The Development of Economics

CHAPTER XVI

COLLECTIVISM AND ASSOCIATIONISM

A. Saint-Simon and Collectivism

With this great mission in mind and with absolute confidence in his own ability to realize it, after the Revolution he devoted his time chiefly to philosophy and science.

At the beginning of this phase of his career, he apparently had the design of creating a science of sciences, a sort of generalization of all knowledge, but soon turned his attention almost exclusively to social subjects and in collaboration with a number of his followers, produced the following works:

“Sur la science de l’homme,” unpublished

“Sur la gravitation universelle,” unpublished

l’Industrie (1817-1818)

De système industriel (1821-1822)

Catéchisme des industriels (1823-1824)

Nouveau christianisme (1825)

Throughout these works he emphasized a few leading ideas, among them the following:

Saint-Simon did not work out completely the form of government which would attain the ideals he had in mind. In a general way he proposed “to confine the executive power to a Chamber of Deputies recruited from the representatives of commerce, industry, manufacture, and agriculture. These would be charged with the final acceptance or refusal of the legislative proposals submitted to them by the other two Chambers, composed exclusively of savants, artists, and engineers. The sole concern of all legislation would, of course, be the development of the country’s material wealth.”

B. The Saint-Simonians

They developed their master’s ideas into a system of state socialism which the French call “collectivism,” laying the foundation for it by a thoroughgoing criticism of the institution of private property, which they regarded as both unjust and uneconomical; unjust, because it involves exploitation; uneconomical, because it often puts the control of economic affairs in the hands of incompetents. Exploitation is the very essence of it, since it furnishes an opportunity to obtain without work wealth, the production of which is imposed upon other people. Since it carries with it the right of inheritance, it puts the control of the agents of production and distribution into the hands of people who do not necessarily have the ability to exercise it in the most efficient manner—of those, namely, who simply happen to be born into certain families. Under these conditions efficient administration is a matter of chance, and inefficiency the rule.

To these arguments they added the testimony of history. They called attention to the fact that the institution of private property had its origin in the remote past and that it has already undergone many modifications. In their judgment, it is destined to disappear, its scope having been steadily narrowing with the progress of time. At first it was broad enough to include men as well as things. Then the right of the master over his slaves was gradually transformed and finally abolished. Reduced in its application to the ownership of things, it could at first be transmitted according to the will of the owner only. Then legislators intervened by making rules in accordance with which it could be inherited, at first making the eldest son the sole heir, then, after the French Revolution, enforcing equal distribution among all children. To accomplish its disappearance the last step remains, namely making the state the sole inheritor.

The Saint-Simonians advocated the taking of this step which would ultimately give the state complete control of all the agents of production. This accomplished, the management of economic affairs should be put in the hands of the most competent persons, and the wealth produced should be distributed among all workers according to the contribution of each to the total. “From each according to his ability and to each according to his contribution” was their motto.

Regarding the details of the procedure necessary for accomplishing this reform, the Saint-Simonians were for the most part silent, thus leaving many difficult problems unsolved, but they believed that it would appeal to people once it was understood and had great faith in the ability of their sect to spread understanding of it among the people.

C. The Associationists

Contemporaneously with Saint-Simonism appeared a group of writers and thinkers who, as the correct means to social reform, looked to voluntary association instead of collective action imposed from above. They believed that individual liberty was a possession as precious as economic well-being and that the acquisition and maintenance of both should be the goal of reformers. Individual liberty, they thought, had been practically destroyed by competition under the existing regime and would be equally endangered by the compulsion necessarily involved in state socialism. The problem, as they saw it, was to eliminate competition among employers for profits and among laborers for wages, which, in their opinion, had resulted in monopoly and the loss of individual liberty, and to substitute for it voluntary cooperation, leaving individuals free to follow their own desires and avoiding the compulsory features of the plans of the collectivists. Such association, they believed, would also accomplish better results than the present regime in the realms of production and distribution.

For the solution of this problem a considerable number of plans were suggested, differing widely from each other, some of them fantastic and absurd, others sufficiently practical to invite experimentation. The authors of some of these have exerted sufficient influence to warrant a brief account of them here. These are Robert Owen, Charles Fourier, Louis Blanc, and Proudhon.

