only will the majority levy taxes to meet the expenses of policing, road maintenance, religion, charitable institutions, schools etc., but it will levy them also to set up communal workshops, trading outlets etc. Will not the non-socialist minority be obliged to pay these local taxes?
Under such a regime, what happens to the people’s sovereignty? Will it not disappear under the tyranny of the majority?
More directly even than centralisation, decentralisation leads to complete communism, that is to say to the complete destruction of sovereignty.
What has to be done to restore to men that sovereignty which monopoly robbed them of in the past; and which communism, that extended monopoly, threatens to rob them of in the future?
Quite simply the various industries formerly established as monopolies and operated today communally, need to be given their freedom. Industry still managed or regulated by the State or by the communes, must be handed over to the free activity of individuals.
In this way, man possessing, as was the case before the establishment of societies, the right to apply his faculties freely, to any kind of labor, without hindrance [p. 318] or any charge, will once again fully enjoy his sovereignty.
THE CONSERVATIVE.You have reviewed the various branches of industry which are still monopolies, or enjoy privileges or are subject to controls, proving to us, with greater or lesser success, that for the common good such production should be left in freedom. Very well then. I do not wish to return to a worn-out subject. Is it really possible, however, to take away from the State and from the communes the task of general and local defence?
THE SOCIALIST.And the administration of justice too?
THE CONSERVATIVE.Yes, and the administration of justice. Is it possible that these industries, to use your word, might be undertaken other than collectively, by the nation and the commune?
THE ECONOMIST.I would perhaps be willing to say no more about these two particular communisms if you were to agree very frankly to leave me all the others; if you would agree to reduce the size of the State so that henceforth it would be only a policeman, a soldier and a judge. This, however, is impossible!... For communism in matters of security is the keystone of the ancient edifice of servitude. Anyway, I see no reason to grant you this one rather than the others.
You must choose one or the other:
Either communism is better than freedom, and in that case all industries should be organized in common, in the State or in the commune. [p. 319]
Or freedom is preferable to communism, and in that case all industries still organised in common should be made free, including justice and police, as well as education, religion, transport, production of tobacco, etc.
THE SOCIALIST.This is logical.
THE CONSERVATIVE.But is it possible?
THE ECONOMIST.Let us see! Are we talking about justice? Under the old regime the administration of justice was not organised and its workforce paid, communally. It was organised as a monopoly and its workforce paid by those who made use of it.
For a number of centuries, no activity was more independent. It constituted, like all the other forms of material or non-material production, a privileged corporation. The members of this corporation could bequeath their offices or functions to their children, or even sell them. Possessing these offices in perpetuity, the judges made themselves well-known for their independence and integrity.
Unfortunately these arrangements had, looked at in another way, all the vices inherent in monopoly. Monopolised justice was paid for very dearly.
THE SOCIALIST.And God knows how many complaints and claims required the payment of bribes to the judges.[156] Witness the little verse scrawled on the door of the Palais de Justice after a fire: [p. 320]
One fine day, Dame Justice
Set the palace all on fire
Because she’d eaten too much spice.[157]
Should not justice be essentially free of charge? Now, does not being free of charge entail collective organisation?
THE ECONOMIST.The complaints were about the justice system receiving too many bribes. It was not a complaint about the bribing itself. If the system had not been set up as a monopoly, if the judges had been able to demand only what was their legitimate payment for their industry, people would not have been complaining about the corruption.
In some countries, where those due to be tried had the right to choose their judges, the vices of monopoly were very markedly attenuated. The competition established in this case by the different courts ameliorates the justice process and makes it cheaper. Adam Smith attributed the progress of the administration of justice in England to this cause. His words are striking and I hope the passage will allay your doubts: [p. 321]
THE SOCIALIST.The fees of court seem originally to have been the principal support of the different courts of justice in England. Each court endeavoured to draw to itself as much business as it could, and was, upon that account, willing to take cognizance of many suits which were not originally intended to fall under its jurisdiction. The court of king’s bench, instituted for the trial of criminal causes only, took cognizance of civil suits; the plaintiff pretending that the defendant, in not doing him justice, had been guilty of some trespass or misdemeanor. The court of exchequer, instituted for the levying of the king’s revenue, and for enforcing the payment of such debts only as were due to the king, took cognizance of all other contract debts; the plaintiff alleging that he could not pay the king, because the defendant would not pay him. In consequence of such fictions it came, in many cases, to depend altogether upon the parties before what court they would chuse to have their cause tried; and each court endeavoured, by superior dispatch and impartiality, to draw to itself as many causes as it could. The present admirable constitution of the courts of justice in England was, perhaps, originally in a great measure, formed by this emulation, which antiently took place between their respective judges; each judge endeavouring to give, in his own court, the speediest and most effectual remedy, which the law would admit, for every sort of injustice. Originally the courts of law gave damages only for breach of contract. The court of chancery, as a court of conscience, first took upon it to enforce the specifick performance of agreements. When the breach of contract consisted in the non–payment of money, the damage sustained could be compensated in no other way than by ordering payment, which was equivalent to a specifick performance of the agreement. In such cases, therefore, the remedy of the courts of law was sufficient. It was not so in others. When the tenant sued his lord for having unjustly outed him of his lease, the damages which he recovered were by no means equivalent to the possession of the land. Such causes, therefore, for some time, went all to the court of chancery, to the no small loss of the courts of law. It was to draw back such causes to themselves that the courts of law are said to have invented the artificial and fictitious writ of ejectment, the most effectual remedy for an unjust outer or dispossession of land. [158]
But once again would not a system with no charges be preferable?
