Cyclopædia of Political Science, Political Economy, and the Political History of the United States

Edited by: Lalor, John J.
(?-1899)
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1881
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New York: Maynard, Merrill, and Co.
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1899
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Includes articles by Frédéric Bastiat, Gustave de Molinari, Henry George, J. B. Say, Francis A. Walker, and more.
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PRODUCTION OF WEALTH

III.95.1

PRODUCTION OF WEALTH. The word production, which, in ordinary language, means the giving birth to, or producing, without regard to the utility of the thing produced, or the outlay required for that production, takes, in economic science, a particular meaning, much more restricted, more exact and more absolute. This word, in political economy, is applied to that particular branch of the science which has for its object the creation of values, considered apart from their distribution and their consumption; and, scientifically speaking, it can be applied only to work resulting in a product of a value superior, or at least equal, to that of the services of every kind which that operation has taken. It is only when this balance is obtained, that there is truly production. There would be destruction on the contrary hypothesis, that is, if the value produced was found to be inferior to the sum of those necessarily consumed in order to obtain it; and this is so true, that, if one attempted to repeat the same operation a certain number of times he would finally destroy the entire sum of the values he had originally employed in the experiment, so that it would become physically impossible to repeat it. There is, then, no doubt that in political economy, what is called production, and the only operation susceptible of being characterized as productive, is that which, taking everything into account, results in a sum of values superior, or at least equal, to that which has had to be devoted to it; and, in truth, it is this exact estimation of the result, this strict reckoning of the consequences, for good or evil, for profit or loss, advantage or disadvantage, of our labors, our operations, our enterprises of every kind, which, more than anything else, has given to the investigations of political economy the character of a science, and which has made its intervention sometimes appear to ignorant or evil-intentioned rulers so much to be dreaded.

III.95.2

—But if it is not possible to raise a question as to the essential meaning given to the word production in political economy, we must admit that we are still far from having exhausted the controversy: in the first place, on the determination of the kinds of labor that should be called productive: and secondly, on the analysis of the means by which production takes place. This controversy has lasted ever since the first systematic efforts were made, more than eighty years ago [now more than a hundred years ago.

III.95.3

Translator], to raise political economy to the condition of a science; and, first to speak only of the question of knowing what kinds of labor are susceptible of being qualified as productive, it seems to us that people are not yet well settled in that regard, either as to the category of the kinds of labor which act upon things, or, above all, as to that of the kinds of labor whose efforts are exerted directly on man. One can not deny, for example, that the nomenclature of kinds of labor of the first category presents omissions and inaccuracies that are quite serious.

III.95.4

—There is, in the first place, one entire class of labors, viz., that of the extractive industries, which has become far too considerable for it to be possible to take an account of it, and which, at the same time, differs too much from all the others for it to be allowable to confound it with any other class. How incomprehensible that any one should omit to speak of a class of industries capable of throwing upon the market masses of products comparable to those furnished by hunting, fishing, the industry of the wood cutter, the quarry man, and, above all, the miner! and, on the other hand, how permit them to be confounded, as is sometimes done, with agricultural industry! What is there in common between arts, which, confining themselves to extracting from waters, forests and earth the materials for a multitude of industries, employ for that purpose only mechanical forces, and an art which, like agriculture, is devoted to the multiplication and improvement of useful animals and vegetables, and which, for that purpose, makes use of a force so special, so little understood, so delicate to manage, as life? Perhaps it would be better to confound them, as is also done, with the transportation industry; for, like that industry, the extractive arts do, in fact, change the place of things which they supply for consumption. But they are not, like it, confined to bringing about a change of place: their craft especially consists in the very fact of extraction, an industrial action very difficult to practice, in all cases very unlike that of transportation; and there is no other way but to make of it an altogether separate classe of labors, under the name of the extracting arts or extractive industries.

III.95.5

—Another serious inaccuracy to be noted in the nomenclature of the arts which are exercised in the material world, is the application of the term trade to the business of transportation.*50 Trade has put people in the way of that industry, has taught them to specialize it, has led them to recognize how an intelligent removal of things so as to bring them within reach of whoever needs them, may contribute to production; but it has not, for all that, become the art of transportation, the carrying industry. The carrying industry is a vast business, clearly distinguished from all others, and should accordingly have its separate name. We can not give it the name of trade without doing violence to language, without miserably mutilating it, in fact; and it is so much the more impossible to call the transportation industry trade, because the term trade is applied to a class of facts altogether different, which should also have its appropriate appellation. To trade is to buy in order to sell again; it is not an act peculiar to one class of workmen; it is an act absolutely common to all and, to speak the truth, there is not a business, from the highest to the lowest, in which people do not begin by purchases and end by sales. If the owner of a vessel or other means of conveyance buys things in one place to sell them in another, the manufacturer buys them under one form to sell them under a different one; whoever practices any handicraft, art or function, has begun by acquiring aptitudes, talents, faculties, which he afterward continually sells under the form of services. Everybody, then, buys and sells, and buys in order to sell. Only, between the purchases and the sales which every one makes, there intervenes some labor, some art, the intelligent practice of which constitutes his avocation: and, to recur to the people whose business is to distribute things abroad in the world, and to put them within reach of whoever needs them, there is, between the purchases and the sales they make, and art, which consists less in the act of buying, selling and trading, which all kinds of workmen do, the same as they, than in the judicious change of place of things, and in the marvelous and peculiar labor they perform, from which it is but reasonable that their industry should receive its name.

III.95.6

—Finally, a last inaccuracy to be mentioned in the nomenclature of the great classes of labors which act upon the material world, is the order in which they have been arranged. It is certainly not very natural to call attention first to the one of these classes which is the most difficult, which was the last to originate, and which, by the nature of the particular agent it employs, viz., life, most nearly approaches the high arts*51 which act directly on the human race; and a logical arrangement would have placed agricultural industry last, instead of first. We have elsewhere given the order in which we should think it proper to class the kinds of labor in this first category.