1. Robert Owen.

Born June 14, 1771, in Newton, North Wales, Robert Owen passed his boyhood first as an apprentice in a mercantile establishment in Stanford, Lincolnshire, and afterward as a clerk in a mercantile house in London. At the age of eighteen he moved to Manchester, where he made a study of the cotton industry, in which he became an expert. In his early twenties he purchased a spinning factory in New Lanark, Scotland, in which he began a series of social and economic experiments which made him famous.

The first of these aimed at the improvement of working conditions in the New Lanark factory. When he took it over he found that the laboring people were badly housed and inadequately paid, that they worked excessively long hours, and that they were addicted to drunkenness and other bad habits. These conditions applied to women and children as well as men. In attempting to remedy them he encountered numerous obstacles, including a feud between his Scotch and English workmen and the opposition of his stockholders. He succeeded in overcoming them all, however, and in completely transforming the factory and the community. He abolished child labor; shortened the hours of work, especially of the women; raised wages; improved sanitary conditions; furnished educational facilities for all; and provided entertainment and means of social intercourse. He so completely changed the environment in which his work-people lived and so much increased their happiness and well-being that, in his opinion, they became different men and women with new ideas and ideals and a new attitude toward each other, their employers, and life.

From the point of view of profits his operations were also successful, but he insisted on keeping the rate of dividends at 5 per cent and distributing the surplus earnings among the laboring people.

His experiments and experiences at New Lanark implanted in Owen’s mind certain convictions which became the basis of a social philosophy which he later developed and expounded in a number of writings, namely, that the productivity of labor depends very largely upon the kind of treatment accorded laborers by their employers; and that the character and ideas of laboring people can be transformed by a change in their environment. He developed and defended these principles in some essays published in 1812 and 1813 under the title, A New View of Society; or Essays on the Principle of the Formation of the Human Character and the Application of the Principle to Practice.

An impulse to the development of other theories was supplied by the commercial crisis of 1815, which was accompanied, as such catastrophes always are, by the closing of factories, unemployment, increase of poverty, and financial loss. Of these phenomena Owen offered the following explanation: The improved technique of industry resulting from the industrial revolution accompanied by the demand of the government for war supplies enormously increased the supply of goods during the period of the Napoleonic wars. At their close the government demand decreased without a corresponding increase from other sources, leaving a surplus of production which precipitated the crisis.

The failure of the public demand to increase to take the place of the lessened government demand he explained by the substitution, during the preceding period, of machinery for labor, which had lowered wages and diminished the purchasing power of working people.

He later developed a more general theory of crises in which the struggle for profits played an important role. In this struggle he saw a cause for overproduction which operates continually and brings about crises periodically without the intervention of war. He came to regard profits as one of the major evils of modern society. “They are,” he said, “the excess of the price of goods over the costs of production,” whereas “goods ought to sell at the cost of production,” and they constitute an injustice and a perpetual menace. Their elimination should be one of the goals of social reform.

After the crisis of 1815 Owen conducted a number of experiments in the form of labor colonies and in the years 1830-1832 he established a labor exchange in London. The colonies were voluntary associations of a communistic character in the United States, Mexico, and England, and the labor exchange was an experiment in cooperative marketing in which profits were dispensed with and goods were exchanged on the basis of their costs of production in labor. Goods were received at the exchange and credited to those bringing them or paid for in labor tickets on the basis of the amount of labor required to produce them. They were sold on the same basis, the amounts purchased being debited to the accounts of the purchasers or paid for in labor tickets.

All of these experiments were short-lived and none of them successful in the sense that they resulted in the establishment of permanent institutions or demonstrated the feasibility of dispensing with profits or preventing unemployment by the voluntary association of producers. But their failure did not disillusion Owen. He clung to the belief that environment is the dominant influence in the formation of human character and that profits must be eliminated in the interest of permanent and far-reaching social reform. He reasoned that, if goods could be exchanged on the basis of their cost of production in labor, the total value of everything produced would be transferred to laborers, who would then be able to buy everything offered for sale, thus preventing overproduction, crisis, and unemployment. Money, which he regarded as a great evil, could also be eliminated, the labor ticket taking its place.

Owen devoted the later years of his life to the development and propagation of his theories, publishing numerous articles in the Economist, the Orbiston Register, the Coöperative Magazine, and the Coöperator, and several monographs, among them The New Moral World in 1834, What Is Socialism? in 1841, and The Human Race Governed without Punishment in 1858.

