Thoughts on the mechanism of societies

by marquis de Charles Casaux

It will not be in regard to the situation of a country, which might allege a difference of 7 or 8 per cent. in its prices, as an insurmountable bar to competition, that I shall examine in what manner that very competition might be established; I shall suppose a nation in the 6th, 7th, and 8th hypotheses, wherein wheat is rated at 40s. per quarter, by a series of revolutions in the coin, or a multiplication of taxes, or by an increase in wealth; and I shall place it in opposition to another nation, considered as paying few or no taxes, and humbly consuming her wheat at the rate of 26 or 27s. the quarter.

In order to render the effects of the disproportion more sensible, I shall further suppose, that the shilling in both nations equally contains 86 grains of silver at the same standard.

Before these two nations be represented as vying with each other in the foreign markets, I shall, in the first instance, examine, whether it might not be possible to settle between them a direct trade, equally advantageous to both; for if this be practicable, why should not the competition be so likewise?—Is not the trade of each competitor a direct one with the nation, in which he vies?—And if, in this case, there be a sure and equitable principle for one of the competitors, why should it not be so for the other?

A necessary Principle of Trade, considered both as direct, and in Competition.

In all imaginable suppositions, Commerce is nothing more than the exchange of one want against another want, or of one fancy against another fancy; or, in fine, of a fancy against a want. All idea of a commerce between two nations, as between man and man, carries with it two objects different in their nature, or their form; and the relative value of these objects must essentially be previously determined by some general principle, if we mean not to transact business in the dark.

Now, the nation so rich, or, in other words, so over-loaded with money, as to have raised, at home, the quarter of wheat to 40s. can certainly have no real interest in taking away the small portion of the other, so scantily provided, that she is obliged to sell for 24 or 27s. that which fetches 40s. to the former; for, after all, what would be the consequence of this spoliation? It would serve only to lessen, in the opulent country, the value of the precious metal already so much disparaged there. What then will be the case, if both have sense enough to prefer real enjoyments to chimerical possessions, or rather, profit to loss?

After the first years, destined, since the establishment of Societies, to be spent in endeavouring, if possible to cheat each other, it will certainly become indispensable to agree upon a fixed rule of appraisement, as unexceptionable for one country as for the other. Now, in the supposed state of the question, money cannot be that rule; for one of them demands none, and the other is not willing to part with any, not out of regard for the favourable balance, but because she would get less by the exportation of her money, than of her goods; it will therefore become necessary, for the respective advantage of the parties concerned, to agree, that the labour of 10, of 100, of 1000 men in one country, shall be looked upon as repaid by the labour of the same number of hands from the other, upon a tacit proviso nevertheless, that the respective merchants in both nations shall have it in their power to ransom their countrymen, according to the proportions established in both countries, a little by the degree of estimation in which commerce is held, but a great deal by the degree of foreign competition by which the natives are or will be kept or called to order.—And what is required to prevent any injustice, and, above all, any mistrust from the merchant of one nation towards the merchant of the other?—Nothing more than to follow the practice almost generally established all over Europe.—The merchant in Rome, I suppose, will send his son to his friend in London, and vice versâ. Now if the Roman perceives that in London, where a quarter of wheat costs 40s. the article he proposes to buy is commonly sold at 80s. he will readily conceive, without having gone through a course of algebra, that some other article, which is bespoke of him in exchange, going for 54s. in Rome, where wheat is at 27s. per quarter, he will exactly pay, value for value, according to the balance and weight of the commercial sanctuary, the 80 of London with the 54 of Rome.

It appears to me that matters thus settled, might remain so for ever, without inconvenience, without any alteration of prices, in either of the two nations, had not Nature, either from mere caprice, or to make men, in spite of themselves, dependent on each other, and oblige them to look on one another as brethren, established certain unknown rules, in consequence of which, that very same wheat, which would cost only 26 or 27s. at Rome, we have supposed, and 40s. in London, this same wheat I say, the staff of life all over Europe, every where accounted the standard of labour, and every where cultivated in proportion to its common necessity, is at times nevertheless at one place in great plenty, and very scarce at another. Now it seems to be a matter of perfect indifference, that in regard to any other article a merchant should ransom his wealthy fellow citizen, a landed proprietor, by charging him, for instance, 30 crowns for an English trinket, originally purchased for no more than 10, as an equitable measure between labour and labour: it is the younger son who robs the elder brother, to provide against the right of primogeniture; or, in other words, it is no more than the transferring of a few crowns, from a very valuable hand, that of the consumer, to another equally precious, that of an agent of the production: but it is of the utmost consequence for the Sovereign, that, in a time of scarcity, insatiable men, were they even his subjects, do not presume to ask 4000 grains of silver for a quarter of wheat, upon pretence that in England, from whence it was imported, they have paid for it 3440 grains, (for it is always upon such victorious arguments that the national monopolist endeavours to defend his extortions, in times of distress); the difference is so great between 4000 grains of silver, and only 2200 or 2300, the common price by which that of labour is regulated in my hypothesis, that all the treasure shut up in the castle of St. Angelo could not prevent half the inhabitants from starving for want of food in a time of dearth. Luckily, however, this misfortune may be obviated by one of the grandest operations in finance, that can possibly be conceived; for the object is no less than to oblige the people to pay in good earnest for their wheat in a moment of scarcity, at the rate of 4000 grains of silver per quarter, a price so far above the means of that very people, to whom the intention is to shew some favour. This financiering operation is founded on the following remark, obvious to the meanest capacity, and perhaps not unworthy of being deeply searched into by a judicious observer.