M. GUYOT ON SOCIAL ECONOMY.

SAUL among the prophets was not a stranger sight than is the appearance of one of the shining lights of French Radicalism in the character of a philosopher who frankly owns that in all fiscal matters England leads the vanguard of nations, who defends Free-trade, and denounces "what Buckle called the Pro- tective spirit, and what the Italian Meuzotti calls Colbertism," as the greatest existing hindrance to the prosperity of Europe. M. Guyot belongs to the laissez-faire, laissez-passer school of politicians ; and just now, when the tendency is rather too much in the other direction, and too many among us are trying to put on the State greater burdens than it can bear, and confide to it tasks which it is unfitted to accomplish, he does good service in reminding us how utterly the attempt of one of the greatest statesmen of his time to substitute Government action for in- dividual initiative failed, and what disastrous consequences it entailed. To secure cheap bread, Colbert forbade the ex- portation of grain, thus destroying a main source of profit to the agriculturist. England and Holland answered his customs-tariff with a war-tariff, and ceased to buy French wines. The French peasantry were in the deepest misery ; the subsidised industries did not flourish ; Colbert himself confessed that, multiply privileges as he would, he was always asked for more. "People never attempted to sur- mount difficulties by their own efforts so long as the King's authority could do it for them." He describes the tariffs as the " crutches " of industry, as if industry were a cripple unable to walk alone ! But after bringing France to the verge of ruin, Colbert himself died in despair, and his remains were only saved by a secret funeral from the last insults of the mob. And yet he had intellectual powers of the highest order, unwearying perseverance, a rare faculty for organisation, and disposed at will of all the prerogatives wielded by a despotic king. Where this man failed, who can hope to succeed ? But Colbertism still survives in France,—may, indeed, be regarded either as an endemic yet intermittent malady, or as a chronic insanity with lucid intervals. At present the madness is passing through one of its acnter stages. After protecting French industry at the expense of French agri- culture, the Government are attempting to redress the balance by placing husbandry under the aegis of Colbertism. This is the very red uctio ad absurdum of the system, and goes far to justify Buckle's strictures on the ineptitude of statesmen, and his theory that nations lose more by the foolishness of their rulers than they gain by their wisdom. But there is a lower depth of economic folly even than that reached by the lawgivers of the Republic. The new import-duty on bread- stuffs is likely to prove detrimental to the Austrian corn- trade—at any rate, the Austrians think so, and they are probably right — so, by way of mending matters, their Government announces its resolution to prohibit altogether the entry of certain classes of French goods into the • Principles of Social Economy. By Ives Guyot, Hon. Member of the Cobden Club. Translated from the French by C. H. Dilyncourt Leppington. London : W. Swan Sonnenschein and Co.

Austro-Hungarian Monarchy ! Could folly go further ? The French Government injure their own people by putting a tax on bread, a measure which will probably somewhat lessen imports of Austrian corn—but very slightly, France being only an occasional buyer of foreign grain—whereupon Austria retaliates by hampering her trade and injuring her people. For it cannot be doubted that the tabooed articles will be obtained from other countries at higher prices, probably from France itself, by circuitous routes and indirect methods.

Meanwhile, certain branches of trade will be thrown out of gear, and the price of the commodities in question enhanced to the consumer, who will hardly be reconciled to the infliction by the thought that he has fellow-sufferers in France. As M. Guyot observes, one is almost ashamed to demolish fallacies that have been a thousand times slain ; but so long as obvious truisms are not universally accepted in practice, and there exists in this country a party hungering after the flesh-pots of Protectionism, we should lose no opportunity of exposing the evils of the system, and the misconceptions on which it is based. It is so much easier, as Prince Bismarck and French Premiers evidently find, to impose tariffs than master the theory of Free-trade.

As M. Guyot shrewdly points out, one of the stock arguments on the Continent against Free-trade is its very success in this country. If you adduce the prosperity of England and the growth of her trade as evidence of the advantages of an unpro- tective tariff, the answer is always the same,—" But England is the market of the world." The following is M. Gnyot's rejoinder ; and to it we beg leave to call the particular attention of Fair- traders :—

" Yes ; and why F Because she has opened the frontiers of all the world ; because she buys, all the world over, at the lowest price, augmented only by the cost of transport. It is she herself who gains by the freedom she gives. Moreover, as everything goes to the English market, it is the English market which decides the current price ; and the English merchant or manufacturer is the first to profit by the rise or fall, while those of other nations follow at a distance. It is not Havre that rules the price of cottons, it is Liverpool. The English manufacturer, getting his raw material in the cheapest pos- sible market, can produce at the lowest possible price, and at the same time afford the highest wages. The value of man, like that of land and building, rises in proportion to the cheapness and abundance of circulating capital. Yet this cheapness is the terror of the French Colbertist. His ideal is the policy of dearness."

