Simone De Sismondi as an Economist 9780231890571

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STUDIES IN HISTORY, ECONOMICS, AND PUBLIC LAW EDITED BY T H E F A C U L T Y OF P O L I T I C A L SCIENCE OF C O L U M B I A U N I V E R S I T Y

Xtimber 2 9 8

SIMONDE B E SISMONDI AS AN ECONOMIST

®n DR. POLING CHANG P R E S I D E N T OF NANKAI U N I V E R S I T Y T I E N T S I N , CHINA IN APPRECIATION OF HIS INSPIRING PERSONALITY AND GF.NF.ROUS ENCOURAGEMENT, T H I S MONOGRAPH IS RESPECTFULLY

DEDICATED

PREFACE THE evolution of economic theories seems to have assumed an oscillating motion, emphasizing now the " state ", and now the " individual ", first touching the one, then swinging toward the other. I n ancient times, when division of labor was still insignificant, there was probably little collective action outside the family, and individual philosophy became everywhere triumphant. Later, under the feudal regime, the " state " began t o play a dominant part. T h e swing of the pendulum was complete when in the seventeenth century mercantilistic policies which prescribed all detailed laws governing production as well as consumption were adopted. State interference acted as too great a shackle upon the human mind, which naturally seeks free play. Excessive state control caused the reaction manifested in the individualistic philosophy of the eighteenth century, which found its inevitable expression in the French Revolution. Since that time, another oscillation has occurred; laissezfaire became the slogan and liberty was to be attained at any price. Production, it is true, received its most powerful impetus under the influence of this philosophy. Very soon, however, the new means of production and the ever-growing inter-dependent and complicated social life forced the pendulum to swing back towards the " state ". T o d a y one need not be a radical thinker to believe in state intervention. Social laws and legislation are no longer a novelty. But a thinker who, a century ago, when the trend of thought was still persistently swinging towards laissez7

8

PREFACE

faire, could defy the existing order and foresee many of the present-day reforms is surely deserving of our study. In the latest final swing of the " pendulum " toward state interference, Sismondi was recognized as the first interventionist. Besides being the precursor of much of our presentday social legislation, he furnished the arsenal from which most of the socialist writers of the nineteenth century drew their weapons. But Sismondi himself was not a socialist. Far from endorsing any of the popular dogmas of the day, such as " equal distribution ", " abolition of property ", etc., he held such tenets to be reactionary and disastrous to civilization. He sought remedies for existing social evils only in the slower, evolutionary process of legislative measures. Socialists of the last century have to a great extent plagiarized his criticism of the Industrial Régime, but have refused to endorse his reformative policy. This monograph is not an attempt to discredit the orginality of the socialist writers, but merely an effort to point out the worth of the contributions of this independent mind to the science of economics. Sismondi was unfortunately one of the most neglected economists of the nineteenth century. Only lately has he received belated recognition from French and German writers who placed him in rightful position in the history of economic thought. The present monograph is an endeavor to make a critical study of his economic doctrines in the hope that readers may be influenced to seek further acquaintance with the work of the great Genevese economist. For assistance in the preparation of the present thesis, grateful acknowledgment is made to Mrs. Cecil P. Killien, Miss Adelia R. Hall and Mr. Dale Zysman, for their literary criticism, to Mrs. C. A. Stewart, assistant editor of the Columbia Studies, to Director G. T. Chao of the Chinese Educational Mission, Washington, D. C. and to Messrs

PREFACE

9

T o n j o u L. Hsi and Waimin C. Sung, for their sincere encouragement and valuable assistance. T h e author also wishes to acknowledge his indebtedness to his brother Maohan, for assistance in proof-reading. For the immeasurable benefits received from the sound teaching and inspiring guidance of Professors Edwin R. A . Seligman, Vladimir G. Simkhovitch, and Professor Wesley C. Mitchell, as well as for Professor Mitchell's generous aid in the correction of this monograph, both as to form and substance, the author gratefully expresses his appreciation. MAO-LAN C O L U M B I A U N I V E R S I T Y , N E W Y O R K , OCTOBER,

1927.

TUAN.

CONTENTS PAGE

C H A P T E R

I

INTRODUCTION

A . Industrial transformation and e c o n o m i c theories of the nineteenth century B . B i o g r a p h i c a l s k e t c h of S i m o n d e de S i s m o n d i . . . ! C . E v o l u t i o n of his ideas . . . . C H A P T E R SISMONDI THE

II CRITIC

A . H i s criticism of the industrial r é g i m e B . H i s criticism of the rural o r g a n i z a t i o n C . H i s criticism of the classical e c o n o m i s t s C H A P T E R THEORETICAL

A. B. C. D. E.

His His His His His

33 46 53

III

C O N C E P T I O N S OF

SISMONDI

c o n c e p t i o n of e c o n o m i c s and m e t h o d o l o g y t h e o r y of crisis theory of population theories of t a x a t i o n c o n c e p t i o n of private p r o p e r t y C H A P T E R

13 18 26

62 68 83 96 105

IV

R E F O R M S S U G G E S T E D BY

SISMONDI

A . T h e rôle of t h e state B . Labor reforms C. Agricultural reforms

112 118 127 CHAPTER

SISMONDI'S

V

FOLLOWERS

A . Villeneuve-Bargemont B . Joseph D r o z C. Eugène Buret

136 147 155

CONCLUSION

166

BIBLIOGRAPHY

172

INDEX

177

11

CHAPTER I INTRODUCTION A. I N D U S T R I A L T R A N S F O R M A T I O N AND ECONOMIC T H E O R I E S OF T H E N I N E T E E N T H

CENTURY

THE beginnning of the nineteenth century witnessed two memorable developments: the rapid change of the social structure as a result of the industrial revolution, and the triumph of the classical school of economics with its famous maxim of laissez-faire, laissez-passer. With the advent of the modern factory the economic principles of the old regime, such, for example, as the mercantilistic doctrines, including corporation laws and the statute of apprenticeship, quickly gave way before the forces of the new order. The spirit of the old Colbertism was everywhere waning, while the immortal work of the great Scotch master, Adam Smith, came to enjoy a considerable influence. Under the encouraging sway of the free school mechanical inventions were making gigantic strides, while economic change was so rapid, that the results were deservedly regarded as an industrial revolution. Historians record an unprecedented era. Novel industries developed with magic swiftness in the great new cities, such as Manchester and Birmingham, in England, Glasgow in Scotland, and Lille, Sedan, Rouen, Elbeuf and Mulhouse in France. These industrial successes were accompanied by new social phenomena, such as the occurrence of business cycles and the rise of a rapidly increasing new stratum of the population, the proletarian class. Factory life in the 13

SIMONDE

DE SISMONDI

AS

AN

ECONOMIST

early part of the nineteenth century might well represent the reverse side of a brilliant medal. Large numbers of the agricultural population were induced or compelled to become factory workers and to toil long hours for a starvation wage. Men became installed as a cog in the productive machine. Children of all ages were employed. There seems to be reason for believing that something like a regular system of transporting children from London to the new manufacturing districts of the country was in operation; and there is unfortunately no doubt that the greed of parents joined with the eagerness of employers to increase the number and intensify the labor of the young apprentices in the factories. 1 T o the already deeply depressed working population there came at this time another formidable enemy: uncertainty as to the future. Either because of the changing economic policies of the management or because of some new mechanical invention a laborer might at any moment be thrown out of employment. A worker earning with desperate effort barely enough for a day's subsistence, might on the m o r r o w be turned off with nothing. U n d e r this regime while the present was dark the f u t u r e was even more desperate. It was but natural that a laborer, under such a strain, should seek temporary relief in drinking. Moreover urban congestion and poverty contributed to the malignant growth of crime and degenerate habits. T h e life of the worker in this period certainly furnishes a gloomy picture, justly designated by Buret as the " Mediaeval Age of industry ". 2 However, the capitalists, also, had to face an uncertain f u t u r e and the vicissitudes of fortune. Sharp and ruthless competition drove many to the wall, and they were forced to 1 Palgrave, Dictionary of Political " Industrial Revolution." 1

Vide infra,

p. 169.

Economy,

loc. cit., vol. ii, p. 140,

INTRODUCTION

close d o w n their factories.

!5

In 1793 E n g l a n d saw

many

business failures and the stagnation of all commercial activities.

A f t e r a f e w years of depression, followed by some

uneven prosperity, another panic afflicted E n g l a n d in 1797, causing m a n y failures and extensive unemployment.

The

hectic prosperity which accompanied the Napoleonic-wars w a s punctuated by a severe reaction in 1810. flourished

T h o u g h industry

in E n g l a n d in 1 8 1 3 the false calculations of the

E n g l i s h manufacturers v e r y soon brought about the crisis of 1815.

T h e stocks which they had accumulated during the

w a r s they expected to market on the return of peace.

When

they found, however, that their supply exceeded the continental ability to pay, they were compelled to shut d o w n their mills.

W i t h the establishment of the new regime, crises and

panics became incorporated as part of the new

economic

structure. 1 S u c h were the changing conditions at the beginning of this new epoch.

Meantime the followers of A d a m S m i t h were

gradually t r a n s f o r m i n g the doctrines of the Scotch master into more or less of an orthodoxy.

In the grip of such an

influential school it was, indeed, a dangerous enterprise to sound a different note. 2 B e f o r e w e undertake to explain the doctrines formulated by the dissident economist, Sismondi, it is perhaps pertinent to review a salient feature of the classical school, namely their theory of labor, f o r it is around this problem that Sismondi's theories cluster and in this he diverges f r o m the 1

Thorp, W . L., Business

Annals.

* " I am not at all surprised at not having made a more profound impression; I expressed doubt concerning principles which w e r e accepted as final; I shook a science which, by its simplicity, by the clear and systematic deduction of its laws, appeared to be one of the noblest creations of the human spirit; finally I was attacking an orthodoxy, a dangerous enterprise in philosophy as in religion." Nouveaux principes d'economic politique, vol. i, p. i, P r e f a c e .

16

SIMONDE

DE SISM0ND1

AS AN

ECONOMIST

ideas of the classical school. Adam Smith, the father of political economy, was generally looked upon as the founder of the classical school. H e still thought of political economy as the art of making nations wealthy and prosperous rather than as the science of explaining the conditions on which wealth and prosperity depend. His sympathy was particularly with labor. Those who feed, clothe and lodge others should get from the product of their work a part sufficient to feed, clothe and lodge themselves comfortably. The essential point of the Smithian doctrine, however, is the philosophy of " self-interest ", coupled with belief in an " invisible hand " which combines the individual interest with the general interest. A man, in seeking his own interest, comes unconsciously and invariably to a furthering of the general good. On the whole, nature works for human happiness and progress. It is governmental intervention, restrictive laws, which disturb the natural progress of the country and often do wrong to the laborer by infringing his most sacred rights of property, " the property which every man has in his own labor 'V Statesmen should allow private interest to go its way alone; for what is prudence in the conduct of every private family can scarcely be folly in that of a great nation. To him the natural action of private self-interest would lead to the most perfect organization of social and economic relations and to the highest welfare of all. Every individual, he points out, is continually exerting himself to discover the most advantageous employment of whatever capital he can command. It is his own advantage, indeed, and not that of society, which he has in view. But the pursuit of his own advantage naturally, or rather necessarily, leads him to prefer that employment which is most advantageous to society. In 1 Smith, Adam, Wealth of Nations, casioned by the policies of Europe."

bks. i, x, pt. ii, " Inequalities oc-

INTRODUCTION

17

such a natural course of affairs, any officious anxiety on the part of the lawgiver is as impertinent as it is oppressive. Smith's doctrines were further developed by the classical school, of which Malthus and Ricardo are representative. Malthus, although generally considered as belonging to the classical school, held views which were quite at variance with the reigning orthodoxy. H e criticized the abstract character of its doctrine, and emphasized distribution; in fact his treatise on economics has in many respects the appearance of a modern work. On the whole, Sismondi showed much reverence for his work and personality. Because of his famous population laws and his wage-fund theory, Malthus was classified as a pessimist. In the former he pointed out that population constantly taxes the food supply. Any increase in the wage-fund, he believed, tended to encourage an increase of population. Wages, in the long run, have a tendency to correspond with the standard of subsistence, i. e. a standard barely sufficient to enable the wage-earner to rear the family. The theory thus implies a rigid dependence of wages upon capital and leads to the conclusion that neither labor organization nor labor legislation could in any way improve materially the lot of the laborers. Ricardo, the real leader of the classical school, who developed the theory of distribution by subtle reasoning, gave political economy the appearance of an exact science. The production and the distribution of wealth seemed to him to be completely explained in a few clear-cut propositions. The factors in production were designated as land, labor and capital, and the recipient shares correspondingly rent, wages and profits. According to Ricardo, rents in the long run tend to rise, profits to fall, and wages to remain constant on a minimum level, being compressed between the rent of the landlord, on the one hand, and the profits of the capitalist, on the other. Ricardo did think that there was some hope

!8

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

of teaching the working classes thrift and of raising their standard of living. H e believed, nevertheless, that on the whole, wages tend to coincide with the " natural price " of labor, which is more or less a subsistence level, sufficient to enable laborers " to subsist and to perpetuate their race without either increase or diminution." 1 Ricardo also believed that wages should be left to take their natural course: " L i k e all other contracts, wages should be left to the fair and free competition of the market, and should never be controlled by the interference of the legislature." 2 A résumé of the salient features of the classical school is to be found in Carlyle's characterization of political economy, as a dismal science and Brentano's comparison of the classical school with classical sculpture, in which personal peculiarities were ignored in favor of broad general human characteristics,—and of an " abstract man " without scars or wrinkles. During the rise of the classical school to the zenith of its power, the honor of being its first critic and its first opponent should indisputably be given to Sismondi with whose doctrines the present monograph deals. B. B I O G R A P H I C A L

SKETCH

OF

SIMONDE

DE

SISMONDI

On the 9th of May, 1773, three years before the publication of the Wealth of Nations, our author was born in the beautiful city of Geneva. H e was baptized with the lengthy name of John Charles Leonard Simonde de Sismondi. He traced his origin to the illustrious Sismondi family of Pisa. The family later became established in Dauphiny. A f t e r the revocation of the Edict of Nantes- ( 1685 ), having been forced because of their Protestant belief to emigrate, they found an 1 Ricardo, Principles of Political 1895), Gonner's edition, p. 70. 2

Ibid., p. 82.

Economy

and Taxation

(London,

INTRODUCTION

!9

asylum in the city of Geneva, which at that time was a refuge for all the persecuted of Europe. The first years of Sismondi's childhood were passed in a beautiful country house called " Châtelaine " situated in a picturesque valley in the shadow of the Alps. He showed a precocious taste for political studies and, at the age of ten, began his classical studies at school. When he finished this preliminary training he was sent to Lyons to study commerce in the house of the Égnards, one of the greatest Genevese firms in that city. The father of Sismondi, a pastor by profession, had a small fortune but had suffered a big loss through investing in French securities, because of his confidence in the financial plans of Necker. Due to financial loss he was determined to place his son in a business which, although not agreeable to him, might make him wealthy. Young Sismondi submitted to his father's will and later became an excellent clerk. From first-hand experience he acquired a solid, practical foundation for his later work in economics. In 1792 he was forced by the uprising at Lyons to return to Geneva where also, the ideology of the French Revolution was fast entrenching itself. The popular party overthrew the aristocratic régime, Sismondi's father was imprisoned, and the remainder of his f ortune was levied upon as a compulsory contribution. Because of this misfortune, the family decided to quit Switzerland and went to England. It was Sismondi's first visit to England. He profited by his residence there in studying the language, industries and institutions. At the end of eighteen months, on account of his mother's desire to return, the family set out for Geneva and took up their residence once more in their old home " Châtelaine." Hardly had they arrived when another catastrophe occurred. One of the poor, aged syndics, Caila by name, proscribed by the popular party and closely related to the family of Sismondi, came to ask for an asylum from his

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

enemies and was hidden in a shed at the end of the garden. Y o u n g Sismondi, who had been placed as a sentinel to watch over his safety, was knocked down by the gendarmes and Caila was dragged away and shot within hearing of the Sismondi family. A f t e r this fatal event the Sismondi family determined to leave Geneva forever. They reluctantly sold their " Châtelaine " and went to live in Tuscany where they settled in a beautiful spot in the Val de Nievole between Succa, Pistoia and Florence. In this country home Sismondi undertook the cultivation of the family property but still had leisure for deep study. W i t h the exception of a short imprisonment inflicted on him by one of the parties who temporarily conquered Italy, he lived there happily for five years, and during his stay composed his first work, the A g r i culture of Tuscany (Tableau de l'agriculture en Toscane), published in 1801. There, too, he gathered material for his history of the Italian Republics. In 1800 he returned to Geneva. In 1803 he published a two-volume work, De la richesse commerciale, ou principes de l'économie politique appliqués à la législation du commerce (commercial wealth, or principles of political economy as applied to commercial legislation). This book is chiefly an attempt to expound and popularize the theories of Adam Smith. Although Sismondi later belittled its value this book helped materially to advance the reputation of the Genevese author. Shortly after its publication the chair of political economy in the university of Wilna in Poland was offered to Sismondi who was then serving as secretary to the Chamber of Commerce of Leman at Geneva. Such an offer was indeed a strong temptation to him, especially as he was very needy at the time. H e declined, however, in order to preserve his liberty and remain near his mother. While it was through her in-

INTRODUCTION

21

fluence that he decided to become a historian, in complying with her wish, he was at the same time following his own desire. Sismondi was indeed well equipped to become a historian. W i t h his gifts as a philologist and linguist he combined an inquisitive spirit, high intellect, accuracy of judgment and fidelity in describing. His apology for the neologisms occasionally found in his work, reveals his aptitude for languages : The number of the original historians is tremendous and almost all of them wrote in foreign languages. This circumstance might provide me with some excuse in the eyes of those who will not fail to accuse me of neologisms and incorrect expressions. It is never voluntarily, never consciously, that I have employed expressions different from the common usage. But to fulfil a task which I had imposed upon myself, to attain the truth which I was engaged to present to the public, I was obliged to live somewhat out of my mother tongue. In a work of at least eight hours every day for twenty years, I have had to read and think habitually in Italian or in Latin, and occasionally in German, Spanish, Greek, English, Portuguese and Provençal. I must have passed from one language to the other without always thinking of the form in which the thought was couched, without noticing the substitution of one form for the other.1 T h e sixteen volumes on the Italian Republics, begun in 1803, were not finished until 1818. It was not until 1807, and then with some difficulty, that Sismondi succeeded in getting the first two volumes printed at Zurich. Their success facilitated the publication of the rest of the work and gave it prestige. It was both a brilliant and a learned work. He went back to the origin of the numerous Italian cities, described their constitutions, described their internal 1 Histoire des Republics " Introduction ".

Italiennes

du moyen âge, vol. i, p. xxviii,

22

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DE SISMONDI

AS AN

ECONOMIST

existence, and explained the causes of their downfall. During these fifteen years Sismondi devoted his life to intellectual labor. It was during this period that he cultivated the friendship of Necker, Madame de Staël, Jean de Müller, the historian of Switzerland, Schlegel, the critic, and other men of ability in the Europe of his time. He accompanied Madame de Staël in her travels in Italy and Germany, and retained for her as long as she lived, a tender and unchanging friendship. In 1 8 1 1 he gave at Geneva a course of public lectures on the literature of South Europe. These lectures were published later as a two-volume work. When he went there to look after this publication, Sismondi's first opportunity to visit the great city of Paris came at the beginning of 1813. He at that time became intimately acquainted with many distinguished persons and formed some enduring friendships. Sismondi, who was republican by conviction, combated the ultra-democratic tendencies of his time, and, until 1815, showed a marked indifference to the Empire. It was during his stay in Paris that Napoleon returned without opposition from the Isle of Elba to the Tuileries. This peaceful return caused Sismondi to change his former attitude and to see in Napoleon the triumphant choice of the people, the defender of the principles of the Revolution which had been compromised. Sismondi now openly declared himself in his favor, and in a series of remarkable articles, contributed to the Moniteur, he ably defended the cause and acts of the Corsican ruler. Napoleon invited him to l'Elysée Bourbon, held a long conversation with him, and was genuinely pleased to become acquainted with such a distinguished scholar. When the Emperor wished to bestow upon him the cross of the legion d'honneur, he declined the honor, preferring always to preserve his disinterested position. Sismondi cherished a great faith in Napoleon and only after

INTRODUCTION

23

the battle of Waterloo did his air castles, founded on this hope, collapse. After the fall of the Empire, Geneva, which had been included in its territory, recovered its former independence and Sismondi, who had been elected to the sovereign council of the Republic, assisted in the work of its reorganization. Very soon, however, he was grieved to witness the manner in which the allied kings abused their victory. Sismondi supported all liberal movements, in 1 8 1 7 he wrote powerful attacks against the slave trade, in 1823, became enthusiastic for the independence of Greece, and applauded and encouraged the attempts of all those countries which endeavored to make themselves free. After 1803, the year when he published his first economic work, On Commercial Wealth, he read very little in economic science. In 1818, however, when he was asked to write an article on political economy, he resumed his study of economics. To his surprise, he discovered that he must repudiate many of the principles which he had formerly believed. In 1 8 1 9 he published his Nouveaux principes d'économie politique, (New Principles of Political Economy), of which a second edition appeared in 1827. It was in this work that he first presented views dissident from the classical doctrines. In 1 8 1 9 Sismondi was married to Miss Jessy Allen whose elder sister was the wife of his friend, the celebrated Sir James Mackintosh. He found in her a pleasant companion and a devoted wife. She was a source of comfort to him during the remainder of his life. Their union proved very beneficial to him and helped to compensate him when in 1821 he lost his mother, for whom he had the deepest affection. At this time he settled in a country house which he had bought near the village of Chêne not far from Geneva, where except for occasional visits to France, Italy and England, he spent the rest of his life. For more than twenty

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

years, he was chiefly occupied in writing his great work, l'Histoire des Français (History of the French). Begun in 1815, it remained unfinished at his death. There his days rolled on with little variation. A t least eight hours every day were devoted to the writing of his History and the remainder of his time was given to the defense of subjects which interested him, or to his favorite recreation, walking. His evenings were congenially spent in animated conversation, which he could carry on in the language of each of his guests. In 1836 he published his Études sur les constitutions des peuples libres (Studies on the Constitutions of Free Peoples) the only work in which he expounded his political views. Although in the field of political economy, Sismondi was always sympathetic with the proletarian class and favored a more even distribution of wealth, in politics he would be called a conservative. He made a sharp distinction between republicism and democracy. In a private letter to a friend he said, " I am liberal and republican, but never a democrat." He repeatedly declared similar views in his Etudes sur les constitutions des peuples libres. Being a philologist he was inclined to hold the word " democracy " strictly to its etymological interpretation, i. e., government by the commonalty, of which he saw a rather unhappy experiment in the early Greek city states. Apparently the mob rule which he personally experienced in his youth at Geneva helped not a little to solidify such convictions. In using the term " republican ", he probably had in view the Italian Republics of of the Middle Ages, whose government rested on a selected few and did not function through the actual participation of of the masses, as in ancient Greece. Sismondi declared himself to be an opponent of universal suffrage, maintaining the liberty of the minority, and insisting on attacking the political incapacity of the mass and the

INTRODUCTION

25

1

despotism of majority rule, and to him it is not government by all the people, but a good government, that is to be desired. " One must listen to the man who is hungry in order to remedy his hunger; but if instead of listening to him, one takes orders from him, his hunger would cause famine for the whole society. Every decision taken from the majority made up of opposing interests would bring forth the cruel as well as unfair sacrifice of one among them ; every appeal to the suffrage between rival professions, between masters and workers, between buyers and sellers, would not at all give an equitable arrangement, but the triumph of the conquerors over the conquered." 2 Here he is clearly advocating government by a chosen few. This view is not essentially contradictory to his economic doctrines; as he believes in government control in the increasing activities of government, the function of the state is rendered all the more difficult and complicated. An effective and representative government was needed to cope with the new situation. Sismondi spoke very highly of the government of the United States, which he considered republican rather than democratic. In 1838 he was elected to the Académie des Sciences Morales et Politiques as one of its five foreign associate members. In the same year he published his fragmentary articles on political economy as the second and third volume of his Études sur les sciences sociales, the first volume being his Études sur les constitutions des peuples libres. In 1841 he received, as a precious souvenir from France, the cross of the Légion d'honneur, a distinction which he had refused in 1 8 1 5 when offered to him by Napoleon. 1 " For there is tyranny in the republics as well as in the monarchies, whenever there is an unlimited power, which abuses its forces." Histoire des Républiques Italiennes au moyen âge, vol. i, p. 15. 2

Études sur les constitutions des peuples libres, p. 109.

20

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DE

SISMONDI

AS

AN

ECONOMIST

The tranquillity of his declining days well illustrated in the following description: From 1838 on, Sismondi lived a retired life at Chênes, still working from eight to ten hours every day. His wife cooperated with him in searching the ancient chronicles and helped him to gather the material for his Histoire des Français. After dinner the couple would ride in a wagonnette lazily pulled by two old horses about the country. A t night they would close their door to outside noises, as if they had shut out everything disturbing to their life. Together they read by candle-light valued books.1 In an unpublished journal he prayed Providence to grant him an extension of life to finish the great history which he had undertaken. But this noble wish was not fulfilled. Uninterrupted hard labor for forty-seven years, the tragic loss of warm friends, disappointments, cherished hopes destroyed by the course of events,—all these misfortunes combined to weaken his physique. During a long period he suffered from cancer of the stomach, which interfered with his work upon the Historié des Français. O n the eighth of June, 1848 Sismondi, for the last time, put his hand on the twenty-eighth volume of his history. O n the twenty-fifth of June, the life of a conscientious worker, a life of righteousness and simplicity, was ended. C. EVOLUTION OF HIS IDEAS

A s said above, in 1801, at the age of twenty-seven, Sismondi produced his first work, Tableau de l'agriculture en Toscane (Sketch of Agriculture in Tuscany). This work is notable for its charming poetic style as well as for its usefulness in depicting the various modes of cultivation in 1 P . - N . de Puybusque, " Mélanges et documents, Lettres inédites de Sismondi," Revue Historique, 39e année, Tome cxvii (Septembre-Octobre 1914), p. 66.

INTRODUCTION

27

Tuscany. It is an excellent book on agricultural economics, presenting the fruit of his personal observations during his sojourn in that beautiful country. In this book we find forecasts of the characteristic doctrines which Sismondi later developed. A t that early period he favored the cultivation of small farms as against extensive farming. He believed large-scale farming might result in a net profit greater than that from the small farm, yet as to the gross profit, small farming was certainly superior. A n increase of gross profit is what is desired, inasmuch as it would feed a larger population. 1 From this work also we select the following passage to show how- he was at that early date inclined to combat abstract theories, which to the end he never ceased to attack vigorously: When the taste for and study of the natural sciences began to revive in Europe, the new philosophers tended, from the start, to seize upon the theory and reduce it to a system. They aimed at the imagination instead of experience, and they tried to teach at a time when they should have been learning; it was some time before they renounced this course, which they had taken to be that of genius, and were satisfied to listen, to observe, to learn and to wait. But the days of experience came at last; it was universally recognized that experience alone should enlighten us: and in agricultural science as well as in other sciences, only lessons gained by experience were to be followed.2 T w o years later, in 1803, Sismondi published his first work on economics, De la Richesse Commerciale ( On Commercial Wealth). A s stated above, he showed himself in this twovolume work to be a zealous disciple of Adam Smith. His only criticism of the Scotch master was that the latter was rather defective in the matter of exposition, lacking pre1

Tableau de I'agriculture en Toscane, pp. 190-192.

2

Tableau de Vagriculture en Toscane, p. 1.

28

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DE SISMONDI

AS AN

ECONOMIST

cision and clearness of form. In this work he undertook merely to clarify and popularize the principles of Adam Smith, which, he believed, were more universally admired than understood. 1 As to fundamental principles, he was in perfect agreement with Adam S m i t h : " T h e doctrine of the English philosopher is so perfectly founded, it is so f a r f r o m any kind of exaggeration, it answers so clearly all questions presented, it has been so well confirmed by all the subsequent events . . . that one can not understand without being convinced of its verity." 2 T h e work on Commercial Wealth deals with only one phase of economic science, the application of economic principles to commercial legislation, as indicated by its subtitle: principes de l'économie politique appliqués à la législation du commerce. It is divided into three books, treating respectively capital, prices and monopolies. T h r o u g h o u t the work, Sismondi made manifest his agreement with Adam Smith in the doctrine of self-interest. In the third book, on monopoly, he attacked all kinds of government intervention and insisted on the policy of laissez-faire to promote production. 3 At this time he had no idea that the greatly desired freedom 1 " In vain, the profound author of the Wealth of Nations recognized that all the fundamental truth ought to serve as a rule to the legislators; his book, which, it is true, lacks systematic treatment, is not understood, one may almost say, by anyone. It is quoted without being understood, perhaps without being read, and the treasure of knowledge which it contains, is lost to governments." De la Richesse Commerciale, vol. ii, p. 4.

2 3

De la Richesse Commerciale,

vol. i, p. 13.

" Freedom for commerce is, in fact, the greatest benefit any government can bestow to the nation. Of all the obstacles to the industrial development of modern Europe, the most harmful ones are found in the folly of almost all legislators. They wish to direct commerce, which is not at all their business ; they wish to hold in their hand the balance of those particular interests, which, when left to free compeition, tend to a realization of the general good without any effort." Ibid., vol. ii, p. 144.

INTRODUCTION

29

would become a source of many social evils to be combated in his later works on economics. Even in this work, however, apparently so loyal to the orthodoxy of his time, there were a few points which the author never subsequently retracted. In the first place, he regarded political economy as a part of the science of government, and believed that economics, together with la haute politique, formed the entire science of government. 1 It is a science for the legislator, who, if not well versed in it, would run the risk of hampering by his laws, the progress of national prosperity. 2 It is a science, also, which aims to increase wealth, or in other words, to increase the enjoyment of wealth, to put it at the disposal of a greater number of men, to extend its use. It is true that not everyone becomes richer through having studied political economy; but all will enjoy a greater degree of comfort, if the government adopts its principles. 3 Thus it is evident that from the very beginning Sismondi conceived of political economy as the art of increasing the happiness of the people. Sismondi also early emphasized the importance of the observation of facts as opposed to mere abstract theories. It [economics] is not founded on dry calculations, nor on a mathematical chain of theorems, deduced from some obscure axioms, given as incontestable truth. . . . Political economy is founded on the study of man and of men; human nature must be known, and also the condition and life of societies in different times and in different places. One must consult the historian, and the travellers; one must look into one's self; not only study the laws, but also know how they are executed; not only examine the tables of exportation and importation, but also know the aspect of the country, enter the bosom of families, judge the 1

De la Richesse Comtnerciale, vol. i, p. xi.

' De la Richesse Comtnerciale, vol. i, p. 13. s

Ibid., vol. i, p. xii, Preface.

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

comfort or the suffering of the mass of the people, verify great principles by observation of details, and compare ceaselessly science with daily practical life. 1 In some passages of this work, also his sympathy was shown to be already on the side of the laborers. For example, in trying to explain the fall of the interest rate as a sign of national prosperity, he said it might mean the diminution of mercantile profit, or that the share of the worker was gaining ground at the expense of the employer, so that the most numerous and the most interested class of society was not reduced to the standard of absolute necessity by the profit of the capitalist.2 But in this work he did not push this view consistently; in many passages he forsook the attitude and continued his scientific analysis, treating labor as a factor of production quite as indifferently as did his contemporaries in the field of classical economics. A f t e r deserting economics for a long interval, as we noted above, he underwent a profound mental transformation. This " turning a w a y " was only accidentally discovered. In 1 8 1 8 he was invited to contribute an article on political economy to the Encyclopedia of Edinburgh. He thought such an article should be clear and short and that a writer could attain these two qualities only by following the course of his own ideas without having recourse to those of others. He decided, therefore, not to consult any books on political economy and took up the subject again, as if it had not yet been worked out. He thus sought to be completely free from the systematic authority of his time. T o his own surprise he found, in expounding the principles, some entirely new results that he for a long time had held to be universally accepted. The economic transformation that took place in the early part 1

De la Richesse Commerciale, vol. i, p. xv, preface.

1

Ibid., vol. i, p. 77.

