Thursday, April 19, 2012

Competition - Frédéric Bastiat - Pt 3


Let us pause a moment to look back over the road we have just traveled.
Man has wants that know no limits; he experiences desires that are insatiable. To satisfy them he has raw materials and forces that are supplied him by Nature, faculties, implements—all the things that his labor can put into operation. Labor is the resource most widely distributed among all men. Every man seeks instinctively, inevitably, to bring to his aid all the forces of Nature, all the natural or acquired talent, all the capital that he can, in order that all this co-operation may bring him more utility or, what amounts to the same thing, more satisfactions. Thus, the more and more active participation of natural resources, the constant development of his intellectual faculties, the progressive increase of capital, all give rise to this phenomenon, surprising, at first sight: that a given amount of labor furnishes a constantly growing sum of utility, and that everyone may, without taking away from anyone else, enjoy a number of consumers' satisfactions far out of proportion to the ability of his own efforts to produce them.
But this phenomenon, the result of the divine harmony that Providence has implanted in the social structure, would have turned against society itself, by introducing the seeds of constantly increasing inequality, if it were not combined with another and no less admirable harmony, competition, which is one of the branches of the great law of human solidarity.
In fact, if it were possible for the individual, family, class, or nation that finds certain natural advantages within reach or makes an important discovery in industry or acquires through thrift instruments of production, to be permanently exempt from the law of competition, it is obvious that this individual, family, or nation would retain the monopoly of its exceptional remuneration for all time to come, at the expense of mankind. Where would we be if the inhabitants of the tropics, free from all competition among themselves, were able, in exchange for their sugar, coffee, cotton, and spices, to demand from us, not amounts of labor equal to theirs, but pains equal to those we ourselves would have to take in order to raise these commodities in our rugged climate? By what an immeasurable distance would the various social strata of mankind be separated if only the race of Cadmus could read; if no one could handle a plow unless he could prove that he was a direct descendant of Triptolemus; if only Gutenberg's descendants could print, Arkwright's sons could operate a loom, Watt's progeny could set the funnel of a locomotive to smoking? But Providence has not willed that these things should be, for it has placed within the social machinery a spring as amazingly powerful as it is simple. Thanks to its action every productive force, every improved technique, every advantage, in a word, other than one's own labor, slips through the hands of its producer, remaining there only long enough to excite his zeal with a brief taste of exceptional returns, and then moves on ultimately to swell the gratuitous and common heritage of all mankind. All these discoveries and advantages are diffused into larger and larger portions of individual satisfactions, which are more and more equally distributed. Such is the action ofcompetition. We have already noted its economic effects; it remains for us to glance at a few of its political and moral consequences. I shall confine myself to pointing out the most important.
Some superficial commentators have accused competition of creating antagonisms among men. This is true and inevitable as long as men are considered solely as producers; but consider them as consumers, and you will see that competition binds individuals, families, classes, nations, and races together in the bonds of universal brotherhood.
Since the riches that originally appear to be the exclusive possession of a few become, through the admirable decree of divine bounty, the common patrimony of all; since the natural advantages resulting from location, fertility, temperature, mineral deposits, and even industrial aptitude, merely slip through the hands of their producers because of the competition they engage in with one another, and turn exclusively to the profit of the consumer; it follows that there is no country that does not have a selfish interest in the advancement of every other country. Every step of progress that is made in the Orient represents potential wealth for the Occident. Fuel discovered in the south of France means warmer homes for the men of the north. Let Great Britain make all the progress she can with her spinning mills. Her capitalists will not be the ones to reap the benefit, for the interest on money will not rise; nor will it be her workers, for their wages will remain the same; but, in the long run, the Russian, the Frenchman, the Spaniard, all mankind, in a word, will obtain equal satisfactions for less pains, or, what amounts to the same thing, greater satisfactions for equal pains.
