Principles of Political Economy Part 44

_Carey_, also, relying on the a.s.sumption that more fertile land is brought under cultivation as civilization advances, allows us to see no limits whatever to this growth. (Past, Present and Future, ch. 3.) Still more clearly is the principle of unlimited and continually accelerated growth laid down in his Principles of Social Science, I, 270.

_Carey_ ill.u.s.trates this principle by means of the example of the continually accelerated motion of a falling body, without noticing the practical _ad absurdum deductio_ involved in it, that at the end of the thousandth second a falling body reaches a velocity of 1,000,000 feet. (loc.

cit., 204.) But even in England, at present, we find such thoughts at times. _Banfield_, for instance, can scarcely understand how the relative rates of wages, interest and rent can decrease, except by an increase of their absolute amounts. See his Organization of Industry, pa.s.sim. And so _v. Prittwitz_ entertains the most rosy-colored hopes. He has no doubt that all governments which are still bad will see the error of their ways and correct them. (Kunst reich zu werden, 79.)

The growth of capital and even of human wealth in general is capable of indefinite increase (81). The rate of interest would sink almost to zero if so much capital were acc.u.mulated that no "undertakers" could be found who care to use it (305). Large farming will entirely cease in the future (307), and when the system of railroads is entirely completed, the whole earth will present the appearance of one immense park (29). He would allay all fear concerning the exhaustion of combustible material by pointing out the possibility consequent upon improved means of communication, that a great many of the inhabitants of the colder regions of the earth might migrate in winter to a warmer climate (21). At the same time, artesian wells might be made to bring to the surface the internal heat of the earth, or metallic plates connected with the wings of a windmill, might be made to generate heat by their friction on one another (22). See the same author's Andeutungen uber kunftige Fortschritte und die Granz en der Civilization, 21 Aufl., 1855.]

[Footnote 263-2: According to -- 165, we might say: where the product of the workman last employed is not sufficient to meet his own wants. Thus _J. B. Say_ says that only that can be considered a product, the utility of which is at least equal to its cost. He makes use of the example where a three days' journey is necessary to obtain the food requisite for one. As the limits of production he gives the following: too few human wants; too costly methods of production; too high taxes, natural obstacles created by infertility or too great distance. (Traite I, ch. 15. Cours pratique, I, 349.)]

[Footnote 263-3: _D. Hume_, Discourses, No. 3, On Money.]

[Footnote 263-4: England is especially well situated in this respect, in consequence of its excellent commercial position and its surplus of the princ.i.p.al auxiliary products, such as coal, iron, etc. Should the coal-beds of such a manufacturing country be ever entirely exhausted, it is scarcely possible to see, from our present point of view, how the most rapid and most frightful decline of its national economy could be averted! Compare the opening address before the British a.s.sociation, by Armstrong, at Newcastle (1863), who prophecies the exhaustion of the English coal-beds in 212 years at the rate at which coal had been consumed during the eight preceding years. According to the report of the royal committee on the coal question (1871, vol. III), Great Britain has still attainable deposits, that is 4,000 feet deep, 90,207,000,000 tons of coal in its coal beds already known; and in beds not yet worked, 56,273,000,000 tons. Compare, also, _Jevons_, The Coal Question (1866). It is estimated that the most productive French coal-field will be exhausted in 100 years.

(_M. Chevalier_, Rapport du Jury international de 1867, 57.)]

[Footnote 263-5: Even _J. S. Mill's_ views on the probability of perpetual peace on earth are altogether too rosy: Principles III, ch. 17, 5. This is still truer of _Buckle_. History of Civilization, I, ch. 4. In the modern state-system of Europe, there is wont to be in each generation, a peaceful half and a warlike one, which follow each other as ebb and flow. I need only mention the preponderance of peace between 1714 and 1740, between 1763 and 1793, and between 1815 and 1853. It happens frequently that at the close of the period of peace, intelligent and n.o.ble but unhistorical and therefore short-sighted minds begin to dream of perpetual peace. Even a man like _Dohm_ (Ueber die burgerliche Verbesserung der Juden, 227 seq.) expected, in 1785, that considering the size and quality of armies, and the mutual knowledge of all countries of one another, that instead of actually waging war, nations might send to each other well authenticated statements of the strength, for instance, of their navies and of the sums necessary to maintain them for a number of years.]