THE ECONOMIST.So you have not yet retreated from the illusion of something being free of charge. Do I need to demonstrate to you again that the administration of justice without charges is more expensive than the alternative, given the cost of collecting the taxes paid out to maintain your free courts and to give salaries to your free judges.[159] Need I show you again that the provision of justice at no charge is necessarily iniquitous because not everyone makes equal use of the justice system and not everyone is equally litigious? What is more, justice is far from free under the present regime, as you are aware. [p. 322]
THE CONSERVATIVE.Legal proceedings are ruinously expensive. Can we complain, however, about the present administration of justice? Is not the organization of our courts irreproachable?
THE SOCIALIST.What! Irreproachable. An Englishman whom I accompanied one day to the Assize Court, came away from the hearing quite indignant. He could not conceive how a civilised people could permit a prosecutor of the Crown or the Republic to engage in rhetoric when calling for a death sentence. He was horror-struck that such eloquence could serve as a purveyor to the executioner.. In England they are content to lay out the accusation before the court; they do not inflame it.
THE ECONOMIST.Add to that the proverbial delays in our law courts, the sufferings of the unfortunates who await their sentences for months, sometimes for years, when the inquiry could be conducted in a few days; the costs and the enormous losses which these delays entail, and you will be convinced that the administration of justice has scarcely advanced in France.
THE SOCIALIST.We should not exaggerate, however. Today, thank Heaven, we have the jury system.
THE ECONOMIST.Which means that, not content with forcing taxpayers to pay the costs of the justice system, we also make them carry out the functions of judges. This is pure communism: ab uno disce omnes.[160] Personally, I do not think [p. 323] the jury is any better at judging than the National Guard, another communist institution!, is at making war.[161]
THE SOCIALIST.Why is that?
THE ECONOMIST.Because the only thing one does well is one’s trade or speciality, and the jury’s speciality is not acting as a judge.
THE CONSERVATIVE.So it suffices for the jury to identify the crime and to understand the circumstances in which it was committed.
THE ECONOMIST.This is to say that it carries out the most difficult, most thorny function of the judge. It is a task so delicate, demanding judgment so sane and so practiced, a mind so calm, so dispassionate, so impartial, that we entrust the job to the chance of names in a lottery. It is exactly as if one drew by lot the names of the citizens who would be entrusted every year with the making of boots or the writing of tragedies for the community.
THE CONSERVATIVE.The comparison is forced.
THE ECONOMIST.It is more difficult in my opinion to deliver a good judgment than to make a fine pair of boots or to produce a few hundred decent rhyming couplets. A perfectly enlightened and impartial judge is rarer than a skilful shoemaker or a poet capable of writing for the Théâtre Français.
In criminal cases, the jury’s lack of skill [p. 324] is revealed every day. Sad to say, however, only scant attention is ever paid to mistakes made in the Court of Assize. Nay, I would go further. People regard it almost as a crime to criticise a judgment rendered in court. In political cases does not the jury tend to pronounce according to its opinion, white (conservative) or red (radical), rather than according to what justice demands? Will not any man who is condemned by a conservative jury be absolved by a radical one and vice versa?
THE SOCIALIST.True alas!
THE ECONOMIST.Already minorities are very weary of being judged by juries belonging to majorities. See how it turns out...
Is the point at issue the industry which supplies our external and internal defence? Do you think it is worth much more than the effort committed to justice? Do not our police and especially our army cost us very dearly for the real services they supply us with?[162]
In short, is there no disadvantage in this industry of defence being in the hands of the majority?
Let us examine this issue.
In a system in which the majority determines the level of taxation, and directs the use of public funds, must not taxation weigh more or less heavily on certain parts of the society, according to the predominant influences? Under the monarchy, when the majority was purely notional, when the upper class claimed for itself the right to govern the country to the exclusion of the rest of the nation,[163] did not taxation weigh principally on the consumption [p. 325] of the lower classes, on salt, wine, meat etc.?[164] Doubtless the bourgeoisie played its part in paying these taxes, but the range of its consumption being infinitely wider than that of the consumption of the lower classes, its income ended up, all said and done, much more lightly attacked. To the extent that the lower class, in becoming better educated, will gain more influence in the State, you will see a contrary tendency emerge. You will see progressive taxation, today turned against the lower class, turned against the upper class. The latter will doubtless resist this new tendency with all its powers. It will cry out and protest, quite rightly, against the plunder and the theft; but if the communal institution of universal suffrage is maintained, if a surprise reversal of power does not once again put the government of society into the hands of the rich classes, to the exclusion of the poor classes, the will of the majority will prevail, and progressive taxation will be established. Part of the property of the rich will then be legally confiscated to relieve the burden of the poor, just as a part of the property of the poor has been confiscated for too long in order to relieve the burden of the rich.
But there is worse still.
Not only can the majority of a communal government set the level of taxation wherever it chooses, but it can also make whatever use of that taxation it chooses, without taking account of the will of the minority.
In certain countries, the government of the majority uses a portion of public monies to protect essentially illegitimate and immoral properties. In [p. 326] the United States, for example, the government guarantees the southern planters the ownership of their slaves. There are, however, in the United States, abolitionists who rightly consider slavery to be a theft. It counts for nothing! The communal mechanism obliges them to contribute out of their wealth to the maintenance of this sort of theft. If the slaves were to try one day to free themselves of this wicked and odious yoke, the abolitionists would be required to go and defend, by force of arms, the property of the planters. That is the law of majorities.
