Saturday, March 31, 2012

Man's Wants - Frédéric Bastiat - 2

Many economic errors are due to the fact that human wants are considered as a fixed quantity; and for that reason I have felt obliged to enlarge on this subject. At the risk of anticipating what I shall say later I shall now describe briefly this mode of reasoning. All the chief satisfactions of the age in which one happens to live are taken into account, and it is presumed that humanity admits of no others. Then, if the bounty of Nature or the productivity of machinery or habits of temperance and moderation result for a time in rendering idle a certain part of human labor, this progress is viewed with alarm, it is considered a disaster, and the theorists take refuge behind absurd but plausible formulas, like: We are suffering from overproduction; we are dying of a surfeit; production has outstripped consumer buying power, etc.
It is impossible to find a good solution to the problem of the machine, foreign competition, and luxury, as long as wants are considered as an invariable quantity, or their capacity for indefinite multiplication is not taken into account.
But if man's wants are not fixed quantities, but progressive, capable of growth like the inexhaustible desires on which they constantly feed, we must conclude, granting that a balance between the means and the end is the first law of all harmony, that Nature has placed in man and about him unlimited and constantly increasing means of satisfaction. This is what we shall now examine.
I said, at the beginning of this work, that political economy has for its subject man, considered from the point of view of his wants and the means whereby he is able to satisfy them.
It is thus natural to have begun by studying man and his nature.
But we have also seen that he is not a solitary being. If his wants and his satisfactions—in virtue of the nature of his senses—are inseparable from his being, the same is not true of his efforts, which are part of his dynamic constitution. These are transferable. In a word, men work for one another.
Now a very strange thing happens.
When we consider man from a general and, so to speak, abstract point of view—his wants, his efforts, his satisfactions, his constitution, his inclinations, his tendencies—we arrive at a series of observations that seem clear beyond all doubt and strikingly self-evident, for each one of us finds their proof within himself. So obvious and commonplace are these truths that the writer fears the public's derision if he presents them. He feels, with some reason, that he can see the angry reader throwing away the book and crying out, “I will not waste my time learning anything so trivial.”
Nevertheless, these truths, held to be so incontestable—as long as they are presented in a general way—that we can hardly bear to be reminded of them, are no longer regarded as anything but ridiculous errors, absurd theories, as soon as we view man in his social surroundings. Who, contemplating man in his isolated state, would ever think of saying: We have overproduction; consumption cannot keep pace with production; luxury and artificial tastes are the source of wealth; mechanical inventions destroy labor; and other aphorisms of the same import, which, when applied to the mass of mankind, are nevertheless accepted as so axiomatic that they are made the foundation of our industrial and commercial laws? Exchange produces in this respect an illusion capable of beguiling even the best minds, and I affirm that political economy will have gained its objective and fulfilled its mission when it has conclusively proved this fact: What holds true for one man holds true for society. Man in a state of isolation is at once producer and consumer, inventor and entrepreneur, capitalist and worker; all the economic phenomena are performed in him, and he is, as it were, a society in miniature. In the same way, humanity, viewed in its totality, is like a single man, immense, composite, many-sided, to whom are applicable exactly the same truths observable in a single individual.
I felt the need to make this remark, which, I hope, will be better justified later, before continuing my studies on man. Had I not made it, I should have feared that the reader would reject as superfluous the deductions, the veritable truisms, that are to follow.
I have just spoken of man's wants, and, after an approximate enumeration of them, I have observed that they are not static, but progressive. This is true whether they are considered by themselves alone or included altogether in the physical, intellectual, or moral order. How could it be otherwise? There are certain wants of our bodies that must be satisfied, or we die; and, up to a certain point, we could maintain that these wants are fixed quantities, though this statement is not strictly accurate. For, however little we may desire to overlook an essential element—the force of habit—and to condescend to subject ourselves to honest self-examination, we are constrained to admit that our wants, even the most elemental, like eating, are unquestionably modified by habit. Anyone who would take exception to this remark, as smacking of materialism or epicureanism, would be most unhappy if we took him at his word and reduced him to the black broth of the Spartans or to the pittance of an anchorite. But, in any case, when these wants are satisfied once and for all, there are others that spring from the most elastic of all our faculties—desire. Can we imagine a moment in man's life when he is incapable of new desires, even reasonable desires? Let us not forget that a desire that is unreasonable at a certain point in civilization, when all human resources are absorbed in the satisfaction of lesser desires, ceases to be unreasonable when the improvement of these resources has cleared the way. Thus, a desire to go thirty miles an hour would have been unreasonable two centuries ago but is not so today. To assert that the wants and desires of man are fixed and static quantities is to misunderstand the nature of the soul, to deny the facts, to make civilization inexplicable.