[Footnote 263-6: The Mongols saw the abandonment of their nomadic life in so gloomy a light that they seriously thought of turning all China with its countless human beings into pasture-land! (_Gibbon_, History of the Roman Empire, ch. 34.)]

[Footnote 263-7: It is a fact characteristic of the history of England, that Norman supremacy and afterwards bondage were wiped out so gradually that contemporary historians have nothing to say of the transformation. (_Macaulay_, History of England, ch. 1.) Repeal of the corn laws _vis-a-vis_ of the most recent industrial advance of the country.]

[Footnote 263-8: Even _Ricardo_ says that in a highly civilized country the continual making of savings is by no means desirable. Carried to an extreme, saving would lead to the equal poverty of all. (Principles, ch. 5.)]

[Footnote 264-9: The _Beccaria_, Economia publica I, 3, 31, teaches that the limits of population are to be found at the point where agriculture cannot be made to yield an additional increase of products, and where foreign countries do not offer any more a counter value of their products in exchange for the manufactured articles and the services to be furnished them. Similarly, _Busch_, Geldumlauf III, 7; otherwise, indeed, V, 15, in which, in opposition to _Adam Smith_, it is claimed that the work to be performed by one nation for others has no limits which cannot be exceeded.

_Steuart's_ theory of the limits to the production of every commercial nation: Principles, I, ch. 18. _Lauderdale_, Inquiry, ch. 5, 274 ff., says categorically, that all wealth which is produced by the transformation of raw material depends on the production of such raw material, and of the means of subsistence necessary for the support of the labor employed in such transformation. Excellent investigations by _Malthus_ in the additions (1817) to the Essay on the Principles of Population, II, ch. 9-13. Compare _Roscher_ Nationalocon. des Ackerbaues, -- 162. As early a writer as _Mirabeau_, Philosophie rurale, ch. X, was of opinion that a country whose industries were on as large a scale as those of Holland, dispersed its people indeed over the whole earth, made them independent at home, but almost destroyed their nationality.]

SECTION CCLXIV.

THE DECLINE OF NATIONS.

That, after a whole nation has reached the zenith of its prosperity, it is subject to old age and to decline, and cannot avoid them, is in general, a proposition susceptible neither of proof nor refutation.[264-1] This uncertainty is practically very useful, for were it otherwise, mediocre statesmen might become either discouraged or indifferent. However, we should not a.s.sume, as so many do,[264-2]

without proof, the earthly immortality of nations, provided only they observe a proper diet; nor call the science of the physiology or medicine of nations a chimera, simply because it confesses that it knows of no preventive against such old age. It has doubtless been the fate of many nations to die, that is, not precisely to be destroyed--just as in the physical world, not a particle of matter is lost--but to see their former national personality disappear, and themselves continue to exist only as component parts of some other nation.[264-3] This phenomenon, indeed, finds its a.n.a.logon in every thing that is human, but seems to contradict a law of nature which very widely prevails, viz.: that it is easier to advance in a certain direction in proportion to the distance gone over in it already.[264-4]

The problem of decline, however, is solved by the enervating influence of possession and power, an influence which only a select few among men can escape. And yet to every external advance there must be a corresponding advance of the interior man, else there is a fall great in proportion to the height before attained. The greater number take their ease once they have attained the object of their ambition. I need only cite the example of the posterity of those men who have grown rich by unusual exertion. Success itself generates vanity and a feeling of false security, the latter especially, inasmuch as that is expected from the whole community, from the state for instance, from others generally, which should be the fruits of one's own vigilance and one's own endeavors. It should not be forgotten that the nation is made up of individuals.[264-5]

