Thoughts on the mechanism of societies

by marquis de Charles Casaux

All other kinds of taxes, as well as the poll-tax, seem to affect only the article on which they are laid; but this article comprehends the three interests, and trebles the action of the tax when the interest of the labouring man, that is, the price of his day’s work, constitutes, as it does in England, nearly one third of the revenue.⸺How could it be supposed that the taxing of industry in its products, was granting to its capitalist the right of increasing his price by the whole amount of the tax, without making it necessary for the land proprietor to enhance the price of his commodities at the same rate? And how could it be supposed that the products of agriculture and industry, happening to be, by a very just re-action, (whether it originates with the one or the other), increased in price in the same proportion, agriculture and industry should not be compelled to increase of course the price of labour which procured those products? If therefore you advance by 10 millions, the prices either of all the productions of the earth, by taxing agriculture, or of all the productions of the arts, by taxing industry, you equally compel the untaxed part to advance its prices to the whole amount of the 10 millions laid on the corresponding part, otherwise goods to the amount of 10 millions would evidently remain unsold. Now the influence of those new prices will enforce by degrees an increase on the price of labour, and this increase will soon be followed by a fresh one on the value of its products; whence it appears at last, that after all the necessary re-actions, the same tax of 10 millions, which by a general equitable poll-tax, supposed as equitable as it is impossible to make it so, would only raise the prices by one twelfth, or 8⅓ per cent.; if laid, either on the land, or luxury, or general consumption, would necessarily advance the prices, sooner or later, to 25 per cent.; the very precise period whereat every one would find himself in the exact state in which he was previous to the tax, paying, it is true, every thing 25 per cent. dearer, but being himself paid 25 per cent. dearer too.

Alter the proportion of the usual price of labour, by supposing a country so far barren as to make it necessary to appropriate one half of the revenue to the labouring people; in such case a tax of 10 millions laid on a revenue of 60 would increase by 30 per cent. the price of labour, and of its products; 30 per cent. would raise the revenue from 60 to 78 millions: now 39 being the half of 78, as 30 is that of 60, the burden of the tax would then prove equally null, after every article should have been raised 30 per cent.

Alter again the proportion of the common price of labour, by supposing that the cultivator is allowed only one fourth of the revenue; this division may take place in a country extremely fertile; in this case, a tax of 10 millions on a revenue of 60, would only add 20 per cent. to the former prices; instead of raising the revenue of 60 millions to 75, as in the case of three equal shares, or to 78, as in the supposition of the revenue being divided in halves, the tax would then carry it only to 72. Now the 4th part of 72 is 18, as 15 is the 4th of 60; therefore if, after the tax is imposed, you give 18 wherever you paid only 15 before that period, the burden will clearly be null again, since the increase in the price of labour, must have followed the advanced price of its products, an advance necessitated by the impost.

Here, methinks, I hear the enthusiasts exclaim, How! the fertility of the land is then of no advantage, but to its greedy owners!—I am in hopes that before I conclude this Pamphlet, I shall be able to find, to the great satisfaction of all good men, how many advantages remain in the hands of the most opulent land proprietor; nay I hope to prove that in a fertile land there is nothing lost to any of its inhabitants, unless extraordinary efforts be used to concenter within that spot the general benefit which must result from it. I shall content myself at present with requesting the reader to compare my thoughts on the taxes, with the two following problems, so often debated both in England and in France. How is it that France has constantly retrieved her errors and her misfortunes? How comes it that England has not yet sunk under the burden of her taxes? The French exciseman says: It is because the more the people are loaded, the better they walk; and very sensible men in England used to say, “Reason and experience seem to prove that taxes stimulate industry, and that the poor, to live as well as before, perform more work without demanding more for their labour.” (D. Hume’s Essay VIII. on Taxes). It seems to me that the above two problems are more humanely solved by the reasons I have produced, and that those reasons destroy all idea of a miracle, or of the necessity of loading the people in order to spur their industry, and encourage them to work: on the contrary, to forward those two great points, it is necessary to increase the price of their labour in the same proportion as that of its products is raised by the taxes; and this will suffice to render evidently null the burden of all taxes whatever.

Further Considerations on the Necessity of a Correspondence between the Prices of Agriculture and those of Industry.

