Friday, June 27, 2014

An Inquiry into those Principles, respecting the Nature of Demand and the Necessity of Consumption, &c.


"Up to this time, things passed off without any noise; and, thank Heaven! nobody kicked against my prescriptions: — but, however excellent is the practice of a physician, somebody or other is always sure to find fault with it." This was the sage remark of that very learned professor of medicine, Gil Blas, after his quarrel with the fiery little doctor Cuchillo. They had both been called to visit a grocer's son in the last stage of dropsy; Gil Blas, on the authority of his great master, the illustrious Sangrado, prescribed copious bleedings, and immeasurable draughts of hot water; while Cuchillo quoted Celsus in favour of abstinence from liquids under this disorder, and called Sangrado a fool. Gil Blas returned the civility with interest; and the two doctors, forgetful of their dying patient, soon came to fisty-cuffs by his bed-side, so that it was not an easy matter for the grocer, with the assistance of his shopman, to separate them.

To see the country sinking under a chronic disorder which is daily exhibiting more aggravated and alarming symptoms, while the attendant physicians, both in and out of parliament, are quarrelling about the nature of it, and about the efficacy of their respective prescriptions, may well remind us of the disputes between Gil Blas and Cuchillo. One set of doctors attributes the present disease of the country to deficient consumption; a second, to excessive production; while a third calls them both fools, and contends that there can be no such thing as excess of production or deficiency of consumption, because the one is of necessity a measure of the other, since production, M. Say asserts, always opens a market for production. When there is a glut of commodities, the way to cure it is to produce more; when you are dropsical, drink, drink: "chaque produit cree est un debouche ouvert, et chaque produit detruit ou consomme est un debouche ferme." — "Tout ce qui petit se produire peut trouver des consommateurs!"

The question, which is the more immediate subject of investigation in the pamphlet before us, has already been introduced in our notice of Mr. Malthus's work on political economy in a preceding portion of this Number; where we stated, briefly, but we trust with tolerable correctness, his views of the nature of demand and supply, and the opposite ideas of M. Say. We cannot spare room to renew the discussion; and indeed the market is so glutted with publications on political economy, that, notwithstanding M. Say's notion that consumption always keeps pace with production, we should anticipate the nausea of a surfeit in devoting a larger portion of our pages to these interminable disputes. Any person, however, who is disposed to fathom the question, will do well to read the present Inquiry, which is written with considerable ability and acuteness; and we must say that the inference which Mr. Malthus has chosen to draw from his view of it, so convenient and acceptable to the "powers that be," (namely, that taxation and the maintenance of unproductive consumers are conducive to the progress of wealth,) is here refuted with great precision and force of argument.

With respect to the general distress which prevails in this kingdom, if a rapid depreciation of the products of the earth may be fairly considered as one of the proximate causes of it, we must look to other and more remote sources for its origin. All climates and countries have their own peculiar productions, and the industry of every people shoots out in its own favourite and peculiar directions. The consequence is that all possess a superabundance of certain articles of product and manufacture, which they are glad to exchange for other articles that they want. All Europe, and indeed the whole civilized world, is thus supplied: the deficiencies of some countries being remedied by the superfluities of others; and the wants and the consumption of each encouraging the productions of all others, as well as of its own. Any long-continued obstruction, therefore, must derange this salutary circulation, this beneficial system of interchange and reciprocal accommodation. During the last unhappy war, not only was every link in the commercial chain which had previously connected together the various nations of Europe, even during their hostilities, snapped asunder, but the intercourse also of Europe with America was violently interrupted. The ball which we fired at the enemy rebounded,

"And, like a devilish engine, back recoiled
Upon ourselves."

Before that time, neutral bottoms always made neutral goods: but, in our impolitic zeal to destroy the entire commerce of France by means of our maritime superiority, we assumed the right of search; and, after having annihilated the fleets of our enemy, we refused to allow any European neutral nation to hold commerce with France, or even to suffer America to carry on the commerce between that country and her own West-Indian colonies. If, however, we were omnipotent at sea, France was equally powerful on land; and Bonaparte, turning our own weapons against us, endeavoured hermetically to close every market on the Continent against British manufactures. Even this was not all: our measures drove America to war with us, and the consequence was that we lost one of the largest outlets for our commodities.

Peace came at last: but hitherto it has afforded us only "a death-like silence and a dread repose;" a melancholy leisure for contemplating, in all its extent and horror, the devastation of war. While the hurricane rages, the mind is absorbed in a state of tumult and agitation between hope and fear; — it is in the calm of evening, and when the contending elements are hushed, that we walk abroad and mourn over the desolation around us, the shattered forest, the uprooted canes, the ripened ears of corn, cut from their brittle stems, and lying on the earth,

"Thick as autumnal leaves, that strew the brooks
in Valambrosa."

It must be evident, observed the Marquess of Lansdown in his motion for the appointment of a committee on foreign-trade, that when, for a number of years, twenty or thirty millions (or whatever the amount might be, but always a large sum) had been taken from the capital of the country to be used in the expenditure of the government, a great additional demand must necessarily be created. The natural consequence of that demand was to cause an increased supply, which would be still farther augmented by the consumption of those individuals who would derive a great part of their support, indirectly, from that increased expenditure. When this enlarged expenditure ceased, it was followed of course by a great decrease of demand, and a proportionate diminution of consumption; while, by bringing back the standard to its original value, the amount of taxation pressed more heavily on the diminished means of the community. The only remedy, therefore, for the distress thus occasioned, is to be found in economy, and retrenchment of the public expenditure. Economy, however, is a foe to patronage; and patronage, being a first favourite at court, keeps its enemy at a distance.

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