Bastiat’s name is frequently linked with Dunoyer’s, to whom we have already had occasion to refer.[736] Dunoyer was one of the most militant of the politico-economic Liberals, and fully shared their belief that free competition was a sufficient solution for every social problem.[737] The obvious drawbacks of free competition, he thought, were due to its imperfect character. No one was more opposed to State Socialism and to intervention of every kind. He was opposed to labour legislation, to Protection, to the regulation of the rights of property, and even to the State management of forests. As we have already remarked, he was against every kind of combination, because it stood as an obstacle in the path of free competition.
Logically enough he was in favour of the free disposal of land, and would not even make any reservations in favour of heirs. He refuses to recognise the right of entail because the exercise of the testator’s liberty necessarily involves the curtailment of the liberty of his successors.[738]
Some of the arguments which he employs in support of free exchange are quite novel. The following is one of the most interesting. Admitting that it is not to the advantage of a poor country to trade with another which is wealthier or industrially superior, the same thing must apply to the poorer districts of a country in their dealings with other provinces that have suddenly become rich, or with rich provinces recently acquired by conquest. But “as soon as they are annexed their superiority presumably disappears.” The argument is amusing, but not very solid. It is not impossible that free exchange, even within the bounds of the same country, may have the effect of drawing capital and labour from the poorer districts towards the richer, from Creuse or Corsica to Paris. This is just what does happen. It is not, perhaps, a very serious evil, because what France loses on the one hand she gains on the other; but if Creuse or Corsica were independent states, anxious to preserve their individuality, we could understand their taking measures to prevent this drainage. It is true that it is not easy to see how protective rights could accomplish this—a point which Dunoyer might well have emphasised.
We cannot speak of Dunoyer without saying a word about his theory of production. Labour with him is everything. Nature and raw material are nothing. He stands at the opposite pole to the Physiocrats,[739] and supplied a handle to those socialists who before Marx’s day had thought that labour was the only source of wealth, and that consequently all wealth should belong to the worker. But he pays no very great attention to this idea. His chief concern is with production, and not with distribution.
From this view of production he draws several interesting conclusions.
In the first place, it matters little to him whether labour is applied to material objects or not. That makes no difference, so far as its character or productivity is concerned, for in both cases what is produced is an immaterial thing called utility. What the baker produces is not bread, but the wherewithal to satisfy a certain desire. This is exactly what the prima donna produces. The so-called liberal professions are placed in the same category as manual work, and in this respect again Dunoyer takes up a position opposed to that of the Physiocrats.[740]
Contrary to what might have been expected, this large extension of the concept production fails to include commerce. Dunoyer applies the title productive to the singer, but refuses it to the merchant, and by this strange reversal he arrives once again at the Physiocratic position. Exchange is not productive[741] because buying and selling does not involve any work, and where there is no work there is no production. Exchange creates utilities, and it is not easy to understand what more Dunoyer expects from it, seeing he admits that labour can do nothing more. Exchange, he thought, was a purely legal transaction, and he was loath to admit that any act of a “corporate will” without labour or physical effort could create wealth, just as the Physiocrats found it impossible to think of wealth other than as a product of the soil.
CHAPTER II: THE APOGEE AND DECLINE OF THE CLASSICAL SCHOOL. JOHN STUART MILL
While the French economists, alarmed at the consequences involved in the theories of Malthus and Ricardo, strove to transmute the Brazen laws into Golden ones, the English economists pursued their wonted tasks, never once troubled by the thought that they were possibly forging a weapon for their own destruction at the hands of socialists.
The thirty years which separate the publication of Ricardo’s Principles of Political Economy (1817) from Mill’s book bearing the same title are occupied by economists of the second rank, who apply themselves, not to the discovery of new principles, but to the development and co-ordination of those already formulated. Of course we must not lose sight of the mass of critical work bearing upon certain aspects of current doctrines, which was produced by English economists just about this time. But their ideas attracted as little attention as did Cournot’s in France or Gossen’s in Germany.[742]