I have spoken only of the benefits; I could have said as much for the ills that afflict certain peoples or certain regions. The peculiar action of competition is to make general what was once particular. It acts on exactly the same principle as insurance. If a scourge of Nature ravages the farmers' lands, the consumers of bread are the ones who suffer. If an unjust tax is levied on the vineyards of France, it is translated into high wine prices for all the wine-drinkers on earth. Thus, both advantages and disadvantages of any degree of permanence merely slip through the hands of individuals, classes, and peoples; their ultimate destiny, as ordained by Providence, is to affect all humanity and to raise or lower its standard of living. Hence, to envy any people whatsoever the fertility of its soil or the beauty of its ports and its rivers or the warmth of its sun is to fail to understand the benefits that we are invited to share. It is to disdain the abundance that is offered us; it is to deplore the toil that we are spared. Hence, national jealousies are not only perverse sentiments; they are absurd. To harm others is to harm ourselves; to spread obstacles, tariffs, coalitions, or wars along the path of others is to obstruct our own progress. Consequently, evil passions have their punishment even as noble sentiments have their reward. With all the moral authority that it commands, the principle of complete justice for all speaks to our self-interest, enlightens public opinion, proclaims and must eventually make prevail among men this eternally true proposition: The useful is one of the aspects of justice; liberty is the most beautiful of social harmonies; equity is the best policy.
Christianity gave to the world the great principle of the brotherhood of man. It speaks to our hearts, to our sentiments, to our noblest instincts. Political economy proclaims the same principle in the name of cold reason, and, by showing the interrelation of cause and effect, reconciles, in reassuring accord, the calculations of the most wary self-interest with the inspiration of the most sublime morality.
A second conclusion to be derived from this doctrine is that society is a true common association. Messrs. Owen and Cabet may save themselves the trouble of seeking the solution to the great communist problem; it has already been found. It is derived, not from their despotic contrivances, but from the organization that God has given to man and to society. The forces of Nature, efficient techniques, tools of production—everything is available in common to all men or tends to become so, everything, I say, except the individual's pains, labor, and effort. There is, there can be, among men, only one inequality, which even the most uncompromising communists admit: the inequality that comes from that of men's efforts.
Efforts alone are exchanged for other efforts according to terms discussed and agreed upon. All the utility imparted to commodities by Nature, by the genius of past centuries, and by human foresight are obtained gratis, into the bargain. The reciprocal remunerations established are related only to respective efforts, whether performed in the present under the name of labor or prepared in the past under the name of capital. The system is therefore a commonwealth in the most literal and rigorously accurate sense of the word, unless one wishes to assert that each person's share in the satisfactions should be equal, although his participation in the labor is not, a situation that certainly would produce the most unjust and monstrous of inequalities—and the most disastrous, for it would not destroy competition, but would merely reverse its direction: men would still compete, but they would compete to excel in idleness, stupidity, and improvidence.
Finally, this doctrine that we have just elaborated, so simple, and yet, as we believe, so true, lifts the great principle of humanperfectibility out of the realm of mere oratory and establishes it as a demonstrable fact. From this inner drive, which never rests within man's heart and always prompts him to improve his lot, is born progress in the arts, which is nothing more nor less than the co-operation of forces that are by their very nature incompatible with any remuneration. From competition comes the process that transfers into the communal realm advantages originally held by certain individuals only. The amount of effort once required for a given result grows constantly less, to the benefit of the entire human race, which thus finds that its circle of satisfactions and leisure grows larger from generation to generation, and that its physical, intellectual, and moral level rises. By virtue of this arrangement, so deserving of our study and everlasting admiration, we clearly discern mankind moving upward from the state to which it had fallen.
Let no one misconstrue my words. I do not say that brotherhood, community, and perfectibility are contained in their entirety in the idea of competition. I do say that it is allied and combined with these three great social dogmas, that it is part of them, that it reveals them, and that it is one of the most powerful agents for effecting their realization.
