Melon: the superiority of power through commerce

The Essai by Jean-Francois Melon (1736) is a remarkable work, if only for the number of its editions and translations.^[52] Its purpose is clearly expressed: “It does not relate to the commerce of particular Peoples between themselves; but the way in which the Legislator can procure for his Nation the means to use advantageously all the productions of its Land” (Melon 1736, 13).

Military government and commercial government

Melon uses this commonplace that every government is driven by a desire for power that it expresses through two opposing logics. The first, dominant in the early days of the history of societies, is the “spirit of conquest”, justifying both territorial expansion, appropriation of the wealth of conquered territories, and what Melon calls the “military government”. The second, called the “spirit of preser­vation”, seeks less to conquer than to preserve what has been acquired. Melon combines this spirit of preservation with a third spirit, that of commerce, aimed at acquiring power and wealth through the more peaceful means of exchange with other territories. In ancient times, military governments had some success. In the modern era, things are different, at least in Europe. Two empires were formed, but one, the Spanish Empire, was weakened for not having been able to transform its spirit of conquest into a spirit of preservation, while the other, the Russian Empire, was strengthened, not by gaining new lands, but by seeking to develop its navy and its trade.

Melon draws several lessons from his historical description. First, conquest sooner or later turns into its opposite, subjugation, every conquering nation ceasing to be one someday. Second, in the modern era, the idea of conquest has certainly not disappeared, but territorial expansion has a limit in Europe, expressed by the “bal­ance of powers”: nations still seek power and wealth, but they cancel each other out or balance each other. This situation is made possible by commerce, which conveys a form of rivalry of nations free from the idea of war. Third, the spirit of conquest - what contemporaries have called “universal monarchy” or “empire on land”, that is, a nation ruling all others thanks to its military power - is an inappropriate solu­tion for modern times. Fourth, to achieve its good effects, the spirit of commerce should be combined with the spirit of preservation, seeking “less to extend its Bor­ders, than to build Fortresses for its tranquillity”, rather than to form a “universal trade” subject to the “greed” of merchants (1736, 80; 357; 106), namely to govern the trade of the world thanks to the establishment of a maritime empire.

From original trade to the trade of competing nations

It is within this framework that Melon places his parable of the islands.^[54] First of all, he considers an original situation of equality: three islands, each specialised in the production of a commodity (corn, wool and drinks), with the same number of inhabitants and workers and the same area of territory exchange their commodities and distribute them exactly according to the needs of their population.

Then Melon introduces an imbalance leading to a second situation: one island, that of corn, is in the situation of being able to produce its own commodity in overabundance, but also those produced by the other islands, in sufficient quantity for its domestic consumption. The original equality is therefore broken. Having become self-sufficient, this island no longer has to trade with its neighbours, while the latter are deprived of the commodity most necessary for life. Melon then con­siders two consequences. The first is an exodus of the population from the two neighbouring islands to the island of corn to work and to obtain the means of sub­sistence that they lack. The second is that, to stop this migration and to return to the original balance, the two neighbouring islands form a league aiming at forcing the island of corn to stop producing their commodities. If this league is victorious, it enforces the law of nations, legitimately superior to the law of a particular nation. If it is defeated, because it is too costly or its population is weakened by a dearth of corn, it submits to the “superiority of power” of the island of corn (1736, 9).

Finally, Melon imagines a third situation in which several islands, all produc­ing necessaries of life, dominate others producing commodities of lesser necessity or luxuries. It appears that the more numerous the former, the more difficult it becomes to determine which will be the most powerful, because no dominant posi­tion will be permanently guaranteed.

Melon draws three lessons from his parable: (i) corn, the basis of trade and State power, is the first object of the legislator (1736, 4, 343); (ii) the population is the second object of the legislator (1736, 5), because any progress in agriculture or in manufacturing, allowing the same quantity to be produced with fewer men, frees up supernumeraries for new activities, of which the commodities sold abroad will strengthen the nation’s power; (iii) the more trade expands, the more there must be a means that measures, facilitates exchange, and circulates in sufficient quantity: money, the third object of the legislator (1736, 7).

Three criteria therefore ensure power: fertile land and sufficiently productive agriculture freeing up manpower for manufacturing; manufacturing capable of creating and responding to new needs and employing a growing workforce; and sufficient money circulation. Consequently, if an island has these three advantages, which is the case with France, it will achieve superior power, not without provok­ing hostile reactions. The important thing is that this island is no longer driven by the spirit of conquest, but ruled by “new political interests”. It should not end trade, but continue to attract foreign labour to employ it in the most diverse manufactures, support “the trade of islands of which it will have nothing to fear” and “destroy the trade of the islands, whose competition may alarm it: thus, its tranquillity will become equal to its power” (1736, 11).

Liberty in a commerce of rivalry

Melon points out that trade is based on two issues: increasing maritime trade and naval power, and the fluidity of domestic trade. One of the lingering questions is that of “free trade”. From the second chapter onwards, he states that “trade requires only liberty and protection” and that “in the alternative between liberty and protec­tion, it would be much less harmful to take away protection than liberty; because with liberty, the force of commerce alone can hold the place of protection” (1736, 26-7). “The word liberty”, he notes, “which has caused so many disputations in religions, and so much disorder in the States, is not better understood in commerce” (1736, 150-51). His use of this word refers to vague Republican themes^[55] - liberty associated with the independence of the nation, liberty protected by the law, the primacy of the common good over private good, etc. - but also, in a more prag­matic way, the present state of commerce: to advocates of the “general liberty of commerce”, he responds that, in order to establish this, “it would be necessary for the whole of Europe to contribute to it through general views, difficult to reconcile with the narrow interests with which most men are occupied” (1736, 131).