2. Charles Fourier.

Fourier was born in Besançon, France, in 1772. His father, who was a successful coffee merchant, died when Charles was yet young, and left him an inheritance of 100,000 francs which he invested in foreign trade in Lyon. During the Reign of Terror in 1793 this city was besieged, his business was ruined, and he himself was imprisoned. After this he joined the army for a time, but ill health compelled him to return to mercantile pursuits.

His business was not his only interest, however, and did not completely occupy his mind. Intellectually gifted and with a natural love for theorizing, he spent much time in thinking and writing and made a reputation for himself by his publications and schemes for social reform.

His thoughts are said to have been directed toward social problems by two events in his early life. One was a reproof received for telling the truth regarding some matters concerning which the proprietors of the shop in which he was employed had been accustomed to practise misrepresentation and the other was his being required to assist in throwing overboard in the harbor of Marseilles rice that, for speculative purposes, had been kept so long that it had spoiled. From these experiences he concluded that there was something radically wrong with a social system that “forced children to lie and men to allow food needed by hungry people to rot.”

The results of his thinking on social subjects were embodied chiefly in three books: la Théorie des quatre mouvements, published in 1808; Traité de l’association domestique agricole ou attraction industrielle, later entitled la Théorie de l’unité universelle, published in 1822; and Nouveau monde industriel, published in 1829.

The basic principle of his social philosophy is what he called the law of attraction, which he thought operated throughout the entire universe. In society its natural result is association, which is now prevented by man-made, artificial obstacles the removal of which would bring about social harmony and a great increase in the production of wealth and in the happiness and well-being of men.

For the housing of each phadanstère, the name he proposed for each of these groups, he recommended the construction of a large and magnificent building containing apartments of all kinds to suit the tastes of the different people, common dining-halls, a theater and concert room, a library, and all the other accessories of a comfortable and pleasant life. An amount of land sufficient for the production of the food and most of the raw materials needed was to be provided for each phalanstère, and there were also to be manufactured by the members of each the goods needed for their comfort, an amount that he thought could and would be much smaller than is required by present-day standards. He believed that each phalanstère should be economically independent, or nearly so, exchange with others supplying only those few commodities for the production of which facilities or raw materials might be partly or wholly lacking.

Each person belonging to the group was to work, but at that occupation which pleased him. Fourier believed that labor was naturally attractive and agreeable and that, if people could be assured a sufficiency of the necessaries and comforts of life, they would want to be occupied and that they would love work as children now love play. He did not anticipate any difficulty in getting the requisite kinds of work done because, since all combinations of the major passions would be represented in each group, all kinds of tastes would be present and labor of every kind would be voluntarily chosen. The love of change, one of the major passions, would be gratified by the freedom of each person to change his work as often as he pleased.

Fourier proposed that these phalanstères should be financed on the joint-stock principle, each person owning as many shares of stock as he desired, and that the joint product should be divided among the members on the principle that labor should receive 5/12; capital, that is the stockholders, 4/12; and talent as he called it, or the professions chosen by the direction and management of the concern, 3/12.

These communities were to be organized on a purely democratic basis, all officers and directors being chosen by the free votes of members. He had no doubt that under this system the very best people would be selected for the respective places, since each person would be interested in having the work done in the best possible manner. Each phalanstère was to be managed by a chief, known as a unarch. Groups of phalanstères, amounting to three or four, were to be managed in their joint interest by an officer known as a duarch. These in turn might be federated indefinitely and their chiefs known as triarchs, tetrarchs, pentriarchs, etc. When the whole world should be organized, he proposed that the capitol and the highest officer, whom he would call omniarch, should be located at Constantinople, which he proposed to make the capital of the world.

Another great advantage to be gained from this reform, according to Fourier, is the disappearance of antagonisms and hatreds among men. Associated in these ties, men would learn to understand each other and would soon lose their prejudices, antipathies, and hatreds. Since labor would become attractive and everybody would work, health would be greatly improved, life prolonged, and the sum total of happiness enormously increased.

