Public Consumption

Section 1: The Nature and general Effect of Public Consumption

Besides the wants of individuals and of families which it is the object of private consumption to satisfy, the collection of many individuals into a community gives rise to a new class of wants, the wants of the society in its aggregate capacity, the satisfaction of which is the object of public consumption.

The public buys and consumes the personal service of the minister, that directs its affairs, the soldier, that protects it from external violence, the civil or criminal judge, that protects the rights and interests of each member against the aggression of the rest.

All these different vocations have their use, although they may often be unnecessarily multiplied or overpaid; but that arises from a defective political organization, which it does not fall within the scope of this work to investigate.

The same reasoning may be easily applied to all other kinds of public consumption. When the money of the tax-payer goes to pay the salary of a public officer, that officer sells his time, his talents, and his exertions, to the public, all of which are consumed for public purposes.

On the other hand, that officer consumes, instead of the tax-payer, the value he receives in lieu of his services; in the same manner as any clerk or person in the private employ of the tax-payer would do.

We shall see presently whence it is, that the public derives all the values, wherewith it purchases the services of its agents, as well as the articles its wants require. All we have to consider in this chapter is, the mode in which its consumption is effected, and the consequences resulting from it.

There has been long a prevalent notion, that the values, paid by the community for the public service, return to it again in some shape or other; in the vulgar phrase, that what government and its agents receive, is refunded again by their expen- diture.

This is a gross fallacy; but one that has been productive of infinite mis chief, inasmuch as it has been the pretext

If I have made myself understood in the commencement of this third book, my readers will have no difficulty in compre- 224Book III= On Consumption for a great deal of shameless waste and dilapidation. The value paid to government by the tax-payer is given without equiva- lent or return= it is expended by the government in the pur- chase of personal service, of objects of consumption; in one word, of products of equivalent value, which are actually trans- ferred. Purchase or exchange is a very different thing from restitution. 26

contrary, that public wealth increases with the increase of public consumption= inferring thence this false and danger- ous conclusion, that the rules of conduct in the management of private fortune and of public treasure, are not only differ- ent, but in direct opposition?

If such principles were to be found only in books, and had never crept into practice, one might suffer them without care or regret to swell the monstrous heap of printed absurdity; but it must excite our compassion and indignation to hear them professed by men of eminent rank, talents, and intelligence; and still more to see them reduced into practice by the agents of public authority, who can enforce error and absurdity at the point of the bayonet or mouth of the cannon. 28

Turn it which way you will, this operation, though often very complex in the execution, must always be reducible by analysis to this plain statement. A product consumed must always be a product lost, be the consumer who he may; lost without return, when. ever no value or advantage is received in re- turn; but, to the tax. payer, the advantage derived from the services of the public functionary, or from the consumption effected in the prosecution of public objects, is a positive return.

Madame de Maintenon mentions in a letter to the Cardinal de Noailles, that, when she one day urged Louis XIV to be more liberal in charitable donations, he replied, that royalty dis- penses charity by its profuse expenditure; a truly alarming dogma, and one that shows the ruin of France to have been reduced to principle. 29 False principles are more fatal than even intentional misconduct; because they are followed up with erroneous notions of self-interest, and are long perse- vered in without remorse or reserve. If Louis XIV had be- lieved his extravagant ostentation to have been a mere grati- fication of his personal vanity, and his conquests the satisfac- tion of personal ambition alone, his good sense and proper feeling would probably, in a short time, have made it a matter of conscience to desist, or at any rate, he would have stopped short for his own sake; but he was firmly persuaded, that his prodigality was for the public good as well as his own; so that nothing could stop him, but misfortune and humiliation. 30 If, then, public and private expenditure affect social wealth in the same manner, the principles of economy, by which it should be regulated, must be the same in both cases. There are not two kinds of economy, any more than two kinds of honesty, or of morality.

If a government or an individual consume in such a way, as to give birth to a product larger than that consumed, a successful effort of productive industry will be made.

If no product result from the act of consumption, there is a loss of value, whether to the state or to the indi- vidual; yet, probably, that loss of value may have been productive of all the good anticipated. Military stores and sup- plies, and the time and labour of civil and military functionaries, engaged in the effectual defence of the state, are well bestowed, though consumed and annihilated; it is the same with them, as with the commodities and personal service, that have been consumed in a private establishment.

The sole benefit resulting in the latter case is, the satisfaction of a want; if the want had no existence, the expense or consumption is a positive mischief, incurred without an object.

So likewise of the public consumption; consumption for the mere purpose of consumption, systematic profusion, the creation of an of- fice for the sole purpose of giving a salary, the destruction of an article for the mere pleasure of paying for it, are acts of extravagance either in a government or an individual, in a small state or a large one, a republic or a monarchy. Nay, there is more criminality in public, than in private extrava- gance and profusion; inasmuch as the individual squanders only what belongs to him; but the government has nothing of its own to squander, being, in fact, a mere trustee of the pub- lic treasure. 27

So little were the true principles of political economy under- stood, even by men of the greatest science, so late as the 18th century, that Frederick II of Prussia, with all his anxiety in search of truth, his sagacity, and his merit, writes thus to D’Alembert, in justification of his wars= “My numerous armies promote the circulation of money, and disburse impartially amongst the provinces the taxes paid by the people to the state.” Again I repeat, this is not the fact; the taxes paid to the government by the subject are not refunded by its expendi- ture. Whether paid in money or in kind, they are converted into provisions and supplies, and in that shape consumed and destroyed by persons, that never can replace the value, be- cause they produce no value whatever. 31 It was well for Prussia that Frederick II did not square his conduct to his principles.

