Economic Sophisms

department would supply the whole consumption of France?" Referring to the argument on the previous page regarding whether a single region could provide enough for the whole country. In his eyes, then, good lies in sterility and dearth A scarcity or lack of something; specifically, a shortage of food., while evil lies in fertility and abundance.

La Presse and Le Commerce original: "The Presse, the Commerce"; these were major French newspapers of the time., along with the majority of the daily papers, publish one or more articles every morning to demonstrate to the Chambers The French legislative bodies: the Chamber of Peers and the Chamber of Deputies. and the Government that it is sound policy to use laws to raise the price of all things by means of tariffs Taxes on imported goods designed to protect domestic industries.. And do the Chambers and the Government not obey these instructions? Now, tariffs can only raise prices by diminishing the supply of goods in the market! Therefore, the newspapers, the Chambers, and the Minister put the "theory of scarcity" into practice, and I am justified in saying that this theory is by far the most popular one.

How is it that in the eyes of workers, journalists original: "publicists"; writers on current affairs or political topics., and statesmen, abundance appears to be something to be dreaded, while scarcity seems advantageous? I propose to trace this illusion to its source.

We notice that a man grows richer in proportion to the profit yielded by his efforts—that is to say, in proportion as he sells his product at a higher price. He sells at a higher price in proportion to the rarity or the scarcity of the article he produces. We conclude from this that, as far as he is personally concerned, scarcity enriches him. By applying this same reasoning to all other producers in turn, we construct the theory of scarcity. We then proceed to apply this theory: in order to favor producers generally, we raise prices artificially and cause a scarcity of all goods through prohibitions, trade restrictions, the suppression of machinery, and other similar means.

The same logic applies to abundance. We observe that when a product is plentiful, it sells at a lower price, and the producer earns less. If all producers are in the same situation, they are all poor. Therefore, people conclude it is abundance that ruins society. And as theories are soon put into practice, we see the law struggling against the abundance of goods.

This sophism A clever but false argument, especially one used to deceive. may make little impression when stated in its general form, but when applied to a specific set of facts, to a certain branch of industry, or to a given class of producers, it is extremely persuasive; and this is easily explained. It forms a...