INTRODUCTION

31

of the nineteenth century certainly played a large part in producing this change of attitude. Many woeful spectacles prevented him from taking pride in an otherwise marvelous progress, spectacles such as the abuse of unlimited production and the reduction of whole sections of the population to poverty, as inventions revolutionized industry. Observing these unhappy events, the very foundation of his former economic principles was shaken. 1 During the fifteen years and more since I wrote On Commercial Wealth, I have read very few books on political economy, but I have not ceased to study facts. Some of them appeared to be contrary to the principles that I had adopted. All of a sudden, they seemed to me to be well arranged and mutually explained by the new development which I gave to my theory. The more I went on, the more was I convinced of the importance and the truth of these modifications which I brought to Adam Smith's system.2 Upon the publication of these new principles Sismondi's standing as a " non-conformist " economist became established. The classical economists, of course, could not agree with his " heretic views ". Thanks to his charming personality, however, Sismondi still retained the high personal regard of most of the leading economists of his time. This 1

Monsieur Festy is probably correct in asserting that Sismondi got his notion of the social disturbances wrought by the Industrial Revolution chiefly through his reading of newspapers and books, or through conversation with his friends, rather than through his personal investigation. On his first visit to England he was still too young to take up work of investigation of a serious nature. Then he did not revisit England until the first edition of his Nouveaux Principes d'Économie politique was ready for press (the first edition of this work being published in March, 1819, a few days before his marriage in London, which took place on April 19th of the same year). And in France at this time, the industrial transformation was barely in its budding age. Vide Revue d'Économie politique, Tome 32, year 1918, pp. 119 et seq. * Nouveaux

Principes

d'Économie

politique, vol. i, p. xxi, preface.

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

was especially true in France, where great economists, like Say, 1 and Blanqui, were even induced partly to modify their principles in conformity with the " Nouveaux Principes ". O f the English school Sismondi interviewed MacCulloch and Ricardo. Although the former seems to have received the " non-conformist" rather unfavorably, 2 it is interesting to note that Sismondi made a very good impression upon Ricardo, the real leader of the school which Sismondi opposed. 3 ' " 26, September 1826—I had this morning a visit f r o m Say, w h o said to me that his friendship f o r M r . Ricardo, and his school, has o f t e n cramped h i m ; that in truth he finds that they have injured the science by the abstractions into which they have thrown it, and that he shall be obliged, in the new edition he is preparing, absolutely to oppose them." " 5, September 1828—I have had a letter f r o m M . Say, who announces to me a second volume of his book, with some concessions to my principles on the limits of production."—Extracts f r o m the private journal and letters of M . de Sismondi. 2 " Edinburgh, A u g u s t 7th, 1826.—We dined with the H o m e r s , and met MacCulloch, w h o has something hard in his countenance and manners, and w h o f o r a long time measured me with his eye, as if I w e r e an adversary whom he ought to combat. I led the conversation to political economy; he attacked me on the facts which I gave f r o m the reports of Chaptel, and some others. T h e r e w a s something in his ironical smile which hurt me, so I fought him on his own ground, laying hold on all the errors in facts, w h i c h were certainly numerous, such as the increase of mendicity in France, the custom in France of borrowing only f o r life. I think I had constantly the advantage of him, but I f e a r I w a s sometimes rude, and that he will retain some resentment against m e . " — E x t r a c t s f r o m the private journal and letters of M . de Sismondi.

* " Notwithstanding my differences with Monsieur Sismondi, on the doctrines of Political Economy, I w a s a great admirer of his talents, and I w a s very favorably impressed by his manners—I did not expect f r o m what I had seen of his controversial writings to find him so candid and agreeable." Letters of Ricardo to Trower 1811-1823 edited by Bonar and Hollander ( O x f o r d , 1899), p. 195.

C H A P T E R II SlSMONDI, T H E CRITIC

As Sismondi observed the unhappy consequences of the Industrial Revolution, lie began to reason anew. He laid all his former beliefs aside and attacked with vigor the laissez-faire doctrine of the classical school. Such a task was as unpleasant as it was dangerous. It meant isolation. But his strong conviction forced him to take this step, in the belief that a doctrine could not be true if the pursuance of it led to such undesirable ends. In attacking the laissez-faire doctrine, Sismondi went too far and exaggerated the virtues of the old guild system in contrast with the evils of the new regime. It is, perhaps, an attitude frequently adopted in theoretical discussions, when, knowing that the arch is bending too much in one direction, the critic bends it too far toward the opposite side in his effort to put it back into a straight position. Now let us proceed to a systematic examination of Sismondi's criticisms of classical political economy. A. H I S CRITICISM OF T H E INDUSTRIAL RÉGIME

To Sismondi the industrial régime is characterized by a new and striking phenomenon, free competition. This results in universal rivalry, large-scale production and, as a consequence, in over-production and crises. The interests of capital and labor become opposed to each other. In the struggle the working classes are handicapped by the resulting exploitation of labor and the wretched condition of the proletariat. In contrast with this régime, Sismondi accentuated the few good points of the previous guild system, which 33

34

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

had disappeared with the advent of the new order. Under the old régime the corporation laws of the guild system aimed primarily to protect the interests of the various trades already in existence. Under this protection all producers cooperated like fraternal members, instead of attempting to rival each other. " Every organization of the corporation tends to restrict the number of those who practise the useful arts, to restrain the country people who are willing to enter into the trades of the city, to limit competition and to prevent over-production." 1 In this manner, although production is very much curtailed, everything produced can be sure of finding a consumer There is, hence, no fear of industrial unemployment, of crises or of over-production. In those days, poverty indeed existed, but paupers became such only when workers were accidentally thrown out of work and were few in number. Members of each trade were self-supporting, each guild having a special relief fund, leaving few paupers to be taken care of by public charity, which was quite adequate to deal with the situation. T h e apprenticeship regulations required long years of training as an apprentice and some capital to begin with. This had the beneficial effect of checking the tendency of rustic folk to migrate to the city where they often lost their health and happiness in urban life. The industrial population could not increase unduly, since the number of masterartisans was limited and no workman married before he became a master-artisan, thus preventing the evil of bringing children into the world without adequate means to provide for them. Under this system, there were more holidays and the daily working hours were shorter. T h e relation between the master-artisan and his workmen was amicable and sympathetic. Their relation was in no way antagonistic, for 1

Études sur l'Économie

politique,

vol. ii, p. 339.

SISMONDI,

THE

CRITIC

35

every w o r k m a n had the hope that some day he, too, would become a master.

Sismondi quoted historical evidence to

prove that, f r o m the Middle A g e s down, the w o r k i n g classes under this system had, on the whole, been quite comfortable. 1 T h e industrial régime ushered in marvelous scientific inventions, hitherto undreamed o f .

Efficiency of production

was increased a hundredfold, but improvement in living conditions did not keep pace w i t h the increased production of wealth.

T h i s paradox w a s set forth by Sismondi in the

f o l l o w i n g question : What, then, is the object of human society? Is it to dazzle the eye with an immense production of useful and elegant things; to daunt the senses with the control which man exercises over nature, and with the precision or the speed with which a human work is executed by lifeless beings ? Is it to cover the sea with vessels and the earth with railways which distribute in all directions the products of an ever increasing industry? Is it lastly to give to two or three individuals among each hundred thousand the power to dispose of an opulence which would suffice to maintain these hundred thousand in comfort? If such is the case, we have undoubtedly made immense progress as compared with our ancestors ; we are rich in inventions, rich in activities, rich in scientific powers, rich in merchandise everywhere; for every nation has produced not only for itself but also for its neighbors. But, if the aim which society ought to accept, in encouraging labor and protecting the fruits of labor, is rather to assure the development of man and of all men, to distribute with a benevolent hand throughout the whole of society, though in different proportions, the fruits of the labor of man, fruits which we call wealth,—if these fruits, which consist of moral and intellectual goods as well as material goods, should be the means of improvement as well as of enjoyment, are we sure that we are approaching our goal. 2 1

Études sur l'Économie

politique, vol. i, p. 26.

2

Études sur l'Économie

politique, vol. i, p. 27.

36

SIMONDE DE SISMONDI AS AN

ECONOMIST

In former times the capitalist and the worker were frequently the same person.

W h i l e the artisan was a worker

he owned all of the tools necessary to carry on his work. W i t h the introduction of new means of production, an ordinary artisan found his modest means inadequate to undertake new enterprises, as capital was necessary to buy the very expensive machinery. wealth.

T h e natural result was concentration of

Following the law of decreasing cost, large-scale

production, easily replaced by machinery, all of the former artisans, deprived them of their little property and their skill, and forced them to become propertyless workers.

" It is

not yet quite realized that w e are in a new social era never before experienced.

W e tend to separate completely all

kinds of property f r o m all kinds of labor."

1

Hence two

distinct social classes are formed : the capitalists and the laborers. W i t h the doctrine of free competition and

laissez-faire,

the terms "over-trade"' and "under-sell" were adopted.

This

overtrading and underselling not only places the capitalist and the laborer in a naturally antagonistic position, but also makes capitalists and laborers natural rivals within their own classes.

T h e former compete for profits while the latter bid

for wages.

Whereas goods were formerly produced f o r con-

sumption, the immediate object of production now is not consumption but profit.

It is not because human nature has be-

come more greedy for gain and more cruel in conducting business; it is the social régime which has made necessary this change.

Sismondi offered the following

interesting

dialogue as descriptive of the present régime : The agent brought the book of accounts to the manufacturer and said to him : " Y o u r manufacture of glass has no more sale, but you can devote your furnaces to the preparation of chemical 1

Études sur l'Économie

politique,

vol. i, p. 92.

SISMONDI, THE

CRITIC

37

products. With the investment of one million francs you will provide for the consumption of the whole of France." M.—•" How so? How much is the consumption of France?" A . — " So much." M . — " Who is providing for it to-day? " A . — " So and so manufactures in such and such provinces." M . — " Won't they carry on their industri.es any more? " A . — " No, you can sell ten per cent cheaper than their selling prices." M . — " What will they do then ? " A . — " They will succumb." M . — " What will their workers do? " A . — " They, too." M . — " Start the work. Y o u shall have the million." 1 U n d e r such a system, the tyrant and his victim usually do not know each other even by name, do not live in the same country, do not even speak the same language.

" T h e op-

pressor, far from being hard-hearted, is perhaps generous and reasonable, he does not account for the evil which he is doing, he himself resigns to the inevitable fatality, which seems to govern the industrial world of to-day. fatality,

which,

in spite of the promise of

I t is this liberty

and

equality, imposes a horrible oppression on millions of human creatures."

2

Pursuit of a policy of over-trading and necessitates running in a vicious circle.

under-selling

In order to under-

sell his rivals the capitalist must cut down the cost of production, which means lowering wages.

B u t as wage-earners

constitute the bulk of the consumers, the outlet will be narrowed if their means of consumption is curtailed.

T h e capi-

talists are therefore compelled to seek foreign markets for an outlet, a step which necessarily results in nationalistic wars. 3 1

Études sur les constitutions des peuples libres, p. 296.

2

Études sur les constitutions des peuples libres, p. 297.

3

Études sur l'Économie politique, vol. i, p. 31.

SIMONDE DE S1SM0NDI

AS AN ECONOMIST

I f such an outlet can not be found, then the course of largescale production is bound to reach a crisis.

W e shall deal

more fully in the next chapter with Sismondi's theory regarding crises. As a result of the separation of property and labor, and of free competition in production for profit, a class struggle has come into existence.

" Every man of the privileged

class can count over against him five individuals, not belonging to the privileged class, and there is between them such an opposition that the rich say to the p o o r : ' Our life is your death,' and the poor reply to them : ' Y o u r death would be our life.' "

1

Such a hostile relation brings about the destruction

of property and harvests, industrial disturbances, incendiary acts, assassinations, and other disasters which inevitably follow in the wake of social unrest. first

Sismondi was, perhaps, the

economist in the last century to expound the class-

struggle theory.

Many years later, K a r l M a r x took it up

and made it a sort of a " master-key " for unlocking the secrets of history.

Sismondi's treatment o f the subject,

however, is quite different from that of his successor's.

He

approached the class-struggle theory from a truly historical viewpoint.

H e thought its existence to be entirely due to

the social organization of the time ; he did not regard it as permanent and believed that it could be remedied.

H e also

pointed out that under the prevailing order there existed not only a struggle between capitalists and laborers, but a universal struggle among the members o f each class. H i s successor, M a r x , on the contrary, combined his historical observations with theoretical abstractions, tinged perhaps not a little with sentiment.

Karl M a r x made the state-

ment that the class struggle between the governing and the governed had existed at all times, and that under the government of that day the clash of these two classes was inevitable. 1

Études sur l'Économie

politique, vol. i, p. 337.

SISMONDI,

THE

CRITIC

39

In that struggle he foresaw the ultimate triumph of the proletariat. M a r x was, of course, more or less Ricardian in methodology, attempting to explain complex historical facts by a simple, clear-cut proposition. From Sismondi's attitude would one expect him to denounce such sweeping treatment as one of the false abstractions, against which he was unsparing in his attacks, in controversies with the classical school. In the struggle between the capitalists and laborers Sismondi saw the great handicaps of the latter class. The worker's demand is for subsistence; the capitalist demands labor to gain profit. 1 The capitalist can afford to wait almost any length of time, while to the worker a few days' unemployment might well be fatal. The strength to work constitutes the only commodity of the worker, and it is absolutely no asset to him, if it is not sold. Thus labor like any other material is to face competition thrown on the market with machinery and a constantly increasing working population. Sismondi did not see in mechanical inventions an unalloyed benefit to the human race. He was, on the contrary, rather pessimistic concerning the marvelous inventions almost daily put upon the market. The perfecting of machinery, of course, means that goods can be manufactured with far greater speed by a single inanimate tool than by a large number of human workers. The workers are, of necessity, discharged because it would be uneconomical to employ them. Moreover, as machinery is usually expensive it is found in the hands of limited number and a great many small manufacturers are driven out of existence. However, since both the dismissed workers and the defeated small manufacturers themselves form a large proportion of the consuming public, when their incomes are curtailed, a correspondingly large proportion of the goods produced by efficient machine-production 1

Nouveaux

Principes d'Économie

politique, vol. i, p. 91.

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

will remain unsold, thus causing an over-production crisis. Sismondi w a s of course fully aware of the fact that machine production lowers prices, but he felt that the benefits brought by machinery did not offset the losses w h i c h it entailed.

Be-

cause the increased manufactures brought about by machineproduction have diminished the price o f their products only in an arithmetic ratio, while they have suspended manual w o r k in a geometric ratio. 1 T h e w o r k of the household, such as baking, weaving, etc., appeared to Sismondi to h a v e the happy effect of insuring domestic happiness.

Since a textile mill produces finer and

cheaper fabrics and a commercial bakery produces bread at a more reasonable price, machine production replaces the w o r k formerly done in the home and jeopardizes the sacred tie of marriage. 2

T h e s e views o f Sismondi's furnished a basis

f o r the accusation that he w a s antagonistic to scientific inventions.

T o this charge Sismondi w a s quite unwilling to plead

guilty : Must one conclude that every discovery in the arts which saves the work of man, is always fatal to some part of human society? Doubtless no. Society has made progress only through such discoveries ; it is through them that the work of man has sufficed for his needs. . . . Every invention in the arts, which has multiplied the power of man's work, from that of the plough to the steam engine, is useful. . . . It is not the fault of the progress of machanical science, but the fault of the social order, if the worker, who acquires the power to make in two hours what would take him twelve to make before, does not find himself richer, and consequently does not enjoy more leisure, but on the contrary is doing six times more work than is demanded. 3 [He adds] I beg that attention be given to the fact that is it not at all against machinery, not at all against dis1

Nouveaux

2

Études sur l'Économie

Principes

3

Nouveaux

Principes

d'Économie politique, d'Économie

politique,

vol. ii, p. 324.

vol. i, p. 43. politique,

vol. i, p. 349.

SISMONDI,

THE

CRITIC

41

coveries, not at all against civilization that my objections aim, it is against the modern organization of society, an organization which, after depriving the workman of his property of all kinds, except that of his arms, does not give him any protection against competition, against unfair bidding to his disadvantage, unfair bidding of which he must necessarily become a victim. 1 In spite of such explanations, however, it is evident that Sismondi did believe that mechanical inventions, particularly when they occur in rapid succession, bring more harm than good. H e thought that it would be better, if inventions were made more gradually. His objection was that they revolutionized rather than improved existing industries. Another difficulty was the handicap placed upon workers by an ever-increasing labor supply. Mechanical inventions had already replaced a vast amount of manual work. F u r thermore, the operating simplicity of the machines brought f o r w a r d women and children to compete with men in the labor market. This, in the eye of Sismondi, was a horrible evil. T o him the business of the wife in a workman's household should be the preparation of food and housekeeping, combined with the important duty of training the children, whom she should inspire with the affection which binds them to their parents. But under the system of machineproduction, both the wives and the children are forced to enroll themselves in the factory, thus destroying family life and effectively contributing to f u r t h e r reductions in the price of hand labor. Under the guild system workers married when they became master-artisans, for they knew that then their labor would be in demand. Population thus increased slowly and prudently. Under the industrial system, however, workers are never in a position to calculate the demand for their labor in the market. They may be discharged at the very moment they marry. 2 Their moral sentiments are deadened 1 2

Nouveaux Nouveaux

Principes Principes

d'Économie d'Économie

politique, politique,

vol. ii, p. 433. vol. ii, p. 262.

4

2

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

and their sympathy destroyed by privations and sufferings. They are ready to marry and rear large families—particularly when their wives and their children, at an early age. can go into the factory and so contribute to the family budget. 1 But the ill-adjusted increase among "the working population merely aggravates the situation of the proletarian class. With such handicaps imposed upon the working classes on the one hand, and the universal competition among members of the capitalist class on the other, pauperism becomes definitely installed in the social organization. T o be sure, poverty has existed at all times, but poverty as the normal state of the great mass composing the working classes was a new thing. T o this new institution Sismondi gave the name proletariat, a term borrowed from the Romans. (Mr. H . G. Wells reproaches the economists for using a term which has no modern equivalent, proletarii in Rome being a voting division of fully qualified citizens, whose property was less than 10,000 copper asses (about £275). 2 But our author fully anticipated such criticism and explicitly stated : " The fundamental change which took place in society was the introduction of the proletariat in the social ranks, of the proletariat, whose name borrowed from the Romans is ancient, but whose existence is altogether new." 3 Sismondi selected this term for the new social class merely because of its etymological composition: " P r o l e s " means to propagate ad prolem generandam.4 Proletarii in Rome were useful to the state only as parents of children, and they generally had large families with neither means nor ability to provide for them,—precisely the situation of the modern proletariat. 1

Nouveaux

Principes

d'Économie

2

W e l l s , The Outline

3

Études sur l'Économie

* Nouveaux

Principes

of History politique, d'Économie

politique,

vol. ii, p. 266.

( 1 9 2 1 ) , vol. i, p. 456; vol. ii, p. 398. vol. i, p. 34. politique,

vol. ii, p. 264.

SISMONDI,

THE

CRITIC

43

T h e policy of underselling necessitates the cutting of wages in order to insure successful competition in the international market. Manufacturers have even been praised f o r their patriotism, if they have refused to increase the wages of their workers. 1 Sismondi felt that the extension of the national market was too dearly paid f o r if bought at such a price. " T h e nations are enriching themselves, when they increase their incomes, not when the income of one class is usurped by another class, nor when the rich gain what the poor lose." 2 Under the modern regime it seems to be the rule that " efforts are separated f r o m their compensation ; it is not the same man who works and who then reposes; but it is that one works so that some one else may repose." 3 Here we find a line of reasoning which later was taken up by K a r l M a r x and developed into his exploitation theory of value. The profit of an entrepreneur is sometimes nothing but a spoliation of the worker whom he employs. He gains not because his enterprise produces much more than it costs him, but because he does not pay all that it costs him, because he does not give to the worker a sufficient compensation for his work. Such an industry is a social evil, for it reduces to utmost misery those who execute the work, while it only assures the ordinary profit to those who direct it.4 He emphasizes this idea later in other words : " One could almost say that modern society lives at the expense of the proletariat, whose share of the compensation for work it takes a w a y . " 5 When capital and labor are united, Sismondi observes, they have an expansive force and produce a " better 1 2

Nouveaux Principes d'Économie politique, vol. i, p. 377. Ibid., vol. 1, p. 379.

s

Nouveaux Principes, vol. i, p. 79.

4

Ibid., p. 92.

6

Etudes, vol. i, p. 35.

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

value " (Mieux value)} This term is similar to the Mehrwert, the corner-stone of Marx's famous exploitation theory of value. Although on this point there is some similarity in wording between Sismondi and Marx, we feel with Prof. Aftalion 2 that Sismondi's treatment is more defensible than that of his illustrious follower. Sismondi based his criticism on the observation of facts, taking into consideration the respective situations of both the capitalist and the worker of his time. It is more historical and less dogmatic. He gives due credit to capital, and also believes in its proper remuneration. As shown in the previous paragraph, he laments the fact that the worker is exploited when the capitalist gets only an ordinary profit. To him therefore, this social order is harmful both to the laborer and the capitalist, for a crisis works against the latter just as cruelly and with the same element of uncertainty. What he sought was some remedy which would break the vicious circle and increase the wages of the proletarian class. Karl Marx founded his exploitation theory on the Ricardian theory of value. This was purely an abstract theory, based solely on the labor cost theory. To Marx himself it worked like the theory of gravity. To him the process of exploitation is a necessary thing leading inevitably to a clash of the classes and the final triumph of the proletariat. The dogmatic element in his theory leads to its collapse, as pointed out by Prof. Simkhovitch in his book Marxism versus Socialism.3 According to Sismondi under the industrial régime with its inequalities, the laborers do not care whether industry prospers and production flourishes. They want, of course, to be better fed, better clad and better lodged ; but their mere desire will not induce employers to demand more of their 1 2 3

Nouveaux Principes, vol. i, p. 103. Aftalion, L'oeuvre économique de Simor.de de Sismondi, p. 122. Simkhovitch, Marxism vs. Socialism, pp. 254-277.

SISMONDI, w o r k or raise their wages.

THE

CRITIC

45

T h r o u g h o u t his work on eco-

nomics Sismondi did not spare any effort in depicting the wretchedness of the w o r k i n g classes. These unfortunate workers who are living in an atmosphere always heated above 80 degrees Fahrenheit, always impregnated with cotton lint, always corrupted by oil and other mephitic emanations, rarely attain the age of forty, and at this age, they are almost always turned off, as unfit for work ; most of them, old before their time, live and die in misery, squalor ; and vice ; the principal work is done by unfortunate children from six to thirteen, sold formerly by a beggars' agency, now by their parents ; sold we say, f o r their work is forced by punishment and the wage is not for them; all intellectual development, as well as all the pleasures of life, are forbidden to them by unending hard work. They are only kept awake by beating, f o r otherwise they succumb to fatigue. Everyday they are forced to work fourteen hours or more. 1 Sismondi painted the picture in even darker colors, saying that such wretchedness would have a very serious effect on people's morals ; No enjoyment whatsoever is attained by this miserable class; hunger and suffering deaden all their moral affections ; when one must fight every hour to live, all passions are concentrated in selfishness, every one in his own pain forgets the pain of others, the natural sentiments become deadened; constant work, obstinate and monotonous, stupefies all faculties ; one is shamed to see to what degree of degradation, the human race can descend, how it can voluntarily submit itself to a life inferior to that of animals. In spite of the advantages that man has reaped from the arts, we are tempted sometimes to curse the division of labor and mechanical inventions, when we see to what extent they have reduced beings who were created fellow-men. 2 1

Études, vol. ii, pp. 214-215.

2

Nouveaux Principes, vol. ii, p. 313.

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

H e further pointed out that the suffering of the w o r k i n g classes not only presents a w o e f u l spectacle in human society, but is itself a great social danger. T h e proletarii are cut off from all the benefits of civilization; their food, their dwellings and their clothes are insalubrious; without recreation, no pleasures except occasional excesses interrupt their monotonous labor. T h e introduction of the wonder of mechanical production, far from shortening their hours of labor, has prolonged them. N o enjoyment is secured by their family ties, which instead only reflect their sufferings. It is almost inevitable that they should become degraded and brutalized in an attempt to escape from their misery. Society, which threatens them with even a worse condition in the future, is regarded by them as an enemy to combat and destroy. That is not all ; while their own distress is increasing, they see society overcome, as it were, by the weight of its material opulence; they are in want of everything, and on all sides, their eyes are struck with what is everywhere superabounding. 1 S u c h w a s the imminent danger that threatened the social order that Sismondi appealed to the capitalists in their o w n interest, not basing his argument on altruistic grounds in an effort to relieve the miserable condition of the w o r k i n g classes. E.

H I S C R I T I C I S M OF R U R A L

ORGANIZATION

Sismondi well deserves to be called the champion of the rural interests as he devoted a preponderant part of his w o r k s on economics to this particular field.

H i s enthusiasm f o r the

agricultural class w a s doubtless due to the f o l l o w i n g factors : In the first place his o w n environment and experience unquestionably exerted a v e r y considerable influence upon his 1 Sismondi, " D u sort des ouvriers dans les manufactures." A n article which originally appeared in the Revue mensuelle d'économie politique, T o m e I I I , 1834. citation here is taken f r o m Political Economy, a translation of Sismordi's fragmentary w o r k by an anonymous writer.

SISMONDI,

THE

CRITIC

47

mental attitude. During the years he spent in Tuscany he actually lived a farmer's life. That admirable work, Tableau de I'agriculture en Toscane, an exhaustive treatise on agricultural economics, was the result of his personal investigations in that country. Secondly, the eighteenth-century philosophers, especially the physiocrats of France, generally favored agricultural pursuits and advocated a return to nature. Sismondi, without sharing these views, became absorbed in such reading, and may have come to believe the truth of such maxims as " God creates the country and the devil creates the city,"—• particularly since urban life in the manufacturing centers revealed so many unpleasant sights. Lastly, the industrial transformation had already taken place in his days, whereas the various agricultural processes were as yet in a very early stage of industrialization. He though that by stressing the topic, many of the inherent evils of the industrial transformation might be prevented from afflicting the rural classes. It is for these reasons, perhaps, that Sismondi was so persistently concerned with rural organization. His criticisms of rural organization center around two main ideas: disapproval of large land ownership and large-scale farming, and advocacy of small proprietorship and small farming. Before criticising the rural change which was about to take place, Sismondi examined very minutely various methods of land cultivation in use in the past, and distinguished them according to the following divisions: patriarchal exploitation, servile exploitation, the metayer system, the corvee, capitation exploitation, the lease system and the emphyteotic lease. The following are the general conclusions reached by Sismondi concerning the various forms of cultivation. In patriarchal exploitation the landowner himself cultivates the land with the help of his children and his domestic?. The

48

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

farmer's perpetual interest and affection for his land contribute most largely to its improvement. Wherever patriarchal cultivation is in practice, the population is visibly prosperous. There, integrity and good faith are always found, instead of deception and cheating. Land-owning farmers, as a class, furnish the greatest security for an established order. 1 Sismondi severely attacked servile exploitation, a system under which the condition of the slaves is most pitiful and the arrogant masters cease to work. The history of Rome shows how servile exploitation brought about agricultural ruin and depopulation, the terrible servile war and the barbarian invasions in which the Roman slaves joined hands with the intruding enemies. W i t h this system of cultivation, the nation almost completely disappeared and nearly reverted to savagery. Sismondi even at that time believed the servile cultivation practiced around the Gulf of Mexico to be unprofitable, since it had to be supported by a monopoly in order to carry on production. H e protested vigorously against slavery, saying that a master stole from his slave his daily wage, a theft that the law did not punish. 2 The metayer system, under which the cultivator pays his rent in kind, was considered by Sismondi to be one of the happiest inventions of the Middle Ages. Here the cultivator, although not the land owner, enjoys practically all the benefits of proprietorship, for this cultivation establishes a unity of interests between the land-owner and the metayer, since they have to share the harvest. The mode of payment is also very convenient for the metayer, as he does not have to sell at an inconvenient time to pay the rent or taxes in money. A s a metayer always gets half of the harvest, the land-owner 1 Vide Nouveaux Principes d'Économie politique, Chap, iii, " D e l'exploitation patriarcale ".

* Vide Nouveaux tion servile."

Principes,

vol. i, pp. 165 et

seq.

vol. i, pp. 177 et seq., ch. iv, " D e l'exploita-

SISMONDI,

THE

CRITIC

49

has reason to be tempted to dismiss him for a new metayer who would pay precisely the same ratio. Hence a metayer has almost perpetual ownership of the land he cultivates. 1 Sismondi saw in Italy a flourishing population under the metayer system. The corvée system, under which the rent is paid by rendering labor gratuitously for a certain number of days in the week, was considered undesirable by Sismondi because it would discourage the farmer and make him more dependent. Moreover it was almost always connected with serfdom. T h e corvee and metayer systems were based on the same theory, but the former was misapplied. However, to Sismondi, the substitution of the corvée system for complete slavery represented some improvement in the condition of the poor peasants. 2 T h e capitation system Sismondi considered slavery, since it meant renting out the service of owner was too lazy to supervise their work. not dwell much on this system, as it had already the destruction of slavery. 3

equivalent to slaves, whose Sismondi did died out with

Lease-farming, 4 generally practised in England and in Ireland, was condemned by Sismondi. Under it, the farmers, instead of being themselves cultivators, became a class of agricultural speculators and a new class of miserable journeymen came out to work for the farmers. It was impossible for these journeymen to entertain any hope of improving their condition by thrift. T h e emphyteotic lease, under which an interest in the property was given to the cultivator 1 Vide ibid., pp. 189 et seq., ch. v, " De l'exploitation par métayers, ou à moitié fruits." 2 Nouveaux par corvée."

Principes, vol. i, pp. 204 et seq., ch. vi, " De l'exploitation

3

Ibid., pp. 218 et seq., " De l'exploitation par capitation."

1

Ibid., pp. 2iq et seq., ch. viii, " De l'exploitation par bail à ferme."

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

by means of a perpetual rent (exemplified by the free holders in England) appeared to Sismondi to possess both advantages and drawbacks. It apparently gave to the cultivator a feeling of possessing the land and would therefore encourage him to spare no effort in its cultivation. On the other hand, it involved a double ownership of the same piece of land and would therefore usually result in conflict. Moreover it sometimes compelled the cultivator to give up a part of his capital as rent, instead of participating in the fruits of his work. 1 T h e foregoing brief review of his treatment of these various modes of cultivation shows that Sismondi clearly indicated his approval of patriarchal cultivation, that is, the combination of the ownership of land and its cultivation in the same person. Here, Sismondi's position in attacking the large farming system is greatly strengthened by the fact that division of labor and the application of machinery, apparently so advantageous in industrial enterprises, are not so adaptable to farming. T h e very nature of the work renders the concentration of capital and the extensive use of machinery less profitable than in the industrial field. W h e n small farming is replaced by large farming, the thousand arpent farm is able by cutting down the wages of the journeymen, to turn over to the landlord a bigger profit than would be yielded by the combination of the former fifty farmers with twenty arpents each. But this gain, to Sismondi, is very harmful. " T h e increase of net produce at the expense of the gross produce can be and, in fact, often is a great national calamity." 2 For it is much better for the nation to have fifty families not rich but all well-to-do, than to have one opulent family, with fifty other families suffering from want. 1

Nouveaux

Principes, vol. i, pp. 243 et seq., ch. ix, " De l'exploitation

emphytéotique."

' Ibid., p. 153.

SISMONDI,

THE

CRITIC

51

The small proprietor-farmer of course finds it impossible to compete with his rich neighbor. Whenever there is a collision between the large and small farming systems, the former always sweeps over the latter to assured victory, and the small proprietor-farmer is compelled to sell out his modest property and to enroll himself in the army of the journeymen. Capital and machinery displace manual force, and tend to make the journeymen useless. " The nation is nothing other than the union of individuals of whom it is composed, and progress of her wealth is fallacious, if it be attained at the price of popular misery and of mortality. 1 Formerly, under the small farming system, land was cultivated mainly for the purpose of supplying food for the families depending upon it. But the big farming system, after driving out these families, would produce for sale. Hence the gain in net produce would be counterbalanced by the constant fluctuation of prices in the corn market. The revolution which the economist and the agronomist propose to accomplish in agriculture by the introduction of the large farming system and scientific cultivation menaces the national happiness in another way ; it makes the cultivators entirely lose their view of the relation so essential to maintain between demand and production; it delivers almost the entire harvest of the big farmers to commerce ; thus it makes each dependent upon all ; it exposes everybody to the chances of the market . . . it condemns in turn the one to be suffocated by abundance and the other to perish in misery.2 When, under the large farming system, small farmers are reduced to the grade of laborers, working under the orders of the rich, their condition becomes more dependent, in some respect, than that of the former serfs. N o participation of any kind in the property is to be expected and they live from 1

Nouveaux

2

Études, vol. i, p. 193.

Principes, vol. i, p. 233.

