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£ct*^ ^^6.

HARVARD
COLLEGE
LiBRARV

f<:»n ^Ai.-H

HARVARD
COLLEGE
LIBRARY

POLITICAL ECONOMY:

OBJECTS, USES, AND PRINCIPLES:

OOlfSXDERBD WITH RBPISINOI TO THI OOH-
DITION or THK AMIBICAN PBOPLK.

WITH ▲ SUKMIRT, FOB THB U8B OP 8TUDBNT8.

A. POTTER, D.D.,

PBOrKSBOR or MORAL PBILOSOPHT IM UXIOM COLLS«B.

NEW YORK:

HABPEB & BROTHERS, PUBLISHER.S,

329 & 331 PEARL STREET,

FAANSL JN SqT7AB.S.

186 2.

HAHVARO COllEe£ LifiaAftV

GIFT 0^
MRS. CHARLES S. n\f%Ct

Entered, according to Act of Congress, in the year one tl
eight hondred and forty* one, by

Harper & Brothers,

in the CleriL'i Office of the District Court of the Southern

of New York.

:>.

n-;

ADVERTISEMENT.

l^s volame consists o^ four parts.

The^^ part, entitled Preliminary Chapter, dis-
cusses the Object, Uses, and History of Political
Economy.

The second part is an exposition of the funda-
Viental principles of the science, in connexion with
Prions questions of practical interest.

The third part, or Supplementary Chapter, is a
special appUcaUon of these principles to the condU
tioa of labouring men in the United States.

Theyour^ part is a brief Summary of the same
pHnciples for convenient reference, and especially
for the use of students in seminaries of learning.

The second part is substantially a reprint of the
^fst ten chapters of Scrope's Political Economy, a
^ork published in England in 1833 by G. Poulett
&rope, Esq., a member of the House of Com-
mons, and well known in his own country as an
^le writer on Currency, Taxation, &c. In adopt,
^g that portion of the work which contains the el«
ements of the science, it was found necessary to
abridge a few chapters, to enlarge others, and to
iii^odify various statements of the authori in order

Ti ADVERTISEMENT.

either to adapt them to the meridian of this coun
try, or to make them more consonant with the ed
itor's views of truth. So many alterations of thi
kind have been hazarded, that they could not, with
out inconvenience, nor without some appearand
of pedantry, be specified in notes ; aod hence, tb
alternative has been takea of issuing the wor]
without the name of Mr. Scrope in the title-p9§f
that he may not be held responsible for doctrine
which he does not teach. .Whereveiiit lias l^eei
fouad expedient, instead of altering the text, to ad
a note, that course )ias been adoptedt.aivi the aol
designated by the abbreviation {Ed*)*

The three remaining parts of the V0I91&0 are fion
the pea of the editor.

Two objects have been kept ia vi^w to pr^pa
ring this work : fi^stj to provide a tref^tise for gep
eral readers, adapted to the times, ana especiail;
to tlie wants of our country, which should not h
encumbered unnecessarily with controversial mat
ter or with abstract discussions; second^^ to fur
nish a cheap and convenient fnanucU for seminariei
in which larger and more expensive text-book
coukl UQt well be used, or in which it might h
thought desirable to confine the student's attentioi
to such doctrines as are best established and.mos
generally useful.

This ycdume will probably be followed by ao

ADVERTISEMENT. TU

Other, in which the subjects of Pauperism, Taxa.
tion, Currency, Banking, and Trade will be dis.
cussed, with direct reference to the state and pros-
pects of our own country.

The editor takes this opportunity of acknowU
edging his obligations, while preparing this volume^
to a learned and valued friend, Professor Tell-
kanipg late of the University of Grottingen, but
sow of Union College. Besides many valuable
suggestions, this gentleman has contributed an Els*
Bay on Currency and Banking, which will be in*
Berted in a future volume.

CONTENTS.

OlmnMAKT Chaptbb T»t» U

CHAPTER I.

'^finition of the Science. — ^The Study of the Happinen of So-
cieties so far as it depends on the Abandance and Dittiiba*
tion of their Wealth.— Its Principles capable only of MoraL
not liathematical Proof 61

CHAPTER II.

X^efinitioD of Wealth and of Labour. — All Laboar prodactiTe.
^-Labour rather a Pleasure than a Sacrifice : most, however,
be firee, and sufficientlv remunerated. — Minimum of sufficient
Remuneration. — ^Wealth no certain measure of Happiness.—
Test proposed 54

CHAPTER ni.

Conditions of the Production of Wealth.--The Institution of
priTate Pr(q;>ert]r.— Labour. — Land. — Capital . . .00

CHAPTER IV.

^iboiur.— Exchanges of its Produce.— Right to Free Exchange.
—Division of Labour.— Its Advantages. — Cooperation md
niitual Dependance of all Labourers.— Barter.— Money.— Its
me. — Coin.— Credit. — General use of . . . .76

CHAPTER V.

^•ges. — Ample and continually increasfaig Wages secured to
Labourers by the Principles of Free Labour and Free Ex-
change.— Inequality of Wages in different Employments and
of diaMint Individuals.- Ability, even of the lowest Class,
Uk;reasee, and its Reward ought to rise pTopOTl\OTi«Xc\^,'«V0L
V^Pngnu of Civilization ^

CONTENTS.

CHAPTER VI.

Land.~It8 Appropriation essential to Production. — HistQ
Causes of its Appropriation in different Ages and Count
In the East by the Sovereign.— In Europe by the Aristc
— In America by the People.— Influence of these di
Systems on Production and National Welfare. — ^
Laws of Property in Pa

CHAPTER VII.

CAPITAL.

The Result of previous Labour— Not affixed to Land — I
corporated with Human Ability— Nor reserved for ]
Consumption — But employed, or reserved for Employ
in Production, with a View to Profit from sale of its Pr>
— Necessity of so restricting the Meaning of the Ti
Utility of Capital.— Profit on Capital.— Nature of Prof
Natural Right to its Enjoyment. — Mistaken Views of
who declaim against the Profits of Capital.— Fixed an
culating Capitsus.— Elements of Profit.— Net Profit, or
est of Money. — Inequality of Gross Profits. — Equality <
Profit in the same Country

CHAPTER VIII.

VALUE.

Value necessarily Relative.— No real Value.— General Va
Means " Purchasing Power."— Elements of Value. — y^
oly.— Costs of Production. — Rent, the Result of Monop
Does not enter into Price. — Distinction between good ai
Monopolies. — Demand and Supply. — Their Variations a
ciprocal Action.— Cost of Pnxfuction.— Consists in Li
Capital, Time, Monopoly, and Taxation. — Competition c
ducers, by which Supply and Demand are kept nearly ]
— Different Investments of Capital and Labour.— Partial
—General Glut impossible, except through a Scare
Money

CONTENTS. n

CHAPTER IX.

DISTRIBUTION OF WEALTH.

KMiibI and Decenary Inequality of Conditiona and Propeitf .
— Adventitioaa Advantagea.— Nataral Right of Sacceaaioo to
Property by Will or Inheritance.— Variety of ConventiODal
Rolea. — Teat of their Equity.— Natural Diatribation of new
Wealth—among Labourera, Land-ownera, and Capitaliata —
can be determined only by the Principle of free Exchange.—
Tbeaame Pnnciple tends to the greatest Increaaeof dimbo*
table Produce. — Limitation of Interference of Oovemment to
the aecuring of Peraona and Property . . Pag« 195

* CHAPTER X.

PRODUCTIVE INTERESTS.

Agrieoltore. — Manufacturea.— Commerce. — Progress, Sub&
i^iona, and Utility of each.— Their community of Intereat,
and equal Importance. — Preference awarded to Aariculture.
owin^ to the unnatural exiating relationa of PopUMtioD and
Snbsiateiioe 810

SOPPLSMKMTABT ChAPTBB S3S

lOMKABT OV PbINCIPLBB . • • • W

PRELIMINARY CHAPTER.

In entering upon any department of Leamingp
it is desirable, in the first place, to form some Da>
tioQ of its precise Object and Uses^ as well as of
its past History and present State. To meet thia
want is the aim of the present chapter.

I. OBJECT OF POLITICAL ECONOMT.

This branch of science proposes to investigate '
the laws which regulate the production and distri-
BimoN of proper^ in a nation, and from these laws
to deduce practical rules for the guidance of a peo*
pie both in their private pursuits and in respect to
legislation. It forms one department of the more
general science of Politics. It considers men iaj
society as occupied in acquiring property, and it
proposes to explain the principles by which they
are governed in this pursuit, the causes which most
contribute to their success, and the influence of such
success on their general welfare. It begins by as^
sundng that property is not only a legitimate object
of desire, but also a most powerful agent in the
work of civilization ; that it owes its existence, in
all cases, directly or indirectly, to human skill and
industry co-operaiing with nature ; and that it be*
oomes of the highest importance, thecefoxe, X<c^ ^i%«
eerta/a in what way such skill and mdunilr) t»3^

14 PRELIMINARY CHAPTER.

|be rendered most effective and useful. Th(
preliminary truths, each of w hich merits e
tion. We have only room, however, in this
to commend them to the notice and reflect
the reader.

II. USES OF POLITICAL XCONOSfY.

At first sight there would appear to be
if any, occasion for such a science. All mei
that industry and economy are the conditio
which alone, as a general rule, indi vidua
hope to acquire property ; and it may be sa
what is obvious in respect^ to individuals, is n
obvious in respect to communities, which an
up of individuals. Where the people are all
trious in creating value, and where they arc
ful, from year to year, to consume, each on
-than he produces, it must be evident that
will accumulate, and the nation ultimately b
rich. What then remains for political ec<
to teach ? Does not this simple truth compi
that can be known upon the subject ; or
least, that the mass of mankind can be m;
comprehend or act upon 1 The answers to
questions will serve to indicate some of the <
which this study is thought to have on our r
both as a subject for reading and inquiry, an
as a branch of elementary education.

I. In the first place, then, instruction is r

to demonstrate, and. above all, to enforce the

that labour and economy are the true sourc

tffeaM. Truism though it now seems, this

c^h was overlooked Xo a |gc«»x ^3^«Q^. ^n<

PRELIMINART CHAPmU 16

Statesmen before the time of Adam Smith, and at
this moment it is recognised and acted upon much
less generally than might be supposed. Is not the
world still full of expedients by which men are to
become rich suddenly and without pains ? By too
many is not labour still regarded as a great hard-
ship rather than the necessary condition of their •
highest welfare and enjoyment, while almost all are
ready to stigmatize frugality as a niggardly vir.
tue? How many of the exchanges of property \
which take place by way of what is termed spec-
vikUwrij add nothing to the aggregate wealth of a
people ; being but delusive expedients for creating
Value without industry or economy, and serving to
absorb a vast proportion of talent and capital
which might have been usefully employed? So
in eharity. If the benevolent duly appreciated
this fundamental truth of political economy, they
would be more careful so to bestow their bounty
as not to paralyse industry or engender a spirit of.
improvidence. It is melancholy to observe how),
tnuch injury can be occasioned by even the noblest
sentiments when misdirected, or when indulged by
the ignorant and unreflecting. So, again, in gov'
eminent. In older countries, many live in idleness
and ennui, as pensioners on the public purse, who
would have been useful and h&ppy producers of
Wealth had government placed a proper estimate
on industry, relieving, on the one hand, none but
unavoidable indigence, and rewarding, on the other,
only those who have rendered actual service ; doing
this, however, promptly and adequately.

//• lastruction ia also needed to \aifo\i ^Qda

16 PRELIMINARY CHAPTER.

rious agencies tohich conspire toitk industry in the
production of wealth ; and more especially the va*
rious forms assumed by industry and economy when
these are most productively employed. Besides
industry, the workman, in order to fabricate any*
thing valuable, must have materials, tools, knowi.
edge, temporary subsistence, &c. When fabrica-
ted, the article may require to be transported to
a distant market, and to be left for a time in care
of some one in order to be sold ; as, when sold, the
proceeds may need to be exchanged for other ar-
ticles more desired by the artificer, or to be placed
in deposite for safe-keeping. So, again, the artifi-
cer may be sick, and require medical aid to enable
him to resume his labours ; or his legal rights may
be invaded, and he may need the professional ser-
vices of an attorney to protect him from oppression
or loss.

It is obvious, then, that he is dependant for much
of his efficiency as a producer on the co-operation
of others. Of these, some furnish him with ma^
terials and food (or money to purchase them), the
results of previous labour, which have been saved
by economy, i. e., by abstinence from present ffroti-
fication. Others contribute kinds of labour cuSer*
ent from his own, but without which his own wonU
have been in no demand, or would have been com-
paratively unproductive. Thus, for examplof the
bread which we eat is not the produce of the ba-
ker's industry merely, nor of the miller's, nor of
the farmer's, but of all these combined ; and not
only combined, but in the case of each one aided
and enforced by capital. Neither one of these
could have supplied \>ie^ viYkSt^ \\. S&^^sfi«A. V[

PRBLIMINARY CHAPTER. 17

the city consumer, of the right quantity and qual*
ity, and at precisely the right time, unless he had
been aided by all the rest ; nor could all of them
together have done it, unless each in his proper
iphere had been supplied with the accumulated
results of previous labour in the form of capital.

We are thus brought to the one great and indis'
Tensahle condition of all efficient production in so-
nety, viz., Co-operation involving division of la-
bouTf exchange, and capital, 1. There must be la*
)our, but that labour, in order to be made skilful
md more productive, must be s) distributed that
iach one shall be able, by devoting himself to
I single employment, to acquire facility. 2. To
render such distribution possible, there must be
DQUtual exchangee of the surplus remaining to each
labourer after his own wants have been supplied,
8. To enable this skilled and distributed labour to
apply itself continuously and in the most efficient
DQAnner, it must avail itself of the stores which
bave been laid up by a provident economy, i. e«,
9f eapUaL

It will be perceived, then, that a commodity,
irben at length it reaches the consumer, owes its
radne to several species of labour, each of which
ilike has been applied to it, and to each of
iirhich, therefore, remuneration is due ; and also
» capital, for the use and risking of which the
)wiier9 no less evidently, is entitled to profit. Un-
fer whatever form labour is exerted, whether by
the husbandman in furnishing the raw material, or
by the mechanic in so transforming that material
ai to adapt it to our use, or by the merchaid. m
\imBporting, preserving, and selling it, oi b^ \])ad

18 PRELIMINARY CHAPTER.

physician in taking charge meanwhile of the la>
bourer's health, or by the attorney and mofistrali
in securing to him the protection of law, or by the
teacher in augmenting his knowledge or the koowl*
edge of his children ; in whichever of these formf
industry is applied, it is evident that the agent is a
productive member of society, and, as such, may
claim his rightful share of respect and reward*
Not less is he a productive agent, who, by self-da-
nial, forecast, or activity, provides capitalj that
"giant labourer," without which the arm of the
husbandman or artisan would be all but powerlen*
These are truths, which, when thus stated, cannoC
but appear almost self-evident. In practice, how-
ever, they are frequently overlooked. One class of
labourers rails at another, as if its members aloos
were producers of wealth, and the rest but dnnM
in the social hive. The capitalist expatiates upoa
the power and useful agency of capital until he for-
gets that it would be worthless unless wielded \j
the steady hand of industry ; the industrious, i
their turn, speak of the capitalist as a bloated rep*
tile, who fattens at their expense, and yields ban
nothing to sustain or enrich society. These prej-
udices, vulgar as they may appear, have controlled
not a little of the legislation of the world, and are
at this moment active in our own country. Hm
relative rights of capital and labour, and of difiB^
ent kinds of labour as compared with each othei^
is the question lying at the foundation, not only of
ancient and imbittered controversies in England
and of strikes and Trades Unions in Americai bit
of discussions now inxDiaK more rife. HappOji
howeveif with ua, capVtAi uiA \eiX^\)2L ^i^ «^

PRELIMINARY CHAPTBR. 10

ally held and applied by the same person, that error
OQ such subjects is less prevalent, and, where prev.
alent, is less pernicious than it is abroad. Yet
even here it still broods over many minds, and is
entirely dispelled from, 1 had almost said, none.
We argue, then, in behalf of the study of Political
Economy among the people, because we believe it
will impress those of different pursuits with a deep-
er sense of their relative rights and respective
usefulness, inspiiing them with feelings .of stronger
cordiality, and with a greater disposition to co-op^
ki erote in promoting their own and the general weal.

III. Instruction in Political Economy will serve,
(^ <igain, to enforce and recommend the all-important
K truth, that the productive power of both labour and
f- eapiUd may be vastly increased, if property is a
Uessing, it becomes alike the interest and duty of
every one to augment it, by giving to the instru-
ments of production the utmost efficiency. Now
i Political Economy proposes to teach how this may
j be done : 1st. By knowledge, i. e., by such an ac-
i qoaintance with the laws of nature and the state of
1^ the world as enables both workman and capitalist
:; to choose the shortest and most certain road to
tbeir objects. Bleaching cloth, which was former-
ly the work of months, is now, by the aid of chym-
ical science, performed in a few hours. The na-
tives of South America spent (Ulloa tells us) even
years in weaving, without machinery, a piece of
cloth which a workman, aided only by a hand-loom,
would produce now in a few days. Enable the
nme workman to substitute the power of aleTwttv ot
water for his own strength^ and you add^agoSoi)^

20 rAELIMINARY CHAJPTi:&.

hundred, and, in some instances, a thousand
his productive capacity. With the self-actin
one girl, in spinning cotton, will do the nv
from eight to twelve hundred. These, of
are but specimens of the advantage which
from coupling science with labour and capii
advantage which is experienced in every
ment of the arts, and which seems to admit
most unlimited extension.

