francs. He divided his domain into four parts and established the following rotation: first, corn; second, wheat; third, clover; fourth, rye. He and his family needed only a small part of the grain, meat, and milk that the farm produced, and he sold the excess to purchase oil, flax, wine, etc. All of his capital was spent each year on wages and other payments owed to neighboring workers. This capital was returned through sales and even increased from one year to the next, and our farmer, knowing full well that capital produces nothing unless it is put to use, made the working class benefit from these annual surpluses which he used for fencing, land clearance, and improvements to his farm equipment and buildings. He even invested some savings with the banker in the neighboring town, who did not leave the money idle in his coffers but lent it to shipowners and entrepreneurs carrying out useful work, so that it continued to generate wages.
However, the farmer died, and his son, as soon as he had control of the inheritance, said: “It must be confessed that my father was a fool all his life. He purchased oil and thus paid tribute to Provence while our land could at a stretch grow olive trees. He bought wine, flax, and oranges and paid tribute to Brittany, the Médoc, and the islands of Hyères, while vines, jute, and orange trees could, more or less, provide a small crop on our land.7 He paid tribute to millers and weavers while our domestic servants could well weave
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our linen and grind our wheat between two stones. He ruined himself, and in addition he had foreigners earning the wages that were so easy for him to spread around him.”
Using this reasoning, our scatterbrain changed the rotation of the domain. He divided it into twenty small strips of land. On one he grew olive trees, on another mulberry trees, on a third flax, on a fourth vines, on a fifth wheat, etc., etc. He thus managed to provide his family with everything and become independent. He took nothing from general circulation and, it is true, paid nothing into it either. Was he any richer? No, for the land was not suitable for growing vines, the climate was not conducive to the prospering of olive trees, and in the end the family was less well provided with these things than at the time when his father obtained them through trade.
As for the workers, there was no more work for them than in the past. There were indeed five times as many strips to cultivate, but they were five times smaller. Oil was produced but less wheat; flax was no longer purchased, but rye was no longer sold. Besides, the farmer could not pay more than his capital in salaries, and his capital, far from increasing through the new distribution of land, decreased constantly. The majority of it was tied up in buildings and countless items of equipment that were essential for someone who wanted to do everything. As a result, the supply of labor remained the same, but the means to pay these workers declined and there was of necessity a decrease in wages.
That is a picture of what happens in a nation that isolates itself through a prohibitionist regime. It increases the number of its industries, I know, but it decreases their size; it provides itself, so to say, with a rotation of industries8 that is more complicated but not more fruitful, far from it, since the same capital and workforce have to attack the job in the face of greater natural difficulties. Fixed capital absorbs a greater portion of working capital, that is to say, a greater part of the funds intended for wages. What remains of the fund for wages may well be diversified, but that does not increase the total amount. It is like the water in a lake that people thought they had made more abundant because, having been put into many reservoirs, it touches the ground on more spots and offers a greater surface to the sun. They do not
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understand that it is precisely for this reason that it is absorbed, evaporated, and lost more quickly.
With a given amount of capital and labor, a quantity of output is created that decreases in proportion to the number of obstacles it encounters. There is no doubt that, where barriers to international trade in each country force this capital and labor to overcome greater difficulties of climate and temperature, the general result is that fewer products are created or, which comes to the same thing, fewer needs of people are satisfied. Well, workers, if there is a general decrease in the number of needs satisfied, how can your share increase? I ask you, would those who are rich, those who make the law, have arranged things so that not only would they suffer their fair share of the total reduction in the needs that can be satisfied, but that even their already reduced portion would decrease still further, they say, by everything that is to be added to yours? Is that possible? Is it credible? Oh! This generosity is suspect and you would be wise to reject it.
PUBLISHING HISTORY:
Original title: “Théorie, pratique.”
Place and date of first publication: No date given. First published in book form.
First French edition as book or pamphlet: Economic Sophisms (First Series) (1846).
Location in Paillottet’s edition of OC: Vol. 4. Sophismes économiques. Petits pamphlets I, pp. 79–86.
Previous translations: 1st English ed., 1846; 1st American ed., 1848; FEE ed., 1964.
People accuse us, advocates of free trade, of being theoreticians and not taking sufficient account of practical aspects.
“What a terrible prejudice against M. Say,”1 said M. Ferrier,2 “is this long
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line of distinguished administrators, this imposing line of writers, all of whom have seen things differently from him,” a point M. Say does not hide from himself! Listen to him:
It has been said, in support of old errors, that it is necessary to have some foundation for the ideas so generally adopted by every nation. Should we not be suspicious of observations and reasoning that overturn what has been taken to be constant up to now, what has been taken to be certain by so many leading figures to whom their enlightenment and intentions give credence? This argument, I admit, is worthy of making a profound impression and might cast doubt on the most incontrovertible points if we had not seen in turn the most erroneous opinions, now generally acknowledged to be such, accepted and professed by everyone for many centuries. It is not so long ago that every nation, from the coarsest to the most enlightened, and all men, from street porters to the most learned philosophers, recognized four elements. Nobody thought of disputing this doctrine, which is nevertheless false, to the extent that today there is no assistant biologist who would not be decried if he considered the earth, water, and fire as elements.
At which point, M. Ferrier makes the following observation:
If M. Say thinks that he has answered the strong objection put forward, he is strangely mistaken. That men, who were nevertheless highly enlightened, have been wrong for several centuries on some point of natural history is understandable and proves nothing. Were water, air, earth, and fire, whether elements or not, any the less useful to man? Errors like this are inconsequential; they do not lead to upheavals; they do not cast doubt into people’s minds and above all do not harm any interests, and for this reason they might be allowed to last for thousands of years without mishap. The physical world therefore moves forward as though they did not exist. But can this be
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so for errors that attack the moral world? Can we conceive of an administrative system that is totally false and consequently harmful being followed for several centuries and in several nations with the general consent of all educated men? Could we explain how a system like this could be allied to the increasingly great prosperity of nations? M. Say admits that the argument he is
