Notice to the Second Edition (1827)

It is now seven years since I published the work of which I today offer the public a second edition. I will not hide that it did not win the approval of the men who are rightly regarded today as having brought about the most remarkable advances in the science; I must even put down to their personal goodwill the forbearance with which they opposed my book. I was not surprised to have made no deeper impression. I was calling into doubt principles that were regarded as settled; I was shaking a science which, by its simplicity and by the clear and methodical deduction of its laws, seemed one of the noblest creations of the human mind; I was attacking, in short, an orthodoxy, a dangerous undertaking in philosophy as in religion. At the same time I laboured under one more disadvantage: I was parting company with friends whose political opinions I share. I was pointing out the danger of innovations they recommend; I was showing that several institutions they had long attacked as abuses had had beneficial consequences; I was calling, in short, on more than one occasion, for the intervention of social power to regulate the progress of wealth, instead of reducing political economy to the simpler, and apparently more liberal, maxim of laissez faire et laissez passer.

I had no grounds for complaint; I waited, for truth is stronger than the spirit of system. If I had been mistaken, the course of events could not fail to show it to me; if, on the contrary, I had discovered new principles, which even in my own eyes were then only beginning to acquire importance, the facts would not be long in appearing to support them, and, while respecting the authority of the high priests of the science, I could say with Galileo: Eppur si muove.

Seven years have passed, and the facts seem to me to have fought victoriously on my side. They have proved, far better than I could have done, that the learned men from whom I had parted were in pursuit of a false prosperity; that their theories, where they were put into practice, might well increase material wealth, but that they diminished the mass of enjoyments allotted to each individual; that if they tended to make the rich richer, they also made the poor poorer, more dependent and more destitute. Wholly unexpected crises have followed one another in the commercial world; the progress of industry and of opulence has not saved the industrious people who created that opulence from unheard-of sufferings; the facts have answered neither to common expectation nor to the predictions of the wise; and despite the implicit faith that the disciples of political economy place in the teachings of their masters, they are compelled to seek new explanations elsewhere for phenomena that depart so far from the rules they believed established.

Among these explanations, those that I had given in advance have turned out to agree perfectly with the results. Perhaps it is to this coincidence that I should attribute the quicker sale of my work, and the request made to me to prepare a new edition. It is in England that I carried out this task. England gave birth to the most celebrated economists. Their science is taught there today with redoubled ardour. Ministers of state, already adepts in the doctrine of public wealth, have been seen attending the lectures of one of the ablest professors of political economy, and have been heard constantly invoking his principles in Parliament. Universal competition, or the effort to produce ever more and ever more cheaply, has long been the system of England, a system I attacked as dangerous. This system has made English industry take gigantic strides, but twice it has plunged the manufacturers into frightful distress. It is in the presence of these convulsions of wealth that I thought I ought to place myself in order to revise my reasoning and compare it with the facts.

The study I have made of England has confirmed me in my New Principles. In that astonishing country, which seems to be undergoing a great experiment for the instruction of the rest of the world, I have seen production increase while enjoyments diminish. The mass of the nation there, like the philosophers, seems to forget that the increase of wealth is not the end of political economy, but the means at its disposal for procuring the happiness of all. I look for this happiness in every class, and I do not know where to find it. The high English aristocracy has indeed reached a degree of wealth and luxury that surpasses anything seen in any other nation. Yet it does not itself enjoy an opulence that it seems to have acquired at the expense of the other classes; it lacks security, and in every family privation is felt even more than abundance. If I enter those houses whose splendour is altogether royal, I hear their heads declare that if the monopoly of corn that they exercise against their fellow citizens is abolished, their fortunes will be destroyed, for their lands, which stretch over whole provinces, will no longer pay the costs of cultivation. Around these heads I see a number of children without example anywhere else in the aristocratic class; many have ten, twelve, sometimes more; but all the younger sons and all the daughters are sacrificed to the vanity of the eldest; their share in capital will not equal one year of their brother’s rents; they must grow old unmarried, and their dependence at the end of their lives makes them pay very dearly for the luxury of their early years.

Below this aristocracy, titled and untitled, I see commerce holding a distinguished rank. It embraces the whole world in its enterprises; its agents brave the ice of both poles and the heat of the equator, while each of the chiefs who gather at the Exchange can dispose of millions. At the same time, in every street of London and of the great towns of England, the shops display goods enough to supply the consumption of the universe. But has wealth assured the English merchant the kind of happiness it is fitted to guarantee? No: in no country are bankruptcies so frequent. Nowhere are those colossal fortunes, which by themselves would suffice to fill a public loan or to sustain an empire or a republic, overturned with such speed. All complain that business is scarce, difficult and unprofitable. Within a few years of each other, two terrible crises have ruined part of the bankers and spread desolation over all the English manufactures; at the same time another crisis has ruined the farmers, and its rebound has been felt in the retail trade. On the other hand, this commerce, for all its immense extent, has ceased to draw in the young men who are looking for a career; every place is taken, and in the upper ranks of society as in the lower, the greater number offer their labour in vain, without being able to obtain a wage.

