Turgot, Reflections on the Formation and the Distribution of Riches (1776)

Editing History

  • Item added: 18 Sept. 2016
  • 1st Edit:

Source

Anne-Robert-Jacques Turgot, Reflections on the Formation and the Distribution of Riches, trans. William J. Ashley (New York: The Macmillan Co., 1898). <http://oll.libertyfund.org/titles/122>. Selections.

  • 8. First division of society into two classes, the one productive, or the cultivators, the other stipendiary, or the artificers.
  • 15. A new division of society into three classes. Cultivators, Artificers, and Proprietors, or the productive, stipendiary, and disposible classes.
  • 16. Resemblance between the two laborious classes.
  • 17. Essential difference between the two laborious classes.
  • 18. This difference authorises another distinction into the productive and barren classes.
  • 61. Subdivisions of the industrious stipendiary class, in undertaking capitalists and simple workmen.
  • 65. Subdivisions of the class of cultivators into undertakers, or farmers, and hired persons, servants, and day-labourers.
  • 93. In which of the three classes of society the lenders of money are to be ranked.
  • 94. The lender of money belongs, as to his persons, to the disposing class.
  • 95. The use which the money-lender makes of his interest.
  • 96. The interest of the money is not disposable in one sense, viz. so as the state may be authorized to appropriate, without any inconvenience, a part to supply its wants.
  • 99. There exists no revenue strictly disposable in a state, but the clear produce of lands.
  • 100. the land has also furnished the total of moveable riches, or existing capitals, and which are formed only by a portion of its production reserved every year.

Editor's Intro

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Text

8. First division of society into two classes, the one productive, or the cultivators, the other stipendiary, or the artificers.

Here then is the whole society divided, by a necessity founded on the nature of things, into two classes, both industrious, one of which, by its labour, produces, or father draws from the earth, riches continually renewing, which supply the whole society with subsistence, and with materials for all its wants; while the other is employed in giving to the said materials such preparations and forms as render them proper for the use of man, sells his labour to the first, and receives in return a subsistence. The first may be called the productive, the latter the stipendiary class.

15. A new division of society into three classes. Cultivators, Artificers, and Proprietors, or the productive, stipendiary, and disposible classes.

We now behold society divided into three branches; the class of husbandmen, whom we may denominate cultivators; the class of artificers and others, who work for hire upon the productions of the earth; and the class of proprietors, the only one which, not being confined by a want of support to a particular species of labour, may be employed in the general service of society, as for war, and the administration of justice, either by a personal service, or by the payment of a part of their revenue, with which the state may hire others to fill these employments. The appellation which suits the best with this division, for this reason, is that of the disposable class.

16. Resemblance between the two laborious classes.

The two classes of cultivators and artificers, resemble each other in many respects, and particularly that those who compose them do not possess any revenue, and both equally subsist on the wages which are paid them out of the productions of the earth. Both have also this circumstance in common, that they only gain the price of their labour and their disbursements, and that this price is nearly the same in the two classes. The proprietor agreeing with those who cultivate his ground to pay them as small a part as possible of its produce, in the same manner as he bargains with the shoemaker to buy his shoes as cheap as he can. In a word, neither the cultivator, nor the artificer receives more than a bare recompense for his labour.

17. Essential difference between the two laborious classes.

But there is this difference between the two species of labour; that the work of the cultivator produces not only his own wages, but also that revenue which serves to pay all the different classes of artificers, and other stipendiaries their salaries: whereas the artificers receive simply their salary, that is to say, their part of the productions of the earth, in exchange for their labour, and which does not produce any increase. The proprietor enjoys nothing but by the labour of the cultivator. He receives from him his subsistence, and wherewith to pay for the labour of the other stipendiaries. He has need of the cultivator by the necessity arising from the physical order of things, by which necessity the earth is not fruitful without labour; but the cultivator has no need of the proprietor but by virtue of human conventions, and of those civil laws which have guaranteed to the first cultivators and their heirs, the property in the lands they had occupied, even after they ceased to cultivate them. But these laws can only secure to the idle man, that part of the production of his land which it produces beyond the retribution due to the cultivators. The cultivator, confined as he is to a stipend for his labour, still preserves that natural and physical priority which renders him the first mover of the whole machine of society, and which causes both the subsistence and wealth of the proprietor, and the salaries paid for every other species of labour, to depend on his industry. The artificer, on the contrary, receives his wages either of the proprietor or of the cultivator, and only gives them in exchange for his stipend, an equivalent in labour, and nothing more.

