Letters to Malthus on Political Economy and Stagnation of Commerce
Jean Baptiste Say (1821)

Mr. Malthus, Professor of Political Economy, at the East India Company's College, has raised himself very high in the literary world by his Essay on Population, which has been translated into all the languages of Europe. For these two years past he has informed us, that he is preparing new Principles of Political Economy, considered with respect to the practical Applications. This work, which was impatiently expected, appeared in London, a few months since. M. J. B. Say, who has rendered great services to this science in our Country, and whom we can proudly oppose to the most celebrated English names, has not waited for a French Translation of it (1) to combat those opinions which are in opposition to his.
This discussion, between two men who have proved themselves able, and which is at this moment interesting to all the Trading Interest in the world, has appeared to us worthy the attention of the public, not only under existing circumstances, but at all times.
It will further serve to make Mr. Malthus's work known to those who have not read it.



All those who cultivate the new and beautiful science of Political Economy desire to read the work with which you have just enriched that subject. You are not one of those authors who address the public without having something to inform them; and when to the celebrity of the writer is joined the importance of the subject, when the subject is of no less importance to society, than to inform them what are their means of existence and enjoyment, it is to be supposed that the reader's curiosity must be doubly excited.

I shall not undertake, Sir, to join my suffrage to that of the public, by pointing out every thing that is ingenious, and at the same time just, in your work; this would be too great a task. Nor shall I undertake to enter into a discussion with you, upon some points to which you seem to me to attach an importance that they scarcely appear to merit. I shall not here tire either the public or you by dull controversies. But, I say it with sorrow, that there are some fundamental principles discoverable in your doctrine, which, were they to be admitted on so powerful an authority as yours, might cause to retrograde a science, the progress of which you are so good as to assist by your extensive knowledge and talent.

And, in the first place, what fixes my attention, because all the interest of the moment is attached to it, is, from whence comes that general overstock of all the markets of the universe, to which goods are incessantly carried which sell at a loss? — Whence comes it that in the interior of each state, with a want of action in unison with all the developments of industry, whence comes, I say, that universal difficulty that .is experienced in obtaining lucrative employ? And when the cause of this chronic malady is discovered, what are the means of cure? These are questions upon which the happiness and tranquillity of nations depend. Wherefore I cannot think a discussion tending to elucidate them will be unworthy your attention, and that of an enlightened public.

All those who, since Adam Smith, have turned their attention to Political Economy, agree that in reality we do not buy articles of consumption with money, the circulating medium with which we pay for them. We must in the first instance have bought this money itself by the sale of our produce.

To a proprietor of a mine, the silver money is a produce with which he buys what he has occasion for. To all those through whose hands this silver afterwards passes, it is only the price of the produce which they themselves have raised by means of their property in land, their capitals, or their industry. In selling them they in the first place exchange them for money, and afterwards they exchange the money for articles of consumption. It is therefore really and absolutely with their produce that they make their purchases: therefore it is impossible for them to purchase any articles whatever, to a greater amount than those they have produced, either by themselves or through the means of their capital or their land.

From these premises I have drawn a conclusion which appears to me evident, but the consequences of which appear to have alarmed you. I had said — As no one can purchase the produce of another except with his own produce, as the amount for which we can buy is equal to that which we can produce, the more we can produce the more we can purchase. From whence proceeds this other conclusion, which you refuse to admit — That if certain commodities do not sell, it is because others are not produced, and that it is the raising produce alone which opens a market for the sale of produce.

I know that this proposition has a paradoxical complexion, which creates a prejudice against it. I know that one has much greater reason to expect to be supported by vulgar prejudices, when one asserts that the cause of too much produce is because all the world is employed in raising it. — That instead of continually producing, one ought to multiply barren consumptions, and expend the old capital instead of accumulating new. This doctrine has, indeed, probability on its side; it can be supported by arguments, facts may be interpreted in its favour. But, Sir, when Copernicus and Galileo taught, for the first time, that the sun, although we see it rise every morning in the east, magnificently pass over our heads at noon, and precipitate itself towards the west in the evening, still does not move from its place, they had also universal prejudice against them, the opinions of the Ancients, and the evidence of the senses. Ought they on that account to relinquish those demonstrations which were produced by a sound judgment? I should do you an injustice to doubt your answer.

