Political Economy
by J.C.L. Simonde de Sismondi
1815


Chapter 1

Objects and Origins of the Science


    Political economy is the name given to an important division
of the science of government. The object of government is, or
ought to be, the happiness of men, united in society; it seeks
the means of securing to them the highest degree of felicity
compatible with their nature, and at the same time of allowing
the greatest possible number of individuals to partake in that
felicity. But man is a complex bring; he experiences moral and
physical wants; therefore his happiness consists in his moral and
physical condition. The moral happiness of man, so far as it
depends on his government, is intimately connected with the
improvement of that government; it forms the object of civil
policy, which ought to diffuse the happy influence of liberty,
knowledge, virtue, and hope, over all classes of the community.
Civil policy should point out the means of giving to nations a
constitution, the liberty of which may elevate the souls of the
citizens; an education which may form their hearts to virtue and
open their minds to knowledge; a religion which may present to
them the hopes of another life, to compensate for the sufferings
of this. It should seek not what suits one man or one class of
men, but what may impart most happiness by imparting most worth
to all the men living under its laws.
    The physical well-being of man, so far as it can be produced
by his government, is the object of Political Economy. All the
physical wants of man, for which he depends on his equals, are
satisfied by means of wealth. It is this which commands labour,
which purchases respectful service, which procures all that man
has accumulated for use or pleasure. By means of it health is
preserved, and life maintained; the wants of infancy and old age
are supplied; food, and clothing, and shelter, are placed within
the reach of all. Wealth may therefore be considered as
representing all that men can do for the physical well-being of
each other; and the science which shows to governments the true
system of administering national wealth is an important branch of
the science of national happiness.
    Government is instituted for the advantage of all the Persons
subject to it; hence it ought to keep the advantage of them all
perpetually in view. And as in respect of civil policy it should
extend to every citizen the benefits of liberty, virtue, and
knowledge, so it ought likewise, in respect of political economy,
to watch over all the advantages of the national fortune.
Abstractly considered, the end of government is not to accumulate
wealth in the state, but to make every citizen participate in
those enjoyments of physical life which wealth represents.
Government is called to second the work of providence, to augment
the mass of felicity on earth and not to multiply the beings who
live under its laws, faster than it can multiply their chances of
happiness.
    Wealth and population are not, indeed, absolute signs of
prosperity in a state; they are only so in relation to each
other. Wealth is a blessing when it spreads comfort over all
classes; population is an advantage when every man is sure of
gaining an honest subsistence by his labour. But a country may be
wretched, though some individuals in it are amassing colossal
fortunes; and if its population, like that of China, is always
superior to its means of subsistence; if it is contented with
living on the refuse of animals; if it is incessantly threatened
with famine, this numerous population, far from being an object
of envy, is a calamity.
    The improvement of social order is generally advantageous to
the poor as well as to the rich; and political economy points out
the means of preserving this order by correction, but not of
overturning it. It was a beneficent decree of Providence, which
gave wants and sufferings to human nature; because out of these
it has formed the incitements, which are to awaken our activity,
and push us forward to develop our whole being. If we could
succeed in excluding pain from the world, we must also exclude
virtue; if we could banish want, we must also banish industry.
Hence it is not the equality of ranks, but happiness in all
ranks, which the legislator ought to have in view. It is not from
the division of property that he will procure this happiness, but
from labour and the reward of labour. It is by maintaining the
activity and hopes of the mind; by securing to the poor man as
well as to the rich, a regular subsistence and the sweets of
life, in the performance of his task.
    The title given by Adam Smith to his immortal work, on the
science we are now engaged with, 'The Nature and Causes of the
Wealth of Nations' forms at the same the most precise definition
of that science. It presents a much more exact idea than the term
political economy, afterwards adopted. The latter designation, at
least, requires to be understood according to the modern
acceptation of the word economy, not according to its etymology.
In its present sense economy denotes the preservative,
administrative, and the management of property; and it is because
we use the somewhat tautological phrase domestic economy for the
management of a private fortune, that we have come to use the
phrase political economy for the management of the national
fortune.
    From the time when men first entered into social union, they
must have occupied themselves with the common interests
originating in their wealth. From the beginning of societies, a
portion of the public wealth was set apart to provide for the
public wants. The levying and management of this national
revenue, which no longer pertained to each, became an essential
part in the science of statesmen. It is what we call finance.
    Private fortunes, on the other hand, made the interests of
each citizen more complex; being exposed to the attacks of
cupidity and fraud, their wealth required to be defended by the
public authority, according to the fundamental article of the
social contract, which had combined the strength of individuals
to protect each with power of all. The rights over property, the
divisions of it, the means of transmitting it, became one of the
most important branches of civil jurisprudence; and the
application of justice to the distribution of national property,
formed an essential function of the legislator.
    But no inquiry concerning the nature and causes of national
wealth had occupied the speculations of our ancestors. They had
not ascended to the principles of political economy, in order to
deduce from that source their systems of finance and civil
jurisprudence, which ought, however, to be nothing more than
corollaries from those principles. They had abandoned the
development of public wealth to the result of individual efforts,
without examining their nature; and thus property had accumulated
silently, in each society, by the labour of each artisan to
procure his own subsistence, and afterwards his own comforts -
before the manner of acquiring and preserving it became an object
of scientific speculation. The philosophers of antiquity were
engaged in proving to their disciples, that riches are useless
for happiness; not in pointing out to governments the laws by
which the increase of those riches may be favoured or retarded.
The attention of thinking men was at length directed to national
wealth by the requisitions of states, and the poverty of the
people. An important change which occurred in the general
politics of Europe, during the sixteenth century, almost every
where overturned public liberty; oppressed the smaller states;
destroyed the privileges of the towns and provinces; and
conferred the right to dispose of national fortunes on a small
number of sovereigns, absolutely unacquainted with the industry
by which wealth is accumulated or preserved. Before the reign of
Charles V, one half of Europe, lying under the feudal system, had
no liberty or knowledge, and no finance. But the other half,
which had already reached a high degree of prosperity, which was
daily increasing its agricultural riches, its manufactories, and
its trade, was governed by men who, in private life, had attended
to the study of economy, when, in acquiring their own property,
had learned what is suitable in that of states; and who,
governing free communities to which they were responsible, guided
their administrations, not according to their own ambition, but
according to the interest of all. Till the fifteenth century
wealth and credit were no where to be found in the republics of
Italy, and of the Hanseatic league; the imperial towns of
Germany; the free towns of Belgium and Spain, and perhaps also in
some towns in France and England, which happened to enjoy great
municipal privileges. The Magistrates of all those towns were men
constantly brought up in business, and without having brought
political economy to the form of a science, they had yet the
feeling as well as the experience of what would serve or injure
the interests of their fellow-citizens.
    The dreadful wars which began with the nineteenth century,
and altogether overturned the balance of Europe, transferred a
nearly absolute monarchy to three or four all-powerful monarchs,
who shared among them the government of the civilized world.
Charles V united, under his dominion, all the counties which had
hitherto been celebrated for their industry and wealth, - Spain,
nearly all Italy, Flanders, and Germany; but he united after
having ruined them; and his administration, by suppressing all
their privileges, prevented the recovery of former opulence. The
most absolute kings can no more govern by themselves, than kings
whose authority is limited by laws. The former transmit their
power to ministers whom they themselves select, in place of
taking such as would be nominated by the popular confidence. But
they find them among a class of persons different from that in
which free governments find them. In the eyes of an absolute
king, the first quality of a statesman is his being in possession
of a rank so high that he may have lived in noble indolence, or
at least in absolute ignorance of domestic economy. The ministers
of Charles V, whatever talents they show for negotiation and
intrigue, were all equally ignorant of pecuniary affairs. They
ruined the public finances, agriculture, trade, and every kind of
industry, from one end of Europe to the other; they made the
people feel the difference, which might indeed have been
anticipated, between their ignorance and the practical knowledge
of republican magistrates.
    Charles V, his rival Francis I, and Henry VIII, who wished to
hold the balance between them, had engaged in expenses beyond
their incomes; the ambition nf their successors, and the
obstinacy of the house of Austria, which continued to maintain a
destructive system of warfare during more than a hundred years,
caused those expenses, in spite of the public poverty, to go on
increasing. But as the suffering became more general, the friends
of humanity felt more deeply the obligation laid on them to
undertake the defence of the poor. By an order of sequence
opposite to the natural progress of ideas, the science of
political economy sprung from that of finance. Philosophers
wished to shield the people from the speculations of absolute
power. They felt that, to obtain a hearing from kings, they must
speak to them of royal interests, not of justice or duty. They
investigated the nature and causes of national wealth, to show
governments how it might be shared without being destroyed.
    Too little liberty existed in Europe to allow those who first
occupied themselves with political economy to present their
speculations to the world; and finances were enveloped in too
profound a secrecy to admit of men, not engaged in public
business, knowing facts enough to form the basis of general
rules. Hence the study of political economy began with ministers,
when once it had fortunately happened that kings put men at the
head of their finances, who combined talents with justice and
love of the public weal. Two great French ministers, Sully under
Henry IV, and Colbert under Louis XIV, were the first who threw
any light on a subject till then regarded as a secret of state,
in which mystery had engendered and concealed the greatest
absurdities. Yet, in spite of all their genius and authority, it
was a task beyond their power to introduce any thing like order,
precision, or uniformity into this branch of government. Both of
them, however, not only repressed the frightful spoliations of
the revenue farmers, and by their protection communicated some
degree of security to private fortunes; but likewise dimly
perceived the true sources of national prosperity, and busied
themselves with efforts to make them flow more abundantly. Sully
gave his chief protection to agriculture. He used to say that
pasturage and husbandry wee the two beasts of the state. Colbert,
descended from a family engaged in the cloth trade, studied above
all to encourage manufactures and commerce. He furnished himself
with the opinion of merchants, and asked their advice on all
emergencies. Both statesmen opened roads and canals to facilitate
the exchange of commodities: both protected the spirit of
enterprise, and honoured the industrious activity which diffused
plenty over their country.
    Colbert, the latter of the two, was greatly prior to any of
the writers who have teated political economy as a science, and
reduced it to a body of doctrines. He had a system, however, in
regard to national wealth: he required one to give uniformity to
his plans, and delineate clearly before his view the object he
wished to attain. His system was probably suggested by the
merchants whom he consulted. It is now generally known by the
epithet mercantile, sometimes also by the name Colbertism. Not
that Colbert was its author, or unfolded it in any publication;
but because he was beyond comparison the most illustrious of its
professors; because, notwithstanding the errors of his theory,
the applications he deduced from it were highly advantageous; and
because, among the numerous writers who have maintained the same
opinion, there is not one who has shown enough of talent even to
fix his name in the reader's memory. It is but just, however, to
separate the mercantile system altogether from the name of
Colbert. It was a system invented by trading subjects, not by
citizens; it was a system adopted by all the ministers of
absolute governments, when they happened to take the trouble of
thinking on finance, and Colbert had no other share in the matter
than that of having followed it without reforming it.
    After long treating commerce with haughty contempt,
governments had at length discovered in it one of the most
abundant sources of national wealth. All the great fortunes in
their states did not indeed belong exclusively to merchants; but
when, overtaken by sudden necessity, they wished to levy large
sums at once, merchants alone could supply them. Proprietors of
land might possess immense revenues, manufacturers might cause
immense labours to be executed; but neither of them could dispose
of any more than their income or annual produce. In a case of
need merchants alone offered their whole fortune to the
government. As their capital was entirely represented by
commodities already prepared for consumption, by merchandise
destined for the immediate use of the market to which it had been
carried, they could sell it at an hour's warning, and realise the
required sum with smaller loss than any other class of citizens.
Merchants therefore found means to make themselves be listened
to, because they had in some sort the command of all the money in
the state, and were at the same time nearly independent of
authority - being able, in general, to hide from the attacks of
despotism a property of unknown amount, and transport it, with
their persons, to a foreign country, at a moment's notice.