Fourier died at the age of sixty-five without having seen any considerable measure of success attend his efforts for social reform. He had made a few but very few converts, and very few experiments with his phalanstères had been attempted. After his death, however, a considerable number of disciples appeared, and in the aggregate a considerable number of experiments with his scheme have been tried. In his History of American Socialism J. H. Noyes mentioned thirty-four in the United States. Several others have been tried in France and some in England. Among the most noteworthy of these is a community at Guise, France, founded by Jean Godin, a wealthy manufacturer, which has flourished for many years. In his history of economic doctrine Gide mentions others, recommending in “particular as the best representatives of these institutions the ones located at Bournville, Port Sunlight, and Agneta Park, Holland.” The famous Brook Farm of which Albert Brisbane, Horace Greeley, Charles A. Dana, George Ripley, Margaret Fuller, George William Curtis, Nathaniel Hawthorne, and W. H. Channing were members, belonged also among these experiments.

3. Louis Blanc.

Unlike the other associationists who have been described, Louis Blanc lacked faith in the ability of unaided individuals to accomplish social reform. He believed that the state must assist in the process but only by way of giving the movement a start.

He was born in Madrid, October 28, 1813, his father at the time being an inspector of finance under Joseph Bonaparte. While he was still a child, the family moved to Corsica, the native place of his mother, and in 1830 to Paris where, as a result of the Revolution, his father met with financial disaster. Thrown upon his own resources, in 1834 Louis joined the staff of a newspaper, le Bon sens, and in 1839 founded the Revue du progrès, in which first appeared the publication by which he is chiefly known among economists and socialists, entitled Organization du travail. He afterward published a history of the decade which followed the revolution of 1830 under the title Histoire de dix ans, a history of the revolution of 1789 entitled Histoire de la revolution française, a Histoire de la révolution de 1848, and Lettres sur Angleterre.

On account of the part he was supposed to have taken in revolutionary activities, in 1848 he was forced to leave France. He fled to Belgium and afterward to England, where he resided until the downfall of Napoleon III in 1870, maintaining himself by writing, among his other literary activities serving as English correspondent of Le Temps. After his return to Paris in 1870 he was elected a member of the National Assembly. He died December 6, 1882.

During his young manhood he evinced a tendency toward radical thinking on social subjects and in his Organization du travail explained his ideas, including a plan for social reform. The revolution of 1848 gave him an opportunity to put some of them into execution. As a member of the Provisional Government in February of that year he advocated the theory of the right to labor, involving the duty of government to guarantee work to everybody. To this end he demanded the establishment of a ministry of labor and progress, but succeeded only in securing the appointment of a committee of investigation, of which he was made the head, and the establishment of Ateliers Nationaux for the supply of labor to the then unemployed. The management of these institutions was put into the hands of a man in no sense sympathetic with Blanc’s ideas, and their failure has been attributed to this fact. They certainly did not remotely resemble the institutions Blanc described in his book. His forced departure from France after the labor uprising of May 15, 1848, in which he was believed to have participated, put an end to his opportunities to put his ideas into practice.

After his return to France he opposed revolutionary activity and as a member of the government took part in the suppression of the Commune.

As a means to this end he proposed the organization of social workshops, that is, voluntary organizations of producers supplied temporarily by the government with the capital necessary for the execution of their enterprises, the products of which should be divided into three parts, one for wages of labor, one for the accumulation of a fund for the payment of the advances made by the government and for the supply of capital to future enterprises, and one for profits to be distributed among the laborers as a supplement to their wages. The distribution of work and of wages and profits among laborers should follow the principle, from each according to his capacity and to each according to his needs.

He believed that the advantages and economies of these workshops would become so apparent that producers would organize them in large numbers and that capitalists would ultimately be forced to join them since they would be unable to compete against the advantage of capital without interest and the economies of associated effort.

He further proposed that the management of these shops should be in the hands of officers, appointed by the government during the first year but thereafter by the workmen themselves, and that mutual assistance of one shop by another should be a recognized principle from the beginning, expecting by this means eventually to relieve the government of the obligation of supplying capital and to realize the universal sway of the principle of voluntary association.

4. Proudhon.

Differing in character and in many of his views from the three men just described, Proudhon should nevertheless be classed with them as an associationist.

He was born of humble parents in Besançon July 15, 1809, and, after enjoying such educational advantages as his native city afforded, learned the trade of a printer. As a proof-reader in an establishment which printed a large number of theological works he became familiar with that branch of knowledge and published a number of articles in the Encyclopédie catholique. He also studied comparative philology and published some essays in that field. In 1839, a prize having been offered by the Academy of Besançon for the best essay on the “Utility of the Celebration of Sunday,” he entered the competition, and, while he did not win, the ability he exhibited so much impressed the committee of award that a sum of money was appropriated to enable him to devote himself to study and writing. He decided to begin with the investigation of the causes of poverty and the means of improving the condition of the poor, and once started his activities included participation in politics, social agitation, and attempts at social reform.