III.95.7

—But if science is not yet well settled as to their classification, or as to their nomenclature, does it, at least, now recognize that they all contribute to production? and does it know how they co-operate in it? It would be difficult to assert this of the long category of arts which act directly on the human race. As to these, we are where we have long been in regard to the others. We known how tardy was the recognition that the latter participated in the creation of wealth, and what difficulty there was in discerning how they participated in it. The truth in regard to this, which was first admitted in reference to the extractive arts and agricultural industry, was long denied in reference to manufactures, and still longer in regard to the industry of transportation, improperly called commercial. The only real products were those which were the immediate result of the extractive and agricultural industries. Manufacture transformed them; but it was supposed, without creating new products, since it took nothing more from the earth. The industry of transportation changed the places of things; but still less than manufactures did it create new products, since those it transported remained identically the same. It was only after much difficulty that the matter was relieved of its confusion, and people were made clearly to perceive how these industries added new values to existing wealth.

III.95.8

—Here is where we now are as to the arts which act directly on men. People still deny, at this very day, that they add to the mass of wealth created. Most books on political economy, even to the last, including the best,*52 have been written with the supposition that there were no real riches, or values susceptible of being qualified as wealth, except those which labor had succeeded in embodying in material objects. Smith sees scarcely any wealth save in things palpable. Say starts by designating by the name of wealth, lands, metals, moneys, grain, dry goods, etc., without adding to that enumeration any class of values not realized in matter. Whenever, according to Malthus, wealth is in question, our attention is drawn almost exclusively to material objects. The only kinds of labor, according to Rossi, with which the science of wealth is concerned, are those which enter into the struggle with matter to adapt it to our needs. Sismondi does not recognize as wealth products which industry has not clothed with a material form. Riches, according to Droz, are all the material goods which serve to satisfy our wants. "The opinion most true," he adds, "is that we should see it [i.e., wealth] in all the material things which serve men." Finally, the writer of these lines can not forget that he had to maintain, only a few months ago [probably written in 1863 or 1864.

III.95.9

Translator], a long debate with several economists, his colleagues in the academy of moral sciences, without succeeding in persuading them that there are other riches than those which are so improperly called material.

III.95.10

—Not only do economists recognize as wealth only values realized in material objects, but they declare unproductive the arts which are not exercised on matter, mentioning by name those which act directly upon man. Smith, after having enumerated them, presents them all, from the noblest to the meanest, as leaving nothing with which one could afterward purchase an equal quantity of labor. "Their work," he adds, "perishes the very instant of its production." ("Wealth of Nations," book ii., chap. 3.) We have elsewhere cited the opinions of a list of well-known economists, who all say the same thing. Tracy, Malthus, Sismondi, and James Mill, in speaking of the labor of magistrates, instructors, priests, savants, artists, etc., say of their services that they are productive only at the moment when they are rendered, and that there remains nothing of them, or that there remain only intellectual or moral results, and that people do not store up that which appertains only to the soul. Droz, whom we did not mention, after having represented the arts which act on matter as the only ones which produce wealth, elsewhere considers those who work on the mind as not creating. J. B. Say, who essays an innovation on this point, represents as productive all the long category of kinds of labor performed directly on man; but, from a misapprehension which prevents him from arriving at the truth, he sees the products of these labors in the works themselves, instead of seeing them where they are, that is to say, in the useful and lasting results they leave behind them; and, while qualifying them as productive, he is led to say of them all that the others say to prove that they are not so, namely, that their products are attached to nothing, that they perish as fact as they are created, that it is impossible to accumulate them, that they add nothing to the wealth of society, that there are even disadvantages in multiplying them, and that the expense incurred to obtain them is unproductive.

III.95.11

—It is very singular, that, while thus in accord in declaring the arts unproductive which act directly on the human race, these economists are unanimous in finding them productive when they consider them in their consequences, that is to say, in the utilities, the faculties, the values, which they finally succeed in realizing in man. Thus, Adam Smith, after having said, in certain passages in his book, that literary people, savants, and other workers in the same category, are workmen whose labor produces nothing, expressly says elsewhere that "the useful abilities acquired by members of society" (abilities which could have been acquired only by the aid of these men whom he calls unproductive) "are a capital fixed are realized, as it were, in the persons who possess them, and constitute an essential part of the general funds of society—a part of its fixed capital." ("Wealth of Nations," book ii., chap. 1.) Thus, also, J. B. Say, who says of the same classes of workers, that their products are not susceptible of accumulation, and that they add nothing to the wealth of society, formally pronounces, on the other hand, that the talent of a public functionary, and that the business of a mechanic (evidently creations of these men whose products can not be accumulated), from an accumulated capital. Thus, M. Sismondi, who, on the one hand, declares the labors of instructors, etc., unproductive, affirms positively, on the other hand, that literary men and artists*53 (the incontestable work of these instructors) constitute a part of the national wealth. Similarly M. Droz, who somewhere makes the observation that it would be absurd to consider virtue as wealth, properly so called, terminates his book by saying it would be falling into a disgraceful error to regard the magistracy which makes justice rule, the savant who diffuses intelligence, etc., as producing nothing. It is, however, obvious that the same labor can not be at once productive and non-productive, result in products which at the same time perish and become permanent, which vanish as fast as they are created, and which accumulate in proportion as they are created; and seeing to what contradictions the founders of the science are brought on this capital point, it is easy to recognize that the question needs a more satisfactory explanation than that which they have given of it. This explanation we have elsewhere produced, and we think it will compel assent. It arises obviously from the quite natural distinction to be made between labor and its results.