2dly. Political Economy also shows h<
productive power of labour, and even of
may be increased hy the moral and intellecU
ture of the labourer, i. e., by raising his cha
It must be admitted, however, that this tn
not usually held that prominent place in the i
to which it is entitled. By scientific wrii
well as by manufacturers and capitalists, i1
to have been too oflen assumed, that the pr
ive degradation of the operative must be th
itable result of the triumphs of modern ind
and that education could do little except
employer. To this melancholy convictioi
have seemed too ready to resign themseh

* The views of Smith and other writers in respect tc
dency of the division of UJwur to deaden the faculties anc
scribe the intelligence of the operative, may be taken i
ample. They seem to have overldoked the fact that ihii
cy might be more than counteracted by the intimate ini
and associations among workmen induced by such divi
a view of the new and wonderful improvements in mi
&c.. which are constantly forced upon their attention, ai
are the result of knowledge, and by the habits of readi
activity which are cultivated in large manufactories. I
added, that the very monotony of empl(n[ment occas
•uch division not onlv facilitates, but is likely to com
application of the mina to other subjects on which it ctt
ito snrplns activity.

PaSLIlilNART CHAPTER. M

OdDsidering that such triumphs, however splendid^
ought be purchased at too dear a rate, and that
the wheels of modern enterprise had better roll
btckf than advance only to crush beneath their
ntthless weight the hopes of so large a proportion
of mankind. But we cannot believe tliat there is
any such dire alternative. It seems like an im^^
peachment not only of the goodness, but of the wiaT
dom of Grod, to suppose that he can have connected
the ultimate and highest achievements of industry
with the deterioration of the industrious classes ;
to suppose that men who have become besotted by
vice and enslaved by ignorance are to be employed
as the most efficient instruments of production.
That in some countries the arts may have im-
proved and wealth been accumulating while the
labourer has appeared to degenerate, we do not
deny. But we hold it to be equally clear that such
was not the purpose of Providence, and that, by
this very circumstance, the increase of wealth has
been greatly retarded. The power of every irtdu
vidual as a producer vjUI he augmented tn exact
proportion to his intelligence and virtue. By in*
creased intelligence he is able not only to perform
his allotted task better, but to suggest improve-
ments; and by increased virtue he becomes at
ooce more useful to society in educating his chil-
dren, husbanding his property, &c., and more val-
uable in his employment, inasmuch as he is more
worthy of confidence. No one can have visited
those of our manufacturing villages which have
been brought under the combined influence of good
schools, temperance societies, and churches, with-
out being amazed at the consequent increase, not

22 PRELIMINARY CHAPTER.

only of comfort, but also of productive energy,
Instead of the vice, idleness, and squalid povert]
which other countries may have taught us to asso*
ciate with manufacturing industry, we find that it
such villages, as elsewhere, order, competence, and
comfort are the invariable result of a proper sys-
tem of culture, and that the value of a workman's
services to his employer always rises in a ratio
with his own moral and intellectual elevation. In-
deed, the whole history of New.England, rich at
first in nothing but the intelligence and virtue of
its people, and yet always pre-eminent for its pro-
ductive power, is full of instruction on this sabjeet
That history teaches that freedom, educatign, and
MORAL WORTH Constitute with every people tiio
grand elements of material prosperity no less than
of social and individual welfare.

Sd. Instruction in Political Economy will teach
us farther how to increase production, by teaching
us to distinguish between a true and a false econonof*
There was a time when men thought that, in order
to become rich, they must hoard their property*
We now begin to understand that, if we would
have it accumulate most rapidly, we must keep it
employed. Still, the true uses of capital — the im-
portance, on the one hand, of having it actively
employed, and yet the advantage, on the other, en
many investments which yield but a slow return—
the immense difference to the community, as wd
as to ourselves, between productive and unproduc*
tive expenditure — all these and many other kindred
subjects are still but imperfectly understood, and
even when understood, are not always redact U
practice. On the one hand there is much of thi)

PRELIMINARY CHAPTER. 83

penurious expenditure, by both individuals and
states, which has been described as '* penny wise
and pound foolish," and on the other there has been
great and almost unlimited profusion in regard to
objects which could yield no equivalent of pleasure
to tho' individual, or of benefit to the community.
One man allows his property to lie unproductive,
because he dreads an outlay which will be sure,
however, in a few years, to repay him liberal,
ly; while another invests in a splendid mansion
or in sumptuous furniture capital which he needs
for his business. Even the same man may be
seen one day mourning over the prodigality with
which money is lavished on railroads or canals,
and the next day encouraging his wife or daughter
to pay 950 for a pocket-handkerchief or 91000
for a necklace. We are far from denouncing the
luxuries of life ; but we cannot but entertain more
respect for him who, after providing handsomely
fi>r the wants of his family, employs his remaining
income in permanent improvements on his estate,
in reclaiming unoccupied or regenerating exhaust-
ed soils, in erecting useful buildings, than for him
who expends the same amount on grand dinners,
fine houses, or masquerade balls. In a country
where there is *' ample room and verge enough"
for the productive employment of capital, and
where, too, there are such noble objects of public
utility to which we may apply our surplus gains,
one cannot but lament the precocious extravagance
with which such gains are oflen wasted. Let him
who has five hundred dollars to spend, and who is
tempted to such extravagance, but reflect upon the
di&reDt results which would be likely to follow

24 PRELIMINARY CHAPTER.

were it devoted to the intellectual culture, or tc
the religious and moral instruciion of hia countrj'
men or of the world.

4th. Another means of increasing the productin
power of both labour and capital is to transfer ft
useful employments the vast amounts of both whid
are now misdirected^ being employed in fabricatini
useless or pernicious commodities. Elxperience hai
taught, for instance, that the use of intoxieadoj
substances as beverage or refreshment is never ad
vantageousy and almost invariably hurtful ; that it
tends insidiously to excess, and that, through sucli
excess, a fearful and almost incalculable amount of
property, as well as of life and happiness, is annu^
ally sacrificed. It is too evident for argument,
that, while these substances, when thus employed,
do, according to the most eminent physicians, no
good, they, on the other hand, are, in cases alnxMl
innumerable, disabling the labourer, absorbing a
large proportion of his gains, and debasing him in
his character. In what light, then, must PolitksKl
Economy regard the application of capital and
labour to the manufacture of such substances ibi
such a use : a manufacture which destroys no small
part of our bread-stufis, occupies many thousand
hands, diverts from useful employments an im*
mense amount of capital, and which can flourisli
only by spreading abroad poverty, wretchedness,
disease, and death! To be able to answer thii
question, we have simply to consider what efiecl
would follow were this vast amount of capital and
enterprise transferred in a single day to the cnlti.
ration of the soil, and \Vi<& ^bTvcation of usefbl
ttad elegant commoditiea^ vi^x^ ^<;»^\sAX\^s£«sQta

PUBLUflNARY CHAPTER. 25

1 are now productive only of evil, transformed
.ce, as if by enchantment, into th'j beneficent
ters of humanity and civilization ! The Ics-
of Public Economy are here, as everywhere
in unison with the voice of morality. This
ce protests against distilling and brewing on
ame principle as it protests against gambling
war. With the relative innocence of these
lits it has no concern. Its only appropriate
.nee is to point out their relative influence on
\tction, and, considered in this respect, they ev.
ly belong to the same class, and must incur
ame condemnation.

have thus specified three principal ways in
h the study of Political Economy would be
r to be useful. It may not be improper to
lercy that there is much in our own age, and
ually in this country, which recommends this
' to peculiar favour. It is the age pre-emi-
y of the people ; an age in which their welfare
prosperity have become the great objects of
tion as well to the statesman as to the philan-
list. It is also an age of peace ; one in which
have discovered that the game of war is ex-
Lve to both parties alike, and that the intelli.
application of a nation's powers to the useful
liberal arts is the only true way to enduring
tness. It is, in fine, an age of industry ; one
hich the true agency of property, as an ele-
t in human improvement and civilization, is
^ning to be understood ; in which the influence
le industrious classes is proportionably in-
sed, and in which, of course, it becomes tciox^
ever Important that that influence «i\\o\]\dL \m

26 PRELIMINARY CHAPTER.

well directed. If this be true of the world at larg-^
it is yet more true of our people, who are nearly a
devoted to the work of production in some one of &
fcrms, and who are accustomed to measure eves
enterprise and every question in no small degr<
by its bearings on that work. In such an age, ax
especially in such a land, where many of the topi<
discussed in works on Political Economy are pel
petually before the people, it seems doubly impoi
tant that they should be made familiar with grea
fundamental truths, and not be occupied only will
details. It is important, too, that they should be
accustomed to efforts of comprehensive thought
and inquiry, and be taught to look in their owD
plans beyond the present. ' Above all is it impo>
tant that they should be led to raise their minds
from the survey of mere production, to its uses in
advancing the dignity and welfare of man ; to reac
those solemn moral lessons which this science ad
dresses to the reflecting and conscientious ; to be
hold that perfect harmony which the Creator ha:
established between his moral, inteUectiml, and eeo
nomic laws, and thus to lay deeply to heart th
truth that virtue and self-improvement, as they con
stitute the grand end of life, so are they means mofi
efficient for the attainment even of property.

IV. Hitherto I have spoken of the uses of Pc
litical Economy to individuals when engaged i
their private pursuits. It must be considerec
however, that in this country each one sustains re
lations to the public and to the great work of ic
gislation which render his acquaintance with tni
subject doubly desirable. . Many of our laws f"

PRELIHINARY CHAPTER. 87

^^ded to bear favourably on the production and
*8tribution of wealth. That they often fail of
^ir object is but too evident, and it is hardly less
^^ideot that this failure must be ascribed to the
H^^t of large and enlightened views, not merely
'^ those who fVame laws, but yet more, perhaps, in
^hose who, by their votes, determine the selection,
^1* by their influence direct the policy of legisla-
^rs. We are far from supposing that every per-
son can be made to comprehend thoroughly all the
^t)tricate questions which this science presents.
^ot a few of them, as we well know, are encum-
bered with insuperable difficulties even to the clear-
est and most sagacious minds. Still it might be
"^Vell if the people were so far instructed, even with
to such questions, that they could appreciate,
least to some extent, the magnitude of these dif-
Qculties. ^ It would dispose them to be more toler-
ant towards those entertaining diflferent opinions ;
^jdd, above all, it would teach them the necessity
^::^f greater caution before they venture on sudden
c^r material changes in public law or policy. No-
'(hing, probably, has contributed more to bring this
^tudy into disrepute, than the rash and inconsiderate
Ynanner in which some of its principles have been
applied to legislation. A few sweeping and com-
prehensive maxims, that have passed from the wri-
tings of Smith into vulgar currency, are seized
\ipony and, without regard to the nice limitations
under which they were originally put forth anc
must always be employed, they are applied to ev
ery case, however peculiar or critical. " Nothin
18 more adverde to the tranquillity of a statesman,
nys the author of an eloge on the administratic

28 ^ PRELIMINARY CHAPTER.

of Colbert, " than a spirit of moderation ;
it condemns him to perpetual observation, showM
him every moment the insufficiency of his wisdom^
and leaves him the melancholy sense of his own
imperfection ; while, under the shelter of a few
general principles, a systematical politician enjoys
a perpetual calm. By the help of one alone, that
of a perfect liberty of trade, he would govern the
world, and would leave human afiairs to arrange
themselves at pleasure, under the operations of t&
prejudices and self-interests of individuals. If these
run counter to each other, he gives himself no anz*
iety about the consequence ; he insists that the re*
suit cannot be judged of till after a century or two
shall have elapsed. If his contemporaries, in con*
sequence of the disorder into which he has thrown
public aflfairs, are scrupulous about submitting quiet-
ly to the experiment, he accuses them, of impa*
tience. They alone, and not he, are to blame for
what they have suflTered ; and the principle con-
tinues to be inculcated with the same zeal and the
same confidence as before."

The student of Political Economy cannot be too
often reminded, that the principles laid down in
books, however true in the abstract, rarely admit
of immediate and unqualified application to public
affairs. By the great masters of the science they
are usually stated with some reserve, and as rep-
resenting the uMfnate rather than the immedieke
• objects at which governments ought to aim. " It
must,'' says Mr. Hume, ** be advantageous in all
cases to know what is most perfect in the kind,
that we may be able to bring any real constitution
or form of government as near it as possible^ fay

PRELIMINART CHAPTER. 29

'Qch gentle alterations and innovations as may not
give too great disturbance to society." The great
error of theorists is, that they do not appreciate
the impediments, which must always oppose the
practical adoption of any new system, and they
are therefore impatient of ^^ gentle alterations,**
They do not consider that a vicious system may
'^not only introduce," to use the language of Smith,
**very dangerous disorders into the state of the
body politic, but disorders which it is oflen difficult
to remedy, without occasioning, for a time at least,
still greater disorders :" that '* the man whose pub.
lie spirit is prompted altogether by humanity and
benevolence will," to borrow again from the s€une
bigh authority, ** respect the established powers and
privileges even of individuals, and still more of
societies, though he shoul8 consider them as in
some measure abusive. When he cannot conquer
the rooted prejudices of the people by reason and
persuasion, he will accommodate, as well as he can,
his public arrangements to them. If he cannot
establish the right, he will not disdain to amelio.
rate the wrong ; but, like Solon, when he cannot
establish the best system of laws, he will endeav-
our to establish the best that the people can bear."
It is much to be regretted that the writings of po-
litical economists have not contained more of this
kind of counsel. Principles are too frequently
stated without the necessary qualification, and as
if they were fitted for immediate and universal
adoption. It seems to have been almost forgotten,
too, that the first and safest place for applying
these principles is in private life ; and by drawing
illustrations only from subjects of a public or na«

30 PRELIMINARY CHAPTER.

tional character, the erroneous impression has be
conveyed, that in respect to these alone could t
science assist us.

I cannot close this subject without adverting
an error, the opposite of that which has just be
noticed. If some persons are too much addici
to mere speculation, there are others who seem
be deeply infected with a dread of all theories, ai
indeed, of all attempts at scientific inquiry. Tl
a theory may be framed without proper regard
all the facts, is true ; and equally true is it that t
disciple of such a theory may blind himself to <
currences which ought to have corrected his viei
and may thus fail to profit by experience. But
, it not also true, that they who boast of being pri
tical men are often partial in their obser vatic
and inconclusive in their reasoning ? They a
in truth, no less theorists than those against wh<
they object. No general opinions can be forn
or expressed, in relation to trade and indust
without theorizing on facts ; and, since these fa
are of constam recurrence, hardly a day can pi
or a conversation be held that we do not pronoui
some judgment which is, in substance, a theory
poUtical economy. So with books. Every tr
eller, who, in recording his notices of a fore
land, speculates upon th^ causes or tendencies
facts ; every historian, who attempts to trace
progressive steps by which nations have risen
declined ; and even every poet, who, like Goldsm
muses over the ruins of a ** Deserted Village,'
touches in any way on the vicissitudes of the be
politic, is engaged in tHeoriviag ; ^ud^if he does
^norantly and rashly, Vv\a 8^c\3\a.\io\» xdskj ^

PRELIMINARY CHAPTER. 81

^i^bute more to diflfuse errors in political economy
Ulan the most formidable quartos of a Malthus.
T^hey, then, who claim to be practical merely be-
cause they disregard books and science, are but
theorists who reason crudely from an insufficient
number of cases ; whereas the truly practical man
is one who would enlarge his own experience and
reflections by the accumulated wisdom of the
World ; who, having gathered principles from books,
and modified them by his own observation, stands
ready still fkrther to correct and modify them, as
the progress of events or the enlargement of his
own views shall require. He knows that many
of his opinions are at best but Approximations to
truth ; and that, instead of dismissing all farther
inquiry, it becomes him to lose no opportunity of
rectifying his data, and of subjecting his reason-
ings to new and severer tests.

ni. HISTORY OF POLITICAL ECONOMY.

This science is of recent origin. Its principles
can hardly be said to have formed a distinct subject
of inquiry until within the last two centuries.*
The respective parts taken in this inquiry by
France and Italy on one side, and by England and
America on the other, may serve as an apt illus-
tration of the great difference which marks the in-
tellectual character and habits of these nations.
The two former had the merit of first proposing

♦ The labours of Aristotle form, perhaps, the only exception.
(q his work on Politics (Book !.)» as well as his Ethics (Book
v.), he has anticipated several of the most important doctrines
of modern economists. I'his is especially the c^seN^vtkXVsi^vv:!^
lect of money f the proper agency of labour in pioducMvow, vcA ^'^
importance of freedom to trade and induBlry.

88 PRELIMINARY CHAPTER.

theories on the subject, and of giving them a
tific form. The latter were distinguished i
able discussion of particular questions, and
early adoption of improved systems of n
economy. The writers of the former wer<
conversant in practice with affairs of stat
addicted, both by taste and habit, to speci
they drew out their views in formal propo;
and held these propositions forth as the subj
a free, but not always sufficiently cautious o
prehensive discussion. Those who, in the t
ter countries, took up their pens, were for th
part either merchants or legislators, and w<
customed to consider only such questions a
of immediate concern, and in regard to whic
were called to act as well as think. It reqi
mind like that of Adam Smith, combining th
of both schools, to give at once sufficient
and yet sufficient moderation to the study,
impart to its conclusions an authority which
command regard alike from the scholar a
statesman. Living in a commercial town, in
with its merchants, and wont, like all his cc
men, to discuss freely all public questions, wl
the other hand, he was withdrawn by his p
from the strife of faction, and accustomed tc
and comprehensive views of truth, he was p
inently fitted for the great work of prosecut
Inquiry into ike Nature and Causes of the i
of Nations, That work he performed, in i
ner which entitled him, in the estimation
James M*Intosh, to a place beside Grotius
tesquieu, and Locke. Says that judicious ai
writer, " The Treatise on \W liaw cvl '^

PBBUMINARY CHAPTER. 88

IWe, the Essay on the Human Understanding!
The Spirit of Laws, and the Inquiry into the
Causes of the Wealth of Nations, are the works
^fhkh have most directly influenced the opinion of
Gurope during the last two centuries. They are
ftlso the most conspicuous landmarks in the scien-
ces to which they belong."