His career as an agitator began in 1848. He did not take part in the revolution of February of that year, but in April became editor of a paper entitled Representant du peuple and in time was elected representative of the department of the Seine in the Constituent Assembly. In spite of having witnessed the defeat in this body of several plans of social reform, he submitted one of his own, that of the Exchange Bank, which met the same fate, the vote being 691 to 2 against it. He continued to agitate with pen and voice, however, frequently using violent and extreme language and criticizing other agitators as well as the defenders of the existing regime.

These methods soon brought him into conflict with the authorities, with the result that his paper was suppressed and he was imprisoned for three years. During this confinement he wrote a book entitled la Revolution sociale demontrée par le coup d’etat du 2 Décembre, 1851. After his release he devoted himself chiefly to the writing of the books which have been enumerated, the one entitled De la justice dans la révolution et dans l’église bringing him in 1858 again into conflict with the government. To avoid another imprisonment he fled to Belgium, not returning to Paris until 1860, when amnesty was granted him. He died in 1865.

His writings are full of contradictions, and it is difficult accurately to describe his ideas. His first book entitled What Is Property? was a violent attack on that institution, which he declared to be legalized robbery, since it enabled some to live from the labor of others. Every argument employed in favor of it, he thought, condemned it. For example, the claim that the right to property in land is justified by the occupation of the first comers he met by the statement that, if in the beginning land belonged to no individual, then it either was the property of all individuals in common or God’s. If the former, the title still remains with the people and cannot be extinguished by occupation; if it was God’s, the title still remains with Him, since He has never renounced it.

The argument that property is the result of the incorporation of one’s labor with land or that he who joins his labor to the land has just title to it he met by saying that this argument justifies the right of possession but not that of property, the former involving merely the utilization of a natural agent of production in connection with one’s own labor and not the securing of an income from it by transferring its use to others.

While many statements from Proudhon’s writings could be quoted to show that he condemned private property root and branch, in reality he seemed to condemn only rent, interest, and profits. He believed in private property in income and in the most complete and thoroughgoing enjoyment by an individual of what he himself produces or acquires. He vigorously condemned communism and socialism of the types being advocated by his contemporaries.

His theory of property was in reality a theory of possession. Each person, he thought, should have free access to the means of utilizing his own labor; and so long as an instrument of production, natural or artificial, is used for that purpose, his right to it as against others should be unquestioned. But on no account should he be permitted to rent such an instrument to another person or receive an income in any form from another’s use of it.

He believed that, if the right of each individual to the free use of the instruments of production were guaranteed and made real, the need for government in the ordinary sense of the term would disappear and in its place would appear arrangements for production and distribution voluntarily entered into to the mutual advantage of all concerned.

The Exchange Bank which he advocated in the Constituent Assembly and unsuccessfully attempted to put into operation was designed to accomplish this very thing, namely the guarantee to each person of free access to the instruments of production, thus rendering government unnecessary. In essence it was a bank of issue free from the obligation of redeeming its notes in coin but required without charge to exchange them for the promissory notes of people in need of capital, the payment of these promissory notes, after the productive operations which they were to make possible had been completed, bringing the notes issued by the bank back for reissue or cancellation.

Proudhon believed that this privilege of discounting without charge would enable any person to satisfy his need for capital and at the same time leave him quite free to employ his energy in any manner he might wish, thus solving the problem of individual liberty as well as that of production and distribution.

He was as thoroughgoing an individualist as the classical economists and as much opposed as they to all forms of communism and socialism, but he did not believe in the fundamental principles of private property and competition upon which the present economic system as well as their system of thought is based.

Footnotes

1 Richard T. Ely, French and German Socialism in Modern Times (New York: Harper & Brothers, 1883), p. 56.

2 Ely, op. cit., p. 62.

3 Quoted by Gide and Rist, A History of Economic Doctrines, translated by Smart and Richards, p. 204.

4 Ibid., p. 208.

5 Ibid., op. cit., p. 206.

6 Ibid., pp. 208 and 209.

7 Gide and Rist, op. cit.

8 For the names of the more prominent members and the details of its organization, see ibid., p. 211, and Ely, op. cit., p. 74.