III.95.12

—It was, as we have said, because of not having distinguished labor from its results, that Smith and his principal successors fell into the contradictions which we have just pointed out, and that they so badly resolved the question whether or not the arts, which act directly on man, should be considered productive. All the useful occupations, whatever they may be, those which work upon things as well as those which operate on men, perform labor which vanishes as fast as performed, and they all create utility which is accumulated as fast as it is obtained. It is not necessary to say, with Smith, that wealth is accumulated labor; we should say that it is accumulated utility. It is not labor that one accumulates, it is the utility which labor produces. The labor passes away as fast as performed; the utility it produces remains.

III.95.13

—To be sure, the lesson which a professor gives is consumed while being produced, the same as the manual labor expended by the potter on the clay he holds in his hands; but the ideas inculcated b the professor in the minds of the men, who listen to him, the shape given to their intelligence, the salutary impression wrought on their susceptible faculties, are products which remain, quite as much as the form impressed on the clay by the potter. A physician gives advice, a judge pronounces a sentence, an orator delivers a discourse, an artiste sings a song or recites a tirade; this is their labor; it is consumed as fast as produced, like all possible kinds of labor: but it is not their product, as J. B. Say erroneously claims: their product, like that of every kind of producers, is in the result of their labor, in the useful and durable modifications that both kinds have wrought on the men upon whom they have acted, in the health the physician has restored to his patient, in the morality, the instruction, the taste, which the judge, the professor, and the artiste have spread. Now, these products remain, they are susceptible of preservation and increase, of accumulation; and we can acquire more or less virtue and knowledge, just as we can impress upon any portion of matter some of the utilities which are of a nature to become fixed in things, and which give them more or less value.

III.95.14

—It is true, that instruction, taste, talents, are immaterial products; but do we ever create any other kind? and is it not surprising to see J. B. Say distinguish between material and immaterial, he who has so judiciously remarked that we can not create matter any more than we can annihilate it, and that in all things we only produce utilities, values? The form, the figure, the color, that an artisan gives to rough bodies, are things just as immaterial as the knowledge that a professor communicates to intelligent beings: both only produce utilities, and the only real difference that can be observed between their industries, is that the one aims to modify things, and the other to modify men.

III.95.15

—It can not be said that the labor of the professor, the judge, the comedian, the singer, is attached to nothing, nor that nothing remains of it: it is attached to the men upon whom it operates, and there remain from it the useful and lasting modifications which it has wrought in them; just as the labor of the spinner, the weaver, and the dyer, is realized in the things which receive it, and leaves upon them the forms, the figure and the colors which it has impressed on them.

III.95.16

—It can not be said that the values realized in men, the capacity, industry and talents that have been communicated to them, are not susceptible of sale. What are not sold, at least in countries civilized enough to have no more slaves, are the men in whom human industry has developed these qualities; but, as to the talents which these men possess, they are quite susceptible of sale, and are, in fact, continually being sold; not, I readily admit, in kind and in themselves, but under the form of the services, the labor, and the instruction which is commonly employed to communicate them to others.

III.95.17

—No more can we say that the values which labor succeeds in impressing upon men are not of a nature to be accumulated: it is as easy to multiply in ourselves the useful modifications of which we are susceptible, as to multiply, in the things which surround us, the useful modifications they can receive.

III.95.18

—Nor can it any more be said that there is disadvantage in multiplying them. What can not be multiplied without disadvantage, are the expenses necessary in order to obtain any kind of products whatever; but, as to the products themselves, it can not surely be said that there is any disadvantage in increasing them. We do not hear men complain of having too much industry, taste, imagination, skill or any good quality, and more than we hear them complain of possessing too many utilities of any other kind.

III.95.19

—It can not be said that the expense incurred to obtain these products is unproductive. What would be unproductive, would be the incurring of needless expense in creating them: but as to the necessary outlay for that purpose, it is not unproductive, since it may result in actual wealth, and in wealth greater than the expense of producing it. It is surely not rarely that acquired talents are worth more than the expense incurred to acquire them: it is not impossible that a government should give rise, by an active and firm administration, enlightened by justice, to a value infinitely superior to the expense required to obtain so valuable a result.

III.95.20

—It can not, in short, be said that these products add nothing to the national capital: they augment it as really as products of any other kind could do. A capital of mental acquirements or of good habits is worth no less than a capital of money or of any other kind of values. A nation has not alone physical wants to be satisfied; it naturally experiences many intellectual and moral wants; and, however little culture it may have, it will place virtue, instruction and taste in the category of its most real and most valuable riches. These things, then, which are in themselves true wealth, on account of the pure and elevated pleasures they procure, are, besides, absolutely indispensable means for obtaining that other species of values which we succeed in embodying in material objects. It is not sufficient, in fact, in order to create these latter values, to possess workshops, tools, machines, provisions, moneys: there must be strength, health, knowledge, taste, imagination, good private and social habits; and the men who work to create and bring to perfection these products may justly be considered producers of the wealth called material, just as much as those who work directly to create it. It is obvious, in a word, that if a nation increases its capital by extending its area of cultivation, improving its lands, perfecting its workshops, its implements, and its cattle, still more does it increase it by perfecting itself, that which is preeminently the force, the force which directs and gives value to all the others.