Thus, although neither the cultivator and artificer gain more than a recompence for their toil; yet the labour of the cultivator produces besides that recompense, a revenue to the proprietor, while the artificer does not produce any revenue either for himself or others.

18. This difference authorises another distinction into the productive and barren classes.

We may then distinguish the two classes not disposable into the productive class, which is that of the cultivators, or the barren class, which comprehends all the other stipendiary members of society.

61. Subdivisions of the industrious stipendiary class, in undertaking capitalists and simple workmen.

Thus the whole class-employed in supplying the different wants of society, with an immense variety of works of industry, is, if I may speak thus, subdivided into two classes. The one, of the undertakers, manufacturers and masters, all proprietors of large capitals, which they avail themselves of, by furnishing work to the other class, composed of artificers, destitute of any property but their hands, who advance only their daily labour, and receive no profits but their salaries.

65. Subdivisions of the class of cultivators into undertakers, or farmers, and hired persons, servants, and day-labourers.

Hence it follows, that the class of cultivators may be divided, like that of manufacturers, into two branches, the one of undertakers or capitalists, who make the advances, the other of simple stipendiary workmen. It results also, that capitals alone can form and support great enterprizes of agriculture, that give to the lands an unvariable value, if I may use the expression, and that secure to the proprietors a revenue always equal, and the largest possible.

93. In which of the three classes of society the lenders of money are to be ranked.

Let us see now, how what we have just discussed about the different ways of employing capitals, agrees with what we have before established about the division of all the members of society into three classes, the one the productive class of husbandmen, the industrious or trading class, and the disposing class, or the class of proprietors.

94. The lender of money belongs, as to his persons, to the disposing class.

We have seen that every rich man is necessarily possessor either of a capital in moveable riches, or funds equivalent to a capital. Any estate in land is of equal value with a capital; consequently every proprietor is a capitalist, but not every capitalist a proprietor of a real estate; and the possessor of a moveable capital may chuse to confer it on acquiring funds, or to improve it in enterprizes of the cultivating class, or of the industrious class. The capitalist, turned an undertaker in culture or industry, is no more of the disposing class, than the simple workmen in those two lines; they are both taken up in the continuation of their enterprises. The capitalist who keeps to the lending money, lends it either to a proprietor or to an undertaker. If he lends it to a proprietor, he seems to belong to the class of proprietors, and he becomes co-partitioner in the property; the income of the land is destined to the payment of the interest of his trust; the value of the funds is equal to the security of his capital.

If the money-lender has lent to an undertaker, it is certain that his person belongs to the disposing class; but his capital continues destined to the advances of the enterpriser, and cannot be withdrawn without hurting the enterprise, or without being replaced by a capital of equal value.

95. The use which the money-lender makes of his interest.

Indeed, the interest he draws from that capital seems to make him of the disposing class, since the undertaker and the enterprise may shift without it. It seems also we may form an inference, that in the profits of the two laborious classes, either in the culture of the earth or industry, there is a disposable portion, namely, that which answers to the interest of the advances, calculated on the current rate of interest of money lent; it appears also that this conclusion seems to agree with what we have said, that the mere class of proprietors had a revenue properly so called, a disposing revenue, and that all the members of the other classes had only salaries or profits. This merits some future inquiry. If we consider the thousand crowns that a man receives annually, who has lent 60,000 livres, to a merchant, in respect to the use he may make of it, there is no doubt of this being perfectly disposable, since the enterprize may subsist without it.

96. The interest of the money is not disposable in one sense, viz. so as the state may be authorized to appropriate, without any inconvenience, a part to supply its wants.

But it does not ensue that they are of the disposing class in such a sense, that the state can appropriate to itself with propriety a portion for the public wants. Those 1000 crowns are not a retribution, which culture or commerce bestows gratuitously on him that makes the advance; it is the price and the condition of this advance, independently of which the enterprize could not subsist. If this retribution is diminished, the capitalist will withdraw his money, and the undertaking will cease. This retribution ought then to be inviolable, and enjoy an entire immunity, because it is the price of an advance made for the enterprize, without which the enterprize could not exist. To encroach upon it, would cause an augmentation in the price of advances in all enterprizes, and consequently diminish the enterprizes themselves, that is to say, cultivation, industry, and commerce.