In addition to this there is the striving after the new for the sake of novelty; a striving promotive of progress in itself, and without which the full development of the forces of civilization would probably not be possible. But if the genius of no nation is possessed of infinite capacities, it must happen, at last, that, in case the best has been attained, and the demand for novelty continues, men will go over to that which is worse. Even very great compet.i.tion has here a dangerous influence, since it raises the great ma.s.s of the incompetent to the dignity of judges, and endeavors to seduce them by illicit means; in the arts, for instance, sensuousness is made to take the place of the feeling of the beautiful.[264-6]

There is, further the process of undeceiving, inseparable from the prosecution of any ideal purpose. Such ideals have always very much of human weakness in them. The great crowd of ordinary men follow, as a rule, their material interests. Only occasionally do they rise to the height of ideal things; and here we discover the brightest points in history. Later there comes uniformly a period of disenchantment and of exhaustion after the debauch is over. When all the ideals accessible to the nation have been destroyed or outlived, nothing can be done to awaken the ma.s.ses from their slumber, or induce them to shake off their inactivity.

As a rule, the influences which have accelerated a nation's progress and brought it to the apogee of its social existence end in precipitating its ruin by their further action. Every direction which humanity takes has almost always something of evil in it, is limited in its very nature, and cannot stand its extremest consequences.[264-7] All earthly existence bears in itself, from the first, the germs of its decay.

However, to calm the feeling of human liberty, we may boldly a.s.sert that there never was a nation remarkable for its religiousness and morality which declined so long as it preserved these highest of all goods; but then no nation outlived their possession.

[Footnote 264-1: Even in the case of individuals, that death is necessary is not susceptible of absolute demonstration; but no one doubts it, because of the experience so frequently repeated; an experience, however, which cannot be had in the same degree in the case of whole nations.]

[Footnote 264-2: Remarkable controversy between _Hume_ and _Tucker_. The former had charged the latter with holding the opinion that industry and wealth must necessarily continue to advance indefinitely; and yet all things had in them the germs of decay. _Tucker_, on the other hand, remarked that all he wished to say was that no one could point out where progress must necessarily cease. All political bodies like all natural bodies might decay; but it is not necessary that they should. With good laws and morality they would become more vigorous with increasing age. A great deal depended here on the more general distribution of property, on the a.s.surance that industry would meet with its reward, and on the removal of the princ.i.p.al defects in the English electoral system. (Four Tracts, 477 seq. Two Sermons, 30.) Most political economists are of the same opinion; thus _McCulloch_, Principles, II, 3. See, however, the last two sections in _Ferguson_, History of civil Society.]

[Footnote 264-3: We a.s.sume that a new nation has arisen, when, after the disappearance of an earlier and high civilization, combined with the taking up of new ethnographic elements, we perceive anew the easily recognizable symptoms of youthful immaturity.]

[Footnote 264-4: Expressed in the domain of religion in the words of the Savior: _Matth._, 25, 29. But at the same time the equally well-known expression in _Luke_, 12, 48, must be fulfilled. Compare _H. Brocher_, L'Economie monetaire, 1871, 25 ff.]

[Footnote 264-5: Schools of art are generally ruined by mannerism. Of the two great means of education in art, the study of nature and the study of cla.s.sic models, the latter is the easier, and the former is readily neglected for it.

Then there is the endeavor to flatter the master, which is most effectually done by imitating his faults; and the fact that pretending connoisseurs are most cheaply satisfied by mannerism.]

[Footnote 264-6: There is a peculiar charm, very productive in itself, attaching to the cultivation of a field which has been but little cultivated, and which, therefore, has the advantage of promising something new. On the other hand, the decline of almost all literatures begins with this, that writers and readers no longer think out completely the forms of speech, modes of expression, etc. to which they have become used, as their original creators did; a great temptation to have recourse to a more and more spicy literary style. _J. S. Mill_ considers the stationary state (Principles, IV, ch. 6) a very pleasant one to contemplate, but he overlooks the very important fact, that as men are const.i.tuted it uniformly introduces national decline.]