    Governments would gladly have increased the merchant's
profit, on condition of obtaining a share of it. Imagining that
nothing more was necessary than to second each other's views,
they offered him force to support industry. and since the
advantage of the merchant consists in selling dear and buying
cheap, they thought it would be an effectual protection to
commerce, if the means were afforded of selling still dearer and
buying still cheaper. The merchants whom they consulted eagerly
grasped at this proposal; and thus was founded the mercantile
system. Antonio de Leyva, Fernando de Gonnzago, and the Duke of
Alva, viceroys of Charles V and his descendants - the rapacious
inventors of so many monopolies - had no other notion of
political economy. But when it was attempted to reduce this
methodical robbery of consumers into a system; when deliberative
assemblies were occupied with it; when Colbert consulted
corporations; when the people at last began to perceive the true
state of the case, it became necessary to find out a more
honourable basis for such transactions; it became necessary not
only to study the advantage of financiers and merchants, but also
that of the nation: for the calculations of self-interest cannot
show themselves in open day, and the first benefit of publicity
is to impose silence on base sentiments.
    Under these circumstances the mercantile system was moulded
into a plausible form; and doubtless it must have been plausible,
since, even till our own times, it continued to seduce the
greater part of practical men employed in trade and finance.
Wealth, said those earliest economists, is money: the two words
were received into universal use as almost entirely synonymous;
no one dreamed of questioning the identity of money and wealth.
Money, they said, disposes of men's labour and of all its fruits.
It is money which produces those fruits; it is by means of money
that industry continues in a nation; to its influence each
individual owes his subsistence and the continuation of his life.
Money is especially necessary in the relation of one state to
another. It supports war and forms the strength of armies. The
state which has it, rules over that which has it not. The whole
science of political economy ought, therefore, to have for its
object the increase of money in a nation. But the money possessed
by a nation cannot be augmented in quantity, except by the
working of mines, if the nation has any; or by foreign trade, if
it has none. All the exchanges carried on within a country, all
the purchases and sales which take place among Englishmen, for
instance, do not increase the specie contained within the shores
of England by a single penny. Hence it is necessary to And means
of importing money from other countries; and trade alone can do
this by selling much to foreigners and buying little from them.
For in the same way as each merchant in settling with his
correspondent, sees at the year's end whether he has sold more
than he has bought, and Ands himself accordingly creditor or
debtor by a balance account which must be paid in money; so
likewise a nation, by summing up all its purchases and all its
sales with each nation, or with all together, would find itself
every year creditor or debtor by a commercial balance which must
be paid in money. If the country pay this balance, it will
constantly grow poorer; if it receive the balance, it will
constantly grow richer.
    For a century, the mercantile system was universally adopted
by cabinets; universally favoured by traders and chambers of
commerce; universally expounded by writers, as if it had been
proved by the most unexceptionable demonstration, no one deeming
it worth while to establish it by new proofs; when, after the
middle of the eighteenth century, Quesnay opposed to it his
Tableau Economique, afterwards expounded by Mirabeau and the Abbe
de Riviere, enlarged by Dupont de Nemours, and adopted by a
numerous sect which arose in France, under the name of
Economists. In Italy too this sect gained some distinguished
partisans. Its followers have written more about the science than
those of any other sect; yet they have admitted Quesnay's
principles with such blind confidence, and maintained them with
such implicit fidelity, that one is at a loss to discover any
difference of principle, or any progress of ideas in their
several productions.
    Thus Quesnay founded a second system in political economy,
still named the territorial system, or more precisely the system
of the economists. He begins by asserting that gold and silver,
the signs of wealth, the means of exchange, the price of all
commodities, do not themselves constitute the wealth of states;
and that no judgment can be formed concerning the prosperity of a
nation, from the abundance of its precious metals. He next
proceeds to survey the different classes of men, all of whom,
occupied in gaining money, and causing wealth to circulate, even
when acquiring it for themselves, are not, according to him,
occupied with any thing besides exchange. He endeavours to
distinguish the classes possessed of a creative power; it is
amongst them that wealth must originate, all the transactions of
commerce appearing to be nothing else but the transmission of
that wealth from hand to hand.
    The merchant who carries the productions of both hemispheres
from one continent to the other, and on returning to the ports of
his own country, obtains, at the sale of his cargo, a sum double
of that with which he began his voyage, does not, after all,
appear, in the eyes of Quesnay, to have performed any thing but
an exchange. If, in the colonies, he has sold the manufactures of
Europe at a higher price than they cost him, the reason is, they
were in fact worth more. Together with their prime cost, he must
also be reimbursed for the value of his time, his cares, his
subsistence, and that of his sailors and agents during the
voyage. He has a like reimbursement to claim on the cotton or
sugar he brings back to Europe. If, at the end of his voyage, any
profit remains, it is the fruit of his economy and good
management. The wages allowed him by consumers, for the trouble
he has undergone, are greater than the sum he had expended. It is
the nature of wages, however, to be entirely expended by him who
earns them; and had this merchant done so, he would have added
nothing to the national wealth, by the labour of his whole life;
because the produce which he brings back does nothing more than
exactly replace the valuE of the produce given for it, added to
his own wages, and the wages of all that were engaged with him in
the business.
    Agreeably to this reasoning, the French philosopher gave to
transport trade the name of economical trade, which it still
retains. This species of commerce, he asserts, is not destined to
provide for the wants of the nation that engages in it, but
merely to serve the convenience of two foreign nations. The
carrying nation acquires from it no other profit than wages, and
cannot grow rich except by the saving which economy enables it to
make on them.
    Quesnay, next adverting to manufactures, considers them an
exchange, just the same as commerce; but instead of having in
view two present values, their primitive contract is, in his
opinion, an exchange of the present against the future. The
merchandise produced by the labour of the artisan is but the
equivalent of his accumulated wages. During his labour, he had
consumed the fruits of the earth, and the work produced by him is
nothing but their value.
    The economist next directs his attention to agriculture. The
labourer appears to him to be in the same condition as the
merchant and the artisan. Like the latter, he makes with the
earth an exchange of the present against the future. The crops
produced by him represent the accumulated value of his labour;
they pay his hire, to which he has the same right as the artisan
to his wages, or the merchant to his profit. But when this hire
has been deducted, there remains a net revenue, which was not be
found in manufactures and commerce; it is what the labourer pays
the proprietor for the use of his land. This revenue, Quesnay
thinks, is of a nature quite different from any other. It is not
wages; it is not the result of an exchange; it is the price of
the earth's spontaneous labour, the fruit of nature's
beneficence; and since it does not represent pre-existent wealth,
it alone must be the source of every kind of wealth. Tracing the
value of all other commodities, under all its transformations,
Quesnay still discovers its first origin in the fruits of the
earth. The labours of the husbandman, of the artisan, of the
merchant, consume those fruits in the shape of wages and produce
them under new forms. The proprietor alone receives them at their
source from the hands of nature herself, and by means of them is
enabled to pay the wages of all his countrymen, who labour only
for him.
    This ingenious system totally supplanted that of the
merchants. The economists denied the existence of that commercial
balance to which their antagonists attached so much importance;
they asserted the impossibility of that accumulation of gold and
silver which the others expected from it; throughout the nation,
they could see only proprietors of land, the sole dispensers of
the national fortune; productive workmen, or labourers producing
the revenue of the former. and a hired class, in which they
ranked merchants also denying to them, as to the artisans, the
faculty of producing any thing.
    The plans, which these two sects recommended to governments,
differed not less than their principles. While the mercantilists
wished authority to interfere in every thing, the economists
incessantly repeated laissez faire et laissez passer (let every
man do as he pleases, and every thing take its course;) for as
the public interest consists in the union of all individual
interests, individual interest will guide each man more surely to
the public interest than any government can do.
    An excessive ferment was excited in France by the system of
the economists. The government of that nation allowed the people
to talk about public affairs, but not to understand them. The
discussion, of Quesnay's theory was sufficiently unshackled; but
none of the facts or documents in the hands of the
administration, were presented to the public eye. In the system
of the French economists, it is easy to discern the effects
produced by this mixture of ingenious theory and involuntary
ignorance. It seduced the people, because they were now for the
first time occupied with their own public affairs. But, during
these discussions, a free nation, possessed of the right to
examine its own public affairs, was producing a system not less
ingenious, and much better supported by fact and observation; a
system which, after a short struggle, at length cast its
predecessors into the shade; for truth always triumphs in the
end, over dreams, however brilliant.
    Adam Smith, author of this third system, which represents
labour as the sole origin of wealth, and economy as the sole
means of accumulating it, has, in one sense, carried the science
of political economy to perfection, at a single step. Experience,
no doubt, has disclosed new truths to us; the experience of late
years, in particular, has forced us to make sad discoveries: but
in completing the system of Smith, that experience has also
confirmed it. Of the various succeeding authors, no one has
sought any other theory. Some have applied what he advanced to
the administration of different counties; others have confirmed
it by new experiments and new observations; some have expanded it
by developments, which flow from the principles laid down by him;
some have even here and there detected errors in his work; but it
has been by following out the truths which he taught and
rectifying them by light borrowed from its author. Never did
philosopher effect a more complete revolution in any science: for
those even who dissent from his doctrine acknowledge his
authority; sometimes they attack, solely because they do not
understand him; most commonly, they flatter themselves with the
belief of still following, even while they contradict him. We
shall devote the rest of this article to explain the science
which he taught us, though in an order different from his. We
shall arrange it under the six following heads: Formation and
Progress of Wealth: Territorial Wealth; Commercial Wealth; Money;
Taxes; and Population.

Chapter 2

Formation and Progress of Wealth

    Man brings into the world with him certain wants, which he
must satisfy in order to live; certain desires which lead him to
expect happiness from particular enjoyments; and a certain
industry or aptitude for labour, which enables him to satisfy the
requisitions of both. His wealth originates in this industry: his
wants and desires are its employments. All that man values is
created by his industry; all that he creates is destined to be
consumed in satisfying his wants and desires. But, between the
moment of its production by labour, and its consumption by
enjoyment, the thing destined for man's use may have an existence
more or less durable. It is this thing, this accumulated and
still unconsumed fruit of labour, which is called wealth.
    Wealth may exist not only without any sign of exchange, or
without money, but even without any possibility of exchange, or
without trade. Suppose a man to be left on a desert island; the
undisputed property of this whole island is not wealth, whatever
be the natural fertility of its soil, the abundance of the game
straying in its forests, of the fish sporting on its shores, or
the mines concealed in its bosom. On the contrary, amid all these
benefits presented him by nature, the man may sink to the lowest
degree of penury, and die perhaps of hunger. But, if his industry
enables him to catch some of the animals that wander in his
woods: and if, instead of consuming them immediately, he reserves
them for his future wants; if, in this interval, he gets them
tamed and multiplied, so that he can live on their milk, or
associate them to his labour, he is then beginning to acquire
wealth, because labour has gained him the possession of these
animals, and a fresh labour has rendered them domestic. The
measure of his wealth will not be the price, which he might
obtain for his property in exchange, because he is debarred from
all exchange, but the length of time during which no farther
labour will be requisite to satisfy his wants, compared with the
extent of those wants.
    By subduing those animals, the man has made them his property
and wealth; by subduing the ground, he will, in like manner,
convert it into property and wealth. His island is destitute of
value so long as no labour has been bestowed on it; but if,
instead of consuming its fruits the moment they come to his hand,
he reserves them for future want; if he commits them again to the
earth, again to be multiplied; if he tills his fields to augment
their productive power, or defends them by inclosures from wild
beasts; if he plants them with trees, the fruit of which he does
not look for till many years have elapsed; he is then creating
the value, not only of annual produce raised by his labour from
the ground, but also of the ground itself, which he had tamed, as
he tamed the wild beasts, and rendered fit to second his
exertions. In that case he is rich, and the more so the longer he
can suspend his labours without suffering new wants.
    Our Solitary, being now liberated from the most pressing of
all demands, that of hunger, may devote his exertions to provide
lodging and clothes, or to improve those already provided. He
will build himself a hut, and fit it out with such furniture as
his unaided labour may suffice to construct; he will change the
skin and fleeces of his sheep into shoes or coats; and the more
convenient his dwelling shall be rendered, the better his
storehouse shall be filled with provision for his future food and
clothing, the more rich may he call himself.
