Thoughts on the mechanism of societies

by marquis de Charles Casaux

Eighteenthly, Is it not even probable that every wise nation will be sensible that there is but one way to carry on, without being constantly duped, a commerce with another nation, obliged to raise the price of her goods; viz. to raise, in the same proportion, those which are given in exchange?—This, some will say, is an indirect advice which I take upon me to give to industry; nothing more useless, will they add; industry in all countries never fails making that calculation.—I do not assume the liberty of advising industry;—Industry is far better acquainted, than I am, with her own interest: it is to agriculture I presume to give advice; and this I have an incontestable right to do, since I myself am a cultivator, an American cultivator, and that my fortune cannot increase, nor even stand as it is, but with that of my brethren, the cultivators throughout all Europe, whose consumption is as essential to me, in regard to sugars, cottons, coffee, indigo, &c. as mine is essential to them, with respect to wines, flour, oils, hemp, iron, &c. How is it possible to charge them with an advanced price on the goods they purchase, without diminishing their means of buying, unless they raise their own commodities equally with the above goods?—How can one diminish their power of buying, without diminishing also my resources for a sale?—How can one diminish my resources for a sale, without diminishing my means of production?—And how is it possible to put a stop to the productions of America, without crushing in the very bud all the European productions, which are to pay for them?—There is not the least doubt, but that, between merchant and merchant, alien or native, there never is any difficulty: nothing more candid than their respective conduct; never a word about prices; each fixes his own, and it often happens that a bale of goods has been sold ten times upon the invoice, and never opened:—But when a merchant, no matter of what nation, says to his customer, no matter of what country; English goods have increased in price from 20 to 22, I cannot have them for less; it is essential for every land proprietor, from Pole to Pole, to know that he must not hesitate to answer: You cannot come down to me, give me leave to get up to you; or, in other words, I also advance my prices from 20 to 22, so that every thing is in its due order, and the cock of the balance stands still in its place. On this principle, clearly evident and of an irrefragable necessity, I maintain that it is England, successively compelled, as well by her wealth, as by her taxes and monopoly, to increase her prices at home,—England, trading to all parts of Europe, more largely than any other country,—it is England, I say, who, to this day, has raised the prices of every thing all over Europe; and I insist, that England, once more obliged to carry those prices still higher, once more will compel Europe to follow her example, and that all Europe will grow richer by her means, (as has been the case hitherto) on account of the encouragement which this increase will give in all countries, where England may think fit to continue or extend her trade on fair and equitable principles.

It is certain, that one cannot, without some reflexion, comprehend that chain composed of so many incoherent, so widely distant links, that union, that mutual dependance of interests, in appearance so opposite to each other; and that, even with the assistance of a few hypotheses sufficient to give an idea of the whole, the only confession subscribed to by the reader, will be, that they imply no palpable contradiction, but that they are nevertheless the mere offspring of imagination, and ought to be ranked amongst non-entities. Yet the two hypotheses of which Rome seemed to be the subject, were no more, if we except the paper-currency, than the type of the revolution which took place in France at the time of the regulation I have spoken of,—a regulation, which in less than two years increased the wealth of that nation from 16 to 24, 50 per cent.; as if the French had been at last made sensible, that England could not work for herself without working for them, and that consequently they had a right to say with my Roman: England is rich to the amount of 24, only because she denominates 24 that same quantity of wheat which our barricadoes and barriers have obliged us to call only 16 in our country; the only thing to be done therefore, is to set fire to our barricadoes, and break down our barriers, that henceforth the same 16 may be denominated 24, and all at once we shall be in fact as rich as England, without having been so judiciously at work.