Thus the history of Political Economy naturaUy
^resolves itself into ttoo periods ; one precedfng and
the other following the publication of the *^ Wealth
of Nations." During the former, two theories had
possession successively of the mind of Europe :
^ firsts called the mercantile ; the second^ the agm
ficiUurcdf phynocratical, or economical system.

According to the first of these theories, wealth
Was derived principally from trade, the great ob-
ject being to secure what was termed a favourable
Ulonee, u e., a balance of exports over imports,
which was to be paid in gold and silver. This
theory seems to have had its rise, partly in the be-
lief then prevalent throughout the world, that all
toeaJth was to he measured by the quantity of the
frecums metals actually in possession, and partly in
the desire which the inhabitants of cities (i. e., mer-
chants and manufacturers) had to secure to them,
selves a monopoly of trade against foreigners. In
order to keep the balance in favour of the nation, or,
in other words, to produce a constant influx of specie
and bullion, importation was discouraged and expor-
tations stimulated. According to Mr. M'CuUoch,
Melon and Farbonnais in France, Grenovesi in It-
aly, Mun, Sir Josiah Child, Dr. Davenant, the au-
tikDrs of the British Merchant, and Six iame^ ^\.w«
kit in JBagland, were the ablest wn\ei% nvVo et^

34 PRELIMINARY CHAFTBR.

poused, some with more and some with fewes
exceptions, the leading principles of the Mercatu
tile System.

The Agricultural or Economical Systefli was tba
fruit of a natural reaction. The importance of afle
riculture having been underrated in the Mercantik
System, it was but natural, when the error wa
discovered, that writers should verge to the oppc
site extreme. Hence Quesnay, the founder of tki
school, and, indeed, the first modern writer win
seems to have investigated and analyzed the source
of wealth with the intention of ascertaining the fun-
damental principles of Political Economy, main'
taincd that agriculture was the only species of in-
dustry which contributed to increase the riches of a
nation. He was a physician attached to the court
of Louis XV. Having been educated in the coun*
try, he was inclined to regard agriculture with more
than ordinary partiality ; a partiality which, in his
case, was stimulated by seeing its depressed state at
that time in France, as well as the evils induced, by
commercial extravagance. In regard to mercan-
tile and manufacturing industry, he contended that
all the value they added to the raw material on
which they operated was but just equivalent to the
stock and capital consumed by them in the course
of such operation. Hence they were regarded ai
unproductive employments ; and the Economistf
(as this school were usually termed) may be re
garded as the legitimate precursors of those wh<
in our own age are so prone to stigmatize as mi
productive all kinds of industry except their own
It must be admitted, however, that the Economis
went farther than the orator of the Trades' Unioa

PRELIMINARY CHAPTER. 35

^<he latter is willing to recognise any form of la-
Aoor as productive, provided only that it be manual
Utbour, and that the employer does not apply it.
IjMtead of regarding (with Sully, the great minis,
ter) both ** Commerce and Agriculture as teats of
the state," they held that the latter alone was the
source of wealth, and, that it might be fostered,
there must be unlimited freedom of industry.
Laisfesfaire et laisses passer* (i. e., let every one
do as he pleases, and everything take its course)
was their motto. They reasoned as many now
reason ; ^' since the public interest consists in the
union of all individual interests, individual interest
will guide each mai\ more surely to the public in*
terest than any government can do." They over-
looked the obvious but much-neglected truth, that
an individual may find it his interest to prose-
cute some business which tends to impoverish the
community ; and, farther, that the proposition that
his own judgment is the best and only guide he can
have in consulting his private interest, is a propo-
sition which needs to be received with some limit-
ation. The leading doctrines of the Economists
became universal in France, and obtained no little
authority in England. Next to Quesnay, Dupont
de Nemours, Turgot, Condorcet, and Raynal may
be regarded as their ablest expounders ; and, with
all their errors, there can be no doubt that these
writers did much to promote a thorough and accu-
rate analysis of the sources of wealth, and of the
laws which regulate its production and distribution.
The narrow views which were taken by this sys-

* The reply made b^ the French merchants when asked by
Odbert what he, as mmister, could do to serve them.

36 PRELIMINARY CHAPTER.

tern of the nature and functions of labour, coi
not but strike many minds. For Adam Smitbi
however, long a professor of moral philosophy i
the University of Glasgow, and afterward a Tesi—
dent for several years on the Ck)ntinent, where h&
was a close observer of public aflfairs as well as of
philosophical theories — ^for him it was reserved,
not only to demonstrate this pervading fallaoj
of the Economists, but to substitute in its place a
new and more complete system. To him belongi
the honour of having first assigned to labour iti
true place as the primitive source of all wealth.
He abolished the imaginary distinction between
agricultural and other kinds of. industry, and shov-
ed that, when employed in commerce or xnanufiMS-
tures, labour is not less productive of utility than
when employed in husbandry. He unfolded, in a
clear and beautiful manner, the means by which
labour is rendered more elective ; and bib disur*
tations on the division of labour, on the use oC
machinery and the functions of capital, have rave*
ly, if ever, been surpassed. The prevailing error
that wealth consisted in an abundance of gold and
silver, he may be said to have finally dispelled 4
and his attack upon the multitudinous and most
vexatious restraints which at that time fettered
the internal as well as external trade of eveiy
country in Europe, was so masterly and over*
whelming, that it may be ranked among the most
powerful of the causes which have contributed to
their abolition.

So great a change, however, has since taken
place in the political condition of the world, that
much of this great treatise is already obsolete. It

PRELIXINARY CHAPTER. dT

^Kist be admitted, too, that it is by no means free

^ fom error ; that more than one of its fundamental

propositions is questionable ; that the spirit which

Pervades it is too utilitarian ; and that, if applied

to legislation in this age, and especially in this

country, its principles would not always be found

safe, much less salutary. Considered, too, as a

work of art, it is by no means perfect. The ar^

rangement has been often censured as perplexed

and illogical ;* the digressions are numerous, and,

* Since writing this passage I have met, not without sur-
prise, with the following passage in an " Account of the Life
and Writings of Adam Smith," prepared by the late Dugald
Stewart, and read before the Royal Society of Edinburgh in
1793. " It may be doubted," says Professor Stewart, " with
respect to Mr. Smithes ' Inquiry,* if there exists any book beyond
the drele of the mathematical and physical sciences which is at once
90 agreeable in its arrangement to the rules of sound logic^ and so ac-
cesable to the examination of ordinary readers. Abstracting
entirely from the author's peculiar and original speculations, I
do not know that, upon any subject whatever, a work has been
jffodaced in our time containing so methodical, so comprehen-
Hve, and so judicious a digest of all the most profound and en-
iJl^tCHoed philosophy of the age." He remarks, in another pas-
sage, that no one had " approached Mr. Smith in the precision
and perspicuity with which he had stated" the doctrines of free
trade, '* or in the scientific and luminous manner in which he
had deduced it from elementary princi{)Ies." Accustomed to
re^;«rd the opinions of Mr. Stewart with great deference, I
aught be tempted to retract the criticism on which I have ven-
tared in the text, did I not find that, in addition to the authority
of Sir James M'Intosh, which I have subsequently mentioned,
I am sustained by the authority of almost every editor or critic
«f the work. Mr. M*Culloch, in his late edition, speaks of the
*' perplexed and illogical arrangement" of the " Wealth of Na
Kions*' as a great defect, and the writer of a critical notice of
that edition, m a recent number of the Edinburgf^ Review, adds
to this complaint that *' his" (Smith's) ** wanderings are so very
flstensive, nis involutions of digression within digression so
vmry complex, that it is next to impossible to read his work in
aay other way than as a series of slightly-connected essays (m
• tariety of interesting subject^ I !" The conviction of this has

38 FRBUHINARY OHAPTSK.

in many ioatances, long; and the exposition o
ciplea not always sufficiently precise. Yi
style is so clear and attractive ; the illusti
so rich and pointed ; the very absence of ar.
ment, and the desultory mode of discussioD, :
it so agreeable tu the majority of readers, a
B of information displayed ia so vast, tl
: on this subject is likely soon to supers'
" lis very faults," to borrow again the laogin
Sir James M'Intosh, " hare, perhaps, contr
in some degree to its specific usefulness ; a
rendering its conteala more accessible to th

ledui ablefrench writer (U.Gsmier) to prepare what l
B" Melbodof faciUtatlng thesludf orDr. Smllb't work.

mgei
orko

■'Method" is, ih

■tance of thai i

been bUmed, viz., a want o( inelhod, and a neglect in i

entific walks of those divisions and arrangementa whi

lo asaist the memory of the teader and to guide his uni

mc. The author," continues M. Gamier, " aeema lo h

importance of his subject and with the extent of his div
He begins by displaying before the eyes of his reader!
numerable wonders effected by the diviiim of labour ; i
Ihia magnificent and impreaaire picture he opens his c
instructions. He then goes bacli to consider those cirt

subject to tlie definition of valmi, to the laws which
them, to the analysis of their several elemetils, and to
tions subsisting between those of diSereot natures ani

^etely destr<

Wtatlk of NatioM, with a Cemmnlary by (/

1. i23,L<maoii, 1B3S.

PRELIMINARY CHAPTBR. 39

jority of readers, hare more completely blended its
principles with the common opinion of mankind."
Since the time of Smith several eminent writers
iutve appeared, among whom are Ricardo, Mal-
thus, M^Culloch, and Senior in Great Britain, Say,
Gamier, and Sismondi in France, and Sartorius
ftnd Storch in Germany. Ricardo is thought by
many to have thrown much new light on the theo-
ry of iJ^iU, and on the reciprocal influence of Wages
And Profits. M althus, though the author of several
new doctrines, is principally known by his Princi"
pfe of Population, according to which it would ap-
pear that population tends to increase in a ratio
much more rapid than capital or the means of sub-
sistence ; and hence that its growth, if left to itself,
must ultimately plunge multitudes into want and
starvation. M'CuUoch and Senior are distinguish-
ed rather for clear and impressive expositions of
existing doctrines than for originality. This is
also the chief merit of Say and Gamier, who, with
Storch, may be regarded as the most enlightened
£)lIowers of Smith on the Continent. Sismondi,
an able and acute writer, is opposed to the views
of Ricardo in relation to Rent, to the theory of Mal-
thus in* regard to Population, and generally to what
are termed the doctrines of Free Trade. It is a
subject of much doubt whether the discoveries
which are alleged to have been made by some of
these writers are entitled to that name.

It would be improper to close this brief historical
sketch without adverting to the labours in this de-
partment of science of our own countrymen. The
love of freedom, and the spirit of bold and restless
enterprise which characterized the early seUleva.

40 PRELIMINARY CHAPTBR.

rendered them impatient of the restrictione
were then imposed on the trade and industr]
colonists ; and hence it was that they we:
for the practical adoption of many new and
tant principles before they were even discov
Europe. Nothing in our history is more r
able than the clearness and force with whi(
principles were wont to be put forth in th
dresses to the throne, in occasional pamphk
in petitions for the redress of grievances. I
seem as if the migration of well -trained and
ted minds to a wilderness world, and the exp
afforded by a position so entirely new, were
the necessary means ^f emancipating re
from many of the errors which for ages had
like a spell on legislation. Among the wri
pamphlets and occasional essays, Frank
course, stands pre-eminent. In his views res
freedom of trade, the mutual benefits confej
commercial exchanges on both parties, a
folly of attempting to force a favourable bah
prohibiting the exportation of gold and si]
well as in his opinions respecting the tende
English corn and poor laws, and the indue
the South American mines on money priced
the value of the precious metals — on the£|^
as on other subjects, he clearly auticipai
doctrines of Smith, and shows how much the
mind on this continent was, in regard to sue
tions, in advance of that of England.'" Aj

* Many of the Essays of Franklin were written m
twenty years before the publication of the Wealth of
and it is also said, on what authority we have not 8<
while preparing this ^reat work, Mr. Smith was in coo
tion with Dr. Franklin.

P&ELIlCINAaT CHAPTER. 41

sioie of the war of the revolution and the adoption
tf the GoDstitution, vast service was rendered to
tile science, as well as to the country, by the wri.
tiogs of Hamilton. His reports as secretary of
the treasury, on the Public Credit, on a National
Bankj and on Manufactures, were fraught with in-
struction adapted to the state of the country at that
time ; and there can be no doubt that they contrib-
uted most powerfully to the adoption of the policy
which has developed, with such wonder-working
rapidity, the resources of an infant but mighty
empire.

IV. PRESENT STATE OF THE SCIENCE.

The progress which has been made by Political
Economy, as well as its present state, may be infer-
red from the opposite opinions expressed in regard
to it by writers of authority. By one class its
principles are represented to be so clear and in-
contestable^ that they merit the name of '' Political
Mathematics." By another it is said, that ^per-
haps no study of the day which bears the name of
science presents more vague theory, grave, mys-
terious empiricism, dull prolixity, inconsequential
arguments, gratuitous assumptions, jejune discus-
sions, and elaborate triviality. There are (contin-
ues a writer) many useful truths which pass under
the name of Political Economy ; but a large pro-
portion of the treatises, from that of Adam Smith
downward, seem to bear the same relation to an in-
telligible practical development of the causes and
phenomena of national growth, wealth, and decline,
that alchyray does to modern chymistry."* Mr.

* 8m Enejdopedia Americana, ait PolUietU iBooHomy.

42 PRELIMINARY CHAPTER.

Senior, one of the most recent and highly respect*
ed authorities, speaking of several of its principleSf
says that '* they appear almost too plain for ibrmal
statement," though he admits that out of England
they are not all embraced, and some of them not
even comprehended. On the other hand^ M. Neck*
ar gives it as his judgment, that ** the subjects it
involves are so run into one another, that people
pass and repass them over and over without ever
distinguishing their beginning or end." One able
writer* says, " In the far greater part of its doc-
trines there is nothing perplexing or obscure;"
another, perhaps not less able,*!* gives it as his
opinion that " the science is yet in its infancy.
If I may venture," adds he, "to call myself an
economist, our alphabet is unformed and our knowl-
edge most imperfect." " The known principles of
the science leave unexplained some of its noost
important phenomena." From these contradicto-
ry statements, what would be inferred by an un-
instructed but impartial reader? Would he not
conclude that the science in question was impor-
tant, but, as yet, by no means perfect ; that, while
some of its principles were doubtless clear and
certain, admitting, too, of very useful applicationSi
others ought to be regarded as mere hypotheses?

Such, we have no doubt, is the truth. No one, we
conceive, can be even moderately conversant with
the writings of Political Economists, without per-
ceiving that the terms which they employ are often
indefinite ; that some of their first princioles are stiU

* Edinburgh Review, vol. xliiL, p. 1, seq.
f Wakefield, see Preface to Smith's Wealth of Nations, wl^
a comnMntary by the author of " England and Ammkii **

PRBMMINARY CHAPTER. 48

mattera of earnest debate ; and that doctrines bear.
tng the sanction of the most renowned names, and
considered at one time as unquestionable, are now
losing authority. Whoever will turn to an article
on Ambiguous Terms, prepared by Mr. Senior for
Whately's Logic, will see that, in his estimation,
even the most important terms appropriated by
this science are used not only in different senses
bj di^rent writers, but in vague and inconsistent
senses even by the same writer in different parts
of his work.* It is thus apparent that the first
condition of scientific accuracy, viz., precision in
the use of terms, is still unattained, and that the
attempt to raise Political Economy to a place be-
side mathematics is akin to that made in former
times to imbody, in the shape of algebraic formu-
IsB, the great truths of moral science.f We may be
allowed, perhaps, to express some surprise, that,
having thus frankly acknowledged the obscurity
which hangs over even the symbols employed in
economical reasoning, Mr. Senior should in other
places have claimed the merit of such rigorous ex-
actitude for its conclusions.

On the other hand, it deserves to be considered,
that the terms employed in a study may be indefi-

* Mr. Ricardo appears (says Mr. Senior) to set out by admit-
ting Adam Smith's definition of value in exchange. But in the
greater part of hia *' Principles of Political Economy" he uses
the word as synonymous with cost : and by this one ambiguity
has rendered his great work a long enigma. — Whately^s Logic^ p. 311.

t The attempt here referred to was made by Dr. Francis
Hatcheson, one of the most acute and able of those philosophers
who resolve all virtue into benevolence. So well satisfied was
he of the truth and correctness of his principles, that, in conform-
ity to them, he constructed the formule referred to in the text,
hf which he propoMsed to compute nuUhenuUicaUy the morality ^

4i FAELIHIMART CBArTKB.

nite, and many of the priociples enunciatml OnR
than duubtfui, and yet the study itself be far frooi
useless. How is it with the moral sciences gener-
ally? with Law, Ethics, and the Philosophy of
MindT Id each of these we encounter at everj
step ambiguous language, uDsatisfuctoTy analyai«i
and inconclusive reasoning. Yet we do not, oD
this account, the less claim in their hehalf the re>
gari] and application of the student. We still be>
heve that there are great truths which they uoibld,
and valuable intellectual habits which they cul-
tivate. It is ao with Political Economy. Some
most important truths it evolves for the first timE
before the student ; others it illustrates and enfor-
ces. It gives a new and useful direction to the
thoughts; provokes a spirit of inquiry ; fastens on
the mind certain practical convictions which an
invaluable ; and arms us against errors which pre-
vail around us. It is in these respects, rather than
as a text. book for legislators, that we should be
disposed to recommend it.

It would be neither useful nor proper to enter in
this place on an examination of the many ques-
tions which are in dispute among Political Econo-
mists. I shall merely call the attention of the
reader to one or two defects, which seem to me to
characterize most of their speculations, and agaiuil
which the student cannot too carefully guard.

