Page:Encyclopædia Britannica, Ninth Edition, v. 19.djvu/376

Rh 360 POLITICAL ECONOMY directed against the artificial manners of the times, by others against contemporary political institutions ; it was specially employed by the physiocrats in criticizing the economic practice of European Governments. The general political doctrine is as follows. Society is composed of a number of individuals all having the same natural rights. If all do not possess (as some members of the negative school maintained) equal capacities, each can at least best understand his own interest, and is led by nature to follow it. The social union is really a contract between these individuals, the object of which is the limitation of the natural freedom of each, just so far as it is inconsistent with the rights of the others. Govern ment, though necessary, is a necessary evil; and the governing power appointed by consent should be limited to the amount of interference absolutely required to secure the fulfilment of the contract. In the economic sphere, this implies the right of the individual to such natural enjoyments as he can acquire by his labour. That labour, therefore, should be undisturbed and unfettered; and its fruits should be guaranteed to the possessor ; in other words, property should be sacred. Each citizen must be allowed to make the most of his labour; and therefore freedom of exchange should be ensured, and competition in the market should be unrestricted, no monopolies or privileges being permitted to exist. The physiocrats then proceed with the economic analysis as follows. Only those labours are truly &quot;productive&quot; which add to the quantity of raw materials available for the purposes of man ; and the real annual addition to the wealth of the community consists of the excess of the mass of agricultural products (including, of course, metals) over their cost of production. On the amount of this &quot;produit net&quot; depends the wellbeing of the community, and the possibility of its advance in civilization. The manufacturer merely gives a new form to the materials extracted from the earth ; the higher value of the object, after it has passed through his hands, only represents the quantity of provisions and other materials used and con sumed in its elaboration. Commerce does nothing more than transfer the wealth already existing from one hand to another ; what the trading classes gain thereby is acquired at the cost of the nation, and it is desirable that its amount should be as small as possible. The occupa tions of the manufacturer and merchant, as well as the liberal professions, and every kind of personal service, are &quot;useful&quot; indeed, but they are &quot;sterile,&quot; drawing their income, not from any fund which they themselves create, but from the superfluous earnings of the agriculturist. Perfect freedom of trade not only rests, as we have already seen, on the foundation of natural right, but is also recom mended by the consideration that it makes the &quot; produit net,&quot; on which all wealth and general progress depend, as large as possible. &quot; Laissez faire, laissez passer &quot; should therefore be the motto of Governments. The revenue of the state, which must be derived altogether from this net product, ought to be raised in the most direct and simplest way, namely, by a single impost of the nature of a laud tax. The special doctrine relating to the exclusive produc tiveness of agriculture arose out of a confusion between &quot; value &quot; on the one hand and &quot; matter and energy &quot; on the other. Smith and others have shown that the attempt to fix the character of &quot; sterility &quot; on manufactures and commerce was founded in error. And the proposal of a single impot territorial falls to the ground with the doctrine on which it was based. But such influence as the school exerted depended little, if at all, on these peculiar tenets, which indeed some of its members did not hold. The effective result of its teaching was mainly destructive. It continued in a more systematic form the efforts in favour of the freedom of industry already begun in England and France. The essential historical office of the physiocrats was to discredit radically the methods followed by the European Governments in their dealings with industry. For such criticism as theirs there was, indeed, ample room : the policy of Colbert, which could be only tempor arily useful, had been abusively extended and intensified ; Governmental action had intruded itself into the minutest details of business, and every process of manufacture and transaction of trade was hampered by legislative restric tions. It was to be expected that the reformers should, in the spirit of the negative philosophy, exaggerate the vices of established systems ; and there can be no doubt that they condemned too absolutely the economic action of the state, both in principle and in its historic manifesta tions, and pushed the &quot; laissez faire &quot; doctrine beyond its just limits. But this was a necessary incident of their connexion with the revolutionary movement, of which they really formed one wing. In the course of that movement, the primitive social contract, the sovereignty of the people, and other dogmas now seen to be untenable were habitually invoked in the region of politics proper, and had a transitory utility as ready and effective instru ments of warfare. And so also in the economic sphere the doctrines of natural rights of buying and selling, of the sufficiency of enlightened selfishness as a guide in mutual dealings, of the certainty that each member of the society will understand and follow his true interests, and of the coincidence of those interests with the public welfare, though they will not bear a dispassionate examination, were temporarily useful as convenient and serviceable weapons for the overthrow of the established order. The tendency of the school was undoubtedly to consecrate the spirit of individualism, and the state of non-government. But this tendency, which may with justice be severely condemned in economists of the present time, was then excusable because inevitable. And, whilst it now impedes the work of reconstruction which is for us the order of the day, it then aided the process of social demolition, which was the necessary, though deplorable, condition of a new organization. These conclusions as to the revolutionary tendencies of the school are not at all affected by the fact that the form of government preferred by Quesnay and some of his chief followers was what they called a legal despotism, which should embrace within itself both the legislative and the executive function. The reason for this preference was that an enlightened central power could more promptly and efficaciously introduce the policy they advocated than an assembly representing divergent opinions, and fettered by constitutional checks and limitations. Turgot, as we know, used the absolute power of the crown to carry into effect some of his measures for the liberation of industry, though he ultimately failed because unsustained by the requisite force of character in Louis XVI. But what the physiocratic idea with respect to the normal method of government was appears from Quesnay s advice to the dauphin, that when he became king he should &quot;do nothing, but let the laws rule,&quot; the laws having been of course first brought into conformity with the jus naturae. The partiality of the school for agriculture was in harmony with the sentiment in favour of &quot; nature &quot; and primitive simplicity which then showed itself in so many forms in France, especially in combination with the revolutionary spirit, and of which Rousseau was the most eloquent exponent. It was also associated in these writers with a just indignation at the wretched state in which the rural labourers of France had been left by the scandalous neglect of the superior orders of society a state of which the