Another advantage that would accrue from that uniformity, nearly general, in all prices, if one would lend an helping hand to Nature, after having been convinced of the impossibility of reaping any other benefit from the obstacles thrown in her way, but the sad advantage of retarding her progress;—another advantage, I say, that would accrue from that kind of uniformity in prices, which undergoes no alteration, but from the wants and demands, is, that all that monstrous system of prohibitions or equivalent restrictions, must crumble of itself: for, with what face could a national manufacturer solicit the means and privilege of making his own countrymen pay 10 per cent. dearer for those goods, which another nation tenders to them at 10 per cent. cheaper, notwithstanding the expence of exportation? What reasons could he urge when, instead of answering, a cultivator should rise in the national council, and ask, for the exportation of corn, an absurd premium which would instantly enhance its price 25 per cent.?—But the game of imports and exports to which this last observation alludes, requires to be treated in a separate article which it is not yet time to enter upon; all we have now to do is to think on the means of giving a free circulation to the revenue of all Europe, supposed to be increased in the proportion of 20 to 22, on account of the same increase necessary in England to pay three millions interest, without any one being the poorer for it. I shall say nothing of the facility of paper-currency, when the inutility of a national robbery shall be once generally acknowledged.

Nineteenthly and lastly, If we are frightened by the necessity of a balance in money, every where more considerable, in order to circulate every where, a revenue increased from 20 to 22, to face the indispensable rise in the prices of England, who trades to all parts of the globe; (when we consider besides, that France and England are by the same reason obliged to add to their respective balance already so loaded,) it appears to me, that, after a retrospective view of what has passed, one may readily be convinced, that whenever money becomes necessary for circulation, wherever nothing more is required to circulate and balance objects really existing, and equal to each other, there are always people enough ready to carry money thither; and that this operation, as all those that are beneficial to society, is generally effected when it is neither counteracted nor encouraged, without any one perceiving it.—Nevertheless it must be confessed, that the pretentions set up by France, in regard to a balance, are as terrible, as formidable, as those of England, due regard being paid to the difference between the exports of both; I shall examine these pretensions as I have done those of England, and bring them besides closer to each other, that they may be more properly estimated.

The pretended Balance of France in point of Trade.

The Work of Mr. Necker on the French finances, is in my judgement, for that nation, the most precious work that this age has produced; it is a sword hanging over the head of whoever shall fill up that department during the reign of the present King, and of all those of his successors whom God shall bless with a soul like his. That work would still be precious, though it should serve only to expose the knavery or the incapacity of those who pretended that France, preparing for a war which required the creation of a navy, without which she could not carry it on, forced to have recourse to new loans proportionate to such an undertaking, and weighed down, as it was said, by the load of the old taxes imposed for discharging the interest of her former debts, was again on the eve of laying new imposts, in spite of herself, and perhaps of having recourse to those degrading reductions, so lightly, yet so often practised before. The first public operation of Mr. Necker (his Compte rendu) inspired every one with the enthusiastic spirit of an unbounded confidence, wherever nothing was foreseen but the discouragement arising from discredit. He did not create anything, it is true; but he dispelled the clouds which had hitherto concealed what really existed; he restored order where confusion reigned before, and treated the mechanical part of the finances, like a merchant willing at all times to have it in his power to compare his undertakings with his means, his plans with his resources. No other step could be taken at first. I have no kind of connexion with Mr. Necker, neither direct nor indirect; nor am I bound to him by the ties of friendship, interest, or gratitude; and, besides, it is not my intention either to praise, or to censure; yet I cannot forbear to observe, that Mr. Necker, entirely circumscribed by the circumstances of the time, charged with the triple load of clearing up what was passed, supplying present wants, and guarding against future events, could only loosely survey, regret, and prepare, what a situation so critical did not permit him to undertake. His being displaced, left him no other advantage than that of informing the public of what he intended to do; and the manner in which the nation has received the work wherein he recorded his projects, is at the same time a tribute of the national esteem for the man who planned them, and a pledge of the national gratitude, even for any one of his successors, who should confine himself to carry them into execution.