9 Ely, op. cit., p. 92.

10 Ely, op. cit., p. 95.

11 Ibid., p. 98.

12 Ibid.

13 Ely, op. cit., p. 117.

14 Gide and Rist, op. cit., pp. 256-257.

15 Gide and Rist, op. cit., pp. 291 and 292, foot-note.

16 Gide and Rist, op. cit., pp. 134 and 135.

• 1Professor Schmoller found the key to the explanation of this aspect of the system in the development of the national economies of the various European states. These succeeded (in order of time) territorial, municipal, tribal, and family economies, each representative of a certain stage in the history of European civilization, and each produced by the struggle of contending forces, a higher and broader organization in each case subordinating to itself lower and narrower ones. “The essence of this system,” he says, “lies not in some doctrine of money, or of the balance of trade; not in tariff barriers, protective duties, or navigation laws, but in something far greater, namely, in the total transformation of society and its organization, as well as of the state and its institutions, in the replacing of a local and territorial economic policy by that of the national state.” More specifically he says, “The whole internal history of the seventeenth and eighteenth centuries, not only in Germany but everywhere else, is summed up in the opposition of the economic policy of the state to that of the town, the district, and the several estates; the whole foreign history is summed up in the opposition to one another of the separate interests of the newly rising states, each of which sought to obtain and retain its place in the circle of European nations, and in that foreign trade which now included America and India. What was at stake was the creation of real political economies as unified organisms, the center of which should be, not merely a state policy reaching out in all directions, but rather the living heart-beat of a united sentiment.”
• 2Professor Schmoller found the key to the explanation of this aspect of the system in the development of the national economies of the various European states. These succeeded (in order of time) territorial, municipal, tribal, and family economies, each representative of a certain stage in the history of European civilization, and each produced by the struggle of contending forces, a higher and broader organization in each case subordinating to itself lower and narrower ones. “The essence of this system,” he says, “lies not in some doctrine of money, or of the balance of trade; not in tariff barriers, protective duties, or navigation laws, but in something far greater, namely, in the total transformation of society and its organization, as well as of the state and its institutions, in the replacing of a local and territorial economic policy by that of the national state.” More specifically he says, “The whole internal history of the seventeenth and eighteenth centuries, not only in Germany but everywhere else, is summed up in the opposition of the economic policy of the state to that of the town, the district, and the several estates; the whole foreign history is summed up in the opposition to one another of the separate interests of the newly rising states, each of which sought to obtain and retain its place in the circle of European nations, and in that foreign trade which now included America and India. What was at stake was the creation of real political economies as unified organisms, the center of which should be, not merely a state policy reaching out in all directions, but rather the living heart-beat of a united sentiment.”
• 3The industrial organization of the towns was also gradually weakened by conflicts of interest between townsmen themselves and the oppression of the weaker trades by the stronger, and by the growth of domestic industries. Increasing interference of the central government in town affairs was invited by these conditions, and the power of resistance to it was weakened. The growth of a merchant class in London and some of the other large towns also contributed to the same result. The interests of this class extended beyond the boundaries of the town in which they lived and were promoted by the breaking-down of local trade barriers. The power of this class grew rapidly in and after the sixteenth century.
• 4By the seventeenth century a national commercial and industrial organization had developed, the chief organs of which were middlemen who intervened between producers and consumers and between different classes of producers. Among those of chief importance were the wool-staplers, the clothiers, the drapers, and the foreign trading companies. The wool-staplers purchased the farmers’ wool, their most important staple, and sold it to manufacturers or foreign merchants. The clothiers acted as middlemen between the carders, spinners, weavers, and other handicraftsmen engaged in transforming the wool into cloth. They purchased the wool from the staplers, delivered it to the carders and spinners, distributed the yarn among the weavers to be woven into cloth, and then placed the cloth in the hands of the “fuller,” “walker,” or “tucker” to be fulled and cleansed. The spinners, carders, weavers, and fullers were scattered throughout the hamlets and villages as well as the cities of the country, in many, perhaps most cases, doing agricultural work as a main or a side occupation. The drapers purchased the cloth and sold it to consumers or to foreign merchants; some of them were themselves connected with one of the trading companies. Foreign commerce was chiefly carried on by these latter organizations, to each of which a charter had been granted conferring the exclusive right to trade in a specified part of the world. The Eastland Company, for example, had the exclusive right to trade with Scandinavia and the Baltic region; the Russian Company, with Russia; the Merchant Adventurers, with the Netherlands; the Levant Company, with the Mediterranean region; the Guinea or African Company, with Africa; the East India Company, with the countries of Asia; and several other companies with portions of the American field. At the beginning of the seventeenth century France, Spain, and Portugal were the only countries with which trade could be carried on by an Englishman not a member of one of the companies.
