POLITICAL ECONOMY. 



Political sible, the whole money circulated in the country will 



Economy, fall in value till it be reduced to the equation which it 



"""V"- cannot pass, that is, to the numerical value of all the 



aales and payments made within the year, divided by 



the rapidity of circulation. 



In like manner, it' the money of a country is not 

 sufficient for its circulation, the country will purchase 

 money in exchange for some one of the values it pos- 

 sesses, just as it would have purchased uny other kind 

 of goods. It is not the balance of trade which can 

 make money enter or leave a country. This balance is 

 completely illusory, for it is not true that nations set- 

 tle their accounts with each other. On the contrary, 

 indeed, it often happens that one is constantly a bor- 

 , rower, the other constantly a lender. And, the credit 

 aales of the most commercial being renewed from year 

 to year, before the first debt is extinguished, a second 

 is already contracted, which is followed by a third ; 

 and though each is paid in its turn, the purchaser may, 

 nevertheless, perpetually remain debtor to his seller. 

 Thus, sales on credit form a capital which may either 

 increase, or be reimbursed in the inverse sense of other 

 commercial speculations. 



Abstracting all that concerns these credits, which 

 modify more than three-fourths of its commercial spe- 

 culations, the purchases of a nation would be exactly 

 balanced by its sales ; because it is as impossible for the 

 one always to purchase, and find the source of a per- 

 petual draining of money, unless it work at mines, as 

 for the other to sell always, and find an employment for 

 a perpetual importation of coined metal. Money is 

 imported, and exported from one nation to another, not 

 because it pays their accounts, but because the one 

 having need of it, sells its goods cheaper, till it has ac- 

 quired enough ; and, because the other having more 

 than enough for its circulation, buys dearer, or gives a 

 greater quantity of guineas for the same quantity of 

 goods, till the equilibrium is re-established. 



But as the emission of any sum in bank notes sup- 

 plies the place of an equal sum of money, the latter is 

 immediately withdrawn from circulation and sold in 

 foreign countries. So long as there remains any coin 

 to be exported, credit may repeat its operation and 

 create new bank notes ; when there is no more coin to 

 export, the paper money will, of itself, diminishing in 

 value, seek the proper equation ; and to whatever nomi- 

 nal sum its fabrication may be carried, it will never 

 sell, in the total amount, for any thing more than the 

 pre-existing total amount of money which it replaces. 



CHAP. VI. 



OF TAXATION. 



DfTaxa- THE primary object of political economy is the de- 

 .ion. velopment of national wealth ; but the object of all go- 



vernments, since they began to bestow any attention 

 on this subject, has been to participate in this wealth, 

 and to acquire the disposal of a greater share of the 

 nation's annual revenue. The ever-increasing neces- 

 sities of governments, and the excessive expence of 

 wars, have forced princes to load their people with the 

 weightiest possible yoke. Taxation, of itself always 

 an object of repugnance to the subject, has become a 

 nearly intolerable burden ; the question is no longer 

 how to make it easy ; it is not to do good, but to do the 

 least possible evil, that all the efforts of governments in 

 this respect are limited. 



Quesnay's sect of economists, who discovered in the 



VOL. XVII. FABT I. 



net revenue of land the solitary source of wealth, might 

 also believe in the advantage of a solitary species of 

 taxation. They rightly observe, that government, in 

 justice, ought to apply to him who is detained to psy 

 the tax in the long run ; because, if this tax is paid by 

 one citizen, reimbursed by a second, who again i re- 

 imbursed by a third, not only will there be three per* 

 sons instead of one incommoded by this payment, but 

 the third will be so much the more incommoded, as it 

 will be necessary for him to indemnify the preceding 

 two for their advances of money. Upon the same princi- 

 ple, the economists called the tax which weighs on the 

 revenue of land a direct tax ; to all others they gave 

 the name of indirect, because those taxes arrive indi- 

 rectly at the person who pays them at last. Their sys- 

 tem has fallen, their definitions are no longer admitted, 

 but their denominations have remained in general use. 

 We have recognised but a single source of wealth, 

 which is labour ; yet we have not recognised but a 

 single class of citizens, to whom the revenues produced 

 by labour belong. These are distributed among all tl:e 

 classes of the nation ; they assume all manner of forms, 

 and, therefore, it is just that taxation should follow 

 tlum into all their ramifications. Taxation ought to 

 be considered by the citizens of a state as a recom- 

 pence for the protection, which government grants to 

 their persons and properties. It is just that all sup- 

 port this, in proportion to the advantages secured them 

 by society, and to the expences it incurs for them. 

 The greater part of the charge arising from social es- 

 tablishments, is destined to defend the rich against 

 the poor ; because if left to their respective strength, 

 the former would very speedily be stripped. It is hence 

 just that the rich man contribute not only in propor- 

 tion to his fortune, but even beyond it, to support a 

 system which is so advantageous to him ; in the same 

 way as it is equitable to take from his superfluity ra- 

 ther than from the other's necessaries. Most public la- 

 bours, most charges for defence, and for the admini- 

 stration of justice have territorial rather than moveable 

 property in view ; it is hence, farther just, that the 

 landed proprietor be taxed in proportion higher than 

 others. 



After the sources of income have become various, it 

 cannot be supposed that a single tax will reach them 

 all, unless it assume as a basis this income itself, the 

 valuation of which, in any form, would give room to 

 the most arbitrary and vexatious inquisitions. The 

 tax, though single, would in that case lose all the ad- 

 vantages of simplicity. It was better then, for contri- 

 butors, as well as for government, to multiply taxes, 

 that each by itself might be lighter, and the whole 

 might better reach every class of persons. Govern- 

 ments have therefore multiplied partial taxes. They 

 have taken wherever they have found any thing to 

 take ; and though flattering themselves with having 

 thus reached all their subjects, it would be impossible 

 for them to appreciate how much is asked of each class, 

 and consequently to maintain the proportional equality 

 which justice would have required. On the other hand, 

 contributors like better to submit to this heavj incon- 

 venience, than to the obligations of exhibiting an ac- 

 count of their incomes, which often they do not know 

 themselves, and to a division on arbitrary ground.-'. 

 which most frequently would be intolerable. 



In establishing those different taxes, four rules ap- 

 pear of essential importance for rendering each ux as 

 little burdensome as possible. Each citizen must con- 

 tribute, if he can do so, according to the proportion of 

 I 