Except, it may be added, when he is a buyer, in which event cheapness becomes his ideal, for nobody can drive a harder bargain than the bourgeois trader or manufacturer. The

corollary of Colbertism is the protection of labour by the taxing, or exclusion, of foreign workmen ; and though French and American manufacturers are always declaring that Protective duties are necessary to the maintenance of wages, there is nothing they more strenuously oppose than measures likely to limit the supply of labour. The Bill on trade-syndicates, recog- nising the right of workmen to hold meetings, form associations, and adopt means for selling their labour wholesale, failed to pass the French Senate, because a majority of that body feared that its effect would be to raise wages ! This in a Democratic country like France, where every man is a voter and an actual or potential soldier, is almost as extraordinary as the existence of the law punishing with imprisonment membership of any international

Trades' Union whatsoever, and shows how much more powerful are a few vested interests than thousands of uucombined units. In France, at any rate, as M. Guyot aptly observes, the principle of laissez-faire cannot be said to have failed, for the simple reason that it has never been tried. Existing inequalities are much more the results of restrictive laws and official meddling than of natural causes and free competition. La carriere ouverte aux talents is still little more than a phrase in the country where it was coined.

But M. Guyot's book is far from being limited to a discussion of Colbertism and advocacy of the doctrine of laissez-faire ; it is a, profound treatise on social economy, and an invaluable collection of facts relating to the economic condition of France. In this time of agricultural depression, his views on the Land Question may be interesting to some of our suffering farmers and landowners. The value of French land has probably increased even more rapidly than the value of English land. Less than a hundred years ago (in 1789), the average price of a hectare of land in France was 500 francs ; in 1874, it

was 2,000 francs. In the same time the price of beef increased 275 and the cost of agricultural labour 100 per cent. But the price of bread was exactly the same in 1878 as in 1771. As compared with fixed capital, it had sunk 130 per cent. ; as com- pared with the wages of farm-labourers, 93 per cent. On the other hand, cost of production has been diminished by the use of machinery, improved methods of husbandry, and greater economy of capital. Yet M. Guyot is of opinion that, although /and has risen in value 300 per cent., the rise is far below what it ought to be. "Agriculture," he says, "is perhaps the in- dustry which has made the least progress during the century. Chemistry and physics have shown pretty clearly what are the conditions of cultivation, and have reduced them to very simple formalm ; but so far they have been very little applied. The steam-engine, so widely employed in other industries, is here neglected. While three million horse-power is employed in manufactures, agriculture employs only twenty-five thousand. In short, it is impossible to instance all the utilities lost or neglected by man."

M. Gnyot might have remarked on the strange incapacity shown by agriculturists, both in France and in this country, to profit by the principle of co-operation. Dairy-farmers not a dozen miles from London are selling at a fraction over twopence a quart—and paying carriage—milk which is sold to the con- sumer at fivepence a quart. It thus costs more to remunerate the middleman and distribute the article than to produce it and remunerate the farmer. What joint action can effect in such cases is shown at Pendleton, near Manchester, where a number of consumers by combining, dealing directly with the farmers, and organising their own supply-service, are obtaining their milk at twopence-halfpenny a quart.

Property-owners, albeit just now deserving all our commisera- tion, have had, on the whole, abundant reason to be satisfied with their lot. For in old and thickly-populated countries the natural tendency of fixed capital—land, buildings, mines, and railways— is always to increase in value. The tendency of circulating capital, -on the other hand, is towards depreciation. As time goes on it becomes increasingly difficult to find good investments, and a generation of peace in Europe would probably reduce the normal rate of interest to one or two per cent. So far as regards agricultural land in this country, however, the tendency to rise in value may be countervailed, as it may be accelerated, by exceptional causes ; and if the new countries of the West and the South can produce corn and meat more cheaply than the old, and if difficulties of transport can be permanently overcome, nothing can prevent a fall in rents, which must continue until the growth of population in America and at the Antipodes checks imports and produces a reaction. Hence English land- owners would do well to hedge against this contingency by buying land in the Colonies or the States ; for a general fall in the value of land is out of the question,—if it falls in one part of the world it must rise in another.