III.95.21

—Will some one be kind enough to tell us how it is, that, after all this, any one can maintain that the men whose efforts are exerted directly in the cultivation of their fellow-creatures, create products which vanish in being produced? The truth in regard to these laborers, as well as to all, is, that in the work of production it is only their labor which vanishes, and that, as to their products, they are as real as those of the classes most manifestly productive. What better, in fact, can be done to increase the capital of a nation, than to multiply the number of men, vigorous, skillful, educated, virtuous men, trained to act well and live well? What wealth, even if we took into account merely the question of deriving profit from the material world, could appear superior to this? What wealth is more capable of giving rise to other kinds? Now, this is exactly what all classes of laborers who act directly upon man, produce, different from those who work for him only by acting on things. A government, when it is what it ought to be, is a producer of men subject to public order, and trained to the practice of justice; a true moralist is a producer of moral men; a good instructor is a producer of instructed and enlightened men; an artiste worthy of the name is the producer of men of taste and of soul, of men trained to sensibility to all that is good and beautiful; a teacher of fencing, horsemanship or gymnastics, is a producer of bold, agile, vigorous men; a physician is the producer of well men. Or, if we choose, these various laborers are, according to the nature of the art they practice, producers of health, strength, agility, courage, instruction, taste, morality, sociability—all things which people count upon acquiring when thy consent to pay for the services designed to produce them, and all services whose price is, so to speak, quoted, having consequently a sale value, and forming the most valuable and most fecund portion of the productive forces of society.

III.95.22

—These opinions were published by the author of this article, a number of years ago (in 1827, in the April number of the Revue Encyclopédique); and he confesses that it was not without great surprise, that, referring lately, at a meeting of the Institute, to these former remarks, he beheld savants who were his colleagues, and, among the number, able professors of political economy, combat propositions so evidently correct, and seriously deny that economic science could concern itself with the arts which act upon man; relying, to justify their opinion in that regard, on these two reasons, among others, viz., that it could not take notice of them without exceeding its just limits; and that, on the other hand, it was not possible to make, from the product of these arts, an article of exchange or of commerce.

III.95.23

—But (to pass immediately on the merits of the first of these allegations), how, pray, is the science of political economy naturally limited? Is it by the nature of the arts alone which they would have it investigate, or by the general manner in which it regards all kinds of labor? Does it treat directly and exclusively of certain arts, for example, of those which act on the material world, of extractive industry, of that of transportation, of manufacture, or of agriculture? It has to deal with questions which are peculiar to no art, to which all arts equally give rise, and which are the special object of its study: it investigates how all kinds contribute to production, what part is played by the labor of the various orders of means on which the power of all labor rests, the separation of occupations, the perfecting of the instruments employed, the scientific notions, the talent for applying them, and a number of others which we refrain from enumerating here: it also investigates the manner in which the products resulting from the co-operation of all the social activities are distributed among all, by the contrivance of exchanges and the aid of everything that can facilitate them. Now, these questions, wholly economic, and which it is though natural it should discuss relative to the arts exercised on things, it is obvious it may enter upon, without departing any more from its object, in reference to the arts which act directly on man; and if political economy does not encroach on the instruction of the technologist or the agronomist when it explains how the manufacturer or the agriculturist adds to the value of the materials he transforms, it is evident that it no more encroaches on the labors of the savant, the artiste, or the magistrate, when it attempts to show how these particular orders of workers contribute to the improvement of the people on whom their influence is exercised. Certainly, to tell what part a good division of labor, or the employment of improved instruments, plays in the teaching of the sciences, is not to devote one's self to teaching the sciences. Certainly, too, to say the artiste, the priest, the instructor, can no more do without security and liberty, than the man who plows his field or who keeps his workshops in operation, is neither to be a professor of æsthetics, of morals, or of pedagogy. Finally, it is manifest, that to raise an economic question in relation to the arts which act upon man, is no more to go outside of the bounds of political economy, than it is going outside to treat that question in its relation to the arts whose activity is expended on matter.

III.95.24

—And not only does the economist no more go out from his domain when he concerns himself, from an economic point of view, with the arts whose activity is devoted to the education of the human race, than he goes out of it when he gives his attention to those which act on things; but we must say, that, to completely fill his role, he must concern himself with all, without distinction. There is not one, in fact, which does not indispensably need the co-operation of all the others; and the economist would have only a very incomplete idea of the phenomenon of production, and of all the means on which the powers of production are based, if he did not know how every kind of labor that the economy of society comprises, participates in it. The economist, in a word, must necessarily be instructed in two things: the first is, that man can not be developed in one respect alone; that he can not become rich exclusively; that, in order to become rich, he must also become skillful, trained, enlightened, polished, moral, social; and the second is, that there is not one of these happy qualities which is not a direct source of wealth to the arts which procure them for him; that the savant, the artiste, the magistrate and the moralist enrich themselves while laboring for his education, just as the mechanic and the agriculturist do while adjusting material nature to his wants.

III.95.25

—But, they say (and this is the second objection brought against us), political economy treats essentially of exchangeable wealth; and for it to concern itself with the high arts which labor for the education of man, they should give rise to products which could be a current article of exchange. Now, what do, in fact, come from them, even on the supposition that they succeed in forming men who are well taught, able, honest, capable of rendering services in all respects excellent? And where are the products susceptible of being exchanged, in which their labor is realized? The answer naturally arises from the question. These products are in the very-aptitudes they give the men on whom their labor is expended, and in the services these aptitudes permit them to render. These services are not palpable products, it is true; but have the only arts with which some persons think political economy should concern itself, the arts which act on the materials world, only this kind of products to offer? Do not these people know that the larger part of their agents present themselves on the market with only labor, that they have only services to offer? And if one will please consider that labor, industry and human services are a current article, a constant article, a universal article, of exchange, will he deny that the arts, whose mission is to form men adapted to render services, contribute as much as of any other class to bring exchangeable products into market? Do not the whole world know that there is a trade in services going on, as considerable as that in material things adapted to serve? And do they not also know that the most material of products have been acquired only in view of the services they can render, and that in reality it is only services which are bought and sold?