I have set myself the task of describing the general and, consequently, beneficial effects of competition, for it would be sacrilege to assume that any great law of Nature could be permanently harmful in its effect, but I am far from denying that its action may be accompanied by much hardship and suffering. It even seems to me that the theory that I have just advanced explains both this suffering and the inevitable complaints to which it gives rise. Since the function of competition is to level, it must necessarily work against anyone who raises his proud head above the level. We understand how every producer, in order to set the highest price on his labor, tries to hold on for as long as possible to the exclusive use of a resource, a technique, or a tool of production. Now, since competition quite properly has as its mission and result the taking away from the individual of this exclusive enjoyment and making it common property, it is inevitable that all men, in so far as they are producers, should join in a chorus of imprecations againstcompetition. They can become reconciled to it only when they take into account their interests as consumers; when they look upon themselves, not as members of a special group or corporation, but as men.
Political economy, it must be admitted, has not yet done enough to dispel this disastrous fallacy, which has been the source of so many hatreds, calamities, resentments, and wars. Instead, it has expended its efforts, with little scientific justification, in analyzing the phenomena of production. Even its terminology, convenient as it is, is not in keeping with its object of study. “Agriculture,” “manufacture,” “commerce,” make excellent classifications, perhaps, when the intention is to describe the techniques followed in these arts; but this description, though ideally suited for technology, hardly contributes to an understanding of social economy. I may add that it is positively dangerous. When we have classified men as farmers, manufacturers, and businessmen, what can we talk to them about except their special class interests, which are made antagonistic by competition and are in conflict with the general welfare? Agriculture does not exist for the sake of the farmers, manufacturing for the manufacturers, or trade for the businessmen, but in order that all men may have at their disposal the greatest possible number of commodities of all descriptions. The laws ofconsumption, what is good for it and makes it equitable and moral—these are the really important matters from the social and humanitarian point of view; these are the real objects of the science of political economy; these are the questions on which the clear light of its understanding needs to be focused, for therein lies the bond between classes, nations, and races, the principle and the explanation of the brotherhood of man. It is, therefore, with regret that we see economists expending their great talents and lavishing their wisdom on the problem of production, while they reserve a little space at the end of their books, in the supplementary chapters, for a few brief commonplaces on the phenomena of consumption. Recently a justly celebrated professor was known to have entirely suppressed this aspect of our science, to have concerned himself with the means to the exclusion of the ends, and to have banished from his course all reference to the consumption of wealth, on the ground, he said, that this was a subject that belonged to ethics and not to political economy! Can we be surprised that the general public is more concerned with the disadvantages of competition than with its advantages, since the former affect the public from the particular point of view of production, which is always being talked about, and the latter only from the general point of view of consumption, which is never mentioned?
As for the rest—I repeat—I do not deny, I recognize and deplore as much as others, the suffering that competition has inflicted on men; but is this a reason for shutting our eyes to the good that it accomplishes? It is all the more reassuring to perceive this good because I believe that competition, like the other great laws of Nature, can never be eliminated. If it could be destroyed, it undoubtedly would have succumbed in the face of the universal opposition of all men who ever competed in the production of any commodity since the beginning of the world, and particularly under the impact of the mass uprising of all the modern reformers. But if they have been mad enough to try to destroy it, they have not been strong enough to do so.
And what element of progress is there in the world whose beneficial action has not been marred, particularly at the beginning, by much suffering and hardship? Our great urban masses of human beings stimulate bold flights of thought, but they often deprive individuals in their private life of the corrective of public opinion and serve to shelter debauchery and crime. Wealth combined with leisure favors the cultivation of the mind, but it also nurtures ostentation and snobbishness among the great and resentment and envy among the lowly. Printing brings enlightenment and truth to all strata of society, but it also brings nagging doubt and subversive error. Political liberty has let loose enough tempests and revolutions upon the earth and has sufficiently modified the simple and naive customs of primitive peoples to make serious thinkers wonder whether they would not prefer tranquillity under the shadow of despotism. Christianity itself has sown the great seed of love and charity upon ground soaked in the blood of the martyrs.