[Footnote 264-7: Great rulers, of whom it is said that they conquered the world by following out their own ideas to their ultimate consequences, would most certainly have lost the world by reason of the same logic if they had continued it only fifty years longer. What would have become of Alexander the Great and Charlemagne if they had lived one generation more?]

SECTION CCLXV.

CONCLUSION.

All the separate nations which have lived side by side, or followed one another, are embraced under the general name, humanity. Who would deny the existence of a point, viewed from which humanity might be seen to const.i.tute one great whole; all the variations and differences in its life only one great plan, one wonderful sovereign decree of the divine will, grandly and wonderfully executed by G.o.d? Or who is so bold as to say that he stands on this point himself? Theologians should be the last to do it, since even the apostle Paul calls G.o.d's ways inscrutable. So long as we do not even know whether we live in one of the first or one of the last decades of humanity, every system of universal history in which each nation and period is made to take its place in due subordination to its superiors, can be only a castle in the air; and it is a matter of indifference whether the basis of the system is philosophical, socialistic, or natural-philosophical.[265-1]

The usual error into which the builders of such history fall, is that they consider the peculiarities of certain stages of civilization, which may be shown to exist among all nations in the corresponding period of their history as the national peculiarity of the single people with whose history they are, for the time being, concerned. They deduce wonderful consequences, from the premises they laid down, but which our increasing acquaintance with other nations immediately shows to be unfounded.

There is, however, a number of facts really peculiar to a people which make up the national character, and which may give to an observer endowed with an imaginative mind, an inkling to the special vocation in the economy of providence of a particular people. That a positive system can be constructed from the material of such facts, I do not, indeed, think. But they are at least a safeguard against false systems, against the improper application of a.n.a.logies, against the idle, fatalistic exaggeration of the maxim: "nothing new under the sun!" It had almost become the fas.h.i.+on to compare our present with the period of decline of the Greek and Roman republics. Frightful parallel, in which the greatest and most undoubted differences were frequently overlooked for smaller and certainly questionable similarities. Is not the abolition of slavery, which has been accomplished among all the most important nations of the present, something new and of great import from a moral and economic point of view?[265-2] Can the national wealth, which depends on labor and frugality, be in any way compared with that which was based on plunder? And so, no one can calculate the benefits which may be reaped by posterity from the mere continuation of the scientific and especially natural-philosophical results obtained by former generations. The discovery of the whole earth soon to be completed, and its probable consequence, the civilization of all nations of any importance, must remove the danger to which all the civilized nations of antiquity eventually succ.u.mbed, namely, destruction by entirely barbarous hordes. Nor should the significance of the state-system of Europe, which might be extended soon enough into a state-system embracing the world, be under-estimated. Macedonia would not so readily have subjugated the h.e.l.lenes and the Persians if the great powers of the west, Rome and Carthage, had intervened at the right time. And there, too, is Christianity, whose means of grace are at hand for every one at all times, for his complete moral regeneration.

In one word, the usual argument with which the "man of experience" meets the man of inventive genius, that there never was anything of the like seen before, may suffice in thousands and thousands of cases; but it affords no strict proof. It is the province of genius to compel rules to extend their limits. But science should never forget that self-denial is necessary to the discovery of truth.[265-3]

[Footnote 265-1: I mean here, especially, the attempt so frequently made (by _Herder_, for instance) to draw a parallel between the periods of universal history and the age at different times of the individual, or with the seasons. If there were a great many humanities between which we might inst.i.tute a comparison, we might accomplish something with the a.n.a.logy, but----!]

[Footnote 265-2: However, even such a man as Minister _Stein_, thinks that a laboriously acquired wealth may affect a people's morality injuriously. "The striving after wealth is the striving for the possession of the means of satisfying chiefly sensuous wants. This striving may suppress all n.o.bler feelings, whether it find expression in violence or industry." Contrariwise, it is possible that some of the n.o.blest of human qualities may be found side by side with the forcible acquisition of wealth, viz.: courage, patriotism. (_Pertz_, Leben Steins, II, 466.)]