Elsewhere, it can come about that the majority, pushed by political intrigue or by religious fanaticism, declares war on some foreign nation. However much the minority are horrified by this war, and curse it, they are obliged to contribute their blood and their funds to it. Once again this is the law of the majority.
So what happens? What happens is that the majority and the minority are in perpetual conflict and that war sometimes comes down from the parliamentary arena into the streets.
Today it is the red minority which is in revolt.[165] If this minority were to become a majority, and if using its majority rights, it reshaped the constitution as it wished, if it decreed progressive taxation, forced loans and paper money, who could assure you that the whites would not be in revolt tomorrow?
There is no lasting security under this system. And do you know why? Because it endlessly threatens property; because it puts at the mercy of a majority, whether blind or enlightened, moral or immoral, the persons and the goods of everybody.
If the communal regime, instead of being applied [p. 327] as in France, to a multitude of objects, found itself narrowly limited as in the United States, the causes of disagreement between the majority and the minority being less numerous, the disadvantages of this regime would be fewer. They would not, however, disappear entirely. The recognised right of the majority to tyrannise over the will of the smaller, would still in certain circumstances be likely to cause a civil war.[166]
THE CONSERVATIVE.Once again, though, it is not easy to see how industry which provides the security of persons and property, could be managed, if it were made free. Your logic leads you to dreams worthy of Charenton.[167]
THE ECONOMIST.Oh, come on ! Let us not get angry. I suppose that after having recognised that the partial communism of the State and of the commune is decidedly bad, we could let all the branches of production operate freely, with the exception of the administration of justice and public defence. Thus far I have no objection. But a radical economist, a dreamer,[168] comes along and says: Why then, after having freed the various uses of property, do you not also set free those who secure the maintenance of property? Just like the others, will not these industries be carried out in a way more equitable and useful if they are made free? You maintain that it is impracticable. Why? On the one hand, are there not, in society, men especially suited, some to judge the disputes which arise between proprietors and to assess the offences committed against property, others [p. 328] to defend the property of persons and of things, against the assaults of violence and fraud? Are there not men whom their natural aptitudes make especially fit to be judges, policemen or soldiers? On the other hand, do not all proprietors, without exception, have need for security and justice? Are not all of them inclined, therefore, to impose sacrifices on themselves to satisfy this urgent need, above all if they are powerless to satisfy it themselves, or can do so only by expending a lot of time and money?
Now, if on the one hand there are men suitable for meeting one of society’s needs, and on the other hand men ready to make sacrifices to obtain the satisfaction of this need, is it not enough to allow both groups to go about their business freely[169] so that the good demanded, whether material or non-material, is produced and that the need is satisfied?
Will not this economic phenomenon be produced irresistibly, inevitably, like the physical phenomenon of falling bodies?
Am I not justified in saying, therefore, that if a society renounced the provision of public security, this important industry would nonetheless be carried out? Am I not right to add that it would be done better in a system based on liberty than a system based on community?
THE CONSERVATIVE.In what way?
THE ECONOMIST.That does not concern the Economists. Political economy [p. 329] can say: if such a need exists, it will be satisfied and done better in a regime of full freedom than under any other. There is no exception to this rule. As to how this industry will be organized, what its technical procedures will be, that is something which political economy cannot tell us.
Thus I can affirm that if the need for food is plainly visible in society, this need will be satisfied, and satisfied all the better, when each person remains as free as possible to produce food or to buy from whomever he thinks fit.
I can give assurances, too, that things will work out in exactly the same way, if rather than food, security is the issue.
Therefore, I maintain that if a community were to announce that after a given delay, say perhaps a year, it would give up financing the pay of judges, soldiers and policemen, at the end of the year that community would not possess any fewer courts and governments ready to function; and I would add that if, under this new regime, each person kept the right to engage freely in these two industries and to buy their services freely from them, security would be generated as economically and as well as possible.
THE CONSERVATIVE.I will still reply to you that this is not conceivable.
THE ECONOMIST.At the time when the regulatory regime kept industry prisoner within its communal boundaries, and when each privileged corporation had exclusive control of [p. 330] the communal market, people said that society was threatened, each time some audacious innovator strove to attack that monopoly. If anyone had come and said at that time that instead of the feeble and stunted industries of the privileged corporations, liberty would one day build immense factories turning out cheaper and superior products, this dreamer would have been very smartly put in his place. The conservatives of that time would have sworn by all the gods that such a thing was inconceivable.
THE SOCIALIST.Oh come on! How can it be imagined that each individual has the right to create his own government, or to choose his government, or even not choose it...? How would things turn out in France, if having freed all the other industries, French citizens announced by common agreement, that after a year, they would cease to support the government of the community?
THE ECONOMIST.On this subject all I can do is conjecture. This, however, is more or less how things would turn out. Since the need for security is still very great in our society, it would be profitable to set up businesses which provide government services.[170] Investors could be certain of covering their costs. How would these firms be set up? Isolated individuals would not be adequate, any more than they would suffice for building railways, docks etc. Huge companies would be set up, therefore, in order to produce security. These would procure the resources and the workers they needed. As soon as they felt ready to operate, [p. 331] these property-insurance companies[171] would look for a clientele. Each person would take out a subscription with the one which inspired him with most confidence and whose terms seemed to him the most favourable.