Why has it entered into the plans of infinite Goodness and Justice that the happiness of one region or one age should be purchased by the sufferings of another age or another region? What is the divine purpose hidden under this great and irrefutable law ofsolidarity, of which competition is merely one of the mysterious aspects? Human wisdom does not know the answer, but human wisdom does know that good is constantly spreading and evil diminishing. Beginning with the social order as it had been made by conquest, where there were only masters and slaves, and where the inequality within society was extreme, the work of competition in bringing ever closer together men of different rank, fortune, and intelligence could not be accomplished without inflicting individual hardships that, as the work has progressed, have continually become less, like the vibrations of a sound or the oscillations of a pendulum. Against the sufferings still in store for it, humanity is daily learning how to oppose two powerful remedies, foresight, born of experience and enlightenment, and social co-operation, which is organized foresight.

Conclusion to the Original Edition

In the first part of this work—alas, all too hastily written!—I have tried to fix the reader's attention on the line of demarcation, always shifting, but always distinct, that separates the two regions of the economic world: Nature's collaboration and man's labor, the liberality of God and the handiwork of man, what is gratuitous and what is onerous, what is paid for in exchange and what is donated without charge, total utility and the partial and supplementary utility that constitutes value, absolute wealth and relative wealth, the contribution of chemical or mechanical forces brought to the aid of production by the instruments that render them serviceable and the just returns due the labor that has created these instruments, common wealth and private property.
It was not enough to point out these two orders of phenomena, so fundamentally different in nature; it was also necessary to describe their relations, and, if I may so express it, their harmonious evolution. I have tried to explain how it was the function of private property to seize hold of utility for the human race, to transfer it to the communal domain, and then to fly away to new conquests, so that each given effort (and, consequently, the sum total of all efforts) constantly renders available to mankind an increasing number of satisfactions. Progress consists in the fact that human services, when exchanged, while keeping their relative value, act as a vehicle to convey a larger and larger proportion of utility which is free of charge, and therefore common to all. Thus, the possessors of value, of any kind whatsoever, far from usurping and monopolizing God's gifts, actually multiply them, but do not on that account make them any the less gratuitous to all—which was the intent of Providence.
In proportion as satisfactions (for which progress makes Nature foot the bill) fall, by reason of that very fact, within the communal domain, they become equal, since inequality can be conceived only in the realm of men's services, which are compared, appraised, and evaluated for exchange. Hence, it follows that equality is necessarily progressive. It is also progressive in another respect, for the inevitable result of competition is to equalize services themselves and to make their rewards correspond more and more closely with their true worth.
Let us now glance over the ground remaining for us to cover.
In the light of the theory that we have set forth in this volume, we still have to examine more closely the following subjects:
Man's relations, both as producer and as consumer, with economic phenomena.
The law of rent on landed property.
The law of wages.
The law of credit.
The law of taxation, which, introducing us to what is, strictly speaking, the subject of government, will lead us to the comparison of private and voluntary services with public and compulsory services.
The law of population.
We shall then be in a position to solve a number of practical problems that are still subjects of controversy: free trade, automation, luxury, leisure, association, organization of labor, etc.
Anticipating our findings in this study, I do not hesitate to say that they may be expressed in the following terms: A steady approach by all men toward a continually rising standard of living—in other words: improvement and equalization—in a single word: harmony.
Such is the final result of the providential plan, of the great laws of Nature, when they act without impediment, when we consider them in themselves, apart from the disturbance to which their action has been subjected by error and violence. At the sight of this harmony the economist may well cry out, as does the astronomer on beholding the movement of the planets, or the physiologist when he contemplates the structure of our human organs: Digitus Dei est hic!
But man is a free agent, and consequently fallible. He is subject to ignorance and passion. His will, which can err, enters as an element into the workings of economic laws; he can misunderstand them, he can nullify them, he can divert them from their purpose. Just as the physiologist, after admiring the infinite wisdom that has gone into the creation and arrangement of each one of our organs and vital parts, also studies them in their abnormal state, when they are sickly and diseased; so we too shall have to enter a new world, the world of social disturbances.
We shall introduce this new study with a few observations on man himself. It would be impossible for us to evaluate the ills of society, their origin, their effects, their function, the ever narrowing limits within which their own action compresses them (a phenomenon that constitutes what I would almost dare to call a harmonious discord), if we did not examine the necessary consequences of free will, the aberrations due to self-interest, which always entail retribution, and the great laws of human responsibility and solidarity.