The Jirat of these is prenuilure mduetion, Toc
many works in Political Economy have been wri^
ten in view of the condition of but one or two comi'
tnes ; assuming that such condition was natunl
and destined, unless prevented by special effort, (C
become universal. It may be, however, that t

FRBLmmAaY chaftbr. 45

i purely artificial, having been superinduced by
icious system of legislation ok other cause ; and
t countries living under happier auspices opay

be destined to the same sad experience. Thas,

excess of population complained of in some
mtries, instead of being the result (as taught by
Ithus) of the superfecundity of the human spe-
9, may have arisen from defects in the social
terns of those countries which interfered seri-
ly with . the natural increase of the means of
sistence. So with many other phenomena. It
lid seem that, in order to a perfect development
the laws of wealth, distinguishing natural from
ficial causes, we need a much more thorough
1 extended examination of the industrial history
difierent nations than we yet possess. Th^
sperity of England first taught economists that

wages were not, as they supposed, essential to
growth of national wealth. So the history of

own country has already served to refute more
Q one specious but narrow theory, and seems
dned to do the same work on others.
)ne great evil of conclusions drawn from a lim-

observation is, that what is truth only for one
on or one state of society, is taught as universal
h, entitled to reception and practical applica-

e very where. Thus the economists of Europe,
ting in view of a multitude of absurd and costly
ilations, which had fettered every species of in-
:ry around them, have used language which,
er such circumstances, was not unnatural. The
culty is, that, not content with announcing what

truth far England or France simply as suchf
' have announced it as truth for the whole

46 PRELIMINARY CHAPTERc

world. They have not considered that a couDtry
like the United States, with a vast and unoccupied
territory, having little capital, and where industry
has, from the beginning, been almost without direc*
tion from govermnent, that such a country does
not need the kind of legislation which may be want-
ed in an old and thickly- peopled one, burdened with
restrictions, and having an industrial skill and cap-
ital which gives it great advantage over all other
nations. The latter would derive from more in-
tercourse with foreigners, benefits which the latter
might be able to attain only by cultivating its in-
ternal trade and industry. It is, at all events, quite
clear, that language which, written and read in
England, would be substantially correct, mi^t, if
brought to our country, and read and construed with
reference to our institutions, be equivalent to gross
error.

This is conceived to be one of the disadvantages
under which, as a people, we have laboured in re-
spect to this science. We have borrowed our Po-
litical Economy from England, and from works
which have been written for the express purpose of
operating on British legislation. The changes in
industrial and commercial policy, which these works
are intended to hasten abroad, were incorporated
with our system at its commencement. We al-
ready enjoy, in most respects, the utmost freedom
of trade towards which other nations so earnestly
aspire. Yet, forgetting this, and reading such
works as if they had been composed expressly for
our use, we apply to salutary, and, perhaps, indis-
pensable provisions of a wise, paternal policy, the
condenmation which they levelled only at buideiis

PRELIHINABT CHAPTER. 47

d restrictions, not, perhaps, at first without use,
t now superfluous and oppressive.
Another fault in the speculations of Political
^norny to which we msn^ he permitted to refer
ry briefly, is the want of more generous and com-
ehensive views. The science is frequently treat-
as if within itself, and independent on the one
nd of Ethics, and on the other of general Poli-
s, it embraced all the elements of social welfare,
le production of wealth, too, is dicussed as if this
sre the ultimate and only end of human pursuit,
d man but its passive instrument. That man is
chief instrument is true ; but by no means that
is a passive one. We shall never comprehend
>roughly the laws of production until we learn to
justice to his active powers and faculties. Nor
all we impart to such production its utmost efli-
mcy, until we consider that the value of this, its
man instrument, depends chiefly upon his intel-
ence and virtue, and hence that the cultivation
his higher nature must be regarded as the first
d most important step towards it.
Again, if man is the instrument of production, he
yet more its end ; such production being useful
1y as it supplies the wants and gratifies the de-
es of the greatest possible number of human be-
HB ; while, by affording them leisure and inciting
3ir minds to greater activity, it contributes at
3 same time, both directly and indirectly, to their
ellectual and moral improvement. To consider
faith irrespective of these its ends, is not only
infuse into the inquiry too sordid a spirit, but it
to overlook one of the professed objects of Eco-
mical Science. This science professes to show»

48 PRELIMINARY CHAPTER.

not merely how the greatest amount of wealth may
be produced, but also how it may be so distnbuitd
as best to promote the greatest happiness of the
greatest number. To be able to decide this ques-
tion, we must have previously ascertained in what
happiness consists, and how property can be made
to concur with other agencies in advancing it
among a whole people. So, in order to compre-
hend man's agency as a producer, it is not suffi-
cient to assume, with Smith, that, in all his indus-
trial efforts, he is governed merely by self-interest,
and that the only principles antagonist to this are
aversion to labour, and the desire of immediate in
place of remote gratification. A more thorough
analysis would disclose other and more generous
principles co-operating with this desire of gain, and
would require us also to make allowance for other
counteracting causes. In one word, as Political
Economy forms but a branch of the Philosophy of
Man, it should begin, we conceive, by borrowing
more largely from that philosophy its first princi-
ples. It should accustom us to look at man, not
merely as the slave of a narrow self-love, who not
only may, but must care only for himself, but as
the member of a vast family, to whose claims he
may not be insensible, and for whose advance-
ment he was ordained to labour. Instead of with-
drawing itself from other and kindred branches of
study, it should become more intimately associated
with them, and should thus teach us to entertain
larger and more generous views of the duty and
destiny of man. Not content to deal only with
propositions which, like those of Greometry, are

niBLIMINAST CHAPTEK. 49

but in the abstract,* it should aim to speak u>
business and bosoms of men. Then will itl
y merit the too partial praise bestowed by M.
lier on the Wealth of teutons, " The science
olitical Economy," says he, ''considered ac-
ing to the view of the French economists,
; be classed with the natural sciences, which
purely speculative, and can have no other end
the knowledge of the laws which regulate the
:t of their researches ; while, viewed according
te doctrine of Smith, Political Economy be
» connected with the other moral sciences,
h tend to ameliorate the condition of their ob«
and to carry it to the highest perfection of
h it is susceptible."

ays a very able writer and admirer of the science, ** The
■I008 of Public Economy, like those of Geometry, are only
18 the common phrase is, in the abatract ; that is, they are
ne under certam suppositions, in which none bat general
— tanses ccxnmon to the whole does of cases under con*
ion — are taken into the account" — WeetmineUr Reviemt f^
sr,183&

PRINCIPLES

DLITICAL ECONOMY.

9VCBD FBOSC THE NATURAL LAWS OP SOCIAL

WELFARE.

CHAPTER I.

on of the Science. — The Study of the Happmess of So*
• 80 far as it depends on the Abundance and Distriba*
rf their Wealth. — Its Principles capable only of Bioral,
[athematical Prood

.incAL Economy teaches the art of managing
K^uniary resources of a society to the best
tage of its members. It embraces the mor-
i religious education, the political constitu-
»r the personal protection of a- people no far-
ban these influence the production or dis-
on of property f i. e., of those things which
s result of labour and the objects of exchange ;
hich, when accumulated to any considerable
, are ordinarily spoken of as wealth.
ice it has been usually designated as the
of *' the nature and causes of the wealth of
s." This definition is, however, incomplete,
uch as it does not include individual as well
iofuU wealth among the objects of the science ;
Asmuch also as it seems to restrict inquiry to

52 POLITICAL ECONOMY.

the means of increasing the gross amount of im«
tUmal toeahh, without regard to its diffusionj or to
the influence of different modes of production and
distribution on happiness. Again, it has been call-
ed the science of " the happiness of states ;" but
this would extend it over too wide a field. Its true
subject of inquiry is, we think, the happiness' of so-
cieties, so far as that happiness depends on the
abundance and distribution of their wealth.* ■

The principles of Political Economy must obvi-
ously be deduced from maxims, relative to the con-
duct and feelings of mankind which have been
framed upon general and extensive observation.
But neither the feelings nor the conduct of a being

* There is much difiScuUy in defining with preciaioD the
province of Political Economy. Its title would lead us to sap-
pose that» in its practical bearings, it must be to a state what
domestic economy is to a household. It is, however, much lea
comprehensive ; mcluding, of State Economy, only so much ai
relates to the production and distribution of property. By most
writers, again, such production or distribution are conaidml
as the ultimate objects of inquiry ; while some hold with the
author, that happmess or welfare being the great end of a wise
public economy, only that production and distribution of wallh
IS to be considered which conduces to this end. The tnith
doubtless is, that the production which most conduces to wel-
fare is that, also, which most conduces to wealth, and tnce verss;
so that at first sight it might seem sufiScient, as well as man
consistent with the rigorous fonns of science, to limit our in-
quiries to mere production and distribution. Still, this indisso-
luble connexion between the highest welfare and wealth is sf
often overlooked ; so many write of the latter aa thou|^ it
were the end of life, and there are, again, so many modes of ac-
quiring property which are conducive to anything but welAM,
or in their last results even to wealth, that I have preferred to
retam the language of the author. The attempt to exclude
from this science all mora/ considerations is not only perniciocB,
but futile, since we can establish hardly one principle for diti'^
utin^ wealth without inquiring what is jutt, or what most Ci^
ducive to the general good.— J^d.

POLITICAL ECONOMT. 58

?'^e man, endowed with freedom of volition, and
''^finitely-varying degrees of sensibility, can, with
^futh, be assumed as uniform and constant under
^ same circumstances. Hence the highest de-
gree of certainty which can belong to the princi«
pies of Political Economy must fall far short of
the accuracy that characterizes the laws of the
physical sciences. This consideration should have
prevented the attempts which have been made by
many writers on Political Economy to attribute
the force of mathematical demonstration to its con-
clusions. The fashion just now among this clas^
of inquirers is to designate their favourite study
as " Political Mathematics ;" but it would obvious-
ly be just as reasonable to give the name of " Ethi-
ca\ Mathematics" to the sister science of morals ;
since the principles of both are to be ascertained
only by studying the same variable course of hu-
man action, and with a reference to the same in-
definite end, viz., the welfare of the species.

Still, though the nature of the subject precludes
any approach to mathematical certainty, the gen-
eral laws of human action and human happiness
are to be ascertained with a correctness amply suf.
ficient for the formation of general rules. Though
the conduct of an individual cannot, with complete
confidence, be predicted from a knowledge of the
circumstances surrounding him, yet that of the
generality of men — of the great masses of man-
und'-may be determined beforehand with the ut-
most probability ; and the object of the political
economist, like that of the moralist, being to act
upon the masses, this knowledge is sufficient for
his purpose.

64 POLITICAL ECONOmr.

CHAPTER II.

Definition of Wealth and of Labour. — All Labour prodncthitk
— Labour rather a Pleasure than a Sacrifice: moat, howevei^
be free, and sufficiently remunerated. — Minimum of sufficieBl
Remuneration. — Wealth no certain measure of HappineM.—
Test proposed.

Wealth, then, in its relation to happinesa, is the
subject of the investigations of Political Ek^onomy ;
and by wealth we profess to understand all the ue*
cessaries, comforts, and luxuries of life which are
habitually bought and sold, or exchanged. If a
brief definition of wealth were desired, it might be
declared to compreliend all ^* the purcheuseable
means of hunwn enjoyment."

There are many things which contribute to the
enjoyment of man, such as air, water, the light
and warmth of the sun, the beauties of nature, the
blessings of health, and the exercise of the social
affections, which yet are not considered (unless
metaphorically) as wealth. They are valuable
iti the common sense of the term ; but they pos-
sess no value in exchange. They are not ca-
pable of being made the subject uf purchase and
sale, or of being guarantied by the law as proper-
ty ; the economist, therefore, has no concern with
them. The range of his inquiries is limited to
such objects of human desire as are capable of ap-
Dropriation by the law, and of transfer by sale or
exchange. The regulation of those elements of
happiness, physical or mental, over whose supply

POLITICAL ECONOMY. 55

man exercises no control, he leaves to Providence ;
while to the moralist, the divine, the physician, he
leaves the study of those which fall within their
respective spheres. His peculiar object is to as-
certain the means of augmenting the happiness of
mankind, in as far as that happiness may be aiSect-
ed by the abundance, or distribution, or quality^ of
those things which, being matters of purchase, are
capable of being measured or appreciated.f

* To the words " abundance or distribution" in the text I
have added or quality, because, in estimating the effects of wealth
on happiness, it is important to consider the nattare of those
things which are reckoned to have exchangeable value, as well
as their abundance. Were a nation so depraved in taste that it
attached more value, in consumption, to opium or brandv than
to good books, good food, or gooa houses, it is evident that its
WMlth, however great, would conduce but little to happiness.
The use of such articles, being prejudicial to health, inaustry,
and virtue, would in the same proportion induce unhappiness,
and would also react vpon production to diminish it, i. e., to make
the nation poorer. Hence, whether we consider the means of
timfly jmmidng and distributing wealth, or the means of so do-
ing it as to promote happiness, we should in neither case over-
look the quality of the things which are recognised as having
exchangeable value. According as a nation is led by its tastes
and habits to attach value in exchange to one or another class
of objects, in consumption, will be its productive energy and its
aggregate happiness. It would seem, then, that, before under-
taung to unfold the laws of production, we ought to distinguish
between the various *' purchaseable means of enjoyment," and
■how how important both to the productive power and welfare of
anati(Hi is a nigh standard of physical, intellectual, and moral
taste.~J^.

t Mr. Malthus and other economists have much puzzled
themselves and their disciples by raising a needless debate
ibout some particular things, of which it is disputed whether
they are to be considered wealth, and, therefore, within the
ruige of Political Economy or not. For example, the ser-
vices of menials, and of artists and actors, &;c., htve caused
much dispute. Mr. Malthus excludes them from tlje category
of wealth on the ground that they are immaterial. Inasmuch
M timy are habitually bought and sold, I should consider them

56 POLITIC A.L ECONOMY.

One of two circumstances is necessary to con-
fer exchangeable value on an object, in eddition to
its useful or desirable qualities, viz., that it require
some labour to produce it, or that it exist in less
quantity than is wanted — in technical terms, that
its supply be short of the demand for it. Water,
however useful, nay, necessary to man — ^however
valuable in the ordinary meaning of the word-
yet, wherever it is to be had in abundance without
trouble, as by the side of a river, has no exchange-
able value : it costs nothing, and will, therefore,
sell for nothing. But at a distance from springs
or rivers, as in a town, where water is not to be
obtained without some trouble, it acquires a value
in exchange, and that value will depend chiefly
upon the trouble or labour it costs to procure it.
An additional element in value is scarcity, or an
insufficient supply to meet the demand. In the
deserts of Africa, a skin of water may at times ac-

comprehended in the definition of wealth ^iven above. I can
see no essential distinction between the services of. a nobleman'f
outrider and those of the horse he rides : between the valae
conferred upon a piece of canvass by an artist, and that con-
ferred upon a piece of cotton by a calico-printer: they are equal*
ly reckoned as the signs of wealth by others ; they are equally
enjoyed as wealth by their possessor. But, in truth, Ihe at-
tempt to refine upon the subject with such minute accuracy of
definition is much more likely to lead to confusion than clear-
ness. [It is doubtful whether mere ability, or *' services" of
any kind should be regarded as wealth. As an all-important
element of production, they must hold a prominent place in
Political Economy, and, when they are possessed in abundance
by a nation, they enable it to become rich, but of themselvus do
not make it so. In an inventory of its actual wealth, i. e., of
riches in possession, they could not be enumerated. A noble-
man's horse has exchangeable value, and, therefore, forms a part
of his wealth. Not so the servant who rides him, unless in a
slave country ; yet, as an agent of production, the servant may
be much more useful than the animal. — Ed.}

POLITICAL ECONOMY. 67

quire a value infinitely exceeding the cost of con-
veying it there from the nearest well. A rare
jewel, or book, or object of art, oflen obtains a vaU
ue bearing no relation to the labour by which- it
was procured or produced. But the primary ele-
ment of value in most things is cost of procure-
tnenl ; and the cost of procurement consists almost
wholly of the trouble or labour necessary for pro-
curing the article.

What, for example, gives their value in market
to the fruits of the earth ? Not their adaptation
to the appetite of man. The finest fruits, if they
grew spontaneously in such abundance over all the
inhabited earth that every one might satisfy his
longings for them by the mere trouble of lifting his
hand to them, would have no selling value. But,
inasmuch as fruits grow only in particular situa-
tions, and require much trouble in planting, pro-
tecting, gathering, and bringing them to market,
they acquire a proportionate value ; since those
who wish, to obtain them must either take them-
selves all the trouble necessary for procuring them,
or must give to those who do take it a fair equiv-
alent.

All saleable property, or wealth, therefore, is
the produce of trouble or labour. And, in order to
avoid confusion, it is desirable to confine this term
labour to such exertion as is productive of wealth.
Men exert themselves for amusement, health, or
recreation, and may fatigue themselves as much in
80 doing as a ploughman or a mason ; but their
exertion neither produces nor is intended to pro-
duce anything which can be exchanged or sold,
and it will be desirable, therefore, not to call such

68 POLITICAL ECONOMY.

exertion labour. The limitation of the term Uu
hour to such occupations as v.re pursued for the
sake of gain, and result in an ii crease of the com-
mon stock of wealth, may serve to put an end to
the unprofitable discussion, so common in works
on political economy, as to what kinds of labour
are productive and what unproductive.*

Though it is a law of nature that labour in some
shape is necessary for the support of man's exist*
ence, since even the necessaries of life are 1b no
quarter of the globe to be procured without it, yet
diose persons are surely in error who consider this
condition as an evil, and labour as essentially a
sacrifice or hardship. Eating and drinking are
likewise necessary for the maintenance of life;
but they are not on that account usually consider-
ed as sacrifices. As has just been remarked, we
often see the amateur artist, gardener, farmer, or
mechanic, fatigue himself as much for the mere
pleasure afforded by the employment, as those who
do the same things for their daily bread or for
gain. So far from complete inaction being perfect
enjoyment, there are few sufferings greater than
that which the total absence of occupation gener-
ally induces. Count Caylus, the celebrated French
antiquary, spent much time in engraving the plates

* The difficulties with which the ultra refining and ina&e-
matical school of political economists have to contend, are well
exhibited in the disputes between them as to the limits of pro*
ductiveness. Mr. Malthus denies that the labour of a cook, •
coachman, an author, or an actor is productive, though assert-
ing the productiveness of that of a butcher, a coacnmaker, a
printer, and a scene-painter. Mr. M'Culloch, running into the
other extreme, insists that the occupations of billiard playing,
blowing soap-bublf les, nay, of eating, drinking, and sleeping, are
productive * See on this subject Preliminary Chapter, p. iZ

POLITICAL ECONOMY 59

which illustrate his valuable works. When his
friends asked him why he worked so hard at such
an almost mechanicai occupation, he repUed, ** Je
grave pour ne pas me pendre."* When Napoleon
was slowly withering away, from disease and ennui
together, on the rock of St. Helena, it was told
him that one of his old friends, an ex-colonel in
his Italian army, was dead. *' What disease killed
Wm ?" asked Napoleon. " That of having nothing
to do,'* it was answered. " Enough," sighed Na-
poleon, *^ even had he been an emperor."

