III: THE CIRCULATION OF WEALTH
The Physiocrats were the first to attempt a synthesis of distribution. They were anxious to know—and it was surely a praiseworthy ambition—how wealth passed from one class in society to another, why it always followed the same routes, whose meanderings they were successful in unravelling, and how this continual circulation, as Turgot said, “constituted the very life of the body politic, just as the circulation of the blood did of the physical.”
A scholar like Quesnay, the author of the work on animal economy[39] and a diligent student of Harvey’s new discovery, was precisely the man to carry the biological idea over into the realm of sociology. He made use of the idea in his Tableau économique, which is simply a graphic representation of the way in which the circulation of wealth takes place. The appearance of this table caused an enthusiasm among his contemporaries that is almost incredible,[40] although Professor Hector Denis declares that he is almost ready to share in Mirabeau’s admiration.[41]
We know by this time that this circulation is much more complicated than the Physiocrats believed, but it is still worth while to give an outline of their conception.[42]
Quesnay distinguishes three social classes:
1. A productive class consisting entirely of agriculturists—perhaps also of fishermen and miners.
2. A proprietary class, including not only landed proprietors, but also any who have the slightest title to sovereignty of any kind—a survival of feudalism, where the two ideas of sovereignty and property are always linked together.
3. A sterile class, consisting of merchants and manufacturers, together with domestic servants and members of the liberal professions.
The first class, being the only productive class, must supply all that flow of wealth whose course we are now to follow. Let us suppose, then—the figures are Quesnay’s and seem sufficiently near the facts—that the value of the total wealth produced equals 5 milliard francs. Of this 5 milliards 2 milliards are necessary for the upkeep of the members of this class and its oxen during harvest and sowing. This portion does not circulate. It simply remains where it was produced. The produce representing the remaining 3 milliards is sold. But agricultural products alone do not suffice for the upkeep of Class 1. Manufactured goods, clothes, and boots also are required, and these are got from the industrial classes, for which a milliard francs is given.
There remain just 2 milliards, which go to the landowners and the Government in rents and taxes. By and by we shall see how they attempted to justify this apparent parasitism.
Let us pass on to consider the propertied class. It manages to live upon the 2 milliards which it receives by way of rents, and it lives well. Its food it must obtain from the agricultural class (unless, of course, the rents are paid in kind), and for this it possibly pays a milliard francs. It also requires manufactured goods, which it must get from the sterile class, and for which it pays another milliard francs. This completes their account.
As to the sterile class, it produces nothing, and so, unlike the preceding class, it can only get its necessaries second-hand from the productive class. These may be got in two ways: a milliard from the agricultural class in payment for manufactured goods and another milliard from the landed proprietors. The latter milliard being one of the two which the landed proprietors got from the agriculturists, has in this way described the complete circle.
The 2 milliards obtained as salaries by the sterile class are employed in buying the necessaries of life and the raw material of industry. And since it is only the productive class that can procure these necessaries and raw materials, this 2 milliards passes into the hands of the agriculturists. The 2 milliards, in short, return to their starting-point. Adding the milliard already paid by the landed proprietors to the 2 milliards’ worth of products unsold, the total of 5 milliards is replaced in the hands of the productive class, and so the process goes on indefinitely.[43]
This résumé gives but a very imperfect idea of the vast complexities and difficulties involved in tracing the growth of revenues—an evolution which the Physiocrats followed with the enthusiasm of children. They imagined that it was all very real.[44] The rediscovery of their millions intoxicated them, but, like many of the mathematical economists of to-day, they forgot that at the end of their calculations they only had what they had assumed at the beginning. It is very evident that the table proves nothing as to the essential point in their system, namely, whether there really exist a productive and a sterile class.[45]
The most interesting thing in the Physiocratic scheme of distribution is not the particular demonstration which they gave of it, but the emphasis which they laid upon the fact of the circulation of wealth taking place in accordance with certain laws, and the way in which the revenue of each class was determined by this circulation.
The singular position which the proprietors hold in this tripartite division of society is one of the most curious features of the system.
Anyone examining the table in a non-Physiocratic fashion, but simply viewing it in the modern spirit, must at once feel surprised and disappointed to find that the class which enjoys two-fifths of the national revenue does nothing in return for it. We should not have been surprised if such glaring parasitism had given to the work of the Physiocrats a distinctly socialistic tone. But they were quite impervious to all such ideas. They never appreciated the weakness of the landowners’ position, and they always treated them with the greatest reverence. The epithet “sterile” is applied, not to them, but to manufacturers and artisans! Property is the foundation-stone of the “natural order.” The proprietors have been entrusted with the task of supplying the staff of life, and are endued with a kind of priestly sacredness. It is from their hands that all of us receive the elements of nutrition. It is a “divine” institution—the word is there.[46] Such idolatry needs some explanation.
One might have expected—even from their own point of view—that the premier position would have been given to the class which they termed productive, i.e. to the cultivators of the soil, who were mostly farmers and métayers. The land was not of their making, it is true. They had simply received it from the proprietors. This latter class takes precedence because God has willed that it should be the first dispenser of all wealth.[47]
There is no need to insist on this strange aberration which led them to look for the creator of the land and its products, not amid the cultivators of the soil, but among the idlers.[48] Such was the logical conclusion of their argument. We must also remember that the Physiocrats failed to realise the inherent dignity of all true labour simply because it was not the creator of wealth. This applied both to the agricultural labourer and the industrial worker, and though the former alone was considered productive it was because he was working in co-operation with nature. It was nature that produced the wealth and not the worker.
Something must also be attributed to their environment. Knowing only feudal society, with its economic and political activities governed and directed by idle proprietors, they suffered from an illusion as to the necessity for landed property similar to that which led Aristotle to defend the institution of slavery.[49]
Although they failed to foresee the criticisms that would be levelled against the institution of private property, they were very assiduous—especially the Abbé Baudeau—in seeking an explanation of its origin and a justification of its existence. The reasons which they advanced are more worthy of quotation than almost any argument that has since been employed by conservative economists.
The most solid argument, in their opinion—at least the one that was most frequently used—is that these proprietors are either the men who cleared and drained the land or else their rightful descendants. They have incurred or they are incurring expenditure in clearing the land, enclosing it and building upon it—what the Physiocrats call the avances foncières.[50] They never get their