People bewail the greed and selfishness of our age!

I, for my part, find the world, especially Paris, peopled with Deciuses.

Open the thousand books, the thousand newspapers, the thousand pamphlets, that the Parisian presses spew forth every day over the country. Are they not all the work of little saints?

What animation in the painting of the vices of our day! What moving concern for the masses! With what liberality the rich are invited to share with the poor, if not the poor with the rich! What a host of plans for social reforms, social improvements, social organizations! Is there any hack scribbler who is not devoting himself to the welfare of the toiling masses? For an advance of a few crowns, he will find the opportunity to indulge himself in humanitarian lucubrations.

And yet people talk about the selfishness and individualism of our era!

There is nothing that does not pretend to serve the well-being and the edification of the people—nothing, not even the customhouse. You think, perhaps, that it is just another instrument of taxation, like the license bureau or the tollhouse at the end of the bridge? Nothing of the kind. It is essentially an institution for the advancement of civilization, fraternity, and equality. What do you expect? To be in fashion today, one must show, or pretend to show, feeling, sentimental sensibility, everywhere, even at the customhouse window where they ask, “What do you have there, friend?”

But for realizing these humanitarian aspirations, the customhouse has, it must be confessed, some rather strange procedures.

It musters an army of directors, assistant directors, inspectors, deputy inspectors, superintendents, auditors, collectors, department heads, assistant department heads, clerks, supernumeraries, candidates for the jobs of supernumeraries, and candidates for the candidacy, to say nothing of those on active service—all with the object of exercising over the productive activities of the people the negative action that can be summed up in the word bar.

Notice that I do not say tax, but quite genuinely bar.

And to bar, not acts repugnant to morality or dangerous to public order, but transactions that are innocent and, as is admitted, conducive to peace and harmony among nations.

Nevertheless, mankind is so flexible and adaptable that in one way or another it always surmounts these barriers. It is just a matter of applying more labor.

If people are barred from importing their food from abroad, they produce it domestically. This is more laborious, but one must eat. If they are barred from passing through the valley, they climb over the mountains. This way is longer, but one must reach one’s destination.

All this is regrettable, but it does have its ridiculous side. When the law has in this way created a certain number of obstacles, and when, in order to overcome them, mankind has diverted a corresponding amount of labor from other employments, you are no longer allowed to demand the reform of the law; for if you point out the obstacle, the jobs that it makes for are pointed out to you, and if you say, “These are not jobs that have been created, but displaced, by the obstacle,” you are answered in the words of L’Ésprit public: “Only our impoverishment is certain and immediate; as for our enrichment, that is more than problematical.”

This reminds me of a Chinese story.

Once upon a time there were, in China, two great cities: Chin and Chan. They were connected by a magnificent canal. The emperor judged it desirable to have enormous blocks of stone thrown into it, in order to put it out of service.

Seeing this, Kuang, his chief mandarin, said to him:

“Son of Heaven, you are making a mistake.”

To which the emperor replied:

“Kuang, you are talking like a fool.”

(Of course I am reporting here only the gist of their conversation.)

After three moons had passed, the celestial emperor sent for the mandarin and said to him:

“Kuang, look yonder.”

And Kuang opened his eyes and looked.

And he saw, some distance from the canal, a multitude of men at work. Some were excavating, others were raising embankments, still others were leveling the ground, and others laying paving stones; and the mandarin, who was very well read, thought to himself: They are making a highway.

After three more moons had passed, the emperor summoned Kuang and said to him:

“Look yonder.”

And Kuang looked.

And he saw that the highway was completed, and he noticed that at different points all along the road, inns were being built. A host of pedestrians, carts, and palanquins were coming and going; and innumerable Chinese, overcome with fatigue, were carrying heavy burdens from Chin to Chan and from Chan to Chin. And Kuang said to himself: “It was the destruction of the canal that provided jobs for these poor people.” But it never occurred to him that their labor had been diverted from other employments.

And three more moons passed by, and the emperor said to Kuang:

“Look yonder.”

And Kuang looked.

And he saw that the inns were always full of travelers, and, grouped around them, were the shops of butchers, bakers, and dealers in swallows’ nests, to feed the hungry travelers. And, inasmuch as these worthy artisans could not go about naked, there had also settled among them tailors, shoemakers, and dealers in parasols and fans; and since people do not sleep out in the open air, even in the Celestial Empire, there were also carpenters, masons, and roofers. Then there were police officials, judges, and fakirs; in brief, a city with its suburbs had grown up around each inn.

And the emperor said to Kuang, “What do you think of it?”

And Kuang replied: “I should never have thought that the destruction of a canal could create jobs for so many people”; for it never occurred to him that these jobs had not been created, but displaced, and that the travelers used to eat just as well when they went along the canal as they did after they were forced to use the highway.

However, to the great astonishment of the Chinese, the emperor died, and this Son of Heaven was laid to rest.

His successor sent for Kuang and said: “Have the canal opened up.”

And Kuang said to the new emperor:

“Son of Heaven, you are making a mistake.”

And the emperor answered:

“Kuang, you are talking like a fool.”

But Kuang persisted and said, “Sire, what do you have in mind?”

“I have in mind,” the emperor said, “facilitating the movement of men and things between Chin and Chan by making transportation less expensive, so that the people may have tea and clothing at lower cost.”

But Kuang was all prepared. The evening before, he had received several issues of the Moniteur industriel, a Chinese newspaper. Knowing his lesson well, he asked permission to reply; after obtaining it, he prostrated himself nine times and said:

“Sire, by facilitating transporation, you hope to reduce the price of consumers’ goods, in order to put them within reach of the people, and to this end, you begin by making them lose all the jobs that the destruction of the canal gave rise to. Sire, in political economy, low prices…”

The emperor: “You seem to be reciting this from memory.”

Kuang: “You are right; it will be more convenient for me to read it to you.”

And, after unfolding L’Ésprit public, he read:

In political economy, low prices for consumers’ goods are of only secondary importance. The real problem consists in establishing an equilibrium between the price of labor and that of the means of subsistence. The wealth of a nation consists in the amount of employment it provides its labor force, and the best economic system is that which provides the greatest possible number of jobs. The question is not whether it is better to pay four cash or eight cash for a cup of tea, five taels or ten taels for a shirt. These are childish considerations unworthy of a mature mind. No one disputes your thesis. The problem is whether it is better to have to pay more for a commodity, but to have, thanks to the abundance of jobs and the higher price of labor, more means of acquiring it; or whether it is better to limit the number of job opportunities, reduce the total quantity of domestic production, and transport consumers’ goods by water, doubtless at lower cost, but at the same time denying some of our workers the possibility of buying them even at these reduced prices.

Since the emperor was still not entirely convinced, Kuang said to him: “Sire, deign to wait. I still have the Moniteur industriel to read to you.”

But the emperor said:

“I do not need your Chinese newspapers to know that to create obstacles is to divert and displace labor. But that is not my mission. Go out there and clear the obstacles from the canal. After that, we’ll reform the tariff.”

And Kuang went off, tearing at his beard and lamenting: “O Fô! O Pê! O Lî! and all other monosyllabic, circumflected gods of Cathay, take pity on your people; for there has come to us an emperor of the English school, and I can see that before long we shall be in want of everything, since we shall no longer need to do anything.”


This segment of Economic Sophisms is found at the Library of Economics and Liberty.
The featured image was taken by DaiLuo (CC BY 2.0 — cropped).
If you would like to download your very own copy, or join in on the discussion, please click the book! ☞