Even severe manual labour is not necessarily a
sacrifice. There is an animal pleasure in toil.
It is questionable whether the mental or bodily ex-
ertion to which the highest and wealthiest classes
hie driven as a resource against ennui, communi-
cates, in general, so pleasurable an excitement as
the muscular exertions of the common labourer
when not overworked. Nature has beneficently
provided, that if the greater proportion of her sons
must earn their bread by the sweat of their brow,
that bread is far sweeter for the previous efibrt
than if it fell spontaneously into the hand of list-
less indolence. It is scarcely to be questioned,
then, that labour is desirable for its own sake, as
well as for the substantial results which it affords ;
and, consequently, that it by no means lessens, but
rather adds to the general chance of happiness,
that nearly all the members of society should, in
lome shape or other, be placed under an obligation
to labour for their support.f

* I engrave* lest I should hang mjrself.
t In a popalar farce^ Deputy Figgins, a London shopkeeper,
Vmo persu%d^ by the solicitation of ^is wife to leave his shop

60 POLITICAL ECONOMY.

Nor b it much to be regretted that some modes
of employment are less agreeable or more irksome
than others. Besides a difference in the original
tastes of men, leading some to prefer occupations
which to others would be irksome, habit has a pow-
erful effect. Hundreds of facts might be adduced
to prove that persons engaged in employments
which to those of different habits appear intolera-
bly disagreeable, become, after some practice, not
merely reconciled, but attached to them. There
are few workmen, indeed, who, if asked, will not
declare their preference for the branch of labour
to which they have been brought up or long accus-
tomed. They might have entered upon it, at first,
from necessity ; they continue in it frorai choice.
Whether an individual ply his occupation by sea
or land, in the open air, in the interior of crowded
towns or manufactories, or in the bowels of the
earth, these circumstances seem to affect, but in a
slight degree, his happiness. And farther, what-
ever inconveniences do attend particular employ-
ments, are usually compensated by the propoirtion-
ately increased remuneration which, under a 83rs-
tem o^ free labour, is awarded to them ; and that
this compensation is complete in the estimation of
the labourers themselves, is proved by there being
as much competition for such employments as for
any other.*

for a day and take an excursion to Richmond, exclaims, <* Well,
my dear, since we must give up the day to pleasure, let us make
it as like business as possible/* And the sentiment is so troA
to nature, that the hit always tells through the theatre.

* The competition here spoken of by tlie author is provoked,
we apprehendf not so mvicVv by the «up^8ed tuffidency of tte
coajpeoBatioR, as by the fr.cV Ibat olViei voii i&!si« K^^rawtSote oft

POLITICAL ECONOMY. 61

This brings us to the important consideration,
that, in order not to interfere with happiness, la-
knur must he free, that is to say, voluntarily exert-
ed, and left at liberty to take whatever direction it
shall please the labourer to give to it. Compulsion
is itself a hardship, so that an occupation which
miglit be undertaken and exercised with pleasure
by any one of his free will, becomes a grievance
and a burden if forced upon him.

But not only is forced labour less pleasurable
than free, it is likewise incomparably less produc-
tive. All observation confirms what our instinc-
tive sentiments will suggest, that, to encourage a
man to put forth his powers to the utmost, he must
be left free in his choice as to the nature and quan-
tity of his work. It is scarcely necessary to refer,
in proof of this, to the notorious idleness, apathy,
and obstinacy of the slave. But it may be well to
advert to the decisive fact, that by far the most
productive labour of all is that of the mind, which
18 not susceptible of compulsion. A man may be
forced to dig a field or spin a web, but he cannot
he forced to improve a plough or a loom, much less
to produce . a masterpiece in poetry or art. Nor,
even if compulsion could extort such results of
mental labour from those who were capable of it,
could a master know beforehand where lay the dor-
mant capacity. No artificially prescribed contri-
vances can direct the ingenuity of individuals into
those lines of thought or action for which they are by
nature best qualified. Perfect liberty in the choice

cnpations are taken up ; and by the farther fact, that multitudes,
from want of education, are fitted only for ii\ienoi p>usvi\\.ft^vEiil^
therftfim^ cm compete for do .other. — £d

62 POLITICAL ECONOMY.

of occupations is absolutely necessary to ensure the
adoption of such as are most suitable to the pecu-
liar qualifications of the individual, and likely, in
consequence, to be most productive, as well as
most agreeable. And thus the freedom of labom'
becomes doubly important, as necessary for in-
creasing both the happiness of the labourer and the
productiveness of his toil.

Neither must labour, to be pleasurable or pro-
ductive, be tDithotU an object. It is the cheering
anticipation of some gratifying result which sweet-
ens the toils of labour, relieves its irksomeness,
«nd appears to shorten its duration. Though in
itself no evil, yet it is the prospect of its reward
that gives it much of its zest ; and, if this be scan-
ty and inadequate, the toil endured for its sake is
imbittered. If, on the other hand, it be sufficiently
remunerated, labour cannot, under a system of
freedom, be a source of suffering. The temptation
of high wages may, it is true, induce some indi-
viduals to overwork themselves, and thus prema-
turely exhaust their strength and health. But
these are rare exceptions. We deal only in gen-
erals ; and, as a general rule, it cannot be dotibted
that, where a sufficient remuneration is to be ob-
tained by moderate labour, it may be most safely
left to the labourers themselves how far they wfll
or will not exceed that point.

With respect to what constitutes a sufficient re-
muneration for labour, there may be some uncer-
tainty. This, however, may be laid down as Im-
questionable, that it must not he less than will find
the labourer and his family, if he have one, in a
sufficiency of wholesome and agreeable foodi warm

POLITICAL ECONOMY. 63

tnd decent clothing, and convenient lodging ; in
short, in the means of comfortable subsistence, be-
sides enabling him to improve his mind by reading,
to educate his children, to indulge in an occasional
holyday, and to lay by a provision against sickness,
casualty, and old age.

If, as we think will hardly be denied, these views
are correct, we arrive through them at something
like a general principle as to the economical con-
ditions essential to the general happiness ; namely,
that the labour, which we must believe will always
be necessary for the support and gratification of
the great mass of mankind, be voluntary and free
in the choice of Us direction ; and that by moderate
exertion it obtain as its recompense at least a suffi-
ciency of the necessaries and principal comforts of
life, both for the present consumption of the labour-
er and his family, and for a reserve against the fu-
ture.

These conditions fulfilled, every farther increase
of the comforts or luxuries which falls to be divi-
ded among the members of a community is an in-
crease to their general means of happiness, pro-
portionate, ccderis paribus, to the equality with
which they are distributed. But these conditions
must he fulfilled before an increase of the general
wealth can be assumed to be an addition to the gen-
eral happiness, and therefore a desirable object in
the eyes of the political economist ; who, mindful
of the true end of his science, looks to wealth only
as a means of happiness, and declares against all
such measures as, though tending to augment the
mass of wealth, do not tend to distribute it in such
a manner as to promote that end.

64 POLITICAL ECONOMY.

That every increase of wealth is not a proper*
tionate increase of the aggregate means of enjoy*
ment — nay, that some kinds of wealth may be much
augmented at a great sacrifice of human happiness
— is easily demonstrable. Suppose, for example,
a race of absolute sovereigns, having a taste for
jewels, were to employ several thousands of their
subjects or slaves, generation aider generation, in
toiling to procure them : these treasures will be
wealth of enormous value, but will add barely any-
thing to the aggregate means of enjoyment. Sup-
pose another race of sovereigns to have employed
equal numbers of workmen during the same time
in making roads, canals, 'docks, and harbours
throughout their dominions, and in erecting hospitals
and public buildings for education or charity ; these
acquisitions to the wealth of the country, having
cost the same labour, may be of equal exchange-
able value with the diamonds of the other sover-
eign; but are they to be reckoned only equally
useful — equal accessions to the aggregate of hu-
man gratification ? Suppose two tracts of ground
of equal extent and fertility, one laid down as a
race-course for the sole pleasure of a few wealthy
individuals, the other divided into moderate-sized
farms, each affording to the landlord a fair rent, to
the occupant employment and maintenance, and t^
the community an enlarged supply of food. Such
tracts may be equally valuable if sold in the mar-
ket, but are they equal in their influence on the
sum of human enjoyment 1 Even Slavery itself
may be a means (though far from the most produc-
tive) of increasing the quantity of exchangeable
wealth in the world ; but will any one recommend

POLITICAL ECONOMY. 66

it as a means of augmenting the mass of human
happiness 1 No ! wealth may be purciiased at too
high a price, if that price be the degradation and
Buffering of those who produce it. Wealth is only
to be measured by its exchangeable value. In this
sense increase of wealth assuredly is no true meas*
ure of the increase of enjoyment ; and the science
of wealth, if the attention be confined to the means
of increasing its aggregate amount, may just as
frequently lead to what will injure as to what will
benefit the human race. If the greatest happiness \
of the community is the true and only end of all
institutions, it follows that a government which
should take political economy of this kind as a
guide to its legislation, without continually correct-
ing its conclusions by reference to the principles
on which the happiness, not the wealth, of man de-
pends, must often sacrifice the real interests of the
people it presides over for a glittering fiction.

It may be said that such inquiries would be dif-
ficult and complicated ; that it is impossible to mete
out happiness, or establish a graduated scale by
which to ascertain the utility of legislative meas-
ures towards this end. But the same argument
might evidently be urged with equal force against
all moral science. The happiness of society is
the only end of every moral as of every economic
precept. If it be, as we readily admit, impossiblej
to ascertain to a fraction the precise extent in
which any given measure is likely to affect the
happiness of a community, still this can be no
reason for adopting so obviously false a standard
18 the increase of its aggregate wealth alone*
There are other tests which there can be no good

6G POLITICAL ECONOMY.

reason for neglecting ; there are, in the pursuit of
economic as of moral policy, some broad landmarks
to which it would be folly to shut our eyes ; some
palpable boundaries which it would be madness to
cross ; some clear general rules which point the
direction of our path, and reduce the chances of
error within very trifling limits, if we do not mad*
ly refuse to walk by their light.

One of these criteria, and by far the most im-
portant, is the proposition, which we do not hesi-
tate to lay down as a fundamental truth, that ike
amount of human enjoyment principally depends on
the number of human beings enabled, without exces-
give toil, to obtain a comfortable subsistence, tosA
satisfactory security for its continuance.

That the happiness of individuals does not ne-
cessarily increase with their wealth, is attested by
the combined authority of all the philosophers and
moralists of past ages. The most cursory obser-
vation of mankind proves that there is ofteni as
much enjoyment of life beneath a straw roof as a
painted ceiling, under a smock frock as a silken
robe. Nay, there are who very plausibly urge that

" Quel che felici son non ban camicia — "*

* Casti, la Camicia delV Uomo Felice ; one of the few of hw
Novelle that can be read witb a relish for the philosophy, un-
disturbed by disgust at the profligacy, of this clever satirist. A
sick sovereign is recommended, as an infallible specific for hii
disorder, the application of "the shirt of a happy man.** Hm
emissaries in vain ransack all countries in search of such t
being. At last tbey discover an individual who acknowledge!
himself to be happy, in the shape of a wild mountain shepherd.
But, alas ! he has no shirt ! on which the talc «Qdu with tlM
above exclamation, " Those only are happy who have no shirti
to wear." So D'Alembert used to say, " Qui est ce qui est bOB
Tecs T Quelque miserable !**

POLITICAL ECONOMY. 67

tbe cares of life increase with the increase of prop-
erty.

Without heaping together commonplaces on the
subject, it will be disputed by few, that, beyond a
certain point, the amount of enjoyment shared by
the different classes of society is pretty equal.
"Life," says a shrewd writer, herself of the most
elevated class, " affords disagreeable things in plen-
ty to the highest ranks, and comforts to the lowest ;
so that, on the whole, things are more equally divi-
ded among the sons of Adam than they are gener.
ally supposed to be."* " Whoever enjoys health,"
says Jean Jacques, " and is in no want of necessa-
ries, is rich enough ; 'tis the aurea mediocriias of
Horace."

The means, then, of comfortable subsistence,
compose the competence which admits of perhaps
as keen and complete enjoyment of life as any for-
tune can bestow. That this comfortable subsist-
ence is to be procured only by labour, so that it be
voluntary, free in its direction, and not excessive,
is, as I have attempted to show, no detraction from
the enjoyment it affords, but rather, if anything, an
addition to them.

If, however, we come to the conclusion that an in-
dividual who has within his easy reach the means
of comfortable subsistence, enjoys as fair a chance
of happiness as those who occupy stations in the
common opinion of the world more enviable, it is
very clear that less than this will not afford the same
chance. Though the enjoyments of wealth may be*
OQ the whole, counterbalanced by the cares that ac-
company it, the evils of poverty are real and uocom

* Letters of Lady M W Montague.

68 POLITICAL ECONOMY.

pensated. An individual who wants the means of
subsistence — nay, of comfortable subsistence, to-
gether with satisfactory security for its continuance,
is in a state of suffering ! Ck)arse diet may pleaw
the hungry appetite of the peasant as much, or more^
than do costly viands the palate of the rich gour-
mand, and a frieze coat may be as pleasant weai
as superfine ; but scanty, unvaried, and ill-flavour
ed food, or deficient clothing and fuel, or intellecta
al and moral degradation, each, if it does not entire
ly prevent, must greatly detract from the enjoymenl
of life.

The conclusion then is, that every individual who
has assured to him the means of comfortable sub-
sistence without excessive toil, has a tolerably equal
chance for happiness with those who possess a !ar>
ger share of wealth ; but that any falling off from
this condition will proportionably lessen the individ-
ual chance of enjoyment. Consequently, the means
of enjoyment possessed by any society must be judg*
ed of principally by the number of those who pos-
sess the means of comfortable and rational subsist^
encc on these terms, compared with that of those
who fail in obtaining them. And we thus acquire
B, primary measure of national happiness, independ-
ent of the aggregate amount of wealth in its pos-
session, which cannot but be of service in the study
of the domestic economy of communities.

The inference we deduce from this position is,
that the first economical object with every people
ought to be the securing to each individual the means
of comfortable subsistence in return for his labour,
and the certainty of its continuance ; and that, un-
til this is effected, no general augmentation of the

POLITICAL EcoNomr. 69

natiODal wealth ; no signs of increased luxury
among the higher or middle classes ; no swelling
of the import or export lists, or other supposed testa
of national prosperity, can he depended on. The
increase of wealth may add to the means of grati.
fication of the few who have already more than they
can possibly enjoy, but it may be accompanied by a
falling off in the means of the many, who even now
have less than the minimum necessary to save them
from positive suffering.

How this great object is to be accomplished ;
what are the steps which should be taken to pro-
mote so desirable a -state of things, can only be dis-
covered by a study of the natural laws which de-
termine the production and distribution of wealth,
and particularly of those things which compose the
necessaries and primary comforts of life. To this
study we now proceed.

CHAPTER III.

Conditions of the Production of Wealth. — The Institution of
private Property. — Labour. — Land. — CapitaL

It appears that man has everywhere and always,
from the first traces we possess of his history, la-
boured in the production of wealth on that simple
principle of appropriation, that whatever an individ-
oal creates or redeems from a state of nature by
his labour^ is his, and aught to he at his disposaL

70 POLITICAL ECONOMY.

In some rare instances, however, this princi
private property has been exchanged for thai
community of goods between all the members
society. But the experiment may be pronoi
to have never succeeded in practice. Indeed^ ;
appear upon reflection to be irreconcilable wil
most obvious principles of human nature. C
the strongest of these is the desire of individu
propriation. Sympathy is no doubt a very p<
ful sentiment ; but it is provided by Nature v
view, as we may well believe, to the preservati
the species, that the instinct of self-appropri
should for the most part prevail over it. I
common phrase, one'^ self stands as naniber
In the extremity of want or danger, this instinc
trays itself most conspicuously. Next to a i
own self, in his estimation, usually stand his
dren, his parents, and the wife of his bosom. 1
are almost a part of himself ; and their gratific
is nearly as strong a motive for exertion as his
But the sentiment becomes diluted by an atten
expand it over a wide circle. And it is certain
as a general rule, man will not labour for others
his immediate family, or for the increase of any
mon fund to be shared in alike by the memberc
large community, with anything like the zesi
willingness, the assiduity and perseverance
which he will toil for himself.

Even within the limits of a family circle
same rule holds good among those who hav«
tained to an age rendering them capable of lal
History presents us with many examples, and i
are yet to be found existing, of patriarchal j
Ilea in wbioh all the membeiat e.oxcv^t«hending

POLITICAL ECONOMY. 71

eral generations, labour for one common fund.
But, though these communities frequently offer en-
gaging pictures of domestic happiness, they have
been rarely, if ever, observed to make much ad-
vance in the arts of production or in the accumu-
latioa of wealth ; but are found to stagnate in a
condition barely removed above want, until some-
thing occurs by which they are broken up, and the
strong stimulus of individual gratification is sub-
stituted for the less cogent one of the general
benefit.

