Thursday, April 12, 2012

Private Property and Common Wealth - Frédéric Bastiat - Pt 1

Private Property and Common Wealth

While freely granting to the land, to the forces of Nature, and to the tools of production what is their just due—the power of creating utility—I have taken pains to deprive them of what has been attributed erroneously to them—the faculty of creating value—since this faculty resides exclusively in the services that men perform for one another through exchange.
This simple correction will at one and the same time strengthen the role of property by redefining it according to its true character and will reveal to political economists a fact of the greatest importance, which, if I am not mistaken, they still have not noticed, namely, that of common ownership, constituting a real, essential, and progressively increasing communal domain, which develops providentially in any social order that is guided by the principles of liberty. Its manifest destiny is to lead all men, as brothers, from their state of original equality, the equality of privation, want, and ignorance, toward ultimate equality in the possession of prosperity and truth.
If this basic distinction between the utility of things and the value of services is sound in principle as well as in the consequences I have deduced from it, its significance cannot be misunderstood; for it means that the promise of utopia falls within the scope of political economy, and that all conflicting schools of thought will be reconciled in a common faith, to the complete satisfaction of all minds and of all hearts.
Men of property and of leisure, however high on the social scale your achievements, your honesty, your self-control, your thrift, may have carried you, you are still strangely disturbed. Why? Because the sweet-smelling but deadly perfume of utopia threatens your way of life. There are men who say, who rant, that the competency you have laid aside for the quiet of your old age, for your daily bread, for the education and the future of your children, has been acquired at the expense of your brethren. They say that you have stood between God and His gifts to the poor; that, like the greedy publicans of old, you have exacted a tribute on these gifts in the name of property, of interest, of rent, and hire. They call upon you to make restitution. To add to your dismay, only too often your own advocates make this implicit admission in coming to your defense: The usurpation is indeed flagrant, but it is necessary.
But I say, no, you have not misappropriated the gifts of God. You have received them gratis from the hand of Nature, it is true; but you have also passed them on gratis to your fellow men and have withheld nothing. They have acted similarly toward you, and all that has passed between you has been compensation for mental or physical effort, for sweat and toil expended, for dangers faced, for skills contributed, for sacrifices made, for pains taken, for services rendered and received. You thought only of yourselves, perhaps, but even your own self-interest has become in the hands of an infinitely wise and all-seeing Providence an instrument for making greater abundance available to all men; for, had it not been for your efforts, all the useful effects that Nature at your command has transmitted without payment among men would have remained eternally dormant. I say, without payment; for the payment you received was only the simple return to you of the efforts you had expended, and not at all a price levied on the gifts of God. Live, then, in peace, without fear and without qualms. You have no other property in the world save your claim to services due you for services that you have fairly rendered, and that your fellow men have voluntarily accepted. This property of yours is legitimate, unassailable; no utopia can prevail against it, for it is part and parcel of our very nature. No new ideology will ever shake its foundations or wither its roots.
Men of toil and hardship, you can never shut your eyes to this truth: that the starting point for the human race was a state of complete community, a perfect equality of poverty, want, and ignorance. By the sweat of its brow humanity is regenerated and directs its course toward another state of community, one in which the gifts of God are obtained and shared at the cost of less and less effort; toward equality of another kind, the equality of well-being, of enlightenment, of moral dignity. To be sure, men's steps along this road to a better and better life are not all of equal length, and to the degree that the rapid strides of the advance guard might impede your own, you would have just cause for complaint. But the contrary is the case. No spark of knowledge illumines another's mind without casting some small gleam of light upon your own; no progress is achieved by others, prompted by the desire for property, that does not contribute to your progress; no wealth is created that does not work for your liberation, no capital that does not increase your enjoyments and diminish your toil, no property acquired that does not make it easier for you to acquire property, no property created that is not destined to increase the abundance shared by all men. The social order has been so artfully designed by the Divine Artificer that those who have moved farthest ahead along the road to progress extend a helping hand, wittingly or unwittingly; for He has so contrived that no man can honestly work for himself without at the same time working for all. It is strictly accurate to say that any attack upon this marvelous order would be on your part not only an act of homicide, but of suicide as well. The whole of mankind constitutes a remarkable chain wherein, miraculously, motion imparted to the first link is communicated with ever increasing speed right up to the last.