It would be still more inexplicable if the unlimited formation of new wants were not accompanied by the potentially unlimited development of new means to satisfy them. As far as progress is concerned, what good would the indefinitely elastic nature of our wants do us if, at a certain definite point, our faculties could advance no further, if they encountered an immovable barrier? Therefore, unless Nature, Providence, or whatever may be the power that rules our fate, has fallen into the most cruel and shocking contradiction, we must presume, since our desires are without limit, that our means of satisfying them are likewise without limit.
I say “without limit,” and not “infinite,” for nothing that relates to man is infinite. Because our desires and our faculties go on developing endlessly, they have no assignable limits, although they do have absolute limits. We can mention countless points above and beyond humanity that humanity can never reach, yet we cannot for that reason determine an exact instant when progress toward them will come to a halt.1
I do not mean that desire and the means of satisfying it keep pace with one another. Desire runs ahead, while the means limps along behind. The nature of our desire, so quick and adventurous compared with the slowness of our faculties, reminds us that at every step of civilization, on every rung of the ladder of progress, a certain degree of suffering is and always will be man's lot. But it teaches us also that suffering has a mission, since it would be impossible to comprehend the role of desire as a goad to our faculties if it lagged behind them, instead of rushing along ahead, as it does. Yet let us not accuse Nature of cruelty for having built this mechanism, for it is to be noted that desire does not become a real want, that is, a painful desire, unless habit has turned it into a permanent satisfaction; in other words, unless the means of gratifying it has been discovered and placed permanently and irrevocably within our reach.2
We must now consider this question: What means are available to us to satisfy our wants?
It seems clear to me that there are two: Nature and labor, the gifts of God and the fruits of our efforts, or, if you will, the application of our faculties to the things that Nature has placed at our disposal.
No school of thought, as far as I know, has attributed to Nature alone the satisfaction of our wants. Such an assertion is obviously refuted by experience, and we do not have to study political economy to perceive that the intervention of our faculties is necessary.
But there are schools that have attributed this distinction to labor alone. Their axiom is: All wealth comes from labor; labor is wealth.
I cannot refrain from observing here that these formulas, taken literally, have led to gross errors of principle and, consequently, to deplorable legislative measures. I shall speak of this subject elsewhere.
I confine myself here to maintaining that, in point of fact, Nature and labor function together for the satisfaction of our wants and our desires.
Let us look at the facts.
The first want, which we have placed at the head of our list, is that of breathing. On this score we have already noted that, generally, Nature foots the whole bill, and that human labor intervenes only in certain exceptional cases as, for example, when it is necessary to purify the air.
The want of quenching our thirst is satisfied by Nature, to a greater or lesser degree, according to the availability and quality of the water provided; and the role of labor is to compensate by wells and cisterns for Nature's deficiencies.
Nature is no more uniformly liberal toward us in the matter of food; for who will say that the amount of labor we must perform is always the same whether the land is fertile or barren, the forest filled with game, the river with fish, or the contrary is the case?
As for lighting, there is certainly less for human labor to do in places where the night is short than where it has pleased the sun to run a briefer course.
I dare not state this as an absolute rule, but it seems to me that as we rise on the scale of our wants, Nature's co-operation diminishes, and more is left to our own faculties. The painter, the sculptor, even the writer, are forced to use materials and instruments that Nature alone furnishes; but we must admit that they must draw upon their own genius for the qualities that make for the charm, the merit, the usefulness, and the value of their works. Learning is a want that is satisfied almost entirely by the use of our intellectual faculties. Nevertheless, could we not say that here too Nature aids us by offering to us, in different degrees, objects for observation and comparison? For an equal amount of work can an equal amount of progress in botany, geology, or biology be made everywhere in the world?
