We have had in England a controversy, What is Profit? as we have just seen.In France there has been a controversy,Whether there ought to be Profits? Whether capital ought to be allowed to bring Profit to its owner? It has been maintainedby the socialists that the Profit of capital is a thing which is wrong and against nature.
(Bastiat, p.3.) "It is thus that the democratic Socialist, Thoré, expresses himself:
"`The revolution will always have to be recommenced, so long as we occupy ourselves with consequences only, withouthaving the logick or the courage to attack the principle itself".This principle is capital, false property, interest, and usury,which by the old regime, is made to weigh upon labour.
"`Ever since the aristocrats invented the incredible fiction, that capital possesses the power of reproducing itself, the workershave been at the mercy of the idle.
"`At the end of a year, will you find an additional crown in a bag of one hundred shillings? At the end of fourteen years, willyour shilling have doubled in your bag?
"`Will a work of industry or of skill produce another, at the end of fourteen years?
"`Let us begin, then, by demolishing this fatal fiction.'
"I have quoted the above," Bastiat says, "merely for the sake of establishing the fact, that many persons consider theproductiveness of capital a false, a fatal, and an iniquitous principle.But quotations are superfluous; it is well known that thepeople attribute their sufferings to what they call die trafficking in man by man.
"In fact, the phrase, tyranny of capital, has become proverbial."Bastiat argues against this doctrine with great force and ingenuity.To us the matter will seem to need no argument.A manwho has capital will not give the use of it for nothing.And no one would accumulate capital if he was to get nothing by it.
Bastiat gives a curious illustration of this.
(Bastiat, p.45.) "A friend of mine, commissioned to make enquiry into Parisian industry, has assured me that themanufacturers have revealed to him a very striking fact, which proves, better than any reasoning can, how much insecurityand uncertainty injure the formation of capital.It was remarked, that during the most distressing period, the popularexpenses of mere fancy had not diminished.The small theatres, the fighting lists, the public-houses, and tobacco depots,were as much frequented as in prosperous times.In the inquiry, the operatives themselves explained this phenomenon thus:'
What is the use of pinching? Who knows what will happen to us? Who knows that interest will not be abolished? Whoknows but that the State will become a universal and gratuitous lender, and that it will wish to annihilate all the fruits that wemight expect from our savings?' Well! I say, that if such ideas could prevail during two single years, it would be enough toturn our beautiful France into a Turkeymisery would become general and endemic, and, most assuredly, the poor would bethe first upon whom it would fall."Mercantile Price is meant.
I return to the subject of Price.
Price, as I have said, depends on three elements; Wages, Profits, and Rent.The Price here spoken of is what may be calledMercantile Price.
Mr Mill notices this duly according to its importance ( Pol.Econ.pp.519, 521), he says:
"I must give warning, once for all, that the cases I contemplate are those in which value and prices are determined bycompetition alone.In so far only as they are thus determined, can they be reduced to any assignable law.`rho buyers must besupposed as studious to buy cheap, as the sellers to sell dear.The values and prices, therefore, to which our conclusionsapply, are mercantile values and prices; such prices as are quoted in price-currents; prices in the wholesale markets, in whichbuying as well as selling is a matter of business; in which the buyers take pains to know, and generally do know, the lowestprice at which an article of a given quality can be obtained, and in which, therefore, the axiom is true, that there cannot be,for the same article, of the same quality, two prices in the same market.Our propositions will be true in a much morequalified sense, of retail prices; the prices paid in shops, for articles of personal consumption.For such things there often arenot merely two, but many prices in different shops, or even in the same shop; habit and accident have as much to do in thematter as general causes.Purchases for private use, even by people in business, are not always made on business principles:
the feelings which come into play in the operation of getting and that of spending their income, are often extremely different.