We have seen that all the social harmonies are contained in germ in these two principles: property and liberty. We shall see that all the social discords are merely the extension of these two contrary principles: plunder and oppression.
And, indeed, the words “property” and “liberty” merely express two aspects of the same fundamental notion. From the economic point of view, liberty is connected with the act of production, property with the thing produced. And, since value has its origin in human activity, we can say that liberty implies and includes property. The same holds true of oppresson as related to plunder.
Liberty! Therein, in the last analysis, lies the source of harmony. Oppression! Therein lies the source of discord. The struggle between these two forces fills the annals of history.
And since oppression has as its aim the unjust seizure of property, since it is transformed into and merges its identity with plunder, it is plunder that I shall show in action.
Man comes into this world bound to the yoke of want, which is pain.
He can escape only by subjecting himself to the yoke of toil, which is also pain.
He has, then, only a choice between two kinds of pain, and he hates pain.
For this reason he looks about him, and if he sees that his fellow man has accumulated wealth, he conceives the idea of making it his own. Hence, property unjustly acquired, or plunder!
Plunder! Here is a new element in the economy of society.
From the day when plunder first appeared on earth, until that day, if it ever comes, when plunder will have completely disappeared, this element has had and will have a profound effect on the entire social mechanism; it will disturb, to the point of making them unrecognizable, the operation of the harmonious laws that we have worked to discover and describe.
Our task, then, will not be done until we have given a complete account of plunder.
Perhaps it will be thought that it is only an accidental, abnormal phenomenon, a sore that will soon heal, unworthy of scientific investigation.
But let us beware. Plunder occupies, in the traditions of families, in the history of nations, in the occupations of individuals, in the physical and intellectual energies of all classes, in the arrangements of society, in the precautions of governments, almost as important a place as property itself.
No, plunder is not a passing scourge, accidentally affecting the social mechanism, and the science of economics may not exclude it from consideration.
In the beginning this sentence was pronounced on man: In the sweat of thy face shalt thou eat bread. Hence, it appears that effort and satisfaction are indissolubly joined, and that the one can never exist unless paid for by the other. Yet everywhere we see man revolting against this law, and saying to his brother: Yours be the toil; mine, the fruit of that toil.
Enter the hut of the savage hunter or the tent of the nomadic shepherd. What sight meets your eyes? The wife, thin, disfigured, terrified, faded before her time, bears all the burden of the household chores, while the husband lolls in idleness. What idea can we form here of family harmony? It has disappeared, because force has laid upon the defenceless the burden of toil. And how many centuries of civilization will it take before woman will be raised from this frightful degradation?
Plunder, in its most brutal form, brandishing torch and sword, fills the annals of history. What are the names that make up history? Cyrus, Sesostris, Alexander, Scipio, Caesar, Attila, Tamerlane, Mohammed, Pizarro, William the Conqueror—outright plunder by means of conquest. To it go the laurel wreaths, the monuments, the statues, the triumphal arches, the songs of the poets, the heady admiration of women!
Soon the conqueror thinks of a better way of dealing with the conquered than to kill them, and slavery covers the earth. Almost down to our own day, all over the world, it was the accepted way of life, leaving in its wake hatred, resistance, civil strife, and revolution. And what is slavery except organized oppression with plunder as its object?
If plunder arms the strong against the weak, it no less lets loose the intelligent upon the credulous. What industrious peoples are there on earth who have escaped exploitation at the hand of sacerdotal theocracies, Egyptian priests, Greek oracles, Roman augurs, Gallic druids, brahmins, muftis, ulemas, bonzes, monks, ministers, mountebanks, sorcerers, soothsayers, plunderers of all garbs and denominations? It is the genius of plunderers of this ilk to place their fulcrum in heaven and to glory in a sacrilegious complicity with God! They put in chains, not men's bodies alone, but their minds as well. They put the brand of servitude as much upon the conscience of a Seid as upon the brow of a Spartacus, thus achieving what would seem to be impossible: the enslavement of the mind.