• 5The literary remains of Colbert are of the same general character as those of Sully in that they consist of letters, instructions, and memoirs. They differ from Sully’s, however, in the extent to which they reflect mercantile doctrines. Colbert was the chief executor of the mercantile policy of France, and among his letters, instructions, and other papers may be found expositions and defense of nearly every feature of it. Much more completely than the English writers he reflected the doctrines of nationalism and of the entrepreneur relation of the state to industry. To a greater extent than in any other country these doctrines were realized in the practices of France during the reign of Louis XIV, and for this fact Colbert was largely responsible. Louis XIV aspired to be not only absolute sovereign in France but the dictator of Europe, and he fully realized that foreign commerce and command of the world’s supply of the precious metals would assist in the accomplishment of his purposes.
• 6Becher was at one time a court physician and professor of medicine in Mainz, whence he went to Wurzburg, and later to Vienna. At the two latter places, he was connected with the carneræ of the reigning sovereigns. He wrote on natural science as well as Kameralwissenschaft, his chief work in the latter field appearing at Frankfurt in 1668 under the title Politische Discurs von den eigentlichen Ursachen des Auf- und Abnehmens der Städte, Lander und Republiken, in specie, wie ein Land Volkreich und Nahrhaft zu machen und in rechte Societaten civilen zu bringen. In this book he defines a city as eine volkreiche, nahrhafte Gemeine and defends the following fundamental propositions: The more populous a city, the more powerful it is; but in order to be populous, it must be supplied with an abundance of nourishment; the membership of a community consists of (a) those who serve it and are supported by it, for example, government officers, clergy, learned men, physicians, apothecaries, soldiers, etc.; and (b) those who really constitute it, namely, peasants, handicraftsmen, and merchants. These three classes are essential each to the other. In explaining their mutual relations, however, he makes the following argument: “Consumption is the soul of the three classes, the only bond which holds them together and enables them to live by each other. It is on account of consumption that the merchant class is so necessary in a community, however large the peasant class may be. . . . Since the nourishing of a community can only be accomplished through the trading [Verhandlung] and turning into money [Versilberung] of goods . . . everything which hinders these operations hinders and weakens the populousness which results from it.”
• 7Wilhelm Freiherr von Schroder was in the service of Austria as conductor of a factory according to plans outlined by Becher. He wrote several books, the most noteworthy of which was entitled Fürst-liche Schatz und Rentkammer, which was published in 1686. He was a strong advocate of absolute monarchy and admirably set forth the mercantilistic view of the relation of a sovereign to his people, in the following passage: “A Prince is like a housefather. Now a housefather must fertilize and plough his fields if he would reap a harvest therefrom. He must well stock his pond if he would have fish. He must feed his cattle if he would slaughter them, and well fodder his cows if he desires them to give much milk. Thus a Prince must first help his subjects to a good living, if he wishes to take anything from them.”
• 8In the Détail he gives a discussion of the relation between money and wealth in which he says: “As gold and silver are not and never have been wealth in themselves and are valued only in relation to other things necessary to life,—to which things they serve only as a guarantee and a measure of value,—it is a matter of indifference whether we have much or little of them, provided the same results are produced.” That the same results are produced by much or little he attempts to prove by the following: “Thus we learn from the old accounts that in 1250 a laborer in Paris, who to-day earns 40 or 50 sous a day, earned only 4 pennies a day, 12 one-hundredths part of what he earns now. Nevertheless he then lived with as much comfort as now because all things were in proportion. He satisfied his wants with his four pennies as well as one of the same trade now does with his 50 sous. It follows that a man who at that time had a thousand livres of rent was as rich as one who at present has one hundred thousand.”
• 9In other connections he says: “It is very certain that it [money] is not a good in itself and that the quantity of it does nothing for the opulence of a country in general provided there is enough of it to sustain the prices of the goods necessary to life.”