Men of good will, lovers of equality, blind defenders and dangerous friends of all who suffer, who lag behind on the road to civilization, you who seek to establish the state of community in this world, why do you begin by unsettling men's minds and natural interests? Why, in your pride, do you aspire to bend all wills to the yoke of your social inventions? Do you not see that this community for which you yearn so ardently, and which is to extend the kingdom of God over the whole world, has already been conceived and provided for by God Himself; that He has not awaited your coming to make it the heritage of His children; that He does not need your inventions or your acts of violence; that every day His admirable decrees make it more and more a reality; that He has not turned for guidance to the uncertainties of your childish makeshifts nor even to the increasing expression of altruism manifested by acts of charity, but has entrusted the accomplishment of His plans to the most active, the most personal, the most enduring of our energies, our own self-interest, confident that it is ever alert? Study, therefore, the machinery of society, as it came from the hands of the Great Artificer, and you will be convinced that He evidences a concern for all men that goes far beyond your dreams and fantasies. Then, perhaps, instead of proposing to redo the divine handiwork, you will be content to pay it homage.
This does not mean that there is no room in the world for reforms or reformers. Nor does it mean that humanity must not eagerly recruit and generously encourage devoted researchers and scholars, loyal to the cause of democracy. They are still most necessary, not to subvert the law of society, but, on the contrary, to oppose the artificial obstacles that disturb and pervert its natural action. Truly, it is difficult to understand how people can continue to repeat such trite statements as this: “Political economy is very optimistic toward accomplished fact; it affirms that whatever is, is right; whether confronted with evil or with good, it is content to say laissez faire.” Do they imply that we do not know that humanity began in complete want and ignorance, and under the rule of brute force, or that we are optimists concerning accomplished facts such as these? Do they suggest that we do not know that the motive force of human nature is aversion to all pain, all drudgery; and that, since labor is drudgery, the first manifestation of self-interest was the effort to pass this painful burden along from one to another? Do they mean to say that the words “cannibalism,” “war,” “slavery,” “privilege,” “monopoly,” “fraud,” “plunder,” “imposture,” have never reached our ears, or that we see in these abominations the inevitable rumblings of the machine on the road to progress? But are not they themselves to some extent willfully confusing the issue in order to accuse us of confused thinking? When we admire the providential laws that govern men's transactions, when we say that the self-interest of every man coincides with that of every other man, when we conclude that the natural direction of these coincident interests tends to achieve relative equality and general progress; obviously it is from the operation of these laws, not from interference with their operation, that we anticipate harmony. When we say, laissez faire, obviously we mean: Allow these laws to operate; and not: Allow the operation of these laws to be interfered with. According as these laws are conformed to or violated, good or evil is produced. In other words, men's interests are harmonious, provided every man remains within his rights, provided services are exchanged freely, voluntarily, for services. But does this mean that we are unaware of the perpetual struggle between the wrong and the right? Does this mean that we do not see, or that we approve, the efforts made in all past ages, and still made today, to upset, by force or by fraud, the natural equivalence of services? These are the very things that we reject as breaches of the social laws of Providence, as attacks against the principle of property; for, in our eyes, free exchange of services, justice, property, liberty, security, are all merely different aspects of the same basic concept. It is not the principle of property that must be attacked, but, on the contrary, the principle hostile to it, the principle of spoliation and plunder. Men of property of all ranks, reformers of all schools, this is the mission that must reconcile us and unite us.
It is time, it is high time, that this crusade should begin. The ideological war now being waged against property is neither the most bitter nor the most dangerous that it has had to contend with. Since the beginning of the world there has also been a real war of violence and conspiracy waged against it that gives no sign of abating. War, slavery, imposture, inequitable taxation, monopoly, privilege, unethical practices, colonialism, the right to employment, the right to credit, the right to education, the right to public aid, progressive taxation in direct or inverse ratio to the ability to pay—all are so many battering-rams pounding against the tottering column. Could anyone assure me whether there are many men in France, even among those who consider themselves conservatives, who do not, in one form or another, lend a hand to this work of destruction?
