It is true that such transfer or accretion of matter may increase the value of the product, but only in proportion to the amount of wealth which had to be consumed in order to produce it; because the price of manual labour is always equal to the cost of the necessaries consumed by the worker. All that we have in this case, however, is a collection of superimposed values with some raw material thrown into the bargain. But, as Mercier de la Rivière put it, “addition is not multiplication.”[29]
Consequently, industry was voted sterile. This implied no contempt for industry and commerce. “Far from being useless, these are the arts that supply the luxuries as well as the necessaries of life, and upon these mankind is dependent both for its preservation and for its well-being.”[30] They are unproductive in the sense that they produce no “extra” wealth.
It may be pointed out, on the other hand, that the “gains,” both in industry and commerce, are far in excess of those of agriculture. All this was immaterial to the Physiocrats, for “they were gained, not produced.”[31] Such gains simply represented wealth transferred from the agricultural to the industrial classes.[32] The agricultural classes furnished the artisans not only with raw material, but also with the necessaries of life. The artisans were simply the domestic servants, or, to use Turgot’s phrase, the hirelings of the agriculturists.[33] Strictly speaking, the latter could keep the whole net product to themselves, but finding it more convenient they entrust the making of their clothes, the erection of their houses, and the production of their implements to the artisans, giving them a portion of the net product as remuneration.[34] It is possible, of course, that, like many servants in fine houses, the latter manage to make a very good living at their masters’ expense.
The “sterile classes” in Physiocratic parlance simply signifies those who draw their incomes second-hand. The Physiocrats had the good sense to try to give an explanation of this unfortunate term, which threatened to discredit their system altogether, and which it seemed unfair to apply to a whole class that had done more than any other towards enriching the nation.
It is a debatable point whether the Physiocrats attributed this virtue of furnishing a net product solely to agriculture or whether they intended it to apply to extractive industries, such as mining and fishing. They seem to apply it in a general way to mines, but the references are rare and not infrequently contradictory. We can understand their hesitating, for, on the one hand, mines undoubtedly give us new wealth in the form of raw materials, just as the land or sea does; on the other hand, the fruits of the earth and the treasures of the deep are not so easily exhausted as mines. Turgot put it excellently when he said, “The land produces fruit annually, but a mine produces no fruit. The mine itself is the garnered fruit,” and he concludes that mines, like industrial undertakings, give no net product, that if any one had any claim to that product it would be the owner of the soil, but that in any case the surplus would be almost insignificant.[35]
This essential difference which the Physiocrats sought to establish between agricultural and industrial production was at bottom theological. The fruits of the earth are given by God, while the products of the arts are wrought by man, who is powerless to create.[36] The reply is obvious. God would still be creator if He decreed to give us our clothes instead of our daily bread. And, although man cannot create matter, but simply transform it, it is important to remember that the cultivation of the soil, like the fashioning of iron or wood, is merely a process of transformation. They failed to grasp the truth which Lavoisier was to demonstrate so clearly, namely, that in nature nothing is ever created and nothing lost. A grain of corn sown in a field obtains the materials for the ear from the soil and atmosphere, transmuting them to suit its own purpose, just as the baker, out of that same corn, combined with water, salt, and yeast, will make bread.
But they were sufficiently clear-sighted to see that all natural products, including even corn, were influenced by the varying condition of the markets, and that if prices fell very low the net product disappeared altogether. In view of such facts can it still be said that the earth produces real value or that its produce differs in any essential respects from the products of industry?
The Physiocrats possibly thought that the bon prix—i.e. the price which yielded a surplus over and above cost of production—was a normal effect of the “natural order.” Whenever the price fell to the level of the cost of production it was a sure sign that the “order” had been destroyed. Under these circumstances there was nothing remarkable in the disappearance of the net product. This is doubtless the significance of Quesnay’s enigmatic saying: “Abundance and cheapness are not wealth, scarcity and dearness are misery, abundance and dearness are opulence.”[37]
But if the bon prix simply measures the difference between the value of the product and its cost of production, then it is not more common in agriculture than in other modes of production. Nor does it extend over a longer period in the one case than in the other, provided competition be operative in both cases; on the contrary, it will become manifest in the one case as easily as in the other, especially if there be any scarcity. It remains to be seen then whether monopoly values are more prevalent in agricultural production than in industrial. In a very general way, seeing that there is only a limited quantity of land, we may answer in the affirmative, and admit a certain degree of validity in the Physiocratic theory. But the establishment of protective rights and the occurrence of agricultural crises clearly prove that competition also has some influence upon the amount of that revenue.