Antoine Augustin Cournot

“ But those skilled in mathematical analysis know that its object is not simply to calculate numbers, but that it is also employed to find the relations between magnitudes which cannot be expressed in numbers and between functions whose law is not capable of algebraic expression. ”

“ What is really important is to know the laws which govern the variation of values, or, in other words, the theory of wealth. This theory alone can make it possible to prove to what absolute variations are due the relative variations which come into the field of observation; in the same manner (if it is permissible to compare the most exact of sciences with the one nearest its cradle) as the theory of the laws of motion, begun by Galileo and completed by Newton, alone makes it possible to prove to what real and absolute motions are due the relative and apparent motions of the solar system. ”

“ Under this conception, wealth has doubtless only an abstract existence; for, strictly speaking, of all the things on which we set a price, or to which we attribute a value in exchange, there are none always exchangeable at will for any other commodity of equal price or value. In the act of exchange, as in the transmission of power by machinery, there is friction to be overcome, losses which must be borne, and limits which cannot be exceeded. The proprietor of a great forest is only rich on condition of managing his lumbering with prudence, and of not glutting the market with his lumber ”

“ It is, to be sure, a common saying, that the price of money is steadily diminishing, and fast enough for the depreciation of value of coin to be very perceptible in the course of a generation; but by going back to the cause of this phenomenon, as we have shown how to do in this chapter, it is plain that the relative change is chiefly due to an absolute upward movement of the prices of most of the articles which go directly for the needs or pleasures of mankind, an ascending movement produced by the increase in population and by the progressive developments of industry and labour. ”

“ What ought to have been added, and what we shall have occasion to develop, is that commerce may also be a cause of destruction of values, even while making profits for the merchants who carry it on, and even when in every one's eyes it is a benefit to the countries which it connects in commercial intercourse.
A fashion, a whim, or a chance occurrence may cause a creation or annihilation of values without notable influence on what is regarded as public utility or the general welfare; it can even come about that a destruction of wealth may be salutary, and an increase detrimental. ”

“ But, on one hand, one of the most delicate points in the theory of wealth is just this analysis of the causes of variation of the value of the monetary metals used as means of circulation, and on the other hand it is legitimate to admit, as has been already said, that the monetary metals do not suffer notable variations in their values except as we compare very distant periods, or else in case of sudden revolutions, now very improbable, which would be caused by the discovery of new metallurgical processes, or of new mineral deposits. ”

“ I propose to show in this essay that the solution of the general questions which arise from the theory of wealth, depends essentially not on elementary algebra, but on that branch of analysis which comprises arbitrary functions, which are merely restricted to satisfying certain conditions. ”

“ The division of economists into schools, and the war waged between practical men and theorists, have arisen in large measure from the ambiguity of the word wealth in ordinary speech, and the confusion which has continued to obtain between the fixed, definite idea of value in exchange, and the ideas of utility which every one estimates in his own way, because there is no fixed standard for the utility of things. ”

“ Whenever there is occasion to go back to the fundamental conceptions on which any science rests, and to formulate them with accuracy, we almost always encounter difficulties, which come, sometimes from the very nature of these conceptions, but more often from the imperfections of language. For instance, in the writings of economists, the definition of value, and the distinction between absolute and relative value, are rather obscure: a very simple and strikingly exact comparison will serve to throw light on this. ”

“ Property, power, the distinctions between masters, servants and slaves, abundance, and poverty, rights and privileges, all these are found among the most savage tribes, and seem to flow necessarily from the natural laws which preside over aggregations of individuals and of families; but such an idea of wealth as we draw from our advanced state of civilization, and such as is necessary to give rise to a theory, can only be slowly developed as a consequence of the progress of commercial relations, and of the gradual reaction of those relations on civil institutions. ”

“ The Theory of Wealth, according to the idea we are trying to give, would doubtless only be an idle speculation, if the abstract idea of wealth or value in exchange on which it is founded, were too far from corresponding with the actual objects which make up wealth in the existing social status. ”

“ There are authors, like Smith and Say, who, in writing on Political Economy, have preserved all the beauties of a purely literary style; but there are others, like Ricardo, who, when treating the most abstract questions, or when seeking great accuracy, have not been able to avoid algebra, and have only disguised it under arithmetical calculations of tiresome length. Any one who understands algebraic notation, reads at a glance in an equation results reached arithmetically only with great labour and pains. ”

“ We conceive that a body moves when its situation changes with reference to other bodies which we look upon as fixed. If we observe a system of material points at two different times, and find that the respective situations of these points are not the same at both times, we necessarily conclude that some, if not all, of these points have moved; but if besides this we are unable to refer them to points of the fixity of which we can be sure, it is, in the first instance, impossible to draw any conclusions as to the motion or rest of each of the points in the system. ”

“ I have said that most authors who have devoted themselves to political economy seem also to have had a wrong idea of the nature of the applications of mathematical analysis to the theory of wealth. They imagined that the use of symbols and formulas could only lead to numerical calculations, and as it was clearly perceived that the subject was not suited to such a numerical determination of values by means of theory alone, the conclusion was drawn that the mathematical apparatus, if not liable to lead to erroneous results, was at least idle and pedantic. ”