There are people in whose eyes property appears only in the form of a plot of land or a sack of coins. Provided only that the land's sacrosanct boundaries are not moved and that pockets are not literally picked, they are quite content. But is there not also property in men's labor, in their faculties, in their ideas—in a word, is there not property in services? When I throw a service into the social scale, is it not my right that it remain there, suspended, if I may so express myself, until, according to the laws of its own natural equivalence, it can be met and counterbalanced by another service that someone is willing to tender me in exchange? By common consent we have instituted forces of law and order to protect property, so understood. Where are we, then, if these very forces take it upon themselves to upset this natural balance, under the socialistic pretext that freedom begets monopoly, that laissez faire is hateful and merciless? When things reach such a pass, theft by an individual may be rare and severely dealt with, but plunder is organized, legalized, and systematized. Reformers, be of good cheer; your work is not yet done; only try to understand what it really is.
But, before we proceed to the analysis of plunder, public or private, legal or illegal, its role in the world, the extent to which it is a social problem, we must, if possible, come to a clear understanding of what the communal domain and private property are; for as we shall see, private property is bounded on one side by plunder even as it is bounded on the other by the communal domain.
From what has been said in previous chapters, notably the one on utility and value, we may deduce this formula:
Every man enjoys gratis all utilities furnished or produced byNature on condition that he take the pains to avail himself of them, or that he pay with an equivalent service those who render him the service of taking pains for him.
In this formula two elements are combined and fused together, although they are essentially distinct.
There are, first, the gifts of Nature: gratuitous raw materials and gratuitous forces; these constitute the communal domain.
In addition, there are the human efforts that go into making these materials available, into directing these forces—efforts that are exchanged, evaluated, and paid for; these constitute the domain of private property.
In other words, in our relations with one another, we are not owners of the utility of things, but of their value, and value is the appraisal made of reciprocal services.
Private property and the communal domain are two correlative ideas founded, respectively, on those of effort and freedom from effort.
What is free of effort is held in common, for all men enjoy it and are permitted to enjoy it unconditionally.
What is acquired by effort is private property, because taking pains is prerequisite to its satisfaction, just as the satisfaction is the reason for taking the pains.
If exchange intervenes, it is effected by the evaluation of two sets of pains taken, or two services rendered.
This recourse to pains implies the idea of an obstacle. We may then say that the result sought comes closer and closer to the condition of being gratis and common to all in proportion as the intervening obstacle is reduced, since, according to our premise, the complete absence of obstacles would imply a condition of being completely gratis and common to all.
Now, since human nature is dynamic in its drive toward progress and perfection, an obstacle can never be considered as a fixed and absolute quantity. It is reduced. Hence, the pains it entails are reduced along with it, and the service along with the pains, and the value along with the service, and the property with the value.
But the utility remains constant. Hence, what is free of charge and common to all is increased at the expense of what formerly required effort and was private property.
To set man to work, a motive is necessary; and that motive is the satisfaction aimed at, or utility. It cannot be denied that he tends always and irresistibly to achieve the greatest possible satisfaction with the least possible amount of work, that is, to make the greatest amount of utility correspond with the least amount of property; consequently, the function of property, or rather of the spirit of property, is continually to enlarge the communal domain.
Since the human race started from the point of greatest poverty, that is, from the point where there were the most obstacles to be overcome, it is clear that all that has been gained from one era to the next has been due to the spirit of property.
This being the case, can anyone be found anywhere in the world who is hostile to the idea of property? Does not everyone see that it is impossible to imagine a force in society that is at once more just and more democratic? The fundamental dogma of Proudhon himself is mutuality of services. On this point we are in agreement. The point on which we differ is this: I call this dogma property, not mutuality of services, because careful analysis assures me that men, if they are free, do not and cannot have any other property than the ownership of value, or their services. Proudhon, on the contrary, like most economists, thinks that certain natural resources have an intrinsic value of their own, and that they are consequently appropriated. But, as for the idea that services constitute property, far from opposing it, he makes it his main article of faith. Does anyone desire to go further yet? As far as to say that a man should not be the owner of the pains he himself takes, that, in exchange, it is not enough to turn over gratis the help received from natural resources, that he must also surrender gratis his own efforts? But let him take care! This would mean glorifying slavery; for, to say that certain men must render services that are not paid for means that other men must receive services that they do not pay for, which is certainly slavery. Now, if he says that this gratuitous gift must be reciprocal, he is merely quibbling; for, either the exchange will be made with a certain degree of justice, in which case the services will be in some way or other evaluated and paid for; or else they will not be evaluated and paid for, and, in that case, some will give much and others little, and we are back to slavery.
