Reflections on the Formation and Distribution of wealth [30]
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.
97. Objection.
It may doubtless be objected, that the capitalist may indifferently either lend his money, or employ it in the purchase of land; that in either case he only receives an equivalent for his money, and whichever way he has employed it, he ought not the less to contribute to the public charges.
98. Answer to this objection.
I answer first, that in fact, when the capitalist has purchased an estate, the revenue will be equal as to him, to what he would have received for his money by lending it; but there is this essential difference with respect to the state, that the price which he gives for his land, does not contribute in any respect to the income it produces. It would not have produced a less income, if he had not purchased it. This income, as we have already explained, consists in what the land produces, beyond the salary of the cultivators, of their profits, and the interest of their advances. It is not the same with the interest of money; it is the express condition of the loan, the price of the advance, without which the revenue or profits, which serve to pay it, could never exist. I answer in the second place, that if the lands were charged separately with the contribution to the
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.
97. Objection.
It may doubtless be objected, that the capitalist may indifferently either lend his money, or employ it in the purchase of land; that in either case he only receives an equivalent for his money, and whichever way he has employed it, he ought not the less to contribute to the public charges.
98. Answer to this objection.
I answer first, that in fact, when the capitalist has purchased an estate, the revenue will be equal as to him, to what he would have received for his money by lending it; but there is this essential difference with respect to the state, that the price which he gives for his land, does not contribute in any respect to the income it produces. It would not have produced a less income, if he had not purchased it. This income, as we have already explained, consists in what the land produces, beyond the salary of the cultivators, of their profits, and the interest of their advances. It is not the same with the interest of money; it is the express condition of the loan, the price of the advance, without which the revenue or profits, which serve to pay it, could never exist. I answer in the second place, that if the lands were charged separately with the contribution to the