[Footnote 265-3: Compare my discourse on the relation of Political Economy to cla.s.sic antiquity in the transactions of the royal Saxon Academy of Sciences, May, 1849; also many excellent remarks in _Knies_, Polit. Oekonomie. _Chr. J.

Kraus_, has zealously discussed the question whether the development of humanity turns about eternally in a circle, or whether it forever advances to a progressively better future. He strongly advocates the latter view, and on grounds which appeal both to the head and to the heart.

(Vermischte Schriften, III, 146 ff.; IV, 277 ff.)]

APPENDIX II.

INTERNATIONAL TRADE.

INTERNATIONAL TRADE.

SECTION I.

THE MERCANTILE SYSTEM.

The princ.i.p.al peculiarities of the so-called mercantile system depend on a five-fold over-estimation: of the density of population, of the quant.i.ty of money, of foreign commerce, of the industries concerned with the transformation of materials (_Verarbeitungsgewerbe_), and of the guardians.h.i.+p of the state over private industry.[A2-1-1] All these tendencies are very intelligible, and almost self-evident, in a sovereign city-economy (_Stadtwirthschaft_) as opposed to the governed and worked-out (_ausgebeuteten_) country districts; as they are found even in the city-republics of later medieval times. But they are also natural in whole national economies, during that period of youthful and rapid growth in which the increasing density of population continues still, for a long time, to be really only a spur and an a.s.sistance, and in which, therefore, there can be no expression of anxiety concerning over-population; in which the new and rapidly growing division of labor draws attention particularly to the market-side of all businesses and to the circulation of goods; in which the progress from trade by barter to trade by money necessarily makes the volume of money needed even relatively greater; but especially are they natural in that world-period in which foreign trade suddenly increased enormously in consequence of the discovery of the whole earth; when the citizen cla.s.ses of the people a.s.sumed immense importance as compared with the landed and clerical aristocracy, and when, in the internal affairs of state absolute monarchy, and in foreign politics, the system of equilibrium, through the instrumentality of the great compact-formation of states prevailed.

All these tendencies are most intimately connected with one another. If precious metal-money be really the essence of national wealth,[A2-1-2] a people who possess no gold and silver mines themselves;[A2-1-3] for instance, Italy, France and England, can become richer only through foreign trade,[A2-1-4] by means of a favorable balance produced by a preponderance of their exports over their imports; and only inasmuch as this excess is balanced by a payment in money from foreign parts. And so, too, in foreign trade, one nation can gain only what another nation has lost.[A2-1-5] Gain is promoted not only by direct obstacles placed in the way of the exportation of the precious metals, but still more by the value-enhancement of the exported commodities, and by the value-diminution of the imported commodities.[A2-1-6] And as commodities which have undergone the process of transformation are, on an average, more valuable than raw materials, the state can best carry out this policy by import duties, import prohibitions, and export premiums on manufactured articles, as well as by export duties, export prohibitions and import premiums on raw materials.[A2-1-7] This is extremely necessary against those nations who are superior to others in culture, wealth, the cheapness of labor and capital; and hence the envy of the mercantilists was directed chiefly against Holland, and after Colbert's time also against France.[A2-1-8] Such commodities as are not at all adapted to the nature of a country, because of its climate, for instance, the nation should produce at least in colonies of its own, that it might, in this way, emanc.i.p.ate itself from foreign countries.[A2-1-9] As the clear distinction drawn to-day between money and capital has a.s.serted itself only since Hume's time, the notion that prevailed for centuries, that much money, much trade and a large population mutually conditioned one another, was a very natural one.[A2-1-10]

The younger and more refined conception of the mercantile system is distinguished from the coa.r.s.e Midas-believing one, by two tendencies especially: