Protectionist might exercise by himself at the frontier and that which he has the law exercise for him can be judged quite differently from the moral point of view. There are people who think that plunder loses all its immorality as soon as it becomes legal.
Personally, I cannot imagine a more alarming situation. However that may be, one thing is certain, and that is that the economic results are the same. You may look at the question from any point of view you like, but if you examine it dispassionately, you will see that no good can come from legal or illegal plunder. We do not deny that it may bring for Mr. Protectionist or his industry, or if you wish for Edition: current; Page: [ 30 ] domestic industry, a profit of five francs.
But we affirm that it will also give rise to two losses: one for James Goodfellow, who pays fifteen francs for what he used to get for ten; the other for domestic industry, which no longer receives the difference. Make your own choice of which of these two losses compensates for the profit that we admit. The one you do not choose constitutes no less a dead loss. Moral: To use force is not to produce, but to destroy. If to use force were to produce, France would be much richer than she is.
Preface to the English-Language Edition
Every year their increasing power condemns to pauperism millions of workers, taking their jobs away from them, and with their jobs their wages, and with their wages their bread! A curse on machines! That is the cry rising from ignorant prejudice, and whose echo resounds in the newspapers.
What puzzles me is that it is possible to find anyone at all who can be content with such a doctrine. For, in the last analysis, if it is true, what is its strictly logical consequence?
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It is that activity, well-being, wealth, and happiness are possible only for stupid nations, mentally static, to whom God has not given the disastrous gift of thinking, observing, contriving, inventing, obtaining the greatest results with the least trouble. If this doctrine is true, and as all men think and invent, as all, in fact, from first to last, and at every minute of their existence, seek to make the forces of Nature co-operate with them, to do more with less, to reduce their own manual labor or that of those whom they pay, to attain the greatest possible sum Edition: current; Page: [ 31 ] of satisfactions with the least possible amount of work; we must conclude that all mankind is on the way to decadence, precisely because of this intelligent aspiration towards progress that seems to torment every one of its members.
Hence, it would have to be established statistically that the inhabitants of Lancaster, fleeing that machine-ridden country, go in search of employment to Ireland, where machines are unknown; and, historically, that the shadow of barbarism darkens the epochs of civilization, and that civilization flourishes in times of ignorance and barbarism. Evidently there is in this mass of contradictions something that shocks us and warns us that the problem conceals an element essential to its solution that has not been sufficiently brought to light.
The whole mystery consists in this: behind what is seen lies what is not seen. I am going to try to shed some light on it. My demonstration can be nothing but a repetition of the preceding one, for the problem is the same. Men have a natural inclination, if they are not prevented by force, to go for a bargain —that is, for something that, for an equivalent satisfaction, spares them labor—whether this bargain comes to them from a capable foreign producer or from a capable mechanical producer.
The theoretical objection that is raised against this inclination is the same in both cases. In one as in the other, the reproach is made that it apparently makes for a scarcity of jobs. However, its actual effect is not to make jobs scarce, but to free men's labor for other jobs. And that is why, in practice, the same obstacle—force—is set up against it in both cases. The legislator prohibits foreign competition and forbids mechanical competition.
For what other means can there be to stifle an inclination natural to all men than to take away their freedom? In many countries, it is true, the legislator strikes at only one of these types of competition and confines himself to grumbling about the other. This proves only that in these countries the legislator is inconsistent.
That should not surprise us. On a false path there is always inconsistency; if this were not so, mankind would be destroyed. We have never seen and never shall see a false principle carried out completely. I have said elsewhere: Absurdity is the limit of inconsistency. I should like to add: It is also its proof. But now suppose that he devises an arrangement of ropes and weights that will shorten the work by half.
Then he obtains the same satisfaction, saves a franc, and discharges a worker. See how freedom is fatal to equality! The human mind has made a conquest, and immediately another worker has forever fallen into the abyss of poverty. Perhaps James Goodfellow can still continue to have both men work for him, but he cannot give them more than ten sous each, for they will compete with one another and will offer their services at a lower rate.