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

hand to mouth. ! Good years or the fertility of soil become matters of indifference to them. They naturally would not plant trees for their posterity or make extensive improvements in order to enjoy the fruits in their advanced age. W h e n a man is reduced to a purposeless existence Sismondi thought it, perhaps, inevitable for him to take recourse to intoxication to benumb his feeling. 1 T o Sismondi, the extensive use of machinery for land cultivation in England was a grave evil, for, as a result, the rural population in a given area in England was estimated to be only half as numerous as that in a corresponding area in France. This rural population, though small in number, became constantly poorer, and the English cottager was less happy and had less hope and security than the peasants of nearly every other country in Europe. 2 Such sad results were produced by hope of the proprietor for an increase of net produce as contrasted with gross produce. Sismondi was extremely indignant at an incident in Scotland, where the Countess of Sutherland, proprietor of a domain of a million acres, animated by the calculation of a better net income, drove out three thousand families w h o had lived there for centuries, and put in their places one million sheep. Sismondi devoted an entire essay to denouncing such inhuman cupidity. 3 Sismondi advocated not only small farming but also the ownership necessarily connected with it. Small farming without ownership would entail as much misery as the large farming system. H e pointed out that under the small farming system the Irish population lived an unbelievably miserable life, because the whole country belonged to a few families with the remaining population constituting proletariat. 4 1

Nouveaux

2

Ibid., p. 239.

Principes, vol. i, p. 225.

3

Études, vol. i, pp. 203-238.

1

Ibid., p. 248.

SISMONDI,

THE

CRITIC

53

When ownership and cultivation are united, numerous advantages are achieved. Possession of property insures habits of order and economy, and daily abundance destroys the taste for gourmandising and intoxication; for after all it is privation that drives people to excess. 1 The proprietor farmer is the one who draws most from the soil. It is he who always thinks of the future, who always knows by experience how to utilize his land to the best advantage. The rural population will always be happy and prosperous under this system. In depicting the condition of the Tuscan metayers, who have all the benefits of the ownership of land, Sismondi gives us every detail, even describing the furniture in the room of a Tuscan metayer. 2 H e attributed the prosperity of the United States and Switzerland to the fact that in both countries the ownership of land is not separated from the care and the fruit of its cultivation. C. HIS CRITICISM OF T H E C L A S S I C A L ECONOMISTS

Political economy as conceived by the classical economists is the science that treats of the nature, the production and the distribution of wealth, but to the distribution part, they do not seem to have paid sufficient attention. Senior explicitly stated his attitude in the following words : To what extent and under what circumstances the possession of wealth is, on the whole, beneficial or injurious to its possessor, or to the society of which he is a member ; what distribution of wealth is most desirable in each different state of society; and what are the means by which any given country can facilitate such a distribution ?—all these are questons of great interest and difficulty, but no longer form part of the science of political economy. . . . The subject treated by political economy is not happiness but wealth.3 1

Nouveaux

2

Études,

3

Senior, Political

Principes,

vol. i, p. 168.

vol. i, pp. 278-329. Economy

(1850 edition), p. 2.

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

This was a view with which Sismondi could not agree. To him a science dealing merely with wealth is not political economy, but should be designated by the Greek name " Chrematistics ". The doctrine of the " chrematistic school " is briefly summed up by Sismondi in the following words : to increase wealth, it must be produced in big quantities and at little expense. 1 Thus wages, in the eyes of a classical economist, were an item of expense. T h e chrematists aimed to produce and did produce, without regarding for a moment the suffering of the working classes. They refused to investigate the moral consequences of their doctrine. W i t h Sismondi, to forget the man and stand only for the thing is to sacrifice the end for the means. 2 " T h e chrematistic science, or the study of the means of increasing wealth, in setting aside the purpose of this wealth, is a false science." 3 It is to pursue a shadow without reality. If production alone is to be considered, entirely overlooking the " man ", only the hope remains that the king, living alone on the Island, in constantly turning the crank, may automatically accomplish all the works of England. 4 In this respect Sismondi considered the ancient Greek philosophers superior to the classical economists. For though they were sometimes led astray by the activity of their imagination and their speculative theories, they never lost sight of the fact that the value of wealth consisted merely of what it contributed to the national happiness.6 A s a result of the application of the chrematistic doctrine, division of labor, and the use of machinery, amazing pro1

Études, vol. ii, p. 235.

J

Nouveaux

3

Études,

Principes,

vol. ii, p. 140.

vol. i, p. 4.

4

Nouveaux

5

Ibid., vol. i, p. 20.

Principes,

vol. ii, p. 331, footnote.

SISMONDI,

THE

CRITIC

55

gress has certainly been made in the field of production. But, according to Sismondi, " it has diminished the number of the rich; it has multiplied products and has made their prices much cheaper, but it has cut off the income of those who can buy ; finally, it has created wonders in the arts, but side by side it has also created the proletariat and pauperism." 1 A f t e r all, to Sismondi, the progress recommended by the classical school only served to strengthen the aristocracy of money and the creation of the proletariat. 2 We have seen in the first chapter that in his early work, le Tableau de l'Agriculture en Toscane, he already exhibited a marked inclination to combat abstract theories. For this reason he did not direct his main attack against A d a m Smith, believing that this Scotch economist did not intend to confine his theories to general abstraction. The true reformer of the science, Adam Smith, however, had traced another road for it. He felt that our view is not sufficiently penetrating or comprehensive to grasp the entire society ; he felt that it is always necessary for us to fix our views on a single object to know it well, and he undertook to make us understand the social organization, not by seeking to find the attributes of society, and treating abstractly of its work, its commerce, its wealth, but by entering the society of man, and there understanding him in his complicated relations with his fellow-men.3 It is this method that Sismondi claims to follow and in this respect he differs from many of the classical writers. Sismondi thought that A d a m Smith, though regarding political economy as a science of experience, was not consistently faithful to this doctrine, 4 while his English disciples plunged absolutely into abstract theories. 1

Études, vol. ii, p. 75.

5

Ibid., vol. i, p. 241.

5

Ibid., p. 118.

4

Nouveaux

Principes,

vol. i, p. 56.

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

The science in their hands is so speculative, that it seems to be detached from all practice. It was believed at first that in extricating the theory from all the accessory circumstances, one ought to render it clearer and easier to seize, but the opposite is attained. The new English economists are quite obscure and can be understood only with great effort because our mind is opposed to admitting the abstractions demanded of us. This repugnance is in itself a warning that we are turning away from the truth, when in moral science, where everything is connected, we endeavor to isolate a principle and to see nothing but that principle.1 Sismondi pointed out that it is natural for man " to seek to reduce all his operations to the simplest formula; to generalize all his rules and to accomplish by a uniform process all that can be subtracted from the more complicated processes." 2 This habit of generalization, though very essential to the progress of some sciences, must be carefuily guarded against lest our minds be limited by abstractions and then led into the pitfall of absurdity. " These philosophers (the classical economists), in fact, pretend to simplify a question by neglecting all its accessories; but in this way they give to their supposition a character absurd and contradictory, to which our mind can not submit." 3 ( T h e above criticism was shared to a remarkable degree by Malthus : " T h e principal cause of error, and of the differences which prevail at present among the scientific writers on political economy appears to me to be a precipitate attempt to simplify and generalize." A n d in a later passage, Malthus literally reproduced Sismondi's idea. " In political economy the desire to simplify has occasioned an unwillingness to acknowledge the operation of more than one cause in the 1

Nouveaux

Principes, vol. i, p. 56.

' Ibid., vol. ii, p. 171. ' Études, vol. i, p. 79.

SISMONDI,

THE

CRITIC

57

production of particular effects; and if one cause might account for a considerable portion of a certain class of phenomena, the whole has been ascribed to it, without sufficient attention to the facts, which would not admit of being so solved." 1 Sismondi blamed the English economists for drawing too many abstractions from casual observation in England alone, without examination of what had happened in other countries. 2 For example, Ricardo maintained that the cultivation of corn would be discontinued, if the sale of corn did not command a remunerative price. Referring to this statement Sismondi pointed out that Ricardo had failed to study the different systems of cultivation in other countries. In Poland, where the corvée system was in practice, it required no more effort on the part of the landlords to get the harvest than beating " some hundred of strokes to be distributed among the peasants." T h e corn cost them nothing more than the whipping. In this case, the peasants did not care in the least for the market price of the corn, for they would eat up the entire meagre portion left for them, while the other half belonging to the lords would be sold at any price, since it was a free income to them. 3 F o r this reason, they would not discontinue cultivation, even if they failed to get a remunerative price. A salient feature of the Ricardian theory of value, the assumption of the almost absolute potency of the regular competitive forces, met with Sismondi's strong disapproval. W e shall begin by protesting that we do not in any way admit the basis of Mr. Ricardo's reasoning or the constant rate of profits in all industries. W e believe, on the contrary, that pro1

Malthus, Principles

2

Nouveaux

1

Ibid., pp. 255-260.

of Political

Economy

Principes, vol. i, p. 265.

(London, 1820), p. 6.

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

p r i e t o r s w i t h fixed capital, b e c a u s e o f t h e i r e v e r p r e s e n t i n a b i l i t y to s h i f t f r o m one industry to another keep their capital invested in e n t e r p r i s e s w h i c h y i e l d a s m a l l e r r e t u r n t h a n t h a t i n v e s t e d i n other enterprises. T h e i r p e r s i s t e n c e in t h e s a m e e n t e r p r i s e is g r e a t l y i n c r e a s e d b y t h i s r e l u c t a n c e t o lose all t h e i r a c q u i r e d skill a n d a l s o b y t h e i r inability t o e n t e r a n o t h e r p r o f e s s i o n

The

can not merely by their o w n w i s h become weavers. one d i s t r i c t c a n m i g r a t e t o a n o t h e r difficulty.

If

there

is a n y t h i n g

farmers

F a r m e r s of

district only w i t h

proven by

experience,

great it

is

t h a t p r o f i t s a r e n o t at all e q u a l in t h e s e v e r a l p r o v i n c e s a n d f r o m t h e d i f f e r e n t k i n d s o f soil. 1 T h i s condition Sismondi attributed to the fact that habits 1 Noaveaux Principes, vol. i, p. 302. Half a century later, J. E. Cairnes seems to have developed the same idea: " But of the disposable labor each element—that is to say, each individual laborer—can only choose his employment within certain tolerably well-defined limits. These limits are the limits set by the qualifications required for each branch of trade and the amount of preparation necessary for their acquisition. Take an individual workman whose occupation is still undetermined, he will, according to circumstances, have a narrower or wider field of choice; but in no case will this be coextensive with the entire range of the domestic industry. If he belongs to the class of agricultural laborers, all forms of mere unskilled labor are open to him, but beyond this he is practically shut out from competition. The barrier is his social position and circumstances, which render his education defective, while his means are too narrow to allow of his repairing the defect, or of deferring the return upon his industry till he has qualified himself for a skilled occupation. . . . What we find, in effect, is, not a whole population competing indiscriminately for all occupations, but a series of industrial layers, superposed on one another, within each of which the various candidates for employment possess a real and effective power of selection, while those occupying the several strata are, for all purposes of effective competition, practically isolated from each o t h e r . . . the average workman, from whatever rank he be taken, finds his power of competition limited for practical purposes to a certain range of occupations, so that, however high the rates of remuneration in those which lie beyond may rise, he is excluded from sharing them."—John E. Cairnes, Some Leading Principles of Political Economy (New York, 1874), pp. 65-69.

SISMONDI,

THE

CRITIC

59

and customs are a kind of moral force, which can not be reduced to calculations. The classical economists have too often forgotten that they are dealing with men and not with machines.1 With this important postulate discredited, Sismondi believed the whole Ricardian system would collapse. In his chapter discussing Ricardo's theory of rent, therefore, he did not attack this theory directly. He merely asserted that Ricardo's rent theory would be well founded if the poor, uncultivated fields were not appropriated, and any one could freely put them into cultivation whenever he thought it advantageous to do so. But everywhere land was appropriated, either by individuals or by communities. It is evident, therefore, that the possession of land is always a tangible something whereas Ricardo considered it nothing and stated his scale of comparison by calling it zero, which, in fact, it is not.2 Sismondi then summed up his refutation of the Ricardian theory by stressing the fact that " in political economy, one should guard against absolute propositions, as well as abstractions. All of the forces which are destined to balance each other in every market, may undergo variations in themselves independent of the one against which they are weighted. An absolute quantity is nowhere to be found; and every abstraction is always a deception." 3 Against the theory of self-interest, Sismondi began a most subtle attack. The theory of self-interest, a very essential part of the classical doctrines, maintains that every one knows his own interest best; with this the government should not interfere. Any interference on the part of the government is often not only useless, but even harmful. Laissezfaire is the best policy that any government can follow; for 1

Nouveaux Principes, vol. i, p. 336.

2

Ibid., p. 304.

3

Ibid., p. 313-

6o

S1M0NDE

DE SISMONDI

AS AN

ECONOMIST

if people are left alone to work, the interest of each will be the interest of all. Sismondi pointed out that they fail here to take notice of the fact that the interest of each to escape greater evil might not be to the interest of all. It is the interest of one to rob his neighbor, and it is to the interest of the latter to let him do it, if he has a weapon in hand, in order not to be killed; but it is not to the interest of society that one should use force and the other should give in. The entire social organization presents to us at every step a similar compulsion, not always with the same sort of violence, but always with the same danger of resistance.1 He further added that if self-interest is to be restricted by the interest of others, then the interest of each would be the interest of all. But as a matter of fact it is not; everyone is seeking his own interest at the expense of others. In this action their forces are not equal. Hence " injustice can often triumph, in the struggle of the interests of one against those of others, and in this case, injustice will almost always be there, being backed by public force which is believed to be impartial, but which, in fact, without examining the cause, always places itself on the side of the stronger." 2 In view of such existing inequalities to explain the principles of political economy by the doctrine of unlimited competition would be to sanction the efforts of everyone against society and to sacrifice the interest of humanity to actions dictated by individual greed. 3 Sismondi was certainly one of the earliest economists in the last century to charge the classical school with approaching their theory of value from the view-point of production alone. T o him, demand should enjoy equal weight in the 1

Nouveaux Principes, vol. i, p. 200.

' Nouveaux Principes, vol. i, p. 408. ' Ibid., vol. ii, p. 368.

S1SM0NDI,

THE

CRITIC

61

discussion of the value problem. " One should always distinguish in political economy two kinds of value, intrinsic and relative; the former is determined by production, the latter by competition. One is the relation of the thing produced to the labor that has accomplished it ; the other is the relation of the thing produced to the demand of those who want." 1 It is quite evident that our author had in mind what most modern treatises on economiecs maintain,—that is, that the theory of value should be approached from the consumption side, as well as from the view-point of production costs, and that it should take into consideration both demand and supply. 1

Nouveaux Principes, vol. i, p. 306.

CHAPTER

III

T H E O R E T I C A L C O N C E P T I O N S OF

SISMONDI

W H I L E Sismondi is generally regarded as a great critic, his contributions to positive theory are considered to be weak, although Mr. Henryk Grossman holds a quite different view and believes that Sismondi's merit is to be found particularly in his theories. 1 It is possible to believe that there is some merit in both of these contentions. At the time when the classical school was in vogue, Sismondi, in view of the unhappy consequences of pursuing such doctrines, naturally devoted his main attention to combating the existing orthodoxy with which he could not agree. His efforts in constructing positive theories of his own were thus considerably lessened. On the other hand, we feel that Sismondi did make to the theoretical field some very subtle contributions which are saliently Sismondian, and which we shall endeavor to examine in the following categories. A. H I S CONCEPTION OF ECONOMICS AND METHODOLOGY

Contrary to the practice of the classical economists, especially Senior, whose conception of political economy was to make it amoral and to separate it from politics or legislation, Sismondi stressed the point that political economy is a part of the science of government, 2 and an indispensable study for the legislator. Sismondi's conception seems to be due to two reasons : firstly, being an eminent philologist, 1

Grossman, Henryk, Sismonde de Sismondi et ses theories (Bibliotheca Universitatis Liberae Poloniae), p. 20. 2

Nouveaux 62

Principes,

vol. i, p. 8 ; Études, vol. ii, p. 238.

économiques

THEORETICAL

CONCEPTIONS

OF SISMONDI

63

he was inclined to hold " Political E c o n o m y " strictly to its Greek etymological interpretation, by which oiKos-vofios means literally the rule of the house; and, secondly, he may have been influenced by the previous Italian writers who regarded political economy not as an isolated science but as a science of administration. 1 T h e very fact that all the French universities have put political economy in the curriculum of their law faculties seems to show that the French conception of this science agrees with Sismondi's view. T o him, " the physical well-being of man, in so far as it can be the work of his government, is the object of political economy." 2 H e professed the same doctrine as the classical school in maintaining that labor is the only source of wealth and that economy is the only way to accumulate it. But from this point he proceeded along a different road emphasizing that enjoyment is the only aim of this accumulation. 3 As a science of government " political economy should assure to all the advantages of the national fortune, it should search for the order which will assure to the poor as well as to the rich a participation in the conveniences, pleasures and repose of life. . . . T h e aim of the government is not at all, in an abstract manner, the accumulation of wealth in the state, but, rather, the participation of all citizens in the enjoyment of the physical life which wealth represents." 4 Sismondi reproached the classical economists for overlooking the distribution of wealth. I am engaged above all in exposing the theory of the distribution of wealth, whereas the chrematistic school occupies itself only with its formation . . . and the true political economy, the rule of the city and of the household, should direct human work in 1

Pecchio, Storia de la economia pubblica in Italia, passim.

2

Nouveaux Principes, vol. i, p. 8.

' Ibid., p. 15. 4

Ibid., p. 9.

64

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

such a way that all may have a share in the enjoyment which it procures, that all may be fed, clothed, lodged in a manner to utilize the favors the Creator has prepared for man.1 In his criticism of the classical school for being interested solely in the formation of wealth, Sismondi must have been referring to Smith rather than the later economists. To such accusations, Ricardo certainly would not plead guilty, since he judged distribution to be the central problem in economics. " Political economy you think is an inquiry into the nature and causes of wealth ; I think it should rather be called an inquiry into the laws which determine the division of the produce of industry among the classes who concur in its formation. . . . Every day I am more satisfied that the former inquiry is vain and delusive, and the latter only the true object of the science." 2 W e believe, however, that Sismondi's accusation was directed against the negligence of the classical economists, not in the sense that they had overlooked the problem of distribution, but rather because of their amoral treatment of the science, their indifferent attitude, and, above all, their belief in the natural course that would take care of the distribution. Though Ricardo judged distribution to be the true object of the science, he believed also that legislation should not tamper with distribution. 3 Precisely for this reason, Malthus came to agree with Sismondi. " It is obviously impossible, therefore, for a government strictly to let things take their natural course ; and to recommend such a line of conduct, without limitations and exceptions, could not fail to discredit general principles as totally inapplicable to practice." 4 1

Études, vol. i, p. vii.

2

Letters of Ricardo to Malthus, edited by James Bonar (Oxford, 1887),

P- 1753

Vide supra, p. 7.

4

Malthus, Principles of Political Economy

(London, 1820), p. 20.

THEORETICAL

CONCEPTIONS

OF

SISMONDI

65

Sismondi regarded political economy as a practical, administrative science immediately concerned with the happiness of the people. Whenever a science is concerned with the accumulation of wealth alone, forgetting the man for the thing, it is then taking the wrong direction. The question " for whom " is always to be kept in mind, and it must be carefully ascertained whether the man belongs to the thing or the things belongs to the man. 1 " It forms no branch of political economy whatsoever should not be judged by its relation to the happiness of the mass of the people." 2 In short, Sismondi's conception of political economy is that it should serve two ends: the increase of happiness and its diffusion among a greater number of people. " Political economy investigates the means by which the greatest number of men, in a given state, can participate to the highest degree in physical well-being, which depends upon the government Political economy becomes in general the science of beneficence." 3 Here we find a tone which reminds us of Bentham's philosophy. Sismondi was probably very familiar with the great utilitarian work, which was so popular in England at that time. Regarding Sismondi's methodology, we must agree with Professors A f t a l i o n and Rist that Sismondi was, on the whole, attacking the abstract, a priori method, and it was he who paved the way for what the later historical school in Germany is glorified for having inaugurated. 4 A n d he was, indeed, not altogether consistent in keeping up his vigorous contention that " all abstraction is always a deception." W e find that he, too, slipped occasionally and set up theories too 1

Études, vol. i, p. 4.

2

Nouveaux

Principes,

vol. i, p. 154.

3

Nouveaux

Principes,

vol. ii, p. 250.

' Cf. Rist, Histoire des doctrines economiques, économique de Simonde de Sismondi, p. 55.

p. 230; A f t a l i o n ,

L'Oeuvre

66

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DE SISMONDI

AS AN

ECONOMIST

abstract for defense. Mr. Henryk Grossman tried in vain to defend him as being a constructive theorist. 1 W e find it quite impossible to accept such defense. The constructive basis, as compared by Mr. Grossman to Dr. Quesnay's famous " formula of the economic table," seems to us exactly what Sismondi would have pronounced to be a deception. His insistence upon the experimental method was made unquestionably clear in the following extract from the preface to his Études sur l'économie politique: Furthermore, I am convinced that one is falling into serious error in wishing to generalize everything that is related to social sciences. It is, on the contrary, most essential to study human conditions in detail. One must get hold sometimes of a period, sometimes of a country, sometimes of a profession in order to see clearly what man is and how institutions act upon him.2 This is a rather formal declaration of his methodology, a comparative, historical attitude over against the classical theory of an absolute notion. He definitely criticized "those who wished to see man isolated from the world or rather who considered abstractly the modifications of his existence, and always arrived at conclusions that are belied by experience." 3 This proves beyond doubt his uncompromising opposition to the theory of the " economic man," as expounded by the classical economists. He is deservedly called the early reformer of the science of economics. He realized the complexity of the industrial era of his time for which a few abstract theories were far from adequate and, consequently, far from the truth. Such attitude, however, met 1 Grossman, Henryk, Simonde de Sismondi et ses theories (Bibliotheca Universitatis Liberae Poloniae). 4

Études, vol. i, p. iv.

3

Études, vol. i, p. iv.

économiques

THEORETICAL

CONCEPTIONS

OF SISMONDI

67

with the hearty approval of one great economist of the classical school, Malthus, who persistently considered that the science of political economy should bear a closer resemblance tc the science of morals and politics than to that of mathematics. The similarity between Malthus and Sismondi is striking, especially in their methodology. Malthus, in his Principles of Political Economy, stressed the point that "one of the specific objects of the present work is to prepare the general rules of political economy for practical application, by a frequent inference from experience, and by taking as comprehensive a view as I can of all the causes that concur in the production of particular phenomena." 1 In another passage, Malthus' approach to Sismondi presents a similarity even in language: It appears to me, I confess, that the most perfect sincerity, together with the greatest degree of accuracy attainable, founded upon the most comprehensive view of all the circumstances of the case, are necessary to give that credit and circulation to general principle which is so desirable. And no views of temporary advantage, nor, what is more likely to operate, the fear of destroying the simplicity of a general rule, should ever tempt us to deviate from the strict line of truth, or to conceal or overlook any circumstances that may interfere with the universality of the principle.2 Malthus, too, seems to have fully grasped the complexity of the modern social machinery and showed his disapproval of abstract treatment: " W e shall fall into a serious error if we were to suppose that any propositions, the practical results of which depend upon the agency of so variable a being as man and the qualities of so variable a compound as the soil, can ever admit of the same kind of proof, or lead to 1

Malthus, Principles of Political Economy (London, 1820), p. 21.

2

Ibid., p. 15.

68

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

the same certain conclusions, as those which relate to figure and number."

1

B.

H I S T H E O R Y OF CRISIS

W h a t chiefly distinguishes Sismondi in the history of economic thought is his early contribution to the theory of crisis. Indeed, the essence of this theory has been the guide that many of the critics of the industrial régime, from his time to the present day, have been, consciously or unconsciously following, though in an elaborate way. In furnishing an explanation of the social evils wrought by the Industrial Revolution, we do not think that Sismondi is guilty of committing the error that he so vehemently attacked. For the theory of crisis is not in the same category as, for example, Ricardo's theory of value. T h e abstract theory of value is attacked by Sismondi, not because it reasons from the general to the particular, but because the generalization is not based on the actual observation of particular facts. The theory of crisis, on the other hand, is only a descriptive record of one particular fact, namely the " crisis ". Though it assumes the name of a theory, its basis is strictly descriptive and practical, and needs no postulate of any kind to make it work. It is the result of the investigation of something actually happening in the industrial world. Sismondi's crisis theory, however, has been very much misunderstood, especially during the author's lifetime, partly because of the dominant influence of the classical school but more, perhaps, because of his own fault in writing. Sismondi was much too fond of touching on many ideas at the same time. In the exposition of this theory, he failed to put his central idea in a clear-cut and comprehensive way, and in addition, he combined many subordinate ideas with his main theme. These ideas were, of course, origi1

Malthus, Principles

of Political

Economy

(London, 1820), p. I.

THEORETICAL

CONCEPTIONS

OF SISMONDI

69

nally intended to strengthen his position, but unfortunately, the exact opposite was the result. Readers are misled and the subordinate idea have become the target for attack. The main theory, alloyed with such a mixture, becomes obscure. Hence, in explaining his theory of crisis proper, we deem it better to set aside these auxiliary ideas. It is not because they are altogether false, but because they are not essential to the theory, be they true or false. In the beginning of the nineteenth century, Sismondi already noted the recurring phenomena of crises. What was more astonishing to him, he saw what would be termed economic success — over-production. In trying to explain this paradoxical phenomenon, he offered the subtle theory of crisis, but rather unwisely he offered, also, the following statements together with his main theory : First, in view of the complexity of the new industrial régime, it was difficult for Sismondi to give a comprehensive generalization of his view of crises. He thought, however, he might create some device to help people to understand his viewpoint. The very device he used, however, unfortunately created a negative effect. T o clarify his theory, he introduced the expressions : " annual income " and " annual production," and went on to say that " it is the income of the past year that will pay for the production of this year ; it is a predetermined quantity, which serves to measure the indefinite quantity of work to come." 1 Such doctrine met with justified opposition from his contemporary economists on the ground that the annual income of a nation is nothing other than her annual production, and that, at any time, things produced may be exchanged and mutually paid for. 2 1

Nouveaux Principes, vol. i, p. 120.

T o this, Malthus judiciously raised the objection: " M. Sismondi, in his late work, speaking of the limits of accumulation, observes, ' On ne fait jamais après tout qu'échanger la totalité de la production de l'année contre la totalité de la production de l'année précédente.' If this were 2

JO

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

In this way, as justly remarked by Professor Rist, Sismondi reasons as if the nation were composed entirely of agriculturists who buy each year manufactured goods with the income from the sale of their last year's crop. 1 Furthermore, in the light of our present multifarious methods of sale, methods which were, of course, unknown to Sismondi, we are still convinced that the word " annual " is surely not a happy one, since many times sales orders are taken before the goods are manufactured; or, on the installment-payment plan, goods are delivered to the buyer long before his income is realized. But, in spite of the inadequacy of these terms, it is not to be inferred from these words that Sismondi's theory of crisis is altogether false, for this idea is to him only a clarifying device, an auxiliary to his main theory. Since it fails of its intended use, however, we had better omit it. Secondly, prompted somehow by humanitarian impulses, Sismondi emphasized the distinction between goods to satisfy primary needs and luxury goods. He maintained that only the demand for luxuries is unlimited, whereas the demand to meet primary needs is strictly limited. 2 Being a Swiss Protestant (French and Swiss Protestants are generally puritanical in their beliefs), he vigorously denounced the luxuries produced for a few rich people at the expense of a vast number of workers. O n the other hand, to overproduce articles for which the demand is limited is to glut the market and to cause a crisis. However admirable his sentiments may have been, this distinction gives good reason for criticizing him for having founded a backward science, really the case, it would be difficult to say how the value of the national produce could ever be increased." Malthus, Principles of Political Economy (London, 1820), p. 420. 1

Cf. Rist, Histoire des doctrines economiques, p. 120.

Nouveaux Principes, vol. i, ch. iii, "Augmentation des besoins de l'homme social et bornes de la production." 2

THEORETICAL

CONCEPTIONS

OF SISMONDI

71

economie politique a rebours, as phrased by Bastiat. It is pointed out that men's wants are never satisfied and the line of demarcation between luxury and necessity cannot be sharply drawn, with a constantly changing standard of living. Here again, we think Sismondi has deviated from his main thesis. He did not have to stress the question as to whether the demand for primary needs is limited or not. His theory is little concerned with this. Even if the demand created by primary needs were unlimited, it would not affect his theory, for the theory deals with a phenomenon, where superabundance of goods is shown side by side with a starving working population, who are still desperately in want of the goods for their primary needs. In the third place, Sismondi did not always qualify his idea of general over-production with enough precision. Sometimes he was carried away from his original theme by digressions and illustrations. For example, he would unhesitatingly set down some idea coming into his mind which might serve well to illustrate one part of his theory, such as the story of Gandalin: In the time of enchantment, Gandalin, who lodged a sorcerer in his home, noticed that every morning the sorcerer would take a broom-handle and, saying a few magic words on it, he made out of it a water-carrier, who at once would get for him as many pails of water as he desired. One morning Gandalin hid himself behind a door and listened with all his might to over-hear the magic words which the sorcerer pronounced for his enchantment. He, however, did not hear what the sorcerer said next to undo it. As soon as the sorcerer went away, Gandalin repeated the experiment; he took the broom-handle, pronounced the mysterious words and the broom water-carrier went forward to the river and returned with water, and then again went forward and came back with it, thus again and again; Gandalin's reservoir was already full and the water flooded the room. " It's enough! " cried he, " Stop! " But the machine-man neither

SIMONDE

DE SISMONDI

AS AN

"ECONOMIST

saw nor heard; insensible and indefatigable, he would have brought all the water from the river. Gandalin, in his despair, took an axe and hit his carrier with repeated blows. Then he saw the fragments of the broom, upon falling on the ground, immediately get up and reassume the magic form and run to the river. Instead of the carrier, he had now four, eight, sixteen; the more he struck down his machine-men, the more machine-men got up to do his work in spite of him. The entire river would have passed into his home, if the sorcerer had not fortunately come back and destroyed his enchantment. . . . He further added that " water is a useful thing, but even of the best things of life we may have too much." 1 The foregoing story illustrated well his point that a machine is not an unmixed blessing. But, at the same time, the story, however picturesque, impressed some as evidence that Sismondi actually thought that we may have too much even of good things. Hence it would be quite reasonable to refute Sismondi's argument on the ground that " every human society can produce of all things a quantity superior to what she can consume. I ask then how it happens that seven-eighths of the population lack a multitude of things considered to be necessary." 2 Here again we see his enthusiasm carrying him too far and leading to a deviation from his theory. In order to make clear his essential viewpoint, it would have been, perhaps, wiser to omit remarks of this kind. Lastly, he emphasized the limits of the market, showing that national rivalry for foreign markets would lead to nationalistic wars, and general over-production would still result, if all the nations followed the same system. 3 Hence he resorted to another device—that of basing his argument 1

Etudes, vol. i, p. 6o.

2

Say, J. B., Oeuvres diverses, p. 252.

3

Etudes, vol. i, p. 77.

THEORETICAL

CONCEPTIONS

OF

SISMONDI

on an imaginary, isolated community. This naturally gave rise to the criticism that he, too, resorted to abstraction, which he so violently condemned. As a matter of fact he did not need to emphasize this point to prove his idea of over-production. Complete saturation of the world was, indeed, too far away to justify his fear. But, within a single country, he could even then gather sufficient data to substantiate his theory. After setting aside these auxiliary ideas his theory of crisis can, perhaps, be better understood. Sismondi was to have the honor of being the first to notice the paradoxical phenomenon that characterizes the modern industrial régime. To demonstrate the complexity of the industrial régime, he first described the relatively simple machinery of the preceding eras. In the primitive patriarchal society, every family was self-sufficient, the members of the family producing almost everything they needed. In such a state of affairs, when every man was working for himself alone, he knew perfectly what he wanted and there was no ground for fear that he might waste his efforts in producing things not desired.1 When the division of labor gradually came in and the exchange of goods took place, men began to work not only for themselves, but also for others. Under the mercantile system, the apprentice rules and the corporation laws were primarily to protect the producers. In fact, all the producers were allied to fight against the consumers. With this protection, even though the cost of production was high, the spirit of invention restricted, and material progress hampered, yet to Sismondi this state of affairs offered at least one great advantage, the elimination of the fear of crises and sudden ruin. The value of a product was formerly measured only by its utility to man. " Inasmuch as men are working to satisfy their own wants, utility is to them the true measure of value, 1

Études, vol. i, p. 95.