Besides, when I assert that produce opens a vent for produce; that the means of industry, whatever they may be, left to themselves, always incline themselves to those articles which are the most necessary to nations, and that these necessary articles create at the same time fresh populations, and fresh enjoyments for those populations, all probability is not against me.

Let us go back only two hundred years, and suppose that a merchant had taken a rich cargo to the sites on which the present cities of New York and Philadelphia stand — Would he have sold it? Suppose that, without failing a victim to the natives, he had succeeded in laying the foundation of an agricultural or a manufactural establishment: Would he have sold there any one of his articles? Most certainly not. He would have been obliged to consume them all himself. Why do we see it so different in our days? Why, as soon as goods arrive, or are manufactured at Philadelphia or New York, are we sure to sell them at the course of exchange? It appears evident to me that it is because the farmers, the merchants, and at present the manufacturers, even of New York and Philadelphia, and of the surrounding provinces, produce, and import produce, by the means of which they acquire that which is offered to them by others.

What is true as regards a new State, it will be said is not so of an old one. There was room in America for more producers and more consumers; but in a country where there were already more producers than were necessary, consumers only were wanted. Allow me to answer, that the only real consumers are those who produce on their part, because they alone can buy the produce of others, and that barren consumers can buy nothing except by the means of value created by producers.

It is probable that in the time of the reign of Queen Elizabeth, when England had not half the population of the present day, they had then discovered that there were more labourers than work. I desire no other proof of this than that very law which was then passed in favour of the poor, the result of which is one of the banes of England. Its principal object is to furnish work for the unfortunate who can find no employ. There was no employ in a country which since then has been able to furnish enough for a double and triple number of labourers. Whence comes it, Sir, whence comes it, however unfortunate may be the situation of Great Britain? Are more of divers articles sold in it, than in the days of Elizabeth? What can be the cause of this, if not that more is produced? One produces one thing, which he exchanges with his neighbour who produces another. Having more than enough for use, the population is increased, and still everybody has been better supplied.

It is the capability of production which makes the difference between a country and a desert. And the more a country produces, the more it is advanced, the more populous it is, and is the better provided.

This observation, which is self-evident, probably is not denied by you, but you complain of the conclusions I draw from it.

I have asserted that if there is an overstock, a superabundance of many kinds of goods, it is because other goods are not produced in sufficient quantities to be exchanged with the first. That if the producers of them could produce more, or others, the first would find the vent which now fails; in a word, that there is only too much produce of certain kinds because there is not enough of others, and you pretend that there may be a superabundance of all kinds at the same time, citing at the same time facts in your favour. M. de Sismondi had already opposed my doctrine, and I am very glad to quote here his most forcible expressions, in order not to deprive you, Sir, of any advantage that belongs to you, and that my answers may serve for both.

"Europe," says this ingenious author, "is arrived at a point to have, in all its parts, an industry and a manufacture superior to its wants." He adds, that "the incumbrance which results from it begins to be felt in the rest of the world." "Examine the reports of commerce, the newspapers, rand the accounts of travellers, and every where will be seen proofs of that super-abundance of production beyond the consumption, of that manufacture, proportionate, not to the demand, but to the capital employed; of that activity of merchants which induces them to go in crowds to every new settlement, and which exposes them by turns to ruinous losses in every trade in which they expected profit. We have seen merchandise of all kinds, but particularly that of England, the great manufacturing power, abound in all the markets of Italy, in a proportion so far beyond the demand, as to compel the merchants, in order to realise part of their funds, to sell their goods at a loss of a quarter, or a third, instead of at a profit.

The tide of commerce turned away from Italy, found its way into Germany, Russia, and the Brazils, and very soon met with the same obstacles there.