An additional objection to a community of prop-
erty isy that it necessarily puts an end to all indi-
vidual liberty of choice as to the direction or amount
of labour. Each labourer must have his specific
task allotted to him by some superior power estab-
lished for the purpose, which task he must be com-
feUed to execute under pain of some forfeiture or
privation. But we have already shown, that to en-
courage the utmost productiveness of labour, as
well as to render it pleasurable, the labourer must
be leftyree to choose both the nature and the quan-
tity of his work.

It is the neglect of these principles which is
even now betraying many misguided persons into
signal and mischievous absurditieh. Such is the
case with the followers of Owen in this country and
Great Britain, and of St. Simon in France, with
other similar sects which are spreading through
Grermany and the United States. Struck by the
remarkable fact that the vast advance made of late
years by civilized nations in the art of production
and in wealth has not added proportionately to
the share of enjoyment that falls to lYie ^^^IXmAl^

72 POLITICAL ECONOMY.

of the people, whose labour is the primary instTU
ment of all production, they have hastily jumped to
the conclusion that, in order to ensure the xnoiv
equal distribution of the products of industry, ab
that is wanting is a new arrangement of socio^ a*
the basis of a community of property, Noir iid»
thing can look more pleasing upon paper, or sound
nK)re enchautingly in a lecture upon social happt
ness, than a proposal to put an end to all the sirug*
gles of individual competition, and the painful con-
trast of contiguous wealth and poverty ; to. substi-
tute love, friendship, and common enjoyment for
hatred, jealousy, and exclusive self-gratification.
But is it possible to realize this beatific visioiit
There is not the slightest ground for supposing so.
Its authors forget that the industry, of which^in the
present advanced state of society, they witness tht
fruits, has been awakened, and has hitherto grown
and thriven, onZ^ under the shelter of the institution
of private property and the stimulus of competitions
and that neither history nor observation warrant*
the assumption that this industry could be main-
tained except on these conditions. The establish*
ment of a community of property would most prob«
ably, by damping industry and discouraging prob
duction, shortly leave no property whatever to di-
vide. The desire of individual acquisition has htth»
erto been the main motive to every exertion. Taice
it away, by sharing the result of a man's labours
equally, or in certain proportions, fixed by otherSy
among his neighbours, so that he himself shall not
be specially benefited by its increase, and who will
guaranty the continuance of his exertions with the
same vigour and energy YfYv\<i\i \» itfsw ^^Vnces, if

FOLITICIL ECONOMY. 73

he even continue them at all? Experience has
preyed the constitution of the human mind to be
such, that freedom in the direction of labour, and
■ecurity for the personal enjoyment or disposal of
its products, are the conditions on which alone in-
du^xy will be effectually put forth and production
advanced. The proposal of a community of goods
as a remedy for their unequal distribution, is like
an attempt to cure a horse of stumbling by cutting
oflT his legs.

That the products of industry are at present too
unequally distributed in many countries of Europe
is most true ; but surely some remedy may be de*
vised short of the complete annihilation of Uie prin-
ciple itself of production. That such means are
attainable indeed, and this by the simplest exertion
of forethought and pre-arrangement, I trust to be
able to show.

All wealth is the product of labour, but not of
labour alone. Labour can create nothing. All
that it does is to alter the disposition of things al-
ready existing in what is usually called a state of
nature. To produce anything, the labourer must
operate upon some natural substance, and call in
the ever-active powers of nature to his aid. The
agriculturist, for example, does not create corn ;
he only applies the seed after a certain method
which his knowledge, obtained through experience
or precept, teaches him to be best adapted for pro-
moting its growth ; and the powers of the soil and
the atmosphere, the moisture of the heavens, and
the genial warmth of the sun bring about the pro»
iuction of his crop. These powers, therefore, of
earthy air, water, and heat (which tVvQ a.tiQAeii\s^\ix

74 POLITICAL ECONOMY.

their ignorance of chymistry, considered, and in
their equally ignorant though pardonable gratip
tude, worshipped as primary elements)^ or, to speak
more correctly, the natural affinities of the mate-
rial substances occurring on the surface of the earth
must co-operate with the labourer, or his toil is ut-
terly unproductive.

Nor is this generally enough. There are few
things which an individual, though availing himself
of all the powers of nature within his reach, can
produce hy himself^ or by a single effort of labour.
He must call in the aid of others ; he must like-
wise exert himself at repeated intervals ; and be
must avail himself of the results of his premoiu
labour^ or that of others, generally of both. Take
the simplest case — the labour by which a man may
sometimes satisfy his hunger by gathering berries
from a bush. Even here nature must have first
produced and ripened the fruit to his hand. Wild
fruits, however, are but scantily supplied by na^
ture. If, then, to supply his wants, a man desire
animal food, he must provide himself with some
product of previous labour (his own or of others),
a club, a bow, a trap, or a gun ; and he must ac-
quire, moreover, by previous labour, both of mind
and body, a knowledge of the haunts and habits of
the animals he wishes to take, or he has but a
small chance of breaking his fast upon them. If
wild fruits and animals become equally scarce, and
he is led by Necessity, the fertile mother of Inven-
tion, to sow or plant the herbs and trees which pro-
duce the former, and to domesticate the latter for
the supply of his wants, still more observatioDi
/bret/iought, contrivance, and preparation are ne*

POLITICAL ECCNOMT. 75

eessary on his part. He must acquire a knowledge
of the habits and characters of these plants and
animals ; of the best methods of cultivating, im-
provingy and storing them ; he must provide the
proper seed and plants; tools with which to dig
up the soil, clean it, and gather liis crops ; fences
to keep off wild animals, and confine his tame
ones, with a 3tore of fodder for their sustenance.
All these preparations are the result of previous
labour, accumulated for the purpose of aiding him
in the production of food. Similar provisions will
be required to supply him with clothing, shelter,
and other desirable objects.

The results of labour so accumulated, or provi-
ded beforehand for productive purposes, are called
by the general term Capital.

It is thus made clear, that labour can produce
nothing, or scarce anything, without the aid both
of capital and natural substances. These, then,
are the primary elements of human production :
Labour, Capital, and certain natural powers, which,
as inherent in the earth or attached to its surface,
may be classed under the somewhat vague title of
Ltmd.* And if, as would seem proper, we com.
prebend under the term labour all the ability or
productive capacity of man, natural or acquired ;
under that of capital all the substantial results of
labour, stored up and employed in farthering pro-
inetion ; and under that of land all the natural

* " The word * larri* includes not only the face of the earth,
but everything under it or over it. Therefore, if a man grants
all hie lands, he grants thereby all his mines of metal and other
liitiLi, hie woods, his waters, and his houses, as well as hia
Mdf and meaAowa.^—BlackaUme^s Co}nmentaries,\\.,c.'vi.,^A%

76 POLITICAL ECONOMY.

quaJiUes of those substances met with on the &
of the earth, which can be appropriated and re
dered available for productive purposes, we ab
embrace under these several heads everythi
that in any shape co-operates in the product!
of wealth. These elements of production we ZM
proceed to consider separately, in the order
which they have been mentioned, namely, L
BouR, Land, and Capital.

CHAPTER IV.

Labour. — Exchanges of its Produce.— Right to Free Ezehan
— Division of Labour. — Its Advantages. — Co-operation i
mutual Dependance of all Labourers. — Barter. — Money.—

use. — Coin. — Credit. — General use ot

•

The first essential towards production is laboi
To play its part efficiently in this great busine
the labour of individuals must be combined^ or,
other words, the labour required for producing a
tain results must be distributed among several i
dividuals, and those individuals thus be enabled
co-operate.*

* The principle here referred to is usually called the dnk
tf labour. The phrase is objectionable, since the fandanm
idea is that of concert and eo-operatumj not of divisum, 1
term division applies only to the process ; this being aubdivic
into several operations, and these operations being dislriboi
oi parcelled out among a number of operatives. It is tbni
eamdination of labourers effected through a subdwinoniif fnemt
The ianguage of the aalhoi \iai& \Meici«otnewhat altered in o
trinity with this distinctioii. — Ed.

POLITICiX SCONOMT. 77

If a man were to attempt to raise from the
lirtb's surface all the food required by himself and
ioa family, and all the materials for their clothing,
ftrniture, and shelter, and likewise to prepare them
hr use, it is clear that whatever he could obtain
k this way would only be of the poorest and scan-
tiest description ; not, under the most favourable cir-
cumstances, equal to that which Robinson Crusoe is
described as having provided for himself in his in-
land solitude ; for Crusoe had obtained a knowledge
of many of the arts of civilized life by education
in a society where exchanges of labour had long
been practised. Had all men persisted in labour,
ing on a system of isolation, each for himself only,
all must have remained in a state of barbarism.
None of the useful arts could have existed. The
metals would have slept untouched in the rock ;
th^ timber would have rotted unhewn in the forest ;
the soil would never have been turned up by the
plough or spade. A few raw fruits stripped from
the wild bushes, and the precarious produce of the
chase for food ; clothing of skins, and the rude
shelter of the cave or branch- hut, would have
made up the sum total of human possessions. Un-
der this system, the numbers of mankind must have
been kept within very narrow limits by disease and
by a continual dearth of subsistence. Countries
which now contain millions of civilized men, en-
joying, for the most part, an abundance of comforts,
could scarcely have supported as many hundreds
of half-starved savages.

But, happily, such a state of things does not long
continue. Man is formed to live in society \ aad^
Is we hare seen, necessity stiggesta lo everj ^k^y«

78 POLITICAL ECONOMY.

ety the general recognition of the right of ead
individual to freedom in the directicn of his indot
try, and a private property in its produce. Now
wherever these two fundamental principles of so
ciety are acknowledged, exchanges of the prodndf
of labour immediately must commence among in-
dividuals. One, for instance, has gathered moR
fruits than he can consume, and another has i
larger stock of skins fit for clothing than he cu
make use of. The first is in want of clothing, the
latter of fruit, and each finds his advantage in ei*
changing the excess of the article he possesses Ibi
that of the other. The exchange being wholl]
voluntary on both sides, the advantage is mututl
and by both parties is considered equal. So loo(
as exchanges are free and voluntary, so long it h
evident that the benefit to the exchanging partiei
is mutual and equal, otherwise each would w
agree to it.

The right to freedom of exchange is included ii
the right to a free disposal of the produce of la
hour, and rests on the same ground of expediency
since it is evident that, in whatever degree the la
bourer is at any time prevented from exchangiD|
the produce of his industry with others, for what
ever he can obtain for it most desirable to himseii
to that extent are his exertions discouraged, the!
productiveness diminished, and their reward less
ened.

The adoption of this system of exchanging tb
products of labour makes it exceedingly conve
nient and advantageous for each labourer to confini
himself to the production of one, or, at most, onh
a few commodities, and to exchange all that ti

POLITICAL ECONOMY. 79

^Qces beyond his own consumption with others,
vjio in their turn do the same. Each is thus ena-
Ued to avail himself of any peculiar natural ad-
laotages he may possess, whether of personal pow-
ers or of position, for the production of a particu.
lar commodity ; and likewise to acquire, by the
ibrce of habit and undivided attention, a higher
degree of skiH. By help of these natural and oc-
fimred advantages, he is enabled to produce far
more, and, consequently, to obtain by exchange a
greater quantity of the things he desires to con-
sume, than he could by any possible efforts direct-
ly produce of himself.

It is by this division of labour among a variety
of classes of labourers, each of which takes a dif.
ferent branch of industry, that the gross amount
of production is vastly augmented. Under the
sanction of just and well-administered laws, enfor-
cing the fulfilment of contracts for the exchange
of labour or of goods, and giving security to pri-
vate property, this division is carried in some coun-
tries to an extraordinary extent ; and its efiect in
augmenting the wealth and comforts of all classes
IB almost incalculable. It forms, indeed, the true,
as well as only practicable communis/ of goods.

Dr. Smith was the first writer who called atten-
tion to the extraordinary increase in the produc-
tive powers of industry caused by the division of
employments, and his mode of treating and illus-
trating the subject has been but little improved
upon by any succeeding writer. He classes the
advantages gained as,

Firstf increased sidU and mamud dexterity in
workmen. A nailmaker, for example, by confining

80 POLITICAL ECONOMY.

himself exclusively to the manufacture of that ar
tide, will make two or three thousand nails io i
day ; where an ordinary smith, who only turnec
his hand occasionally to this process^ could maki
but as many hundreds. A man who wanted suck
a common thing as a few pins, might, if he attempt
ed to fabricate them for himself^ spend a day ii
making a dozen of very bad ones ; whereas, b)
giving their attention exclusively to this branch oi
industry, and subdividing its various processei
among themselves, ten men will, in a pin manu-
factory, make in one day as many as 50,000 well'
finished pins, and their cost to the consumer k
proportionately reduced. The rapidity with which
the operations of some manufactures are perform-
ed, exceeds what the human hand could, by those
who had never seen them, be supposed capable of
acquiring.

Secondly, the saving of time* An individual who
carries on many different employments in pla*
ces often necessarily far apart, must waste much
time in moving from one to the other, which wili
be saved by attaching himself exclusively to one
occupation. This is Adam Smith's argument ; but
he might have thrown a far stronger light on the
economy of time that results from a well-regulated
division of labour, if he had noticed the power it
frequently gives to one individual to do the woric
of numbers, quite as effectually as they could do it
themselves. An excellent illustration of this ben*
efit is given by Dr. Whately* in the establishment
of a postofficc and letter-carriers, without which
every ietter would require a special messenger to
* Lectures on Po\it\ca\ Ecououi^^Qitoi&^vaav^

POLITICAL ECONOMY. 81

ooQvey it to its destination. A postman who car-
ries a thousand letters from the office, and delivers
dtem in remote parts of the city in the course of a
few hours, may be said to do the work which, with-
out such a contrivance, would engage a thousand
persons for nearly the same time. The carriage
of goods of all kinds by persons who specially ad-
dict themselves to that calling, whether by sea or
laud, is, of all branches into which employment is
divided, one of the most generally useful ; because
it operates to a vast extent in economizing the
time and labour of individuals. At what rate
would .production of any kind advance, if every
labourer were obliged to proceed in person to fetch
every article he required from the spot where it
was raised, and to carry everything he produces to
ihe place where it is to be consumed ?

It is evident that, by these and many other con-
trivances, there is not only eflTected a vast econo-
my of timej but of power likewise, through the di-
vision of labour. Without it a man would be of-
ten employed in doing what a child could equally
well perform; and a workman of consummate
■kill or natural capacity for some particular branch
of industry, would be forced to let his great powers
of production remain dormant for the greater part
of his time, while he was providing for his varied
necessities in a number of occupations which
might be as well pursued by those who are capa-
Ue of nothing else.

Thirdly^ the invention of tools, machines^ and
frocessesfor shortening labour aud facilitating prOm
duction. It is evident that a man who is tre^^^TvU
Ij ahifdag from one occupation to anolYvei ^c^t >^<^

8S PCUTICAL ECONOMY.

supply of his various wants, will not be^ near
likely to invent ingenious methods for shorteni
or saving his labour, as one whose attention is.<
voted exclusively to a particular branch of iodi
try. In fact, by far the greater number of i
provements in tools and machinery have been pj
duced by the efforts of workmen and artificeiB
economize their time and trouble, and to increi
the productiveness of their peculiar employmen

Perhaps in no trade has the division of labc
been successfully carried to so great an extent
in that of watchmaking. In an examination 1
fore a committee of the House of Commons, it «
stated that there are a hundred and two distil
branches of this art, to each of which a boy m
be apprenticed.

An equal gain results from the division of t
labour of the head as from that of the ham
''As society advances, the study of particul
branches of science and philosophy becomes t
principal or sole occupation of the most ingenio
men. Chymistry becomes a distinct science fn
natural philosophy ; the physical astronomer sept
ates himself from the astronomical observer ; t
political economist from the politician ; and ea<
meditating exclusively or principally on his pec
liar department of science, attains to a degree
proficiency and expertness in it which the gene]
scholar seldom or never reaches. And hence,
labouring to promote our own ends, we all neo
sarily adopt that precise course which is most li
vantageous to all. Like the different parts of
weJi-constructed engine, the inhabitants of a cii
iMed country are ^ muVuuXVf ^<&V^'odsKDl qiub

POLITICAL ECONOMY. 88

Moected with each other. Without any pre-
lious concert, and obeying only the powerful and
steady impulse of self-interest, they universally con-
t^re to the same great end ;* and contribute, each
in his respective sphere, to furnish the greatest
BDpply of necessaries, luxuries, conveniences, and
enjoyments, "f

The system of the division of labour might, as
we have said, be called with more propriety the
combination of labour, since its effect is the co-
operation of many labourers to produce a common
result. In fact, wherever this system has made
any considerable progress, the society assumes
emphatically a co-operative character. Every
member is dependant on the aid of others in ev-
erything that he does and for everything he en-
joys. The ploughman cannot turn a furrow with-
out the help of the wheelwright and smith ; these
can do nothing without that of the timber and iron
merchant, the miner and the smelter. These,

* This is the fundamental principle of the modern school of
Political Economists. It represents individual self-interest a«
the only and all-sufiicient guide of men in promoting as well
the funeral good as their own. ft is spoken of by the author in
a subseauent passage as an '* unerring instinct." He forgets
that the law is often obliged to interpose in order to restrain and
direct thia unerring instinct ; and that, governed by it, individu-
als sometimes engage and pentist in undertakings not the most
conducive to their own interest, much less to that of the public.
The exaggerated notion which is entertained of the Mogaeity
and egelutive svpremacy of this principle of human nature, forms
a great and prevailing fallacy in the writings of the author and
01 moKt other Political Economists It recurs so frequently in
the course of this volume, that the editor has not been able in
all cases to exclude it. He therefore takes this opportunity of
«Dterin|; his protest against it, and of giving the reader a gener-
al caution in regard to it. — Ed.

i M*Ci]i)ocfa, Political Economy, p. 9&.