74

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

and the increase in quantity of one useful thing is a certain increase of w e a l t h . "

B u t w i t h the money economy of the

1

industrial régime, in addition to intrinsic value and utility value, everything assumes an exchange value.

Sismondi

laid much emphasis on the differentiation of intrinsic value and relative value. 2

In a money economy, it is the relative

value that plays by f a r the more important rôle.

M a n works

no longer f o r himself, but f o r others — f o r an u n k n o w n public.

F o r m e r l y people produced in order to consume, but

now they have but one aim in production of any k i n d — t o sell f o r a profit.

I n the productive system of to-day, " w a n t "

ceases to be the immediate incentive f o r production, and, in its stead, we have the more p o w e r f u l incentive, " profit " , which is the soul of the present industrial system.

" To

make profit has become the first consideration of l i f e . "

3

T h e new philosophy has assumed such magnitude that " the hope f o r gain puts capital into circulation rapidly f r o m one end of the k n o w n universe to the other."

4

T o Sismondi, the spirit of the new industrial régime w a s carried out in a world of free competition w i t h t w o w o r d s as k e y n o t e s — o v e r - t r a d e and undersell.

T o over-trade is to

increase the volume of production, so that one m a y e n j o y the advantage of decreasing cost.

T o undersell is to try to oust

one's competitors f r o m business, so that the victor m a y e n j o y monopolistic profit.

H e r e the vicious circle begins.

For

unless their products meet with " d e m a n d " , producers cannot realize any profit.

It must be borne in mind that b y " d e -

mand " Sismondi undoubtedly meant what the E n g l i s h economists would call the " effective demand " .

" It must be re-

membered that in political economy, demand should mean 1

Études,

2

Nouveaux

vol. ii, p. 229.

3

Ibid., p. 457.

4

Études, vol. i, p. 59.

Principes, vol. i, p. 306.

THEORETICAL

CONCEPTIONS

OF

SISMONDI

only what is accompanied by a compensation sufficient for the thing demanded." 1 In other words, it is a demand backed up by means to pay. In the course of the profitmaking business, " it is the buyers and not the ' wants ' which commerce is looking f o r . " 2 In many places, Sismondi repeatedly stressed effective demand. " W h e n the population suffers, it is not because corn and meat are lacking in the market, but because they do not have the means to buy them." 3 It is the effective demand that seems to support Sismondi's theory of crisis triumphantly over his classical opponents. (It must be noted, however, that Malthus quite agreed with Sismondi on this point. ) 4 In order to get a profit, producers must sell their products. Products can be sold only when met with an effective demand, and an effective demand exists only when the working classes, who constitute the bulk of consumers, have enough income with which to buy. This is a necessary sequence. The industrial régime furnishes also a directly contradictory sequence. In order to get a profit producers must undersell their competitors, and this necessitates the increase of production and the cutting down of wages. Workers, in their helpless situation, were forced to consent to both working more and receiving less. Hence, Sismondi saw the prevailing misery brought about by long working hours and meagre pay. A s an increasing number of incomes were devoted to 1

Nouveaux

2

Ibid., vol. i, p. 329.

Principes, vol. ii, p. 318.

* Études, vol. i, p. 132. " But those who are acquainted with the nature of effective demand, will be fully aware that where the right of private property is established, and the wants of society are supplied by industry and barter, the desire of any individual to possess the necessary conveniences and luxuries of life, however intense, will avail nothing towards their production, if there be nowhere a reciprocal demand for something which he possesses." —Malthus, Principles of Political Economy (London, 1820), p. 348. 4

76

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DE SISMONDI

AS AN

ECONOMIST

competitive production, the remaining income was not sufficient to cause effective demand. Cutting down wages and increasing production evidently results in aggravating the situation, until a crisis is inevitable. " The necessary consequence, inevitable from the underselling by someone, is overproduction for all, or the arrival in the market of a quantity of merchandise superior to the demand, which can only be sold at a loss." 1 This vicious circle is further aggravated by two things : machinery and banking. In a world of universal competition, manufacturers can beat their rivals only by bringing the cost of production to the lowest possible point. S o they try to cut down wages and impose upon the laborers long working hours. This is not all. They try furthermore to invent something that will serve to get rid of the laborers altogether, in order to replace this expensive item. " It is not only the happiness of men that one is trying to abolish as an item of useless expense in the process of production, it is the man himself." 2 Consequently, machinery is invented; one single machine run by natural power is able to replace a vast number of laborers. The progress of the cotton industries in England is certainly marvelous, but Sismondi pointed out that the reverse side accompanying such improvement is none the less horrible. " The economy of manual labor had its natural and necessary effect of leaving manual labor unemployed. T h e running streams of Lancashire were accomplishing the work which they had taken from all the poor women in England. They were doing it well and with economy, but all these poor women had lost their occupation which they could never recover." 3 W i t h new inventions 1

Études, vol. ii, p. 233.

2

Ibid., vol. i, p. 191.

Études, vol. ii, p. 297. It must be noted that Ricardo, too, in one of his later writings, modified

3

THEORETICAL

CONCEPTIONS

OF

SISMONDI

making gigantic strides, laborers are constantly kept in a precarious state, never knowing whether or not they will tomorrow be replaced by machinery. Thus a laborer's life is submitted to all the chances of a lottery. The more dependent the laborers are, the longer their hours and the less pay they receive. Machinery is, therefore, working to aggravate the case on both sides, turning out more production than there is an effective demand for, and further cutting down very much his optimism regarding machinery and took a view very similar to Sismondi's : " Ever since I first turned my attention to questions of political economy, I have been of opinion that such an application of machinery to any branch of production, as should have the effect of saving labor, was for the general good, accompanied only with that portion of inconvenience which in most cases attends the removal of capital and labor f r o m one employment to another. It appeared to me, that provided the landlords had the same money rents, they would be benefited by the reduction in the prices of some of the commodities on which those rents were expended, and which reduction of prices could not fail to be the consequence of the employment of machinery. The capitalist, I thought, was eventually benefited precisely in the same manner. He, indeed, who made the discovery of the machine, or who first usefully applied it, would enjoy an additional advantage by making great profits for a time; but, in proportion as the machine came into general usé, the price of the commodity produced, would, f r o m the effects of competition, sink to its cost of production when the capitalist would get the same money profits as before, and he would only participate in the general advantage as a consumer, by being enabled, with the same money revenue, to command an additional quantity of comforts and enjoyments. The class of laborers also, I thought, was equally benefited by the use of machinery, as they would have the means of buying more commodities with the same money wages and I thought that no reduction of wages would take place, because the capitalist would have the power of demanding and employing the same quantity of labor as before, although he might be under the necessity of employing it in the production of a new or at any rate of a different c o m m o d i t y . . . . " These were my opinions, and they continued unaltered as far as regards the landlord and the capitalist; but I am convinced that the substitution of machinery for human labor is often very injurious to the interests of the class of laborers." (On Machinery.) Ricardo, Principles of Political Economy and Taxation (Gonner's edition, London, 189s), PP. 379 et seq.

yg

SIMONDE

DE SISMONDI

AS

ECONOMIST

the effective demand by lowering wages or by refusing the payment of wages altogether, when the workers are replaced. Sismondi fully realized that machine production could lower the prices of products, but he felt that the good it brought fell f a r short of compensating for its evils—the income it curtailed and the life it took away. 1 Banking Sismondi regarded as another accomplice in accelerating and aggravating the crisis. Banks, particularly banks of issue, helped society to speed toward the crisis by two methods. On the one hand they issue notes, keep specie from circulation, and create an artificial capital.2 Specie, formerly unproductive as a medium of exchange, was now destined for further production. On the other hand, the banks extend credit to speculators who, prompted by the desire for profit, start industrial enterprises. Without banking these speculators would be unable to participate in this struggle because of their lack of funds. But well equipped with capital borrowed from the banks, speculators start manufacturing products for which there is no adequate effective demand. Maddened by the desire for profit and equipped with this banking facility, everyone is running fast in this vicious circle, underselling, cutting wages and producing more and more, until over-production reaches the climax, when crisis and suffering will end these activities. Sismondi considered as even worse the fact that the bank of issue extends credit to all note-holders. When a crisis comes, all note-holders would of course make a rush on the bank, and a bank, which has extended its credit to speculators who are engaged in producing goods for which there is no demand, is bound to succumb. Bankruptcy is a logical consequence. Thus the crisis not only ruins the speculators, who become 1

Nouveaux Principes, vol. ii, p. 318.

2

Ibid., p. 92.

THEORETICAL

CONCEPTIONS

OF

SISMONDI

victims of over-production, but also the mass of people who comprise the note-holders. Sismondi regarded over-capitalization as a great social evil. 1 Under the profit-making system, machinery and banking, each in turn, accelerate the vicious process and bring about the crisis. Sismondi early realized the increasing interdependence of all under the industrial régime. It is in itself like a complicated machine when one of its wheels fails to keep pace with others, the social machinery is going to suffer. " In the field of political economy, everything is linked together, and one finds it constantly in a circular movement, because the effect becomes in its turn the cause." 2 T o the classical economist, Sismondi's theory of general over-production was quite inconceivable. They persistently thought that the increasing supply of goods would simultaneously create an increasing demand. 3 But they did admit the possibility of a partial over-production, which might cause a crisis, but they felt that free competition in the long run would cure this evil. It was against this opinion that Sismondi took his stand. His conception of a crisis is based on the theory of general over-production. It is used by him not so much in the sense of general over-production beyond what the people can possibly consume, but production beyond the general effective demand, that is, beyond what the people could pay for with their ever-narrowing means of acquisition. 4 1

Études, vol. ii, pp. 416, 418.

2

Nouveaux Principes, vol. i, p. 409.

' " . . . w h e n he (Sismondi) contends that the abundance of production caused by machinery, and by other means, is the cause of the unequal distribution of property, and that the end he has in view can not be accomplished while this abundant production continues, he, I think, entirely misconceives the subject, and does not succeed in showing the connection of his premises with his conclusion."—Letters of Ricardo to Trower, p. 196. 4

Note that Malthus entirely agreed with Sismondi on the theory of

go

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

In Sismondi's time, economic activities had just begun to take the form of making profit, and we believe that even then a large area in Europe had not yet been attacked by the profit-making system. A big percentage of the population was still engaged in producing for consumption, rather than for profit. Hence Sismondi based his argument of general over-production upon a potential rather than an actual basis. The people of his time could not agree with him, because they failed to see the inevitable trend which was prematurely evident to the penetrating mind of Sismondi. In his day, possibly, it was only jokingly suggested that domestic work might be entirely replaced by machine-production, and man will find that " some kitchen-bus will be able to deliver the hot soup every day to his door." 1 The increasing economic activities under the profit system of today certainly justify Sismondi's prophecy. The theory of over-production caused by under-consumption is now better and more readily understood. general over-production: " It is by no means true, as a matter of fact, that commodities are always exchanged f o r commodities. T h e great mass of commodities is exchanged directly f o r labor, either productive or unproductive; and it is quite obvious that this mass of commodities, compared with the labor with w h i c h it is to be exchanged, may fall in value f r o m a glut, just as any one commodity falls in value f r o m an excess of supply, compared either with labor or money. " In the case supposed there would evidently be an unusual quantity of commodities of all kinds in the market, owing to the unproductive laborers of the country having been converted, by the accumulation of capital, into productive laborers; while the number of laborers altogether being the same, and the power and will to purchase f o r consumption among landlords and capitalists being by supposition diminished, commodities would necessarily fall in value, compared with labor, so as to lower profits almost to nothing, and to check f o r a time further production. But this is precisely what is meant by the term glut, which, in this case, is evidently general not partial."—Malthus, Principles of Political Economy (London, 1820), pp. 353, 354. 1

Etudes,

vol. i, p. 43.

THEORETICAL

CONCEPTIONS

OF

SIS M ON DI

81

In addition to the lack of circumstantial proof, another factor did much to hurt Sismondi's case. This was the conclusion, which Sismondi was led to draw, that production should be limited by the social income available for that production. " The income of every individual is the measure of what he can consume. The sum total of the incomes of all, which forms the social income, is the measure of what all can consume, or what society actually consumes; for consumption would soon cease if the consumer was forced to pay for it more than his income, or if he exhausted the source which should suffice for the future as well as for the present." 1 Here Sismondi realized that social income is a difficult thing to define. W h a t is capital to one may be income to another, and to draw a line of demarcation sharply between income and capital is, indeed, a difficult task. 2 H e thought it necessary, however, to make such a distinction in order to preserve the golden mean for the industrial regime. T o destroy capital is to kill the goose that lays the golden egg. If the income of the big bulk of consumers is sacrificed for capitalization, then over-production is bound to result. These notions led him to emphasize and develop the social income theory, which at best is only a theoretical suggestion. It was so abstract and so vague that, had it been advanced by another, he himself would perhaps have condemned it as a deception. Professor A f t a l i o n has remarked, with justification, that when Sismondi, instead of referring to the lack of effective demand, or the absence of the means of acquisition, speaks of a social income, in his desire to redeem a general theory, his doctrine then becomes difficult to defend. 3 However, Sismondi's theory of social income, although quite vague and abstract, serves to convey the idea 1

Études,

1

Ibid., 135.

vol. i, p. 65.

3

A f t a l i o n , Oeuvre

économique

de Simonde

de Sismondi,

p. 109.

82

SIMONDE

DB SISMONDI

AS

AN

ECONOMIST

that he is advocating a better (not equal) distribution of wealth. From his frequent pleading for the interests of the working classes, we may safely infer that Sismondi thought that raising the wages of the most numerous class of society would help in solving this crisis problem. For, when the income of the most numerous class is raised, the effective demand is increased and this absorbs the over-produced goods. It also means that a smaller proportion of income is devoted to capitalization for production. But such a method of relief is only a palliation of an evil which seems to be more or less inherent in the profit-making system. The present workers in the various manufactories of the United States surely receive far better wages than did the workers of Sismondi's time. Yet workers' savings banks, the profit-sharing plan, self-restraint, making more and spending less, and many other practices inherent in the profitmaking system only induce more people to participate in the struggle for over-production and under-consumption. Since Sismondi's time crisis has become definitely established as a regular phenomenon in the profit-making system, and numerous theories have been advanced to explain it. Though Sismondi's theory was a crude one as compared with the later efforts to account for this complex phenomenon, many of the central ideas in these later theories had earlier germinated in the mind of the great Genevese critic. We find that the " competition " theory of Beveridge, the theory of the " discrepancy between wages and productivity " o f May, the theory of " over-saving" of Hobson, the theory of "diminishing utilities " of Aftalion, the theory of " over-capitalization " of Bouniatan, 1 also modern theories of " inadequate consumers' income " as developed by Foster and Catchings, or Martin, are merely more developed forms of the Sismondian theory. Sismondi deserves the laurel for having been 1

Mitchell, Business

Cycles, ch. i, pp. 3-20.

THEORETICAL

CONCEPTIONS

OF

SISMONDI

83

the first formulator of a theory which plays a dominating part in the modern business world. C.

H I S T H E O R Y OF P O P U L A T I O N

Sismondi's theory of population, like his theory of crisis, shows his penetrating intelligence in dealing with any vital part of the modern social system. He was particularly interested in the population problem, since the working classes form the bulk of the population, and it was with their welfare that the Genevese economist was most deeply concerned. Because of this interest he uses it as part of the title of his principal work, Nouveaux Principes d'économie politique, ou la richesse dans ses rapports avec la population. Before Sismondi undertook to write on the population problem, the famous work of Malthus, published in 1798, had already been in vogue in Europe for some time. Sismondi showed great respect for the English philosopher, " who joins to force and breadth of spirit, a conscientious study of facts, and who is animated in his research by an ardent philanthropy ' n in calling the attention of the world to the misery of over-population. In theory, however, Sismondi differed very much from Malthus. Malthus maintained that population tends to increase in a geometrical progression, whereas the means of subsistence follows an arithmetic progression. W i t h regard to this famous formula, Sismondi made the criticism that Malthus was not comparing these two things on the same basis. Malthus was comparing the potential growth of population with the actual growth of the means of subsistence. 2 " H e puts in opposition the possible growth of human population, speaking abstractly and without regarding the circumstances, with the positive increase in number of animals 1 2

Nouveaux

Principes,

Ibid., vol. ii, p. 268.

vol. ii, p. 268.

84

S1M0NDE

DE

SISMONDI

AS

AN

ECONOMIST

and vegetables, in a confined area, and always under more unfavorable circumstances." 1 If both are compared on the potential basis, then the capacity for raising vegetables and animals (which form the means of subsistence for man) follows a geometric progression infinitely faster than population would. A grain of wheat, producing twenty grains the first year, will produce four hundred the second year. The multiplication of animals, though much slower than multiplication in the vegetable kingdom, still far surpasses the human species. Sheep will be doubled in four years, quadrupled in eight years, and so on. In the course of twenty-five years sheep would multiply to the number of sixty-four times, while the human population would be merely doubled. O f course, Sismondi, too, knew that there was a limit. It is not to be doubted that there is a limit beyond which the subsistence will not be able to increase in a geometric progression. There is even a limit beyond which it can not be increased at all. But we are still infinitely far away from that limit. There is space on the globe for an immense development of cultivation, and all the products which we desire for our subsistence, animals as well as vegetables, are multiplying in a geometric progression infinitely more rapidly than man.2 1

Nouveaux

Principes,

vol. ii, p. 271.

T o this accusation, Malthus indignantly countered : " W i t h regard to population, he has misunderstood my w o r k more than I could have e x pected f r o m so able and distinguished a writer. H e says that my reasoning is completely sophistical, because I have compared the virtual increase of population with the positive increase of food. B u t surely I have compared the virtual increase of population with the virtual increase of f o o d ; and the positive increase of population with the positive increase of food ; and the greater part of m y book is taken up with the latter comparison."—Malthus, Principles of Political Economy (London, 1820), p. 420. 1

Études, vol. i, p. 130.

THEORETICAL

CONCEPTIONS

OF SISMONDI

85

It is evident that Sismondi did not share the opinion entertained by Malthus that by a natural, physiological law the growth of subsistence will be overtaken by the growth of population. " Never has population attained the limit of all possible subsistence, and probably it never will." 1 But Sismondi does share the same fear of over-population, not by any physiological law, but through the social organization. To Sismondi the growth of human population, and vegetable and animal increase are all controlled by the human, will.2 The will power of the agricultural peoples, manifested by their laws of property, can restrict the population to a level much below the means of subsistence.3 Yet, in the modern industrial régime, the fear of over-population is present, not because population outgrows the natural means of subsistence, but because population fails to keep pace with income. Population should be proportioned according to income. If population grows much more rapidly than income, misery is sure to follow. For instance, an individual, before deciding how much he is going to spend for his meals in a day or a year, must first ask himself the question, "How much is my income?" Society, like the individual, should ask the same question, and arrange things in such a way that population will not outgrow income.4 Any disproportion between the two will result in misery. It was Sismondi's opinion that the growth of population could be well controlled by the human will. " The multiplication of the species depends upon the will; it is in this will that its limit is set." 5 A man charged with the duty of providing for his family is naturally led to calculate, to 1

Nouveaux

2

Ibid., p. 272.

3

Ibid., p. 279.

4

Ibid. p. 257.

5

Ibid., p. 252.

Principes, vol. ii, p. 269.

86

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

set a limit upon his instinctive desire. The imprudence of some who marry without adequate means to provide for a growing family may be compensated by the timid prudence of those who remain single because of the groundless fear of not having enough. On the whole, the bachelor marries only when he thinks his income sufficent for the new state of affairs. Hence population is regulated uniquely by income, and ought to be so regulated. 1 This was particularly true of the social organizations of the past. Under the mercantile régime, artisans were always in direct contact with their customers, and were familiar with the condition of the market. Farmers, too, knew the productivity of their possessions. All were very sure as to their incomes. If they saw their incomes diminishing, they would refrain from getting married, or at least would try to avoid having big families. The pride of maintaining their social standard always dictated that they should not bring into the world children whose social rank would be inferior to their own. Sismondi gave statistical data with regard to Geneva (a city Sismondi considered still unimpaired by the industrial order) showing that the average number of children in a family there was below three. T w o children represent the father and mother and will enjoy the income of the parents, while the remaining fraction, below the unit, represents individuals who die early or who are never married. 2 This he gives as evidence of his claim that people with definite incomes are generally wise enough not to leave too many children who would be lower in the social scale. Under the old régime the corporation laws, also, served to preserve a balanced population. Apprenticeship is a long and expensive practice. T h e artisan must first furnish the 1 2

Nouveaux

Principes,

Études, vol. i, p. 131.

vol. ii, p. 254.

THEORETICAL

CONCEPTIONS

OF S1SM0NDI

87

son with means for the necessary training. With such a long term of years imposed in the beginning upon a worker, he necessarily will marry late. Sismondi also contends that workers in an artisan shop will not marry until they are made master-artisans. Their state is only transitory and they have always the hope of succeeding the master-artisan. O f course, many remain single all their lives. Even if they should be reckless enough to consider marriage, there probably would be no woman who would consent to such an imprudent venture. Therefore the population in the cities is perpetuated not by the lowest but by the highest class among the artisans, since only the masters marry. 1 W i t h the beginning of the modern régime, free competition, big production and concentration of capital swept away the old status and initiated a quite new order. Small farmers were compelled to sell their little domains, and become enlisted as journeymen. The proletarian class swarmed into the city, working there for a starvation wage. Under this new regime, neither the urban nor the country workers were assured of their incomes. The extent of the market and the demand for their labor could never be known and foretold. The employers were in no better position than the workers to know the variations. Under a system of universal competition, the profit and loss of an enterprise can never be precisely determined; the market is an entirely unknown power over which neither the proletarian worker nor the capitalistic employers have any control. Under such an unstable régime the prosperity of today may change into a sad disaster by tomorrow morning. Upon the creation of a new demand, or the discovery of a new outlet, production enjoys some degree of prosperity. Wages are raised. W o r k ers, encouraged by their rising incomes, may get married. But very soon competition causes over-production, and a 1

Nouveaux

Principes,

vol. i, p. 432.

88

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

crisis follows. Workers may be laid off just at the time when they have big families dependent upon them. In such a state of affairs everybody's future is a mere chance in a lottery. Sismondi said of this situation: " T h e great evil in the modern social organization is that the poor man can never know upon what demand of labor he can depend, hence his power to work is never a precise and assured income." 1 It is interesting to note that it was precisely these poor people who had the biggest families. "And it may be just the smaller income that encourages an increase of population." 2 Such phenomena were observed in ancient times. The Romans used to call those who had no property at all the proletariat, " as if, more than others, they were called upon to have many children: ad prolem generandam." 3 The explanation of such a paradox, however, is not hard to find. The laboring classes become accustomed to a chronic state of misery and their sensitiveness to suffering becomes very much blunted. After all, riches and poverty are strictly relative terms to be differentiated only in one's psychology. When it is permitted that there shall exist a class whose custom is to possess nothing, whose idea of riches is only to exist, and whose idea of poverty is to die of hunger . . . those who are living in this condition have for objects of their affection only the wishes that they form for themselves. If they live from hand to mouth, they will be contended for their children also to live from hand to mouth. . . . Moral qualities and sympathetic sentiment in them are hence deadened. . . . And the nation will groan under the weight of a population disproportionate to the means to maintain it.4 1

Nouveaux

2

Ibid., p. 264.

3 4

Principes,

vol. ii, p. 261.

Ibid. Ibid., pp. 265, 266, 267.

THEORETICAL

CONCEPTIONS

OF SISMONDI

89

T o many quasi-economists large population constitutes national strength, regardless of circumstances. Even in the present day such a fantastic notion is not infrequently found in naïve minds. Sismondi, with his far-reaching judgment, approached the question more clearly than many of our contemporaries. T o Sismondi, wealth and population were by no means sure signs of national prosperity. It is only their mutual relation that determines the fate of the nation. Wealth is an asset only when it distributes comforts to all classes, and population is an advantage only when man is sure of obtaining for his labor a decent living. But, if the population is too great as compared to the means of subsistence, a country may be quite miserable, in spite of some colossal fortunes accumulated by a few private individuals. If a big population is content to live on the most meagre subsistence, constantly menaced by famine, then the population, far from being an object of envy or a means of power, is a great calamity. 1 Under the modern regime, income may decrease while the population continues to increase. The increasing supply of labor serves to decrease further the workman's income, and to aggravate the wretched condition of the working classes. The premature death rate is increased, and the number of capable men is sensibly diminished. Under such conditions, the birth rate may decrease also, if habits of prudence and order are prevalent in the country. O n the other hand, the birth rate may even increase, if the individual is sufficiently degenerate, thinking only of the present and of his brutal appetites. That is why the tendency toward intoxication increases with poverty. Children are naturally the first victims of poverty. The greater the number, the greater will be the mortality. " The large number of births, often taken as a sign of prosperity, simply indicates the great number 1

Nouveaux Principes, vol. i, p. 9.

SIMONDE

DE

S1SM0NDI

AS

AN

ECONOMIST

of those who are born only to die without having known the pleasures or the duties of life." 1 Contrary to the popular belief, Sismondi was inclined to think that " the rapid increase of population is almost always a sign of distress." 2 In Sismondi's opinion the merit of the old régime under the mercantile system was that while it seemed to make arrival in this world difficult, once one was born there was security and guarantee of fairly comfortable livelihood. The modern régime seems to have reversed the rule ; it makes it easy to be born and hard to live, for in the modern régime the laissez-faire policy is recklessly encouraging the growth of a large population. Then the law of supply and demand acts adversely against wages. The proletariat, in multiplying the number of hands to compete with the demand of employers, are really the authors of their own misery. In the industrial régime, even if population were to remain stationary, the invention of new machinery would be a constant cause of economy in manual labor, and thus the value of labor would be diminished and wages lowered. 3 It is, therefore, necessary that every class, especially the proletarian class, should know its income, in order to regulate the population accordingly. Unhappily, because of universal competition and the separation of capital from the workers, it is impossible to know the condition of the market and the extent of one's income. The consequence is a vicious social organization. " T o encourage growth in a population which ought to be stationary or decreasing . . . is to bring upon the state the calamity that it ought to fear most, more terrible than the loss of a battle, for those who languish and die in misery are really envious of those whom the battle has mowed down." 4 1

Études, vol. i, p. 129.

2

Ibid., p. 346, footnote.

3

Nouveaux

Principes,

< Ibid., p. 256.

vol. ii, p. 312.

THEORETICAL

CONCEPTIONS

OF

SISMONDI

91

Thus Sismondi, though disagreeing with Malthus regarding the causes, came to substantially the same conclusion. T o avoid too large a population in proportion to income, he strongly advocated birth control. " T h e misery of the poor classes cannot be prevented if there is an attempt to provide for the birth of an over-abundant population. A s soon as it exists, in spite of all the precautions the legislature is taking, it lowers the wages of labor by competition. If its work does not suffice to permit it to live and enjoy life, the only means to prevent suffering is to prevent its being born." 1 From this passage we can see that Sismondi was quite sympathetic with the neo-Malthusian doctrine. He was, naturally, opposed to any religious sect which encouraged the growth of population. T o him religion should teach man that marriage is made for all citizens equally; that it is a social duty which everyone ought to keep in mind. Those who have the good fortune to be fathers, yet find their incomes increasing insufficiently, should practice restraint " as bachelors do." 2 For their social duty is by no means fulfilled if they fail to perform their obligations to the beings to whom they have given existence. Needless to say, Sismondi was very much opposed to those mercantilistic, national policies which encourage a large population. He condemned the policy of offering pecuniary rewards or distinctions to fathers of big families. Even institutions that gave indirect encouragement to the growth of population met with his disapproval. He was quite opposed to the poor law in England, under which large sums of money were allotted to finance the system of a legalized charity. In his words, " it is a terrible bonus for the multiplication of beggars." 3 1 2

Nouveaux

Ibid,.,

sIbid„

Principes,

vol. i, p. 428.

vol. ii, p. 298. p. 307.

Both Ricardo and Malthus attacked the poor

laws

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

Sismondi also opposed child labor. Aside from his objections on humanitarian grounds, he considered the sanction of child labor a source of encouragement to an over-growing population. W i t h children starting gainful employment at six or seven years of age, a worker with a large family finds his income increased by the participation of his offspring. Child labor, therefore, becomes an effective inducement to people to have large families. This aggravates the situation, adding oil to the fire. Sismondi, alarmed by the growing population without adequate income for its sustenance, went so far as to advocate the prohibition of undesirable marriages in the first edition of his Nouveaux Principes d'economie politique. Later, apparently having met with serious objection from his opponents who condemned him for advocating feudal ideas, he suppressed this point in the 1827 edition of his Nouveaux Principes. His critics on the whole seem to think this omission a wise step. A f t e r carefully reading the expurgated passage of the first vehemently, though perhaps f r o m slightly different angles. Ricardo seemed to hold the view that the legislature, by enacting poor laws, interfered with the natural price of wages, while Malthus had essentially the same viewpoint as Sismondi. " T h e clear and direct tendency of the poor laws is the direct opposition to these obvious principles; it is not, as the legislature benevolently intended, to amend the condition of the poor, but to deteriorate the condition of both poor and r i c h ; instead of making the poor rich, they are calculated to make rich p o o r . . . " — R i c a r d o , Principles of Political Economy and Taxation (Gonner's edition), pp. 82-84. " T h i s disagreement between apparent wages and the progress of population will be further aggravated in those countries where poor laws are established, and it has become customary to pay a portion of the laborers' w a g e s out of the parish r a t e s . . . . W h e n once the people are reconciled to such a system, the progress of population might be very rapid, at a time when the wages of labor, independently of parish assistance, w e r e only sufficient to support a w i f e and one child, or even a single man without either w i f e or child, because there might still be both encouragement to marriage, and the means of supporting children."—Malthus, Principles of Political Economy (London, 1820), pp. 258-259.

THEORETICAL

CONCEPTIONS

OF

SISMONDI

edition, we are inclined to think that it contains some true and just arguments which ought to be accepted by the public, theoretically at least.

T h e f o l l o w i n g is a translation of some

of the omitted passages : 1 Society should not permit those who are born under her protection to die of misery; she should prevent the birth of those who are only to die of misery. It is one's duty not marry at all when one cannot in the least assure his children the means of living. . . . T h e magistrate is called upon to ask everybody to respect reciprocal duties. It is not at all an abuse of authority to prevent the marriage of those who are most likely to forget this duty. Marriage is a public action, a legal action. It has been put under the protection of the law simply because it is also under its inspection. T h e marriage of beggars ought never to be permitted. . . . It is possible that such legislation would at first arouse complaints from laborers. Very soon these complaints would be changed into expression of gratitude. Complaints from the clergy would be most serious, since it cannot be denied that some libertinism would be the consequence of the compulsory celibacy of the poor. T o consider only the social consequences, however, this evil is less than the almost necessary sacrifice of a great number of young girls who, born without resources, are forced into vice by misery. A s to the complaint of the manufacturers, w h o might find labor thenceforth t o o expensive, Sismondi added: " It is the r e f o r m that the legislator ought to aim at above all else, even if it should be fatal to some manufacturers.

Those

manufacturers are not w o r t h the trouble to be saved if they can be maintained only by the sacrifice of human victims." S u c h a viewpoint is quite judicious, f o r w e feel with Sismondi that the imperative duty of a father is to provide f o r his offspring. 1

Nouveaux

T h e prohibition of these undesirable marPrinciples

(1819 edition), vol. ii, pp. 307-309.

SIMONDE

DE

S1SM0NDI

AS

AN

riages seems to be a logical precaution. ever, in practice.

ECONOMIST

It might fail, h o w -

T h e efficiency of the magistrate, especially

in big cities with millions of population, is, indeed, f a r f r o m adequate to attend satisfactorily to all questionable marriages.

In spite of the logical soundness of the prohibition

against undesirable marriages, many great economists could not agree to this drastic measure.