"The last advices inform us of similar losses in new countries. In the month of August, 1818, complaints were made at the Cape of Good Hope, that all the warehouses were filled with European goods, which were offered at a lower price than in Europe, but without finding a sale. In the month of June, at Calcutta, the complaints of commerce were of the same nature. A strange phenomenon at first appeared — England sending cotton goods to India, and consequently succeeding in working at a lower price than the half-naked inhabitants of Hindostan, and reducing its workmen to a still more miserable state.

"But this whimsical turn giver to commerce did not last long. At present British productions arc cheaper in India than in England itself. In the month of May they were obliged to re-export from New-Holland, European goods which had been sent there in too great abundance. Buenos Ayres, New Grenada, and Chile, are already returning goods in the same way.

"Mr. Fearon's voyage to the United States, completed only in the spring of 1818, presents this spectacle in a still more striking point of view. From one extremity to the other, of this vast and prosperous continent, there is not a city, nor a town, in which the quantity of goods offered for sale is not infinitely greater than the means of the buyers, notwithstanding the merchants endeavour to induce them, by very long credit, and every kind of facility in the payments, which they take in bills or in provisions of all kinds.

"No fact presents itself to us in a greater number of places, or under more varied shapes, than the disproportion of the means of consumption with the production — than the impossibility which producers find to give up their industry because it is declining, — and the certainty that their ranks are never thinned but by failures. How is it that philosophers will not see that which is evident to every vulgar eye?

"The error into which they have fallen is entirely owing to this false principle — that the production is the same thing as the revenue. Mr. Ricardo, according to M. Say, repeats and affirms it. 'M. Say has proved in the most satisfactory manner,' says he, that there is no capital, however large, that cannot be employed, because the demand for produce is only bounded by production.' No person produces but with the intention of consuming or selling the article he produces, and no one sells but with the intention of buying some other production, which may be of immediate use, or contribute to future production.

"The producer becomes therefore consumer of his produce, or buyer and consumer of the produce of some other person. "Upon this principle," continues M. de Sismondi, "it becomes absolutely impossible to comprehend or explain the best demonstrated fact in all the history of commerce, viz. the choaking up the markets." (2)

I shall first of all observe, to those persons to whom the facts about which M. de Sismondi afflicts himself with some reason, appear conclusive, that they are in effect conclusive; but that conclusion is against himself.

There are too many English goods offered in Italy and elsewhere, because there are not a sufficient quantity of Italian goods suited to England. A country buys only what it can pay for; for if it did not pay, others would soon cease to sell to it. Now with what do the Italians pay the English? With oil, silks, and raisins; besides these articles and a few others, if they want more English productions, with what would they pay for them? With money! But they must obtain the money wherewith to pay for the English productions. You see clearly, Sir, that in order to obtain productions, a nation, as well as an individual, must have recourse to its own productions.

It is said that the English sell at a loss in those places which they inundate with their goods, which I readily believe. They multiply the goods offered, which depreciates it; and they take specie in payment as much as they can, which consequently makes more scarce and more valuable. — Being become more precious, a less quantity is given in each exchange. This is the reason they are obliged to sell at a loss. But suppose for a moment, that the Italians had more capital — that they employed their land and their industrious powers better — in a word, that they produced more; and suppose, at the same time, that the English laws, instead of having been framed upon the absurd idea of the balance of commerce, had admitted, on moderate terms, every thing that the Italians could have produced, in payment for English productions; can you imagine that English goods would then incumber the Italian ports, or doubt that a still greater quantity of goods would find a ready sale?

The Brazils, a vast country, highly favoured by nature, could consume a hundred times the English goods which accumulate there, and don't sell; but it would be necessary that Brazil should produce all that it is capable of producing; and how is this poor Brazil to succeed in this? All the efforts of her citizens are paralised by her Administration. If any branch of industry appears likely to yield a profit, the executive power seizes and destroys it. If any one finds a precious stone, it is taken away from him. Great encouragement to seek for more wherewith to buy European goods!!