It would be superfluous to cite other examples. We can already state as a fact that Nature gives us means of satisfaction that have greater or lesser degrees of utility. (This word is used in its etymological sense, i.e., the property of rendering a service.) In many cases, in almost every case, something remains for labor to do before this utility is complete; and we recognize that this contribution by labor will be greater or less, in each individual case, in accordance with the extent to which Nature herself has furthered the operation.
We can therefore lay down these two formulas:

  • 1.Utility is transmitted sometimes by Nature, sometimes by labor alone, almost always by the conjunction of Nature and labor.
  • 2.To bring a thing to its complete state of utility, the contribution of labor is in inverse ratio to the contribution of Nature.
From these two propositions, combined with what we have said about the indefinite elasticity of our wants, allow me to draw a conclusion whose importance will be demonstrated later. If we imagine two men without means of mutual communication placed in unequal situations, with Nature generous to one and parsimonious to the other, the first one will obviously have less work to do for each given satisfaction. Does it follow that that part of his energies thus left, so to speak, available, will necessarily be stricken with inertia, and that this man, because of Nature's liberality, will be reduced to enforced idleness? No, what happens is that he will be able, if he so desires, to employ his energies to enlarge the circle of his enjoyments; that for an equal amount of labor he will obtain two satisfactions instead of one; in a word, progress will be easier for him.
Perhaps I am deluding myself, but it does not seem to me that any science, not even geometry, presents, at its outset, truths more unassailable. If, nevertheless, someone were to prove to me that all these truths are so many errors, he would have destroyed in me not only the confidence that they inspire, but the bases of all certainty and all faith in evidence of any kind whatsoever, for what logic could be more convincing than the logic that he would thus have overturned? On the day when an axiom will be found to contradict the axiom that a straight line is the shortest distance between two points, the human mind will have no other refuge than absolute skepticism, if that can be called a refuge.
Therefore, I feel a real embarrassment in insisting on primary truths so clear that they seem childish. Nevertheless, I must say, in the midst of the complications of human transactions, these truths have been misunderstood; and, to justify myself in the eyes of the reader for delaying him so long on what the English call truisms, I shall point out the singular aberration that has misled some very excellent minds. Setting aside, neglecting entirely, the co-operation of Nature, in relation to the satisfaction of our wants, they have laid down this absolute principle: All wealth comes from labor. On this premise they have constructed the following syllogism:

  • “All wealth comes from labor.
  • “Hence, wealth is in proportion to labor.
  • ”But labor is in inverse ratio to the bounty of Nature.
  • “Hence, wealth is in inverse ratio to the bounty of Nature.”
And, whether we like it or not, many of our economic laws have been inspired by this singular logic. These laws can be only detrimental to the creation and distribution of wealth. For this reason I am justified in setting down these apparently very trivial truths as a preliminary step toward refuting the errors and deplorable misconceptions under which present-day society is laboring.
Let us now analyze this question of the contribution of Nature.
Nature puts two things at our disposal: materials and forces.
Most material objects that contribute to the satisfaction of our wants and our desires are brought to the state of utility, which adapts them to our use through the intervention of labor, by the application of human faculties. But, in any case, the elements, the atoms, if you wish, of which these objects are composed, are gifts, and I add, gratuitous gifts, of Nature. This observation is of the greatest importance, and, I am convinced, will shed a new light on the theory of wealth.
I beg the reader to be good enough to remember that I am studying here in a general way the physical and moral constitution of man, his wants, his faculties, and his relations with Nature, with the exception of exchange, which I shall take up in the next chapter; we shall then see in what areas and in what way social transactions modify the phenomena.
It is obvious that if man in the state of isolation must, so to speak, purchase most of his satisfactions by labor, by effort, it is strictly accurate to say that before any labor, any effort, of his has come into play, the materials he finds available are the gratuitous gifts of Nature. After the first effort, however slight, they cease to be gratuitous; and if the terminology of political economy had always been exact, the name raw materials would have been reserved for material objects in this state, prior to any human activity.
I say again at this point that the gratuitousness of these gifts of Nature, before the intervention of labor, is of the highest importance. In fact, I said in the second chapter that political economy was the theory of value. I add now, anticipating, that things begin to havevalue only when labor gives it to them. I propose to demonstrate, later, that all that is gratis to man in the state of isolation remains gratis to man in society, and that the gratuitous gifts of Nature, however great their utility, have no value. I say that a man receiving directly and without effort a benefit from Nature cannot be considered as having rendered himself an onerous service, and that, consequently, he cannot render any service to another in regard to things that are common to all. So, when there are no services rendered or received, there is no value.