It is certainly amusing to

note that Malthus, w h o shared many of Sismondi's v i e w s and w h o w a s anxious to see that population did not o u t g r o w the means of subsistence, should find this legislative interference with marriages mondi's

opponent

" strange"/

in most

of

while Ricardo,

the economic

Sis-

discussions,

should, in many places, openly support this idea. 2 A f t e r a brief review of his theory of population w e cannot help feeling that many of his ideas are interesting and just. 1 " Practically M . Sismondi goes much further than I do in his apprehensions of a redundant population, and proposes to repress it by all sorts of strange means. I never have recommended, nor ever shall, any other means than those of explaining to the laboring classes the manner in which their interests are affected, by too great an increase of their numbers, and of removing or weakening the positive laws which tend to discourage habits of prudence and foresight."-—Malthus, Principles of Political Economy (London, 1820), p. 430. 1 " It is a truth which admits not a doubt, that the comforts and well being of the poor cannot be permanently secured without some regard on their part, or some eifort on the part of the legislature, to regulate the increase of their numbers, and to render less frequent among them early and improvident marriages."—Ricardo, Principles of Political Economy and Taxation (Gonner's edition), p. 84. Ricardo must also have been quite sympathetic with Sismondi regarding the theory of population as a w h o l e : " M . Sismondi takes enlarged views, and is sincerely desirous of establishing principles which he conceives to be most conducive to the happiness of mankind. H e holds that the great cause of the misery of the bulk of the people in all countries is the unequal distribution of property, which tends to brutalize and degrade the lower classes. T h e w a y to elevate man, to prevent him f r o m making inconsiderate marriages, is to give him property and an interest in the general w e l f a r e : — t h u s f a r w e should pretty well a g r e e . . . " — L e t t e r s of Ricardo to Trozvcr, I-SII-ISPS ( O x f o r d , 1899), p. 196.

THEORETICAL

CONCEPTIONS

OF

SISMONDI

W e have, however, two criticisms to make. First, Sismondi in spite of his dissidence with the classical school, was still tinged with the wage-fund theory. Second, with regard to the population problem, Sismondi certainly exaggerated the evils of the industrial régime. Though he never exactly stated a wage-fund doctrine, as did his classical opponents, his pen, nevertheless, frequently hinted at that very theory. The productivity theory of wages was still undreamed of by him, though he was obviously ahead of his time. He still believed that society possessed a certain amount of circulating capital, for which labor as a whole was to be exchanged. " The labor which forms the income of the poor acquires a commercial value only by its exchange for the circulating capital; it devotes itself entirely to this capital, and it diminishes in price when the capital diminishes." 1 On the other hand, Sismondi thought that if population were increasing, the laborers would suffer more, " for they are giving the totality of the labor offered for this very capital, which was destined to pay for only a small quantity of it." 2 It is thus evident that Sismondi was not at all free from the classical influence. Sismondi, however, was not of the opinion that wages should be reduced to the minimum necessary for existence. He, too, had in mind a necessary wage, but a much higher one than that advocated by the classical economists. " In every state of a society more or less prosperous, there is a common wage which is sufficient to satisfy not only the needs, but also to supply the enjoyments compatible with the condition of the manual laborer. That is the wage which I name, for short, the ' necessary wage '." 3 It was primarily with this wage-fund theory in mind that Sismondi was led 1

Nouveaux

2

Ibid., vol. ii, p. 260.

'Ibid.,

Principes,

p. 427.

vol. i, p. 330.

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

to formulate the vague and abstract social revenue theory, which, as we have seen, was inconsistent with his practical, conscientious habit of studying facts. Secondly, Sismondi seems to have exaggerated the evils of the industrial régime and also the benefits of the old social organization. He spoke as if the industrial régime alone were responsible for bringing about the overgrown population. It is true that the industrial régime caused congestion in the big cities, thus bringing pauperism to the surface and making it visible to every observer. Yet it is none the less true that population may outgrow adequate income without an industrial régime. Sismondi did refer to the condition in China at that time, where over-population brought misery to the nation. 1 Surely that was not caused by machine production or free competition. In spite of these flaws, however, we think that Sismondi's treatment of the population problem is on the whole judicious and sound. His conclusions deserve to be well considered by jingo politicians and those imprudent people who recklessly increase the population regardless of income, with the inevitable result of suffering and war. D. HIS THEORIES OF TAXATION

According to Sismondi, governments, in studying political economy, are chiefly interested in the field of taxation. Their aim is to get as much revenue as possible. Taxation itself, always a distasteful thing to the people, is to them only a necessary evil. " It is out of the question to make it not burdensome; but to make it the least evil possible is the whole task of the government." 2 But it will cease to be an evil, if what it gives in common enjoyment equals what it causes in sacrifice.3 This involves, of course, the extension 1

Nouveaux

2

Ibid., vol. ii, p. 153.

3

Principes,

Ibid., vol. ii, p. 158.

vol. i, p. 10.

THEORETICAL

CONCEPTIONS

OF

SISMONDI

of state activities in providing for the people public education, public utilities, and so forth. This point is consistent with Sismondi's general theories opposing the school of laissez-faire, and advocating state control. In the field of taxation, as elsewhere, his sympathy is with the working classes. A s their income is already reduced to the minimum, it will hit them too hard if they are made to contribute further to the state. Nor is it justifiable to ask them to make any contribution. " In this deplorable social organization, when wages, as an item of expense, are deliberately cut down strictly to the minimum for sustaining life, and limits of work are required every day to a point barely beyond that at which physical strength would succumb, asking the poor worker, who knows no enjoyment, to pay for the enjoyment of an order and of a justice which do not protect him at all, of a national honor to which he is indifferent would no doubt cause some derision." 1 It is absurd to tell a man about the enjoyment of the public order when this very order condemns him to starve. There is still another reason why workers should be exempted from paying any tax. Labor constitutes the strength of the nation. W h e n wages are already reduced to the minimum, any further infringement will impair the " living capital of the nation," which is the essential element for further production. " It is a mistake for the government to touch this part; it sacrifices at once the human victims and the hope of its future wealth." 2 Ricardo, too, was not unaware of this danger, but he held that a tax on wages would be shifted to profits, while Sismondi thought that it would severely hit the working classes. In Sismondi's opinion, however, every citizen should, for political reasons, contribute toward the maintenance of a common government. 1

Nouveaux Principes, vol. ii, p. 164.

8

Ibid., vol. ii, p. 168.

ç8

SIMONDE

DE S1SM0NDI

AS AN

ECONOMIST

T h e tax a man pays to the government is a pledge for liberty. Everybody, rich or poor, enjoys a right to political order, toward the maintenance of which he should contribute. This argument of Sismondi's still further strengthens his advocacy of measures for the betterment of the working classes. The wretched wages they received deprived them of their opportunity to participate in the maintenance of a common government. Also, from the fiscal viewpoint, the inability, on the part of the working classes, to pay taxes is a gross blunder, since they constitute the largest section of the nation's population. The revenue of the government is largely curtailed because of the non-productivity of the largest class of citizens. 1 T h e rich, on the other hand, should contribute through taxes, chiefly because of their ability to pay, and to Sismondi it seemed only fair to exact a big sum from them. Everyone should contribute to the maintenance of the social order, in proportion to the income which that order protects. The present order defends the rich more than it defends the poor. " The largest part of the expense of the social establishment is destined to defend the rich against the poor, because if they are left to exercise their respective forces, it will not be long before the former are robbed." 2 It is thus a benefit theory that Sismondi developed. This do ut facias theory, however, does not impress us as adequate in the light of our present-day knowledge. In the modern democratic régime, it is the needy classes which actually receive greater benefit from the government. T o say nothing of the asylums, poorhouses, public hospitals, which are almost exclusively for the poor, there are many other governmental functions, such as the traffic police, public utilities, the public health board, public charities, etc., which certainly benefit the poor in1

Nouveaux

Principes, vol. ii, p. 169.

* Ibid., vol. ii, p. 155.

THEORETICAL

CONCEPTIONS

OF

SISMONDI

finitely more than the rich. The rich could provide all of these facilities through their private means, while, for the poor, it would be quite out of the question even to dream of such possibilities. 1 T h e statement that the rich would soon be robbed when the social order ceased to exist seems to be also groundless. In developing this idea Sismondi seems to have had in mind only the strength of the greater number against the smaller. W i t h the improvement in modern homicidal weapons, numbers scarcely count. Sismondi well knew that with sufficient pay " man can always hire mercenaries to defend his right." The existence of a few feudal lords who could defend themselves against a vast number of their subjects shows well the impotency of large numbers. T o us, a social order which protects rich and poor alike, furnishing many public utilities, is a great improvement, and one by which the poor get even more of the benefit. However, we think that Sismondi's viewpoint regarding the benefit theory was justified in his own time, when the laissez-faire doctrine was about to reduce all governmental functions to the protection of life and property. In such a situation a man without property, and with his life more or less at stake, surely enjoyed little benefit from the social order. In our day, with the multiplication of governmental activities, to seek justification of taxation by the benefit theory alone is manifestly inadequate. Sismondi was also an advocate of a progressive tax. H e regarded it as just that a rich man should contribute " not only in proportion to his fortune, but even something beyond this proportion," 2 for the support of a social order so much more advantageous to him. His idea of a progressive tax 1 Vide Seligman, Progressive (1908 edition), p. 154. 2

Taxation

in Theory

and in

Nouveaux Principes d'Économie politique, vol. ii, p. 155.

Practice

I O

o

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

is further clearly stated in the following passage : " The sovereigns . . . could, with justice, and should provide that the million sterling, which represents the capital of a thousand families, should pay less to the public treasury than the million which forms the capital of a single individual." 1 Sismondi's advocacy of progressiveness in taxation was influenced by another consideration, in addition to the principle of justice and the theory of benefit. He believed that the inequality of fortune grew steadily under the industrial régime, and that this method of taxation would serve to prevent the concentration of big fortunes in the hands of a few individuals. The progressive tax, he felt, could remedy " this terrible accumulation of property " 2 and thus reduce social inequalities. Sismondi's fiscal theories are recapitulated in the following four rules : 3 1. All taxes should be directed at income and not at capital. In the former case, the state only spends what the individuals would have spent; in the latter case it destroys what would make a living for both the indviduals and the state. 2. In the assessment of taxes the annual gross proceeds should never be confused with the income, for the former includes the latter, as well as all the circulating capital, and a part of these proceeds should be set aside to maintain or repair all the fixed capital, all the accumulated labor and the lives of all the productive laborers. 3. The tax, being the price which the citizen pays for his enjoyment, should never be demanded from one who does not enjoy anything. It ought not, therefore, to hit that part of the income which is necessary to sustain the life of the contributor. 4. The tax should never drive away the weath at which it is 1

Etudes, vol. ii, p. 370.

1

Études, vol. ii, p. 370.

5

Nouveaux Principes, vol. ii, p. 169.

THEORETICAL

CONCEPTIONS

OF SISMONDI

iqi

directed. It should be, therefore, all the more moderate if the wealth is of a fugitive nature. It ought never to strike the part of the income which is necessary for its preservation. A f t e r giving these general rules, Sismondi proceeded to criticize many existing forms of taxation. First, he did not approve the theory of a single tax. He thought that, while the disposition of the human spirit was always to seek for a unique rule, 1 the complexity of modern society would not permit such uniqueness. " W e have well recognized one unique source of wealth—labor, but not a unique class of citizens to which the income produced by the laboring class belongs. Incomes are distributed among all the classes of the nation, and they assume all kinds of forms. It is just, too, that taxation should follow them in all their ramifications." 2 A s to the land tax, Sismondi described the two general methods of taxation, the tithe and the land tax. Differing with Ricardo's view, 3 Sismondi was very much opposed to the tithe, by which a tax is collected before the product comes into the possession of the producer. A s all taxes should be levied only upon net income the tithe is wrong, being levied upon the gross income, in which there is also the circulating capital of the farmer. 4 Sismondi was more favorable toward the land tax to be paid in money, and destined to be paid out of the income of the land owner alone. 5 T h e schedule of the land tax assessment should be revised frequently. For even if the first assessment is well made, after a lapse of time cultivation and the changes of the soil will bring about in1

Nouveanx Principes, vol. ii, p. 171.

2

Ibid., p. 154.

Ricardo, Principles edition), p. 157. 3

4

Nouveaux

6

Ibid., p. 190.

of Political

Economy

Principes, vol. ii, p. 188.

and Taxation

(Gonner's

102

SI MONDE

DE SISMONDI

AS AN

ECONOMIST

justice. T o remedy these injustices, frequent exemption should be made. 1 Another of his views seems to be dissident from our present conception: Sismondi believed that proprietors of real estate should pay more than those possessing other properties. H e arrived at this conclusion from the viewpoint of justice, since he maintained that society spent more for a proprietor of real estate than for others. 2 In our present judgment, the possession of real estate is not a sure sign of ability to pay. Stockholders and others possessing intangible wealth owe much more to the social order than those who own old, unproductive mansions. 3 In his time, however, when these modern corporations were still undreamed of, Sismondi's view was largely justified. T o indirect taxes Sismondi held great objection. In opposing consumption taxes Sismondi was quite aware of the convenience of such taxes. For them no declaration, no inquisition is necessary, and people pay at a time when they are hardly conscious of it.4 But such conveniences are totally incapable of compensating for the injustice wrought by these taxes. Sismondi thought, quite wisely, that if a ten per cent tax were levied upon consumption, then, to be impartial and equal, a consumption tax ought to be levied upon everything consumed. This would necessitate embodying all the following items : 5 i. T a x on residence in a house, for either owner or tenant. For though residence is a slow process of consumption, it is, nevertheless, a form of consumption. But such a tax could hardly be considered an indirect tax. 1

Nouveaux Principes, vol. ii, p. 196.

2

Ibid., p. 156.

8

See E. R. A. Seligman, Essays in Taxation, pp. 8, 14, 1921 edition.

4

Nouveaux

6

Ibid., pp. 207-209.

Principes, vol. ii, p. 206.

THEORETICAL

CONCEPTIONS

OF SISMONDI

103

2. T a x on domestic service. 3. T a x on dogs, horses, carriages and other objects of luxury. 4. T a x on domestic merchandise as well as foreign imported goods. 5. T a x on home-made goods, as well as those bought from the market. Real equality of taxation exists only when all the items of consumption are included. The omission of any one item constitutes a gross injustice. Sismondi denounced the indirect tax, because it was confined to only four means of taxation; namely, the gabelle tax, the tariff, the excise tax and the octroi tax. 1 W i t h the omission of many other taxes on consumption, these indirect taxes are very regressive in nature, hitting the poor much more heavily than the rich. T o him it seemed " a very unjust and a very inhuman proposition, . . . to suppress all the direct impositions, and to levy the total sum of the state revenues as taxes on consumption." T o levy a tax on bread to replace all other taxes was, in his opinion, " to exempt the rich from almost all taxes, and levy taxes largely upon the poor. 2 Sismondi likewise showed his disfavor toward the mortgage tax, and the stamp tax on judiciary documents, because these taxes were collected either on debts or on accidents, and accidents should be considered as symptoms of poverty, or at least as signs of embarrassment, and surely not of wealth. " T o levy a tax on a man's debts or on his lawsuit seems to be hardly less unreasonable than to levy a tax on his illness." 8 Sismondi's fiscal theories may be summed up in a few Nouveaux Principes, vol. ii, p. 210.

1

2 3

Ibid., p. 212. Ibid.,

p. 205.

X04

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

words: advocacy of a direct progressive tax with exemption at the base, which is necessary for sustaining decent life; and the abolition of taxes on consumption, and stamp taxes. Sismondi did not wish, however, to put the whole fiscal burden on land, for he clearly stated that since incomes were distributed among all classes of the nation no single tax should be established. Further, he did not even propose a heavy inheritance tax, though he was opposed to primogeniture, and favored an equal distribution of the inheritance among all the children. 1 W i t h all of these considerations in view, M. Aftalion justly deduced that Sismondi should come to the logical conclusion of a progressive income tax. 2 This logical end, however, Sismondi failed to reach. He advocated no progressive income tax, and even opposed a single income tax. 3 This breach really presents a great inconsistency with his general theories. Sismondi's difficulties in this respect, however, seem to have been twofold, both theoretical and practical. Theoretically, as we have already shown, he was still haunted by the classical influence. His abstract theory of social income seems to be a natural corollary to the classical doctrine of the " wage-fund ". In treating the problem of income Sismondi was most scrupulous, lest the productivity of the existing social income should be impaired, and the workers, consequently, thrown out of employment. It was through fear of infringing upon this curious social income that Sismondi refrained from advocating an income tax. Second, in Sismondi's opinion, the installation of an income tax would have involved some insurmountable difficulties in practice. 4 T h e question of income is more or less 1

Nouveaux Principes, vol. i, p. 296.

2

Aftalion, L'oeuvre economique de Simonde de Sismondi, p. 212.

8

Nouveaux Principes, vol. ii, p. 171.

* Nouveaux

Principes, vol. ii, p. 174.

THEORETICAL

CONCEPTIONS

OF SISMONDI

105

a private matter, and business men usually hide their incomes purposely. Hence, the declaration of the taxpayers would always be insincere, and inquisition measures would inevitably be vexatious and expensive. It was also the practical difficulty that forced Sismondi to renounce this logical and judicious scheme. Were Sismondi alive today, to witness the feasibility and productivity of the income tax, with the progress made in business methods and accounting, there can be little doubt that he, too, would vote for a progressive income tax. E. HIS CONCEPTION OF PRIVATE PROPERTY

Sismondi's standing in the history of economic thought has led to some quite lively arguments. Some regard him as a socialist, or at least very nearly a socialist ; others hold an entirely opposite view. B y his criticism of the industrial régime, Sismondi was, indeed, the precursor of many later socialistic writers, especially the scientific socialists. But he himself did not share in any of the Utopian, socialistic programs of his day. A s to the Saint-Simonian works, Sismondi remarked that " the only truth in their books is the evil that they want to remedy." 1 W e deem it unnecessary to ascertain the truth as to his allegiance or repugnance to socialism. His attitude toward this ideal, however, can be very well understood if we follow his conception of private property, the nucleus of many socialistic and economic doctrines. Before attempting to examine his conception of property, however, it is, perhaps, pertinent to get his viewpoint upon the law, since it is the latter that is largely responsible for the former. Sismondi's conception of law was strictly historical. He does not seem in the least to have believed law to be divine or inviolable, but felt that law came to be estab1

Fragments

du journal et de la correspondance

de Sismondi,

p. 47.

i o

6

SIM ON DE DE SIS M ON DI AS AN

ECONOMIST

lished only because its existence was beneficial to mankind. " L a w or order, which usurpation or violence would have established, but whose result would be to render men better and happier, could be legitimated by this result, because .it is the only end and the only guarantee of every law. Time and duration are not at all a principle of right, but a means of stability, a guarantee of experience. L a w should be judged by history instead of being founded on history." 1 His conception of property was obviously a deduction from this same attitude. T o Sismondi property right was not at all a positive natural right. It was in his time that the English publicists began to take the view that property preceded the institution of society, and that society was constituted only to defend property. " O n the contrary, we would not conceive it to be a property anterior to the law and the public force." 2 Sismondi, while he regarded the appropriation of land as, perhaps, a usurpation, remarked that " it is a happy usurpation, and society, for the advantage of all, may well guarantee it. However, it is only a g i f t of society, and not at all a natural inherent right. History proves it since there are still many nations that do not recognize at all the appropriation of land." 3 Sismondi seems to have confined this idea exclusively to the appropriation of land, making exception of property of other kinds. " Land is not at all a complete creation of any industry." W e think, however, that if such a conception of property is true with regard to land, it might be extended to other forms of property as well. T o manufacture is only to change or to control the form of natural products. A " complete creation " , the pure product of human labor, seems to exist nowhere in the world. Sismondi's exclusive 1 2 8

Introduction, Histoire des Français, p. x. Études sur l'économie politique, vol. ii, p. 41. Nouveaux

Principes, vol. i, p. 159.

THEORETICAL

CONCEPTIONS

OF SISMONDI

107

conception of land appropriation apparently was founded on the fact that there were so many land owners who lived a luxurious life without even coming into contact with agricultural pursuits. He was not, however, a believer in the absolute right to own property. It is desirable only when it meets certain qualifications required by society. In his time when there was a tendency to reduce the largest proportion of the people to the proletarian class, leaving a small proportion of wealthy, he was inclined to criticize property rights. Unlike the division of labor, which Sismondi acknowledged had a very active and advantageous influence upon the progress of industry, " the division of property rights " owed its existence to "particular conveniences," to "chance combinations, often of the passions and vanities." The division of property rights among the land owner, the farmer and the journeyman did not, he believed, give either more zeal to the first, more intelligence to the scond, or more strength to the third. 1 This, however, is an extreme view, perhaps a little inconsistent with his general conception of property. Sismondi favored neither the abolition of property, nor even an equal distribution of property. " The perfected social order is on the whole advantageous both to the poor and to the rich, and political economy is to preserve this order by correcting it, not overthrowing it." 2 A n d an equal distribution of property would destroy the " ardor " for work, " which can find its stimulus only from these inequalities themselves." 3 T h e value of capital, which renders labor more productive, was recognized by Sismondi as an advantage in the unequal division of the fruits of labor. " A m o n g those who partake of the national income, some acquire every year a 1

Nouveaux Principes d'Économie politique, vol. i, p. 152.

2

Ibid., p. 10.

s

Ibid.

I08

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

new right by their work, others have acquired previously, by a primitive work, a permanent right which has rendered the annual work more advantageous." 1 This passage shows clearly Sismondi's approval of the property right, and his recognition of the value of capital. H e was evidently in favor neither of abolition of the property right, nor of an equal division of property, but rather of the participation of a larger number of people in property rights. W h e n the propertied class becomes the most numerous class of society, the social level will be very much improved. For " property gives habits of order and economy; daily abundance destroys the taste for gormandizing and intoxication. It is privation that makes people desire excess; it is the careworn people who seek to benumb themselves in the stupor of intoxication." 2 T h e theory of property should always be looked at in the light of utilitarianism. Experience has shown that the appropriation of land has for all useful and advantageous effects, and it is for this reason that property has existed. It should, therefore, be regulated, accordingly, in its usage. 3 " In fact, it is not on a principle of justice, but on a principle of public utility that the appropriation of land is founded." 4 Hence, the landlords ought to submit to the regulations of the rural legislators, and should not abuse their property rights. In case people abuse their property rights, as did the Countess of Sutherland, who, prompted by the desire for a greater net income, turned away thousands of families from her land and converted it to pasture, then it would be that confiscation of the property would be justifiable. " When a nation is reduced to a pastoral life, then 1 2

Nouveaux Principes d'Économie politique, vol. i, p. 112. Nouveaux

Principes, vol. i, p. 169.

* Études, vol. i, pp. 163 et seq. * Nouveaux Principes, vol. i, p. 160.

THEORETICAL

CONCEPTIONS

OF SISMONDI

109

land should be held in common." 1 It is only because the proprietor assures a higher degree of cultivation, contributing to the benefit of all, that society guarantees property rights to him. T h e aim of the social order is certainly not to make a few wealthy. Wealth is a desirable thing in society, only when it can distribute comforts to all classes.2 Sismondi was very much opposed to the perpetuity of big fortunes, and favored laws that would secure a rapid redistribution of it. Hence, the law of primogeniture met with his disapproval, because he considered that this law rendered the sons of a proprietor unfit for hard work. The one to inherit would despise work in his opulence, while the less favored ones would find it difficult to work efficiently for lack of capital. 3 Although Sismondi was consistently sympathetic with the proletarian class, in his criticism of the social order, he differed sharply with the Marxian socialists in maintaining that both the capitalists and the laborers should be remunerated. " The truly rich nation is the one in which this abundance (of the products of labor) procures the most in material enjoyment for the poor on one hand, and for the rich on the other." 4 H e even thought that the remuneration should be made in different proportions. " T h e national wealth is the participation by all in the advantages of life, but unquestionably the members of society are called upon to partake of the product of the social labor in a different proportion." 5 T h e tone clearly implies that the rich should be more highly remunerated than the proletarian class. His advocacy of different grades of remuneration f o r the 1

Nouveaux

2

Ibid., p. 387.

3 4

Principes,

vol. i, p. 164.

Ibid., p. 296. Études sur l'économie Ibid., p. 5.

politique,

vol. i, p. 8.

IIO

SIM ON DE DE SISMONDI

AS AN

ECONOMIST

different social classes is further shown by this passage: " The true aim of political economy is to assure a distribution of wealth which will allow all to profit by its advantages; still more that some should be favored more than others." 1 This shows that Sismondi was far from sharing the beautiful but absurd idea that equal remuneration should be given for all labor. In fact, Sismondi did clearly state that " the equal distribution of goods would give to everybody, instead of abundance, misery and universal barbarism." 2 The failure of the labor-time currency experiment justified the denunciation pronounced by the Genevese economist. In addition to advocating an unequal distribution, Sismondi even thought the existence of a wealthy class desirable. " The wealthy class seems to us to be necessary, because the faculties of the mind and the intelligence are developed only with complete leisure." 3 This, again, is a corollary of his utilitarian theory that a few rich persons contribute to the general good of the public. A few, more favored by fortune, will find the leisure, independence and inspiration that are necessary for the development of the higher faculties of the mind and spirit. Some are thus enabled to make the advancement in art, science and virtue that will glorify human society as a whole. These few are so privileged for the general good of all. From Sismondi's viewpoint they should even be numerous enough " so that their examples would be everywhere profitable, so that they could be the yeast that ferments the whole mass, or the light that enlightens all." 4 Sismondi was conscious of the fact that by this attitude he might cause people to attack him as being 1

Études, vol. i, p. 377.

2

Ibid., p. x.

' Ibid., p. 173. 4

Ibid.,

p. vii.

THEORETICAL

CONCEPTIONS

OF SISMONDI

11 :

aristocratic. T o counteract this he specifically stated that we do not believe at all that people who are to serve humanity are born most often in the wealthy class." 1 H e proceeds to furnish another explanation to justify the existence of the rich, asserting that it is the rich who appreciate and demand achievements in science and the arts. Without them, there would be no demand for progress in art, letters and science, except for things of immediate utility. " T h e rich may be considered as the consumers, rather than the producers, of this intellectual wealth." 2 Unlike the Marxian socialists, who devoted all their sympathies to the proletarian class, Sismondi gave due sympathy to the proprietor class as well. In this respect he was more impartial and less sentimental. " It is just as unjust and cruel to starve the proprietors as to starve the wage-earners." 3 W e r e Sismondi living today, we may be sure that he would not approve the Bolshevik régime in Russia. " I f the rule is to consult only the interests of the poor consumer, it is just as bad, because it is just as partial as the contrary rule recommended today, to consult only the interests of the producer or proprietor. The government, we believe, should look after the distribution of subsistence, but it ought to act according to the interests of all, and not for any one class of society." 4 It is evident that Sismondi would oppose the "dictatorship of the proletarian " class just as vigorously as he attacked the capitalist class of his time. 1 2

Études, vol. i, p. 174. Ibid.

1

Nouveaux Principes, vol. ii, p. 165.

4

Études, vol. ii, p. 43.

CHAPTER

IV

R E F O R M S SUGGESTED BY S I S M O N D I

career as an economist was most unfortunate. The publication of the Nouveaux principes d'économie politique met with little success and attracted little attention at the time. His position is well described by the French saying: "Entre deux chaises, ni l'une ni l'autre ne prend." His classical opponents naturally viewed his writing with disfavor, thinking he was advocating retrogressive measures. On the other hand, although his sympathy was always with the working classes, he quite disapproved of the Utopian, socialistic schemes of his time. Speaking of these latter schemes he modestly declared : SISMONDI'S

I admit that, after having indicated where, to my mind, lies the principle, I do not feel that I have the force to trace the means of execution. The distribution of the fruits of labor among those who contribute to produce them appears to me vicious; but it seems to me to be almost beyond human power to conceive of a state of property absolutely different from that which is known to us by experience.1 This modest declaration many historians of economic doctrines mistook as admission by Sismondi of his inability to advance any reformative measures. Professor Ingram remarked, " His frank confession of impotence, far wiser and more honorable than the suggestion of precipitate and dangerous remedies, or recurrence to outworn medieval institutions, has not affected the reputation of the work." 2 1

Nouveaux

2

Ingram, History 112

Principes

d'Économie

of Political

politique,

Economy,

vol. ii, p. 364.

p. 162.

REFORMS

SUGGESTED

BY SI S M ON DI

113

We think, however, that Sismondi's declaration was not so much a confession of inability to outline any reformative measures as it was an effort to combat the Utopian schemes of his time. Following this passage, he immediately proceeded to criticize the writings of Owen, Thompson, Fourier, Muiron, saying, " I wish, as they do, that there might be an association between those who cooperate in the manufacture of a product, instead of opposition between them. But I do not consider the means, proposed by them, of reaching this end to be capable of ever accomplishing this thing." 1 Apparently, Sismondi was merely confessing his inability to conceive such an ideal state, or the means of attaining such a state. As an historian, Sismondi's philosophy was much more practical and realistic ; he was, therefore, quite unwilling to admit the feasibility of the highly idealistic schemes of the Utopian socialists. Contrary to the general belief, we consider that the reformative measures advocated by Sismondi for remedying existing social evils were extremely sound and practical. It is true that he did not advance a fixed and detailed program, and that he stated only general principles for the guidance of the public mind. Therein lies his particular merit, in our opinion. He avoided laying down a fixed prescription as a panacea for everything. A historical mind knows only too well that such a program can never work. Sismondi's conception of social progress was evolutionary. His criticism of the industrial régime was directed toward its speedy transformation, which disturbed the social equilibrium and brought suffering to the mass of the people. Likewise, he was opposed to any revolutionary proposal that attempted to readjust, at a single stroke, the social status quo. Though he chose the slower, evolutionary process, he strongly advocated reformative measures to remedy the social 1

Nouveaux

principes,

vol. ii, p. 365.

H4

SIMONDE

DE

SISMONDI

AS

AN

ECONOMIST

evils of his time. In so doing, he was vigorous and optimistic, believing that the organization of human society is our own work, and that, whenever it causes suffering, we are always able to check its action. 1 T h e following are the outstanding features of his reformative policies : A . T H E ROLE OF T H E S T A T E

Sismondi opposed laissez-faire, free competition policies on the one hand, and rejected Utopian, socialistic schemes on the other. H e was, nevertheless, quite at a loss to find acceptable reform measures, until this difficulty was conquered by the discovery of another fulcrum, namely, the responsibility of the " state ". Unlike his classical opponents, who looked upon the state as a necessary evil, which could serve best by governing least, Sismondi vigorously advocated state intervention and state control. For this reason, he deemed it highly important for society not only to accumulate wealth, but also to set up a wise administration. " Society needs more than wealth; it is not in the least complete if it merely consists of proprietors or capitalists and productive workers. Society needs administrators who will direct the social efforts toward a common purpose, . . . it needs legislators w h o will determine the respective rights of its members." 2 W i t h a good administration, the state is able to undertake numerous activities to improve the social machinery or to remedy existing evils. Legislation should have in view the social advantage of all. A s we have noted in the preceding chapter, property rights Sismondi considered owe their existence entirely to the beneficial results they bring to all. They must, therefore, be strictly supervised by law to prevent any misuse of them. " Wherever monopoly exists, the legislator should interpose his authority, so that those who enjoy the right do 1

Études, vol. ii, p. 372.

* Nouveaux

Principes,

vol. i, p. 141.

REFORMS

SUGGESTED

BY

SISMONDI

not abuse it." 1 Sismondi believed that a limit ought to be set upon property rights. It is a false idea to think that one can do whatever he wants with what is " his ". " Propertyis a concession of the law, it is under the protection of the law, and it should be subjected to the law." 2 L a w should provide for a more equal distribution of wealth. The concentration of fortune in the hands of a few not only makes for great social inequality, but, to Sismondi, such concentration has other drawbacks. A s he thought the existence of the rich to be desirable for the development of science and art, he believed that " each time two patrimonies are united in the same family, society, losing one rich family out of the two, loses, consequently, half of the advantages which it expected from the presence of the rich." 3 The law should constantly encourage the division of inheritance, and not its accumulation. 4 A t the time when people divide their property, the sovereign authority of the state should intervene, and the practice of primogeniture, Sismondi believed, ought to be suppressed. Furthermore, he> advocated a progressive tax to reduce the larger fortunes. 5 T h e state is in a position not only to regulate wealth and property, but also to check the vicious circle of crisis and over-production. Over-enthusiastic production should be restricted by the state. " T h e government, far from encouraging indiscriminate production, ought to be on its guard to moderate the blind zeal which turns most often against its citizens, or at least against other human beings." 6 In the same way, legislation should restrict competition and restore 1

Nouveaux

Principes,

2

Études,

3

Ibid., p. 176.

vol. i, p. 203.

vol. i, p. 334.

4

Nouveaux

5

Études,

6

Nouveaux

Principes,

vol. ii, p. 366.

vol. ii, p. 370. Principes,

vol. i, p. 341.