“ For instance, an observer who should see by inspection of a table of statistics of values from century to century, that the value of money fell about four-fifths towards the end of the sixteenth century, while other commodities preserved practically the same relative values, would consider it very probable that an absolute change had taken place in the value of money, even if he were ignorant of the discovery of mines in America. ”

“ The things, then, to which the state of commercial relations and civil institutions permits a value in exchange to be attached, are those which in the language of to-day are characterized by the word wealth; and to form an intelligible theory we ought to absolutely identify the sense of the word wealth with that which is presented to us by the words exchangeable values. ”

“ To sum up, there are only relative values; to seek for others is to fall into a contradiction with the very idea of value in exchange which necessarily implies the idea of a ratio between two terms. But also an accomplished change in this ratio is a relative effect, which can and should be explained by absolute changes in the terms of the ratio. There are no absolute values, but there are movements of absolute rise and fall in values. ”

“ The idea which the word wealth presents to us to-day, and which is relative to our state of civilization, could not have been grasped by men of Teutonic stock, either at the epoch of the Conquest, or even at much later periods, when the feudal law existed in full vigour. ”

“ Experience unquestionably shows that this is true in most cases, since, in general, an incontestable improvement in the condition of the people has kept pace with an equally incontestable increase in the sum total of wealth in circulation. But in consequence of the impossibility of following up analytically all the consequences of such complex relations, theory is unable to explain why this usually happens and is still less able to demonstrate that it must always continue to occur. ”

“ If we compare one nation with another, by what invariable tokens shall we determine the progress or decay of their prosperity? Shall it be according to population? In that case China would far excel Europe. ”

“ We are far from wishing to depreciate the philanthropic efforts of those who seek to throw some light on social economy. It is characteristic only of narrow minds to decry medical science because physiological phenomena cannot be calculated as accurately as the planetary movements. Political Economy is the hygiene and pathology of the social system. ”

“ If chemists should solve the problem of making diamonds, jewellers and the ladies who own sets of jewellery would suffer heavy losses; the general mass of wealth capable of circulation would experience a notable decrease, and yet I can hardly think than any sensible man would be tempted to consider it a public calamity, even though he might regret the individual losses involved. ”

“ Here is an industrial operation, a material production, useful to the publisher who undertook it, useful to those whose products and labour it employed, useful even to the public if the book contains valuable information, and which is nevertheless a real destruction of wealth, in the abstract and commercial meaning of the term.
The rise and fall of exchange show perpetual oscillations in values, or in the abstract wealth in circulation, without intervention of actual production or destruction of the physical objects to which, in the concrete sense, the term wealth is applicable. ”

“ The same shepherd has cattle and milk in abundance; he can provide for a numerous retinue of servants and slaves; he maintains a generous hospitality towards poor dependents; but he is neither able to accumulate his products, nor to exchange them for objects of luxury which do not exist; this man has power, authority, the enjoyments which belong to his position, but he has not wealth. ”

“ The Political Economist, being occupied principally with the material wants of mankind, only considers social institutions as far as they favour or interfere with labour, thrift, commerce, and population ”

“ Among the possible hypotheses on the absolute changes which produce the observed relative changes, there are some which the general laws of probability indicate as most probable. Only knowledge of the special laws of the matter in question can lead to the substitution of an assured decision for an opinion as to probability.
11. If theory should indicate one article incapable of absolute variation in its value, and should refer to it all others, it would be possible to immediately deduce their absolute variations from their relative variations ”

“ But there is a large class of men, and, thanks to a famous school, especially in France, who, after thorough mathematical training, have directed their attention to applications of those sciences which particularly interest society. Theories of the wealth of the community must attract their attention ”

“ A shepherd is in possession of a vast pasture ground, and no one can disturb him with impunity; but it would be vain for him to think of exchanging it for something which he might prefer; there is nothing in existing habits and customs to make such an exchange possible; this man is a landholder, but he is not rich. ”

“ Even the wages of that lowest grade of labour, which is only considered as a kind of mechanical agent, the element often proposed as the standard of value, is subject like wheat to periodic as well as secular variations; and, if the periodic oscillations of this element have generally been less wide than those of wheat, on the other hand we may suspect that in future the progressive changes in the social status will cause it to suffer much more rapid secular variations. ”

“ The science known as Political Economy, which for a century has so much interested thinkers, is to-day more generally diffused than ever before. It shares with politics proper the attention of the great journals, which are to-day the most important means of spreading information ”

“ It is thus that the sciences and all human institutions are organized. The use of coin, which has been handed down to us from remote antiquity, has powerfully aided the progress of commercial organization, as the art of making glass helped many discoveries in astronomy and physics; but commercial organization is not essentially bound to the use of the monetary metals. All means are good which tend to facilitate exchange, to fix value in exchange ”

“ The monetary metals are among the things which, under ordinary circumstances and provided that too long a period is not considered, only experience slight absolute variations in their value. If it were not so, all transactions would be disturbed, as they are by paper money subject to sudden depreciation. ”

“ On the other hand, as the abstract idea of wealth according to our conception constitutes a perfectly dtereminate relation, like all precise conceptions it can become the object of theoretical deductions, and if these deductions are sufficiently numerous and seem important enough to be collected into a system, it will presumably be advantageous to present this system by itself, except for such applications as it may seem proper to make to those branches of Political Economy with which the theory of wealth is ultimately connected. ”