§3. Domination Through
Industrial Superiority
by Frédéric Bastiat
Economic Sophisms, originally in Le Libre échange, Feb. 14, 1847.
Just as, in time of war, a nation attains ascendancy over its enemies by virtue of its superiority in weapons, can a nation, in time of peace, attain ascendancy over its competitors by virtue of its industrial superiority?
This is a question of the highest interest in an age when no one seems to doubt that in the field of industry, as on the field of battle, the stronger crushes the weaker.
For this to be so, someone must have discovered, between the labor that is exerted upon things and the violence that is exerted upon men, a melancholy and discouraging analogy; for how could these two kinds of operations be identical in their effects if they are opposite in nature?
And if it is true that in industry, as in war, ascendancy is the necessary result of superiority, why do we concern ourselves with progress or with political economy, since we live in a world in which everything has been so arranged by Providence that one and the same effect—oppression—inevitably follows from principles that are directly opposed to each other?
In regard to the entirely new policy into which free trade is leading England, many people are making the following objection, which, I must admit, carries weight even with the most openminded among us: Is England doing anything else than pursuing the same end by different means? Has she not always aspired to world supremacy? Assured of superiority in capital and labor, is she not inviting free competition in order to stifle Continental industry, reign supreme, and win for herself the privilege of feeding and clothing the nations she has ruined?
It would be easy for me to demonstrate that these alarms have no basis in fact; that our supposed inferiority is greatly exaggerated; that every one of our major industries is not only holding its ground, but is actually expanding under the impact of foreign competition, and that its inevitable effect is to bring about a general increase in consumption that is capable of absorbing both domestic and foreign products.
Today I propose, rather, to make a frontal attack upon this objection, allowing it all the strength and the advantage of the ground it has chosen. Disregarding for the moment the special case of the English and the French, I shall seek to discover, in general terms, whether a country that, by its superiority in one branch of industry, succeeds in eliminating foreign competition in that industry, has thereby taken a step toward domination over the other country, and the latter a step toward dependence on it; whether, in other words, both do not profit from the operation, and whether it is not the nation that has been bested in this commercial rivalry that profits the most.
If a product is viewed only as an opportunity for expending labor, the alarms of the protectionists are certainly well founded. If we consider iron, for example, only in connection with ironmasters, we might well fear that the competition of a country in which iron is a gratuitous gift of Nature could extinguish the fires in the blast furnaces of another country in which there is a scarcity of ore and fuel.
But is this a complete view of the subject? Is iron connected only with those who make it? Does it have no connection with those who use it? Is its sole and ultimate end simply to be produced? And if it is useful, not on account of the labor for which it provides employment, but by reason of the qualities it possesses, the numerous services for which its hardness and its malleability render it fit, does it not follow that a foreigner cannot reduce its price, even to the point of rendering its production in our country completely unprofitable, without doing us more good in the latter respect than harm in the former?
It should be kept in mind that there are many things that foreigners, on account of the natural advantages by which they are surrounded, prevent us from producing directly, and with relation to which we are situated, in fact, in the hypothetical position we have been considering with regard to iron. We produce at home neither tea, coffee, gold, nor silver. Does this mean that our industry as a whole thereby suffers some diminution? No; it means only that, in order to create the equivalent value needed to acquire these commodities by way of exchange, we employ less labor than would be required to produce them ourselves. We thus have more labor left over to devote to satisfying other wants. We are that much richer and stronger. All that foreign competition has been able to do, even in cases in which it has absolutely eliminated us from a particular branch of industry, is to save labor and increase our productive capacity. Is this the way for the foreigner to attain mastery over us?
If someone found a gold mine in France, it does not follow that it would be to our interest to work it. In fact, it is certain that the enterprise should not be undertaken if each ounce of gold absorbed more of our labor than would an ounce of gold bought from Mexico with cloth. In that case it would be better to continue to regard our looms as gold mines. And what is true of gold is no less true of iron.
The illusion has its source in our failure to see that foreign superiority eliminates the need for but one particular kind of labor in the domestic market and renders that particular kind of labor superfluous only by putting at our disposal the result of the very labor so eliminated. If men lived in diving bells under water and had to provide themselves with air by means of a pump, this would be an immense source of employment for them. To do anything that might interfere with their employing their labor in this way, while leaving their conditions unchanged, would be to inflict frightful harm on them. But if their labor ceases only because there is no longer a need for it, because the men are placed in another environment in which air is introduced into their lungs without effort, then the loss of this labor is in no way regrettable, except in the eyes of those who persist in seeing the sole value of labor in the labor itself.