    The history of this man is the history of the human race:
labour alone has created all kinds of wealth. However great the
beneficence of nature, she gives nothing gratuitously to man;
though, when addressed by him, she is ready to lend her
assistance in multiplying his powers to an indefinite extent. The
history of wealth is, in all cases, comprised within the limits
now specified - the labour which creates, the economy which
accumulates, the consumption which destroys. An article which has
not been wrought, or has not mediately or immediately received
its value from labour, is not wealth, however useful, however
necessary, it may be for life. An article, which is not useful to
man, which does not satisfy any of his desires, and cannot
mediately or immediately be employed in his service, is not more
entitled to the name of wealth, whatever labour may have been
bestowed on producing it. And finally, an article which cannot be
accumulated or kept for future consumption is not wealth, though
created by labour and consumed by enjoyment.
    Before possessing any medium of exchange, before discovering
the precious metals which render it so easy to us, our Solitary
would ere long learn to distinguish the different kinds of labour
in their relation to wealth. Labour producing no enjoyment is
useless; labour, whose fruits are naturally incapable of being
stored up for future consumption, is unproductive; whilst the
only productive kinds of labour - the only kinds producing wealth
- are such as leave behind them, in the estimation even of our
Solitary, a pledge equal in value to the trouble they have cost.
Thus the man, misled by analogy, may have imagined that he could
multiply his olive-trees by planting the olives; he may not have
known but that the stones would germinate as in other such
vegetables; till, after preparing the ground by a complete and
fatiguing tillage, experience would teach him that his toil had
been useless, for no olive-tree was produced by it. On the other
hand, he may have secured his dwelling from wolves and bears; and
the labour would be useful but unproductive; for its fruits
cannot accumulate. If previously accustomed to civilized life, he
may have passed many hours in playing on a flute, saved, we shall
suppose, at his shipwreck; the labour would still be useful, and
probably regarded as his own pleasure; but it would be as
unproductive, and for a like reason, as before. He may have
bestowed on the care of his person and health much time, very
usefully employed; this will also be quite unproductive of
wealth. The Solitary will clearly perceive what difference there
is between productive labour and the labour of hours in which he
amasses nothing for the future; and, without excluding himself
from such occupations, he will call them a loss of time.
    Whatever holds of the isolated man, with regard to creating
and preserving wealth, is true also of society, - when labour,
shared among numerous individuals, is recompensed by wages, while
its fruits are distributed by exchange. For the society, as well
as for the Solitary, there may be a useless as well as an
unproductive kind of labour; and, though both of them be paid,
they still preserve their distinct character, since the first
corresponds not to the desires or wants of the labourer's
employer, and the second admits no accumulation of its fruits.
The wage paid to the workmen in either case must not mislead us;
it puts the payer of it in the workman's place. The part which we
formerly supposed to be performed by a single individual, is now
shared among two or more persons; but the result is not altered
in the least. The day-labourer who plants olives performs a task
which is useless to his employer, though, if he receives his
hire, it may be advantageous to himself. The man who defends his
master or society against bears or hostile enterprises; who takes
charge of the health or the persons of others; who provides the
enjoyment of music, or dramatic exhibition, or dancing, performs,
just like the Solitary, a work which is useful because it is
agreeable, which is lucrative to him because he receives a hire
for his labour, whilst he abandons the enjoyment of it to his
employers; but which is unproductive notwithstanding, because it
cannot be the object of saving and accumulation. He who paid the
wage, no longer has either the wage itself in his possession, or
the thing for which he gave it.
    Thus labour and economy - the true sources of wealth - exist
for the Solitary as well as for the social man, and produce the
same kind of advantage to both. The formation of society,
however, and with it the introduction of commerce and exchange,
were necessary both to augment the productive power of labour, by
dividing it, and to afford a more precise aim to economy, by
multiplying the enjoyments which wealth procures. Thus men,
combined in society, produced more than if each had laboured
separately; and they preserve better what they have produced,
because they feel the value of it better.
    Exchange first arose from superabundance: "Give me that
article, which is of no service to you, and would be useful to
me,,, said one of the contacting parties, "and I will give you
this in return, which is of no service to me, and would be useful
to you." Present utility was not, however, the sole measure of
things exchanged. Each estimated for himself the selling price,
or the trouble and time bestowed in the production of his own
commodity, and compared it with the buying price, or the trouble
and time necessary for procuring the required commodity by his
own efforts; and no exchange could take place till the two
contacting parties, on calculating the matter, had each
discovered that it was better thus to procure the commodity
wanted than to make it for himself. This accidental advantage
soon pointed out to both a constant source of advantage in
trading, whenever the one offered an article which he excelled in
making, for an article which the other excelled in making; for
each excelled in what he made often, each was unskillful and slow
at what he made but seldom. Now, the more exclusively they
devoted themselves to one kind of work, the more dexterity did
they acquire in it, the more effectually did they succeed in
rendering it easy and expeditious. This observation produced the
division of trades; the husbandman quickly perceived, that he
could not make as many agricultural tools by himself, in a month,
as the blacksmith would make for him in a day.
    The same principle which at first separated the trades of the
husbandman, shepherd, smith, and weaver, continued to separate
those trades into an indefinite number of departments. Each felt
that, by simplifying the operation committed to him, he would
perform it in a manner still more speedy and perfect. The weaver
renounced the business of spinning and dyeing; the spinning of
hemp, cotton, wool, and silk, became each separate employment;
weavers were still farther subdivided, according to the fabric
and the destination of their stuffs; and at every subdivision,
each workman, directing his attention to a single object,
experienced an increase in his productive powers. In the interior
of each manufactory, this division was again repeated, and still
with the same success. Twenty workmen all laboured at the same
thing, but each made it undergo a different operation: and the
twenty workmen found that they had accomplished twenty times as
much work as when each had laboured separately.
    Much more work was executed in the world by the division of
labour; but, at the same time, much more was required to supply
the consumption. The wants and the enjoyments of the Solitary,
who laboured for himself, were both very limited. Food, clothing,
and lodging, he indeed required; but he did not so much as think
of the delicacies, by which the satisfaction of those wants might
be converted into pleasure; and still less of the artificial
desires, induced by society, which in their gratification become
new sources of enjoyment. The Solitary's aim was merely to amass,
that he might afterwards repose. Before him at no great distance,
was a point in the accumulation of wealth, beyond which it would
have been foolishness to accumulate more, because his consumption
could not be increased proportionably. But the wants of the
social man were infinite, because the society's labour offered
him enjoyment infinitely varied. Whatever wealth he might amass,
he could never have occasion to say it is enough; he still found
means to convert it into pleasure, and to imagine at least that
he applied it to his service.
    Trade, the generic name given to the total mass of
exchangers, complicated the relation required to subsist between
production and consumption; yet far from diminishing, it
increased its importance. At first, every one procured what he
himself intended to consume; but when each had come to work for
all, the production of all must be consumed by all; and each, in
what he produced, must have an eye to the final demand of the
society, for which he destined the fruit of his labour. This
demand, though not well ascertained by him, was limited in
quantity. for, in order to continue his expenditure, every one
must confine it by certain restrictions, and the sum of those
private expenditures constituted that of the society. The
distinction between capital and income, which in the Solitary's
case was still confused, became essential in society. The social
man was under the necessity of adjusting his consumption to his
income, and the society, of which he formed part, were compelled
to observe the same rule; without incurring ruin, they could not
annually consume more than their annual income, leaving their
capital untouched. All that they produced, however, was destined
for consumption; and if their annual products, when carried to
the destined market, found no purchaser, reproduction was
arrested, and the nation ruined as before. We shall attempt to
explain this double relation, at once so essential and so
delicate, by showing, on the one hand, how income springs from
capital; on the other, how what is income for one may be capital
for a second.
    To the Solitary, every kind of wealth was a provision made
beforehand against the moment of necessity; yet still in this
provision he distinguished two things - the part which it suited
his economy to keep in reserve for immediate, or nearly immediate
use, and the part which he would not need before the time when he
might obtain it by a new production. One portion of his corn was
to support him till the next harvest; another portion, set apart
for seed, was to bring forth its fruit the following year.
    The formation of society, the introduction of exchange,
allowed him almost indefinitely to multiply this seed, - this
fruit-bearing portion of accumulated wealth. It is what we name
capital.
    The ground and his animals were all that man could force to
work in concert with him; but, in society, the rich man could
force the poor to work in concert with him. After having set
apart what corn was necessary till the next harvest, it suited
him to employ the remaining surplus of corn in feeding other men,
that they might cultivate the ground and make fresh corn for him:
that they might spin and weave his hemps and wools; that, in a
word, they might take out of his hands the commodity ready for
being consumed, and at the expiration of a certain period, return
him another commodity, of a greater value, likewise destined for
consumption. Wages were the price at which the rich man obtained
the poor man's labour in exchange. The division of labour had
produced the distinction of ranks. The person who had limited his
efforts to perform only one very simple operation in a
manufacture, had made himself dependent on whoever chose to
employ him. He no longer produced a complete work, but merely the
part of a work; in which he required not only the cooperation of
other workmen, but also raw materials, proper implements, and a
trader to undertake the exchange of the article which he had
contributed to finish. Whenever he bargained with a
master-workman for the exchange of labour against subsistence,
the condition he stood in was always disadvantageous, since his
need of subsistence and his inability to procure it of himself,
were far greater than the master's need of labour; and therefore
he almost constantly narrowed his demand to bare necessaries,
without which the stipulated labour could not have proceeded;
whilst the master alone profited from the increase of productive
power brought about by the division of labour.
    The master, who hired workmen, was situated, in all points,
exactly as the husbandman who sows the ground. The wages paid to
his workmen were a kind of seed which he entrusted to them, and
expected in a given time to bring forth fruit. Like the
husbandman, he did not sow all his productive wealth; a part of
it had been devoted to such buildings, or machines, or
implements, as make labour more easy and productive; just in the
way that a part of the husbandman's wealth was devoted to
permanent works, destined to render the ground more fertile. It
is thus that we see the different kinds of wealth springing up
and separating, whilst each exerts a different influence on its
own reproduction. The funds of consumption, such as domestic
necessaries, do not any longer produce fruit, after each has
secured them for his own use; fixed capital, such as improvement
of the soil, canals of irrigation, and machinery, during the
progress of its own slow consumption, co-operates with labour of
which it augments the products; and, lastly, circulating capital,
such as seed, wages, and raw materials, destined to be wrought,
is consumed annually, or even more rapidly, in order to be again
re-produced. It is essentially important to remark, that those
three kinds of wealth are all equally advancing towards
consumption. But the first when consumed is absolutely destroyed;
for societies, as for individuals, it is merely an expense:
whereas the second and third, after being consumed, are
re-produced under a new form; and for societies, as for
individuals, the consumption of them is a putting out to profit,
or the circulation of capitals.
    We shall better understand this movement of wealth, which,
perhaps, it is difficult to follow, by fixing our observation on
a single family engaged in the simplest of all speculations. A
solitary farmer has reaped a hundred bags of corn, and is
destitute of any market to which he can carry it. At all events,
this corn must be consumed within the year, otherwise it will be
worth nothing to the farmer. But he and his family may require
only thirty bags of it; this is his expense: another thirty may
be employed to support workmen engaged in felling the forests, or
draining the marshes of the neighbourhood, to put them under
culture; this will be converting thirty bags into fixed capital:
and, finally, the remaining forty bags may be sown, and formed
into a circulating capital, in place of the twenty bags sown the
preceding year. The hundred are thus consumed; but seventy of
them are put out to profit, they will reappear partly at the next
harvest, partly at those which follow. By this means, in
consuming he will have saved. Yet the limits of such an operation
are easily discerned. If, this year, out of the hundred bags
which he reaped, he could get no more than sixty eaten, who will
eat the two hundred bags produced next year by the augmentation
of his seed?*
    Resuming these three sorts of wealth, which, as we have seen,
become distinct in a private family, let us now consider each
sort with regard to the whole nation, and see how the national
revenue may arise from this division.
