Encyclopedic Liberty. Jean Le Rond d'Alembert
by dignities, the citizen can again be looked upon both in relation to the laws of his society and in relation to the rank he occupies in the hierarchical order. In the second case, there will be some difference between the citizen as magistrate and the citizen as bourgeois; and in the first, between the citizen of Amsterdam and of Basel.
While acknowledging the distinctions of civil societies and the order of citizens in each society, Aristotle nonetheless recognized as true citizens only those who have a role in the judiciary, and who could expect to pass from the state of simple bourgeois to the first ranks of the magistracy, which fits only pure democracies. It must be acknowledged that it is almost always someone who enjoys these prerogatives who is truly a public man, and that one has no clear distinction between subject and citizen unless the latter is
[print edition page 53]
supposed to be a public man, and unless the role of the former could never be anything but that of a private man, de quidam.11
In restricting the term citizen to those who have founded the state through the first union of families, and to their successors from father to son, Pufendorf introduces a frivolous distinction that sheds little light in his work and that can plunge a civil society into a great deal of trouble, by distinguishing the originary from the naturalized citizens via a misconceived notion of nobility. The citizens in their capacity as citizens, that is to say, in their societies, are all equally noble, because nobility comes not from ancestry but from the common right to the leading honors of the magistracy.
Since the moral, sovereign being is to the citizen what the physical despotic person is to the subject, and since the most perfect slave does not cede his whole being to his sovereign, a fortiori does the citizen have rights that he reserves to himself and from which he never desists. There are occasions in which he finds himself in line, I don’t say with his fellow citizens, but with the moral being who commands them all. This being has two titles: one private and the other public. The former should find no resistance, while the latter can experience resistance on the part of individuals, and even succumb to them in contestation. Since this moral being has properties, commitments, farms, farmers, etc., it is also necessary to distinguish in him, so to speak, the sovereign and the subject of sovereignty. In these cases, he is both judge and party. This is doubtless a drawback, but it affects all government in general, and by itself, it proves nothing for or against except by its rarity or its frequency. It is certain that subjects or citizens will be less exposed to injustices, to the extent that the sovereign being, physical or moral, is more rarely judge and party, on those occasions where he is attacked as a private individual.
In times of trouble, the citizen will take the side of the party that is for the established system. During the dissolution of a system, he will follow the party of his city if it is unanimous; if there is division in the city, he will embrace the party that is for the equality of its members and the liberty of all.
The more the citizens approach equality in ambition and in wealth, the more peaceful the state will be. This benefit seems to belong to pure democracy,
[print edition page 54]
exclusive of all other governments. But in even the most perfect democracy, complete equality among the members is a chimerical thing, and that is perhaps the principle of dissolution for that form of government—unless it is remedied by all the injustices of ostracism. It is with government in general as it is with animal life: each step in life is a step toward death. The best government is not the one that is immortal, but the one that lasts the longest and is the most peaceful.
[print edition page 55]
TRADING COMPANY. This term means an association formed for undertaking, implementing, or managing any commercial operations.
These companies are of two kinds, either private or privileged.
Private companies are normally formed by a small number of individuals who each furnish a portion of the capital, or simply their time and advice, and sometimes both, on the conditions agreed to in the partnership contract. These companies more commonly bear the denomination of firms [sociétés]. See SOCIÉTÉ [Society or Association].
Usage has nonetheless preserved the name company for private firms or partnerships when there are a large number of members, substantial capital, and enterprises distinguished by their risk or their scale. These sorts of company-firms are most often composed of persons from various occupations who, being inexperienced in trade, entrust the direction of operations to partners or to competent agents under a general plan. Although the operations of these companies receive no public preference over private operations, they are nonetheless always regarded askance in commercial locales, because any competition reduces profit. But that reason itself ought to make them very agreeable to the state, whose commerce can be extended and perfected only through the merchants’ competition.
Even in general, these companies are useful to traders because they extend a nation’s knowledge of, and interest in, that sector that is always envied and often despised—despite its being the sole source of all others.
[print edition page 56]
Abundant money, low interest rates, sound public credit, the growth of luxury—all clear signs of public prosperity—are the usual results of these sorts of establishments. They contribute in turn to that prosperity, by multiplying the various kinds of occupation for the people, their ease, their consumption, and finally the revenues of the state.
There is one case, however, in which they might be harmful: that is when dividends are distributed as shares that are traded and transferred without further formality. By this means, foreigners may elude that wise law that in civilized states prohibits non-naturalized or non-domiciled foreigners from participating in armaments companies. Thanks to these shares, peoples who have a better rate of interest than their neighbors can attract from afar all the profit from the trade of these neighbors—sometimes even ruin them, if it is in their interest. It is only then that merchants have a right to complain. Another general rule: anything that can be subject to speculation is dangerous in a nation that pays a higher rate of interest.
The usefulness of these associations to investors is much more ambiguous than to the state. Nonetheless, it is unfair to be biased against all schemes just because most of those that have been seen to hatch at various times have failed. The usual pitfalls are lack of thrift (inseparable from large operations), lavish expense on establishments before being assured of profit, impatience to see gain, hasty loss of appetite for the project, and finally, discord.
Credulity, daughter of ignorance, is imprudent, but it is contradictory to abandon an enterprise one knew to be risky simply because its risks have been unfurled. Fortune seems to take pleasure in making those who solicit her pass through trials; her largesse is not reserved for those discouraged by her first whims.
There are some general rules by which people who are not acquainted with commerce but would like to become interested in it can protect themselves: (1) At a time when a nation’s capital stock has increased among all classes of people—although with some disproportion among them—the types of commerce that have raised up great fortunes, and that sustain brisk merchant competition, never procure substantial profits; the more this competition increases, the more noticeable the disadvantage becomes. (2) In distant and risky trade, it is imprudent to employ capital whose revenue is not superfluous to subsistence. For if the stakeholders annually
[print edition page 57]
withdraw either their dividends or simply their interest (if it is at any tolerably substantial rate), any losses that might occur fall immediately on the capital. Sometimes, this capital itself is found to be already diminished by the extraordinary expenses of the first few years. Operations languish or lack boldness; the plan as conceived cannot be fulfilled, and the dividends will certainly be mediocre, even if things go well. (3) Any plan that shows only