THE CONSERVATIVE.We would queue up to take out subscriptions. Most definitely we would queue up!
THE ECONOMIST.This industry being free, we would see as many companies set up as could usefully be formed. If there were too few, if, consequently the price of security rose too high, people would find it profitable to set up new ones. If there were too many, the surplus ones would not take long to break up. The price of security would in this way always be led back to the level of its costs of production.
THE CONSERVATIVE.How would these free companies arrange things among themselves in order to provide national security?
THE ECONOMIST.They would reach agreement as do monopoly or communist governments today, because they would have an interest in so doing. The more, in fact, they offered each other mutual facilities for the apprehension of thieves and murderers, the more they would reduce their costs.
By the very nature of their industry, these property-insurance companies would not be able to venture outside certain prescribed limits: they would lose by maintaining police in places where they had very few clients. Within their district they would nevertheless not be able [p. 332] to oppress or exploit their clients, on pain of seeing competition spring up immediately.
THE SOCIALIST.And if the existing company wanted to prevent the competitors establishing themselves?
THE ECONOMIST.In a word, if they encroached on the property of their competitors and on the sovereignty of all...Oh! In that case all those whose property and independence were threatened by the monopolists would rise up and punish them.
THE SOCIALIST.And if all the companies agreed to establish themselves as monopolies, what then? What if they formed a holy alliance[172] in order to impose themselves on their peoples , and if, emboldened by this coalition, they mercilessly exploited the unfortunate consumers of security, and if they extracted from them by way of heavy taxes the best part of the results of the labor of these peoples ?
THE ECONOMIST.If, to tell the whole story, they started doing again what the old aristocracies did right up until our era...Well, then, in that case the peoples would follow the advice of Béranger:
Peoples, form a Holy Alliance
And take each other by the hand.[173]
They would unite in their turn and since they possess means of communication which their ancestors did not, and since they are a hundred times more numerous than their old rulers, the holy alliance of the aristocracies would soon be destroyed. No one would any longer be tempted in this case, I swear to you, to set up a monopoly. [p. 333]
THE CONSERVATIVE.What would one do under this regime to repulse a foreign invasion?
THE ECONOMIST.[174]What would be the interest of the companies? It would be to repel the invaders, for they themselves would be the first victims of the invasion. They would agree among themselves, therefore, in order to repel them, and they would demand from those they insured, a supplementary premium for saving them from this new danger. If the insured preferred to run the risks of invasion, they would refuse to pay this supplementary premium; if not they would pay it and they would thus put the companies in a position to ward off the danger of invasion.
Just as war is inevitable in a regime of monopoly, so peace is inevitable under a regime of free government.
Under this regime governments can gain nothing through war; on the contrary they can lose everything. What interest would they have in undertaking a war? Would this be to increase their clientele? But the consumers of security, being free to create their own government as they saw fit, would escape their conquerors. If the latter wished to impose their domination on them, after having destroyed the existing government, the oppressed would immediately demand the help of other nations ....
The wars of company against company could take place, moreover, only insofar as the shareholders were willing to advance the costs. Now, war no longer being able to bring to anyone an increase in the number of clients, since consumers will no longer allow themselves to be conquered, the [p. 334] costs of war would obviously no longer be covered. Who would want therefore to advance them the funds?
I conclude from this that war would be physically impossible under this system, for no war can be waged without an advance of funds.
THE CONSERVATIVE.What conditions would a property-insurance company impose on its clients?
THE ECONOMIST.These conditions would be of several different kinds.
In order to be in a position to guarantee full security of person and property to those they have insured, it would be necessary:
1. For the insurance companies to establish certain penalties for offenders against persons and property, and for those insured to accept these penalties, in the event of their committing offences against persons and property.
2. For the companies to impose on the insured certain restrictions intended to facilitate the detection of those responsible for offences.
3. For the companies, on a regular basis, in order to cover their costs, to levy a certain premium, varying with the situation of the insured and their individual occupations, and the size, nature and value of the properties to be protected.
If the conditions stipulated were acceptable to those buying security, the deal would be concluded; otherwise the consumers would approach other companies, or provide for their security themselves.
Follow this hypothesis in all its details, and I think you will be convinced of the possibility of [p. 335] transforming monopolistic or communist governments into free ones.
THE CONSERVATIVE.I still see plenty of difficulties in this. For example, who will pay the debt?[175]
THE ECONOMIST.Do you think that in selling all the property today held in common – roads, canals, rivers, forests, buildings used by all the commune governments, the equipment of all the communal services – we would not very easily succeed in reimbursing the capital debt? The latter does not exceed six billion. The value of communal property in France is quite certainly far greater than that.
THE SOCIALIST.Would not this system entail the destruction of any sense of nationality? If several property-insurance companies established themselves in a country, would not National Unity be destroyed?
THE ECONOMIST.First of all, National Unity would have to exist before it could be destroyed. Well, I do not see national unity in these shapeless agglomerations of people, formed out of violence, which violence alone maintains, for the most part.
Next, it is an error to confuse these two things, which are naturally very distinct: nation and government. A nation is one when the individuals who compose it have the same customs, the same language, the same civilisation; when they constitute a distinct and original variety of the human race. Whether this nation [p. 335] has two governments or only one, matters very little, unless one of these government surrounds, with an artificial barrier, the territories under its domination, and undertakes incessant wars against its neighbours. In this last instance, the instinct of nationality will react against this barbarous fragmentation and artificial antagonism imposed on a single people, and the disunited fractions of the people will strive incessantly to draw together again.