    As the farmer required a primitive quantity of labour to be
expended in cutting down the forests, and draining the marshes
which he meant to cultivate; so, for every kind of enterprise,
there is required a primitive quantity of labour to facilitate
and augment the circulating capital. The ore cannot be obtained
till the mine is opened; canals must be dug, machinery and mills
must be constructed, before they can be used; manufactories must
be built, and looms set up, before the wool, the hemp, or the
silk can be weaved. This first advance is always accomplished by
labour; this labour is always represented by wages; and these
wages are always exchanged for necessaries of life, which the
workmen consume in executing their task. Hence what we have
called fixed capital, is a part of the annual consumption,
transformed into durable establishments, calculated to increase
the productive power of future labour. Such establishments
themselves grow old, decay, and are slowly consumed in their
turn, after having long contributed to augment the annual
production.
    As the farmer required seed, which, after being committed to
the earth, was returned fivefold in harvest; so likewise, every
undertaker of useful labour requires raw materials to work upon,
and wages for his workmen, equivalent to the necessaries of life
consumed by them in their labour. His operations thus begin with
a consumption; and this is followed by a reproduction which
should be more abundant, since it must be equivalent to the raw
materials worked upon, so the necessaries of life consumed by his
workmen in their labour, to the sum by which his machinery and
all his fixed capitals have been deteriorated during the
production, and lastly to the profit of all concerned in the
labour, who have supported its fatigues solely in the hope of
gaining by it. The farmer sowed twenty bags of corn to reap a
hundred; the manufacturer will make a calculation nearly similar.
And as the farmer at harvest must recover not only a compensation
for his seed, but likewise for all his labours, so the
manufacturer must find in his production, not the raw materials
only, but all the wages of his workmen, all the interests and
profits of his fixed capital, with all the interests and profits
of his circulating capital.
    In the last place, the farmer may augment his seed every
year; but he will not fail to recollect that, since his crops
increase in the same necessaries, he is not sure of always
finding men to eat them. The manufacturer, in like manner,
devoting the savings of each year to increase his re-production,
must recollect the necessity of finding purchasers and consumers
for the increasing products of his establishment.
    Since the fund destined for consumption no longer produces
any thing, and since each man strives incessantly to preserve and
augment his fortune, each will also restrict his consumable fund,
and instead of accumulating in his house a quantity of
necessaries greatly superior to what he can consume, he will
augment his fixed or circulating capital, by all that he does not
expend. In the present condition of society, a part of the fund
destined for consumption remains in the retail-dealer's hand,
awaiting the buyer's confidence; another part destined to be
consumed very slowly, as houses, furniture, carriages, horses,
continues in the hands of persons whose business it is to sell
the use of it, without abandoning the property. A considerable
portion of the wealth of opulent nations is constantly thrown
back into the fields destined for consumption; but although it
still gives profit to its holders, it has ceased to augment the
national re-production.
    The annual distribution of the wealth, annually reproduced,
among all the citizens composing the nation, constitutes the
national revenue. It consists of all the value, by which the
re-production surpasses the consumption that produced it. Thus
the farmer, after deducting from his crop a quantity equal to the
seed of the foregoing year, finds remaining the part which is to
support his family, - a revenue to which they have acquired right
by means of their annual labour; the part which is to support his
workmen, who have acquired the right to it by the same title; the
part with which he is to satisfy the landlord, who has acquired
right to this revenue by the original improvement of the soil,
now no longer repeated; and lastly, the part with which he is to
pay the interest of his debts, or indemnify himself for the
employment of his own capital -  a revenue to which he has
acquired right by the primitive labours which produced his
capital.
    So likewise, the manufacturer finds, in the annual produce of
his manufactory, first the raw material employed; secondly, the
equivalent of his own wages, and those of his workmen, to which
their labour alone gives them right; thirdly, an equivalent for
the annual detriment and interest of his fixed capital, to which
revenue he or the proprietor has acquired right by a primitive
labour; and lastly, an equivalent for the interest of his
circulating capital, which has been produced by another primitive
labour.
    It is to be observed that, among those who share the national
revenue, some acquire a new right in it every year by a new
labour, others have previously acquired a permanent right by a
primitive labour, which has rendered the annual labour more
advantageous. No one obtains a share of the national revenue,
except in virtue of what he himself or his representatives have
accomplished to produce it; unless, as we shall soon see, he
receives it at second hand, from its primitive proprietors, by
way of compensation for services done to them. Now, whoever
consumes without fulfilling the condition which alone gives him
right to the revenue; whoever consumes without having a revenue,
or beyond what he has; whoever consumes his capital in place of
revenue, is advancing to ruin; and a nation composed of such
consumers is advancing to ruin likewise. Revenue, indeed, is that
quantity by which the national wealth is increased every year,
and which accordingly may be destroyed, without the nation's
becoming poorer; but the nation which, without re-production,
destroys a quantity of wealth, superior in this annual increase,
destroys the very means by which it would have acquired an equal
re-production in subsequent years.
    By a circular concatenation, in which every effect becomes a
cause in its turn, production gives revenue, revenue furnishes
and regulates a consumable fund, which fund again causes
production and measures it. The national wealth continues to
augment, and the state to prosper, so long as these three
quantities, which are proportional to each other, continue to
augment in a gradual manner, but whenever the proportion among
them is broken, the state decays. A derangement of the mutual
proportion subsisting among production, revenue, and consumption,
becomes equally prejudicial to the nation, whether the production
give a revenue smaller than usual, in which case a part of the
capital must pass to the fund of consumption; or whether, on the
contrary, this consumption diminish, and no longer call for a
fresh production. To cause distress in the state, it is enough
that the equilibrium be broken. Production may diminish when
habits of idleness gain footing among the labouring classes;
capital may diminish when prodigality and luxury become
fashionable; and lastly, consumption may diminish from causes of
poverty, unconnected with the diminution of labour, and yet, as
it will not offer employment for future re-production, it must
diminish labour in its turn.
    Thus nations incur dangers that seem incompatible: they fall
into ruin equally by spending too much, and by spending too
little. A nation spends too much whenever it exceeds its revenue,
because it cannot do so except by encroaching on its capital, and
thus diminishing future production; it then does what the
solitary cultivator would do if he should eat the corn which
ought to be secured for seed. A nation spends too little,
whenever, being destitute of foreign commerce, it does not
consume its own production; or when, enjoying foreign commerce,
it does not consume the excess of its production above its
exportation; for, if so, it soon comes into the condition of the
solitary cultivator, who having filled all his granaries far
beyond the probability of consumption, would be obliged, that he
might not work in vain, partly to abandon his cultivation of the
ground.
    The nation does not indeed spend all that it consumes; the
name expenditure, in such a case, can properly be given to that
consumption only which produces nothing; while that part of the
consumption which represents the wages of productive workmen, is
an employment of funds, not an expenditure. Thus, the nation,
when it forms manufacturing establishments, does not diminish its
consumption; it consumes, in a productive manner, what it
formerly consumed unproductively. Still, however, this employment
of the national produce in giving movement to new labour, though
it does not destroy the balance between production and
consumption, renders it much more complex. The new produce thus
obtained must, at last, find a consumer; and though it may be
generally affirmed, that to increase the labour is to increase
the wealth, and with it in a similar proportion the revenue and
the consumption; still it is any thing but proved, that by too
rapid an increase of its labour a nation may not altogether
deviate from the proper rate of consumption, and thus ruin itself
by economy as well as prodigality. Happily, in most cases, the
increase of capital, of revenue and of consumption, requires no
superintendence; they proceed, of their own accord, with an equal
pace; and when one of them, at any time, happens to pass the
others for an instant, foreign commerce is almost always ready to
restore the equilibrium.
    We have designedly carried on our history of the formation
and progress of wealth thus far, without mentioning a circulating
medium, to show, that, in fact, such an instrument is not
necessary for its development. A circulating medium did not
create wealth; but it simplified all the relations, and
facilitated all the transactions of commerce; it gave to each the
means of finding sooner what suited him best; and thus presenting
an advantage to every one, it still further increased the wealth,
which was already increasing without it.
    The precious metals are one of the numerous values produced
by the labour of man, and applicable to his use. It was soon
discovered that they, more than any other species of riches,
possessed the property of being preserved without alteration for
any length of time, and the no less valuable one of uniting
easily into a single whole, after being divided almost
infinitely. The two halves of a piece of cloth, of a fleece, and
still less of an ox, - though these are supposed to have once
been employed as money, -  were not worth the whole; but the two
halves, the four quarters of a pound of gold are always, and will
be, a pound of gold, however long they may be kept. As the first
exchange of which men feel the need, is that which enables them
to preserve the fruit of their labour for a future season, every
one became eager to get precious metals in exchange for his
commodity, whatever it might be; not because he at all intended
to use those metals himself; but because he was sure of being
able to exchange them at any time afterwards, in the same manner,
and for the same reason, against whatever article he might then
need. From that time the precious metals began to he sought
after, not that they might be employed in the use of man, as
ornaments or utensils, but that they might be accumulated, at
first, as representing every species of wealth, and then that
they might be used in commerce, as the means of facilitating all
kinds of exchange.
    Gold dust, in its primitive state, continues, even now, to be
the medium of exchange among the African nations. But when once
the value of gold comes to be universally admitted, there remains
but a single step, much easier and far less important, till it be
converted into coin, which warrants, by a legal stamp, the weight
and the fineness of every particle of the precious metals
employed in circulation.
    The invention of money gave quite a new activity to exchange.
Whoever happened to possess any superfluity had no longer
occasion to seek the article likely to be needed in time to come.
He no longer delayed selling his corn till he should meet the
oil-merchant or the wool-dealer to offer them the thing they
wanted; he reckoned it enough to find money, being certain that
for this he could always obtain any required commodity. The
buyer, too, on his side, needed not to study what would suit the
seller: money was always sure to satisfy all his demands. Before
the invention of a circulating medium, a fortunate concurrence of
conveniences was requisite for an exchange: whereas after this
invention, there could scarcely be a buyer that did not find a
seller, or a seller who did not find a buyer.
    As exchanges, and afterwards sales and purchases, were
voluntary, it might be inferred that all values were given for
values completely equal. It is more correct, however, to say,
that bargains were never made without advantages to both parties.
The seller found a profit in selling, the buyer in buying. The
one drew more advantages from the money which he received, than
he would have done from his merchandise; the other more advantage
from the merchandise which he acquired, than he would have done
from his money. Both parties had gained, and hence the nation
gained doubly by their bargain. On the same principle when a
master set any workman to labour, and gave him in exchange for
the work expected to be done, a wage which corresponded to the
workman's maintenance during his labour; - both these contractors
gained; the workman because he had received in advance the fruit
of his labour before it was accomplished; - the master, because
this workman's labour was worth more than his wages. The nation
gained with both; for as the national wealth must, at the long
run, be realized in enjoyment, Whatever augments the enjoyment of
individuals, must be considered as a gain for all.
    Thus the labour of man created wealth; but wealth, in its
turn, created the labour of man. Wherever wealth offered a
profit, a wage, a subsistence, it produced a class of men, eager
to acquire them. The accumulation of primary labour had created
the value of land, by unfolding its productive power. This power,
as it seconded the labour, of man, henceforth became a species of
wealth; and a person possessed of land might, without himself
labouring, obtain payment for surrendering the use of it to such
as laboured. Hence the origin of sales and leases of land. The
farmer again might hire workmen to labour, and thus might acquire
the advantages attached to exchanging present subsistence against
distant produce. He incurred all the charges of cultivation, he
drew all its profits, and left to his workmen nothing but their
wages. Thus the revenues of land, all comprised in the annual
crop, were divided among three classes of men, under the name of
rent, profit, and wages; whilst a surplus included the seed and
the farmer's advance.
    The manufacturer again possessed machinery and materials: he
offered to his labourers an immediate subsistence for the fruit
of a labour which required time and long advances. He enabled
them to live, he furnished them with lodging, tools, machinery,
and paid himself with interest by their work. If, in his own
hand, he had not enough of accumulated wealth, or enough of the
money which represents it, to provide his workmen with all the
advances which their enterprise required, and to wait for the
sale of their labour, he borrowed money, and paid the lender an
interest, analogous to the rent which a farmer pays his landlord.
The labour of the workmen employed by him annually produced a
certain quantity of goods, in the value of which were to be
included the interest of capital for the money-lender, the rent
of implements, machines, immovables, and all kinds of fixed
capital; the profits of the head manufacturer, the wages of his
workmen, and, lastly, the capital expended in raw materials,
together with the whole of that capital which, as it circulates
annually in the manufactory, must be deducted from its annual
produce, in order to leave the net revenue.