III.95.26

—This surely is undeniable; and if political economy can justly be reproached with not having made a sufficiently exact and complete classification of the kinds of labor acting on material nature, which contribute to production, it may still more justly be reproached with not having also been able to admit into the number of productive are the classes of labor, so important and so numerous, whose united activity is devoted to the cultivation of the human race. It is certain, that, in order to have a sufficient idea of the phenomenon of production, it should embrace them all and investigate both without distinction. There may indeed be something in this enlargement of the domain of the science of political economy, to disconcert a little those who cultivate its acquaintance; and we can understand, that, after having made the products clothed with material forms and the kinds of labor which create that sort of products the exclusive object, thus far, of their investigations, it costs them somewhat to extend their attention to the more complicated arts, which concern man and products so different, which are put into circulation under the form of services; but it is nevertheless true, that, to well comprehend the phenomenon of production, they must particularly investigate this class of products and of labors, and there is likewise an additional reason for making them the subject of especial investigation, in the little attention they have hitherto accorded them.

III.95.27

—We will add, that, if it is necessary to investigate equally all the kinds of labor embraced in the economy of society, in order to have an adequate conception of the phenomenon question, it is not less so to have accurate and complete knowledge upon the co-operation of what means the power of labor naturally depends; and that on this second point, as we showed at the commencement of this article, the economists have not yet succeeded in coming to an agreement any more than on the first. If they have not made it sufficiently appear what all the trades and professions are which it is essential for political economy to investigate, neither have they sufficiently shown, at least as it seems to us, by what means the various kinds of business produce, and in the combination of what causes lies the potency of their action. That illustrious man, J. B. Say, the one of these writers, who, in our opinion, has made the most learned exposition, the most detailed and most extended analysis, of the general means of industry, appears to us, nevertheless, to have fallen far short of having made a complete list of them, or even, in many respects, an accurate list.

III.95.28

—To begin with, before entering upon an examination of that analysis, we will express our regret, in common with some other economists, that J. B. Say should have assigned several causes as the origin of production, and represented that man was indebted for the acquisitions he has made, not alone to his efforts, without with, however, the forces of nature, beginning with his own faculties, would have been of no value to him, but to his efforts simultaneously with the co-operation of nature and of capital, which, according to J. B. Say, have labored for-his progress conjointly with himself. "There exists something else than human labor in the work of production," he says. * * Industry, left to itself, could not give value to things; it must possess products already existing, without which, however skillful we may suppose it to be, it would remain inactive: it is necessary, besides, that nature should combine her labor with it and with its instruments." Human industry, according to J. B. Say, never figures as more than one-third in the act of production. In every product a part of the result obtained comes from nature, and another part from capital.

III.95.29

—We fear, as we have already said elsewhere, that in thus assigning to production several primordial causes, J. B. Say has brought confusion where he desired to introduce greater order, and that, far from throwing light on the subject, he has made the primitive source of all our progress more obscure. We think, with Adam Smith, and particularly with M. de Tracy, who on this subject was still more clear than Smith, that labor has been the only generating cause.

III.95.30

—To be sure, human activity is not the only force there is in nature. Outside of that, there exists a multitude of others, which man has no more created than he has created his own faculties, and which he could no more annihilate, and whose existence is wholly distinct from and independent of his. There are dead forces, and there are living ones. The hardness, the strength, the ductility of certain metals, are inert forces. The sun, water, fire, wind, gravitation, magnetism, electricity, the vegetative force of the soil, the vital force of animals, are active forces. But if such forces exist, external to man, there is nothing in them which announces that they exist for him; and, left to themselves, they would show themselves perfectly indifferent to his happiness. For them to serve him, he must bend them to his service; for them to produce, he must force them to produce. To be sure, man does not create them; but he creates the utility that they are to him: he creates them as agents of production, as productive forces. It is also true that he has to take more or less trouble for that: every kind of steel is not equally suitable to make a file; every kind of soil can not be rendered equally adapted to vegetation; but he must put his hand to all things, and nothing is arranged by nature to serve him. How could the qualities of iron have been of service to production, if industry had not been able to separate the metal from the ore, and impress upon it the form suited to render its qualities useful? How could the wind have serve to turn a millstone without the fans of the mill? How could the magnetic fluid have served to direct navigators, without the invention of the mariner's compass? How would the rain and the sun make plants germinate, without the previous labor which presents to the dew of heaven and the warmth of the solar rays a plat of land suitably plowed, manured, prepared and sown? These agents and many others, in short, are equally all the disposal of all men: of what use are they to the savage who has not learned how to derive advantage from them? Yet again, the forces of nature exist independently of human labor; but relatively to man, and as agents of production, they exist only in human industry, and in the instruments by means of which industry has taken hold of them. This it is which has created these instruments and directs their use; this is the only source from which have sprung, not things, nor the properties of things, but all the utility which man derives from things and from their properties.

III.95.31

—J. B. Say is then wrong, we think, in saying that wealth originally came from the combination of three forces, industry, capital and natural agents, among which he gives land an important place. Industry, he says, would have remained inactive, without the aid of pre-existing capital. But, if this is so, it is no longer conceivable how it was able to begin to act; for it is very evident that the existence of capital could not precede the labor which gave rise to it. To appropriate things to his use, man had at firssst only his native faculties, his instincts, his intelligence and his hands. Soon, by the aid of these levers he procured others: he put tools in his fingers; he substituted machines for tools; he added to his forces those of animals, metals, water, fire and wind. By degrees all the powers of nature, some being subjugated by others, under the intelligent direction he gave them, entered his service without disturbance, and began to work for him. The capital thus composed of the combined forces which he added to the little he had on coming from the hands of nature, and including, of course, the successive developments of his own faculties, is of human creation. A piece of land is, as M. Tracy well observes, like a block of marble or a mass of mineral, only a certain portion of matter, endowed with certain properties, and which man may dispose of, and he disposed of, as with a multitude of other things, so as to render its properties useful. Man does not create this matter, nor the properties it has, any more than he creates mater or the properties of matter, from which are formed a hundred other kinds of capital; but he creates, by his successive efforts, the power to derive advantage from both: he creates them as instruments of production, and these forces which J. B. Say represents as acting from the beginning conjointly with human industry, are themselves, at least as instruments of production, creations of industry, and ought to be included in the list of means which it has given itself, and of agents which it has made for itself, while it has developed its own forces. Consequently, and let us note well the fact, it is not necessary to go outside of human activity, to find the origin of the powers which human labor possesses. It is from this that everything visibly proceeds, and no other force is perceptible at the beginning. In other words, man has created all his powers, beginning with those he has derived from himself and from the marvelous faculties whose germ Heaven placed within him. He has created, I repeat, neither these faculties nor the forces throughout nature; but all the power that he has of deriving from both, he has, I say, given himself.