84 POLITICAL ECONOMY.

agaiD» must be assisted by the ropemaker, the
powder manufacturer, the engineer, the carrier, and
several others ; while all depend upon the baker,
the mealman, the butcher, the farmer, the grazder,
&c., for their supplies of food ; and on the tailor,
the cotton and cloth weavers, the flax and wool
'^rower^the importer, &c.,for their clothing. All
society is, in fact, one closely- woven web of mu-
tual dependance, in which every individual fibre
gains in strength and utility from its entwinement
with the rest. But, while all the members of so-
ciety co-operate for a common purpose, the in*
crease of the general welfare, each individual is
still strictly occupied in pursuing what he consid-
ers his own private and exclusive interest in what-
ever way he likes best.

And here is to be seen the vast superiority of
the principle of freedom over that of compulsion :
of the system of co-operation which springs nat-
urally and spontaneously from the mutual wemts of
men, over that artificial, forced, and premeditated
system of co-operation, which of late has been put
forward as the true rule of social arrangement by
the erratic and visionary philanthropist, Mr. Owen,
and some of his followers. Had the wisest of
mortals, at any former period in the history of this
country, been intrusted with full powers to frame
and organize a co-operative system, assigning to
each individual in the state the task he was to per-
form for the common welfare, and distributing to
each the share considered to belong to him of the
common produce, can it be supposed for a moment
that he would have been able to devise arrange-
ments capable of secunn^ «h^^\ii% \^^ \3aa e6i-

POLITICAL ECONOMY. 85

and perfection with which the principles of
i)our, private property, and free exchange
1 at present the supply of all the varied and .
sated wants of a vast population 7 ^ {

e confine our attention to the mode in
the inhabitants of a great metropolis are
d with the necessaries of life, we may see
efits of this system of co-operation wonder-
emplified. If the management of this im*
business were intrusted to a few individu.
leglect, a mistake, an indiscretion on their
ight occasionally bring upon this mighty
of wealth and industry all the horrors of
and compromise the existence of hundreds
lands of people. What is it, then, that per-
his important function? that supplies this
^pulation with its daily food, so quietly and
tually ; without bustle, without even organ-
; without excess, as without waste ; the sup.
equally adjusted to the demand, that the
f butchers' meat and bread do not, perhaps,
I variation of a farthing throughout the
hich is not to be accounted for by natural
affecting the original sources of supply ?
i it that performs this daily miracle, which
es not excite our continual admiration be.
; is self-effected with all the order, ease, and
y of a great natural process ? Why, the
e of competition ; the free and open rivalry
sands of individuals, each acting according
own discretion in his own self-appointed
; each actuated by the unerring instinct* of

the iamo unerring instinct that lea^ o^eift \A\Afii^ %^<*

86 POLITICAL ECONOMY.

self-interest, which prompts him to produc
much as he can sell with profit, but no more
keep the supply full, but to prevent excess.
abundant supply causes each produ jer to lowe
prices, thus enabling the public to enjoy that a
dance, while, on the other hand, an actual a
prehended scarcity causes him to demand a bi
price, or to keep back his goods in expectatic
a rise. '^ For doing this the dealers of provii
are often exposed to odium, as if they wen
cause of the scarcity ; while, in reality (unlea
crating in secret concert, and aided, perbap
the vast capital of banks, when they richly i
all the execration they receive),* they only per
the important service of husbanding the supp
proportion to its deficiency, and thus warding
the calamity of famine. The dealers usualb
serve neither censure for the scarcity they a«
norantly supposed to produce, nor credit fbi
important public service they in reality perf)
They are merely occupied in gaining a fair li
hood. And, in the pursuit of this object, wit
any comprehensive wisdom, or any need of it,
co-operate, unknowingly, in conducting a sy;
which, we may safely say, no human wisdon
rected to that end could have conducted so
the system by which this enormous populati*
fed from day to day."f

The advantages of the division and combini

ming-tables oi brothels. Is there not occasiOD, then, for a
er principle to regfulate production ?—£<{.

* It is proper to state, that the words included in bn
liave been inserted by the editor. — Ed,

f W]iately'BLectuie8,p.lQb.

POLITICAL ECONOMY. 87

)ur will still farther appear when we come
It of the several classes into which society
I itself as civilization advances.

direct exchange of goods of any kind for
18 called harter ; and, as it is the most sim.
de of exchange, so we find it still the only
use among some uncivilized nations. But
MsiTe inconvenience must suggest, even to

. low degree of intelligence, the advantage
roving upon it. Suppose a savage, for ex.
to have taken and killed a bullock or other
inimal, which he would find a difficulty in
ling alone. He is desirous of exchanging
plus for a variety of other objects which he
ant of. His neighbours, on . their side, are
9 to purchase his meat, but it is highly improb-
at each should have by him, and be able to
or the purpose, one of the precise objects of
he is in pursuit. To obviate this difiicultyy
must be continually recurring, one or other

very simple methods would suggest them-
: the one, that he who had the meat or other
to dispose of should give credit to him who
I it, on his engagement to repay him either
ne or such other object as may be agreed
Rrhen able to do so, or at some definite time ;
ler, that individuals should generally keep
m a stock of some one article in general
t, a portion of which would be readily taken
jry seller in exchange for his commodity,
rst of these methods of facilitating exchanges
of credit, the second of money. Both were
>ly coeval in their origin. Both have cow
in use with more or leas of VKu^t^N^m^xiX

88 PJLITI€AL ECONOMY

among all nations, civilized as well as uucivilizedi
to the present day.

Of the commodities that have been, and, in aoni»
instances, still are in use as money by diflSbrent na*
lions, we may instance oxen, shells, salt, leather*
and iron, &c. But in nearly all countriea meo
seem to have been, at an early period, determinedf
by irresistible reasons, to employ in preference &a
this purpose the more valuable metals, copper, di-
ver, and gold. These reasons are, their possenang
qualities fitting them for this peculiar office in a
far superior degree to any other commodity of in-
trinsic worth. They may be kepi almost asiiy time
toithoiU loss ; they are of such rarity, and so muck
esteemed (that is, of such great intrinsic value), that
small portions of them, easy to be carried ahoiU
(more especially o£ the two precious metals), unU
exchange for comparatively large quantities of most
other goods ; and they may be divided toiihout loss
into any number of parts, arid reunited again, through
their fusibility, with the same ease. The only dif-
ficulty was that of ascertaining their precise quan-
tity and quality. For this purpose it would be
necessary both to weigh and assay them. But as
the process of weighing and assaying each piece
of metal every time it was taken in exchange
would have been an endless one, wholly destructive
of all the convenience to be derived from its use
as money, it seems to have been very soon discov-
ered that the government of every country, in order
to prevent imposition as to the weight or quality of
these pieces, should affix a certain stamp on them in-
dicative of their quantity and fineness ; at the same
time prohibiting by law l\\e Vssw^, ot tnMUag<&^«& it

POLITICAL ECONOMY. 89

J* Called, of money by private individuals, and pun-
^^^ the imposition upon the public o^ false rnon.
7) when detected, by the heaviest penalties. So
'tamped, money is called coin ; and on the faith
of this government stamp, and the laws by which
its imitation is prohibited, coined money passes
current by tale, without the troublesome process of
ireighiog or assaying. It is in this form that the
precious metals, gold and silver, have become the
universal measure of the value of other commodi-
ties, and the principal instrument or medium for
their exchange.

But we have already mentioned the existence
and general use of another medium for conducting
exchanges besides money of intrinsic value ; name-
ly, Credit, or the confidence placed by one indi-
vidual in the engagement of another to pay him at
a certain time a certain quantity of goods or mon-
ey. This mode of conducting exchanges has one
great and evident advantage over the use of money,
namely, that it saves individuals the necessity of
keeping by them a stock of an expensive commod-
ity, for no other purposes than that which their
credit, if unquestionable, would answer equally
well. On the other hand, the drawback to the use
of credit, as a medium of exchange, is its insecuri-
ty. Every one may know, in the circle of his
neighbours and acquaintances, individuals whom,
from their character for rectitude and honesty, he
would trust to any extent " with untold gold ;" but,
unfortunately, our moral nature is by no means so
perfect as to admit of such confidence being univer-
•aly or anything like it ; nor, again, is disVvoxv^^V^
the only cause of the failure of en2asew\Gtv\s% \c\

90 POLITICAL EC0N0M7.

order, therefore, to prevent, as far as possible^ frauds
upon the over-credulous or other loss, it has been
found necessary, in all countries, for the govera-
ment to enforce by laws the fulfilment of engage-
ments : a necessity parallel to that which led, as
has just been explained, to the laws for regulating
the coinage of money. Supported by this guaran-
tee, credit has performed its part as an instrument
of exchange in all parts and countries where com-
merce has made any progress, and that to an ex*
tent seldom, perhaps, fully recognised by writers on
these subjects. Because the precious metals, coin-
ed or uncoined, have been almost always and ev-
erywhere employed as the measure of vahie, tiiey
have been hastily concluded to have been likewise
the principal, if not the only, instrument of exchange*
But these two things arc perfectly distinct, and a
very little examination would suffice to convince
us that the employment of credit in commerce, as
a medium of exchange, has been very considerably
underrated ; that it has always carried on a mucn
larger amount of business than money ; and, indeed,
that, without it, commerce could have made but
very little progress, cramped and fettered as it
would have been by the disadvantages incident to
the use of metallic money, which is, in truth, only
a somewhat superior kind of barter.

This inquiry, however, may be better reserved
for a future occasion. I will only mention here
three facts, illustrative of the vastly superior extent
to which, in commercial countries, credit is neces-
sarily employed as an instrument of exchange be-
yond real or metallic money. These are, first, that
the entire commerce of Scotland, both foreign and

POLITICAl ECONOMY. 01

estic, is carried on without the practical use of
tgle gold piece. Secondly, that, at the banker's
ring-house in London, exchange transactions
iaily settled to the extent of five millions ster-
— on some days of thirteen millions — without
ntervention of any coin whatever, and by the
royment of a floating balance of only about
0,000 in Bank of England notes, themselves
jly representing the credit of that establish-
t. Thirdly, that there is at every moment in
:ence in England an aggregate mass of trans-
)le credit in the shape of book debts, foreign
inland bills of exchange, mortgages, annuities^
3ther moneyed liabilities, including the great na-
d debt itself, to an extent, as regards the whole
ire, certainly o( several thousand millions in val-
le whole of which is strictly in continual employ-
i as a medium of exchange; an instrument,
is, whereby one individual obtains possession,
Dnsent, of the produce or property of another ;
3 the amount of real or metallic currency cit-
ing through the same countries does not, per.
, exceed thirty millions, and might probably, as
'cotland, he dispensed with altogether, without
ting in the least the extent of this prodigious
I of transactions on credit.

02 POLITICAL ECONOKT.

CHAPTER V.

Wages. — Ample and continually increasing Wages secorad H
Labourers by the Principles of Free Labour and Fkee £i-
change. — Inequality of Wages in difierent EmploymeDta and
of different Individuals.— Ability, even of the lowest ClaM^
increases, and its Reward ought to rise proportionatelyy with
the Progress of Civilization.

However directed, the chief motive to laboor,
freely exercised, must be the result accruing to the
labourer. This is technically called his toagei*
And, since the more productive labour is rendered
by machinery, by subdivision of employments^ and
fecilitation of exchanges, the greater must be the
aggregate quantity of the good things of life pro-
duced, it seems self-evident that the share falling
to the lot of each individual labourer, as his reo<
ompense or wages, ought to be proportionately
augmented. And such doubtless would be the
case were the labourer, his employer, and othei
joint partners in the work of production left free
to apportion among themselves their respective
shares, untrammelled on the one hand by unwise
laws, and on the other by unfair combinations ; i1
being supposed, of course, that each party is honest
and moderately intelligent. The great principles,
in short, of free labour, and free disposal of its
produce, would seem, in such case, amply suffi-
cient to secure an equitable distribution of proper-
ty among the several classes who contribute to its
creation; and the benefits they thence derive

pouncAi. BcoNOinr. 98

so stimulate their exertions as to cause a
ued increase, not merely in the wealth of the
ff hut also in the share of that wealth falling
lot of any individual member. We believe
\ in some societies which have reached a

artificial and complicated state, this, its nat*
id legitimate consequence, has not always foU
every improvement in the means of produc-
: roust necessarily be owing, and can in every
yy some little attention, be traced either to
nt of proper education among the people, or

interference of erroneous institutions— aa
fence adopted sometimes, doubtless, in igno«
of its mischievous effects to the community
^, but sometimes also with more or less of a
lent intention of diverting the produce of in-

into other hands than those into which the
stem of free labour and free exchange would
ute it.

, under a system of free and equitable ex*
3, the recompense (wages) of every labourer
s by no means equal, nor even exactly pro-
led to the severity or duration of his em-
ent. It must be determined bv the value of
>duce in the market. And this will increase
3ortion to the talent, skill, and application of
bourer, or any other circumstances which
mder his labour move producUve ihsiH that of
jr. A man whose natural powers of body or
mable him to contribute more efficiently to
neral work of production than another, may
bly expect, and will, under the system of
Lchanse, receive a larger share of the gross
il produce. The same is ^ue pf one who^ fay

94 POLITICAL ECONOMY.

advantages of education or continuei/ application^
has acquired a superior degree of skill or knowK
edge in any of the arts of industry, and of one,
too, whose reputation for integrity and vigilance
in his employer's service secures him peculiar
confidence. The increased reward thus obtained
by increased productiveness is the motive and ne-
cessary stimulus to most of those efforts for ren-
dering labour more productive, which have carried
mankind forward from the savage to the civilized
state, and must be depended upon for inciting him
to yet farther advances. Every attempt to equal-
ize the wages of different employments or individ-
uals by compulsory arrangements has the certain
effect of damping the ardour of industry, putting a
stop to improvement, and thus checking the maroh
of production.

The powers of an individual to produce, or co-
operate in the production of wealth, may be called
his dbiWy. The lowest degree of ability consists of
the rude, unskilled powers of the common work-
man. The great body of labourers in most coun-
tries are possessed of little more than this inferior
ability. But the recompense (wages) of this low-
est class of labourers varies, notwithstanding, very
much in different countries. In a savage state of .
society, for example, mere human strength can do
but little, for want of tools with which to work, and
instructions how to employ them. By practice,
and the exercise of his native ingenuity in contri-
ving expedients and fabricating instruments, a
clever savage may increase the productiveness,
and, consequently, the reward of his labour far be-
yond that of his companions ; but, even under the

POLXT.iCAL ECONOMY. 96

**K)8t favourable circumstances, his exertions will
^^ be near so productive as those of the most stu-
pid clown in a civilized country, armed with the
instruments which the accumulated ingenuity of
ages has contrived, and applying them, however
mechanically, after those methods which experi-
ence has proved to be most efficient. On this ac-
count, the inferior degrees of ability will obtain far
higher wages in a highly advanced than in the
earlier stages of society. The produce of the
daily labour of an English ploughman, shepherd,
or common mechanic, is at present probably three
times as much as that of similar classes of labour.
era in the time of Elizabeth, and six times as much
as at the period of the Conquest. If their wages,
or the amount of the necessaries and conveniences
of life which they obtain in return for their labour,
have not increased quite in the same proportions,
it must be in consequence of the faulty direction
given to the distribution of the produce of labour
by the causes to which we have already referred.
In the same way, the productiveness of an English
day-labourer is perhaps twice as great as that of a
Frenchman, four times that of a Russian, and six
or eight times that of a Hindoo. His wages
ought, therefore, to be proportionate, and probably
would be so under an equitable system of econom-
ical policy.

The reward of the industry of the higher class-
es of labourers will in the same manner rise with
its productiveness. An artisan of superior natural
abilities, who has had the advantage of the instruc-
tions of a master in some peculiar business, and
lias applied himself assiduously to acquire the

96 POLITICAL ECONOMY.

manua^ dexterity and the practical arts of his trad6|
has gained a degree of ability which, as contrib*
ating much more largely than that of an inferior
workman to the marketable means of enjoymentf
is enabled to command in the market a propor-
tionately larger share of the general stock. The
wages, or market value, of personal ability of any
kind will depend partly on the degree of study or
application, and partly on the amount of time re-
quired on the average to produce it. It is also
influenced, in a great degree, by the mare or lu$
exclusive possession of ability of any descriptioiL
It is the rarity of particular kinds of talent thai
confers the greater part of their value upon thenk
The average wages of fiddlers is, perhaps, taking
into consideration the time spent in acquiring the
art, little more than that of ploughmen ; but when
the combination of rare genius with equally rare
assiduity creates a Paganini, he is able to com-
mand almost any price in return for his exertions.
There occurs but one Lawrence in a century,
and this it is which enables such an artist to put a
value on his productions, perhaps a hundred times
greater than an ordinary dauber is happy to get
for the same quantity of paint, canvass, time, uid
trouble.

