Posted by: Democratic Thinker | June 30, 2010

Of Monopolies—Samuel Pufendorf

Natural Law

Samuel Pufendorf, in his Of the Law of Nature and Nations, identifes those monopolies which, by virute of Nature, are exempt from legal prohibition.

The next Office of Humanity mention’d by Grotius, is that we allow every Man the Privilege of procuring for himself, by Money, Work, exchange of Goods, or any other lawfull Contract, such things as contribute to the convenience of Life; and that we do not abridge him of this Liberty, either by any Civil Ordinance, or by any unlawful Combination, or Monopoly.PUFENDORF,Law of Nature and Nations, V. III, C. 3., § XI.

Of Chargeable Contracts in particular; and, First, of Bartering, Buying and Selling.
Vol. V, Ch. 5.


§ VII. In this place something maybe expected to be said concerning Monopolies, Whether any, or all of them be against the Law of Nature, or no? For ‘tis an odious Name, and the Laws of many States brand it grievously. But here we must exempt several Things from the invidious Title of Monopolies, which indeed are not such. For sure ‘tis prohibited by no Law, nor can it come under the Name of a Monopoly, if only one Man, in any Town, has got the way of making some sort of Manufacture, or if one Man only has got such a sort of Grain in his Ground, or if some certain Commodity be the Produce only of one particular Country.(a) For Monopolies, as such, imply that others too would sell the same did not one Man ingross the whole Trade to himself. And therefore, he who alone brings a Commodity from a Foreign Country, cannot be said to set up a Monopoly, provided he does not hinder others from importing the same. Nor is it unlawful for any Nation, that abounds in one particular Commodity, to bargain with another Nation to let them only have the Trade of it, for any one may sell his own when and to whom he pleases; indeed when we happen to have a Superfluity of what another cannot be without, then the Law of Humanity requires, that we should not make such a Bargain to the Prejudice of others. But if a Man, without contracting with the Owners, should of his own Head, aim at a Monopoly by hindring some by Force, and others by clandestine Contrivances from coming to the same Place, and by that means lay a Necessity upon all others to buy of him, it is plain that he offends against the Law of Humanity, and impudently breaks in upon the Liberty of the rest.

(a) ‘Since there is no such Produce of Alume in any other Country, which yet is of great use, it is not to be wondred at, that the Lipareans have the Monopoly of it, and setting what Prices they please upon it, make vast Returns.’ Diod. Sic. I. 5. c. 10. p. 293. Ed. Rhodorn.

As for Monopolies among private Citizens, it cannot be accounted illegal, or oppressive that every one is not allowed to set up what Trade he pleases, but those only who have gain’d a right by the Charter of the Corporation; thus in most Cities of Europe no Man can open a Shop, or betake himself to any particular Trade, but he who has served some time an Apprenticeship at it, for it is not enough that he is expert in it.

Besides, the Magistrate may give one Man, or one Company of Men the sole Power of Importing certain Commodities from certain Places, exclusive of all others. And there may be several good Reasons for the granting such a Privilege. For it requires vast Charges to settle a Trade with a very remote Nation, and perhaps after great Expences it may not succeed at all; and therefore the Authors of such a Commerce ought, in reason, to have Security, that others may not intercept gratis what they have established at their great Risque and Charge; and besides such privileg’d Companies are better able to assist the Publick with their Riches, upon any Emergencies, than private Persons: By this means too a greater Trade may be carried on, and with better Credit: Nor is this Method liable to so many Tricks and Shifts, since the Gain comes into the common Bank to be divided proportionably amongst them all. But as for these Privileges, a prudent Government will not grant ‘em, but where the Commodities are imported from remote Places, and with great Hazard; and which do not so much concern the Necessaries as the Superfluities of Life. Nor even then must the Merchants be allowed to enhance the Price of those things at their Pleasure; for it is against Reason to give a few an Opportunity of scraping up exorbitant Riches out of the Fortunes of the rest, when the Publick gets nothing by it.

Lastly, It seems unjust that Tradesmen, or Farmers should be forced to sell their Manufactures, or the Produce of their Ground to certain People only, who sell the same to others by Retail; for by this Means the Riches of the State may come into the hands of a few, to the Detriment and Oppression of the rest.

I cannot but take notice, by the way, that Grotias(b) brings the Example of Joseph, when he was Viceroy of Egypt, in Justification of Monopolies: Tho’ that Example is not much to the Purpose, for neither did the King hinder others from buying up the Corn in the Years of Plenty, nor any from selling, who had too much: Neither had the Alexandrians in Strabo(c) the Monopoly of Indian and Æthiopick Commodities from any Privilege, but from the Situation of the Place.

(b) L. 2. C. 12. s. 16.

(c) L. 17. p. 549. Ed. Gen. Casaub.

But a Monopoly, properly so call’d, as having the Force of a Privilege, cannot be set on foot by private Men: For how can a private Man justify his hindring others from medling with such a sort of Commodity, when he has no Command over, nor can lawfully use Force against them; and therefore the Monopolies of private Men are spurious and illegal, and do not depend upon Rights and Privileges, but are generally carried on by clandestine Frauds and Combinations: As if some few by a Trick should debar others from Trading to those Places from whence they have their Commodities, or should hinder those that have them from bringing them to Market: Or, if they should enter into a Combination to buy up all such sort of Commodities, and then stifle them, that so the Scarcity may enhance the Price.(d) The Knavery of such ought as much to be corrected, as those who(e) enter into Compact to raise extravagantly the Prices of other things, by agreeing privately to sell nothing under such a Rate: Which piece of Roguery Labourers and Workmen are sometimes guilty of.(f)

(d) Against whom may be apply’d that of Apollonius Tyaneus in philostr. l. 1. c. 12. in the Beginning. ‘The Earth is the Mother of all, for she is Just; but you being Unjust have made her only a Mother to your selves.

(e) Ut in Velabro Olearii de quo vide Erasm. Adag.

(f) Add. Plin. c. 37. de erinsceo. L. un. C. de Monopol. L. 6. D. de extraord. crim. and Cujacius obs. X. 19.

I cannot discommend the Sagacity of Thales, who rented all the Olive-yards, having foreseen by his Skill in Astrology, that there would be great Plenty of Olives that Year.(g) (h)

(g) Arist. Pol. l. 1. c. 7. (11.) Diotg. Lacrt. l. 1. s.26.

(h) Vid. Cicer. de Divinat. l. 1. c. 49.