Thoughts on the mechanism of societies

by marquis de Charles Casaux

Fourteenth Hypothesis.

Let us suppose, that, by the suppression of the monopoly enjoyed by the manufacturers, and of which they are so jealous, the price of the whole of their goods should fall one tenth; in such a case, the wheat which the new taxes will enhance in price, I suppose, in the proportion of 40 to 44, would, upon a medium, fall back to 40; and in this case again the produce of the manufactories would only cost industry 20 instead of 22, at which they will be rated when wheat shall have risen from 40 to 44; for, in the latter supposition, it will be necessary for industry to pay finally this increase of expence, in favour of the artificers, who would not long submit to an injustice, without presenting petitions in their own way: just as wheat must indispensably rise from 40 to 44, in order that the land and money-proprietors be not compelled to leave their country, to the great prejudice of the internal consumption, so essential to the truest interest of the manufacturer.

Let it then be supposed, that wheat should fall from 44 to 40, and so of all the rest;—I confess that the proprietor of money would thereby become a gainer, and that the general persuasion is, that it is salutary he should lose: but would he long support his gain? Would not the encouragement which every thing must derive from this new order of things, from that activity which trade would find in the new channels that would open every day, when commerce should build on that true principle, acknowledged to be the only unerring one, the exchange of commodities, (excepting the bullion required for the five articles before mentioned)—would not that activity, I say, that encouragement, inspire in all parts of Europe an eagerness for labour, necessarily followed by an increase of real wealth, a creation of new productions, and by an increase of that imaginary wealth, still more stimulating than the former, because it is its proof and its pledge, but which cannot be obtained without a general increase in all the prices?

Will it be said, that, on the first moment, the fall of prices would affect the intellects of those who can only see, but never compare? that the people, for instance, would lament their being reduced to 10, from the 12 they had been accustomed for some days to receive, although they should pay only 5 for what cost them 6 before? In this case, keep up the prices, but without exception, and export on the true principles of exportation: take for your guide the example set up by my countryman, the American of Philadelphia, in selling dearer because you are compelled to do so; propose to buy dearer also, and this will be only an act of justice; you will see hereafter that you would at last be just, in spite of yourselves; be so intentionally: you cannot come down to the price of your purchasers; raise their prices to a level with your own, they will observe that even the first profit is not the lot of the first bidder, if every one doing justice to himself bids in proportion: mean while, the eagerness for labour goes on increasing, and by little and little the benefit extends to the lowest wretch that dwells in the community; he finds more work to do, and a greater reward for it.

It will be said no doubt, that this is another supposition of a general agreement.—No, certainly not; it is enough for every one to see that it must be so; that it will happen without any other help than the private interest of each individual; that these private and niggardly measures, already taken, or to be taken, in order to prevent the result of all those personal interests, are of no use but to keep justice at a distance; to multiply the number of injuries which daily take place, till what must be, comes to pass; to produce a greater evil, where it might be less; to substitute forced, to necessary prices: but it is so evident that wheat, and all the productions of the earth, should increase by one tenth, as soon as the taxes, or an accession of wealth, shall increase by one tenth the price of the products of industry, that it is necessary to lay this principle as the basis of all regulations, or else openly to adopt as a maxim, that agriculture should be sacrificed to industry.

This maxim, I set forth of the correspondence required between the prices, together with the inconvenience of having them too much out of proportion with those of other nations, militates, it is true, against that monstrous system of prohibitions, corporations, &c. which is the only burden entailed upon us by our forefathers, the only burden which the present legislatures can transmit to posterity; but although it might be an absurdity to suppose a reform as sudden as it would be advantageous, yet would it be less absurd to suppose that, the evil being once found out, the remedy will constantly be rejected? Would it be less absurd to suppose, that the manufacturers, better acquainted with their real interests, will persist in endeavouring to aggravate the evil, instead of complying with the only means of retrieving it? Would it be less absurd to suppose, that each of them will never perceive that he pays for the privilege of ransoming in his branch of industry, by the disadvantage of being himself ransomed on a thousand other objects? Russia, 30 years ago, was perhaps more distant from her present state, than the unmasking of monopoly, and the knowledge of its effects, will be from its extirpation.

On a Cause little suspected of high Prices.

I am not ashamed to own the prejudice I entertain against a diminution in the price of any thing whatever, when I observe that discouragement, at least in the part affected, would be the consequence of such a diminution; whilst, on the contrary, a gradual, general, and proportioned advance in the prices of every thing, is constantly followed by a greater activity in all the branches of labour, which really increases the quantity of its productions, in a proportion far superior to the advance on that imaginary, nominal value, acquired by fermentation; my intention, therefore, cannot be to declaim against one of the most potent causes of the high prices prevailing in England, and which nobody, I think, has yet mentioned. This last expression shews, that I do not mean here, that quantity of paper-money, to which many people, in more than one kingdom, ascribe all the evil, of which the sole real part is the work of monopoly. I think I have proved, that it is impossible there should long remain in circulation any paper above the necessary quantity: all would flock to the Bank to be paid in cash, had not the Bank enough of it to discharge her notes, when presented, with such readiness as to leave no doubt of the validity of those other notes, which, in the natural course of things, would not be presented there to be paid in money. The Bank would derive very little advantage from the momentary cheat of paying off large sums in sixpences; this legerdemain is admirable, but can suffice only to correspond to the wanton tricks sometimes played by great politicians, to give the Bank a momentary trouble. It is, then, necessary to rock those children, whom great men make it their amusement to scare; and they must be rocked till they are fast asleep, or till the great men are tired of making faces at them. After the farce is over, the children wake, and do not even remember to have been frightened; money is found wherever it is necessary, and every thing returns to that order which it is every one’s interest to maintain.

What then is that other cause, so active, so cogent, not of that extravagant price which monopoly alone can occasion, but of that price rather above the necessary one, which gives to every thing an increase of vigour? It is credit. It is that prodigious talisman which realises all that it conceives, since all that it conceives has the same advantage as reality. How many capitals would never have existed, had not credit supposed them several years before they did really exist? How fill up the real chasm of capitals, which may, in an instant, suspend a hundred manufactories in a kingdom, and, by that suspension, ruin, starve, the trader, the merchant, the manufacturer, the mechanic, all, except the farmer, whether proprietor or tenant, who, by the counter-blow, could not die of hunger, but in real misery on his stacks of wheat, which he would no longer attempt to reproduce.