Liberty in Commerce should not consist in the imprudent licence to Traders to freely send and to receive all kinds of commodities, but only commodities whose Export or Import can provide each citizen with the ability to exchange his superfluous for the necessary that it lacks.

(1736, 151)

The extent of liberty is judged according to whether it is “in favour of the citizen”, or, more exactly, in favour, simultaneously, of “the utility of the individual” and of “public utility” (1736, 152, 159). Good laws or good regulations are those which go in this direction, and it is up to the legislator to judge this. So there is no liberty without regulation, just as there is no economic activity without “measures and cali­brated weights... which subject workmen and prevent the fraudulent greed of the merchant” (1736, 152). Thus, the English Navigation Act, which appears to be a restriction on liberty to trade, since it forbids foreign ships “from bringing into Eng­land commodities other than those growing out of the soil of the nation which brings them or manufactured therein” (1736, 153), is not a restriction in the sense of the definition of liberty which has just been provided. This Act has enriched England, expanded its trade and increased its navy. It also has given it a superior power at the expense of the Dutch, until then “universal carriers for the world” (1736, 135).

Rules are therefore needed, and these are known: “Forbid all Export of raw materials necessary to make the manufactures [of the country] work” (1736, 131), for example, wool in England to favour domestic production and the export of sheets, or silk in France; and prohibit the import of wool and silk articles and, more generally, the import of luxury articles, because the nation would, at its own expense, pay for the labour of foreign luxury workers.

For Child and against Petty

The superiority of power, caused by a favourable trade balance, results in “an increase in the quantity of Gold and Silver”. From this increase in the amount of precious metals - which, other things being equal, causes a fall in the interest rate - follows an easier and more extensive trade, Melon writes (1736, 283-5), taking the four rules set out by Josiah Child (1630-1699) in A New Discourse of Trade (Child [1693] 1698, 168-9): (i) “Encrease Hands in Trade”, which involves putting the poor to work, restricting emigration and facilitating the free admission of the for­eign population; (ii) “Encrease stock in Trade”, which will increase the amount of manufactured goods; (iii) “Make Trade easie and necessary, i.e. make it our Interest to Trade” by relaxing regulations and (iv) “Make it the Interest of other Nations to Trade with us”, by establishing trade treaties and, more generally, by making the commerce of nations reciprocal and fair. Melon also endorses Child’s plea for a low-interest rate to thwart usurious practices and facilitate trading activity.

Melon logically associates Child’s fourth maxim with the second and third situ­ations of the parable of the islands, the pursuit of a superiority of power that does not abolish reciprocity of trade. Conversely, he rejects the conclusion of William Petty (1623-1687), by which England’s superiority is such that it can “take posses­sion of the universal trade of all traffickers” (1736, 356). The quest for power does not imply an exacerbation of the spirit of trade to the point of confusing it with the spirit of conquest. Such is not, Melon assures (1736, 357), the aim of France to claim this universal trade:

Far from this vague and crazy ambition, it always wants to contain itself within the limits assigned to each trading Nation; it will send its superfluous commodities to Nations which so desire, to receive from them what their lands produce for the use of its Inhabitants, and This reciprocal commerce will also contribute to the felicity of all.

Behind this peaceful and calm description of French trade is the thesis of the natu­ral superiority of the island of corn (1736, 4): the cumulative dynamic of trade only begins because an island has a sufficiently fertile territory to produce an overabun­dance of agricultural goods, and the productivity gains that it achieves allow it to develop, depending on the degree of civilisation, manufactures of first or second necessity, then luxury, and to increase its navy: “This progress of industry has no bounds... new needs will always arise, on which a new industry can be exerted” (1736, 89).

Recognising the need for a sizeable navy, Melon (1736, 95), however, disputes an English author’s calculation that “a Sailor is of as great value to his nation as three Ploughmen.” He points out that “the Ploughman has another kind of value, in that his product is the commodity of absolute necessity; he is even preferable to the Sailor who would go and bring corn from abroad, because he only transports with­out producing it” (1736, 95-6). It is better to say: “The Sailor, the Ploughman, the Workman, are all necessary; and the States only become great through the quantity of workers, who are increasing in each profession” (1736, 97).

Likewise, if, despite his greed, the trader contributes to the national interest, this does not mean that any commercial enterprise is useful for the nation: “often a Trade which is not very advantageous to each Trader, is very advantageous for the Nation” 1736, 147). In contrast, “the Manufacturer deserves all the attention of the Legislator” (1736, 97).

The legislator should, finally, ensure another balance, this one domestic, between capital and provinces, namely to find a balance between capital - which sees the flow of wealth, taxes and affluent incomes, and which consumes products coming from the provinces - and the provinces, which live off the consumption of the capital and pay taxes (1736, 285-6). The legislator should maintain this reciprocal flow of wealth and prevent the provinces from becoming impoverished. Good regulation should also apply to public works (through privileges granted to public utility companies) and to domestic trade (through the abolition of internal customs which hamper freedom of transport).

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