Il6

SI MONDE

DE SISMONDI

AS

AN

ECONOMIST

the desirable elements of the former corporation laws of the mercantile system. For the evils of over-production Sismondi offered three methods of palliation. All three could be put into practice by the government. They are, first, to enlighten public opinion; second, to give no more encouragement to new industrial enterprises.1 Sismondi thought that the government should undertake to educate the public and keep it well informed. This would be a very efficient measure for remedying industrial uncertainty. The laissez-faire policy throws all the industrial entrepeneurs into a realm of doubt, where they are more dependent upon their skill as prophets than upon their industry as producers. It is for this reason that many radical thinkers would like to overthrow this economic régime altogether. But Sismondi thought that this evil could be largely relieved by a good government's undertaking to make clear to the public the condition of business. Many present day writers on industrial crises are in perfect agreement with this scheme.2 The United States government has recently undertaken many activities in this field, such as the establishment of the Bureau of Agricultural Economics, Labor Bureau of Statistics, etc. It has now been substantially proved that commercial vicissitudes are greatly reduced by the publication of these various government reports, and it is safe to conclude that Sismondi's first suggestion has already met with unmistakable success. To remedy over-production and industrial crises, Sismondi believed that a check on new inventions would be necessary. To attain this end, patent rights should be discontinued. To confer special advantage upon one inventor is to give him a monopoly of the market against all his fellow-producers. 1

Études, vol. ii, p. 363.

* Mitchell, W. C., Business

Cycles (Berkeley, 1 9 1 3 ) , p. 596.

REFORMS

SUGGESTED

BY SISMONDI

117

By such a policy, the benefit of the invention goes to the single inventor only, while all consumers and other producers suffer the consequences. Sismondi believed that to discontinue patent rights would have little effect upon the progress of scientific power. 1 In his opinion, many business failures occurred in enterprises with big capital. He doubted whether the advantages of big capital could compensate for evils such as negligence, dissipation, and other disadvantages connected with big fortunes. He therefore suggested that the sovereignty of the state, instead of stimulating the activity of these captains of industry, should confer decorations upon those who retire and withdraw from business. In addition, the idea of a progressive tax, as we have already noted, was suggested by Sismondi to discourage the concentration of fortunes.2 To prevent the evils of over-capitalization, he believed that the government should also impose serious restrictive laws upon banking, such as the prohibition of competition in banking, and refusal of permission to banks extending credit to accept real estate as collateral.3 T o Sismondi, another important function that should fall within the sphere of state action was control over the birth rate. As we have noted in the preceding chapter, Sismondi thought it disastrous for a population to outgrow the adequate income of the nation,4 and believed the state should have power to supervise the birth rate so that the population might increase proportionally. Though he gave up advocacy of the prohibition of marriages for those unable to support families, in the second edition of his Nouveaux Principes, it is evident that he did not abandon the idea that 1

Nouveaux

2

Etudes, vol. ii, p. 370.

Principes, vol. ii, p. 334.

® Ibid., p. 424. 4

Nouveaux Principes, vol. ii, p. 256.

Il8

SIMONDE

DE SISMONDI

AS

AN

ECONOMIST

the state should conduct effective campaigns for birth control in order to maintain a higher standard of living for the wage earners. B. LABOR REFORMS

Sismondi well deserves to be called the forerunner of modern labor legislation. T o him there were many reasons why the state should take special measures to protect the working classes. In the first place, laborers constitute the most numerous class of society. " I f the administration should propose to secure the advantage of one class at the expense of another, it is the journeymen that it ought to favor. Among those who participate in production, they are the most numerous, and to assure their happiness is to render the great mass of the nation happy." 1 Second, the state should always protect the interests of the weak against those of the strong. In the struggle between workmen and their employers, workers especially need the protection of the state, because they work to gain a livelihood, and cannot afford to wait, while the employers can.2 Moreover, it is not conducive to public safety for the government to neglect the great mass of people in their misery. The lack of adequate labor protection might lead to uprisings which would threaten the social order. Though Sismondi favored the suppression of the laws which protected the union of the employers against the union of the workers, he did not advocate trade unionism. H e did believe unionism to be the " natural means of resistance " for the workers. 3 But he underrated the strength of collective bargaining. H e thought that " strikes " would only make the case worse. " The great association, known in 1

Nouveaux

Principes,

* Ibid., p. 379. ' Études, vol. i, p. 107.

vol. i, p. 377.

REFORMS

SUGGESTED

BY

SISMONDI

England by the name of Trade Union, has been a melancholy experiment of this kind. W i t h a remarkable agreement in their design, the men were able, by refusing to work, to force their masters to close their workrooms, but not to raise their wages, for they could not procure them a single customer; still worse, it is impossible to think without deep sorrow of these poor men, obedient to the law in their distress, dissipating in a vain but just struggle the savings of their labor, and obliged at last to yield." 1 While he did not believe in the efficacy of the more peaceful weapon used by the English unionists, still more did he disapprove of the armed resistance used by the French workers of his time. He did not, however, condemn such uprisings from the legal or moral standpoint ; he considered such resistance not only fruitless, but even harmful. " The convulsions of Lyons only redoubled the activity of manufacturers in Switzerland, Germany and England. It is not, therefore, in the name of morality and law, it is in the name of their own interests that we should unceasingly call upon the workmen to refrain from coalitions, to refrain from uprisings." 2 Sismondi, regarding as futile " labor unions " and " strikes," put the whole task of improving the laborers' condition in the hands of the legislature. Though it is too much to expect to find in an author of a century ago the complete formulation of our present labor laws, yet it appears certain that many principles of our present labor legislation were already taking form in the mind of the great Genevese writer. 1 Revue Mensuelle d'économie politique III, 1834, Sismondi : " Du sort des ouvriers dans les manufactures." Quotations here are taken from an English translation of Sismondi's selected essays by an anonymous writer, under the title of Political Economy, p. 213 (London, 1847). 2

Vide supra, p. 125, note 4.

120

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

i. Hours of Labor Sismondi regarded the long working hours of his time as an affliction; and the government, he thought, should take steps to reduce these working hours. The task of the government, as protector of the population, should be to place limitations everywhere upon the sacrifices which anyone could be compelled to make; to prevent the man, who had been working ten hours every day, from consenting to work twelve, fourteen, sixteen and eighteen. 1 Sismondi considered that long working hours not only impaired the health of the laborers, who rarely attain the age of forty," 2 but he also believed that there were other serious evils as well. Alcoholism, accidents, crimes, and the lack of leisure for recreation are all the inevitable by-products of such long working hours. From the viewpoint of statesmanship long working hours should be reduced. In advocating the reduction of working hours, Sismondi laid down no detailed plan indicating the number of working hours preferred, such as an eight-hour working day. This omission is entirely consistent with his general philosophy, which led him to avoid advocacy of a unique system for all industries, which may be different in their respective natures. In some places, however, he seems to have indicated that he thought a tenhour working day is sufficient, 3 and that night hours destined for repose should not be taken from the laborer for further work. 4 Sismondi strongly advocated one day of rest in seven. He considered the Sabbath practice a " law of beneficence." He, however, did not favor the one day of repose in the week for religious observance. It was to give the worker a chance 1

Nouveaux

2

Etudes, vol. ii, p. 214.

Principes, vol. ii, p. 338.

3

Nouveaux

4

Ibid., p. 387.

Principes, vol. i, p. 201.

REFORMS

SUGGESTED

BY

SISMONDI

121

to taste some of the legitimate pleasures of life. To this great humanitarian economist it was essential not only that men should enjoy the Sabbath holiday, but even that the beasts of burden, the ox, and the donkey should have this weekly recess " so that the cattle may know the enjoyments of life." 1 It was a happy coincidence that this modern legislative movement began first in Switzerland, Sismondi's native country, where a law was passed in 1890 requiring each railway employee to be given, without loss of pay, fifty-two weekly rest-days each year, 2 and today the principle, as recommended by Sismondi, is generally recognized in the civilized world. Sismondi's advocacy of shorter working hours was prompted largely by humanitarian motives; that is, his desire to stop the cruelty which deprived the workers of their proper leisure and destroyed their health. Economically speaking, he believed that cutting down working hours would cause production to become relatively relaxed. This, however, was what he desired, for with production checked the danger of crises caused by overproduction would be greatly reduced. Today, we realize that such a notion is a mistake. Sismondi, however, overlooked the increased efficiency resulting from concentrated efforts in shorter working hours. The shorter hours which labor gained during the World W a r did not result in decreased production. On the contrary, the heightened efficiency of the workers led to a tremendous increase in production. Following the adoption of the eight-hour day in 1 9 1 9 , the tendency in European countries has been to approve this step. Were Sisimondi living today, he would be surprised to find that his moral conviction would coincide even with the chrematistic motive he so much denounced. 1 2

Nouveaux Principes, vol. i, p. 385.

Commons and Andrews, Principles of Labor Legislation, p. 297, 1927 edition.

j 22

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

2. Child Labor His conviction that child labor should be opposed Sismondi based upon two grounds. In the first place, the physique of an undeveloped youngster is not equal to the hard work of an industrial plant. This means that children so employed are likely to die early, 1 without having tasted any of the pleasures of life. Second, as we have noted before, to permit child labor is to furnish an incentive for reckless marriages, leading to an overgrown population. Moreover the wage-bargaining power of men is weakened by the competition of child labor. For both these reasons child labor should be suppressed by legislation. Sismondi also favored legislation which would have prohibited women from becoming common laborers. His reasons for taking this stand were akin to those advanced in support of his position regarding child labor. Furthermore, he considered woman's natural place to be the home, and he thought that it was her duty to care for and educate the coming generation. The question of woman suffrage never occurred to Sismondi. From what we know of his views upon the labor of women, and his disapproval of universal suffrage, it is, perhaps, safe to conclude that the great Geneves e economist would not have cared to see women in politics.

3. Minimum Wage Unlike some mercantile philosophers w h o recommended low wages to ensure a successful campaign in production against rival nations, Sismondi considered a small income for a very numerous class a great disaster to a nation. H e held that from the standpoint of justice, those who actually do the work should be adequately compensated with the fruit of their work. 2 Aside from the moral issue, it is a great danger 1

Nouveaux Principes, vol. i, p. 382.

s

Ibid., vol. ii, p. 449.

REFORMS

SUGGESTED

BY

SISMONDI

to public safety for a nation to have a large indigent population, " uncertain of the future, uneasy about their existence, discontented with the present order." 1 A population which receives miserable wages brings neither force, happiness nor stability to the nation. On the other hand, when the working classes receive adequate compensation, there is increased consumers' income to absorb the over-produced goods, and consequently crises may, to a great extent, be alleviated. Sismondi believed that a laborer's wages, being his only income, should suffice to support him not only during the time of his activity, but also in the declining years of his life, 2 when he is no longer able to work vigorously. The wage rate should therefore be high enough to enable the laborer to save for his old age, because without sufficient saving, destitute old workers will swarm to the poorhouses. The only remedy for this is to increase wages. Sismondi thought it much better to raise wages than to give one portion as wages and another as charity. 3 Influenced by these considerations Sismondi reached the conclusion that the " legislator should propose first of all to increase the wages of the industrial laborer." 4 It is true that Sismondi never stated his idea of a minimum wage in definite monetary units; he was, however, clearly indicating the standard of living that a laborer ought to enjoy. A decent standard of living for a laborer, according to Sismondi, should embrace the following four requisites : ( 1 ) Abundance, variety and wholesomeness of food. ( 2 ) Sufficiency of clothes for cleanliness according to the demands of the climate. 1

Études, vol. ii, p. 331.

2

Nouveaux Principes, vol. i, p. 379.

® Ibid., vol. ii, p. 361. 4

Ibid., p. 344.

J24

SIMON DE DE SISMONDI

AS AN

ECONOMIST

( 3 ) Convenience and healthfulness of lodging, taking into consideration climate and necessity of heating. (4) Security of the future, unclouded by uncertainty, as in the existing state of affairs. Unless the working classes are assured of these four requisites, the nation can not be considered prosperous. 1 It is certain that Sismondi's standard is superior even to the "comfort standard " under present labor conditions. Nearly a century has elapsed since Sismondi advocated this standard, but in spite of notable progress made in some countries,— such as minimum wage laws, and the compulsory arbitration system,—his dream of the establishment of this ideal standard for all working classes is still to be realized.

4. Labor Insurance A s we have seen, the great defect of the industrial régime, pointed out by Sismondi, is the separation of capital and labor, which results in such a precarious existence for the working classes. One of the considerations that most influenced Sismondi to exalt the virtues of the mercantile system was the fact that, under the corporation law, each corporation was expected to provide a special fund for taking care of the accidents and illnesses of fellow-members of a trade. According to Sismondi, this principle of insurance was recognized even in feudal times, when slavery was in force. 2 Whenever a slave became sick, his master was always ready to support him during his illness. Under the industrial regime, in the contrary, with the separation of labor and capital, the lot of the working classes has been greatly embittered by the inevitable hazards of life cause by accidents, illness, old age and unemployment. To counteract this evil, Sismondi early developed the idea of modern labor insurance. 1 1

Études, vol. i, p. 8. Nouveaux Principes, vol. ii, p. 350.

REFORMS

SUGGESTED

BY

SISMONDI

125

T h e state should compel the manufacturer to take care of his workmen, to provide for them not only in their virility, but also in their old age, illness and unemployment. It is only just that the burden should fall upon the manufacturer alone, and he would have no reason whatsoever to complain, 1 for if he does not pay his workmen enough to assure them a decent living, if his factory is unsanitary or dangerous, causing accidents and illness to the workmen, he ought to compensate them for damages which may result. If he finds it too burdensome, then it would be better for him to give up such an enterprise. By making the employer financially responsible for the care of his workmen during illness, old age, accidents, and unemployment Sismondi thought a spirit of solidarity would be created to offset the antagonism then existing between capital and labor. The employer would have to give more consideration to the condition of his workmen, and would be reluctant to impose long working hours upon the laborers, or to subject them to work in unhealthful or dangerous surroundings, because he would have to provide for them in case of illness and accidents. H e would also be unwilling to turn his workmen off, if he had to sustain the loss occasioned by unemployment. In this viewpoint Sismondi differs sharply from the attitude that led to the adoption of our modern labor-insurance legislation. H e was emphatically of the opinion that the employer alone should contribute to the insurance fund, whereas our present-day tendency is to require contributions from three parties,—the state and the employee, as well as the employer. Sismondi's attitude, however, was quite natural under the circumstance of his time, when workers were receiving strictly minimum wages, while the state was supported largely by regressive taxes. For the same reason he was opposed to the poor laws of England, 1

Nouveaux

Principes,

vol. ii, p. 363.

I 2

6

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

maintaining that it put the burden upon society at large, instead of restricting it to the manufacturing class, which alone ought to be responsible for the burden. T h e idea of putting the burden of insurance upon the employer alone, in spite of its justification under the circumstances of his time, presented a great many difficulties. He well knew that " commercial revolutions often ruin the employers themselves, from whom this relief is to be demanded." 1 Such practical difficulties made him rely more and more upon the activities of the state, which was well able, in time of crisis, to undertake constructive works along the line of public utility, for the unemployed workers, and to prevent laborers from working in dangerous places. These reforms were sought by Sismondi only by the " slow and indirect methods of legislation." 2 Furthermore, he early suggested the profit-sharing plan, whereby a common laborer might have hope of promotion in the future, a great incentive to economy and hard work. A worker, he felt, should never marry without assurance of such improved condition in the future. This plan, however, involves great difficulty in the matter of legislation. Finally, he added that " this Utopia may well be the object which the legislator wishes to attain: it is difficult to make it the direct object of law." 3 It is interesting to note that the improvement of labor conditions in the last fifty years have followed, to a great extent, the path traced by Sismondi. Though his proposals were little regarded during his life, he really was the earliest precursor of modern labor legislation. 1

Nouveaux Principes, vol. ii, p. 363.

2

Ibid., p. 366.

' Ibid., p. 346.

REFORMS

SUGGESTED

BY

SISMONDI

C. A G R I C U L T U R A L REFORMS

Sismondi's suggestions for rural reforms favored the development of a number of small farms at the expense of large estates. Legislation, he felt, should take measures to make a greater number of farmers the owners of the land they cultivated. T o make a nation happy and prosperous, there is no other way than " the guarantee, to the man who cultivates, of the perpetual ownership of the fruits of his labor." 1 For it is the love of one's property, confidence in its perpetuity, and the understanding that he is working on his own account that gives a person the force to conquer obstacles of the most difficult nature. The more a system of exploitation elevates the condition of the farmer, insuring to him more comforts, and greater independence, the more it promotes in him intelligence and satisfaction which will assure him success.2 Sismondi believed that there was another very great advantage resulting from making more farmers owners of their land. Large-scale production in agriculture, as well as in industry, always faces the danger of producing things for which there will be no demand. This uncertainty is the greatest evil under the present régime, and one that often lead to crisis. But when farmers are themselves the property owners, and enjoy the right to dispose of the products of their cultivation, they will produce what they want for their own consumption and perhaps supply the needs of the neighboring towns, a demand which is easily ascertainable. Under such conditions their work is very little concerned with the market, and they are no longer affected by fluctuations in prices or by business vicissitudes. 3 In Sismondi's opinion, to be self-reliant, to feed and clothe oneself with one's own 1

Études, vol. ii, p. 129.

' Ibid., p. 200. 2

Études, vol. ii, p. 268.

12 8

SI MON DE

DE

SISMONDI

AS

AN

ECONOMIST

products without recourse to markets, 1 is a great source of security and contentment. Not only did he believe that ownership should be assured to the farmers, but, he also believed it necessary to have more farmers in the nation if a nation is to be prosperous and happy. This notion is a natural corollary of his preponderant interest in rural life, which we noted in the second chapter. N o social class appeared to him to be more concerned with the public order than the agricultural class, and no other class has so much love of the country or shows such strength in its defense, for the very nature of their work invigorates their health and strengthens their courage. It is a mistake to regard them merely as wealth producers ; they are needed for their own sake. " They are in themselves an aim, one of the great aims of society ; and a happy distribution of wealth should only be a means to assure their number, their happiness and their attachment to the fatherland." 2 T o obtain these happy results, Sismondi suggested some reformative measures to be enacted by the legislature. First, he recommended that primogeniture be abolished. The law, he believed, should encourage the multiplication of independent families and an equal partition of inheritance. He considered a great estate to be often a great national disaster, exemplified in his day by the land around Rome, where he saw the expulsion of numerous farmers from their own homes. 3 L a w should, therefore, always provide for an equal partition of property by division, though it would perhaps be too irksome to try to regulate the size of the farm. T h e government, he felt, should favor patriarchal exploitation in preference to all other forms. Sismondi was confident that patriarchal exploitation could develop, to the 1

Nouveaux

3

Études,

3

Nouveaux

principes,

vol. i, p. 263.

vol. ii, p. 240. Principes,

vol. i, p. 236.

REFORMS

SUGGESTED

BY SISMONDI

I2g

highest degree, the latent productive forces of the land. It moreover increased family happiness, he believed, where the members cooperated in the work of the farm. Naturally, such exploitation can be carried out only on farms of small size. To encourage the establishment of a number of such farms, small farmers should be exempted from certain taxes, such as poor rates, and the burden of sustaining the indigent class should fall upon the big landowners alone, partly because of their greater ability to pay, partly to discourage large land holdings and thus make room for small farmers. A farmer possessing less than twenty-five acres Sismondi considered to be a small farmer who should be exempted from the taxes in question. T o remedy the miserable condition of farm laborers, Sismondi developed a plan of insurance similar to that which he suggested for labor reform. H e felt it to be a simple matter of justice that landowners or big farmers should support the journeymen in time of distress, such as accident, illness or old age. This principle was not ignored even in the time of slavery. 1 If the landowner is to be charged with this expense, then he has less incentive to reduce the wages of his journeymen to the minimum. Under this legislation, a degree of natural solidarity would arise between the big farmers and the journeymen. Here Sismondi's optimism went so far as to suggest that perhaps the big farmer would consent to give up part of his land to the journeyman, making the latter a cultivator of his own land. While Sismondi was not ignorant of the disadvantages under which small farmers labored, notably their inability to carry out agricultural improvements involving heavy expense, he thought that the advantages of small farms would more than compensate for their shortcomings. Even in his first work, his book on agricultural economics, in commenting upon the extremely 1

Nouveaux

Principes, vol. ii, p. 351.

I30

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

small farm he said: " It is evident that an extremely small metayage is a handicap in introducing important improvements ; it makes the farmer pay too much for what he gets from the land; but it is none the less evident that an extremely small area makes possible the biggest gross production of the land, and the population which it can feed is the most numerous possible." 1 We believe that Sismondi here overrated the advantages of small farms and the desirability of having a large number of agriculturists in the country. In China, where there is no evidence to show that primogeniture has ever been in practice, ownership of extensive tracts of land is relatively rare. It is true that China's population prospers under this system, and intensive cultivation of land is practised, as predicted by Sismondi. Nevertheless the personal observation of the present writer has convinced him that the results are far from happy. The farms have become so small in size that one of more than ten acres would be regarded as a big farm. Farmers try industriously to get the most from their land, but their inability on account of the smallness of the farms, to undertake improvements and reforestation has led to soil exhaustion and frequent drought. Country life in China is rather the reverse of the happy sketch of Tuscan rural life given by Sismondi. It is true, however, that under this system there exists a great rural population capable of bearing arms, a thing Sismondi so much desired. Yet the general unproductivity of the soil and the frequent famines throw a large number of the farm hands out of employment, and these unemployed constitute a menace to the nation rather than an asset. Thus we can readily see that the principle of smaller farms and more agriculturists, advocated by Sismondi, may be carried to extremes. He however, as we noted, did suggest restriction of the birth rate, to be 1

Tableau de I'agriculture en Toscane, p. 192.

REFORMS

SUGGESTED

BY

SISMONDI

applied to industrial workers particularly. It was, perhaps, somewhat inconsistent to advocate as he did, restriction of the birth rate of the industrial workers, and encouragement of that of the agriculturists. His attitude was, at any rate, not free from bias. We think that Sismondi, to be consistent, should have advocated birth control for industrial workers and agriculturists alike. Sismondi's general principle regarding land reforms, which received little support during his life, is largely in operation today in countries like Italy, Ireland and Russia. In Italy, by the law of 1883, the duty of undertaking certain land improvements is imposed upon landowners, and those who refuse to submit to this law are threatened with expropriation. Although the result of this reform, as pointed out by Professor Aftalion, 1 is not very significant, it is interesting to note that the plan is essentially the same as Sismondi's. Sismondi saw in Ireland the extreme misery of a rural population subsisting on a meagre diet of potatoes, and getting from their landlords less than the domestic animals received. T o make their condition worse, the poor tenants faced constant danger of eviction at the hands of their landlords. It was unnecessary here to advocate small farms, as the farms in Ireland were already small ; it was only in the limitation of property rights that Sismondi sought a remedy. He believed that drastic measures should be taken to persuade the landlords to relinquish their rights. He maintained that " it is the right of the cultivator to be completely supported by his work, as a human creature, and only the surplus profit can be a legitimate source of rent." 2 He considered that the law should make the Irish peasants the proprietors of the land they cultivate. 1

Aftalion, L'oeuvre

2

Études, vol. i, p. 369.

économique de Simonde de Sismondi, p. 194.

2

SIMONDE

DE SISMONDl

AS AN

ECONOMIST

Since the formation of the Tenant-Right League in 1850, agitation for the " three F ' s " had been vigorous. The three " F's " were fair rent, fixity of tenure (which meant that a peasant could hold his land as long as he paid rent), and free sale (that is, the light of a peasant to sell his tenancy). The Land Act of 1881 practically conceded the " three F ' s . " Sismondi's plan was even more nearly realized by the general Land Purchase Act of 1891, under which a tenant was permitted, if he wished, to purchase his holding outright from the landlord by borrowing from the government a sum equal to the full purchase price. Sismondi's plan of giving the Irish peasants the right of ownership of their land was thus carried out by English legislation, half a century after the death of the Genevese author. Under this system, rural Ireland has been immeasurably happier than ever before. 1 Sismondi made no special study of agrarian reforms in Russia, but it would be interesting to compare his agrarian policy with that of the Soviet Republic. Prior to the Revolution of 1 9 1 7 , the distribution of land in Russia was uneven in the extreme. According to the census of 1905, out of a total of million farms, 2.1 million farms (one-sixth of the total) controlled half of all the land allotted to the peasantry, the average farm being 15 dessiatins 2 or more, while more than two million homesteads were entirely landless. This situation was further aggravated by the extremely poor quality of the land allotted to the peasantry, and the inadequate stocks of cattle. The November Revolution of 1 9 1 7 accomplished agrarian reform by a single stroke. A program with definite planks was adopted, the essential features of which were the immediate and complete confiscation of all the lands belonging to the landowners, the crown, the 1 For Irish Land Acts, see Hayes, A Political and Social History of Modern Europe, pp. 321-324, 1925 edition. 2

A dessiatin = 2.7 acres.

REFORMS

SUGGESTED

BY SISMONDI

133

church, etc., and the nationalization of all the land. Such a violent change effectively cured the evils connected with big farms and the abuses of property rights by landlords. Small farmers naturally now have land to cultivate. In thirty-six provinces of European Russia, according to statistics furnished by the People's Commissariat for Agriculture for November 1, 1920, 22.4 million dessiatins of the confiscated land were handed over to the peasantry. This Soviet program, by abolishing private ownership of land, placed the soil in the hands of the toiling classes of the country, the ideal state of affairs for which Sismondi longed. Had he lived today, however, we feel sure that he would not approve the Russian program of 1 9 1 7 . For though Sismondi believed in the restriction of property rights by legislation, though he believed that the right to property is only a concession of the law, he nevertheless maintained that property right is a happy usurpation. He did not favor the abolition of property, but supervision of property rights to prevent abuses. On the other hand, it was essentially perpetuity of the ownership of land that Sismondi repeatedly recommended. The legislator "-should give stability to the existence of the cultivator, favor all the contracts which give him a permanent right in the soil, and, on the contrary, abolish those which render his condition precarious . . . morality is intimately connected with heritage and hope, it is fortified by the duration of time." 1 The nationalization of land in Russia, as adopted in 1 9 1 7 , presents uncertainty for the peasants in essentially the same degree as under the former landlords' regime. The only difference is that now, instead of a capricious landlord, the peasants have an all-powerful state, which has even more power than the former landlords to evict the peasants. This policy is diametrically opposed to Sismondi's viewpoint. 1

Études,

vol. i, p. 2 0 1 .

134

SI MONDE DE SISMONDI

AS AN

ECONOMIST

Moreover, as we have already indicated, Sismondi believed in social evolution. His remedies for social evils are to be sought only through the " slow and indirect means of legislation." The Land Purchase Act of 1891 in Ireland would have won his hearty support, while he would surely have viewed the Russian program of 1 9 1 7 with disfavor. The experiment in Russia, begun in 1 9 1 7 , quite justified Sismondi's advocacy of the perpetuity of ownership of land. Though the major portion of the land was placed at the disposal of the peasants actually engaged in agriculture, yet, because of the absence of a permanent ownership, farmers presented such a policy by restricting tillage. The restricted tillage was due partly to the exactions of the food levy, but more perhaps to uncertainty lest the agricultural improvements made through their efforts might be taken away from them at any moment. Under this condition, farmers produce exactly what they need. Saving and improvements seem to be out of the question altogether. The result in Russia was a tremendous decline in cultivated acreage, which contributed to the severity of the famine of 1 9 2 1 . 1 This hasty policy was soon found to be defective. The present agrarian policy, as formulated at the Ninth All Russian Congress of Soviets, held in the autumn of 1921 and generally known as the New Economic Policy, has largely restored the features of the permanent ownership of land, by ending the sporadic redistributions of land, granting the right to lease out farms, etc. Theoretically, state ownership of land is still maintained with dignity; but practically, Russia has begun to modify her policy, so that it now conforms more closely with that advocated by our Genevese economist. Convinced by this experiment, we, like Sismondi, feel confident that onlythrough permanent ownership of the land can the latent productive forces of agriculture be fully developed. 1

Fisher, The Famine in Soviet Russia (N. Y., 1927), pp. 469 ct seq.

CHAPTER SISMONDI'S

V

FOLLOWERS

IT is a comparatively simple task to identify a group of believers in a religious sect. Those who observe the same ceremonies and believe in the same doctrines are noticeably homogeneous. It is a far more difficult task to discern a school of philosophy, to identify a group of thinkers, whose brains are so varied and so prolific. Such identification, however, is easy in the case of a school having definite planks, such as the Stoics and the Epicureans, or of a school with a founder like Adam Smith whose standing is undisputed. O n the other hand, when we come to look for the followers of Sismondi, whose work failed to win popular support in his own time, the difficulty is apparent. There is no doubt, however, that the publication of the Nouveaux Principes d'économie politique exercised a profound influence upon the trend of economic thought, especially in France. W e have undertaken to state briefly the contribution to the field of economics made by these three writers: Villeneuve-Bargemont, Droz and Buret. The choice of these writers is made, not because they are the direct disciples of the Genevese economist, but because they may be said fairly to represent three different sects. W e can thus see the reaction to Sismondi's doctrines in different schools, in the development of economic thought. Villeneuve-Bargemont, author of the Économie Politique Chrétienne, seems to have been the forerunner of the Catholic Socialism of France. Droz might represent the French school between 1830 and 1840, with Charles Dun135

136

SIMON

DE

DE

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AS

AN

ECONOMIST

oyer, Theodore F i x and Blanqui as fellow members, while Eugene Buret seems to have served as the link between Sismondi and the French Socialists, as noted by Professor Aftalion, 1 although, as we shall see, Buret himself was not a socialist. A.

VILLENEUVE-BARGEMONT

Unlike Sismondi, who lived a retired and scholarly life, Jean Paul Alban de Villeneuve-Bargemont was an administrator and had the opportunity to put many of his ideas into practice. Born at the Château de St. Auban ( V a r ) of a noble family, Villeneuve-Bargemont was early prepared for administrative work. While still a mere youth he held the position of auditor to the council of state, a position which greatly facilitated his advancement in his later political career. He also served as subprefect successively in the small cities of Ziérikzée, Lérida, Catalogne and Namur. In these districts, his administrative ability won him overwhelming popularity. Upon the restoration of the Bourbons, he was appointed prefect of Tarn-et-Garronne, a post which he held for only a short term, his appointment being terminated upon Napoleon's return from Elba. A f t e r the second restoration he was successively charged with the administration of the departments of Charente, Meurthe, LoireInférieure and Nord. Throughout these administrations, he was deeply interested in the task of bettering the condition of the indigent classes, and carefully studied the various means of relieving pauperism. This beneficent work was interrupted by the July Revolution of 1830, for he withdrew his services from the new regime because of his deep attachment to the Bourbon restoration. In the year 1830 Villeneuve-Bargemont retired to private life and devoted his time to the study of political economy. 1

A f t a l i o n , L'oeuvre

économique

de Simonde

de Sismondi,

p. 244.

SISMONDI'S

FOLLOWERS

137

In 1834 he published his L'Economie Politique Chrétienne, and in 1841 the Histoire de l'économie politique, these two being his main works on the science. In 1840 VilleneuveEargemont was selected deputy of the arrondissement of Hazebrouck, and represented this district continuously until 1848. During these years he exerted a very significant influence in parliament, playing an important part in the enactment of the child-labor law (la loi du 22 Mars, 1841). His parliamentary career was ended by the Revolution of 1848, and he died two years later in Paris. For his criticism of the industrial regime in England Villeneuve-Bargemont is entitled to be called a follower of Sismondi. He attacked industrialism with more vigor, and with even more emotion than did his predecessor. His general description of the English industrial system is summed up in a few words : " The English system is founded on the concentration of capital, of commerce, of land, of industry; on indefinite production, on universal competition, on the substitution of machinery for human work, on reduction of wages, on the perpetual stimulation of the physical needs, on the moral degradation of man." 1 Not content with the feeble designation of the " chrematistic school," as Sismondi called it, Villeneuve-Bargemont went so far as to call the Classical School the " sensualist s c h o o l " (l'école sensualiste).2 A s we have already noted, Sismondi did not seem to hold the classical school entirely responsible for the existence of misery among the working classes ; he rather reproached the classical economists for the aloof, indifferent attitude with which they applauded the industrial system, without being at all affected by its lamentable consequences, the suffering of the working classes. In this respect Villeneuve-Bargemont went far beyond Sis1

Économie

2

Ibid., p. 168.

Politique

Chrétienne,

vol. i, p. 24.