III.95.32

—Then, after having thus referred the forces which J. B. Say represents as acting from the beginning conjointly with man, to a place among the general means of production that man has created, we will repeat that M. Say has made, and others after him will continue to make, following his example, an analysis of these means which appears to us neither sufficiently complete nor even sufficiently accurate.

III.95.33

—We will observe, in the first place, that the author of the Traitéd' Economic Politique excludes from the mass of its productive funds, as the author of the "Wealth of Nations" had done, all that part of the general fund of society which is employed in satisfying public or private, particular or general, want. This is the natural consequence of the error which makes them consider the arts which act on man unproductive. Thus all that portion of the social fund which individuals employ in maintaining their physical strength, increasing their intellectual faculties, improving their moral habits, bringing up children who will some day be of help to them, would, according to J. B. Say, constitute no part of their means of the production. And, in like manner, all that part of the same fund employed in satisfying public wants, as for example, maintaining order in the community, creating habitual respect among its members for personal and property rights, procuring instruction for classes which would not naturally receive it, would also not constitute any part of the productive forces of society. All these would serve to satisfy demands, to be sure, and very imperious demands; all these would be productive of utility and gratification, but not of wealth: the service people made of them would add nothing to the wealth and forces of society.

III.95.34

—This affects us, we acknowledge, as one of the most obvious of errors. It is absolutely impossible for us to admit that the portion of his means that a manufacturer employs in keeping his manufactory in repair, constitutes a part of his productive capital; and that that which he employs in maintaining himself, the head of the manufactory and the prime agent of manufacturing production, constitutes no part of it. It is impossible for us to admit that the buildings and the food which an agronomist employs for the preservation of his beasts of burden should constitute a part of his productive capital; and that his dwelling house, his furniture, his clothing, his food, and all that part of his wealth which is employed to keep him, and he himself, the head and the prime agent of agricultural production, constitute no part of it. There are, quite probably, a certain number of men in society incurably worthless, either absolute do-nothings, or employing the little activity they have in preserving their existence, seeking enjoyment, and procuring for themselves agreeable sensations. We are quite willing that all that part of the capital of society which is employed in maintaining such beings should be struck off from its productive funds. But if there are many people in the world who live only for pleasure, happily a still greater number live to act, and make their happiness consist in some profitable employment of their powers; and who, in fact, habitually use them in a way that really benefits humanity. Now, we can not comprehend, we say, how any one can strike out from the productive capital of society the part of its funds it employs in suitably maintaining these men, these who are assuredly the most valuable, the, most noble, the most fruitful of all its products, the one without which no other would exist. Everything that a worthless man expends for the satisfaction of his wants is lost: nothing results from it but the maintenance of a useless man. Everything that a useful man gives to his pleasures, without any advantage to the increase or preservation of his faculties, is equally lost: nothing remains of that expense. But what the same individual devotes to the maintenance or the increase of his powers, however little the forces preserved or acquired may be worth above the outlay in preserving or acquiring them, is reproductively employed, and constitutes part of his means of production: of this there can be no doubt.

III.95.35

—In this mass of means of every kind, of which the general productive fund of society is composed, Smith had already discerned a great number of means and of forces: he had seen those prime materials more or less raw, and those more or less worked; tools and machines of every sort designed to shorten or to facilitate labor; buildings devoted to every kind of labor; lands brought into the condition most, suited for cultivation and tillage; a great number of talents and much useful knowledge acquired by the members of society; a certain total of moneys designed to facilitate exchanges, etc.; and, of all these means, he had composed two classes of capital, fixed capital and circulating capital, both designed to maintain that fund for consumption from which men derive all the means of preserving and improving their existence.

III.95.36

—J. B. Say has gone farther than Smith, and done better in some respects. He first divides the productive funds of society into two great divisions, one of which is composed of the industrial faculties of the labourers, and the other of their implements. Then he distinguishes, among the industrial faculties, that of the savants, that of business managers, that of workmen: and, among the instruments, the natural agents not appropriated, such as the sea, the atmosphere, the heat of the sun, and all the powers of physical nature; the appropriated natural agents, such as cultivable lands, regular watercourses, mines in the way of exploitation, etc.; and the different kinds of capital, among which he distinguishes unproductive capital, capital productive of utility and of gratification, and capital truly productive; dividing again the latter into fixed and circulating, and giving particular attention to capital which exists in the form of machines, and that which exists in the form of moneys; while Smith only describes the functions of money, and does not speak of the influence of machines. Such is the analysis of J. B. Say.

III.95.37

—It is surely having made progress in analyzing this vast mass of levers and forces of every kind of which the general productive funds of society is composed, to have distinguished the industrial faculties themselves from the industrial implements. But, while firmly maintaining that essential and excellent distinction between industry and its implements, or, rather, while forming two well-separated classes of the natural and acquired powers which man possesses in himself, and of those which he has appropriated to himself from all nature, and that it depends upon him to add to those he draws from his own resources, we think there is a better analysis to be made of both. Let us speak first of those which exist in man himself.

III.95.38

—J. B. Say only remarks here a fund of industrial faculties. We shall soon see that there is in him something else than industry, and something, too, which, in the interest of production, it is important to observe. But we will first investigate the industrial funds. J. B. Say only distinguishes among industrial funds the three classes of talents of the savant, the business manager and the workman, or, rather, of theory, administration and execution. The first observation that occurs to the mind, is, that he here confounds two very distinct orders of faculties, which it was essential to keep as separate as possible, viz., those which pertain to the understanding and management of affairs, and those which relate to the execution and the art.