Now governments have until our time divided people in order to retain them the more easily in obedience; divide and rule, such has been at all times the fundamental maxim of their policy. Men of the same race, to whom a common language would supply an easy means of communication, have reacted vigorously against the enactment of this maxim; at all times they have striven to destroy the artificial barriers which separated them. When they achieved this result, they wished to have a single government in order not to be disunited again. Note, however, that they have never demanded that this government should separate them from other people...So the instinct of nationality is not selfish, as is often claimed; it is, on the contrary, essentially sympathetic towards others. Once the various governments cease dragging peoples apart and dividing them, you will see a given nationality happily accepting several others. A single government is no more necessary to the unity of a people, than a single bank, a single school, a single religion, a single grocery store, etc. [p. 337.]
THE SOCIALIST.There, in truth, we have a very singular solution to the problem of government!
THE ECONOMIST.It is the sole solution consistent with the nature of things.
Endnotes
[139] The authors of the footnotes are indicated as follows: GdM = Gustave de Molinari; DOK = Dennis O’Keeffe, translator; DMH = David Hart, editor.
This chapter is also available online at <> at The Forum : Liberty Matters.
Abbreviations used: JDE = Journal des Économistes; DEP = Dictionnaire de l’économie politique (1852); Bastiat, Collected Works = The Collected Works of Frédéric Bastiat (Liberty Fund ed. 2011); AEPS = Annuaire de l’économie politique et de la statistique.
[p. 1] This refers to the original page numbering in the French edition.
[140] GdM - For a long time, economists have refused to concern themselves not only with government, but also with all purely non-material activities. Jean-Baptiste Say was the first to insist on including production of this kind within the domain of political economy, by his applying to all its contents the category non-material products. He thereby rendered economic science a more substantial service than might readily be supposed:
The work of a doctor, he says, and if we want to add to the examples, the work of anyone engaged in administering public matters, of a lawyer [p. 304] or a judge, who belong to the same category, meet such fundamental needs, that without their contributions, no society could survive. Are not the fruits of these labors real? They are sufficiently real that people procure them in exchange for material products, and that by means of repeated exchanges their producers acquire fortunes. – It is therefore quite wrong for the Comte de Verri to claim that the work of princes, of magistrates, soldiers and priests, does not fall immediately into the sphere of those objects with which political economy is concerned. [Jean-Baptiste Say, Traité d’Économie politique, T. 1, chap.XIII.]
[See, Jean Baptiste Say, A Treatise on Political Economy; or the Production, Distribution, and Consumption of Wealth, ed. Clement C. Biddle, trans. C. R. Prinsep from the 4th ed. of the French, (Philadelphia: Lippincott, Grambo & Co., 1855. 4th-5th ed. ). Chapter: BOOK I, CHAPTER XIII: OF IMMATERIAL PRODUCTS, OR VALUES CONSUMED AT THE MOMENT OF PRODUCTION. </title/274/37996>.]
[141] DMH - The expression used is “l’État-gendarme” or the “nightwatchman state”. Say provides the most detailed discussion of his views on the proper function of government in the Cours complet (1828), vol. 2, part VII, chaps XIV to XXXII. He essentially follows Adam Smith’s plan that there are only 3 proper duties of a government: to provide national defence, internal police, and some public goods such as roads and bridges. [See his quoting Smith approvingly on pp. 261-62 of the 1840 revised edition]. However, there is some evidence from an unpublished Traité de Politique pratique (written 1803-1815) and lectures he gave at the Athénée in Paris in 1819 that suggest that his anti-statism went much further than this and that he did toy with the idea of the competitive, non-government provision of police services along the lines developed at more length here by Molinari. [See the glossary entry on “Say’s Anti-Statism.”]
[142] DMH - Charles Coquelin, the reviewer of Molinari's book in the JDE in October 1849 criticized Molinari for putting forward a view of government in the name of "The Economist” which no other Economist of the period supported, thus suggesting that this was a widely held view. At the monthly meeting of the Société d'Économie Politique on 10 October of that year not one of those present came to Molinari's defense. The main critics were Charles Coquelin who began the discussion, then Frédéric Bastiat, and finally Charles Dunoyer. It was the latter who summed up the view of the Economists that Molinari had been "swept away by illusions of logic". [See, Coquelin's review in JDE, October 1849, T. 24, pp. 364-72, and the minutes of the meeting of the October meeting of the Société d'Économie Politique in JDE, October 1849, T. 24, pp.314-316. Dunoyer's comment is on p. 316.]
[143] DMH - The idea that monarchs had a “divine right” to rule was an essential part of the ancien régime which was overturned by the French Revolution of 1789. “Legitimists” in the Restoration period attempted to revive this view with mixed success and it was severely weakened by the Revolution of 1848 and the creation of the Second Republic. However, legitimists continued continued to press their claims throughout the 19th century.
[144] DMH - Molinari uses the socialist expression “la liberté au travail” (right to a job) in order to provoke the Conservative. [See glossary entry on the “Right to Work.”]
[145] DMH - Maistre, Considérations sur la France (Considerations on France) (1796) and Principe générateur des Constitutions politiques (Essay on the Generating Principle of Political Constitutions) (1809). See Oeuvres du comte J. de Maistre. Publiées par M. l’abbé Migne (J.-P. Migne, 1841). [See the glossary entry on Maistre.]