The English Government rejects, on its part, by means of its Custom Houses and Importation Duties, the production which the English might bring from abroad, in exchange for their goods, and even the necessary provisions, of which their manufacturers stand so much in need; and this because it is necessary that the English farmers should sell their wheat at above eighty shillings per quarter, in order to enable them to pay the enormous taxes. All these nations complain of the sufferings to which they have reduced themselves by their own fault. This puts me in mind of invalids who are out of temper with their sufferings, but who will not correct themselves of those excesses which are the primary cause of them. I know that an oak is not so easily grubbed up as a pernicious weed. I know that old barriers are not taken away, however rotten they may be, when they are supported by the dirt which has collected around them. I know that certain corrupt and corrupting governments stand in need of monopolies and custom-duties, to pay for the vote of the honourable majorities who pretend to be the representatives of nations. I am not sufficiently unjust to desire that one should govern with a view to the general interest, in order to obtain all the votes without paying for them; but at the same time, why should I be surprised that deplorable consequences should be the result of so many vicious systems?

You will readily admit with me, Sir, at least I presume so, the mischief which nations do to each other by their jealousies, their sordid interest, or by the ignorance of those who set themselves up as their organisers; but you maintain that, even supposing they have had more liberal institutions, the commodities produced may exceed the wants of consumers. Well, Sir, I am ready to defend myself on this ground.

Let us pass over the war which nations carry on against each other with their "douaniers," let us consider each people in their relations with themselves, and let us understand, once for all, whether we are beyond the reach of consuming what we are capable of producing.

"M. Say, 'Mr. Mill, and Mr. Ricardo, whom you call the principal authors of the new doctrine of profit, appear to me to have fallen into fundamental errors on that subject. In the first place they have looked upon merchandise as though it were an algebraic character instead of being an article of consumption, which must necessarily have reference to the number of consumers, and to the nature of their wants." (3)

I don't know, Sir, at least as far as regards myself, upon what you found that accusation. I have considered this idea in all its shapes — that the value of things (the only quality which makes them riches) is rounded on their utility, on the aptitude they possess to satisfy our wants.

"The need we have of things, I said, (4) depends upon the moral and physical nature of man, the climate he lives in, and on the manners and legislation of his country. He has wants of the body, wants of the mind, and of the soul; wants for himself, others for his family, others still as a member of society. The skin of a bear, and a rein-deer, are articles of the first necessity to a Laplander, whilst the very name of them is unknown to the Lazzaroni of Naples. The latter for his part can do without every thing, provided he can obtain macaroni. In the stone manner the Courts of Judicature in Europe are considered as one of the strongest bonds of the social body, whilst the indigent people of America, the Arabs, and the Tartars, do very well without them.

"Of these wrests, some are satisfied by the use we make of certain things, with which Nature furnishes us gratuitously, such as the air, water, and the light of the sun. We may call these things natural riches, because Nature alone pays the cost of them. As she gives them indiscriminately to all, no one has occasion to acquire them by means of any sacrifice whatever; therefore, they have no exchangeable value.

"Other wants can only be satisfied by the use we make of certain things, to which the use they are of could only, be given them by causing them to undergo a modification, by having effected a change in their state, and by having for that purpose surmounted some difficulty or other. Such are the things which we can only obtain by agricultural process, by commerce, or the arts. These are the only property that has an exchangeable value. The reason of which is evident — they are, by the simple fact of their production, the result of an exchange in which the producer has given his productive services for the purpose of receiving this produce. From that time they cannot be obtained from him, except by virtue of another exchange — by giving him another production which he may estimate at as much as his own.

"These things may be called social riches, because no exchange can take place without social intercourse, and because it is only in society that the right of exclusively possessing what has been obtained by production, or exchange, can be guaranteed."

I add; "Let us observe, at the same time, that social riches are, as riches, the only ones which can become the object of a scientific study; 1st. because they are the only ones which are appreciable, or at least whose appreciation is not arbitrary; 2nd. because they are the only ones which are obtained, distributed, and destroyed, agreeably to the laws which we may make."