III.95.39

—The talent for affairs is composed of several sorts of important faculties which J. B. Say has not described, or even designated, and of which it was, nevertheless, essential to speak; for they occupy a high rank and play a very important part in all kinds of labor, without exception, which the economy of society embraces. This is a considerable omission. The order which J. B. Say assigns to science, in the faculties which pertain to art, is not, I think, the true one: things, in this world, did not begin by theory; a certain practical acquaintance with a trade preceded scientific instruction. People began by acting empirically; then came theoretical knowledge; then the talent for applications, which J. B. Say places among the attributes of the business man, and which is much more in the domain of art; finally, the execution has followed the thought, and has been more or less skillful, according as the thought itself has become more elaborated, and as it has become more natural and more familiar. In all this, as we can see, whether it is a question of business or of art, the only things concerned are address, skill, knowledge and capacity.

III.95.40

—But how is this! are these, then, all there is in man? or does he need no other faculties in order for production? Is he not quite as susceptible of morality as of knowledge? And should we not regard as indispensable that his good abilities should be aided by good breeding, if it is permissible to designate by the familiar phrases, good abilities and good breeding, the whole of the intellectual and moral means of which the powers of the human race are composed? Is a fund of good moral habits any less necessary to the work of production than a fund of industrial faculties? Here again, we say, there seems to as an important and much-to-be regretted omission in the analysis which Smith, J. B. Say, and their successors have made of the general means of production. One can already perceive how much this analysis leaves to be desired in what touches upon the social fund, that which is composed of all the forces which laborers have developed in themselves. Let us pass on to the account of those which they have fixed and accumulated in things.

III.95.41

—We have said that here J. B. Say distinguished unappropriated natural agents, appropriated natural agents, and capitals. We will here, to confirm our first remarks, call attention to the fact that the forces which he designates by the term unappropriated natural agents, such as all the laws of physical nature, could not be considered as instruments of industry, so long as man could not get hold of their power. These agents really exist for him only in the labors, the works, the machines, by means of which he has succeeded in getting hold of them and applying them to his ends. We think we have already rendered this truth palpable. From the moment it is perceived that there are no natural agents for man, except those he has himself got hold of, that he has succeeded in imprisoning in his sails, his gearing, his ingenious and innumerable mechanisms, and which he has made his own by previous and adequate labors of appropriation, it is clear that no such distinction is to be made as unappropriated and appropriated agents. To human industry, only appropriated agents really exist.

III.95.42

—In the list of appropriated agents, we discover absolutely no reason for making two separate classes of capitals and land. Nothing, in fact, seems to distinguish the vegetable or mineral land from the other objects in nature of which man has taken possession, which he has put to his service, in which he has accumulated and capitalized more or less of values; and we can see no more reason for investigating, as J. B. Say has done, how capital and land units to produce industry, than to call attention to the manner in which industry, capital and currents of air or currents of water, or vapor, or the sun, or any other such agent of nature which man has been able to associate with his labor in any manner whatever, combine for the same object. The special distinction of land, in the number of appropriated agents, should then be put aside.

III.95.43

—In the mass of forces within and without himself which man has appropriated to his services, or, to employ language which designates all these forces by one single word, in the mass of capitals, J. B. Say distinguishes unproductive; productive of utility and gratification; and productive of wealth, or, simply, productive. Unproductive capitals (and by these J. B. Say means all buried treasure and unemployed capital), unproductive capitals, we say, scarcely merit figuring in an analysis of the instruments of production. They are, it is true, a potential force: they are capable of being employed; but so long as they remain inactive, they are as if they did not exist, and can hardly be included in an analysis of the social forces. All that part of capitals productive of utility and gratification, which is employed in frivolous or harmful expenses, merits still less being included in the mass of instruments of industry. All that which, on the contrary, serves to bring up useful men, to preserve, extend and improve their faculties, is, as we have explained above, eminently productive, and demands to be ranked among the most valuable and the most effective means of production. There remain, then, simply, productive capitals, which Say distinguishes from natural agents, in which he induces neither land, mines nor water courses, and among which he ranks neither the material of public administration nor the dwelling houses of private citizens, nor their furniture, their clothing, their books, or anything that serves directly for the education of the human race, and in the naming of which, on the contrary, we need not hesitate to combine all the material elements of human industry, all the external forces that it has employed, all the means of action, outside of itself, which it has learned to draw upon and appropriate to its ends, and to which has been able to give a useful direction.

III.95.44

—We will only remark, that, even in comprehending thus under the term capital all the external instruments of industry, we would still be giving to that appellation too restricted an application, and that it is proper to combine under this word all the forces whatsoever that man has accumulated and that he can employ acquiring new ones: that a nation's capital is composed of the forces it has accumulated within itself, quite as much as of those which it has put itself in a position to derive from things; that we may say, and we must say, a capital of knowledge and of good habits, just as we say a capital in money, and that J. B. Say should have been the less averse to this language, because he calls man an accumulated capital, and applies the term accumulated capital to the talent of a workman, an administrator, or an officer. Consequently, man and the world being given, such as they were at the beginning, it is necessary, starting with the active intelligence of the human race as the primordial cause from which all our resources have sprung, to consider as capital, not any particular instruments which man has appropriated, rather than certain others, but all the useful force of every kind, which he has succeeded in developing either in himself or in the things by which he is surrounded, or which he has converted to his use. This being stated, and these various remarks made, here are what seem to us to be the composition of the capital or general productive funds of society, what the various orders of means we discover in it, and the total of the causes with which, in our opinion, the productive power of all kinds of labor is connected.

