Abstract
In this chapter Nathalie Sigot argues that Bentham’s interest in international trade lies in the consideration of the redistributive effects of trade and its consequences on happiness for one’s society. Sigot demonstrates that Bentham’s view on international trade changed between 1786 and 1821, when the principle of the limitation of industry by capital disappeared from his writings. Sigot explains how Bentham’s approach is driven by a focus on security and on a calculus of gains and losses in terms of happiness.
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Notes
- 1.
- 2.
As editor of these manuscripts, M. Quinn stated that although “the source of the material … is not Bentham but Dumont”, it “no doubt provides a fairly accurate reflection of Bentham’s views on political economy at a formative period in the development of his thought” (2016, xxx–xxxi).
- 3.
Bentham proposed that the circle of relatives between whom inheritance operates would be limited to direct heirs, grandparents, uncles and aunts.
- 4.
Stark quoted two extracts from the Dumont papers (1954, 52): in the first one, Bentham wrote that “encouragements with regard to commerce … never have the efficacy which is attributed to them, except perhaps in the first stages of a new branch of industry”; in the second, also reproduced in Quinn’s edition of Bentham’s economic writings (1793–1795, 261), he claimed that taxes on importations “should not be diminished to the point of stifling a nascent domestic industry” (see also Quinn 2016, xxv).
- 5.
Bentham did not provide much detail to justify his position on the infant industries. However, the protection of these industries was discussed in relation to his defence of innovation. In this framework, he listed the measures that “wage war against innovative industry”, such as the usury laws (quoted by Quinn 2016, xxv). Accordingly, his recommendation for the protection of infant industries may be seen as a compensatory measure to offset the effects of this “war”.
- 6.
The argument is that Bentham’s point of view “does not rest content with underlining a policy’s bad welfare effect, but proceeds to try to explain why it is adopted if the balance of its effects is so manifestly negative” (ibid.).
- 7.
By contrast, in his Defence of a Maximum (1801b, 264), Bentham assumed that, regarding corn, there is a maximum quantity of production reserved for exportation which cannot rise, even if the foreign price goes up: “If, notwithstanding the fixation [of the price of corn by the government], the price remained so high as to afford, for the whole mass of corn exportable from foreign countries, a profit greater than could be obtained by the sale of it within these respective countries, the whole of such exportable stock would in consequence be imported into this country, and no further increase of the price could add anything to the quantity of the relief obtainable from that source”.
- 8.
Bentham did not take over Smith’s criticism, although he also put to the fore the issue of diverging interests within the society: he never condemned the fact that individuals behave in a way that is consistent with their own interests. Governments, however, are blameworthy when they implement economic policies without considering their consequences on the happiness of the society: they are accused of being in particular myopic and arrogant (see for instance, Bentham 1793–1795, 246).
- 9.
This echoes Smith’s expression concerning bounties upon exportation: “We cannot force foreigners to buy [the] goods [produced by our merchants and manufacturers] … The next best expedient, it has been thought, therefore, is to pay them for buying” (1776, I, 505).
- 10.
It is unclear whether Bentham considered that bounties on exportation generated the same mechanism for profit rate convergence that he described regarding bounties on production: concerning the latter, he wrote that in the short term an “extra rate of profit” would be paid and a gain would be made by “the first adventurers”, but this extra profit will be “reduced by the competition” (1793–1795, 197).
- 11.
This disappearance may be explained by two elements. First, the fact that Bentham’s attention shifts from the question of exportations to the question of importations. Second, the change in the historical context: the conflict between Britain and France, which started in 1793, ended in 1815. Meanwhile, England faced several economic crises, exacerbated by the continental blockade (1806–1814). However, it seems that more fundamental reasons explain the change in Bentham’s perspective between his early writings and his 1821 one.
- 12.
In his Defence of Usury, Bentham identified two kinds of risk borne by the usurer: a legal one, as a result of the violation of usury laws, and a social and psychological one, as a result of the moral disapproval of usury (see Guidi and Sigot 2014). As for the smuggling of goods, it resulted only in a legal risk, since in Spain, Bentham wrote, the “sympathy of the public is, where it ought not be, – with the criminals” (1821a, 363).
- 13.
They are “highly useful and … persecuted”, he wrote (1787, 112).
- 14.
This does not mean that, for Bentham, the violation of laws is not costly: it undermines the overall efficiency of legislation, for the possibility of evading that particular law raises the hope among people of evading all laws (see Guidi and Sigot 2014). But this cost of non-compliance is the same whether it concerns usury laws or laws prohibiting the importation of foreign goods.
- 15.
It is worth noting that, by contrast, when funding innovations, usurers allow the production of a “new article adapted to man’s use”, the “ameliora[tion of] the quality” and the dimin[ution of] the expence of any of those which are already known to us” (1787, 95).
- 16.
“Evil of punishment composed of the suffering of those [on] whom whether justly or unjustly, under the supposition of delinquency on their parts, the punishment is caused to be inflicted”.
- 17.
“… I find nothing to retract from what has been before the public for these fourteen years in the Defence of Usury”, Bentham claimed (1801b, 285).
- 18.
However, Bentham excluded such a consequence of the unsustainable rise in the price of corn in England due to the existence of the poor laws: consequently, the number of poor people who become dependent is rising, resulting in a higher tax paid by the contributors to the poor rates (ibid.).
- 19.
See also: “The security derived from it [a bounty on exportation] can never equal the security derivable from County Magazines. What you have in your magazine, you are sure you have. You can never be equally sure that the export of one plentiful year will produce a growth in another year to a given amount. What if two very bad years come together? The Magazines, being always full, [will] be a resource: whereas the resource of extra-sowing fails by the supposition” (1793–1795, 235).
- 20.
“The advantage of the Corn-Export-Bounty, if it has any, is this: it keeps the quantity more steady; and the farmer’s gains more steady” (ibid., 236; emphasis added). See also: “The measure of a bounty upon the export of corn, if defensible at all, can only be defensible in the character of an establishment for the security of subsistence. … If this be true…” (ibid., 233; second and last emphasis added).
- 21.
The role of the quantity of money issued on the rent is addressed by Bentham in his Observations on the Restrictive and Prohibitory Commercial System, where he assumed that the rent is a fixed amount. In his Defence of a Maximum, as Winch (1965, 33) underlined, Bentham considers that it is more difficult to apply capital to agriculture than to manufacture; he then concludes that the manufacturing sector tends to grow more rapidly than the agricultural one, limiting the growth of the population. However, Bentham did not assume that returns in agriculture are decreasing, but increasing or constant, depending on the structure of ownership (which determines the surface area of lands) (see Sigot 1999). Moreover, this analysis led him to advocate not free trade, but colonization viewed as “the best solution” (Winch, ibid.).
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Acknowledgments
I am grateful to Ghislain Deleplace and André Lapidus for their comments and suggestions, as well as to the two editors of this volume, Benjamin Bourcier and Mikko Jakonen, whose remarks helped me to improve the paper
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Sigot, N. (2024). One Conclusion and Two Explanations: Bentham’s Economic Analysis of International Trade. In: Bourcier, B., Jakonen, M. (eds) British Modern International Thought in the Making. International Political Theory. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-45713-5_9
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