This answer should lead us to infer, that if we have said, that the capitalist who had lent money to a proprietor, seemed to belong to the class of proprietors, this appearance had somewhat equivocal in it which wanted to be elucidated. In fact, it is strictly true, that the interest of his money is not more disposable, that is, it is not more susceptible of retrenchment, than that of money lent to the undertakers in agriculture and commerce. But the interest is equally the price of the free agreement, and they cannot retrench any part of it without altering or changing the price of the loan.

For it imports little to whom the loan has been made: if the price decreases or augments for the proprietor of lands, it will also decrease and augment for the cultivator, the manufacturer, and the merchant. In a word, the proprietor who lends money ought to be considered, as a dealer in a commodity absolutely necessary for the production of riches, and which cannot be at too low a price. It is also as unreasonable to charge this commerce with duties as it would be to lay a duty on a dunghill which serves to manure the land. Let us conclude from hence, that the person who lends money belongs properly to the disposable class as to his person, because he has nothing to do; but not as to the nature of his property, whether the interest of his money is paid by the proprietor of land out of a portion of his income, or whether it is paid by an undertaker, out of a part of his profits designed to pay the interest of his advances.

99. There exists no revenue strictly disposable in a state, but the clear produce of lands.

It is manifest by what I have said, that the interest of money lent is taken on the revenue of lands, or on the profits of enterprizes of culture, industry, and commerce. But we have already shewn that these profits themselves were only a part of the production of lands; that the produce of land is divided in two portions; that the one was designed for the salary of the cultivator, for his profits, for the recovery and interest of his advances; and that the other was the part of the proprietor, or the revenue which the proprietor expended at his option, and from whence he contributes to the general expences of the state.

We have demonstrated, that what the other classes of society received, was merely the salaries and profits paid, either by the proprietor upon his revenue, or by the agents of the productive class, on the part destined to their wants, and which they are obliged to purchase of the industrious class. Whether these profits be now distributed in wages to the workmen, in profits to undertakers, or in interests of advances, they do not change the nature, or augment the sum of the revenue produced by the productive class over and above the price of their labour, in which the industrious class does not participate, but as far as the price of their labour extends.

Hence it follows, that there is no revenue but the clear produce of land, and that all other profit is paid, either by that revenue, or makes part of the expenditure that serves to produce the revenue.

100. the land has also furnished the total of moveable riches, or existing capitals, and which are formed only by a portion of its production reserved every year.

Not only there does not exist, nor can exist, any other revenue than the clear produce of land, but it is the earth also that has furnished all capitals, that form the mass of all the advances of culture and commerce. It has produced, without culture, the first gross and indispensible advances of the first labourers; all the rest are the accumulated fruits of the oeconomy of successive ages, since they have begun to cultivate the earth. This oeconomy has effect not only on the revenues of proprietors, but also on the profits of all the members of laborious classes. It is even generally true, that, though the proprietors have more overplus, they spare less; for, having more treasure, they have more desires, and more passions; they think themselves better ensured of their fortune; and are more desirous of enjoying it contentedly, than to augment it; luxury is their pursuit. The stipendiary class, and he chiefly the undertakers of the other classes, receiving profits proportionate to their advances, talents, and activity, have, though they are not possessed of a revenue properly so called, a superfluity beyond their subsistence; but, absorbed as they generally are, only in their enterprizes, and anxious to increase their fortune; restrained by their labour from amusements and expensive passions; they save their whole superfluity, to re-convert it in other enterprizes, and augment it. The greater part of the undertakers in agriculture borrow but little, and they almost all rest on the capital of their own funds. The undertakers of other businesses, who wish to render their fortune stable, strive likewise to attain to the same state. Those that make their enterprizes on borrowed funds, are greatly in danger of failing. However, although capitals are formed in part by the saving of profits in the laborious classes, yet, as those profits spring always from the earth, they are almost all repaid, either by the revenue, or in the expences that serve to produce the revenue; it is evident, that the capitals are derived from the earth as well as the revenue, or rather that they are but an accumulation of a part of the riches produced by the earth, which the proprietors of the revenue, or those that share it, are able to lay by every year in store, without consuming it on their wants.

Endnotes

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