All that I say of materials applies also to the forces supplied us by Nature. Gravitation, volatile gases, the power of the wind, the laws of equilibrium, plant and animal life—these are so many forces that we learn to turn to our advantage. The pains, the mental energy, we expend to accomplish this are subject to payment, for we cannot be required to devote our efforts gratis to another's advantage. But these natural forces, considered in themselves alone, and without reference to any intellectual or physical labor, are gratuitousgifts from Providence; and, as such, remain without value through all the complications of human transactions. Such is the central idea of this work.
This observation, I admit, would have little importance if the co-operation of Nature were entirely uniform, if every man, at all times, in all places, under all circumstances, invariably received exactly the same assistance from Nature. In that case science could be excused for not taking into account an element that, remaining always and everywhere the same, would affect the exchange of services to the same extent in all areas. Just as in geometry the segments of lines common to two figures under comparison are eliminated, so in political economy we could disregard this ever-present co-operation and be content to say, as has been said until now: Natural wealth does exist; political economy notes the fact once and for all and is no longer concerned with it.
But this is not the way things happen. The irresistible tendency of the human intellect, stimulated by self-interest and aided by previous discoveries, is to substitute the gratuitous contribution of Nature for the onerous contribution of man; so that any given utility, although remaining the same in its result, in the satisfaction it gives, represents a continually decreasing amount of labor. Certainly we cannot fail to see the tremendous influence of this marvelous phenomenon on our idea of value. For what is the result? In every product the tendency is for gratuitous utility to replace onerous utility. Since utility is the result of two contributions, one requiring payment in terms of effort, the other not, value that is determined only by the former decreases for an identical amount of utility from both sources in proportion as Nature's share is made more effective. Thus, we can say that humanity enjoys greatersatisfactions, or wealth, in proportion as value decreases. Now, since most authors have given a kind of synonymous meaning to the three expressions—“utility,” “wealth,” “value”—they have formulated a theory that is not only incorrect, but the exact opposite of the truth. I sincerely believe that a more exact description of this combination of natural and human forces in the work of production or, putting it another way, a more accurate definition of value, will put an end to inextricable theoretical confusions and will reconcile schools of thought now divergent; and if I anticipate here some of the findings of this inquiry, I do so to justify myself to the reader for dwelling on notions whose importance would otherwise be difficult to appreciate.
After this digression I resume my study of man considered solely from the economic point of view.
Another observation by Jean-Baptiste Say which is obvious enough, although too often neglected by other authors, is that man creates neither the materials nor the forces of Nature, if we understand the word “create” in its strict sense. These materials, these forces, exist independently of man. Man can only combine them, move them about for his own or others' advantage. If he does so for his own advantage, he renders a service to himself; if for the advantage of others, he renders a service to his fellow men, and it is his right to exact an equivalent service in return. Hence, it follows also that value is in proportion to the service rendered, and not at all in proportion to the absolute utility of the thing. For this utility can be, in large part, the result of a gratuitous act of Nature, in which case the human service, the service involving labor and remuneration, is of little value. This results from the axiom stated above: In bringing a thing to the highest degree of utility, man's share in the action is in inverse ratio to Nature's.
This observation overturns the doctrine that places value in the materiality of things. The contrary is true. Materiality is a quality that is given by Nature and is, therefore, gratuitous, possessing no value, although of incontestable utility. Human action, which can never succeed in creating matter, alone constitutes the service that man in a state of isolation renders to himself or that men in society render one another, and it is the free appraisal of these services that is the basis of value. Value cannot be thought of as residing only in matter, as Adam Smith would have put it; rather, between matter and value there is no possible connection.
From this erroneous doctrine, rigorously adhered to, came the conclusion that those classes alone are productive that work directly with matter. Smith thus prepared the way for the error of the modern socialists, who always represent as unproductive parasites those whom they call the middlemen between the producer and the consumer, such as the businessman, the merchant, etc. Do they render services? Do they spare us pains by taking pains for us? In that case, they create value, even though they do not create matter. And, indeed, since nobody creates matter, since we are all limited to rendering reciprocal services, it is altogether accurate to say that all of us, including farmers and artisans, are middlemen in our relations with one another.
