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A Chinese Story

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November 16, 2012

Tags Free MarketsHistory of the Austrian School of EconomicsInterventionism

[The Bastiat Collection (2011); originally from the second series of Economic Sophisms (1848)]

 

There is nothing that is not pretended by the writers in favor of protection to be established as an aid to the working classes — there is positively no exception, not even the custom house. You fancy, perhaps, that the custom house is merely an instrument of taxation like property taxes or the toll bar! Nothing of the kind. It is essentially an institution for promoting the march of civilization, fraternity, and equality. What would you be at? It is the fashion to introduce, or affect to introduce, sentiment and sentimentalism everywhere, even into the toll gatherer's booth.

The custom house, we must allow, has a very singular machinery for realizing philanthropical aspirations.

It includes an army of directors, subdirectors, inspectors, subinspectors, comptrollers, examiners, heads of departments, clerks, supernumeraries, aspirant supernumeraries, not to speak of the officers of the active service; and the object of all this complicated machinery is to exercise over the industry of the people a negative action, which is summed up in the word obstruct.

Observe, I do not say that the object is to tax, but to obstruct. To prevent, not acts that are repugnant to good morals or public order, but transactions that are in themselves not only harmless but fitted to maintain peace and union among nations.

And yet the human race is so flexible and elastic that it always surmounts these obstructions. And then we hear of the labor market being glutted.

If you hinder a people from obtaining its subsistence from abroad it will produce it at home. The labor is greater and more painful, but subsistence must be had. If you hinder a man from traversing the valley he must cross the hills. The road is longer and more difficult, but he must get to his journey's end.

This is lamentable, but we come now to what is ludicrous. When the law has thus created obstacles, and when in order to overcome them society has diverted a corresponding amount of labor from other employments, you are no longer permitted to demand a reform. If you point to the obstacle you are told of the amount of labor to which it has given employment. And if you rejoin that this labor is not created, but displaced, you are answered in the words of the Esprit Public, "The impoverishment alone is certain and immediate; as to our enrichment, it is more than problematical."

This reminds me of a Chinese story, which I will relate to you.

There were in China two large towns, called Tchin and Tchan. A magnificent canal united them. The emperor thought fit to order enormous blocks of stone to be thrown into it for the purpose of rendering it useless.

On seeing this, Kouang, his first mandarin, said to him, "Son of Heaven! This is a mistake."

To which the emperor replied, "Kouang, you talk nonsense."

I give you only the substance of their conversation.

At the end of three months the celestial emperor sent again for the mandarin, and said to him, "Kouang, behold!"

And Kouang opened his eyes, and looked.

And he saw at some distance from the canal a multitude of men at work. Some were excavating, others were filling up hollows, leveling and paving. And the mandarin, who was very cultivated, said to himself, They are making a highway.

When another three months had elapsed, the emperor again sent for Kouang and said to him, "Look!"

And Kouang looked.

And he saw the road completed, and from one end of it to the other he saw here and there inns for travelers erected. Crowds of pedestrians, carts, litters, came and went, and innumerable Chinese, overcome with fatigue, carried back and forth heavy burdens from Tchin to Tchan, and from Tchan to Tchin. And Kouang said to himself, It is the destruction of the canal that gives employment to these poor people. But the idea never struck him that their labor was simply diverted from other employments.

Three months more passed, and the emperor said to Kouang, "Look!"

And Kouang looked. And he saw that the hostelries were full of travelers, and that to supply their wants there were grouped around them butchers' and bakers' stalls, shops for the sale of edible bird nests. He also saw that, the artisans having need of clothing, there had settled among them tailors, shoemakers, and those who sold parasols and fans; and as they could not sleep in the open air, even in the Celestial Empire, there were also masons, carpenters, and slaters. Then there were officers of police, judges, fakirs; in a word, a town with its suburbs had risen round each hostelry.

And the emperor asked Kouang what he thought of all this.

And Kouang said that he never could have imagined that the destruction of a canal could have provided employment for so many people; for the thought never struck him that this was not employment created but labor diverted from other employments, and that men would have eaten and drunk in passing along the canal as well as in passing along the highroad.

However, to the astonishment of the Chinese, the Son of Heaven at length died and was buried.

His successor sent for Kouang, and ordered him to have the canal cleared out and restored.

And Kouang said to the new emperor, "Son of Heaven! You commit a blunder."

And the emperor replied, "Kouang, you talk nonsense."

But Kouang persisted, and said, "Sire, what is your object?"

"My object is to facilitate the transit of goods and passengers between Tchin and Tchan, to render carriage less expensive, in order that the people may have tea and clothing cheaper."

But Kouang was ready with his answer. He had received the night before several numbers of the Moniteur Industriel, a Chinese newspaper. Knowing his lesson well, he asked and obtained permission to reply, and after having prostrated himself nine times, he said, "Sire, your object is, by increased facility of transit, to reduce the price of articles of consumption, and bring them within reach of the people; and to effect that you begin by taking away from them all the employment to which the destruction of the canal had given rise. Sire, in political economy, nominal cheapness—"

The emperor: "I believe you are repeating by rote."

Kouang: "True, Sire; and it will be better to read what I have to say."

So, producing the Esprit Public, he read as follows:

In political economy, the nominal cheapness of articles of consumption is only a secondary question. The problem is to establish an equilibrium between the price of labor and that of the means of subsistence. The abundance of labor constitutes the wealth of nations; and the best economic system is that which supplies the people with the greatest amount of employment. The question is not whether it is better to pay four or eight cash for a cup of tea, or five or ten taels (Chinese money) for a shirt. These are puerilities unworthy of a thinking mind. Nobody disputes your proposition. The question is whether it is better to pay dearer for a commodity you want to buy, and have, through the abundance of employment and the higher price of labor, the means of acquiring it; or whether it is better to limit the sources of employment, and with them the mass of the national population, in order to transport, by improved means of transit, the objects of consumption, cheaper, it is true, but taking away at the same time from many of our people the means of purchasing these objects even at their reduced price.

Seeing the emperor still unconvinced, Kouang added, "Sire, deign to give me your attention. I have still the Moniteur Industriel to bring under your notice."

But the emperor said, "I don't require your Chinese journals to enable me to find out that to create obstacles is to divert and misapply labor. But that is not my mission. Go and clear out the canal; and we shall reform the custom house afterwards."

And Kouang went away tearing his beard, and appealing to his God, "O Fo! Take pity on thy people; for we have now got an emperor of the English school, and I see clearly that in a short time we shall be in want of everything, for we shall no longer require to do anything."


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