Is this considering productions as algebraic characters, by abstracting the number of consumers, and the nature of their wants? Does not this doctrine establish, on the contrary, that our wants alone compel us to make sacrifices by means whereof we obtain productions?

These sacrifices are the price we pay to obtain them. You call these sacrifices, according to Smith, by the name of labor, which is an insufficient expression, for they include the concurrence of land and capital.

I call them productive service. They have every where a price current; as soon as this price exceeds the value of the thing produced, a disadvantageous exchange is the result, in which a greater value has been consumed than has been produced.

As soon as a produce has been created, which is equivalent to services, the services are paid by the produce, the value of which, by being distributed amongst the producers, forms their revenue. You see therefore that this revenue only exists in proportion to the exchangeable value of the produce, and that it can only have that value in consequence of the demand for it, in the present state of society. I do not therefore separate this want, nor do I give it an arbitrary valuation. I take it for what it is — for what the consumers will have it to be. I could quote, if it were necessary, the whole of my book iii. which details the different modes of consuming, their causes and effects; but 1 will not intrude upon your time and attention. Let, us proceed.

You say "It is by no means true; in fact, that commodities are always bartered for commodities. The greatest part of commodities are directly exchanged for labor, productive or unproductive, and it is evident that this mass of commodities altogether, compared to the labor for which they are to be exchanged, may depreciate in value on account of its superabundance, the same as a single article, in particular, may by its superabundance fall in value in respect to labor or money." (5)

Allow me to observe, in the first place, that I did not say that commodities are always bartered for commodities, but rather that productions are only bought with productions.

In the second place, that those who admit this expression, commodity, might reply to you, that when commodities are given in payment of labor, these commodities are in effect exchanged for other commodities, that is to say for those which are produced by the labor that is paid for. But this answer. is not sufficient for those who take a more extended and complete view of the phenomenon of the production of our riches. Allow me to lay before you a striking figure; the public, by whom we are judged, will I hope find great facilities in it, in weighing the merit of your objections and my answers.

For the purpose of showing the operation of industry, capital, and land, in the work of production, I personify them; and I find that each one of these persons sells his services, (which I call productive services,) to an enterpriser who is a merchant, a manufacturer, or rather a farmer. This enterpriser having bought the services of a parcel of land, by paying a rent to the proprietor, the services of a capital by paying interest to a capitalist, and the industrious services of labourers, clerks, or agents of any kind, by paying them a salary, consumes and annihilates all these productive services; and from this consumption, a produce of a certain value emanates.

'The value of the produce, provided it be equal to the costs of production, that is to say, to the price which it has been necessary. to advance for all the productive services, is sufficient to pay the profits of all those who have contributed, directly or indirectly, to this production

The profit of the enterpriser, on whose account the operation has been made, by deducting the interest of the capital that has been employed, represents the salary for his time and talent, that is to say, his own services productive to himself.

If his capacity was great, and his calculations well made, his profit is considerable. If instead of talent, he has shown ignorance in his business, he will have gained nothing; he will have lost. It is the enterpriser who takes all the risk; but it is he, on the other hand, who benefits by every favourable result.

All the productions which daily come before us, and all those which our imaginations tan conceive, have been formed by operations, every one of which forms part of those I have just explained, but combined in an infinity of different ways. What some enterprisers do to obtain certain productions, others do to obtain other productions. Now it is these various productions, which being exchanged against each other, open a reciprocal vent each to the other.. The greater or less want there is of one of these productions, compared with others, determines an exchange at a greater or less price; that is, for a greater or less quantity of any other production. Money is nothing more in this matter than a passing agent, which, the exchange once complete, has nothing more to do with it, but is employed in other exchanges.

It is with the rent of the land, the interest, and the salaries, which form the profits resulting from this production, that the producers purchase the articles of their consumption. Producers are at the same time consumers; and the nature of their wants, having an influence, in different degrees, on the demand for different productions, always favours, when liberty exists, the production of that which is most necessary, because, being the most in demand, it immediately becomes the article which yields the greatest profit to enterprisers.