SI M ONDE

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SISMONDI

AS

AN

ECONOMIST

mondi. His attitude is revealed in such passages as the following. " W e are forcibly led to think that science has presumed too much upon itself, that it has taught the art of producing wealth rather than that of justly distributing it, and hence, instead of relieving poverty, it has very probably contributed to propagate it." 1 Further, Villeneuve-Bargemont offered evidence showing that in his day misery was more general in England, Holland, part of Switzerland, Germany, and in some provinces of France where industry was highly advanced, " a proof of the fatal consequences which the application of the economic and material theories of civilization brings on as the fate of the inferior classes." 2 Thus he not only criticized the classical economists, but sought to incriminate them, an exaggeration hardly committed by Sismondi. Like Sismondi, Villeneuve-Bargemont made agriculture his preponderant interest. Industrial pursuits, to him, were " operations of systematic selfishness." " It is especially by the indefinite extension of manufacturing industry that this selfishness has found the most rapid and most assured means of exercising its disastrous influence. Agriculture, offering a slower production of wealth, and a production less susceptible of centralization, has been neglected and placed in a secondary position." 3 His prejudice against industry was strengthened by his personal observations, made when he was serving as prefect. " The department of Tarn-et-Garronne had two distinct populations, one made happy and peaceful by agriculture, the other miserably agitated by the frequent upheavals of industry." 4 Like Sismondi, Villeneuve-Bargemont further believed that over-population was caused by in1

Économie

2

Ibid., p. 78.

Politique

3

Ibid., vol. iii, p. 583.

4

Ibid., vol. i, p. 8.

Chrétienne,

vol. i, p. 30.

SISMONDI'S

FOLLOWERS

I

39

dustrial organization. " Having been convinced for a long time that an excess of production may and must lead to an excessively large and miserable working population, I do not hide my preference for agriculture, as compared to manufacturing." 1 In this respect the Catholic economist was in full agreement with the Genevese writer. The economic work of Villeneuve-Bargemont, however, was singularly different from Sismondi's in another way, namely, the introduction of Christianity into the science. Villeneuve-Bargemont was, perhaps, the first man in the nineteenth century to study political economy from a religious viewpoint. His conception of political economy was a union of science with religion. After deploring the false doctrines of the classical school, Villeneuve-Bargemont concluded that " the time has come to take up the great work again by uniting science with faith, and it is this field that we call from now on political economy." 2 To Sismondi's doctrines Villeneuve-Bargemont paid a high tribute, declaring that this new school was more moral and more human, occupying itself more with the comforts of individuals than with wealth of nations, more with the happiness of all than with the prosperity of a few. He applauded the aim of the new school of Sismondi, which was to give to every one dignity, liberty, and that portion of well-being belonging to him on earth. But he thought that the realization of this generous aim demanded the taking of still another step—" to unite closely, by an indissoluble link, the science of material wealth with the science of moral wealth; in a word, to take as a foundation the great civilizing power, Christianity." 3 Villeneuve-Bargemont was not unaware of the frequent conflicts between religion and 1

Économie Politique Chrétienne,

vol.i, p. io.

4

Histoire

3

Économie Politique Chrétienne, vol. i, p. 82.

de l'économie politique, vol. ii, p. 430.

14o

SIM ON DE DE SISMONDI

AS AN

ECONOMIST

science in the past. Regarding these, he made the specific remark that " far from opposing the progress of the useful arts, and even the liberal arts, religion has always honored and encouraged them. Religion rejects only that which is injurious to men." 1 He was not only a zealous partisan of the Christian religion, but also, and above all, a Catholic, not free from dogmatic bias. He attributed the misery of the working classes in England at that time, not only to the doctrines of the classical school, as we have noted, but also to the absence of the Catholic Church. " In England, the weakening of religious principles, the necessary consequence of her separation from Catholic unity, brought about by an immoral and sanguinary despot, has caused the people to forget the civilizing power of moral ideals. Hence, political economy, still charitable and religious, conforming to the public laws in France and Italy, must appear in England very much impregnated with the spirit of commerce." 2 In the face of such vigorous denunciation, it becomes difficult for us to regard the Catholic writer as free from sectarian prejudice. W e have noted before that Sismondi seemed to favor moderation of individual wants. Upon this score he was far outdone by Villeneuve-Bargemont. The latter considered pauperism to have been aggravated by the theories of material civilization, based on stimulation and multiplication of various wants. 3 People have become great and powerful only by their abstemiousness, their moderation and their courageous habit of reducing and suppressing their wants. " I t is the multiple of wants which has caused them to degenerate into corruption and weakness, and which has cre1

Économie Politique Chrétienne, vol. i, p. 85.

2

Ibid., p. 40.

3

Ibid.., p. 231.

SISMONDI'S

FOLLOWERS

141

ated by the side of wealth the leprosy of poverty." 1 It would be unfair to criticize Villeneuve-Bargemont as being absolutely hostile to material progress. Though the above passage undoubtedly reveals his conservative attitude, we find elsewhere in his work a passage that would indicate that he wished to qualify this extreme view. " Doubtless the progress of civilization and well-being gives birth to new habits which create real wants. Luxury itself is relative to time and place, but it should come gradually, and should be produced only with just distribution of wealth." 2 The tone here seems to be entirely in keeping with Sismondi's view. With regard to the problem of population, we naturally expect to find Villeneuve-Bargemont in an embarrassing situation, between the school of Sismondi, advocating the restriction of population, a principle in which he himself believed, and, on the other side, the Catholic Church, which professed a contrary doctrine, but of which he was nevertheless a vigorous defender. Upon this point VilleneuveBargemont definitely swung toward the economist, but at the same time ably defended the Catholic Church by a new theological interpretation. He blamed Sismondi, not for advocating the restriction of population, but for mistaking the attitude of the Catholic Church. " Mr. Sismondi, in blaming the Catholic clergy and the other Christian creeds for the kind of encouragement they give to the fecundity of marriages, has quite forgotten that the Christian religion puts continence between the married couple, when it is the result of mutual consent and of desire for perfection, in the ranks of the highest virtues." 3 Villeneuve-Bargemont then proceeded to show the conformity of the Christian religion with the principles of the restriction of population. He said 1

Économie

Politique

2

Ibid., p. 253.

3

Ibid.,

Chrétienne,

p. 207, footnote.

vol. i, p. 156.

142

SIMON

DE DE SIS MON DI AS

AN

ECONOMIST

that, though in Genesis man was ordered to " be fruitful and multiply, and replenish the earth," 1 later, the new faith, adapted to an organized society, recommended abstinence from marriage as advantageous to man. Here a passage found in St. Matthew's Gospel 2 was quoted to substantiate his theological interpretation. He further strengthened his position by alleging that St. Paul made the specific remark that " persons who get married imprudently will suffer in their flesh afflictions and evils. . . . " 3 Villeneuve-Bargemont also used the oath of celibacy required of priests as a concrete proof that the Catholic Church is far from encouraging the growth of population. While he agreed with Sismondi about the restriction of population, he did not share the latter's belief in the wisdom of prohibiting marriage among the most indigent. To Villeneuve-Bargemont such a law would have been an exclusion quite contrary to justice and to natural liberty. In his opinion abstinence from marriage would be inspired among the poor efficiently only by religious sentiment. 4 In commenting upon Malthus' moral restraint, VilleneuveBargemont showed such enthusiastic admiration as to rank Malthus among the defenders of the Catholic doctrine. " It is remarkable, however, that this Protestant writer has made, without knowing it, the most complete defense of Catholic principles and of the wise foresight which has 1

Genesis, ch. i, p. 28.

1

Économie Politique Chrétienne, vol. i, p. 230. Here, f o r reasons unknown to us, Villeneuve-Bargemont quoted the following passage in Latin : " Sunt enim eunuchi, qui de matres utero sic nati sunt ; et sunt eunuchi, qui facti sunt ab hominibus; et sunt eunuchi, qui seipsos castraverunt propter regnum coelorum. Qui potest capere capiat." (St. Matthew, ch. x i x , v. 12.) * Villeneuve-Bargemont gave the quotation as from I Corinthians, ch. vii, vs. 25-30. * Économie

Politique

Chrétienne,

vol. i, p. 235.

SISMONDI'S

FOLLOWERS

143

directed the creation of the monastic orders ; for they are, in reality, only the spirit of sacrifice, devotion and prudence manifested by abstinence from marriage." 1 In short, Villeneuve-Bargemont believed that an overgrown population was a cause of misery, and that it was therefore necessary to restrict the birth rate. He thought, however, that this restriction was to be sought only through moral control, which, in turn, could come only from the influence of Christianity. With regard to the inequality of fortunes, VilleneuveBargemont had much the same view as Sismondi. Though the two arrived at the same conclusion, they reasoned from entirely different angles. Sismondi regarded the existence of private property and the inequality of fortunes as justified by the beneficial results they bring about. VilleneuveBargemont, however, considered property a natural right, ordained by a heavenly will. " Labor, progress, civilization have no other principle; the universal public law is nothing but the recognition of property right." 2 He considered social life a necessity to the human race, and property right and inequality of fortunes he believed to be things without which social life could not exist. 3 He embodied in his Christian political economy one important principle, namely, " to respect the inequalities indispensable to the maintenance of the social order." 4 Here again he utilized theological justification by quoting St. Paul : " But by an equality, that now at this time your abundance may be a supply for their want, that their abundance also may be a supply for your want : that there may be equality." 5 T o the Utopian Socialists of his time Villeneuve-Bargemont made his stand very 1

Histoire

2

Économie

de l'économie Politique

politique,

Chrétienne,

3

Ibid.,

4

Ibid., p. 1 3 1 .

5

I I Corinthians, ch. viii, v. 14.

p. 1 1 9 .

vol. ii, p. 278. vol. i, p. 406.

i44

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DE

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AN

ECONOMIST

clear by saying that " it would be a vain attempt to procure for every member of society the same amount of comfort or enjoyment. Inequality is one of the supreme laws of moral and physical order. . . . " 1 He called Saint Simon an eccentric philosopher whose disciples seemed charged with the mission " to propagate on earth all principles subversive of the social order. 2 Regarding the question of property rights and the inequality of fortune, the difference in attitude between Sismondi and Villeneuve-Bargemont deserves our attention. The former reasoned purely from an unbiased, scholarly position, while the latter was not free from personal sentiment. The birth and condition of the Catholic author warped his writings. Villeneuve-Bargemont, an uncompromising legitimist, described the French Revolution as " the shameful yoke imposed by a multitude of vile and sanguinary tyrants only to suffer the despotism of a crowned soldier." 3 It was natural that Villeneuve-Bargemont should attack the school founded by A d a m Smith, for he was very hostile to the philosophical ideas of the eighteenth century, which had in many respects inspired the Scotch master. In praising Chateaubriand for his revelation of the ineffable treasures contained in his Le Genie du Christianisme, VilleneuveBargemont remarked that he had made accessible " the taste of a thousand pure delights to imaginations soiled and dried up before that time by the literature of the eighteenth century." 4 In the matter of reform measures, Villeneuve-Bargemont 1

Économie

Politique

Chrétienne,

p. 271.

Ibid., vol. i, p. 226. ( W h e n this attitude toward property rights is thus made clear, the idea of classing him as a socialist, as many French writers did, is manifestly absurd.) 2

3

Histoire

4

Ibid., vol. ii, p. 270.

de l'économie

politique,

vol. ii, p. 293.

SISMONDI'S

FOLLOWERS

145

followed for the most part the trail blazed by Sismondi. In many respects the measures advocated by the former seem to have surpassed Sismondi's in practicality, having the advantage of being formulated by an experienced administrator. In view of the appalling pauperism caused by the industrial régime, Villeneuve-Bargemont believed the natural consequence of such a state of affairs would be " either a violent uprising of the proletarian and suffering classes against the holders of property and of industry, that is to say, a return to a state of barbarism, or the practical and general application of the principles of justice, morality, humanity and charity." 1 T o effect the latter result, Villeneuve-Bargemont, like Sismondi, had recourse to legislative intervention, making it a moral duty for the state. " T h e governments instituted to assure the happiness and peace of the people will betray their posts if they fail to ward off all the elements of misfortune and disorder which exist within the nation." 2 Villeneuve-Bargemont was here proposing " organized charity." He also, in addition to advocating labor laws more or less similar to those suggested by Sismondi, advanced the following suggestions for bettering the condition of the working classes : ( a ) Regulation of moral, religious and industrial education, which should be given gratuitously and made compulsory, at the expense of the community; (b) establishment of savings banks; and ( c ) establishment of workmen's associations. T h e last institution is markedly different from anything advocated by Sismondi, who thought the efforts of labor unions would be futile. In this respect especially, Villeneuve-Bargemont was the early precursor of the social Catholic movement in France, which had as one of its most important aims the représentation professionnelle, the organization of a special parliament composed of representatives of economic groups. 1

Économie Politique Chrétienne, vol. i, p. 25.

2

Ibid., vol. ii, p. 155.

i 4

6

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

In still another respect Villeneuve-Bargemont's views diverged from Sismondi's. While the latter deplored indirect taxation, the former advocated a tariff, believing that it would serve to improve production and guarantee home consumption. " Far from deploring the existence of customs duties and regarding them all as more or less fatal, in the present state of the different countries of Europe, I believe they should be considered advantageous as well as necessary." 1 This tone is similar to that of his German contemporary, Frederick List, who published his System of National Economy in 1841. Though consistent, from the viewpoint of a national economist, this attitude seems to us rather paradoxical in a Catholic writer. Throughout his work, Villeneuve-Bargemont attempted to substantiate his theories by biblical quotations, with the result that his works sound more like a sermon than an economic treatise. Only in his arguments advocating a high tariff was our Catholic economist unable to justify his attitude on the basis of Christian principles set forth in Bible texts. In this respect, at least, we think our Protestant economist, the Genevese writer, was perhaps more " catholic " than the author of the Christian Political Economy. A rapid review of Villeneuve-Bargemont's doctrines makes it evident that in writing he was profoundly influenced by Sismondi. More important than the influence of the Genevese economist, however, was the introduction of Christianity as a basic principle on which to build the science of political economy, and as a medium through which reform of industrial evils was to be sought. Perhaps it is not too much tc claim that Villeneuve paved the way for the famous Encyclical Rerum Novarum which Pope Leo X I I I issued in 1891, in an effort to solve the problem of labor and capital by the application of Christian principles. It is clear that 1

Economie Politique Chrétienne, vol. i, p. 455.

SISMONDI'S

FOLLOWERS

147

Villeneuve-Bargemont was the precursor of the later Liberal Action Party in France (Action Liberale) under the leadership of Count de Mun and other notables of the Catholic faith. B. JOSEPH DROZ

Francois Xavier Joseph Droz was born at Besançon on the 31st of October, 1773, the same year that Sismondi was born. His family expected him to occupy a seat in the Parlement de Franche-Comté, but the French Revolution put an end to hope of such a career. Being an enlightened scholar, however, he was enthusiastic in the cause of the Revolution, in spite of the fact that it had damaged his personal interests. For four years he served in the glorious A r m y of the Rhine as captain of a volunteer corps, and participated in the siege of Mayence. A f t e r these years of distinguished service he was appointed professor of rhetoric in the école centrale of Besançon. Later, he established himself in Paris and decided upon the career of publicist. In 1806 he published l'Essai sur l'art d'être heureux (Essay on the art of being happy). In 1834, after the publication of his Sur la Philosophie Morale, he was admitted to the Académie Française. Nine years later, the publication of his Traité sur l'économie politique won his election to membership in the Académie des sciences morales et politiques. He later devoted a great deal of time to writing the Histoire du règne de Louis XIV pendant les années ou l'on pouvait prévoir et diriger la Révolution Française. In his declining years, being a sincere liberal, but with definite spiritual convictions, he explained these views in his last two works : les Pensées sur le christianisme et les Aveux d'un philosophe chrétien. Droz died in Paris on November 9th, 1850. A s a publicist and historian, his career was remarkably like Sismondi's. His works all revealed noble sentiments strikingly similar to those of the Genevese writer. The eco-

148

SIMON DE DE S1SM0NDI

AS AN

ECONOMIST

nomic work of Droz, although greatly influenced by Sismondi's doctrines, bore some traces of the orthodox school. For this reason Professor Aftalion considered that Droz still belonged to the classical school.1 When we read his Économie politique carefully, however, we find that, on the whole, Droz's stand seems to have been much nearer to that of the dissident economist than to that of the reigning orthodoxy. It is true that in the field of production, Droz stood for the classical formula, laissez-faire. He believed that laws should never regulate the division of labor, 2 and regarded competition as the only way to insure progress and cheapness of products. " In countries where competition is forbidden, intelligence and activity are condemned for the profit of ignorance and idleness." 3 In accordance with this view, Droz naturally was much opposed to the old corporations, the disappearance of which Sismondi seemed to deplore. Droz, in support of his views on this subject, cited historical evidence to show the disadvantages of corporations. It would be a mistake, however, to conclude from the above quotations that Droz was diametrically opposed to Sismondi. But under Droz's pen the classical formula laissez-faire assumes an entirely different aspect. H e gives the impression that his laissez-faire is to be put into practice only when it is for the social good, and then under the constant surveillance of the state. Speaking of the social disadvantages of the concentration of capital, Droz thought the true laissez-faire ought to take steps to restrict such combinations. " What should be said to the big capitalists: the same thing that the economists under Louis X V used to tell the chiefs of corporations: ' Do not handicap the people less 1

Aftalion, L'oeuvre

2

Économie Politique, p. 40.

3

Ibid., p. 87.

économique de Simonde

de Sismondi,

p. 235.

SISMONDI'S

FOLLOWERS

149

rich than yourselves in earning their living; laisse2-faire, laissez-passer !" Thus, we see that laisses-faire as used by Droz differs from the classical tradition. Furthermore, he made his stand still clearer by saying that " the economist would deceive himself in taking liberty as an end; it is a means, the end is social welfare. I f , then, liberty endangers in some points public morale or safety, we should subject it to restriction." 1 Droz did not consider it a contradiction of the principle of laisses-faire for the legislator to seek the establishment of child-labor laws, for " the life and health of children are not trading objects." The limitation of Droz's laisses-faire is further seen in his insistence that questions involving liberty or human rights are not mercantile questions. Any business, such as the slavery system, which exploits human blood, should be suppressed. Advocacy of the claims of private interests in this case is no more justified than would be the claim of the right by " bandits to be exonerated by proving that their crimes are lucrative." 2 Droz's laisses-faire is so limited that it appears to us almost equivalent to Sismondi's government interference. In criticizing the social régime, Droz was still nearer to Sismondi. He also remarked that the scale of wages prevailing at that time was far below what one could call their real value, and that " profits resulting from low wages and high selling prices were atrocious." 3 In discussing distribution, he also emphasized the importance of fair distribution: " I f the distribution is so vicious that some have almost everything, and others have almost nothing, the former have no more incentive to encourage industry than the latter have the ability to do so. Everything is languishing." 4 1

Économie Politique, p. 110. Ibid., p. 62. 3 Ibid., p. 240. 4 Ibid., p. 59. 2

15o

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

Droz, like Sismondi, severely attacked certain economists for paying too much attention to the means, which is wealth, and forgetting the end, which is happiness. " In reading certain economists we would believe that products are not made for men, but that men are made for products." 1 T o Droz, the distribution of wealth should be the primary interest of the economists. " T h e happiness of a state depends less on the quantity of the products she possesses than upon the manner in which the products are distributed." 2 W h e n most of the writing on political economy directs the attention of the reader too persistently to the production of wealth, it would seem that one should produce uniquely for productions' sake. 3 This sentiment is quite obviously couched in Sismondi's style. Droz's conception of political economy is likewise much the same as that of the Genevese writer : " Political economy is a science whose aim is to render the comforts of life as general as possible. 4 Like Sismondi, Droz emphasized the importance of making political economy a moral science, since physical comforts are so closely related to moral needs. O f the amoral economists, Droz made the following criticism. " It is painful to hear words such as these : ' The principles of political economy belong to an order of ideas other than moral precepts. I do not know any assertion more false, more calculated to mislead the mind, to deprive of mutual support the two sciences so closely united by needs and by humanity '." 5 Droz felt that economic science should always be concerned with the promotion of public welfare. 1

Économie

Politique,

» Ibid., p. 58. » Ibid., p. 57. 4

Ibid., p. 1.

B

Ibid., p. 310.

p. 59.

SISMONDI'S

FOLLOWERS

In studying the science of wealth, the most essential point is never to lose sight of its relation to the improvement and happiness of mankind. " The study of political economy can harden the feeling of the narrow-minded, make them see nothing on earth but merchandise, sales and profits ; but this study will always be, to the broad-minded, a source of noble meditation on the means of improving the lot of men, and on the favors of the eternal Author of all things." 1 Hence the importance of such a science can never be overemphasized, since the wealth it teaches how to distribute will " mitigate suffering, remove the causes of crime and vice usually generated by poverty." 2 This sounds, perhaps, too optimistic. Droz would make political economy the study of a social panacea. He did not mention his preferred methodology in his Économie Politique. H e seems, however, to have adopted Sismondi's method, judging from his criticism of the abstract theories of Godwin. " W h a t is the use of these hypotheses ? . . . They have not even a shadow of utility, if he [Godwin] undertakes to know what happens on earth." 3 This tone, coupled with his historical attitude, is proof that Droz, too, was an opponent of abstract theories. H e did not, on the other hand, share at all Sismondi's pessimism about machinery. H e regarded it as a beneficial invention, which not only multiplied products and lowered prices, but also saved the strength and lives of many workers, who otherwise would have had to risk themselves in unhealthful or dangerous work. He thought that machinery even elevated the laborers' moral standard, because they were less fatigued by their work, and consequently less subject to the temptations of liquor and other vices. He thought, however, that dangerous machinery should be handled only by 1

Économie Politique,

2

Ibid., p. 13.

3

Ibid., p. 285.

p. 36.

X52

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

trained experts, and that, in addition, a council of scientists should decide upon the regulations under which such machinery should be permitted to be operated in factories. 1 Droz was, in fact, a hearty champion of machinery. He naturally thought of machine production as a desirable thing, for he believed that the comforts of life become available to the greatest number only through cheapness of products. A t the same time he was not unaware of the harm of overproduction, but he thought that " if the overproduction of merchandise does not surpass certain limits, it works less harm than a too limited manufacture." 2 Coming to the theory of crises, Droz again very largely adopted Sismondi's view, and seems to have agreed fully with the idea of the latter that the " effective demand " is strictly limited. "The wants of mankind are always numerous, . . . but the wants of the market are reduced to those of people who are in a position to pay for what is offered to them." 3 Droz attributed crises to the misunderstanding of the wants of the market and to the multiplication of false speculations prompted by cupidity. Here he thought that government intervention was absolutely essential,4 and believed that consuls should speedily transmit the information necessary to remedy this shortcoming. Apparently, Droz, too, considered the education of the public an effective remedy for crises.5 A s to the population problem, Droz was in full agreement with Sismondi. He especially emphasized the fact that " between existence and death, there is an intermediary stage which is suffering. A n increase of population can, there1

Économie Politique, pp. 275, 276, 277.

2

Ibid., p. 89.

3

Ibid., p. 148.

4

Ibid., p. 150.

6

Ibid., p. 288.

SISMONDI'S

FOLLOWERS

153

fore, take place without an equal increase of the means of existence . . . it offers an increase of misery, of pain, and doubtless also of vice and crime." 1 He believed that " marriage should be a reward of labor and economy." This would seem to imply that people without incomes should refrain from getting married, but he did not believe in the prohibition of marriages between paupers, thinking that such prohibition would take away the inherent right of existence itself. His solution of the population problem shows an interesting similarity to Villeneuve-Bargemont's contribution. Improve education, so that the sentiment of human dignity penetrates into the soul; so that, under the happy influence of religion, morals and peace, the condition of society may become prosperous enough to let the laborer participate in the comforts of life, and he will not wish to get married before being assured of the fact that his children will have the same advantages.2 Concerning the tariff question, Droz again swung back to the principle of laissez-faire. " To increase the wealth of a country, it is necessary to develop the intelligence and activity of her inhabitants. Customs duties are conducive to laziness and ignorance." 3 Sismondi and Droz both viewed the tariff policy with disfavor, but from two entirely different angles : the former for its regressive nature, while the latter saw it as a handicap to free competition. As to private property, Droz had substantially the same conception as Sismondi. He, also, believed that ownership of land exercises a beneficial influence upon mankind. Since it is impossible to make an equal division of land, and since it would be impossible to maintain it, even if such an equal division could be effected, it is inevitable that land should either 1

Économie Politique, p. 280. Ibid., p. 291. 5 Ibid., p. 174. 2

154

SIMONDE

DE SISM0ND1

AS AN

ECONOMIST

have no owner or else should be divided among a number of proprietors. Droz believed that the first alternative would be injurious to all, while the second, he thought, best served the interests of all. 1 Justifying the existence of property by the same theory of benefits, Droz denounced communism with vigor. " In our day, various systems are imagined to create universal happiness. A m o n g the number, there are some deplorable ones. The communists are showing themselves to be a menace in some places in Europe. . . . I do not fear that the systems subversive of property will ever have results of any duration, but they may cause troubles and massacres." 2 Droz differed from Sismondi in that he did not believe in the efficacy of an increase of money wages, one of the measures suggested for the relief of misery due to poverty. He believed, as we have noted before, that the general comfort of the greatest number is to be obtained from cheapness of products. Increased wages mean an increase in the cost of production, which, in turn, will be reflected in a higher price level. Moreover, he believed that the misery of the working classes should be attributed not so much to meagre wages as to the bad habits of the laborers, who usually squandered their incomes. T o improve the social machinery, he suggested the three following methods: ( a ) Industrial chiefs should take a serious interest in educating their workers in foresight and behavior; (b) for the arbitration of any conflict between selfish employers and hard-pressed employees, a conseil de prud'hommes should be organized to conciliate the two parties, the decision to be accompanied by publicity. This idea seems to have been the beginning of the modern idea of arbitration in labor disputes. Droz was very much opposed to the weapons used by the trades unions, believing 1

Économie Politique, p. 64.

2

Ibid., p. 246.

SISMONDI'S

FOLLOWERS

155

that " strikes " aggravate the troubles of the laboring classes, ( c ) Well-behaved workers should be rewarded with bonuses in proportion to their economy and skill in the factory. 1 Here Droz deserves the honor of being acclaimed as a forerunner of Mr. Henry Ford. F r o m the foregoing brief review of Droz's theories, we may conclude that Droz, in spite of his difference with Sismondi on some points, was largely an economist of the Sismondian School. Personally, he showed a high regard for Sismondi, and remarked that "Geneva owes a statue to this great citizen." 2 Droz's consideration for "the great citizen" of Geneva is further shown by the fact that whenever he encountered a discordant view he either avoided mentioning Sismondi's name or put his disagreement in mild language. 3 C. EUGENE BURET

Eugène Buret, who was born at Troyes in the year 1810, early gave evidence of literary ability. While still of tender years, his literary ambition prompted him to go to Paris, in the hope of developing there his chosen career. He was first connected with the Courrier français, and for some time enjoyed recognition as an excellent literary critic. H e very soon turned his attention to social and economic questions, and contributed a series of articles on political economy to the Courrier français. In 1840 the Académie des sciences morales et politiques announced an essay contest on the question of " pauperism and its remedies." Buret participated in the contest and won the first prize. W i t h the funds thus 1 Économie pp. 236-268. 2

Politique,

livre iii, ch. iv, " Des profits et des Salaires,"

Ibid., p. 144, footnote.

In one instance, for example, D r o z attributed the prohibition of marriage between paupers to Steuart in preference to quoting f r o m Nouveaux Principes, the more recent French work. Économie Politique, p. 289. Ibid., p. 6. 3

Í56

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

received, a reward of 2500 francs, he immediately proceeded to study conditions in England and published, as the result of his investigation, the admirable book De la misére des classes laborieuses ( T h e misery of the working classes). Upon the completion of this hard task, Buret's health broke down, and he was advised by physicians to go to Algiers, where the warm climate might ensure his recuperation. O n arriving there, instead of taking the necessary rest, he ardently plunged into a fresh undertaking—plans for reorganizing the French colony—and wrote a book on the French possessions in A f r i c a . The enthusiasm of this young economist caused his premature death, which occurred in 1842, at Saint-Leu Taverny. The author of De la misére des classes laborieuses may, in many respects, be called a direct disciple of Sismondi. T h i s is especially true of his criticism of the classical school. Buret blamed the classical economists for making a mathematical science out of a social science, and charged them with having separated things which should be united. 1 H e believed that the science of wealth should not be singled out from the complexity of social phenomena and be made into an abstract study. " I t is much more difficult to separate the various branches of social science than those of physical science: the tree of social knowledge cannot be mutilated without danger." 2 Buret was of the opinion that the followers of A d a m Smith, by making political economy an abstract science, had made all of its social tendencies disappear from sight. In the mind of the classical economists " nations are nothing but workshops for production; man a machine to consume and to produce; and human life, capital — everything is weighed or calculated and economic laws govern the world 1

De la misére des classes laborieuses, vol. i, p. 15.

1

Ibid., p. 11.

SISMONDI'S

FOLLOWERS

157

fatalistically." 1 Buret further reproached the English economists for having neglected to show what constitutes a just distribution of wealth. " Political economy has dealt elaborately with the distribution of wealth; but after having consulted the principal books and systems produced, we do not know what shares are returned to the different agents of production, and still less do we know about the social justice which secures these shares for them." 2 Following Sismondi, Buret made the keenest and most penetrating criticism of the laisses-faire doctrine. He regarded liberty as a right, and one of the most precious rights of man, even though it has unquestionably been abused. Since all rights are limited by duties, he saw no reason to exempt this one. " What was called oppression, social injustice, was the excess of liberty of some one at the expense of society, the abuse of laisses-faire." 3 Only because of the unfair degree of liberty enjoyed by the masters has it been possible to introduce and maintain slavery in the world. Buret did not believe that any substantial difference existed between the application of laisses-faire in politics and its application in economic fields. "Absolute laisses-faire is not worth any more in the industrial régime than in the political régime; its real name is anarchism." 4 Such a doctrine is especially dangerous under the modern industrial régime. Buret believed that the classical economists invented the theory by which men and things should be left, as in ancient society, absolutely alone. The equilibrium of all interests, which he believed would result, would, he felt, contribute to social harmony. Thus the science of wealth only serves to furnish the knowledge of the cause, the only difference be1

De la miscre des classes laborieuses, vol. i, p. 6.

2

Ibid., vol. ii, p. 175.

3Ibid., 4

vol. i, p. 21.

Ibid., vol. i, p. 17.

SIMONDE

DE SISMONDI

AS AN

ECONOMIST

tween modern and primitive society. Here, Buret, interestingly, perhaps also justly, remarked that " science here resembles somewhat the language professor in Molière's Bourgeois Gentilhomme—it theorizes about what everyone, left to himself, does wonderfully by himself; and it teaches him that what he has done so well without suspecting it, is in fact science. F o r about twenty-five years, industry is thus making prose without knowing it." 1 In accordance with this doctrine, the industrial régime is called by Buret the " Medieval A g e of industry." 2 Production, under the encouraging influence of the laissez-faire principles, has more the appearance of an impatient conquest than of a peaceful enterprise. Industry has become a war and commerce a gamble. " Uncertainty of existence is the first feature of resemblance to the poor lot of the savage. F o r the proletariat in industry, as for the savage, life is at the mercy of the chances in a lottery, of the caprices of accident." 3 Though Buret blamed the classical economists for their laisses-faire doctrine, he was far from sharing the attitude of Villeneuve-Bargemont in incriminating the orthodox school. The economists he believed no more responsible for the existence of industrial anarchy than are the historians for the cause of the wars which they relate. 4 " It is far from our opinion that political economy should be held responsible for the miserable condition of men . . . it is not economic science that has made industrial society; it merely attempts to explain the latter. Its mistake has been in regarding as regular and necessary phenomena circumstances which were fortunately transitional; and in mistaking the 1

De la misère des classes laborieuses, vol. i, p. 63.

2

Ibid., p. 22.

3

Ibid., vol. ii, p. 2.

* Ibid., vol. ii, p. 124.

SISMONDI'S

FOLLOWERS

159

confusion which precedes order for the permanent condition of life." 1 Buret not only regarded labor as salable merchandise as conceived by the orthodox school, but he also believed it to be the duty and the right of man to live by the sweat of his brow. 2 Labor he felt to be life itself. He considered the English school too ready to discuss nations without evincing any interest in the peoples who compose these nations, and in the lot of the working classes. Buret regarded as essential study of the influence of production and distribution on the physical and moral condition of the great numbers which comprise a nation. " It is the duty of true social science not only to study wealth but also to study poverty." 3 His book, De la misère des classes laborieuses, by a systematic study of poverty, aims to serve as a counterpoise of English political economy, to supplement and verify the science of wealth by the science of poverty. " In our opinion, the best way is to complete political economy by the study of the phenomena of the poverty-stricken, who are the most legitimate critics of the phenomena of wealth." 4 Buret purposely limited his work to a critical study of economic doctrines as announced by the classical school. " Our book throughout its length will be nothing but a criticism, or, if one pleases, a verification of political economy by facts." 5 He acknowledged Sismondi to be the leader of this critical school. " It is a writer half Italian and half French who is its most intelligent advocate and its hero : we have named Mr. Sismondi." 6 De la misère des classes laborieuses, vol. i, p. 46. s

Ibid., vol. i, p. 49.