It is therefore impossible to argue against the idea that services exchanged on the basis of value for value constitute legitimate property. To explain that this property is legitimate, we do not need to have recourse to philosophy or jurisprudence or metaphysics. Socialists, economists, egalitarians, believers in brotherly love, I defy you one and all to raise even the shadow of an objection against the legitimacy of a voluntary exchange of services, and consequently against property, as I have defined it, and as it exists in the natural order of society.
Of course, I know that in practice the ideal principle of property is far from having full sway. Against it are conflicting factors: there are services that are not voluntary, whose remuneration is not arrived at by free bargaining; there are services whose equivalence is impaired by force or fraud; in a word, plunder exists. The legitimacy of the principle of property is not thereby weakened, but confirmed. The principle is violated; therefore, it exists. We must cease believing in anything in this world, in facts, in justice, in universal consent, in human language; or else we must admit that these two words, “property” and “plunder,” express opposite, irreconcilable ideas that can no more be identified than yes and no, light and dark, good and evil, harmony and discord. Taken literally, the famous formula, property is theft, is therefore absurdity raised to the nth degree. It would be no less outlandish to say that theft is property; that what is legal is illegal; that what is, is not, etc. It is probable that the author of this bizarre aphorism merely desired to catch people's attention with a striking paradox, and that what he really meant to state was this: Certain men succeed in getting paid not only for the work that they do but also for the work that they do not do, appropriating to themselves alone God's gifts, gratuitous utility, the common possession of all. But in that case it would first be necessary to prove the statement, and then to say: Theft is theft.
To steal, in common usage, means to take by force or fraud something of value to the detriment and without the consent of the person who has created it. It is easy to understand how fallacious economic thinking was able to extend the meaning of this melancholy word, “steal.” First, utility was confused with value. Then, since Nature plays a part in the creation of utility, it was concluded that Nature also contributed to the creation of value, and, it was said, since this part of value is the fruit of no one's labor, it belongs to everyone. Finally, noting that value is never surrendered without compensation, the economists added: He steals who exacts payment for value that has been created by Nature, which is not in any way a product of human labor, which is inherent in the nature of things and is, by providential design, one of the intrinsic qualities of material objects, like specific gravity or density, form or color.
A careful analysis of value overturns this elaborate structure of subtleties, from which economists sought to deduce a monstrous identification of plunder with private property.
God put raw materials and the forces of Nature at man's disposal. To gain possession of them, either one has to take pains, or one does not have to take pains. If no pains are required, no man will willingly consent to buy from another man at the cost of effort what he can pluck from the hands of Nature without effort. In this case, no services, exchange, value, or property are possible. If pains must be taken, it is incumbent on the one who would receive the satisfaction to take them; hence, the satisfaction must go to the one who has taken the pains. This is the principle of property. Accordingly, if a man takes pains for his own benefit, he becomes the owner of all the combined utility created by his pains and by Nature. If he takes the pains for the benefit of others, he stipulates that he be given in return a utility representing equal pains, and the resulting transaction presents us with two efforts, two utilities that have changed hands, and two satisfactions. But we must not forget the important fact that the transaction is carried out by the comparison, by the evaluation, not of two utilities (they cannot be evaluated), but of the two services that have been exchanged. It is therefore accurate to say that, from his own individual point of view, man by his labor becomes the owner of the natural utility (this is the only reason that he works), whatever may be the ratio (infinitely variable) of his labor to the utility. But from the social point of View, in regard to the relations of one man with another, men can never be owners of anything except value, which is based, not on the bounty of Nature, but on human services, pains taken, risks run, resourcefulness displayed in availing oneself of that bounty; in a word, as far as gratuitous and natural utility is concerned, the last person to acquire it, the one who ultimately receives the satisfaction, is placed, by way of exchange, in exactly the position of the first worker. The latter happened to come upon the gratuitous utility and went to the trouble of taking possession of it; the ultimate consumer remunerates him by taking an equivalent amount of pains for him in return and thus substitutes his right of possession for the original owner's; the utility becomes his under the same terms, that is to say, gratis, provided he takes the necessary pains. In all this there is neither in semblance nor in fact a usurpation of the gifts of God.
Hence, I confidently advance this proposition as incontrovertible:
In their relation to one another, men are owners only of value, and value represents only services that are compared and voluntarily rendered and received.