I have said it more than once, and beg leave to repeat it here: Let any essential object be denoted by one number or another; it is a matter of perfect indifference, provided the numbers intended to denote the mass of objects corresponding thereto, do not present any ideas contrary to the proportion of labour which exists between the essential object, and the mass which is to form its balance. Thus then, be the value of wheat, which serves as the general standard, because it is useful to all, at all times, and which ought to be so, from another consideration almost equally powerful, namely, that it constitutes about one third of the landed revenue in Europe—be its value, I say, denominated 30, 50, or 25, nothing more indifferent, provided the numbers denoting the value of the other products of land and industry, keep exactly, either by more or by less, within the same proportion; it is clear that, in such a case, neither the land proprietor nor the capitalist of industry, can undergo from the alteration in the numbers, any real alteration in their circumstances. But to think of nothing but the manufactures, and imagine it possible to maintain, and endeavour seriously to maintain, wheat at the same price, whilst the taxes advance by 10 per cent. that of the products of industry,—is to aim at the ruin of agriculture, and to oblige all the proprietors of land and money, whose employments in the State would not indemnify them for such an injustice, to go in search of another country, where the manufacturer, better acquainted with his real interest, would know, or act as if he knew, that the solidity of his wealth is inseparable from that of the land proprietor, and from the ease of the proprietor of money, and of the labouring man.

Then perhaps those national manufacturers, so proud and so jealous of their exportations, so greedy of premiums, prohibitions, restrictions, encouragements of all kinds, would sue more ardently to have those nuisances suppressed, than they ever did for their establishment.

Nothing more admirable than those regulations to which England acknowledges to be indebted for the best part of her wealth and power; but they crept in at a time when ignorance generally prevailed, when all the other parts of Europe had almost no idea either of the principle of commerce, or of its influence over all the other resources of society. In effect, from what known point could one then start, to imagine that a nation, who openly countenances monopoly at home, in order to encourage her foreign trade, lays the most solid basis for the monopoly she wishes to secure to herself every where? How was it possible to conceive that the Dutch, a nation so necessary to those that are deficient in means, and so forcibly compelled by the superabundance of their own, to make them serviceable to those who stand in need of them, could not be shut out from the English ports, without depriving the rest of Europe of the advantage, which their admittance every where was necessarily calculated to procure to their correspondents, by securing to them, as well as to England, a competition so essential to all, and fatal to monopoly alone? Europe, busy at that time in search of another sort of equilibrium, did not consider what weight commerce, carried on upon such principles, would throw into one of the scales; how could Europe then suspect that it would overthrow the balance entirely? But what is the final result of all these projects against Nature?—The pretensions of the Ecclesiastical State stirred up all Europe; and the Pontifical See was fixed in its proper place. France roused all Europe against the ambition of the House of Austria, much more formidable by its real power; the Imperial Throne was fixed in its proper place, and France was hailed as the founder and assertor of European liberties. Soon after the Protectress became a despot; England stirred up all Europe against her, and France was, aukwardly, thrown out of her proper place; England, the principal instrument of the revolution, made an improper use of her importance, as had been successively done by the Ecclesiastical Power, the House of Austria, and by France;—the Armed Neutrality appeared, and presented a code of laws unheard of before; it was just; every nation, that had not bowed beneath the English yoke, adopted it:—there was an instant, when this armed neutrality might have dictated both to England and France, laws as equitable as the code itself; and all Europe would have applauded, had even England and France united, at that very instant, to exterminate in concert the whole naval force of Europe, then burnt the exterminating fleets, and themselves given to all the world those very laws of equity which were intended to be imposed upon them.

Every thing, at this moment, is in that happy state, which gives time to reflect upon what is past, to see what is present, to look forwards to what is to come, and to consider an ensemble, the very idea of which could not be admitted during former periods. A few clouds, dispersed here and there, do not spoil the beauty of the horizon; no body can now, for any length of time, think it his interest to ruin and destroy; and every body is concerned not to suffer any thing to be destroyed. I return to my subject, if I may be said to have deviated from it.

If a diminution in the price of the necessaries of life be looked upon as so very important, there exists a sure method of effecting it, even in England, without any detriment to the land proprietor. Let us see whether this very method would prove injurious to the true interest of the manufacturer, who must be patronised, cherished as the fountain head of riches; I mean that kind of riches called money, which could not long subsist without the riches called wheat.