    The produce of the soil and of manufactories belonged often
to climates very distant from those inhabited by their consumers.
A class of men undertook to facilitate all kinds of exchange, on
condition of sharing in the profits which it yields. These men
gave money to the producer, at the time when his work was
finished and ready for sale; after which having transported the
merchandise to the place where it was wanted, they waited the
consumer's convenience, and retailed to him in parcels what he
could not purchase all at once. They did service to every one,
and repaid themselves for it by the share which is named profits
of trade. The advantage arising from a judicious management of
exchanges was the origin of those profits. In the north, a
producer reckoned two measures of his merchandize equivalent to
one of southern merchandize. In the south, on the other hand, a
producer reckoned two measures of his merchandize equivalent to
one of northern merchandize. Between two equations so different
there was room to cover all the expenses of transport, all the
profits of trade, and interest for all the money advanced to
carry it on. In fact, at the sale of such commodities transported
by commerce, there must be realized, first the capital repaid to
the manufacturer; then the wages of the sailors, carriers,
clerks, and all persons employed by the trader; next the interest
of all those funds to which he gives movement; and lastly, the
mercantile profit.
    Society requires something more than wealth; it would not be
complete if it contained nothing but productive labourers. It
requires administrators, judges, lawgivers; men employed about
its general interests; soldiers and sailors to defend it. No one
of those classes produces any thing; their labour never assumes a
material shape; it is not susceptible of accumulation. Yet
without their assistance all the wealth arising from productive
labour would be destroyed by violence; and work would cease, if
the labourer could not calculate on peaceably enjoying its
fruits. To support this guardian population, a part must be
deducted from the funds created annually by labour. But as the
service done to the community, by such persons, how important
soever it be, is felt by no one in particular; it cannot, like
other services, be an object of exchange. The community itself
was under the necessity of paying it by a forced contribution
from the revenues of all. It was not long, indeed, till this
contribution came to be regulated by the persons destined to
profit from it; and hence the contributors were loaded without
measure; civil and military offices were multiplied far beyond
what the public weal required; there was too much government, too
much defence of men, who were forced to accept those services,
and to pay them, superfluous or even burdensome as they might be;
and the rulers of nations, established to protect wealth, were
often the main authors of its dilapidation.
    Society needs that kind of labour which produces mental
enjoyments; and as mental enjoyments are, nearly all, immaterial,
the objects destined to satisfy them cannot be accumulated.
Religion, science, the arts, yield happiness to man; their origin
is labour, their end enjoyment; but what belongs only to the soul
is not capable of being treasured up. If a nation, however, does
not reckon literature and the arts among its wealth, it may
reckon literary men and artists; the education they receive, the
distinction they acquire, accumulate a high value on their heads;
and the labour which they execute being often better paid than
that of the most skilled workmen, may thus contribute to the
spread of opulence.
    Society, in the last place, needs those kinds of labour, the
object of which is to take care of the persons, not the fortunes
of men. Such labour may be of the most elevated, or of the most
servile kind: according as it requires either the knowledge of
nature and the command of her secrets, like the physician's
labour, or merely complaisance and obedience to the will of a
master, like the footman's labour. All of them are species of
labour intended for enjoyment, and differing from productive
labour, only in so far as their effects are incapable of
accumulation. Hence, though they add to the well-being of a
state, they do not add to its wealth; and such as are employed in
them must live on voluntary contributions drawn from the revenue
formed by other kinds of labour.

Chapter 3

Of Territorial Wealth


    The riches proceeding from land should be the first to engage
the attention of an economist or a legislator. They are the most
necessary of all, because it is from the ground that our
subsistence is derived; because they furnish the materials for
every other kind of labour; and lastly, because, in preparation,
they constantly employ the half, often much more than the half,
of all the nation. The class of people who cultivate the ground
are particularly valuable for bodily qualities fitted to make
excellent soldiers, and for mental qualities fitted to make good
citizens. The happiness of a rural population is also more easily
provided for than that of a city population; the progress of this
kind of wealth is more easily followed; and government is more
culpable when it allows agriculture to decay, because it almost
always lies in the power of government to make it flourish.
    The annual revenue of land, or the annual crop, is
decomposed, as we observed above, in the following manner. One
part of the fruits, produced by labour, is destined to pay the
proprietor for the assistance which the earth has given to the
labour of men, and also for the interest of all the capital
successively employed to improve the soil. This portion alone is
called the net revenue. Another part of the fruits replaces what
has been consumed in executing the labour to which the crop is
due, the seed, and all the cultivator's advances. Economists call
this portion the resumption. Another part remains for a profit to
the person who directed the labours of the ground: it is
proportionate to his industry and the capital advanced by him.
Government likewise takes a share of all those fruits, and by
various imposts diminishes the proprietor's rent, the
cultivator's profit, and the day-labourer's wages, in order to
form a revenue for another class of persons. Nor do the fruits
distributed among the workmen, the superintendent of the labour,
and the proprietor, entirely remain with them in kind: after
having kept a portion requisite for their subsistence, the whole
then equally part with what remains, in exchange for objects
produced by the industry of towns; and it is by means of this
exchange, that all other classes of the nation are supplied with
food.
    The net revenue of territorial produce is considered to be
that portion which remains with proprietors after the expenses of
cultivation have been paid. Proprietors frequently imagine that a
system of cultivation is the better, the higher those rents are:
what concerns the nation, however, what should engage the
economist's undivided attention, is the gross produce, or the
total amount of the crop; by which subsistence is provided for
the whole nation, and the comfort of all classes is secured. The
former comprehends but the revenue of the rich and idle; the
latter farther comprehends the revenue of all such as labour, or
cause their capital to labour.
    But a gradual increase of the gross produce may itself be the
consequence of a state of suffering, - if the population, growing
too numerous, can no longer find a sufficient recompense in the
wages of labour, and if, struggling without protection against
the proprietors of land, to whom limitation of number gives all
the advantage of a monopoly, that population is reduced to
purchase, by excessive labour, so small an augmentation of
produce, as to leave it constantly depressed by want, There is no
department of political economy which ought not to be judged in
its relation to the happiness of the people in general; and a
system of social order is always bad when the greater part of the
population suffers under it.
    Commercial wealth is augmented and distributed by exchange;
and even the produce of the ground, so soon as it is gathered in,
belongs likewise to commerce. Territorial wealth, on the other
hand, is created by means of permanent contacts. With regard to
it, the economist's attention should first be directed to the
progress of cultivation: next to the mode in which the produce of
the harvest is distributed among those who contribute to its
growth; and lastly, to the nature of those rights which belong to
the proprietors of land, and to the effects resulting from an
alienation of their property.
    The progress of social order, the additional security, the
protection which government holds out to the rights of all,
together with the increase of population, induce the cultivator
to entrust to the ground, for a longer or shorter period, the
labour which constitutes his wealth. In the timorous condition of
barbarianism, he will not, at his own expense, increase the value
of an immovable possession, which perhaps he may be forced to
abandon at a moment's warning. But in the security of complete
civilization, he regards his immovable possessions as more
completely safe than any other kind of wealth. In the deserts of
Arabia and Tartary; in the savannahs of America, before
civilization has begun; in the pastures of the Campagna di Roma,
or the Capitanata de la Pouille, after it has ended, men are
contented with the natural fruits of the ground, with grass for
their cattle to browse; and if those vast deserts yet retain any
value, they owe it less to the slight labour by which the
proprietor has inclosed them, than to the labour by which the
herdsman has multiplied the oxen and sheep which feed upon them.
    When the population of such deserts has begun to increase,
and an agricultural life to succeed that of shepherds, men still
abstain from committing to the ground any labour whose fruit they
cannot gather till after many years have elapsed. The husbandman
tills, to reap in the following season; the course of a
twelvemonth is sufficient to give back all his advances. The
earth which he has sown, far from gaining a durable value by his
labour, is, for a time, impoverished by the fruits it has born.
Instead of seeking to improve it by more judicious cultivation,
he gives it back to the desert for repose, and next year tills
another portion. The custom of fallowing, a remnant of this half
savage mode of agriculture, continues to our own time, in more
than three-fourths of Europe.
    But when population and wealth have at last increased so as
to make every kind of labour easy, and when social order inspires
security enough to induce the husbandman to fix his labour in the
ground, and transmit it with the soil to his descendants,
improvement altogether changes the appearance of the earth. Then
are formed those plantations of gardens, orchards, vineyards, the
enjoyment of which is destined for a late posterity; then are dug
those canals for draining or irrigation, which diffuse fertility;
then arise upon the hills those hanging terraces, which
characterized the agriculture of ancient Canaan. A quick rotation
of crops of a different nature reanimates, instead of exhausting,
the strength of the soil; and a numerous population lives on a
space, which, according to the primitive system, would hardly
have supported a few scores of sheep.
    The trade or the manufactures of a country, are not to be
called prosperous, because a small number of merchants have
amassed immense fortunes in it. On the contrary, their
extraordinary profits almost always testify against the general
prosperity of the country. So likewise, in counties abandoned to
pasturage, the profits realized by some rich proprietors ought
not to be regarded as indicating a judicious system of
agriculture. Some individuals, it is true, grow rich; but the
nation, which the land should maintain, or the food which should
support it, are no where to be found. It is not even certain that
the net produce of the land may not diminish, in proportion as
its agriculture yields a more abundant produce, and a greater
number of citizens live on its fruits; just as we see the net
produce of money, or its interest, diminish in proportion as a
country becomes more commercial, and contains more capital.
    The first proprietors of land were doubtless themselves
cultivators, and executed all kinds of field labour, with their
children and servants. To these, in ancient times, were added
slaves; the continual state of war, which exists among
semi-barbarous societies, having introduced slavery at the
remotest era. The stronger found it more convenient to procure
workmen by the abuse of victory than by bargain. Yet so long as
the head of each family laboured along with his children and
slaves, the condition of the latter was less wretched; the master
felt himself to be of the same nature with his servant; he
experienced the same wants and the same fatigue; he desired the
same pleasures, and knew, by experience, that he would obtain
little work from a man whom he fed badly. Such was the
patriarchal mode of cultivation, that of the golden days of Italy
and Greece; such is that of free America; such appears to be that
of Africa, in its interior; and such, finally, but without
slavery, and therefore with still more domestic comfort, is that
of Switzerland, where the peasant proprietor is happier than in
any other country of the world.
    Among the states of antiquity, the farms under cultivation
were small; and the number of freemen labouring in the fields,
always greatly surpassed that of slaves. The former had a full
enjoyment of their persons and the fruits of their labour; the
latter, degraded rather than unhappy, like the ox, man's
companion, which interest teaches him to spare, seldom
experienced suffering, want still more rarely. The head of each
family alone receiving the total crop, did not distinguish the
rent from the profit or the wages; with the excess of what he
wanted for food, he procured the produce of the town in exchange,
and this excess supported all other classes of the nation.
    But the progress of wealth, of luxury, and idleness, in all
the states of antiquity, substituted the servile for the
patriarchal mode of cultivation. The population lost much in
happiness and number by this change; the earth gained little in
productiveness. The Roman proprietors extending their patrimonies
by the confiscated territories of vanquished states; the Greeks
by wealth acquired from trade,first abandoned manual labour, and
soon afterwards, despised it. Fixing their residence in towns,
they entrusted the management of their estates to stewards and
inspectors of slaves; and from that period, the condition of most
part of the country population became intolerable. Labour, which
once been a point of communion betwixt the two ranks of society,
now became a barrier of separation; contempt and severity
succeeded to affectionate care; punishments were multiplied as
they came to be inflicted by inferiors, and as the death of one
or several slaves did not lessen the steward's wealth. Slaves who
were ill-fed, ill-teated, ill-recompensed, could not fail to lose
all interest in their master's affairs, and almost all
understanding. Far from attending to their business with
affection, they felt a secret joy every time they saw their
oppressors' wealth diminished, or his hopes deceived. The study
of science, accompanied with habits of observation, certainly
advanced the theory of agriculture: but its practice, at the same
time, rapidly declined; a fact, which all the agricultural
writers of antiquity lament. The cultivation of land was entirely
divested of all that intelligence, affection, and zeal, which had
once hastened its success. The revenues were smaller, the
expenses greater; and from that period, it became an object to
save labour, more than to augment its produce. Slaves, after
having driven every free cultivator from the fields, were
themselves rapidly decreasing in number. During the decline of
the Roman empire, the population of Italy was not less reduced
than that of the Agro Romano is in our days; while, at the same
time, it had sunk into the that degree of wretchedness and
penury. The cultivation of the colonies situated on the Mexican
Gulf was founded, in like manner, on the baneful system of
slavery. it has, in like manner, consumed the population, debased
the human species, and deteriorated the system of agriculture.