Has this national opulence, whose material progress strikes every eye, at least turned to the advantage of the poor? No more so. The people in England are deprived at once of comfort in the present and of security for the future. There are no longer any peasants in the countryside; they have been forced to make way for day labourers. There are hardly any artisans left in the towns, or independent heads of a small industry, but only factory workers. The industrial, to use a word that this very system has made fashionable, no longer knows what it is to have a trade; he earns only a wage, and since that wage cannot suffice for him equally in every season, he is reduced almost every year to begging alms from the poor rates.

This nation, so opulent, has found it more economical to sell all the gold and silver it possessed, to do without coin, and to carry on all its circulation with paper. It has thus voluntarily deprived itself of the most precious of the advantages of coin, the stability of its price; the holders of the notes of country banks run the risk every day of being ruined by the frequent, and as it were epidemic, failures of the bankers, and the whole state is exposed to a convulsion in every fortune, should an invasion or a revolution shake the credit of the national bank. The English nation has found it more economical to give up the kinds of cultivation that require much labour, and it has dismissed half the cultivators who lived on its fields; it has found it more economical to replace manufacturing workers by steam engines, and it has dismissed, then taken back, then dismissed again the workers of the towns; and the weavers, giving way to power looms, are today dying of famine. It has found it more economical to reduce all workers to the lowest wage on which they can live, and the workers, being no longer anything but proletarians, have not been afraid to plunge themselves into still deeper misery by raising ever larger families. It has found it more economical to feed the Irish only on potatoes and clothe them only in rags, and now every packet boat brings it legions of Irishmen who, working more cheaply than the English, drive them out of every trade. What, then, are the fruits of this immense accumulated wealth? Have they had no other effect than to make every class share in cares, privations and the danger of complete ruin? Has not England, in forgetting men for things, sacrificed the end to the means?

The example of England is all the more striking because it is a free, enlightened and well-governed nation, and all its sufferings arise solely from its having followed a false economic direction. No doubt the foreigner in England is struck by the arrogant pretensions of the aristocracy, and the accumulation of wealth in the same hands tends constantly to increase them. Yet in no country is the independence of every class of the nation better guaranteed, and nowhere does the poor man, alongside a deference that astonishes us, better keep at the bottom of his soul the consciousness of his own dignity. In no country does the feeling of confidence in the law, and of respect for its authority, more thoroughly penetrate every class; in no country is the feeling of compassion more general, or are the rich more eager to come to the aid of every distress; in no country is public opinion more powerful; in none is the ministry more enlightened, more determined to seek the general good, and more skilful in finding it. Are so many means, so many virtues, then useless to human societies? Yes, when they have the misfortune to set out in a false direction. England, more enlightened, freer and more powerful than other nations, has only arrived the sooner at the goal that an error made it pursue. Its vital force and the talents of its statesmen will help it, once it has the firm will, to return to the right road more easily than another nation could; but science has its prejudices and peoples have their habits, and even today, in their distress, the English are taking no measure that does not tend to aggravate it.

I have sought to establish, in the book I am presenting anew to the public, that if riches are to contribute to the happiness of all, as being the sign of all the material enjoyments of man, their increase must conform to the increase of population, and their distribution among that population must follow a proportion that cannot be disturbed without extreme danger. I have set out to show that it is necessary for the happiness of all that revenue should grow with capital, that population should not outrun the revenue on which it must live, that consumption should grow with population, and that reproduction should be proportioned both to the capital that produces it and to the population that consumes it. I have shown at the same time that each of these relations can be disturbed independently of the others; that revenue often does not grow in proportion to capital; that population can increase without revenue being increased; that a more numerous but more wretched population may call for a smaller consumption; that reproduction, finally, may proportion itself to the capitals that set it going, and not to the population that demands it; but that each time one or other of these relations is disturbed, society suffers.

It is on this proportion that my New Principles are founded; it is by the importance I attach to it that I differ essentially from the philosophers who in our day have taught economic science so brilliantly, Messrs Say, Ricardo, Malthus and McCulloch. They seem to me to have constantly abstracted from the obstacles that hampered them in the chain of their theorems, and to have arrived at false conclusions for not having distinguished what it gave them some trouble to distinguish.

All modern economists, in fact, have recognised that public wealth, being only the aggregate of private fortunes, arises, increases, is distributed and is destroyed by the same processes as that of each individual. All knew very well that in a private fortune the most essential part to consider is the revenue; that consumption, or expenditure, must be regulated by the revenue, on pain of destroying the capital. However, since in public wealth the capital of one becomes the revenue of another, they were at a loss to decide what was capital and what was revenue, and they found it simpler to strike the latter out of their calculations altogether.