This is how the rich get richer and the poor become poorer. We must remake society. Fortunately, both premise and conclusion are false, because behind the half of the phenomenon that is seen is the other half that is not seen. The franc saved by James Goodfellow and the necessary effects of this saving are not seen.
Since, as a result of his own invention, James Goodfellow no longer spends more than one franc for manual labor in the pursuit of a given satisfaction, he has another franc left over. If, then, there is somewhere an idle worker who offers his labor on the market, there is also somewhere a capitalist who offers his idle franc.
These two elements meet and combine. And it is clear as day that between the supply of and the demand for labor, between the supply of and the demand for wages, the relationship has in no way changed. The invention and the worker, paid with the first franc, now do the work previously accomplished by two workers. What has then been changed in the world? There is one national satisfaction the more; in other words, the invention is a gratuitous conquest, a gratuitous profit for mankind.
Essays on political economy
From the form in which I have given my demonstration we could draw this conclusion:. The laboring class, even though it suffers from them only temporarily, never profits from them, since, according to what you yourself say, they reallocate a portion of the nation's industry without diminishing it, it is true, but also without increasing it. It is not within the province of this essay to answer all objections. Its only object is to combat an ignorant prejudice, very dangerous and extremely widespread.
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I wished to prove that a new machine, in making a certain number of workers available for jobs, necessarily makes available at the same time the money that pays them. These workers and this money get together eventually to produce something that was impossible to produce before the invention; from which it follows that the final result of the invention is an increase in satisfactions with the same amount of labor.
Yes, at first it is the capitalist, the inventor, the first one who uses the machine successfully, and this is the reward for his genius and daring. In this case, as we have just seen, he realizes a saving on the costs of production, which, no matter how it is spent and it always is , gives employment to just as many hands as the machine has made idle. But soon competition forces him to lower his selling price by the amount of this saving itself.
And then it is no longer the inventor who reaps the benefits of the invention; it is the buyer of the product, the consumer, the public, including the workers—in a word, it is mankind. And what is not seen is that the saving, thus procured for all Edition: current; Page: [ 34 ] the consumers, forms a fund from which wages can be drawn, replacing what the machine has drained off. Thus taking up again the foregoing example , James Goodfellow obtains a product by spending two francs for wages. As long as he sells the product at the same price, there is one worker the fewer employed in making this special product: that is what is seen; but there is one worker the more employed by the franc James Goodfellow has saved: that is what is not seen.
When, in the natural course of events, James Goodfellow is reduced to lowering by one franc the price of the product, he no longer realizes a saving; then he no longer releases a franc for national employment in new production. But whoever acquires it, i. Whoever buys the product pays one franc less, saves a franc, and necessarily hands over this saving to the fund for wages; this is again what is not seen.
Another solution to this problem, one founded on the facts, has been advanced.
The lowering of the price stimulates an increase in consumption, which necessitates an increase in production, and, finally, the use of as many workers as before the invention—or more. We should have to conclude from it that, if the consumption of the special product in question remains stationary or nearly so, the machine will be harmful to employment. This is not so. Suppose that in a certain country all the men wear hats.
If with a machine the price of hats can be reduced by half, it does not necessarily follow that twice as many hats will be bought.
Selected Essays on Political Economy
Will it be said, in that case, that a part of the national labor force has been made idle? Yes, according to ignorant reasoning. No, according to mine; for, even though in that country no one were to buy a single extra hat, the entire fund for wages would nevertheless remain intact; whatever did not go to the hat industry Edition: current; Page: [ 35 ] would be found in the saving realized by all consumers and would go to pay wages for the whole of the labor force that the machine had rendered unnecessary and to stimulate a new development of all industries.
And this is, in fact, the way things happen.
Prof. Bryan Caplan
I have seen newspapers at 80 francs; now they sell for This is a saving of 32 francs for the subscribers. It is not certain, at least it is not inevitable, that the 32 francs continue to go into journalism; but what is certain, what is inevitable, is that, if they do not take this direction, they will take another. One franc will be used to buy more newspapers, another for more food, a third for better clothes, a fourth for better furniture.
Thus, all industries are interrelated.