Whatever I have hitherto said, whatever may drop from my pen in the sequel, in contradiction to some of Mr. Necker’s opinions, was written long before the publication of his work, and in no degree detracts from the solidity of his views. What he devised was perhaps the best that could possibly be imagined in the actual state of things, and according to the received system:—But is that system the best?—I subscribe to his principle concerning the precautions to be taken, and the slowness of the march necessary even through all the paths that may lead to the best; but that best, what is it? France cannot boast of having found it—read the work of Mr. Necker; England cannot boast of having found it—read the debates of both Houses of Parliament:—And do I dare to offer my thoughts!—Yes:—two children, it is said, found what it was necessary to find, in order to the discovery of immense bodies of light, at a distance where nothing was suspected but the limits of creation.—Were my thoughts only plausible, they ought to be thoroughly investigated; they concern the State, they concern mankind at large:—if they prove just, to say that they are impracticable on account of the shackles with which our forefathers have loaded us, is to say nothing but with regard to the fleeting moment in which I speak, already so far off from us; but to feel then that we should not add new shackles to those we endure already, would be a great point gained; to scrutinise afterwards the ancient opinions, without exception; to analyse the principles on which pretended impossibilities are founded; to expect nothing from seduction or from authority; to desire nothing but from general conviction; to spare no pains to make the people sensible of, and familiar with the truths that might be discovered, would perhaps be a second step towards that very mark to which we should probably direct our course, were it not for the pretended impossibility, the mere supposition of which casts a ridicule upon the very thought of looking up to it.

It is upon this plan, and under this point of view, that I purpose to examine the supposed balance of France, in regard to trade:—and I begin by asking, whether there exists a nation in Europe, which, upon perusing what Mr. Necker says to the present purpose, and the use made almost generally in England of the work of Sir Charles Whitworth, much more explicit with regard to the balance of Great Britain, would hesitate an instant to break off all commercial connexions with England and France, if only one half should prove real in the prejudices of the two nations, on the object, which at present seems to determine all the others?

I would, in the next place, propose, for examination, whether those two nations are not indebted to these prejudices, for the greatest part of their mistakes, and of the obstacles which they have found, which they still find, and which they will ever find, in the measures that other nations think themselves obliged to adopt, in order to guard against the effects of those prejudices, till their fallacy is universally acknowledged, as well as their insufficiency to produce their boasted effect, even in favour of those who would obstinately refuse to give them up.

Every year, say the prejudices of both nations, more than seven millions sterling are required for their two terrible balances;—but not above six millions are brought over from America:—if Spain and Portugal be allowed to come in for one sixth (indeed it would be but just), the other parts of Europe must settle it amongst themselves to find the two millions sterling, which without that assessment would be deficient in the balances necessary to France and England.—Whence does Europe take those two millions? Whence have they been taken hitherto? I know not: but it is a stubborn fact: you may consult the work of Mr. Necker for the balance of France, and for that of England the statements of Sir Charles Whitworth; the former amounts annually to 70 millions of livres, about 3 millions sterling; and the latter to 83,678,818l. in the space of 20 years, from 1754 to 1773; it is, one year with another, more than 4,180,000l. per annum. But above all, let it not escape your observation, what is said in France, that the decline of that Empire will begin, when this balance of 70 millions of livres shall begin to decline, and that it is the opinion in England, that, were the favourable balance to be below 2 or 3 millions sterling, a national bankruptcy must indispensably follow. What is most miraculous (and indeed consolatory for those who are obliged to think of their elevation, before they dream of a bankruptcy, or even of their decline) is, that whilst France and England have received annually, the one 4, the other 3 millions sterling, that is to say, one sixth more than America has to share amongst all the European nations, the other countries in Europe have nevertheless increased their mass of money, by all that was necessary to keep up their luxury, and the circulation of a revenue which has almost doubled in the course of a century. These are prodigies which will cease to be so, even if we admit the facts on which they are founded, if we take the trouble of adding thereto a few other facts rather less questionable; and if it be acknowledged at last, that there are yet others, concerning which the most expert calculator cannot flatter himself that he shall even come near the truth, and which give to those who will be at the trouble of reflecting, all the latitude they may want, to conclude that the two supposed balances are as inadmissible when subjected to the discussion of reason alone, as they are afterwards demonstrated to be false, by facts which cannot be controverted.