[146] GdM - Du Principe générateur des Constitutions politiques. – Preface. DMH - Oeuvres, p. 109-10.
[147] DMH - Molinari uses here the phrase “la production de la sécurité” (the production of security) which is title of the provocative essay on this topic which he published in the JDE in February 1849, sparking an extended controversy among the members of the Société d’Economie Politique. [See, Gustave de Molinari, "De la production de la sécurité,” in JDE, Vol. XXII, no. 95, 15 February, 1849, pp. 277-90.
[148] DMH - The Holy Alliance was a coalition between Russia, Austria, and Prussia organized by Tsar Alexander I of Russia during the meeting of the Congress of Vienna following the defeat of Napoleon in 1815. The purpose was to defend the principles of monarchical government, aristocracy, and the Catholic Church against the forces of liberalism, democracy, and secular enlightenment which had been unleashed by the French Enlightenment and Revolution. See the note below (p. ???) which describes Molinari’s interest in the poet Béranger’s poem about the need for the people to form their own Holy Alliance, “The Holy Alliance of the People” (1818).
[149] DMH - The revolutions which broke across Europe in 1848 began with an uprising in Sicily in January 1848, spread to Paris in February, and then the southern and western German states, Vienna and Budapest in March. As a result of political divisions among the revolutionaries the forces of counter-revolution led by Field Marshall Radetsky of Austria-Hungary, with the assistance of the Russian army, were able to crush the uprisings in central and eastern Europe during 1849. In France the Revolution led to the formation of the Second Republic and eventually the coming to power of Louis Napoleon and the Second Empire in 1852. The number of people killed during the uprisings and their suppression are hard to estimate but they are in the order of many thousands.
[150] DMH - Molinari uses the term “la ruse” here which was a key term used by Bastiat in his theory of “sophisms”. Bastiat thought that vested interests who wished to get privileges from the state cloaked their naked self interest by using deception, trickery, or fraud (“la ruse”) in order to confuse and distract the people at whose expence these privileges were granted.
[151] DMH - Molinari uses the word “la police” which had a complex meaning in the ancien regime. On the one hand, it meant more narrowly the protection of life and property of the inhabitants from attack, in other words what we would understand as modern police and defence activities. On the other hand, it also had a much broader meaning concerning the entire “civil administration” of the commune, such as ensuring the provision of public goods like lighting and water, the enforcement of censorship of dissenting political and religious views, the control of public gatherings to prevent protests getting out of hand, the collection of taxes and the supervision of compulsory labour; in other words, the complex mechanism of public control which had evolved during the ancien regime. Since Molinari is talking about security matters in this chapter we have chosen to use the word “police” or “policing” in this context.
[152] GdM - See Studies on England by Léon Faucher. DMH - Léon Faucher, Études sur l'Angleterre (Paris: Guillaumin, 1845, 2nd ed. 1856), 2 vols. The anecdote Molinari refers to can be found in vol. 1, p. 47. Faucher relates how one rundown district in London known as "Little Ireland” had become off limits to the police. Sir Robert Peel (1788-1850) was Prime Minister of Britain twice (1834-35 and 1841-46) and during his second stint he successfully repealed the protectionist Corn Laws in 1846. When he was Home Secretary (1822-29) he reformed the police force of London by creating the Metropolitan Police Force in 1829 which became the model for all modern urban police forces. [See the glossary entry on “Faucher”.]
[153] DMH - The Economists condemned the bureaucratic or administrative centralisation which had made France the most centralised state in the world, as Coquelin phrased it: "In no other time nor in any other country has the system of centralisation been as rigorously established as that which exists today in France" (p. 291). The French State exercised a monopoly in dozens of industries, it claimed title to all mineral resources under the surface of the land, and it exercised the right to inspect and license nearly all businesses. In addition to these interventions in economic activity the central state also regulated and supervise to a large extent the activities of the administrative bodies at the local level, such as provinces, départements, and communes, which may have once exercised some autonomy, but which now were subject to stifling regulation and "the perpetual tutelage of the State" (DuPuynode, p. 417). For many of the Economists the ideal was the political decentralisation described by Tocqueville in America which Coquelin regarded as "the most most decentralised country in the world" (p. 300). Dunoyer went so far as to advocate the radical break up of the centralised bureaucratic state into much smaller jurisdictions, or what he called "the municipalisation of the world" (p. 366). See Charles Coquelin, "Centralisation" in DEP, vol. 1, pp. 291-301; Gustave Dupuynode, "De la centralisation," JDE, 15 July 1848, T. 20, pp. 409-18 and JDE, 1 August 1848, T. 21, pp. 16-24; Charles Dunoyer, L'Industrie et la Morale considérées dans leurs rapports avec la liberté (Paris: A. Sautelet, 1825), p. 366.
[154] DMH - Bastiat has an amusing "economic sophism" on this very idea. In "The Mayor of Énios" (6 February, Le Libre-Échange, reprinted Collected Works, vol. 3 (Liberty Fund, forthcoming), pp. ???) the mayor of a small town wants to "stimulate" local industry in the same way as the nation "stimulates" national industry with high tariffs on goods being brought into his town. His great plans are shot down by the local Prefect who tells him that he believes in free trade within the nation but is a protectionist when it comes to trading with other nations. The mayor cannot understand the difference. Surely what is good for French industry must also be good for the industry in his commune.