I have already shown that, on the one hand, this is the true meaning of the word value; and that, on the other, men never are, never can be, owners of anything except value, a conclusion to be drawn from logic as well as from experience. From logic: for why should I buy from a man, using my pains as payment, what I can obtain from Nature, either without pains or with fewer pains? From universal experience, which is a weighty argument, since nothing can give more support to a theory than the expressed and tacit consent of all men of all times and all places: now, I affirm that universal agreement accepts and approves the meaning that I give here to the word “property.” When a public official makes an inventory following a death, or orders one to be made; when a businessman, a manufacturer, a farmer, makes a similar appraisal on his own initiative; or when the receivers in a bankruptcy case are requested to make one; what is inscribed on the stamped pages of the inventory as each item is presented? Is it the item's utility, its intrinsic worth? No, it is its value; that is, the equivalent amount of effort that any potential purchaser would have to exert in order to obtain a similar item. Do the appraisers concern themselves with deciding whether a given object is more useful than another? Do they take into account the satisfactions that these objects can give? Do they rate a hammer above a piece of bric-a-brac because the hammer can admirably turn the law of gravity to the advantage of its owner? Or do they rate a glass of water above a diamond, because, objectively speaking, the water can render more tangible service? Or a volume of Say above a volume of Fourier, because Say gives more lasting pleasure and solid instruction? No; they evaluate, they seek out the value, rigorously following, please note, my definition. Or rather, my definition follows their practice. They take into account, not the natural advantages, or the gratuitous utility, contained in each item, but the services that anyone acquiring it would have to perform himself or have another perform for him in order to obtain it. They do not appraise—please pardon the rather flip expression—the trouble God went to, but the pains that the purchaser would have to take to obtain it. And when the appraisal is finished, when the public knows the total amount of value listed in the inventory, all say with one voice: This is what the heir owns.
Since property includes only value, and since value indicates only relationships, it follows that property is itself a relation.
When people, on comparing two inventories, declare one man to be richer than another, they do not mean that this comparison applies necessarily to the amounts of absolute wealth or material well-being enjoyed by the two. In satisfactions, in absolute well-being, there is an element of common utility that can greatly affect this ratio. All men, in point of fact, are equal in their access to the light of day, the air they breathe, the warmth of the sun; and any inequality between the two inventories—expressed by the difference in property or value—can apply only to the amount of onerous utility.
And so, as I have already said many times and shall doubtless say many times more (for it is the greatest, the most admirable, and perhaps the most misunderstood of all the social harmonies, since it encompasses all the others), it is characteristic of progress (and, indeed, this is what we mean by progress) to transform onerous utility into gratuitous utility; to decrease value without decreasing utility; and to enable all men, for fewer pains or at smaller cost, to obtain the same satisfactions. Thus, the total number of things owned in common is constantly increased; and their enjoyment, distributed more uniformly to all, gradually eliminates inequalities resulting from differences in the amount of property owned.
Let us never weary of analyzing the result of this social mechanism.
How many times, when considering the phenomena of the social order, have I not had cause to appreciate how profoundly right Rousseau was when he said, “It takes a great deal of scientific insight to observe what we see every day”! Thus it is that habit, that veil which is spread before the eyes of the ordinary man, which even the attentive observer does not always succeed in casting aside, prevents us from seeing the most marvelous of all social phenomena: real wealth constantly passing from the domain of private property into the communal domain.
Let us try, nevertheless, to establish the fact that this democratic evolution does take place, and, if possible, to plot its course.
I have said elsewhere that, if we wished to compare two different eras of a nation's history from the point of view of their actual prosperity, we should have to resort to man-hours of unskilled labor as our measure, asking ourselves this question: What is the difference in the amount of satisfaction that could be obtained in this society, at different stages of its progress, by a given amount, say one day, of unskilled labor?
This question implies two others:
What was, at the dawn of civilization, the ratio between satisfactions and the simplest kind of labor?
What is this ratio today?
The difference in the two will measure the increase in gratuitous utility in relation to the amount of onerous utility, i.e., the extent of the communal domain in relation to that of private property.
I do not believe that a man interested in public affairs can apply himself to any more interesting or instructive problem. I ask the reader's indulgence if I seem to cite a tediously long list of examples before reaching a satisfactory solution.
At the beginning of this book I made a kind of table of the most general human wants: breathing, food, clothing, shelter, transportation, education, amusement, etc.
Let us follow this list and see what satisfactions a common laborer could obtain for a certain number of days' work at the dawn of society and what he can obtain now.

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