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Monday, December 24, 2012



Of Society.
IN the introduction to a treatise on the will it was proper to indicate the generation of some general ideas which are the necessary consequences of this faculty.
It was even incumbent on us to examine summarily,
1st. What are inanimate beings, that is to say beings neither sentient nor willing.
2d. What sentient beings would be with indifference without will.
3d. What are sentient and willing beings but insulated.
4th. Finally, what are sentient and willing beings like ourselves, but placed in contact with similar beings.
It is with the latter we are now exclusively to occupy ourselves, for man can exist only in society.
The necessity of reproduction and the propensity to sympathy necessarily lead him to this state, and his judgment makes him perceive its advantages.
I proceed then to speak of society.
I shall consider it only with respect to economy, because this first part concerns our actions only and not as yet our sentiments.
Under this relation society consists only in a continual succession of EXCHANGES, and exchange is a transaction of such a nature that both contracting parties always gain by it. (This observation will hereafter throw great light on the nature and effects of commerce.)
We cannot cast our eyes on a civilized country without seeing with astonishment how much this continual succession of small advantages, unperceived but incessantly repeated, adds to the primitive power of man.
It is because this succession of changes, which constitutes society, has three remarkable properties. It produces concurrence of force, increase and preservation of intelligence and division of labour.
The utility of these three effects is continually augmenting. It will be better perceived when we shall have seen how our riches are formed.

Of Production, or the formation of our Riches.
IN the first place what ought we to understand by the word production? We create nothing. We operate only changes of form and of place.
To produce is to give to things an utility which they had not before.
All labour from which utility results is productive.
That relative to agriculture has in this respect nothing particular.
A farm is truly a manufactory.
A field is a real tool, or in other words a stock of first materials.
All the laborious class is productive.
The truly sterile class is that of the idle.
Manufacturers fabricate, merchants transport. This is our industry. It consists in the production of utility.

Of the measure of Utility, or of Value.
WHATEVER contributes to augment our enjoyments and to diminish our sufferings, is useful to us.
We are frequently very unjust appreciators of the real utility of things.
But the measure of utility which, right or wrong, we ascribe to a thing is the sum of the sacrifices we are disposed to make to procure its possession.
This is what is called the price of this thing, it is its real value in relation to riches.
The mean then of enriching ourselves is to devote ourselves to that species of labour which is most dearly paid for, whatever be its nature.
This is true as to a nation as well as to an individual.
Observe always that the conventional value, the market price of a thing, being determined by the balance of the resistance of sellers and buyers, a thing without being less desired becomes less dear, when it is more easily produced.
This is the great advantage of the progress of the arts. It causes us to be provided for on better terms, because we are so with less trouble.

Of the change of form, or of fabricating Industry, comprisingAgriculture.
IN every species of industry there are three things: theory, application and execution. Hence three kinds of labourers; the man of science, the undertaker, and the workman.
All are obliged to expend more or less before they can receive, and especially the undertaker.
These advances are furnished by anterior economies, and are called capitals.
The man of science and the workman are regularly compensated by the undertaker; but he has no benefit but in proportion to the success of his fabrication.
It is indispensable that the labors most necessary should be the most moderately recompensed.
This is true most especially of those relative to agricultural industry. This has moreover the inconvenience that the agricultural undertaker cannot make up for the mediocrity of his profits by the great extension of his business.
Accordingly this profession has no attractions for the rich.
The proprietors of land who do not cultivate it are strangers to agricultural industry. They are merely lenders of funds.
They dispose of them according to the convenience of those whom they can engage to labor them.
There are four sorts of undertakers; two with greater or smaller means, the lessees of great and small farms; and two almost without means, those who farm on shares and labourers.
Hence four species of cultivation essentially different.
The division into great and small culture is insufficient and subject to ambiguity.
Agriculture then is the first of arts in relation to necessity, but not in regard to riches.
It is because our means of subsistence and our means of existence are two very different things, and we are wrong to confound them.

Of the change of place, or of Commercial Industry.
INSULATED man might fabricate but could not trade.
For commerce and society are one and the same thing.
It alone animates industry.
It unites in the first place inhabitants of the same canton. Then the different cantons of the same country, and finally different nations.
The greatest advantage of external commerce, the only one meriting attention, is its giving a greater developement to that which is internal.
Merchants, properly so called, facilitate commerce, but it exists before them and without them.
They give a new value to things by effecting a change of place, as fabricators do by a change of form.
It is from this increase of value that they derive their profits.
Commercial industry presents the same phenomena as fabricating industry; in it are likewise theory, application and execution. Men of science, undertakers and workmen; these are compensated in like manner; they have analogous functions and interests, &c. &c.