The good he did to his people, by the economy of his internal administration, more than compensated for the mischief of his wars.

What, then, are we to think of the principles laid down by those writers, who have laboured to draw an essential distinction between public and private wealth; to show, that economy is the way to increase private fortune, but, on the Since the consumption of nations or the governments which represent them, occasions a loss of value, and consequently, of their affection; whereas, the economy of a ruler accrues to the benefit of those he knows very little of; and perhaps he is but husbanding for an extravagant and rival successor.

of wealth, it is only so far justifiable, as there results from it some national advantage, equivalent to the sacrifice of value;

The whole skill of government, therefore, consists in the continual and judicious comparison of the sacrifice about to be incurred, with the expected benefit to the community; for I have no hesitation in pronouncing every instance, where the benefit is not equivalent to the loss, to be an instance of folly, or of criminality, in the government.

Nor is this evil remedied, by adopting the principle of hereditary rule. The monarch has little of the feelings common to other men in this respect. He is taught to consider the fortune of his descendants as secure, if they have ever so little assurance of the succession. Besides, the far greater part of the public consumption is not personally directed by himself; contracts are not made by himself, but by his generals and ministers; the experience of the world hitherto all tends to show, that aristocratical republics are more economical, than either monarchies or democracies. Neither are we to suppose, that the genius which prompts and excites great national undertakings, is incompatible with the spirit of public order and economy. The name of Charlemagne stands among the foremost in the records of renown; he achieved the conquest of Italy, Hungary, and Austria; repulsed the Saracens; broke the Saxon confederacy; and obtained at length the honours of the purple. Yet Montesquieu has thought it not derogatory to say of him, that “ the father of a family might take a lesson of good housekeeping from the ordinances of Charlemagne.

His expenditure was conducted with admirable system; he had his demesnes valued with care, skill, and minuteness. We find detailed in his capitularies the pure and legitimate sources of his wealth. In a word, such were his regularity and thrift, that he gave orders- for the eggs of his poultry-yards, and the surplus vegetables of his garden, to be brought to market.” 35 The celebrated Prince Eugene, who displayed equal talent in negotiation and administration as in the field, advised the Em- peror Charles VI to take the advice of merchants and men of business, in matters of finance. 36 Leopold, when Grand Duke of Tuscany, towards the close of the 18 th century, gave an eminent example of the resources, to be derived from a rigid adherence to the principles of private economy, in the administration of a state of very limited extent. In a few years, he made Tuscany one of the most flourishing states of Europe.

It is yet more monstrous, then, to see how frequently governments, not content with squandering the substance of the people 32 in folly and absurdity, instead of aiming at any re- turn of value. actually spend that substance in bringing down upon the nation calamities innumerable; practise exactions the most cruel and arbitrary, to forward schemes the most extravagant and wicked; first rifle the pockets of the subject, to enable them afterwards to urge him to the further sacrifice of his blood. Nothing, but the obstinacy of human passion and weakness, could induce me again and again to repeat these unpalatable truths, at the risk of incurring the charge of declamation.

The consumption effected by the government 33 forms so large a portion of the total national consumption, amounting some- times to a sixth, a fifth, or even a fourth part 34 of the total consumption of the community, that the system acted upon by the government, must needs have a vast influence upon the advance or decline of the national prosperity.

Should an individual take it into his head, that the more he spends the more he gets, or that his profusion is a virtue; or should he yield to the powerful attractions of pleasure, or the suggestions of perhaps a reasonable resentment, he will in all probability be ruined, and his example will operate upon a very small circle of his neighbours. But a mistake of this kind in the government, will entail misery upon millions, and possibly end in the national downfall or degradation. It is doubt- less very desirable, that private persons should have a correct knowledge of their personal interests; but it must be infinitely more so, that governments should possess that knowledge.

Economy and order are virtues in a private station; but, in a public station, their influence upon national happiness is so immense, that one hardly knows how sufficiently to extol and honour them in the guides and rulers of national conduct. The most successful financiers of France, Suger, Abbé de St. Dennis, the Cardinal D’Amboise, Sully, Colbert, and Necker, have all acted on the same principle.

All found means of carrying into effect the grandest operations by adhering to the dictates of private economy. The Abbé de St. Dennis furnished the outfit of the second crusade; a scheme that required very large supplies, although one I am far from approving.

The Cardinal furnished Louis XII with the means of making his conquest of the Milanese. Sully accumulated the resources, that afterwards humbled the house of Austria — Colbert sup- plied the splendid operations of Louis XIV.

Necker provided the ways and means of the only successful war waged by France in the 18th century. 37

An individual is fully sensible of the value of the article he is consuming; it has probably cost him a world of labour, perseverance, and economy; he can easily balance the satisfaction he derives from its consumption against the loss it will involve.

But a government is not so immediately interested in regularity and economy, nor does it so soon feel the ill conse- quences of the opposite qualities. Besides, private persons have a further motive than even self-interest; their feelings are concerned; their economy may be a benefit to the objects