Enslavement of the mind! What a frightful association of words! O liberty! We have seen thee hunted from country to country, crushed by conquest, nigh unto death in servitude, jeered at in the courts of the mighty, driven from the schools, mocked in the drawing room, misinterpreted in the studio, anathematized in the temple. It would seem that in thought thou shouldst find an inviolable refuge. But if thou shouldst surrender in this last haven, what becomes of the hope of the ages and of the dignity of man?
Yet in the long run (so man's forward-looking nature wills it) plunder generates, in the very places where it holds sway, opposition that paralyzes its power, and knowledge that unmasks its impostures. It does not yield on that account, however; it merely becomes more cunning, and wrapping itself in forms of government and alignments, playing one faction against another, turns to political scheming, so long a fertile source of illicit power. Then we see plunder usurping the citizens' liberty in order the more readily to exploit their wealth, and draining off their substance the better to conquer their liberty. Private enterprise becomes public enterprise. Everything is done by government functionaries; a stupid and vexatious bureaucracy swarms over the land. The public treasury becomes a vast reservoir into which those who work pour their earnings, so that the henchmen of the government may tap them as they will. Transactions are no longer regulated by free bargaining, and nothing can establish or preserve the principle of service for service.
In this state of things the true notion of property is effaced, and every man appeals to the law to give his services an artificial and arbitrary value.
Thus, we enter the era of privilege. Plunder, becoming more and more subtle, establishes itself in monopolies and hides behind restrictions; it diverts the natural course of exchange and forces capital, and after it, labor and the whole population, into artificial channels. It produces laboriously in the north what could be produced easily in the south; it creates precarious industries and livelihoods; it substitutes for the gratuitous forces of Nature the onerous drudgery of human labor; it supports business concerns that cannot survive against competition, and then invokes the use of force against their competitors; it arouses international jealousies, encourages nationalistic sentiments, and invents ingenious theories that make allies of its own dupes; it always has impending industrial panics and bankruptcies; it undermines in the minds of the citizens all confidence in the future, all faith in liberty, and even their sense of justice. And then, when science exposes these misdeeds, Plunder stirs up even its victims against science, with the battle cry: Onward to utopia! Indeed, it repudiates not only the science that stands in its way, but even the idea that science can be applied to these areas, declaring with crowning cynicism: There are no absolute principles!
Nevertheless, spurred on by their suffering, the working-class masses revolt and topple over everything above them. Government, taxation, legislation, everything is at their mercy, and you believe perhaps that Plunder's reign is at an end; you believe that the principle of service for service will be established on the only foundation possible or imaginable, that of liberty. Undeceive yourself. Alas! This pernicious idea has infiltrated the masses: property has no origin, sanction, legitimacy, or justification other than the law, and thereupon the masses institute legislation to plunder one another. Suffering from the wounds inflicted upon them, they undertake to heal everyone of their number by giving to each the right to oppress his neighbor. This is called solidarity, brotherhood: “You have produced; I have not; we are comrades; let us share.” “You own something; I own nothing; we are brothers; let us share.”
We must therefore examine the abuses perpetrated in recent years in the name of “association,” “organization of labor,” “interest-free credit,” etc. We shall have to subject them to this acid test: Are they in harmony with the principle of liberty or of oppression? In other words: Are they in conformity with the great economic laws, or do they constitute a disturbance of their operation?
Plunder is too universal, too persistent, to be considered a purely accidental phenomenon. In this case, as in so many others, it is impossible to separate the study of natural laws from the study of the things that disturb their operation.
But, it will be said, if plunder necessarily enters into the workings of the social mechanism as a discord, how do you dare affirm the harmony of economic laws?
I shall repeat here what I have said elsewhere: In everything that concerns man, a being who is perfectible only because he isimperfect, harmony does not consist in the complete absence of evil, but in its gradual reduction. The social body, like the physical body, is possessed of a curative force, vis medicatrix, whose laws and unfailing power cannot be studied without again eliciting the words: Digitus Dei est hic.

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