By neglecting a quantity so essential to determine, Messrs Say and Ricardo came to believe that consumption was an unlimited power, or at least that it had no bounds other than those of production, whereas it is bounded by revenue. They announced that all wealth produced would always find consumers, and they encouraged producers to cause that glut of the markets which is today the distress of the civilised world, whereas they ought to have warned producers that they could count only on consumers who have a revenue. Through the same oversight Mr Malthus, while pointing out the danger of a disorderly increase of population, set it no limit but the quantity of subsistence the earth can produce, a quantity that will long remain capable of increasing with extreme rapidity; whereas if he had taken revenue into consideration, he would soon have seen that it is the disproportion between the labouring population and its revenue that causes all its sufferings. Mr McCulloch, in a little work intended to enlighten the people on the question of wages, asserts that the wage of the poor is necessarily proportioned to the ratio between population and capital; whereas the wage, being a consequence of the quantity of labour demanded, must also be proportioned to consumption, which is itself proportioned to revenue. In the same work he exhorts the poor man to proportion the increase of his family to the increase of the national capital, a quantity of which he cannot form even the most confused notion; whereas he might have observed that every man, in marrying and founding a family, is always obliged to regulate himself by his own revenue, from which it is easy to conclude that it is enough for the nation that all men regulate themselves by the revenue of all.

I therefore reissue my New Principles of Political Economy today with greater confidence. This rather vague title might suggest that the book is merely a new manual of the rudiments of the science. My claims go further: I believe I have placed political economy on a new basis, both by determining the revenue of all and by seeking out that distribution of this revenue which spreads the most happiness over the nation, and which therefore best attains the end of the science.

Other principles, equally new but of less general application, follow from these. I have shown that landed wealth is the more productive the greater the cultivator’s share in the ownership of the soil; that the laws meant to preserve their patrimonies to old families have caused the ruin of those very families; that the equilibrium between the profits of rival industries, on which modern economists have founded their calculations, is only ever reached through the destruction of fixed capitals and the mortality of the workers engaged in a losing industry; that although the invention of machines which increase the powers of man is a blessing for humanity, the unjust distribution we make of their benefits turns them into scourges for the poor; that a nation’s metallic money is, among its public expenditures, the most useful, and among its magnificences, the most reasonable; that the public funds are nothing but an imaginary capital, an assignment upon the revenue that may arise from labour and industry; that the natural limits of population are always respected by men who have something, and always overstepped by men who have nothing. Let no one accuse me, then, of having tried to make the science take steps backward; on the contrary, I have carried it further forward and onto new ground. It is there that I earnestly ask to be followed, in the name of the calamities that at this very moment afflict so great a number of our brothers, and that the old science teaches us neither to understand nor to prevent.

The criticisms to which the first edition of my New Principles was exposed have not been lost on me. I have recast this work almost entirely; most often I have tried to clear up what may have remained obscure. In fixing my readers’ attention on England, I wished to show, in the crisis it is going through, both the cause of our present sufferings, given the connection that exists between the various industries of the whole world, and the history of our own future if we go on acting on the principles it has followed. But I have also sometimes shown my deference to criticisms that seemed to me just, by cuts or changes. Nevertheless I feel I must protest against the manner, so often superficial and so often false, in which a work on the social sciences is judged by the world. The problem these sciences set us is far more complicated than any that arises in the natural sciences, and at the same time it speaks to the heart as well as to the reason. The observer is called upon to recognise unjust sufferings, which proceed from the act of man and of which man is the victim. He cannot consider them coldly and pass on without calling for some remedy. These remedies will sometimes shock the feelings or the prejudices of readers; they will sometimes be superfluous or inapplicable. These are errors, no doubt, but errors in administration rather than in political economy. The author or the reader may be mistaken about the application, because not all the circumstances on which the application rests are to be found in the book. The chain of principles, however, cannot be shaken by a few corollaries given over to controversy or to mocking malice. If these principles are true, if they are new, if they are fruitful, they will, in spite of some errors real or supposed, have advanced social science, the most important of the sciences, for it is the science of the happiness of man.

There is in political economy a polemical part, which is necessarily tied to the present time, which rests on recent circumstances, and which must change as those circumstances change or develop. Each new edition of a work of this kind therefore necessarily becomes in some sense a new work; so it is impossible for us to supply the purchasers of the earlier editions with supplements containing these changes, as one easily can, and should, for historical works of great length.

I have thought it right to reprint at the end of this work, as forming part of it, two essays published in periodicals, intended to treat in greater detail some of the important questions of political economy on which I differ from my predecessors.