Of Money.
COMMERCE can and does exist to a certain degree without money.
The values of all those things, which have any, serve as a reciprocal measure.
The precious metals, which are one of those things, become soon their common measure, because they have many advantages for this purpose.
However they are not yet money. It is the impression of the sovereign which gives this quality to a piece of metal, in establishing its weight and its fineness.
Silver money is the only true common measure.
The proportion of gold and silver vary according to times and places.
Copper money is a false money, useful only for small change.
It is to be desired that coins had never borne other names than those of their weight; and that the arbitrary denominations, called monies of account, such as livres, sous, deniers, &c. &c. had never been used.
But when these denominations are admitted and employed in transactions, to diminish the quantity of metal to which they answer, by an alteration of the real coins, is to steal.
And it is a theft which injures even him who commits it.
A theft of greater magnitude, and still more ruinous, is the making of paper money.
It is greater, because in this money there is absolutely no real value.
It is more ruinous, because by its gradual depreciation, during all the time of its existence, it produces the effect which would be produced by an infinity of successive deteriorations of the coins.
All these iniquities are founded on the false idea that money is but a sign, while it is value and a true equivalent of that for which it is given.
Silver being a value, as every other useful thing, we should be allowed to hire it as freely as any other thing.
Exchange, properly so called, is a simple barter of one money for another. Banking, or the proper office of a banker, consists in enabling you to receive in another city the money which you deliver him in that in which he is.
Bankers render also other services, such as discounting, lending, &c. &c.
All these bankers, exchangers, lenders, discounters, &c. &c. have a great tendency to form themselves into large companies under the pretext of rendering their services on more reasonable terms, but in fact to be paid more dearly for them.
All these privileged companies, after the emission of a great number of notes, end in obtaining authority to refuse payment at sight; and thus forcibly introduce a paper money.

Reflections on what precedes.
THUS far I believe myself to have followed the best course for the attainment of the object which I propose.
This not being a treatise expressly of political economy, but a treatise on the will, the sequel of one on the understanding, we are not here to expect numerous details, but a rigorous chain of principal propositions.
What we have seen already overturns many important errors.
We have a clear idea of the formation of our riches.
It remains for us to speak of their distribution amongst the members of society, and of their consumption.

Of the distribution of our Riches amongst Individuals.
WE must now consider man under the relation of the interests of individuals.
The species is strong and powerful, the individual is essentially miserable.
Property and inequality are insuperable conditions of our nature.
Labour, even the least skilful, is a considerable property as long as there are lands not occupied.
It is an error in some writers to have pretended there were non-proprietors.
Divided by many particular interests, we are all re-united by those of proprietors and of consumers.
After agriculture the other arts develope themselves.
Misery commences when they can no longer satisfy the calls for labour, which augment.
The state of great ease is necessarily transitory; the fecundity of the human species is the cause.

Of the multiplication of Individuals, or of Population.
MAN multiplies rapidly wherever he has in abundance the means of existence.
Population never becomes retrograde, nor even stationary, but because these means fail.
Amongst savages it is soon checked, because their means are scanty.
Civilized people have more, they become more numerous in proportion as they have more or less of these means, and make better use of them. But the increase of their population is arrested also.
Then there exists always as many men as can exist.
Then it is also absurd to suppose they can be multiplied otherwise than by multiplying their means of existence.
Then finally it is barbarous to wish it, since they always attain the limits of possibility, beyond which they only extinguish one another.

Consequences and developement of the two preceding Chapters.
LET us recollect first, that we all have separate interests, and unequal means.
Secondly. That nevertheless we are all united by the common interests of proprietors and consumers.
Thirdly. That, consequently, there are not in society classes which are constantly enemies to one another.
Society divides itself into two great classes, hirelings and employers.
This second class contains two species of men, namely the idle who live on their revenue.
Their means do not augment.
And the active who join their industry to the capitals they may possess. Having reached a certain term their means augment but little.
The funds on which the stipendiaries live become therefore with time nearly a constant quantity.
Moreover the class of hirelings receives the surplus of all the others.
Thus the extent which that surplus can attain determines that of the total population of which it explains all the variations.
It follows thence that whatever is really useful to the poor, is always really useful to society at large.
As proprietors the poor have an interest, first that property be respected. The preservation even of that which does not belong to them, but from which they are remunerated is important to them. It is just and useful also to leave them masters of their labour, and of their abode.
Secondly. That wages be sufficient. It is of importance also to society that the poor should not be too wretched.
Thirdly. That these wages be steady. Variations in the different branches of industry are an evil. Those in the price of grain are a still greater one. Agricultural people are greatly exposed to the latter. Commercial people are rarely exposed to the former, except through their own fault.
As consumers the poor have an interest that fabrication should be economical, the means of communication easy, and commercial relations numerous. The simplification of process in the arts, the perfection of method are to them a benefit and not an evil. In this their interest is also that of society in general.
After the opposition of our interests let us examine the inequality of our means.
All inequality is an evil, because it is a mean of injustice.
Let us distinguish the inequality of power from inequality of riches.
Inequality of power is the most grievous. It is that which exists among savages.
Society diminishes the inequality of power; but it augments that of riches, which carried to an extreme reproduces that of power.
This inconvenience is more or less difficult to avoid, according to different circumstances. Thence the difference in the destinies of nations.
It is this vicious circle which explains the connexion of many events which have been always spoken of in a manner very vague and very unexact.