' Ibid., vol. i, p. 41. 4

Ibid., vol. i, p. 54.

5

Ibid., vol. i, p. 37.

6

Ibid., vol. i, p. 34.

!6O

SIMON DE DE SISMONDI

AS AN

ECONOMIST

In discussion of the problem of poverty, Buret's penetrating intelligence seems to have far surpassed VilleneuveEargemont's, perhaps even Sismondi's. The Catholic writer complained, as if poverty had been actually created by the industrial régime, and in many instances he advocated a moderation of wants. Buret pointed out that such an idea is unsound. Poverty is only relative; its existence is peculiarly a phenomenon of civilization. In the primitive stage of civilization, there was no poverty, because everybody was poor. It was the multiplication of wants which brought forth the consciousness of poverty. Thus the emergence of poverty is essentially an indication of progress. " Fortunately, civilization and industrial progress are not the direct cause of poverty, they only set off, by the effect of contrast, this deplorable phenomenon." 1 However, though poverty may mark progress in civilization, it is none the less dangerous. Formerly, when people had no bread, no clothing, no fire, they suffered in silence ; now, when wealth and poverty exist side by side, poverty becomes a menace. Especially will their unresisting acquiescence at once forsake the poor if they believe that they can attribute their privations to one class of individuals, or to the government. And the spark is ready to explode the social order. Buret, however, was very optimistic, believing it to be within the range of human power to relieve this disastrous situation. " We have, in our hands, peace or war in the future. It depends upon us whether we plant for the future generations, tranquillity or tempest." 2 Buret's criticism of the industrial régime is much like Sismondi's contribution, which we shall not repeat here. He was, further, alarmed by the multiplication he noticed in the class of middlemen, the wholesale and retail dealers. The 1

De la misère des classes laborieuses, vol. i, p. 119.

2

Ibid., vol. i, p. 58.

SISMONDI'S

FOLLOWERS

161

keen competition of the small dealers, he observed, did not benefit the consumer, and often led to fraud and deception at the expense of society. He was especially worried over the increasing number of middlemen in France, when he could count in the industrial cities one store to three or four families. 1 " Commerce, which is, in principle, a necessary form of production, and indispensable to society, is scarcely anything but a parasitical function, doubly disastrous to the community because of the large number of superfluous agents it employs, and the direct harm these agents bring." 2 For a remedy, Buret approved of " cooperative societies." 3 The task of remedying industrial evils, of bettering the condition of the indigent classes, Buret, like Sismondi, believed should be entrusted to the state. T o harmonize individual interests with the general interest of society " it is necessary that a firm as well as intelligent hand should hold the balance." 4 This " hand ", Buret insists, must belong to the legislative body, who are to know how to save the people. Moreover, it would not be a difficult task for the government to take up this rôle. " Nothing is more simple in theory than the task of the government in the reforms demanded by our economic régime; it confines itself to directing the control which it exercises over national economy by law and taxation, to the services of the principles of justice and equality." 5 Thus in law and taxation, Buret saw two efficient instruments which the state could well afford to use for the correction of social evils. T o meet the situation created by the concentration of fortunes, he boldly filled in the gap left by Sismondi in his doctrines or recommendations for 1

De la misère des classes laborieuses,

2

Ibid., vol. ii, p. 438.

3

Ibid., vol. ii, p. 219.

4

Ibid., vol. i, p. 17.

5

Ibid., vol. ii, p. 344.

vol. ii, p. 216.

J62

SIM ON DE

DE

SISMONDI

AS

AN

ECONOMIST

relief. Buret fully justified and demonstrated the feasibility of a heavy inheritance tax and a progressive income tax. T h e inheritance tax he considered a most equitable l a w : a man arriving at the end of his existence, with death depriving him of the ownership of his property, can well afford to pay the debt that he has morally contracted with the social body. It is most convenient to discharge this obligation to the fellow-members of his community at a time when he can pay without its costing him anything. 1 O f course, the inheritance tax should be progressive, with exemptions on small patrimonies. Buret, unlike Sismondi, did not see any insurmountable difficulty in the way of a progressive income tax. H e believed that the books of every business organization could serve as an accurate basis for taxation. It would be difficult to evade payment by forgery, if the declaration were to be made an act of public good faith, with confiscation of any fraudulently reported value. By such progressive taxation, Buret believed, of course, that any accumulation beyond a certain limit would be made difficult, and that was exactly what he desired. " Should not all good citizens desire that the necessities of life be more easily obtained than are these exaggerated fortunes, which drive their possessors to an extravagance, often more disastrous to the morality than to the economy of the nation?" 2 Buret also believed that the government ought to establish labor insurance and savings banks. He observed that the most productive industrial properties were becoming more and more collective properties, hence eminently social in character. He thought that the government should take steps to encourage this new development, so that the property of industrial enterprises might be distributed among a large 1

De

2

Ibid.,

la misère

des classes

v o l . ii, p. 403.

laborieuses,

vol. ii, p. 405.

SISMONDI'S

FOLLOWERS

163

number of people. 1 He seems to have grasped completely the modern tendency of industrial evolution, corporation shares, profit-sharing plans, etc. The foresight of this young economist was remarkable. In another way Buret improved upon the doctrine of Sismondi, who believed that extremely small divisions of land might lead to quite undesirable effects, small farmers being too poor to undertake improvements to increase the productivity of the land. A s a solution of this problem, Buret proposed cooperative cultivation, a uniting of all the neighboring proprietor farmers for the purpose of tilling the land in common. 2 In industrial crises, Buret was fully aware of the importance of the under-consumption theory. " In order that production may be safe and assured, it is necessary that an active and assured consumption should always demand its products." 3 T o insure this result, he suggested that an industrial council, Grand conseil de l'industrie, composed of representatives of all trade unions, should be organized with the duty of supervising and regulating the relations with foreign countries in regard to production and consumption. The efficacy of such a council is, however, doubtful, since its function would seem to be limited to regulating the relation between exports and imports. It is interesting to note that Buret, too, was an opponent of the tariff policy. His argument seems to have been based entirely on the law of comparative cost. The natural, fruitful industries do not need protection; any protection may induce retaliation from foreign countries against these fitful industries, from which many workers earn a decent living. Buret also remarked that the industries for which forcible 1

De la misère des classes laborieuses,

2

Ibid., vol. i, p. 240.

3

Ibid.,

vol. ii, p. 416.

vol. il, p. 363.

164

SI MONDE

DE SISMONDI

AS AN

ECONOMIST

monopoly of the national market was sought were precisely those which produced industrial miseries. 1 H e concluded that to protect such industries was to protect vice and misery in the nation. Many French writers identify Buret as a socialist in view of his advocacy of cooperative consumption, associate cultivation, progressive income and inheritance taxes. Buret had, it is true, many socialistic tendencies. His work De la misère des classes laborieuses has justly been called an " arsenal, whence many later socialist writers of different schools have taken their weapons." 2 Louis Blanc, Pierre Leroux and many others have frequently quoted him. But he himself does not seem to have been a partisan of any Utopian socialism of his time. T h e difference between his viewpoint and that of the later Marxian socialists is even more marked. It is true that Buret advocated state intervention under some circumstances. In his opinion, " It is the necessity of guaranteeing the right to existence against the exaggeration of the property right, that justifies the intervention of the social power to limit it." 3 Buret, however, deemed the recognition of property rights to be in the interest of all. Buret was, moreover, like Sismondi, ever zealous in defense of the security of private capital. " W e do not wish that capital shall make peace by forcing labor into servitude ; but neither do we wish capital to lose in the least any of its security or guarantees." 4 F a r from being an advocate of an equal distribution of wealth, Buret thought such equality would be only a universal poverty. Buret was essentially an evolutionist, a reformer. The 1

De la misère des classes laborieuses, vol. ii, p. 422.

2

Michel, Henry, L'Idée de l'État, p. 267.

2

De la misère des classes laborieuses, vol. ii, p. 348.

4

Ibid., vol. i, p. 84.

SISMONDI'S

FOLLOWERS

165

dream of achieving any new social order by a sudden stroke seemed to him both an injustice and a folly. " The only means of suddenly transporting the poor . . . from extreme misery to the comforts of life would be to rob those who have more to bestow their possessions upon than to those who have less, but . . . this is neither possible nor equitable, for it would mean establishing universal poverty." 1 A brief review of the book, De la misere des classes laborieuses, shows that Buret not only defended Sismondi's doctrines zealously, but also improved in many respects the work of the Genevese writer. His keen intelligence as a social critic, at least equals, if it does not indeed surpass, that of the author of the Nouveanx Principes d'economie politique. If Buret had not died a young man, in his early thirties, we surely would have seen in him one of the greatest economists of the last century. 1

De la misere des classes laborieuses, vol. i, p. 90.

CONCLUSION A F T E R a study of the salient features of Sismondi's doctrines and a brief review of the economic works of the " pléiade " of writers whose works show the effect of his inspiration, let us sum up the essential points of these doctrines in an attempt to get a comprehensive view of the life and works of the great Genevese economist.

In Sismondi we see a most subtle critic. He was the first economist to break away from the classical dominance as conceived by the classical school. H e criticized the amoral nature of the science of political economy, its abstract method, the dangers of the laissez-faire doctrine, and the necessary conflict of private interest with public interest. Sismondi first endeavored to redress the social evils of the industrial régime by advocating a better distribution, a reform which had been overlooked by the classical economists, or at least conceived of by them as a natural process to which it was unnecessary or useless to give their attention. Sismondi was the first writer of importance to observe the regular vicissitudes of economic fortune, attributing them to under-consumption resulting from low wages. It was he who first called attention to the inequality existing among the social classes, the separation of capital and labor, the dangers of free competition and of the concentration of wealth, and the misery and insecurity of the proletarian class. Despite his brilliant contribution, Sismondi was, of course, not free from faults and inconsistencies. H e seems greatly to have overrated the advantages of the old mercantile régime. In lamenting the shortcomings of the industrial system, he nearly gave the impression of being a retrogres166

CONCLUSION

167

sive economist, who wished to set the clock back. The dangers of the industrial system, as conceived by him, were overdrawn and the increase of consumption as a result of the productivity of machinery correspondingly underrated. There are also some inconsistencies noticeable in his writings. Attacking vigorously the abstractness of the economic theories of his day, Sismondi himself, as we have noted before, developed a very abstract theory of social income, a theory which it would be rather difficult to defend. This vague theory of Sismondi's led him into a trap and made him rather timid in suggesting reforms. It was probably because of this vague theory of social income, that Sismondi feared that this metaphysical income might be infringed, thus further aggravating the lot of the working classes. Largely for this reason he found it difficult to believe in the productivity of the income tax and the efficiency of labor-unions, both of which appeared to be the logical corollaries of his economic doctrines. Many of these inconsistencies were due to the fact that Sismondi was also a victim of his time. Even the greatest talent, we believe, is only a Zeitgeist. Sismondi was affected by the deplorable circumstances of the industrial régime on the one hand and the classical influence on the other. There was a struggle between his keen observation and the habitual mental attitude acquired through familiarity with the old doctrines. Though he succeeded, because of his penetrating intelligence, in breaking away from many of the old traditions, yet his mind still bore some traces of the classical stamp, conspicuously in regard to the wage-fund theory, as we have noted before. Karl Marx, apparently not satisfied with the reformative measures suggested by Sismondi, called him the leader of the Petty Bourgeois socialism. 1 We think, however, that 1

Marx, K., Communist

Manifesto,

p. 51, Chicago, Cooperative edition.

:68

SIMONDE DE S1SM0NDI AS AN ECONOMIST

Sismondi is deserving of admiration for his proposals for reform. H e was one of the first to advocate state intervention to check the ills resulting f r o m the industrial revolution. A s a precursor of modern labor legislation, his standing is secure. H e did not support the Utopian socialistic schemes t h a t offered a panacea f o r all social evils. I n him we find the sanity of a great writer who dealt with facts and always approached a problem f r o m the historical, evolutionary angle. T h e remedies for existing social evils offered by Sismondi proved remarkably successful. State intervention in the f o r m of labor laws has made the lot of the industrial worker of today immeasurably happier than it was in the beginning of the last century. It seems to us that the classical economists, in stressing production, self-interest, laissez-faire, etc., tended to sacrifice the end to the means, emphasizing liberty at the expense of equity. Going to the other extreme, the socialistic writers, in insisting upon a program of equal distribution, seem to have reversed the classical mistake by sacrificing all practical means to an unattainable end. T h e first set of principles seems to be socially disastrous when applied without check; the second set, could it be put into practice, would be equally destructive of the happiness of mankind. Sismondi, it seems clear, occupied an intermediate position between these two extremes and his work consequently did not receive much popular recognition during his lifetime. But it is interesting to note that the leaders of economic thought of the present day are to be f o u n d on the very " fence " on which Sismondi sat so uncomfortably. T h e absolute laissez-faire of the classical school has been gradually but steadily rejected, yet the promise of a Utopian socialistic regime is still a beautiful and indefinite dream. By the consensus of opinion among economists, high tribute may now be paid to the Genevese writer, who once found himself between the devil and the deep sea.

169

CONCLUSION

Of course, an economist living a century ago could not have been expected to grasp fully the complexity of the modern régime in its constantly developing form. Sismondi's proposed reforms were sound in principle, yet they in some respects failed to reach the depths of the social difficulties. Sismondi believed that by raising the standard of wages, industrial crises would be largely relieved, because the effective demand would be augmented sufficiently to absorb the current output. H e therefore suggested a high standard of wages, profit-sharing plans, etc. Can business cycles be actually controlled by raising wages to a level high enough to absorb the total production? The under-consumption theory of crises, as developed by Messrs. Foster and Catchings, shows that even people with large incomes may still strive to restrict consumption and return their receipts to the channel of production. 1 Profitsharing plans would merely secure the workers' participation in the struggle of producing more and spending less. T h e evil resulting f r o m the concentration of fortunes might be redressed by Sismondi's suggestion, yet as a satisfactory solution for the crises of over-production, the efficacy of such a remedy is logically doubtful. It is interesting, in the light of later developments, to recall another of Sismondi's proposals, namely, his suggestion that public opinion be enlightened. This suggestion has since been put into practice in nearly all the highly industrialized countries. Numerous reports issued by the governments and the services of various bureaus have been most effective in reducing the violence of business oscillations. There is good reason to believe that this device, foreseen by Sismondi, can be further improved, and made more effective in the future. Although the Nouveaux principes d'économie politique failed to receive immediate recognition, the author certainly 1

Foster and Catchings, Profits,

1925,

passim.

170

SIMON DE DE SISMONDI

AS AN

ECONOMIST

exercised a very considerable influence on the later development of economic science. In addition to his influence in France, as illustrated by the three representative types cited in the fifth chapter, Sismondi's work has received recognition in other countries as well. In England, where a partial translation of his fragmentary work on political economy was made by an anonymous writer in 1847, he seems to have been widely read. John S. Mill, in his more advanced years, modified his former classical allegiance by saying that " unlike the laws of Production, those of Distribution are partly of human institution: since the manner in which wealth is distributed in any given society depends on the status or usages therein obtaining." 1 It was possibly this statement that led Professor Denis to attribute Mill's change of attitude to his reading of the Nouveaux Principes.2 T h e influence of Sismondi's writing on German writers is far more remarkable. The originality of so-called scientific socialism has been keenly debated. Many attributed to Eodbertus the honor of being the founder, an ascription the partisans of M a r x vehemently repudiated. Upon a review of Sismondi's doctrines, we find that most of the essential features of scientific socialism were present in the work of this early Genevese critic. It is probably true that Karl M a r x owed no indebtedness to Rodbertus, because both had read and liberally borrowed from Sismondi. 3 Furthermore, by his methodology, his emphasis on the observation of facts, 1

Mill, J. S., Principles of Political Economy, vol. i, p. 41, 1894 edition.

2

Denis, Hector, Histoire

des systèmes économiques et socialistes, YOI.

P- 275, 1904 edition. s Rodbertus traveled in Switzerland and France about the year 1830, after the second edition of the Nouveaux Principes appeared. Rodbertus, being interested (from his university studies) in political economy, history and philology, to all of which fields Sismondi made valuable contributions, must have been familiar with the works of the Genevese author, though he did not mention them.

CONCLUSION

171

his comparative and historical attitude, Sismondi contributed toward paving the way for the later Historical School in Germany. If it is too much to acclaim him as the father of the Historical School, he at least deserves the honor of being one of its early precursors. Sismondi's suggested measures for the redress of social evils seem to have found an echo in Germany, the originator and home of state socialism. There, by way of a magnificent compromise, an attempt was made to engraft certain socialistic conceptions upon the existing social order. It is the earnest aim of state socialism that the government be made a potent instrument in carrying out social reforms. Meantime it seeks to retain what is healthful and strong in the old régime, especially the two fundamental laws : the right of private property and the institution of the family. State socialism thus seems to be an almost literal reproduction of the program indicated, or at least implied, in the writing of Sismondi. Finally, we wish to say that in the development of a science it is, indeed, most essential to secure complete and unrestricted liberty, liberty in methods as well as in theories and ideals. At the beginning of the last century, the influence of the classical school almost transformed the science into an influential orthodoxy, stamped wih a patented trade-mark. The merit of Sismondi, who bravely defied his contemporaries by offering most vigorous criticism, can scarcely be overrated. H e helped to save the science f r o m becoming stereotyped. Not only was he a precursor of several constructive developments, but by his independent mind, his penetrating intelligence, his keen observation of facts, Sismondi should be acknowledged as a great leader of the critical school.

BIBLIOGRAPHY S l S M O N D I , J . C . L . S l M O X D E DE WORKS OX ECONOMICS

Tableau de l'agriculture en Toscane, Geneva, 1801. De la Richesse commerciale, ou- Principes d'Économie politique appliqués à la législation du commerce, 2 vols., Geneva, 1803. Nouveaux Principes d'Économie politique, ou de la Richesse dans ses rapports avec la Population, 2 vols., ist edition, 1 8 1 9 ; 2nd editon. 1827, Paris. (References in the present monograph are made on the 2nd edition, unless otherwise indicated.) Études sur l'Économie politique, 2 vols., Paris, 1836. (2nd and 3rd vols, of his Études sur les Sciences sociales.) Political Economy, London, 1847. A series of essays selected from his works, by an anonymous translator. WORKS ON HISTORY AND POLITICAL

SCIENCE

Histoire de la renaissance, de la liberté en Italie, de ses progrès, de sa décadence et de sa chute, 2 vols., Paris, 1832. Histoire des Républiques Italiennes du moyen âge, 10 vols., Paris, 1840. Histoire des Français, vols. 1-29, Paris, 1821-44; vol. 30 by Amédée Renée. Études sur les Constitutions des peuples libres, Paris, 1836. (ist volume of Études sur les Sciences sociales.) PERIODICALS

" Sur la balance des consommations avec les productions " ( R e v u e encyclopédique, vol. xxii, 1824). " D e la richesse territoriale" ( R e v u e Mensuelle d'Économie politique, vol. ii, 1833). " Du sort des ouvriers dans les manufactures " ( R e v u e Mensuelle d'Économie politique, vol. iii, 1834). Adler, George, Geschichte des Sozialismus und Kommunismus, Leipzig, 1899. Aftalion, Albert, L'oeuvre économique de Simondc de Sismondi, Paris, 1899. ——, Les crises périodiques de surproduction, 2 vols., Paris, 1913. Antoine, Charles, Cours d'Économie sociale, Paris, 1821. Ashley, W. J., An Introduction to English Economic History and Theory. 2 vols., London, 1894. Blanqui, Jérôme Adolphe, Histoire de l'Économie politique en Europe. Paris, i860. 173

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I73

Bonar and Hollander, Letters of Ricardo to Trower, 1811-1823, Oxford, 1899. Bonar, James, Letters of Ricardo to Malthus, Oxford, 1887. , Malthus and his Work, New York, 1924. Böhm-Bawerk, Kapitalzinstheorien, Innsbriick, 1884. Bourguin, Maurice, Les Systèmes socialistes et l'Évolution économique, Paris, 1907. Brentano, Geschichtliche Hauptmomente der Nationalökonomik und Handelsproduktion, Fürth O. J . 1850. Buret, Eugène, De la misère des classes laborieuses, 2 vols., Paris, 1840. Cairnes, John E., Some Leading Principles of Political Economy, New York, 1874. Cauwès, Paul, Cours d'Économie Politique, 4 vols., Paris, 1893. Commons and Andrews, Principles of Labor Legislation, New York, 1927. Cossa, Luigi, Introduzione allo studio dell'economia politica, Mailand, 1892. Denis, Hector, Histoire des Système économique et socialistes, 2 vols., Paris, 1907. Droz, Joseph, Application de la morale à la politique, Paris, 1840. , Économie Politique, Paris, 1846. Dubois, A., Précis des Doctrines économiques dans leurs Rapports avec les Faits et avec les Institutions, Paris, 1903. Eisenhart, H., Geschichte der Nationalökonomik, Jena, 1891. Elster, Ludwig, Jahrbücher für Nationalökonomie und Statistik, vol. 48, Jena, 1887. Fisher, H. H., The Famine in Soviet Russia, New York, 1927. Foster, W. T. and Catchings, W., Profits, New York, 1925. Fournier de Flaix, Nouveau Dictionnaire d'Économie politique, edited by Léon Say and Joseph Chailley, Paris, 1892. Gide and Rist, Histoire des doctrines économiques, Paris, 1909. Gide, Charles, Cours d'Économie politique, 2 vols., Paris, 1919. Grossman, Henryk, Simonde de Sismondi et ses théories économiques, Bibliothèca Universitatis Liberae Poloniae, 1924. Haney, Lewis H., History of Economic Thought, New York, 1920. Hayes, Carlton J . H., A Political and Social History of Modern Europe, New York, 1925. Hildebrand, Br., Die Nationalökonomie der Gegenwart und Zukunft, Frankfurt, 1848. Ingram, John Keils, History of Political Economy, London, 1915. Isambert, Gaston, Les Idées socialistes en France de 1815 à 1848, Paris, 1905. Jeandeau, René, Sismondi, précurseur de la législation sociale contemporaine, Bordeaux, 1913.

174

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Kautz, J., Die Geschichtliche Entwicklung d. Nationalökonomik, Vienna, i860. Knies, K., Die politische Ökonomie vom geschichtlichen Standpunkte, Braunschweig, 1883. Laidler, Harry W., A History of Socialist Thought, New York, 1927. Lippert, Handwörterbuch der Staatswissenschaften, edited by Conrad, Elster, Lexis and Löning, Jena, 1893. List, F., Das Nationale System der Politischen Ökonomie, Jena, 1910. Malon, B., Histoire du socialisme depuis les temps les plus reculés jusqu'à nos jours, 2 vols., Paris, 1882. Malthus, Thomas R., An Essay on the Principle of Population, London, 1817. , Principles of Political Economy, London, 1820. Marx, Karl, Communist Manifesto, Cooperative edition. McCulloch, J . R., The Principles of Political Economy, Edinburgh, 1849. Menger, A., Das Recht auf den vollen Arbeitsertrag, Stuttgart, 1891. Michaud, Biographie Universelle Ancienne et Moderne, Paris. Michel, Henri, L'Idée de l'État, Paris, 1896. Mill, John S., Principles of Political Economy, with some of their. Application to Social Philosophy, edited by W. J . Ashley, London, 1920. , Essays on Some Unsettled Questions of Political Economy, London, 1844. Mitchell, Wesley C., Business Cycles, Berkeley, 1913. Mohl, R. v., Geschichte der Staatswissenschaften, Erlangen, 1858. Mombert, Paul, Geschichte der Nationalökonomie, 2 vols., Jena, 1927. Monjean, Dictionnaire de l'Économie politique, Paris, 1854. Montgolfier, de, La vie et les travaux de M. de Sismondi, suivis des Fragments de son journal et de sa correspondance, Geneva, 1857. Oncken, August, Geschichte der Nationalökonomie, 2 vols., Leipzig, 1902. Palgrave, Inglis, Dictionary of Political Economy, 3 vols., London, 1919. Pecchio, Giuseppe, Storia de la economia publica, Lugano, 1829. Périn, Charles, Les doctrines économiques depuis un siècle, Paris, 1880. Rambaud, Jos., Histoire des doctrines économiques, Paris, 1898. Reumont, Alfredo, Sismondo de Sismondi, Liverno, 1842. Ricardo, David, Principles of Political Economy and Taxation, Gonner's edition, London, 1895. Roscher, W., Geschichte der Nationalökonomie in Deutschland, München, 1874. Saint-René Tallandier, Lettres inédites de Sismondi, Madame de Staël et autres, Paris, 1863. Say, Jean-Baptiste, Traité d'Économie politique, Paris, 1826. , Oeuvres diverses, edited by Olbie, Paris, 1848.

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.Schmoller, Gustav, Grundrits der allgemeinen Volkswirtschaftslehre, München, 1920. Schönberg, Gustav von, Handbuch der Politischen Ökonomie, Tübingen, 1896. Seligman, Edwin R. A., Progressive Taxation in Theory and in Practice, New York, 1908. , Essays in Taxation, New York, 1921. Senior, Nassau W., Political Economy, London, 1850. Simkhovitch, Vladimir G., Marxism versus Socialism, New York, 1923. Smith, Adam, An Inquiry into the Nature and Causes of the Wealth of Nations, edited by J. R. McCulloch, Edinburgh, 1838. Spahn, Carl, Der Sozialpolitische Standpunkt des schweizerischen National-ökonomen Simonde de Sismondi, Schaffhausen, 1886. Steuart, J., An Inquiry into the Principles of Political Economy, 2 vols., London, 1767. Thery, Adophe, L'oeuvre économique de Villeneuve-Bargemont, Paris, 1911. Thiers, M., Traité de la propriété, Paris, 1848. Thorp, Willard L., Business Annals, New York, 1926. Vidal, François, De la Répartition des richesses, Paris, 1846. Villari et Monod, Lettres de Sismondi écrites pendant les Cent Jours, Paris, 1877. Villeneuve-Bargemont, Alban, Économie Politique Chrétienne, 3 vols., Paris, 1834. , Histoire de l'Économie politique, 2 vols., Paris, 1841. Wells, H. G., The Outline of History, 2 vols., 1921 edition. D O C U M E N T S A N D PERIODICALS

Festy, Octave, "Sismondi et la condition des ouvriers français de son temps." Revue d'Économie politique, Paris, 1918, Tome 32. , " Le Vicomte Alban de Villeneuve-Bargemont et la condition des ouvriers français aux environs de 1830." Revue des Sciences politiques, Paris, 1919, Tome 42. Grandmaison, Geoffroy de, " Un précurseur social: Le Vicomte Alban de Villeneuve-Bargemont." Institut de France, Compte rendu des séances et travaux, Paris, 1926, Tome 205. Hitier, "Sismondi: ses doctrines économiques et sociales" Revue d'Économie politique, Année 13, Paris, 1899. Mignet, Compte rendue des séances de l'Académie des Sciences morales et politiques, Paris, 1845, Tome 7. Panunzio, Sergio, " La politica di Sismondi," Rivista Internationale di filosofia del diritto, Roma, 1927, Gennaio-Febbraio number. Puybusque, P. N. de, " Mélanges et documents, Lettres inédites de Sismondi," Revue Historique, 39 année, Tome cxvii, Septembreoctobre, 1914.

INDEX Agricultural economics, forms, 127/ Andrew, 121

27 ;

re-

Banking, 76, 78, 82 Bastiat, 71 Bentham, Jeremiah, 65 Beveridge, 82 Birth control, 91, 117 Blanqui, 32, 136 Benar, James, 32 Bouniatan, 82 Brentano, 18 Buret, Eugène, biographical sketch, 1SS-IS6; as a critic, 156-160; on poverty, 160; on taxation, 162163; on state intervention, 164; on crisis, 163; on private property, 164 Business cycles, 13, 15. See Crisis Cairnes, John, 58 Carlyle, 18 Catchings, 82, 169 Chateaubriand, 144 China, 96, 130 Chrematistic science, 54, 63, 137 Classical economists, 13, 33, 53 to 61, 62, 95, 137, 168, 171 Class-struggle theory, 38 Commons, John, 121 Corporation laws, 13, 34, 86 Crisis, 33, 38, 40, 88; theory of, 68 to 83, 116, 152, 169 Denis, Hector, 170 Droz, Joseph, 135 ; biographical sketch, 147-148; as a critic, 149150; his conception of economics, 150; his methodology, 151; on crisis, 152; on population, 152; on tariff, 153 ; on communism, 154; his social reforms, 154-155 Dunoyer, Charles, 135

England, 52, 57, 140 Exploitation theory, 44 Fix, Theodore, 136 Foster, 82, 169 Fourier, 113 France, 13, 31, 161, 170 French revolution, 13, 19, 22, 144 Germany, 171 Guild system, 34, 41 Grossman, Henryk, 62, 66 Hayes, Carlton J. H., 132 Hobson, 82 Hollander, 32 Industrial revolution, 13, 33, 47, 68 ; régime, 33, 35, 44, 73-74, 95-100, 105, 113, 124, 137, 157, 160, 166 Ingram, Professor, 112 Ireland, 52, 131 ; land reforms of, 131-132, 134 Italy, 20, 49, 131 Labor reforms, 118/; working hours, 120-121 ; child labor, 122; minimum wage, 122 ; labor insurance, 124, 126, 129 Laissez-faire, 13, 33, 59, 97, 99, 114, 116, 148, 149, 157, 158, 166, 168 List, Frederick, 146 MacCulloch, 32 Malthus, T . R., 17, 56, 57, 64 67, 69, 75, 79, 83, 84, 91, 94, 142 Martin, 82 Marx, Karl, 38, 43, 44, 167, 170 May, 82 Mercantilistic, 13, 33, 34, 86, 90, 94 Michel, Henry, 164 Mill, J. S., 170 Mitchell, W . C., 82, 116 177

I78

INDEX

Miiller, Jean de, 22 Molière, 158 Muiron, 1 1 3 Napoleon, 22 Necker, 19, 22 Over-production, 34, 69, 71, 79, 87, 116 Owen, 1 1 3 Palgrave, 14 Poland, 57 Population, Malthus' theory of, 17, 83 ; Sismondi's theory of, 83-96 ; Villeneuve-Bargemont's theory of, 1 4 1 - 1 4 4 ; Droz's theory of, IS2-I53 Primogeniture, 104, 1 1 5 Property rights, 1 0 5 - 1 1 1 , 1 1 5 Puybusque, P.-N. de, 26 Rent, theory of, 59 Ricardo, David, 17-18, 32, 57, 58, 64, 68, 77, 79, 9i, 94, 97, 101 Rist, Charles, 65, 70 Rodbertus, 170 Rome, 42, 48 Rural organization, 46; patriarchal exploitation, 47, 50; servile exploitation, 48 ; metayer, 48 ; corvée system, 49 ; capitation system, 49 ; lease-farming, 49 ; emphyteotic lease, 49 Russia, i n , 1 3 1 , 133, 134 Saint Simon, 144 Say, J . B., 32, 72 Schlegel, 22

Seligman, E . R . A., 99 Senior, W . N., 53, 62 Simkhovitch, V . G., 44 Smith, Adam, 15, 16-17, 20, 28, 3 1 , 55, 135, 156 _ Social catholicism, 135, 146 Socialism, 105 Socialist, "scientific," 105; Utopian, 105, 1 1 3 , 1 4 3 ; Marxian, 109, h i Staël, Madame de, 22 State socialism, 1 7 1 Switzerland, 53, 1 2 1 Taxation, theory o f , 96-105; benefit theory of, 98-99; progressive taxation, 99, 100, 1 1 5 , 1 6 2 ; single tax theory, 101 ; land tax, 101 ; indirect taxes, 102-103, 1 6 2 ; income tax, 104, 162; inheritance tax, 104, 162 Thompson, 1 1 3 Thorp, W . L., 15 Tithe, 101 Trade unionism, 1 1 9 United States, 25, 53, 82, 1 1 6 Value, theory of, 60, 68 Villeneuve-Bargemont, biographicale sketch, 136-137; as a critic, 137-139 ; as a Catholic economist, 1 3 9 ; on population, 1 4 1 - 1 4 3 ; 011 property rights, 143-145 ; reforms suggested, 145 ; as a precursor of the social Catholicism in France, 146-147 Wage-fund, 17, 95, 104 Wages, 95 Wells, H . G., 42