For the moment, this is what I have to say about the contribution of Nature. Nature places at our disposal, in varying amounts according to climate, seasons, and our own degree of enlightenment, but always gratis, materials and forces. Therefore, these materials and these forces do not have value; it would be very strange if they did. In accordance with what criterion would we estimate it? How can we understand Nature being paid, recompensed, remunerated? We shall see later that exchange is necessary to determine value. We do not buy Nature's goods; we gather them in, and if, to gather them in, an effort of some sort has to be made, it is in this effort, not in the gift of Nature, that the value consists.
Let us pass, now, to man's action, designated in a general way under the name of labor.
The word “labor,” like nearly all those used in political economy, is very vague; the breadth of its connotations varies from author to author. Political economy has not had, like most sciences—chemistry for example—the advantage of being able to create its own vocabulary. Dealing with things with which men have been occupied since the beginning of the world, and which they have made the habitual subject of their conversation, political economists have found their terms ready-made and have been forced to use them. The sense of the word “labor” is frequently restricted to the muscular activity of men working with material things. Thus, we speak of the “working classes” when we mean those who carry out the mechanical part of production.
The reader will understand that I give this a broader sense. By labor I mean the use of our faculties for the satisfaction of our wants.Want, effort, satisfaction—this is the orbit of political economy. Effort can be physical, intellectual, or even moral, as we shall see.
It is unnecessary to demonstrate here that all our powers, all or nearly all our faculties, can and in fact do contribute to production. Concentration, sagacity, intelligence, imagination have their part to play in it.
M. Dunoyer, in his admirable book on The Freedom of Labor, has included, and with full scientific accuracy, our moral faculties among the factors to which we owe our wealth. This is a new idea and as stimulating as it is sound; it is destined to add scope and luster to the field of political economy.
I shall dwell on this idea here only in so far as it gives me the opportunity to shed a little light on the origin of a powerful agent of production about which I have not yet spoken: capital.
If we examine successively the material objects that serve to satisfy our wants, we shall recognize that all or nearly all of them require for their production more time, a greater part of our lives, than we can expend without renewing our strength, that is to say, without satisfying our wants. Hence, the men who produced such things were first required, presumably, to reserve, to set aside, to accumulate, their means of livelihood during the operation.
The same is true for satisfactions of a nonmaterial order. A priest could not devote himself to his preaching, a professor to his teaching, a magistrate to the maintenance of law and order, unless by their own devices or with the help of others they had at their disposal previously produced means of subsistence.
Let us go back and imagine a man in the state of isolation reduced to earning a living by hunting. It is easy to see that if, every evening, he ate all the game he had caught during the day, he would never be able to undertake any other type of work, such as building a hut or repairing his weapons; all progress would be out of the question for him.
This is not the place to define the nature and function of capital. My only purpose is to show how, even if we do not go beyond mere considerations of wealth, certain moral virtues such as orderliness, foresight, self-control, thrift, contribute directly to the improvement of our way of life.
Foresight is one of man's noblest privileges, and it is hardly necessary to say that, in almost all the circumstances of life, the odds are all in favor of the man who best knows the consequences of his decisions and his acts.
Restraint of one's appetites, control of one's passions, acceptance of present privation for the sake of future, though distant, gain—these are the essential conditions for the building up of capital; and capital, as we have seen, is itself the essential prerequisite for all undertakings that are at all complicated or extensive. All the evidence suggests that if two men were placed in completely identical situations, if we supposed them to possess the same degree of intelligence and initiative, the one making the greater progress would be he who, by storing up his resources, would be able to carry on long-range operations, improve his tools, and thus enlist the forces of Nature in accomplishing his ends.
I shall not dwell on this. We need only look about us to realize that all our strength, all our faculties, all our virtues, work together for the advancement of man and society.
By the same token there is not one of our vices that does not contribute directly or indirectly to poverty. Idleness paralyzes the very sinews of production. Ignorance and error give it false direction. Lack of foresight opens the way to miscalculations. Yielding to the appetites of the moment prevents the building up of capital. Vanity leads to dissipating our energies on illusory satisfactions, at the expense of real ones. Violence, fraud, provoking violence and fraud in return, force us to surround ourselves with burdensome protective measures, to the great depletion of our energies.