Of the employment of our riches, or of Consumption.
AFTER having explained how our riches are formed, and how they are distributed, it is easy to see how we use them.
Consumption is always the reverse of production.
It varies however according to the species of consumers, and the nature of the things consumed. First let us consider the consumers.
The consumption of the hired ought to be regarded as made by the capitalists who employ them.
These capitalists are either the idle who live on their revenue, or the active who live on their profits.
The first remunerate only sterile labour. Their entire consumption is a pure loss, accordingly they cannot expend annually more than their revenue.
The others expend annually all their funds, and all those which they hire of the idle capitalists; and sometimes they expend them several times in the year.
Their consumption is of two kinds.
That which they make for the satisfaction of their personal wants is definitive and sterile, as that of idle men.
That which they make in their quality of industrious men returns to them with profit.
It is with these profits they pay their personal expenses, and the interest due to idle capitalists.
Thus they find that they pay both the hirelings whom they immediately employ, and the idle proprietors and their hirelings; and all this returns to them by the purchases which all those people make of their productions.
It is this which constitutes circulation, of which productive consumption is the only fund.
In regard to the nature of things consumed, consumption the most gradual is the most economical the most prompt; is the most destructive.
We see that luxury, that is to say superfluous consumption, can neither accelerate circulation nor increase its funds. It only substitutes useless for useful expenses.
It is like inequality, an inconvenience attached to the increase of riches; but it can never be the cause of their augmentation.
History plainly shows what happens wherever useless expenses have been suppressed.
All theories contrary to this reduce themselves to this untenable proposition. That to destroy is to produce.

Of the revenues and expenses of government and its debts.
THE history of the consumption of government is but a part of the history of general consumption.
Government is a very great consumer, living not on its profits but on its revenues.
It is good that the government should possess real property. Independently of other reasons it calls for so much the less of taxes. A tax is always a sacrifice which the government demands of individuals. While it only lessens every one’s personal enjoyments, it only shifts expenses from one to another.
But when it encroaches on productive consumption it diminishes public riches.
The difficulty is to see clearly when taxes produce the one or the other of these two effects.
To judge well of this we must divide them into six classes.
We show in the first place that the taxes of each of these six classes are injurious in ways peculiar to themselves.
We show afterwards who in particular are injured by each of them.
Is a conclusion asked? Here it is. The best taxes are, first, the most moderate, because they compel fewer sacrifices and occasion less violence. Secondly, the most varied, because they produce an equilibrium amongst themselves. Thirdly, the most ancient, because they have already mixed with all prices, and every thing is arranged in consequence.
As to the expenses of government they are necessary but they are sterile. It is desirable that they be the smallest possible.
It is still more desirable that government should contract no debts.
It is very unfortunate that it has the power of contracting them.
This power, which is called public credit, speedily conducts all the governments which use it to their ruin; has none of the advantages which are attributed to it; and rests on a false principle.
It is to be desired that it were universally acknowledged that the acts of any legislative power whatsoever cannot bind their successors, and that it should be solemnly declared that this principle is extended to the engagements which they make with the lenders.

THIS is not properly a treatise on political economy, but the first part of a treatise on the will; which will be followed by two other parts, and which is preceded by an introduction common to all the three.
Thus we ought not to have entered into many details, but to ascend carefully to principles founded in the observation of our faculties, and to indicate as clearly as possible the relations between our physical and moral wants.
This is what I have endeavoured to do. Incontestible truths result from it.
They will be contested however, less through interest than passion.
A new bond of union between economy and morality; a new reason for analyzing well our different sentiments, and for enquiring with care whether they are founded on just or on false opinions.
Let us now consider our sentiments.
Tracy- Treatise on Political Economy, A

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