I have said, that for the purpose of better showing how industry. capital, and land, act in productive operations, I would personify them, and mark the services they render. But this is not a mere fiction: they are facts. Industry is represented by the industrious of all classes, capital by the capitalists, and land by the proprietors. It is these three classes of persons who sell the productive action of their commodity, and who affix the price to it.

My mode of expressing myself may be censured; but then it will be necessary to produce a better, for it cannot be denied that things take place as I have asserted. I have described the facts. The mode of description may be censured; but don't let any one flatter himself that he can controvert the facts; there they are, and will defend themselves.

Let us now resume your accusation — You say, Sir, that many commodities are bought with labor; and I go further than you do, I say that they must all be so bought; extending this expression, labor, to the service rendered by capital and land,(6) I say that they cannot be bought in any other way; that it is invariably by such services that use and value are given to things; and that ultimately two things present themselves to us, one of consuming ourselves the utility and consequently the value we have produced, the other to employ it in purchasing the utility and value produced by others; that in both eases we purchase commodities with productive services, and that the greater portion of productive service we employ, the more we can buy.

You pretend that there is no such thing as immaterial produce. Ah! Sir, originally there was no other. A field itself furnished nothing towards the production but its service, which is an immaterial produce. It serves as a crucible in which minerals are put, and from whence tome out metal and dross. Is there any part of the crucible in these productions? No; the crucible serves for a new productive operation. Is there any part of the field in the harvest which it produces? I answer the same: No; for if a fund of land exhausted itself, it would finish at the end of a certain number of years, by being entirely annihilated. A fund of land only returns what is put into it; but this is after an elaboration which I call the productive service of the field. I may be criticised about the word, but I fear not any criticism on the subject, because the thing is, and will be, and wherever political economy is studied this will be found to be the fact, whatever name may be thought proper to be given to it. The service which a capital renders, in whatever enterprise it is employed, whether commercial, agricultural, or manufactural, is the same — an immaterial produce. He who expends a capital unproductively destroys the capital itself; he who expends it productively expends the material capital, and the service of this capital besides, which is an immaterial produce. When a dyer puts one thousand francs' worth of indigo into his cauldron he consumes a thousand francs' worth of indigo, immaterial produce, and he consumes, besides, the time his capital is employed, that is its interest. The dye he obtains returns him the value of the material capital which he has employed, and the value of the immaterial service of this same capital besides.

The service of the workman is also an immaterial produce. The workman leaves his manufactory, in the evening, just as he went into it in the morning. He has left nothing material in his workshop, therefore it is an immaterial service which he has furnished to a productive operation. This service is the daily and annual produce of a fund which I call his industrious powers, and which constitutes his wealth; a poor wealth! particularly in England, and I know the cause of it.

All these things constitute immaterial produce; call. them by whatever name you please, they will be no other than immaterial produce, which will exchange one against the other, or for material produce, and which in all these exchanges will form their regulated price-current, like all other price-currents in the world, on the proportion between the supply and the demand.

All these services, of industry, capital, and land, which are productions independent of all matter, form the revenue of all mankind. What! all our revenues are immaterial!! Yes, Sir, all: otherwise it would be necessary that the mass of matter of which the Globe is composed should be augmented every year. This would be necessary in order that every year we might have a fresh material revenue. We neither create nor destroy a single atom. We confine ourselves to changing its combinations, and every thing we employ in it is immaterial. It is of value; and it is that value, also immaterial, which we consume daily and yearly, and which keeps us alive; for consumption is a change of form given to matter, or, if you prefer it, a derangement of form, as production is the arrangement of it. If you find any thing paradoxical in all these propositions, look at the things they express, and I have no doubt they will appear very simple and very reasonable to you.