III.95.45

—In the first place, the social fund or capital is divided, we think, into two great classes of forces: that which labor has developed in men, and that which it has realized in things. The effective power of all kinds of labor comes from the combination of the two classes. In the number of powers which men have succeeded in developing in themselves, the first which strikes us, that which naturally takes a place at the head of all the others, that which is most indispensable to the success of all enterprises and the well-directed action of all the arts, is the genius for affairs, a talent in which we discover several very distinct faculties, such as capacity for judging of the state of demand or knowing the wants of society; that of judging of the state of supply, or estimating the existing means of satisfying these demands; that of administrating with ability enterprises wisely conceived; and finally, that of verifying, by regular accounts, intelligently kept, the previsions of speculation. After this list of faculties relating to the conception and the conduct of enterprises, and of which the genius for affairs is composed, those which are needed for execution, and from which is formed the genius for art, next present themselves. Such are a practical knowledge of a trade, theoretical notions, a talent for applications, and skill in workmanship.

III.95.46

—All these faculties are industrial. But, again, are these all? No, certainly not; and if, in the fund of the personal faculties of workmen, we discover a great variety of industrial forces, we also remark there a great number of moral qualities. We distinguish in them all that series of habits which guide them in their conduct in regard to themselves, and which concern in some sort only the individual. We also distinguish there all that series of habits of another order, which govern relations and which interest society more particularly. The effective power and the free action of all branches of business depend in the highest degree, as might easily be shown, on the perfection of both. We could not take too much pains to note and call attention to the happy influence exerted in all kinds of labor, by good private morals in laborers and the improvement of their habits as citizens.

III.95.47

—Finally, outside of these various orders of faculties to which labor has given rise in men, and which form, in some sort, the intellectual and moral capital of society, its fund of personal faculties, we perceive a multitude of utilities, forces, levers, Powers, which it has succeeded in fixing in things, and which form, if one chooses so to call it, its real or material capital. In this part of its general funds we perceive, under countless aspects, lands cleared, plowed and planted, regular watercourses, canals, routes, enclosures, constructions, buildings, machines, tools, raw products, provisions, moneys, wages, and an infinite variety of instruments and means of action of every kind. All these, variously brought together, form multitudes of establishments, workshops for labor; and if we very attentively observe these workshops, we notice that, however truly appropriated they may be to their object, it is essential that they be well situated, well organized, that labor in them be skillfully distributed, and that they be provided with a sufficient quantity of well-selected tools, materials, and supplies of various sorts.

III.95.48

—Such is the analysis of which this general fund of society, where are found in deposit all our faculties and all our resources, seems to us susceptible; and such are the various elements of power which we there discover. It would now be necessary, in order to complete the exposition of the important phenomenon which this article aims to describe, to show what particular influence each of the means we have just pointed out, exerts in production. This is a task which we have performed in our work on "Freedom of Labor," from which we have taken almost literally a considerable portion of the remarks that have just been read, and nearly two volumes of which are devoted to explaining either the part which these means play in labor in general, or the diversity of the applications that are made of them in the various kinds of labor that social economy embraces; and it would be impossible for us to give here, even in a summary, any adequate idea of that analysis. We can only refer the reader to that book.

III.95.49

—It has been remarked, that, in so extended an analysis as this of the means of labor, we had omitted to speak of the most considerable of all, namely, capital. As if, beginning as we did, with the natural faculties of man, and enumerating the various orders of forces that he had developed in himself, or had appropriated from without, we could have spoken, and did in fact speak, of anything else! As if, under their own names, the various orders of intellectual, moral or material means that we had pointed out, could be and were anything but different portions of the capital of society! As if, in short, after having spoken successively of all, one particular class of forces or of resources could remain to be treated of, under the name of capital, especially when we had said, in terms so explicit, that this term capital did not apply to any one kind particularly, and that it embraced without distinction all the means of production that man had accumulated around him and within himself!

III.95.50

—No; our error, if such it is, consists in having discarded, at the outset, that trinity of land, labor and capital, which the school makes assist simultaneously in the beginning of all our acquisitions of wealth and of forces; which appeared to us to be a cause of trouble and confusion in the exposition of the science; which, while leading to useless explanations, had in our eyes the error of being at the same time incorrect and inadequate, and, taking man and the world in their primordial state, of having made everything arise from the activity of the human race acting at the same time on things and on itself. But, taking thus our starting point in the activity of man, we have the consciousness of having omitted none of the great categories of productive forces that he has developed in the external world and in himself, no portion of the social capital; and we think we have made a more complete and true analysis of the general instruments of labor, as well as of the kinds of labor which social economy embraces, than we had found in the best books on the science.

III.95.51

—We will only say, in closing, that production does not alone derive its forces from the various categories of personal faculties and material means which have just been enumerated, but also from all the great orders of labor which society contains; that there is not one of them which is not indispensable to the activity of all the others, and that, to make the phenomenon of production fully comprehended, one would have to designate the place that each of these kinds of labor occupies in society, the part it performs there, the mutual assistance they render one another, etc. This is what we endeavored to do in the work on "Freedom of Labor," which we have already mentioned, and to which we are obliged again to refer the reader.

E. J. L., Tr.
CH. DUNOYER.


Notes for this chapter


50.
M. Danoyer here refers to the expression, "the carrying trade," the "commerce of transportation," and others similar.—E. J. L.
51.
By high arts, M. Dunoyer here refers to such arts as that of the orator, the actor, the musician, the sculptor, etc.—E. J. L.
52.
This, however true it may have been when M. Lunoyer wrote, is we are happy to say, no longer so, as witness Macleod's interesting exposition of the nature of incorporeal property, and the writings of Whateley, Senior, and others.—E. J. L.
53.
M. Dunoyer includes actors, musicians, etc., among artists.—E. J. L.

Footnotes for PRODUCTS ON PAPER

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