• 10Silver and gold, he says, have as competitors copper, leather, shells, and “a simple piece of paper which costs nothing but nevertheless performs all the functions of money to the amount of millions by passing from hand to hand an infinite number of times.” By way of illustration he refers to the Lyons fair in the following manner: “In a commerce consisting of purchases and sales to the amount of more than eighty millions not a ‘sou marque’ of money is seen. Everything is done by bills of exchange which after passing through an infinite number of hands, finally return to the original drawer.”
• 11In other connections he emphasized the need of an equilibrium between purchases and sales and the importance of proper adjustments of prices, especially of the prices of raw produce and manufactures.
• 12In order to secure these and other needed adjustments, he affirmed that reliance can be placed only on nature. The following words of his taken from Chapter V of the Dissertation present this doctrine clearly:
• 13In this book he refers with approval to Boisguillebert’s description of conditions, including his criticisms of the system of taxation. His own studies, he says, have revealed “conditions which correspond perfectly to what was written concerning them by the author of the Detail de la France, who developed and brought to the light of day very naturally the abuses and malpractices which are practiced in the imposition and the levy of the Tailles, the Aides and the Provincial tariffs.” In his memoir to Le Pelletier he also said: “Let his Majesty have the goodness to remember that the grandeur of kings can only be measured by the number of their subjects, that upon that depends all their grandeur, their power and their riches, and that without that they have only vain titles which are burdens to themselves and to everybody else and nothing more.” In his book he stresses the doctrine “that persons of all conditions should contribute to the public expenses in proportion to their revenue and their industry without privilege or exemption; that taxes ought to be easily collected in such a manner as not to give rise to contests or to vexations on the part of the fiscal agents; and that so far as possible the contributor should be able to pay all his taxes at one time.” The reform he proposed was the levy of what he called a dîme royale or royal tithe, which in substance was a tax to be derived from four different sources:
• 14In this book he refers with approval to Boisguillebert’s description of conditions, including his criticisms of the system of taxation. His own studies, he says, have revealed “conditions which correspond perfectly to what was written concerning them by the author of the Detail de la France, who developed and brought to the light of day very naturally the abuses and malpractices which are practiced in the imposition and the levy of the Tailles, the Aides and the Provincial tariffs.” In his memoir to Le Pelletier he also said: “Let his Majesty have the goodness to remember that the grandeur of kings can only be measured by the number of their subjects, that upon that depends all their grandeur, their power and their riches, and that without that they have only vain titles which are burdens to themselves and to everybody else and nothing more.” In his book he stresses the doctrine “that persons of all conditions should contribute to the public expenses in proportion to their revenue and their industry without privilege or exemption; that taxes ought to be easily collected in such a manner as not to give rise to contests or to vexations on the part of the fiscal agents; and that so far as possible the contributor should be able to pay all his taxes at one time.” The reform he proposed was the levy of what he called a dîme royale or royal tithe, which in substance was a tax to be derived from four different sources:
• 15In this book he refers with approval to Boisguillebert’s description of conditions, including his criticisms of the system of taxation. His own studies, he says, have revealed “conditions which correspond perfectly to what was written concerning them by the author of the Detail de la France, who developed and brought to the light of day very naturally the abuses and malpractices which are practiced in the imposition and the levy of the Tailles, the Aides and the Provincial tariffs.” In his memoir to Le Pelletier he also said: “Let his Majesty have the goodness to remember that the grandeur of kings can only be measured by the number of their subjects, that upon that depends all their grandeur, their power and their riches, and that without that they have only vain titles which are burdens to themselves and to everybody else and nothing more.” In his book he stresses the doctrine “that persons of all conditions should contribute to the public expenses in proportion to their revenue and their industry without privilege or exemption; that taxes ought to be easily collected in such a manner as not to give rise to contests or to vexations on the part of the fiscal agents; and that so far as possible the contributor should be able to pay all his taxes at one time.” The reform he proposed was the levy of what he called a dîme royale or royal tithe, which in substance was a tax to be derived from four different sources:
• 16The author, Richard Cantillon, was born in Ireland between 1650 and 1690. Soon after the death of Louis XIV he removed to Paris and engaged in the business of banking during the period in which John Law flourished. Being confident of the ultimate failure of the Mississippi scheme, Cantillon speculated on the bear side of the market and made a fortune, but incurred the enmity of Law and was obliged to leave France. He was murdered in London on May 16, 1734, by a discharged man-servant, who set fire to his house and stole some of his papers.