Without this analysis I defy you to explain the entire facts; to explain, for example, how the same capital is consumed twice, productively by an enterpriser, and unproductively by his workman. By help of the preceding analysis it will be seen, that the workman supplies his labor, the produce of his capacity, which he sells to the enterpriser — takes home his salary, which forms his revenue, and consumes it unproductively. The enterpriser, (who has bought the labor of the workman) on his part, by devoting a part of his capital to it, consumes it productively, the same as the dyer productively consumes the indigo he throws into his cauldron. These values, having been reproductively destroyed, reappear in the produce which comes out of the hands of the enterpriser. It is not the enterpriser's capital which forms the workman's revenue, as M. Sismondi pretends. It is in the workshops, and not in the workman's dwelling, that the enterpriser's capital is consumed. The value consumed at the workman's house has another source, it is the produce of his industrious powers. The enterpriser devotes a part of his capital to the purchase of this labor.

Having bought it, he consumes it; and the workman on his part consumes the value he has obtained in exchange for his labor. Wherever there is an exchange, there are two values. created and bartered; and where ever two values are created, there can be and there is in fact two consumptions.(7)

It is the same with productive service yielded by the capital. The capitalist who lends it sells the service, the labor of his commodity, and the daily or yearly price, which an enterpriser pays him for it, is called interest. The two terms of exchange are, the one service ate capital, the other interest.

The enterpriser, at the same time that he productively consumes the capital, also productively consumes the service of the capital. The lender, on his part, who has sold the service of his capital, unproductively consumes the interest of it, which is a material value, given in exchange for the immaterial service of the capital. It is astonishing that there is a double consumption: that of the enterpriser to make his produce, and that of the capitalist to satisfy his wants, since there are the two terms of one exchange, two values proceeding from two different funds, bartered, and both consumable?

You say, Sir, that the distinction between productive and unproductive labor is the earner stone of Adam Smith's work, and that to call, as I have done, that labor productive which is not fixed in any material object, is to overthrow his work from top to bottom. No, Sir, this is not the earner stone of Adam Smith's work, since, that stone being shaken, the edifice is imperfect without being less stable. What will eternally support that excellent work is, that it proclaims in all its pages, that the changeable value of things is the foundation of all wealth. It is from that time that political economy is become a positive science; for the price-current of each thing is a determined quantity, the elements of which may be analised, the causes assigned, the bearings studied, and the changes foreseen. By taking away from the definition of wealth this essential character, allow me to inform you, Sir, we replunge the science into the surge, and drive it back.

Far from undermining the celebrated inquiries into the Wealth of Nations, I support them in all their essential parts; but at the stone time, I think Adam Smith has misconceived real exchangeable value, by forgetting that which is attached to productive service, which leaves no trace behind, because the whole of it is consumed. I think he has also forgotten real services, which even leave traces behind them, in material productions such as service of capital, consumed, independently of the capital itself. I think he has got into infinite obscurity, for want of having distinguished the consumption of the industrious services of an enterpriser, from the services of his capital — a distinction so real, however, that there is scarcely any commercial house that does not keep these accounts under distinct heads.

I revere Adam Smith, — he is my master. At the commencement of my career in Political Economy, whilst yet tottering, and driven on the one hand by the Doctors of the Balance of Trade, and on the other by the Doctors of Net Proceeds, I stumbled at every step, he showed me the fight road. Leaning upon his Wealth of Nations, which at the same time discovers to us the wealth of his genius, I learned to go alone. Now I no longer belong to any school, and shall not share the ridicule of the Reverend Jesuit Fathers who translated Newton's Elements, with notes. They felt that the laws of natural philosophy did not well accord with those of Loyola; they also took care to inform the public by an Advertisement, that although they had apparently shown the motion of the Earth, in order to complete the development of celestial philosophy, they were not less under subjection to the decrees of the Pope, who did not admit this motion. I am only under the subjection of the decrees of eternal Reason, and I am not afraid to say so. Adam Smith has not embraced the whole of the phenomenon of the production and consumption of wealth, but he has done so much that we ought to feel grateful to him. Thanks to him, the most vague, the most obscure of sciences will soon become the most precise, and that which of all others will leave the fewest points unexplained.