I shall end this preliminary study of man with an observation that I have already made concerning wants. The factors enumerated in this chapter that enter into the science of economics and constitute it are essentially variable and diverse. Wants, desires, materials and forces supplied by Nature, muscular strength, bodily organs, intellectual faculties, moral qualities—all vary according to the individual, the time, and the place. No two men are alike in any one of these respects and even less alike in all of them taken together. Furthermore, no man is exactly like himself for two hours running. What one man knows, another does not; what one man treasures, another despises; here Nature has been lavish, there miserly; a virtue that is difficult to practice at one degree of temperature becomes easy in a different climate. The science of economics, therefore, does not have the advantage, as do the so-called exact sciences, of possessing a measure, a yardstick, enabling it to determine the precise intensity of desires, efforts, and satisfactions. If we were called upon to work in solitude, like certain animals, our circumstances would differ to some degree, and even if these outside circumstances were similar, and our milieu identical, we should still differ in our desires, our wants, our ideas, our judgment, our energy, our values, our foresight, our activity; so that a great and inevitable inequality would be manifested among men. Certainly, absolute isolation, the absence of all contacts among men, is only a flight of fancy born in the imagination of Rousseau. But, supposing that this antisocial state, the so-called state of nature, ever existed, I wonder how Rousseau and his faithful followers ever managed to attribute equality to it. We shall see later that equality, like wealth, like liberty, like brotherhood, like unity, is an end, and not a point of departure. It arises from the natural and orderly development of society. Humanity does not move away from equality, but toward it. This thought is more reassuring than what Rousseau would have us believe, and far truer.
Having spoken of our wants and the means we possess to satisfy them, I have a word to say about our satisfactions. They are the result of the whole mechanism. According to the degree of physical, moral, and intellectual satisfactions enjoyed by humanity, we know whether the machine is functioning well or badly. Hence, the word consommation (taken over in French by the economists to mean consumption) would have profound meaning, if, keeping its etymological sense, it were used as a synonym of end, achievement. Unfortunately, in common usage and even in the scientific language, it suggests to the mind a coarse and material connotation, accurate undoubtedly for physical wants, but not for wants of a higher order. The raising of wheat, the spinning of wool are concluded by an act of consumption. Can the word consumption be also applied to the works of the artist, the songs of the poet, the deliberations of the jurist, the sermons of the priest? Here again we encounter the difficulties of the basic error that led Adam Smith to confine political economy to material values; and the reader will pardon me if I often use the word satisfaction to apply to all our wants and to all our desires, since I think it better corresponds to the wider scope that I feel justified in giving to political economy.
Economists have often been reproached for concerning themselves exclusively with the interests of the consumer. “You forget the producer,” people say. But satisfaction being the goal, the end of all efforts, and, as it were, the final consummation of economic phenomena, is it not evident that it is the touchstone of all progress? A man's well-being is not measured by his efforts, but by hissatisfactions. This observation also holds true for men taken collectively. This again is one of those truths accepted by everybody when it is applied to the individual, but disputed endlessly when applied to society as a whole. The expression so much attacked means only this: The value of every economic activity is determined, not by the labor it entails, but by the positive effect it produces, which in turn results in increasing or decreasing the general welfare.
We have said, apropos of wants and desires, that no two men are alike. The same is true of our satisfactions. They are not equally esteemed by all; which is tantamount to the trite observation: tastes differ. But it is the intensity of our desires and the variety of our tastes that determine the direction of our efforts. Here the influence of morality on habits of work becomes clear. We can imagine an individual man as a slave to idle, childish, immoral tastes. In that case, it is obvious that his strength, which is limited, will satisfy his depraved desires only at the expense of more intelligent and reasonable desires. But when society as a whole is considered, this obvious axiom appears erroneous. We tend to believe that idle tastes, illusory satisfactions, which we recognize as a cause of poverty for the individual, are nevertheless a source of national wealth because they create an outlet for a multitude of industries. If such were the case, we should arrive at a very distressing conclusion: Man in the social state has the choice of poverty or immorality. Once again, it is political economy that can resolve these seeming contradictions in the most satisfactory and conclusive way.

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