M. Guyot's theory that there is no such thing as over- production will hardly find general acceptance at the present moment. Commercial crises, he says, though they may be caused by consuming too fast or producing too little, never arise from producing too much. When the demand for English calicoes falls off, it is not because manufacturers are making them too freely, but because their customers are producing too few commodities which they can offer in exchange for our commodities. If, for instance, India, China, and Australia send us their wonted quantities of jute, grain, indigo, tea, wool, and the rest, they will take their wonted sup- plies of our woollen and cotton goods. This is another way of saying—and it is doubtless a true saying—that when our customers do well we do well, and when they fare ill we fare badly. But to this rule there are surely exceptions. 'When, for example, as at present, more corn is grown than all the world can consume, even if everybody had enough, there is over- production, for how prosperous soever people may be, they are unable to eat more than their fill. But even in this case the world is no poorer, the loss of the few being more than made-up by the gain of the many, and the surplus grain of one year serves to supplement the scanty harvests of years to come.

Unsound systems of taxation are among the greatest evils with which industrial development—that is to say, the growth of wealth and the prosperity of the working-classes—have to contend, and the country which possesses a perfect system has yet to be discovered ; but our system, though one of the best, still leaves much to be desired, while the systems of France, Austria, and the United States are simply barbarous. A great variety of indirect taxes must be wrong, for wealth grows in geometric ratio to rapidity of circulation, and they check cir- culation, distort the normal relation of the demand and supply of labour, interfere with its price, and create an apparent rise in wages without benefiting the wage-earner. By

increasing the cost of production they retard consump- tion, especially of manufactures ; for since they fall on the necessaries of life, the imposts so far diminish the capacity of wage-earners to purchase manufactures. Taxa- tion in France absorbs 30 per cent, of the national income, and taxes on circulation compose four-fifths of the budget. M. Guyot's ideal system of taxation would be an impost on the selling-value of fixed capital, fixed capital being defined as con- sisting of "all such utilities as do not lose their identity in the using,—namely, the soil, mines, buildings, machinery, imple- ments, ships, vehicles, beasts of burden, household utensils, and objects of art, when not regarded as commodities offered for sale?' According to the scheme prepared by the author, and which has been put into the shape of a Project of Law, the fixed capital in each district would be rated by a Government Con- troller, assisted by two delegates appointed by the Municipal Council. This scheme has the supreme merits of simplicity and economy, and is free from many of the evils incident to existing arrangements. The objection to it is that mere hoarders and investors in foreign securities would escape taxation altogether. But hoarders are fast becoming an extinct race, and holders of foreign stocks form an infinitesimal proportion of the great body of capitalists. Alcohol and tobacco might be made to contribute their quota to the revenue by imposing heavy licence- duties on the vendors of those articles ; and the removal of heavy restrictions on trade would be an unspeakable boon, as well to merchants and manufacturers as to workers for wages. Where the experiment has been tried, as, for instance, at the island of St. Thomas, in the West Indies, absolute freedom of trade has invariably produced an exceptional prosperity ; and an England without custom-houses would become more than ever the em- porium of the world.

There are many other points in M. Guyot's interesting and suggestive work on which, did time and the space at our com- mand allow, we should like to dwell. We only hope that, as touching his own country, his lessons may not fall on barren ground, for France seems as far as ever from realising his ideals. Though cruelly weighted with her bloated armaments, she wastes her substance on barren expeditions ; though hampered with an antiquated system and heavy liabilities, she refuses, out of fear of her Bondholders, to effect an equitable arrangement for reducing the interest on her Debt. To encourage industry her statesmen lay new taxes on the consumers of manufactures ; and to relieve husbandry they demand fresh sacrifices from consumers of agricultural produce. Their idea of political economy is to give with one hand and take back with the other, and make the unhappy taxpayer defray the cost of the operation.

We are thankful for this translation of M. Guyot's book, though it might have a better index ; it is a valuable addition to the literature of economic lore, but the country in which its teachings are most needed is that in which it was written.