The negro trade has of course filled up those voids, which the
barbarity of planters annually produced in the agricultural
population; and doubtless, under a system of culture, such that
the man who labours is constantly reduced below the necessaries
of life, and the man who does not labour keeps all for himself,
the net produce has always been considerable; but the gross
produce, with which alone the nation is concerned, has uniformly
been inferior to what would have arisen from any other system of
cultivation, whilst the condition of more than seven-eighths of
the population has continued to be miserable.
    The invasions of the Roman empire, by the barbarians,
introduced new manners, and, with them, new systems of
cultivation. The conqueror, who had now become proprietor, being
much less allured by the enjoyments of luxury, had need of men
still more than of wealth. He had ceased to dwell in towns, he
had established himself in the country; and his castle formed a
little principality, which he wished to be able to defend by his
own strength, and thus he felt the necessity of acquiring the
affection of such as depended on him. A relaxation of the social
bond, and the independence of great proprietors, produced the
same effects without the limits of the ancient Roman empire as
within. From the epoch of its downfall, masters in every part of
Europe began to improve the condition of their dependents; and
this return to humanity produced the natural effect; it rapidly
increased the population, the wealth, and the happiness of rural
labourers.
    Different expedients were resorted to for giving slaves and
cultivators an interest in life, a property, and an affection for
the place of their nativity, as well as for its lord. Adopted by
various states, these expedients produced the most decisive
influence on territorial wealth and population. In Italy, and
part of France and Spain, and probably in most part of the former
Roman empire, the master shared the land among his vassals, and
agreed with them to share the crops in a raw state. This is
cultivation for half produce. In Hungary, Poland, Bohemia, and
all that portion of Germany occupied by Slavonic tribes, the
master much more rarely enfranchised his slaves. Keeping them
always under an absolute dependence, as serfs attached to the
soil, he gave them, however, one half of his land, reserving the
other to himself. He wished to share, not the fruits of their
labour, but their labour itself, and therefore he obliged them to
work for him two, three, and in Transylvania, four days of each
week. This is cultivation by corvees. In Russia, and several
provinces of France and England, masters likewise distributed
their lands among vassals; but, instead of wishing to participate
either in the lands or the harvests, they imposed a fixed
capitation. Such was the abundance of uncultivated land always
ready to be cleared, that, in the eyes of those proprietors, the
only difference in the condition of agricultural families was the
number of workmen included in them. To capitation was always
joined the obligation of personal service, and the vassal's
continuance in a servile state. Yet, according as the laws
watched more or less strictly over the subject's liberty,
cultivation upon this principle raised the husbandman to a
condition more or less comfortable. In Russia, he never escaped
from servitude of the soil; in England, by an easy transition, he
arrived at the rank of farmer.
    The system of cultivation by metayers, or cultivation at half
produce, is perhaps one of the best inventions of the middle
ages. It contributes, more than any thing else, to diffuse
happiness among the lower classes, to raise land to a high state
of culture, and accumulate a great quantity of wealth upon it. It
is the most natural, the easiest, and most advantageous step for
exalting the slave to the condition of a freeman, for opening his
understanding, teaching him economy and temperance, and placing
in his hands a property which he will not abuse. According to
this system, the peasant is supposed to have no capital, or
scarcely any, but he receives the land sown and fully stocked; he
takes the charge of continuing every operation, of keeping his
farm in the same state of culture, of delivering to his master
the half of each crop; and, when the lease expires, of returning
the land under seed, the folds furnished, the vines propped, and
every thing, in short, in the same state of completeness as it
was when he received it.
    A metayer finds himself delivered from all those cares which,
in other counties, weigh heavily on the lower class of the
people. He pays no direct tax, his master alone is charged with
it; he pays no money-rent, and therefore he is not called to sell
or to buy, except for his own domestic purposes. The term, at
which the farmer has to pay his taxes or his rent, does not press
the metayer; or constrain him to sell before the season, at a low
price, the crop which rewards his industry. He needs but little
capital, because he is not a dealer in produce; the fundamental
advances have been made once for all by his master; and as to the
daily labour, he performs it himself with his family; for
cultivation upon this principle brings constantly along with it a
great division of the land, or what is called cultivation on the
small scale.
    Under this system, the peasant has an interest in the
property, as if it were his own; without the anxieties of wealth,
he finds in his farm every enjoyment, with which nature's
liberality rewards the labour of man. His industry, his economy,
the development of his understanding, regularly increase his
little stock. In good years, he enjoys a kind of opulence; he is
not entirely excluded from the feast of nature which he prepares;
his labour is directed according to the dictates of his own
prudence, and the plants that his children may gather the fruit.
The high state of culture to be found in the finest parts of
Italy, above all of Tuscany, where the lands are generally
managed in this way. the accumulation of an immense capital upon
the soil: the invention of many judicious rotations, and
industrious processes, which an intelligent, observing spirit
alone could have deduced from the operations of nature; the
collection of a numerous population, upon a space very limited
and naturally barren, shows plainly enough that this mode of
cultivation is as profitable to the land itself as to the
peasant, and that, if it imparts most happiness to the lower
class who live by the labour of their hands, it also draws from
the ground the most abundant produce, and scatters it with most
profusion among men.
    But whenever a country arrives at complete civilization,
whenever the property and safety of individuals are sufficiently
protected, the usual population increases beyond what husbandry
can employ; the extent of land is limited, the population is not
so. A great number of families are brought up on one farm, and
sent away by some accidental cause; penury compels them to offer
their services to some proprietor, for a recompence smaller than
what is given to such as are actually employed. Labourers outbid
each other, and at length go so far as to content themselves with
the most niggardly subsistence, with a portion barely sufficient
in good years, and which in bad years leaves them a prey to
famine. This foolish species of competition has reduced the
peasantry on the coast of Genoa, in the republic of Lucca, in
several provinces of the kingdom of Naples, to content themselves
with a third of the crop, in place of a half. In a magnificent
country, which nature has enriched with all her gifts; which art
has adorned with all its luxury; which annually gives forth a
most abundant harvest - the numerous class that produce the
fruits of the ground never taste the corn which is reaped or the
wine which is pressed, by their labour, and struggle continually
with famine. The same misfortune would probably have happened to
the people of Tuscany, if public opinion had not guarded the
farmer; but there no proprietor dares to impose terms unusual in
the country, and when he changes one metayer for another, he
changes no article of the primitive contact. So soon, however, as
public opinion becomes necessary for the maintenance of public
prosperity, it ought, in strict propriety, to be sanctioned by
law. Whenever vacant lands are no longer to be found, proprietors
of the soil come to exercise a kind of monopoly against the rest
of the nation; and wherever monopoly exists, the legislature
ought to interpose, lest they who enjoy may also abuse it.
    Cultivation by corvees was very far from being as happy an
invention. No doubt it gave to the peasantry a kind of property,
an interest in life; but it reduced them to see their domestic
economy disturbed every moment, by the vexatious demands of a
landlord or his stewards. The peasant could not perform the
operations of his husbandry at the day fixed upon; the landlord's
work must always be done before his own; the rainy days
constantly fell to the share of the weaker party. Under this
system, the labourer performs every service for his master with
repugnance, without care for its success, without affection, and
without reward. In the landlord's fields, he works as badly as he
can without incurring punishment. The steward, on the other hand,
declares it absolutely necessary that corporal penalties be
employed; and the infliction of them is abandoned to his own
discretion. Servitude of the soil has nominally been abolished in
several countries, which have adopted the system of cultivation
by corvees; but so long as this general system of agriculture is
in force, there cannot be any liberty for the peasant. And
although the abolition of servitude has given vassals a property
and right, which the landlord did not formerly acknowledge, it
has hardly at all bettered their conditions. They are as
constantly thwarted and disturbed in their own operations as
before; they work quite as ill during the landlord's day's; they
are quite as miserable within their huts; and the master, who had
been flattered with hopes that the abolition of slavery would
increase his revenue, has derived no advantage from it. On the
contrary, he is ever an object of hatred and distrust to his
vassals; and social order, threatened so incessantly, cannot be
maintained except by violent means.
    The ground of the metayer's contract is every way the same,
as that of a contract with the cultivator by corvees. The
landlord in Hungary, as in Italy. has given up his land to the
peasant, on condition of receiving half its fruits in return. In
both countries, the other half has been reckoned sufficient for
supporting the cultivator, and repaying his advances. A single
error in political economy has rendered what is highly
advantageous for one of these countries disastrous for the other.
The Hungarian has not inspired the labourer with any interest in
his own industry. by sharing the land and the days of the week,
he has made an enemy of the man, who should have been his
coadjutor. The labour is performed without zeal or intelligence;
the master's share, inferior to what it would have been according
to the other system, is collected with fear; the peasant's share
is so reduced, that he lives in constant penury; and some of the
most fertile counties in the world have already been for ages
doomed to this state of wretchedness and oppression.
    But the legislator's interference, which we claimed for the
metayer, has, in some of the countries cultivated by corvees,
actually taken place in favour of the vassal, peasant, or serf.
In the German provinces of the Austrian monarchy, contracts
between the landlord and peasant are, by law, made irrevocable,
and most of the corvees have been changed into a fixed and
perpetual rent of money, or of fruits in a raw state. By this
means, the peasant has acquired a true property in his house and
land: only, it continues to be charged with rents, and some
feudal services. Still farther to protect the peasantry from
being afterwards oppressed or gradually expelled from their
properties, by the opulent lords living among them, the law does
not allow any noble to buy a vassal's land; or, if he does buy
any, he is obliged to sell it, on the same conditions, to some
other family of peasants; so that the property of the nobles can
never increase, or the agricultural population diminish.
    These regulations of the Austrian government in behalf of an
order, which, if left to itself, must needs be oppressed, are
almost sufficient to redeem the errors of its general system, by
this increase of happiness to the subject, and of stability to
the system itself. In a country deprived of liberty, where the
finances have at all times been wretchedly administered, where
wars are eternal - and still disastrous, obstinacy there being
always joined with incapacity; the great mass of the population,
composed almost wholly of peasant-proprietors living in easy
circumstances, have been rendered happy; and this mass of
subjects, feeling their own happiness, and dreading every change,
have mocked all the projects of revolution or of conquest
directed against their country, the government of which is so
little able to defend itself.
    The system of cultivating land by capitation, could be
adopted only among a people scarcely emerged from barbarism. It
is, in fact, nearly a modern farm-lease, the parties to which, in
fixing the rent, pay no regard to the greater or smaller extent
of the ground, to its comparative fertility or barrenness, to the
improvements which labour has already made it undergo. Be the
nature of those circumstances what it may, each proprietor of a
whole Russian province pays thirty roubles yearly to the lord of
it. Doubtless when the capitation was imposed, all those
circumstances were equal; there was more fertile land for each
than each could cultivate, and no part of it had yet been
improved by labour.
    In free counties, capitation is looked upon as a degrading
tax, because it recalls the idea of servitude. It was, indeed,
originally always accompanied with servitude of the soil. The
peasant always depended on the good pleasure of his master; in
executing their mutual contact, no law afforded him protection;
he was always liable to be ejected, carried off, sold, stript of
all the property amassed by his industry; and thus the kind of
authority to which he was subject incessantly reminded him, that,
whatever he saved, he took from himself to give it to his master;
that every effort on his part was useless, every invention
dangerous, every improvement contrary to his interest, and
finally, that every sort of study but aggravated his wretchedness
by more clearly informing him of his condition.