[155] DMH - Molinari uses the expression “la liberté du travail” (the liberty to engage in work) and “la liberté des échanges” (free trade)..
[156] DMH - GdM uses the word “éspices” (spices) which was a slang word for bribes paid to officials.
[157] DMH - The Palais de Justice (Law Courts) of Paris were burned to the ground in 1618. The satirical and libertine poet Marc-Antoine Girard de Saint-Amant (1594-1661) wrote this verse to suggest that it might have been in revenge by Lady Justice for the corruption that went on within the building. See, Oeuvres complètes de Saint-Amant. Nouvelle édition. Publiée sur les manuscrits inédits et les éditions anciennes. Précédée d’un Notice et accompagnée de notes par M. Ch.-L. Livet (Paris: P. Janet, 1855), vol. 1, “Epigramme”, p. 185.
[158] Adam Smith, An Inquiry Into the Nature and Causes of the Wealth of Nations, Vol. I and II, ed. R. H. Campbell and A. S. Skinner, vol. II of the Glasgow Edition of the Works and Correspondence of Adam Smith (Indianapolis: Liberty Fund, 1981). Chapter: [V.i.b] part ii: Of the Expence of Justice. </title/200/217494/2316390>.
[159] DMH - According to the budget for 1848 the Ministry of Justice spent a total of fr. 26.7 million out of total expenditure of fr. 1.45 billion (or 18.5%). The government spent a total of fr. 156.9 million in administrative and collection costs, the share of the Ministry of Justice was therefore fr. 29 million, which is more than was spent in providing justice. See "Budget de 1848" in AEPS pour 1848 (Paris: Guillaumin, 1848), pp. 29-51. See the Appendix on "French Government Finances 1848-1849."
[160] DOK - This maxim from Vergil’s Aeneid, Book II, line 65, means “From one thing, learn about everything.”
[161] DMH - The National Guard was founded in 1789 as a national armed citizens' militia in Paris and soon spread to other cities and towns in France. Its function was to maintain local order, protect private property, and defend the principles of the Revolution. The Guard consisted of 16 legions of 60,000 men and was under command of the Marquis de Lafayette. It was a volunteer organization and members had to satisfy a minimum tax-paying requirement and had to purchase their own uniform and equipment. They were not paid for service, thus limiting its membership to the more prosperous members of the community. The Guard was closed down in 1827 for its opposition to King Charles X but was reconstituted after the 1830 Revolution and played an important role during the July Monarchy in support of the constitutional monarchy. Membership was expanded or "democratized” in a reform of 1837 and opened to all males in 1848 tripling its size to about 190,000. Since many members of the Guard supported the revolutionaries in June 1848 they refused to join the army in suppressing the rioting. This is what Molinari is probably referring to in his comment that it had become "communist". The Guard gradually began to lose what cohesion it had and further reforms in 1851 and 1852 forced it to abandon its practice of electing its officers and to give up much of its autonomy. Because of its active participation in the 1871 Paris Commune many of its members were massacred in the post-revolutionary reprisals and it was closed down in August 1871. [See the history of the National Garde by Charles Comte, Histoire complète de la Garde national, depuis l'époque de sa foundation jusqu'à sa réorganisation définitive et la nomination de see officers, en vertu de la loi du 22 mars 1831, divisée en six époques; les cinqs prière par Charles Comte; et la sixième par Horace Raisson (Paris: Philippe, Juillet 1831).]
[162] DMH - According to the budget for 1848 the Ministry of War spent a total of fr. 305.6 million out of total expenditure of fr. 1.45 billion (or 21.1%). The government spent a total of fr. 156.9 million in administrative and collection costs, the share of the Ministry of War was therefore fr. 33.1 million, which is 10.8% of the cost of providing defense. See "Budget de 1848" in AEPS pour 1848 (Paris: Guillaumin, 1848), pp. 29-51. See the Appendix on "French Government Finances 1848-1849."
[163] DMH - Bastiat calls the very limited number of individuals who were allowed to vote during the July Monarchy the "classe électorale." Suffrage was limited to those who paid an annual tax of fr. 200 and were over the age of 25; and only those who paid fr. 500 in tax and were over the age of 30 could stand for election. The taxes which determined eligibility were direct taxes on land, poll taxes, and the taxes on residence, doors, windows, and businesses. By the end of the Restoration (1830) only 89,000 tax payers were eligible to vote. Under the July Monarchy this number rose to 166,000 and by 1846 this had risen again to 241,000. The February Revolution of 1848 introduced universal manhood suffrage (21 years or older) and the Constituent Assembly (April 1848) had 900 members (minimum age of 25). Furthermore, the "Law of the Double Vote" was introduced on 29 June 1820 to benefit the ultra-monarchists who were under threat after the assassination of the Duke de Berry in February 1820. The law was designed to give the wealthiest voters two votes so they could dominate the Chamber of Deputies with their supporters. Between 1820 and 1848, 258 deputies were elected by a small group of individuals who qualified to vote because they paid more than 2-300 francs in direct taxes (this figure varied over time from 90,000 to 240,000). One quarter of the electors, those who paid the largest amount of taxes, elected another 172 deputies. Therefore, those wealthier electors enjoyed the privilege of a double vote.