Let us figure to ourselves, producers (and under this name I comprise as well the possessors of capitals and lands, as the possessors of industrious powers,) let us fancy them advancing, to meet each other with their productive services, or the profit which has resulted from them (an immaterial quality). This profit is their produce. Sometimes it is fixed on an immaterial object, which is transmitted with the immaterial produce, but which in itself is of no importance, is nothing, in political Economy: for matter, dispossessed of value, is not wealth. Sometimes it is transmitted, is sold by one, and bought by another, without being fixed in any matter. It is the advice of the Doctor or the Lawyer, the service of the Soldier or the public Officer. Every one exchanges the utility he produces against that which is produced by others, and in every one of these exchanges, which are carried to account in a book of competition, as the utility offered by Paul is more or less in demand than that offered by Jacques, it sells dearer or cheaper — that is to say, that it obtains in exchange more or less of the utility offered by the latter. It is in this sense that the influence of the demand and supply must be understood.(8)

This, Sir, is not a doctrine advanced by way of afterthought; it is to be found in sundry parts of my Treatise on Political Economy;(9) and by the help of my Epitome its coincidence with every other principle of the science, and with all the facts which serve for its basis, is fundamentally the same. It is already professed in many parts of Europe; but I earnestly desire that it may succeed in convincing you, and that it may appear to you to be worthy of being introduced into the chair, which you fill with so much eclat.

After these necessary explanations, you will not accuse me of finesse if I rest upon those laws which I have shown to be rounded on the nature of things and on the facts which issue from them.

Commodities, you say, are only exchanged for commodities: they are also exchanged for labor. If this labor be a produce that some persons sell, that others buy, and that the latter consume, it will cost me very little to call it a Commodity, and it will cost you very little more to assimilate other commodities to it, for they are also produce.. Then comprising both under the generic name of Produce, you may perhaps admit that produce is bought only with produce.


1. The Translation of Professor Malthus's Principles of Political Economy, by M. F. S. Constancie, (who translated Mr. Ricardo's work) is in the press, and will appear in the course of the month of August, published by J. P. Aillaud, Bookseller, No. 21, Quai Voltaire. It will consist of two octavo volumes, of about 400 pages each.

2. Sismondi's New Principles of Political Economy, vol. i. 337, and following pages.

3. Malthus's Principles of Political Economy, page 354. (I quote from the English Edition, not having yet seen a translation).

4. Treatise on Political Economy, or simple explanation of the manner in which riches are obtained, distributed and consumed, 4th edition. Vol. ii. page 5.

5. Malthus's Principles etc. page 353.

6. What oftentimes makes English authors obscure is, that they confound by the example of Smith, under the name of labor, the services rendered by men, by capital, and by land.

7. A domestic produces personal services, which, as soon as produced, are unproductively consumed by his master. The service of a public functionary is also entirely consumed by the public, as it is produced. This is the reason why these different services do not produce any augmentation of wealth. The consumer enjoys these services but cannot accumulate them. This is particularly explained in my Treatise on Political Economy, 4th Ed. vol. i. page 124. How Mr. Malthus could print page 35 after this, is inconceivable: in which he says that, "the progress which Europe has made since the feudal times cannot be explained, if per anal service is considered as productive as the labor of tradesmen and manufacturers. It is the same with these services as with the labor of the gardener who has cultivated salads or strawberries. The wealth of Europe certainly does not proceed from the strawberries, because they, like personal service, are all unproductively consumed as they ripen, although not so quick as personal service.

I mention strawberries here, as a produce of very short duration, but it is not because a production is durable that it gives greater facility to accumulation. It is because it is so consumed as to produce its value in another article: for durable or not. every production is devoted to consumption, and is no further useful than by its consumption (this utility consists, either in satisfying a want, or in producing a fresh value). When we begin to write upon political economy, the first thing to be done is to divest ourselves of the idea that a durable production accumulates better than a perishable one.

8. What the English call Want and Supply.

9. Fourth edition. Bk. I. ch. 15. Bk. II ch. l. 2. 3 and 5. See also the Epitome at tho end of each work, particularly the words Productive Services, Charges of Production, Revenues, Profit, Value.

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