    Even in Russia, however, the disinterestedness of some noble
families, who for several generations have not changed the
capitation, has inspired the peasantry with confidence sufficient
to reanimate their industry, to infuse a taste for labour and
economy, and sometimes even to permit their realizing very large
fortunes which, however, always depend on the master's good
pleasure. But in countries where servitude of the soil has been
gradually abolished, the capitation has become a fixed rent;
united most frequently to personal services, and sometimes
reduced to mere feudal rights, as the system, by degrees, varied
from its primitive uniformity. Such was the tenure by villanage
in France, by copy-hold in England, the origin of nearly all the
property possessed by peasants cultivating their own heritages.
On the other hand, such contracts helped to produce the notion of
farm-leases, which, in the wealthiest countries of Europe, have
succeeded every other kind of convention between proprietor and
cultivator.
    By a farm-lease, the proprietor yields his land, and nothing
more, to the cultivator; and demands an invariable rent for it;
whilst the farmer undertakes to direct and to execute all the
labour by himself; to furnish the cattle, the implements, and the
funds of agriculture; to sell his produce, and to pay his taxes.
The farmer takes upon him all the cares and all the gains of his
agriculture; he teats it as a commercial speculation, from which
he expects a profit proportionate to the capital employed in it.
    At the time when slavery was abolished, the system of farms
could not be immediately established: freedmen could not yet
undertake such important engagements, nor were they able to
advance the labour of a year, much less that of several years,
for putting the farm in a proper condition. The master, on giving
them their liberty, would have been obliged to give them also an
establishment; to furnish them with cattle, instruments of
tillage, seed and food for a year; and after all these advances,
the farm would still have been a burdensome concern for the
owner, because by his contract he had renounced the profit of
good years on condition that his farmer should warrant him
against bad years; but the farmer who had nothing could warrant
nothing, and the master would have given up his good crops
without any return.
    The first farmers were mere labourers; they executed most of
the agricultural operations with their own hands; they adjusted
their enterprises to the strength of their families; and as the
proprietor reposed little confidence in their management, he used
to regulate their procedure by numerous obligatory clauses; he
limited their leases to a few years, and kept them in a continual
state of dependence. During the last century, farmers,
particularly in England, have risen to rank and importance.
Political writers and legislators have uniformly viewed them with
a favourable eye; their leases have ceased to be limited in time
to a small number of years, and hence farmers have issued from a
more elevated class of society. With large capitals, they have
taken farms of a larger size; more extensive knowledge, and a
better education have enabled them to teat agriculture as a
science: They have applied to it several important discoveries in
chemistry and natural history; they have also in some degree
united the habits of the merchant with those of the cultivator.
The hope of a larger profit has induced them to make larger
advances; they have renounced that parsimony which originates in
want, and stands in direct opposition to enlightened economy;
they have calculated and recorded the result of their operations
with greater regularity, and this practice has furnished better
opportunities of profiting by their own experience.
    On the other hand, farmers from this time have ceased to be
labourers; and below them has of course been formed a class of
men of toil, who, being entrusted with supporting the whole
nation by their labour, are the real peasants, the truly
essential part of the population. The peasantry, strengthened by
the kind of labour most natural to man, are perpetually required
for recruiting all the other classes; it is they who must defend
the country in a case of need; whom it most concerns us to attach
to the soil where they were born; and policy itself would invite
every government to render their lot happy, even though humanity
did not command it.
    When the system of small farms has been compared, as is often
done, with that of great farms, it has not been sufficiently
considered that the latter, by taking the direction of his labour
out of the peasant's hands, reduces him to a condition greatly
more unhappy than almost any other system of cultivation. In
truth, hinds performing all the labours of agriculture, under the
command of a rich farmer, are not only more dependent than
metayers, but even than serfs, who pay their capitation or their
service. The latter, whatever vexations they experience, have at
least a hope, a property, and a heritage to leave their children.
But the hind has no participation in property, nothing to hope
from the fertility of the toil or the propitiousness of the
season; he plants not for his children; he entrusts not to the
ground the labour of his young years, to reap the fruit of it,
with interest, in his old age. He lives each week on the wages of
the last. Ever exposed to the want of work by derangements in his
master's fortune; ever ready to feel the extremes of want, from
sickness, accident, or even the approaches of old age, he runs
all the risks of ruin without enjoying any of the chances of
fortune. Economy in his situation is scarcely probable; but
though he should succeed in collecting a little capital, the
suppression of all intermediate ranks hinders him from putting it
to use. The distance between his lot and that of an extensive
farmer, is too great for being passed over; whereas, in the
system of cultivation on the small scale, a labourer may succeed,
by his little economy, in acquiring a small farm or a small
metairie; from this he may pass to a greater, and from that to
every thing. The same causes have suppressed all the intermediate
stages in other departments of industry. A gulf lies between the
day-labourer and every enterprise of manufacture or trade, as
well as farming; and the lower classes have now lost that help
which sustained them in a former period of civilization. Parish
aids, which are secured to the day-labourer, increase his
dependence. In such a state of suffering and disquietude, it is
not easy to preserve the feeling of human dignity, or the love of
freedom; and thus at the highest point of modern civilization,
the system of agriculture approximates to that of those corrupt
periods of ancient civilization, when the whole labour of the
field was performed by slaves.
    The state of Ireland, and the convulsions to which that
unhappy country is continually exposed, show clearly enough how
important it is for the repose and security of the rich
themselves, that the agricultural class, which forms the great
majority of a nation, should enjoy conveniences, hope, and
happiness. The Irish peasants are ready to revolt, and plunge
their country into the horrors of civil war; they live each in a
miserable hut, on the produce of a few beds of potatoes, and the
milk of a cow; more unhappy, at the present day, than the
cottagers of England, though possessing a small property, of
which the latter are destitute. In return for their allotted
portion of ground, they merely engage to work by the day, at a
fixed wage, on the farm where they live; but their competition
with each other has forced them to be satisfied with a wage of
the lowest possible kind. A similar competition will act likewise
against the English cottagers. There is no equality of strength
between the day-labourer, who is starving, and the farmer, who
does not even lose the revenue of his ground, by suppressing some
of his habitual operations; and hence the result of such a
struggle between the two classes, is constantly a sacrifice of
the class which is poorer, more numerous, and better entitled to
the protection of law.
    Rich proprietors generally find that for themselves large
farms are more advantageous than small ones. The small farmer
rarely employs a capital sufficient even for his little
cultivation; himself is always so near to ruin, that he must
begin by ruining the ground. And certainly, in counties where the
different systems of cultivation are practically set in
opposition to each other, it is granted that land is ruined by
letting it on lease, and reimproved by cultivating it with
servants or metayers. It is not, therefore, small farms, but
metairies, which ought to be compared with large farms.
Cultivation on the great scale, spares much time which is lost in
the other way; it causes a greater mass of work to be performed
in the same time, by a given number of men; it tends, above all,
to procure from the employment of great capitals the profit
formerly procured from the employment of numerous workmen; it
introduces the use of expensive instruments, which abridge and
facilitate the labour of man. It invents machines, in which the
wind, the fall of water, the expansion of steam, are substituted
for the power of limbs; it makes animals execute the work
formerly executed by men. It hunts the latter from trade to
trade, and concludes by rendering their existence useless. Any
saving of human strength is a prodigious advantage, in a colony,
where the supernumerary population may always be advantageously
employed. Humanity justly solicits the employment of machines to
aid the labour of the negroes, who cannot perform what is
required of them, and who used to be incessantly recruited by an
infamous commerce. But in a country where population is already
too abundant, the dismissal of more than half the field-labourers
is a serious misfortune, particularly at a time when a similar
improvement in machinery causes the dismissal of more than half
the manufacturing population of towns. The nation is nothing else
but the union of all the individuals who compose it, and the
progress of its wealth is illusory, when obtained at the price of
general wretchedness and morality.
    Whilst, in England, the peasantry are hastening to
destruction, their condition is improving in France; they are
gathering strength, and without abandoning manual labour, they
enjoy a kind of affluence; they unfold their minds, and adopt,
though slowly, the discoveries of science. But in France, the
peasants are mostly proprietors: the number of those who
cultivate their own lands prodigiously increased in the
revolution; and to this cause must be attributed the rapid
progress which agriculture is making in that country, in spite of
a long war and heavy contributions. Perhaps England might partly
obtain a similar advantage, if these vast commons were shared
among her cottagers, to whom the charm of property would thus be
restored.
    The most industrious provinces of France are, at this time,
experiencing the unlooked - for effects of dividing property
among its true cultivators; we mean the distribution of great
farms among the contiguous peasantry, by a great number or
particular contacts. A large proprietor now rarely gives his farm
to be cultivated by a single person; he finds it infinitely more
advantageous, at present, to share his domain among a number of
neighbouring peasants, each of whom takes as much land as is
requisite to occupy him all the year. No doubt, the peasant will
generally sacrifice the land which he farms, to that which is his
property; but both those portions are cultivated with the ardour
which a direct interest excites in the labourer and with the
intelligence which is developed in him, now that his lord can no
longer oppress him. The agricultural classes are as happy as the
political circumstances of a country, loved with enthusiasm,
permit them to be.
    To conclude our review of the systems, by which territorial
wealth is incessantly renewed, we ought yet to bestow a moment of
attention on the system of emphyteuses or perpetual farms, the
most suitable of all when government has grants of land to make.
    In other systems of cultivation, the agriculturist acquires
all the fruit of his annual advances, but he can never be sure of
profiting from those irredeemable advances by which a perpetual
value is added to land, from drainings, plantations, and breaking
up of the soil. Proprietors, of themselves, are seldom enabled to
make such advances. If they sell the land, the purchaser, in
order to acquire it, must surrender that very capital, with which
he might have made those improvements. The lease of emphyteusis
or plantation, which is the proper meaning of the word, was thus
a very useful invention, as by it the cultivator engaged to break
up a desert, on condition of acquiring the dominium utile of it
for ever, whilst the proprietor reserved for himself an
invariable rent to represent the dominium directum. No expedient
could more happily combine, in the same individual, affection for
property, with zeal for cultivation; or more usefully employ, in
improving land, the capital destined to break it up. Although
this kind of lease is known in England under the name of freehold
for many lives; and though it is even of great importance in this
kingdom, as the right of voting in county elections depends upon
it, its beneficial influence has chiefly been experienced in
Italy, where it is named livello. In the latter country, it has
restored to the most brilliant state of cultivation whole
provinces, which had been allowed to run waste. It cannot,
however, become a universal mode of cultivation, because it
deprives the direct proprietor of all the enjoyment of property,
exposing him to all the inconveniences, with none of the
advantages, in the condition of the capitalist; and because the
father of a family can never be looked upon as prudent or
economical, when he thus alienates his property for ever, without
at least retaining the disposal of the price to be received in
exchange for it.
    For re-producing territorial wealth, it is sufficient, in
general, that the use of the ground be transmitted to the
industrious man, who may turn it to advantage, whilst the
property of it continues with the rich man, who has no longer the
same incitements or the same fitness for labour, and who thinks
only of enjoyment. The national interest, however. sometimes also
requires that property itself shall pass into hands likely to
make a better use of it. It is not for themselves alone that the
rich elicit the fruits of the earth; it is for the whole nation;
and if, by a derangement in their fortune, they suspend the
productive power of the country, it concerns the whole nation to
put their property under different managers. Personal interest
is, indeed, sufficient to bring about this transmission, provided
the law offers no obstacle. When a soldier comes to inherit a
machine for making stockings, he does not keep it long; in his
hands, the machine is useless for himself and the nation; in the
hands of a stocking-maker it would be productive, both for the
nation and the individual. Both feel this; and a bargain is soon
struck. The soldier receives money, which he well knows how to
employ; the stocking-maker receives possession of his frame, and
production recommences. Most of our European laws respecting
immovable property, are like a law made to hinder the soldier
from parting with the frame, of whose use he is ignorant.
    The value of land cannot be unfolded, except by employing a
capital sufficient to procure the accumulation of that labour
which improves it. Hence, it is essential to the very existence
of a nation that its land be always in the hands of those who can
devote capital to its cultivation. If it were not in any case
allowed to sell a workman's implement, it would not, certainly,
at least, be forbidden to make new ones for the use of new
workmen; but new lands cannot be made, and so often as the law
prevents the alienation of an estate by one that cannot use it,
so often does it suspend the most essential of all productions.