It is precisely this type of labor that machinery, free trade, and progress of every kind are gradually eliminating; not productive labor, but labor that has become superfluous, surplus labor devoid of purpose or result. Protectionism, on the contrary, puts it back to work; it places us once again under water, in order to furnish us with the opportunity of using the air pump; it compels us to seek for gold in the inaccessible domestic mine rather than in our domestic looms. Its whole effect is expressed in the phrase: waste of energy.
It will be understood that I am speaking here of general effects, and not of the temporary inconveniences occasioned by the transition from a bad system to a good one. A momentary disturbance necessarily accompanies every advance. This may be a reason for easing the transition as much as possible; it is not a reason for systematically prohibiting all progress, still less for failing to recognize it.
Industrial competition is generally represented as a conflict; but this is not a true picture of it, or it is true only if we confine ourselves to the consideration of each industry in terms of its effects upon another, similar industry, isolating both of them, in thought, from the rest of mankind. But there is something else to be considered: their effects upon consumption and upon general well-being.
That is why it is not permissible to compare commercial relations, as is often done, to war and to treat the two of them as analogous.
In war, the stronger overcomes the weaker.
In business, the stronger imparts strength to the weaker. This utterly destroys the analogy.
The English may be strong and skillful; they may have enormous amortized investments; they may have at their disposal the two great forces of production: iron and fuel; all this means that the products of their labor are cheap. And who profits from the low cost of a product? The person who buys it.
It is not within the power of the English to annihilate absolutely any part whatsoever of our labor. All they can do is to render it superfluous with respect to a given result that has already been achieved, to furnish us the air and at the same time dispense with the pump, to increase thereby the productive capacities at our disposal, and—what is especially noteworthy—to render their alleged ascendancy over us the less possible the more their industrial superiority becomes incontestable.
Thus, by a rigorous yet reassuring demonstration, we reach the conclusion that labor and violence, which are so opposite in nature, are none the less so in their effects, whatever protectionists and socialists may say of them.
In order to reach this conclusion all that we have to do is to distinguish between labor that has been abolished and labor that has been saved.
To have less iron because one works less, and to have more iron although one works less, are things that are more than just different; they are opposite. The protectionists confuse them; we do not. That is all.
We should realize that if the English undertake enterprises that involve a great deal of activity, labor, capital, and intelligence, and a great number of natural resources, it is not just for show, but to procure for themselves a great number of satisfactions in exchange for their products. They certainly expect to receive at least as much as they give, and what they produce in their own country pays for what they buy elsewhere. If, therefore, they flood us with their products, it is because they expect to be flooded with ours. In that case, the best way to acquire for ourselves as many of their products as possible is to be free to choose between these two means of obtaining them: direct production or indirect production. All the arts of British Machiavellism cannot force us to make a poor choice.
Let us, then, cease this childish practice of comparing industrial competition to war; whatever element of plausibility this faulty analogy has comes of isolating two competing industries in order to determine the effects of their competition. As soon as one introduces into this calculation the effect produced upon the general well-being, the analogy breaks down.
In a battle, he who is killed is utterly destroyed, and the army is so much the weaker. In industry, a factory closes only when what it produced is replaced, with a surplus besides, by the whole of domestic industry. Imagine a state of affairs in which, for each man killed in action, two spring from the ground full of strength and energy. If there is a planet where such things happen, war, it must be admitted, is conducted there under conditions so different from those we see down here that it no longer deserves even to be called by the same name.
Now, this is the distinguishing characteristic of what has been so inappropriately called industrial warfare.
Let the English and the Belgians lower the price of their iron, if they can; let them keep on lowering it until they send it to us for nothing. They may quite possibly, by this means, extinguish the fire in one of our blast furnaces, i.e., in military parlance, kill one of our soldiers; but I defy them to prevent a thousand other branches of industry from springing up at once, as a necessary consequence of this very cheapness, and becoming more profitable than the one that has been killed.
Our conclusion must be, then, that domination through industrial superiority is impossible and self-contradictory, since every superiority that manifests itself in a nation is transformed into low-cost goods and in the end only imparts strength to all other nations. Let us banish from political economy all expressions borrowed from the military vocabulary:
to fight on equal terms, conquer, crush, choke off, be defeated, invasion, tribute.
What do these terms signify? Squeeze them, and nothing comes out. Or rather, what comes out is absurd errors and harmful preconceptions. Such expressions are inimical to international co-operation, hinder the formation of a peaceful, ecumenical, and indissoluble union of the peoples of the world, and retard the progress of mankind.