[164] DMH - According to the budget for 1848 the government raised fr. 202.1 million from customs and salt taxes, as well as another fr. 204.4 million in indirect taxes on drink, sugar, tobacco, and other items, making a total of fr. 406.5 million. Total receipts from taxes and other charges was fr. 1.39 billion. The share of indirect taxes was thus 29.2% of the the total. See "Budget de 1848" in AEPS pour 1848 (Paris: Guillaumin, 1848), pp. 29-51. See the Appendix on "French Government Finances 1848-1849."
[165] DMH - Molinari is referring to the socialist supporters of Louis Blanc, Pierre Leroux, and Auguste Blanqui who made up a sizable faction in the National Assembly during the Second Republic and who organized numerous political clubs during 1848-49. Several of the clubs adopted names reminiscent of groups in the radical phase of the first French Revolution, such as “The Mountain” and “The Society of the Rights of Man”. In the election for the Constituent Assembly held on 23 and 24 April 1848 about half of the 900 members were moderate republicans, 250 were royalists of various kinds, and about 200 were more radical republicans, and many of these would shave been socialist. Blanc was made a Minister without portfolio and headed the Luxembourg Commission to look into labour questions such as the National Workshops program and “right to work” legislation. In the election of 19 January 1849 of the 705 seats, 450 were won by members of the "Party of Order” (an alliance of legitimists and other conservatives), 75 by moderate republicans, and 180 by "the Mountain” (radical democrats and socialists). Left wing protesters were joined by several dozen left-wing Deputies in a demonstration on 13 June which was suppressed upon orders of the President of the Republic, Louis Napoleon. This led to the closing down a several left-wing newspapers and the political clubs. [See the glossary entry on “Press (socialist).”]
[166] DMH - The irony of this passage is that Molinari has earlier pointed out the class based structure and injustice of the U.S. slave system and the stresses which this creates, and then argued that the smaller size of the U.S. government means that these tensions would be reduced. It should be pointed out that the Civil War broke out in 1861 only 12 years after the Soirées was published.
[167] DMH - The "Maison royal de Charenton", also known as the "Hôpital Esquirol", was a psychiatric hospital which was founded in 1641. One of its most famous inmates was the Marquis de Sade in the late 18th century. The Hospital was the subject of a major study, "Rapport statistique sur la maison royale de Charenton", in 1829.
[168] DMH - Molinari is hinting here that he is “Le Rêveur” (the Dreamer), the radical liberal, who wrote but did not sign the essay “L’Utopie de la liberté. Lettres aux socialistes” in the JDE, 15 June, 1848, vol. XX, pp. 328-32. This is an appeal written just prior to the June Days insurrection of 1848 for liberals and socialists to admit that they shared the common goals of prosperity and justice but differed on the correct way to achieve these goals. Molinari reveals that he was in fact the author in an appendix he included with Esquisse de l'organisation politique et économique de la société future (Paris: Guillaumin, 1899), p. 237, written 50 years later. Note also that Bastiat wrote a thinly disguised account of a Prime Minister who was appointed out of the blue to enact radical liberal reforms but who refuses to at the last moment because reform imposed from the top down was doomed to failure. See “The Utopian” in Economic Sophisms. Series II, chap. XI (17 January, 1847), Collected Works, vol. 3 (forthcoming).
[169] DMH - Molinari actually uses the phrase “laissez faire” here: “de laissez faire les uns et les autres.”
[170] DMH - Molinari uses the phrase “des enterprises de gouvernements” (businesses which provide government services).
[171] DMH - Molinari calls them “compagnies d’assurances sur la propriété” (property insurance companies).
[172] DMH - See the earlier footnote on the Holy Alliance in 1815 which was designed to protect the monarchies of Prussia, Austria, and Russia against the threats of liberalism and democracy.
[173] DMH - Pierre-Jean de Béranger (1780-1857) was a poet and songwriter who rose to prominence during the Restoration period with his funny and clever criticisms of the monarchy and the church, which got him into trouble with the censors who imprisoned him for brief periods in the 1820s. The quotation is the refrain in Béranger’s anti-monarchical and pro-French poem, “La sainte Alliance des peuples” (The Holy Alliance of the People) (1818) in Oeuvres complètes de P.J. de Béranger contenant les dix chanson nouvelles, avec un Portrait gravé sur bois d’après Charlet (Paris: Perrotin, 1855), vol. 1, pp. 294-96. For a translation see, Béranger’s Songs of the Empire, the Peace, and the Restoration. Translated into English verse by Robert B. Clough (London: Addey and Co., 1856), pp. 59-62. The first verse goes as follows: “I saw fair Peace, descending from on high, Strewing the earth with gold, and corn, and flow’rs; The air was calm, and hush’d all soothingly The last faint thunder of the War-gods pow’rs. The goddess spoke: ‘Equals in worth and might, Sons of French, Germans, Russ, or British lands, Form an alliance, Peoples, and unite, In Friendship firm, your hands’.” [See the glossary entry on Béranger.]
[174] DMH - This is in fact the Economist speaking. It is listed as the Socialist in the French original.
[175] DMH - Total debt held by the French government in 1848 amounted to fr. 5.2 billion which required annual payments of fr. 384 million to service. Since total annual income for the government in 1848 was fr. 1.4 billion the outstanding debt was 3.7 times receipts and debt repayments took up 27.6% of annual government income. See Gustave de Puynode, "Crédit public," DEP, vol. 1, pp. 508-25. See the Appendix on "French Government Finances 1848-1849."