    The systems of cultivation, which we have now glanced over in
review, certainly cause the earth to produce, by the hands of
temporary cultivators, when the permanent advances have been
made; but they absolutely discourage such cultivators from making
those permanent advances which, as they give a perpetual value to
property, cannot be laid out except by those with whom that
property is destined to continue. Legislators in general,
altogether occupied with preventing the alienation of immovables,
and preserving great fortunes in great families, have dreaded
lest such an alienation might clandestinely be brought about by a
lease, for a long term, and without return. They have eagerly
attempted to defend the rights of proprietors against proprietors
themselves; they have guided that class of people by forfeits and
resolutory clauses; they have fixed upon a short term for farm
leases; they seem continually repeating to the cultivator: "This
land, on which you work, is not yours; acquire not too much
affection for it; make no advances which you might run the risk
of losing; improve the present moment, if you can, but think not
of the future; above all, beware of labouring for posterity."
    Besides, independently of legislative errors, it belongs to
the very nature of a farm lease never to allow the farmer to take
as much interest in the land as its proprietor. It is enough that
this lease must have an end, to induce the farmer, as this end
approaches, to care less about his fields, and to cease laying
out money for improving them. The metayer, with smaller power, at
least never fears to improve the land committed to him as much as
possible; because the conditions of his lease are invariable, and
he is never dismissed except for bad behaviour. The farmer,
again, is liable to be dismissed directly in consequence of his
good management. The more he has improved his farm, the more will
his landlord, at renewing the lease, be disposed to require an
augmentation of rent; and, besides, as part nf the advances laid
out by the cultivator, on the ground, create a perpetual value,
it is neither just nor natural that they should be made by one
whose interest is merely temporary. The farmer will carefully
attend to the fields and meadows, which, in a few years, are to
give him back all his advances; but he will plant few orchards;
few high forests in the north; few vineyards in the south; he
will make few canals for navigation, irrigation, or draining; he
will transport little soil from one place to another; he will
clear little ground; he will execute, in short, few of those
works which are most conducive to the public interest, because
they found the wealth of posterity.
    None of those labours, on which the increase of the whole
national subsistence depends, can be undertaken, save by a
proprietor, rich in movable capital. It is not the preservation
of great fortunes that concerns the nation, but the union of
territorial fortunes with circulating ones. The fields do not
flourish in the hands of those who have already too much wealth
to watch over them, but in the hands of those who have enough of
money to bring them into value. Territorial legislation ought,
therefore, without ceasing, to strive that movable capital be
united with fixed; property which we call personal with property
which we call real. Legislation, over almost all the world, has
striven to do quite the contrary.
    And first, it were always for the national advantage, and
favourable to the increase of its production, that the
proprietor, whenever his fortune is embarrassed, should sell his
property, instead of borrowing on it; yet, on the contrary,
facilities have been held out to him for borrowing, rather than
for sale. A particular system of law has been created for
territorial debts; marked differences have been established
between real and personal property; the rank of creditors on land
has been regulated according to their date, whilst an absolute
equality prevails among creditors of all dates, who claim only on
movable property. And thus thousands of law-suits have been
created, interminable difficulties have been started, and the
time is almost come when half the lands of Europe are possessed
by a people who far from possessing the power to dispose of a
capital that might increase their productiveness, on the
contrary, are debtors by a pretty large capital, which they
cannot extract from those funds. Hence those embarrassed
proprietors have incessantly had recourse to ruinous expedients
not to put money on their lands, but to take it off; to borrow of
their farmers, to diminish the funds of cultivation, to sell
their woods, and deteriorate their estates. If the law had given
no preference to territorial creditors; if, on the other hand it
had given as much facility to a creditor for selling an immovable
property, as for making seizure of a movable one; especially, if,
in protecting personal liberty, sacrificed too slightly, it had
permitted lands to be sold as often as it now permits the debtor
to be put in prison - most old debts would be extinguished, and
those immovable possessions, which ought to support the nation,
would be in the hands of such as could force them, by capital and
labour, to furnish the means of subsistence.
    But the props lent to the pride of family by entails,
fideicommissa, primogenitures, and the laws invented to hinder
families in a ruinous condition from selling their property, have
still further impeded the development of agriculture and
industry. The legislator aimed at fixing fortune in great
families: he has fixed beggary and want in them. On pretext of
securing the patrimony of children, he has forbidden the heir of
entail to sell or borrow with a sufficient security to his
creditors; but he could not hinder him from going to ruin, and
overwhelming himself with clamorous debts. In that case, even the
care of his honour, the feeling of justice, and his own security,
oblige him to employ all the resources of his mind, all his
industry in destroying his patrimony, that he may obtain the
disposal of what law has reserved to his heir. Whatever produce
he can detach from the ground without replacing it, whatever
advance he can dispense with laying out, is, in his eyes, just so
much profit; and Europe has come to see the proprietors of noble
estates, almost everywhere, the enemies of their property. At the
same time, if the legislator's object was the preservation of
families, he has failed in this object; because entails condemn
all the sons of a rich family to idleness; the elder out of
pride, the younger out of inability. The system has proscribed
all from industry, the sole mean of increasing property; whilst
it leaves them subject to all human chances, which never cease to
attack whatever is ancient, and which must always, in the end,
destroy whatever opulence is not renewed.

Chapter 4

Of Commercial Wealth

    By labour man drew his first wealth from the earth, but
scarcely had he satisfied his primitive wants, when desire made
him conceive other enjoyments, not to be obtained without the aid
of his fellows. Exchanges began. They extended to whatever had
any value, to whatever could produce any; they comprised mutual
services and labour, no less than the fruit of labour; and gave
room to the formation and increase of a new kind of wealth, which
was no longer measured by the wants of him who produced it, but
by the wants of all those with whom he might transact exchanges,
- with whom he might carry on commerce; and hence we have named
it commercial wealth.
    The solitary man was used to labour for his own wants, and
his consumption was the measure of his production; he fitted out
a place to produce him provisions for a year, for two years
perhaps; but afterwards he did not indefinitely augment it. It
was enough to renew the process, so as to maintain himself in the
same condition; and, if he had time to spare, he laboured at
acquiring some new enjoyment, at satisfying some other fancy.
Society has never done any thing by commerce, except sharing
among all its members what the isolated man would have prepared
solely for himself. Each labours, in like manner, to provide for
all, during a year, two years, or more; each labours, afterwards,
to keep up this provision, according as consumption destroys a
part of it; and since the division of labour and the improvement
of arts allow more and more work to be done, each, perceiving
that he has already provided for the reproduction of what has
been consumed, studies to awaken new tastes and new fancies which
he may satisfy.
    But when a man laboured for himself alone, he never dreamt of
those fancies, till he had provided for his wants; his time was
his revenue; his time formed also his whole means of production.
There was no room to fear, that the one would not be exactly
proportioned to the other; that he would ever work to satisfy an
inclination that he did not feel, or which he valued less than a
want. But when trade was introduced, and each no longer laboured
for himself, but for an unknown person, the different proportions
subsisting between the desire and what could satisfy it, between
the labour and the revenue, between production and consumption,
were no longer equally certain; they were independent of each
other, and every workman was obliged to regulate his conduct by
guessing on a subject, concerning which the most skilful had
nothing but conjectural information.
    The isolated man's knowledge of his own means and his own
wants, required to be replaced by a knowledge of the market, for
which the social man was labouring; of its demands and its
extent.
    The number of consumers, their tastes, the extent of their
consumption, and their income, regulate the market for which
every producer labours. Each of these four elements is variable,
independently of the rest, and each of their variations
accelerates or retards the sale. The number of consumers may
decrease, not only by sickness or war, but also by obstacles
which policy may place in the way of their communication, or by
the avarice of new sellers. Their tastes may be changed by
fashion: an extraordinary consumption of one kind of merchandize,
brought about by some public calamity, may have reduced them to
be frugal in all the rest; and finally, their income may diminish
without a diminution of their number, and with the same wants,
the same means of satisfying them may no longer exist. Such
revolutions in the market are difficult to know with precision,
difficult to calculate; and their obscurity is greater for each
individual producer, because he but imperfectly knows the number
and means of his rivals, the merchants, who are to sell in
competition with him. But one single observation serves him,
instead of all them: he compares his price with that of the
buyer, and this comparison, according to the profit or loss which
it offers him, is a warning to increase or diminish his
production, for the following year.
    The producer establishes his price according to what the
merchandise has cost, including his profit, which ought to be
proportional to what might be obtained in any other kind of
industry. The price must be sufficient to repay the workmen's
wages, the rent of the land, or the interest on the fixed
capitals employed in production, the raw materials wrought by
him, with all the expenses of transport, and all the advances of
money. When all these reimbursements, calculated at the mean rate
of the country, are themselves repaid by the last purchaser, the
production may continue on the same footing. If the profits rise
above the mean rate, the producer will extend his enterprizes; he
will employ new hands and fresh capital, and, striving to benefit
by this extraordinary profit, he will soon reduce it to the
common level. If the buyer, on the other hand, pays a price too
low for compensating all the producer's reimbursements, the
latter will, of course, seek to reduce his production, but this
change will not be so easy as the other. The workmen employed by
him, rather than abandon what gains their bread, consent to work
at a lower price; for less even than the necessaries of life.
Fixed capitals, moreover, cannot be put to another use; he will
content himself with a smaller profit, and continue to work with
them till they produce next to nothing. Lastly, the manufacturer
himself must live by his industry, and never willingly abandons
it: he is ever disposed to attribute the decline of his last
year's trade to accidental causes; and the less he has gained,
the less is he willing to retire from business. Thus production
continues almost always longer than demand, unless the
manufacturer has, of his own accord, renounced his business to
attempt a new one.
    The buyer's price, an the other hand, is fixed by
competition. He does not inquire what the article costs, but what
are the terms on which he may obtain another to serve in its
stead; he addresses himself to various merchants, who offer him
the same commodity, and bargains with him who will sell the
cheapest; or else he considers which will suit him best, among
several articles of a different nature, but capable of being
substituted for each other. As each is occupied solely with his
own private interest, each tends to the same object: all the
buyers, on one hand, all the sellers on the other, act as if in
concert: the sums asked, and the sums offered, are brought to an
equilibrium, and the mean price is established.
    The seller's price should enable him to reproduce the article
sold, with a profit, under the same condition, in the same place.
His market, therefore, extends to every country where the mean
price established by commerce is no smaller than his. His
production is not limited by the consumption of neighbors or
countrymen; it is regulated by the whole number of those who,
whatever country they inhabit, find an advantage in purchasing
his goods, or for whom his producing price is not superior to the
buying price. It is this which properly constitutes the extent of
market.
    As the division of labour incessantly augments its productive
powers, and the increase of capitals daily obliges the merchant
to seek new employment for industry, and try new manufactures,
the producer feels no interest more pressing than that of
extending his market. If he cannot find new places of sale, it
will neither suit him to enlarge his manufactory, when his
capital has been increased by saving, nor to improve his
fabrication by performing more work with the same machinery, or
the same number of hands. The whole progress of his fortune
depends on the progress of his sale.*
    Among the causes which augment this sale, the first is the
discovery of such an economy in labour as may enable the
manufacturer to sell cheaper than his brethren, and to get
possession of their custom: he will sell more, but they will sell
less. The consumers will make a light saving; yet, if both are
subjects of the same state, the difference in regard to the
national interest will not be great. The distress of those
producers, who have lost their custom, and who, probably, will
lose a considerable part of their capital by selling their wares
too cheap, and abandoning their former machinery, will perhaps
counterbalance the profit of purchasers.
    As policy is wont to comprise the obligation of social duties
within the circle of our countrymen, the mutual rivalship of
foreign producers has more openly displayed itself. They have
striven to exclude each other from the markets, where they came
in competition, by selling at a cheaper rate. Every national
discovery, which allows the producers of one country to sell
cheaper than those of other countries, inevitably increases the
former's production at the latter's expense; and the profit of
this saving is shared between producers who extend their market,
and consumers who provide for their wants at a smaller expense.
Yet if a single manufacturer has succeeded in making this saving,
which extends his market; or if the exclusive use of it is
secured to him by patent, his countrymen. also manufacturers,
against whom he has