But the possessor of superior ability in any line
of industry is not only enabled to put a higher
value on the produce of his labour directly exerts
ed, he has it likewise in his power, in many in*
stances, to communicate that ability to others by
instruction ; and while he requires, of course, pay-
ment from them in exchange for such instruction*
be puts it in their power to obtain in turn, a pro*

POLITICAL XCONOMT. 97

PWwnately higher recompense for their owu in-

^try. The value of such instructions is some-

^mes heightened by the communication of secret

Processes, which give to their possessor a decided

iid?antage over his competitoi*s in the same line of

AH In general, however, it consists in the com-

iQumcation of a variety of delicate and difficult

Qiaiiipulations, such as can only be learned by

actual exhibition and repeated experiment under

the eye and tuition of an experienced master.*

Tile high premiums of apprenticeship taken by

those who are engaged in the superior departments

* A. remarkable instance in proof of the necessity of per-
sonal instruction in some of the useful arts, was related by
Mr. Ostler, a manufacturer of glass beads and other toys, to
the Committee of the House of Commons on artisans and
machinery; and is quoted in Mr. Babbage's valuable work
OQ the Economy of Manufactures. Mr. Ostler, it seems, had
noeived, some years since, an order for upward of five hun-
dred pounds' worth of doll's eyes. But, notwithstanding his
having some of the most ingenious glass toymakefs in the
kingrom in his service, he could not succeed in making the
article, and was obliged to renounce the cmler. "About
eight months ago," he continues, "I accidentally met with
a poor fellow who had impoverished himself by drinking,
and who was dying in a consumption, in a state of great
want. I showed him ten sovereigns ; and he said he would
instruct me in the process. He was in such a state that he
could not bear the effluvia of his own lamp ; but, though I
was very conversant with the manual part of the business,
and it related to things I was daily in the habit of seeing, I felt
I could do nothing irom his description. (I mention this to
show how difBcult it is to convey by description the mode of
working.) He took me into his garret, where the poor fellow
had economized to such a degree, that he actually used the en-
trails and fat of poultry from Leadenhall market to save oil
(the price of the article having been latterly so much reduced
by competition at home). In an instant, before I had seen him
make liiree, I felt competent to make a gross ; and the difiference
between bis mode and that of my own worknren was so triiliDg,
that X So\% the utmost astonishment."

96 POLITICAL ECONOlCr.

of the useful and ornamental arts, arise chiefly
from this source ; and the proportionately high
wages that are earned by journeymen or maaten
in these several callings follow necessarily firom
the expensive course of instruction they have im*
dergone, the assiduity with which they have ea^
deavoured to perfect themselves in their art, and
the more or less rare excellence to which, by theie
means, aided perhaps by superior natural abiiitiei»
they have attained in its practice.

In this way the skill or acquired ability of one
man is handed down from father to son, or from
master to pupil, through successive stages, accu-
mulating, as it passes on, the added improvements
of its various possessors. But, as every pupil or
apprentice is enabled to instruct a considerable
number of others, there is a constant tendency in
every improved process or secret to spread throu^
a wider circle. There are, moreover, many pro-
cesses of art which can be communicated by written
directions, without personal exhibition ; and thete^
sooner or later, transpire and become extensivetf
known. This is the case especially wherever tfate
blessing of a press, more especially of ^free press,
exists. Once committed to printing, a receipt or
peculiar process travels in all directions, not only
through the country where it was invented, but
through many others likewise, and is handed down,
with little or no chance of loss, to distant ages and
generations. It is to the splendid invention of let-
lers and printing, and to the freedom with which
knowledge now circulates, that we owe the rapidi-
ty with which the process of mutual instruction in
the productive arts is now daily increasing the

POLITICAL ECONOMY. M

h of modern societies. Without their aid,
ole and precept might hand down some im-
ments in human ahUity ; but they would be
t to frequent loss and destruction ; and the
3urse of minds must, under such circumstan-
3 comparatively slow, torpid, and unfruitful,
sse are the things that constitute '^ useful
sdge." The vast superiority in the produc.
» of a Watti an Arkwright, or a WeJge.
over that of a clever savage, is almost en.
3wing to the influence of accumulated abili.
his nature stored up in hooks, and operating

development of intellectual powers, which
otherwise have remained dormant and use-
wards enriching the individual, or, as in the
f the three great men we have named, to.
the lasting benefit of the whole human race,
fronderful inventions, when thus proclaimed
world, become public property, a gratuitous
n of vast amount to the ability of all pres-
d future labourers in the peculiar arts to
they are applicable.

ay, it is true, be long before the Calmucs or
e avail themselves of the increased power
Qventions put at their disposal ; but, in the
time, even these distant nations profit from
h rough the greater cheapness of the com-
3S with which they are supplied, by the
ig ability of Europeans and Americans. And,

mean time, the latter are improving even
[lese inventions far more rapidly than other
I can adopt them; so that the superiority
ive once obtained is continually increasing
than diminishing^

100 POLITICAL ECONOMY.

We have hitherto spoken of wages (real wages)
in the sense of the quantity of the necessaries aiu)
conveniences which the labourer can commaDd in
the market in exchange for his services. Such ap«
pears to be the most correct meaning of the expres-
sion. But, in common language, wages are gen-
erally understood as referring to the sum in money
(money.wages) which the labourer obtains. These
two meanings are, of course, very distinct. The
money-wages of a labourer may rise, while the
quantity of necessaries and comforts he can obtain
in exchange for them, and upon which alone hii
condition in fact depends, is decreasing. This wis
notoriously the case in Britain in the early part cf
the present century, when, owing to a succession of
bad harvests, the money-price of necessaries reach-
ed an exorbitant elevation ; and, though the money-
wages of nearly every class of labourers rose like-
wise, their purchasing power was greatly lessened.
It was the case, again, in our own country in the
years 1836, 7, &c., when, owing to the sudden
expansion of the currency and other causes, the
prices of articles of prime necessity to the labourer
rose so much more rapidly than his wages, thati
though the latter did increase, his command over
such articles was continually diminishing.

Enough has been said to show that, in a country
which has already made great progress in the arts
of production, and is still daily improving upon
them, the remuneration for labour, even of the
lowest kind, ought to be considerable, as compared
with earlier periods, and ought, likewise, always to
be on the increase ; never, unless locally and tem-
porarily, to fall off in its amount.

POLITICAL ECONOMY. 101

Itf therefore, in such a country, the wages of the
n&ss of labourers are at any time not sufficient to
cofflmand for them a competence of the necessaries
lod comforts of life ; if wages are found, during pe-
Ti'ods of considerable duration, through extensive
districts, and in a variety of occupations, to de-
crease in amount instead of advancing, we may
K8t assured that such a state of things can only be
the result of something faulty in the institutions, or
io the intellectual and moral condition of the peo-
ple. And the study of the naturally just and equi.
table principles on which such institutions ought to
hare been modelled — and, when proved to be in
ftnlt, ought to be corrected — becomes one of the
most important and interesting subjects of inquiry
!o which the attention of any reasonable friend to
lamanity can be addressed.

Before, however, we can prosecute our research-
is into the nature of such errors and the mode of
orrecting them, we must first examine the other
lements which co-operate with labour in the great
ruainess of production ; and the owners of which
tave, of course, an equal right with the labourenv
sbsure in the joint produce.
These are, ns we have seen, Land and CapUaL

102 POLITICAL ECONOMY.

CHAPTER VI

Land.— Its Appropriation essential to Prodnction. — History tad
Causes of its Appropriation in different Ages and Coantnw. ■
In the East by the Sovereign.— In Europe by the AristocraQf.
— In America by the People.— Influence of these di&mrf
Systems on Production and National Welfare. — Natmil
Laws of Property in.

Political Economists^ following the example d
lawyers, comprehend under the term land^ whe&
speaking of it as a source of wealth, all the natuni
powers of the surface of the globe which can be
made available for the use of man, includingy to-
gether with its soils, mines, quarries, and wateri»
the animals and vegetables found thereon in a wild
state.

These gifts of Nature, our common mother, an
poured forth in all but infinite profusion for the
common use of mankind. But, in order to avail
himself of them for his various purposes, man mustf
as has been shown, appropriate them by his fau
hour ; and, having done so, he acquires an equita*
ble title to their possession, founded on this labour.
If fruit grew spontaneously, on herb or tree, in suf-
ficient abundance to supply the wants of all, the lap
hour of gathering were alone necessary to give an
individual an equitable property in fruit. With
the fish of the sea, and many of the fowls of the
air, and some wild animals, this rule indeed holds
good in law at the present day, even in countries
where society has in many, respects attained a most

POLITICAL BCONOMT. 103

fcial and complicated condition.* But of the
8 of the earth, and the animals most fitted for
> there is no such spontaneous abundance ; and,
tier to ensure the production of a sufficiency
lese for the wants of man, it is necessary that
1 pains should be taken by some one ; that the
i>e enclosed with fences to prevent the ravages
ifldering animals, broken up by tillage, planted
own with the fitting vegetables, and the; grow-
rops protected, as well as gathered. Now no
t is plain, would take the trouble to enclose
ultivate a piece of ground, and plant or sow
leral months, perhaps years, before the crop
)e fit to gather, unless he were secured (so
t least, as human confidence can be secured)

exclusive privilege of gathering and appro-
Dg the fruits of his labour when ready for

And the same may be said of the land em*
J for breeding, rearing, and fattening domes-
dmals. For this simple reason, it becomes
itely necessary, in order to admit of the pro-
>n of artificial crops or stocks of cattle, to se-
[Q the strongest possible manner a property in
to him who encloses and cultivates it, or in
ray renders it productive. And this necessi-
i been perceived and acted on throughout all
nown and cultivated regions of the globe,
h in a great variety of ways ;*j* some of which

ir law maxims with regard to fish, game, and sach things
fenB natwrcs" assert that they are " ntdlius in honitt** or no
foods ; and that of them *' Capiat qui capere po$$it" catch
tch can. A quahfied property is still to be acquired in
od some other things **per industriam.'" — See Blackstane,

m exclusive property b wells appears from Scripture to

104 POLITICAL ECONOMY.

afibrd moie, some less, encouragement than oth^'a
to production. That system is evidently to to
preferred which affords the mu.-.t.

It has, indeed, seldom been sufficiently remark-
ed by those who have studied the nature and causes
of national wealth, to what a pre-eminent degree
the social and economical condition of a people is
influenced by the laws and customs that prevail
among them respecting the occupation and owne^
ship of land. There is no exaggeration in the aa«
sertion that, by these circumstances almost afoM»
the position of any nation in the scale of civiliza-
tion is practically determined. Nor will any one
be inclined to doubt this when he adverts to the
simple consideration that it i^from the landy and Ae
land alone, that nations derive as well the whole
of the food on which they are supported, as the
raw materials out of which, by their industry and
ingenuity, they elaborate all the other necessariesy
comforts, and luxuries of life ; so that it must
chiefly depend upon the more or less easy and
equitable terms on which the cultivation of the soil
by those who possess the means, is permitted or
encouraged, whether the production of every kind
of wealth be restrained within the narrowest limits^
or be developed to the utmost extent of which hu-
man industry is capable.

have been established in the first digger or occapant, eten in
places where the ground and herbage remained yet in common.
See Blackstone, ii., c. i., p. 5, who also states, "It is agreed opoo
all hands that occupancy gave the original right to the permanent
property in the substance of the earth, wnich excludes ereiy
one else but the owner from the use of it.'* Occupancy by uae
and improvement must be intended, though Blackstone does
not clearly express this, it is not probable that any IndividQal
would have been allowed to appropriate more land than he could
cKcupy in this sense.- 4d., p. 5.

POLITICAL ECONOMY. 105

The terms on wnich the cultivators of the soil
'Jfe admitted to its occupation vary materially in
^ffferent parts of the glohne ; and a review of these
^fferent customs, and of the influence they several.
V exercise over the moral, economical, and politi-
cal condition of the countries in which they prevail,
Would in itself be a work of great interest. The
^ce we can afford to this branch of our subject
is less than it deserves.

I. Wherever despotic power exists, whether the
result of domestic treachery or foreign invasion,
there property, as well in land as of all other
kind — and even life itself — is, of course, held only
at the will of the ruler. And, accordingly, we find,
in countries which appear to have been subjected to
this form of government, that the exclusive proprie-
torship of the land, as the primary source of all
wealthy has been claimed by the sovereign.

In some parts of the world this claim has been
practically exercised up to the present day, in
others but nominally ; the right of occupying and
Ofling the soil having been transferred by grant of
the sovereign to inferior holders, and his claim con-
tinued, perhaps, only in name. Throughout all
Asia, from China to Turkey (excepting only the
Russian provinces), the revenue of the ruler is still,
and always has been, raised from the cultivators of
the soil by a sort of land-tax, consisting of a pro-
portion of the produce, which varies, as may natu-
rally be imagined, with the tyranny or mildness of
the reigning sovereign, and the greater or less pow-
en of exaction with which the intermediate collect-
ors are armed. The cultivator is by some persona

106 POLITICAL ECONOMY.

considered to be, throughout this large portion of tlM
globe, the legal owner of his plot of laud. And, in-
deed, he has some of the supposed characteristics oj
ownership, since he is empowered, in general, to
mortgage, sell, or alienate it ; and it descends at hii
decease, if not otherwise disposed of, in equal por-
tions to his heirs. There is, however, an almost ia-
finite variety in the local customs which determiiN
this tenure ; every petty province having some mi-
nute peculiarity. And it is even yet a matter of dis-
pute among writers who have deeply studied the in-
stitutions of the Indisui empire, which of the three
parties who have everywhere a joint interest in the
land, the peasant-cultivator (or Tyot)^ the tax-collect-
or (or zemindar), or the sovereign, is its real legiti-
mate proprietor. In practice, each has a lien upon
its produce, and to that extent each may be reckon-
ed its owner. The tax-collector, like the ryot^ has
an hereditary and transferable interest in his post,
which brings him a revenue in a per centage of the
sum he collects from the ryots for the sovereign.

The question, however, as to who is the legal
owner of the soil, seems to us susceptible of a veiy
simple solution. Throughout the East, the wiU d
the sovereign has always been law ; so that to hold
land by that will was to hold it by law. It is only
when law acquires a power above that of the sov
ereign that private property in its true sense cac
be said to exist. We must not ask, then, with re-
gard to Asia, what is the law, but what is the cus-
tom and the fact ; and the answer is, that the n&
cessity of affording to the peasant-cultivator som.«
guarantee for his continued occupation of the 80*3
be ploughs and sows, in order to induce him t^

POLITICAL ECONUMT. 107

ttbour, has compelled Asiatic despots to allow him
t partial and limited proprietorship ; that is to say,
they have permitted him and his descendants to
occupy and cultivate his spot of ground on con.
dition of paying whatever proportion of its produce
the sovereign chooses directly, or through his of-
ffi^rs, to exact. And he has seldom, or never,
been content to take less than could be extorted by
threat or violence. The cultivator is, then, in law,
custom, and fact, the slave of his sovereign,* and
his property is wholly at the command of the latter.
If, therefore, as seems presumable, the ovmer of land
can only be defined as one who has the right of prof-
iting by whatever circumstances may improve the
value of his land, the ryot has been always consid-
ered, in theory, the landowner, never in ^practice.
He was continually promised this right by sover-
eigns or their collectors, who wished to tempt him
to improve his land ; but who, so soon as it was
improved, raised their demands on him in propor-
tion, 80 as to leave him none of the benefit.

The Asiatic system is evidently a compromise
between the usurped and unlimited power of the
despot, and the ancient and natural privilege of
private property as the result of appropriation by
labour ; a compromise extorted from the chief by
the necessity of persuading his people to exercise
their iq^ustry, lest he should prove, like Sultan
Mahmoud in the Arabian Nights, a ruler only
over owls and ruins, barren plains and dead car-
casses.

* He is minishable with stripes if he neglect to cultivate dnly
hit land — nis pretended property. He is, therefore, not even
iBMter of bis own limbt and actions, but essentially a dam»

108 POLITICAL ECONOMY.

•

There is nothing necessarily mischievous in the
theory of the Eastern forms of land occupation.
On the contrary, it approximates to that which we
consider the most natural, equitable, and beneficial
arrangement, namely, the securing a permanent
property in the land to him who renders it produc-
tive, and to his heirs, subject only to a payment to
the state proportioned to the value of the produce^
for the purpose of defraying the expenses neces*
sary for the protection of this and other property.
The misery suffered by the land-cultivators in Asia
and the wretched state of their agriculture are a
consequence not of the original rule of the coun-
try, but of its continual infraction. It is their ex*
posure to the desolating violence of almost perpet-
ual warfare, the insatiate tyranny of despotic pow-
er, and the extortionate rapacity of its minionsy
that has dried up the naturally abundant sources
of production throughout Asia, repressed industrji
and prevented the acquisition of skill or capitid.
Had there existed in India any defined legal rights,
any power beyond the mere caprice of an individ-
ual, by which the demands of the state upon the
cultivators could have been so far restrained as to
leave the latter the power of bettering their condi-
tion by their industry, the vast quantity of waste
but exuberantly fertile land in that country, and
the luxuriance of its climate, would have admitted
of an increase of production which must ha?e
raised the prosperity of the natives and the re-
sources of the government to an almost incalcula-
ble extent. The regulations which, with the most
humane intentions, have been lately enforced for
securing to the ryots the legal ownership of their

POLITICAL ECONOMY. 109

jand, and permanently fixing the proportion of
their contribution to the state, are likely, in no long
time, to change the entire face of the country, and
benefit all parties in an extraordinary degree.*

The remarks we have been led to make at some
length on the systems of land occupation in the
East, will enable us to understand the more easily
the origin and real character of those which pre-
vail in Europe and the United States.

IL In Europe the power of the sovereign never
became absolute as in Asia. His principal vassals
were always more or less independent of him.
Each had his own clan or body of vassals, who
looked up to him as their only head, and were
ready to obey his orders at any time, whether to
act for or against his suzerain. And a league of
these chieftains could often overawe, and occa-
sionally succeeded in dethroning their sovereign.
Much of the history of Europe, in fact, is but
the narrative of continued struggles between sov-
ereigns and some of their vassal nobles, in which
now one, now another party obtained the mastery.
Under the immediate successors of Clovis, the
Frank conqueror of Gaul, the royal authority was
uppermost. But the nobles soon contrived to re-
gain the power which their . negligence alone had
allowed the sovereign to usurp, and which that of
the feeble kings of the line of Clovis enabled them
easily to resume. The chief vassals of the crown

* Mr. Jones's work " Oij the Distribution of Wealth" con-
tains in its Appendix some valuable information from Col. Tod's
Eajast'han and other sources, upon the interesting topic of ths
lud-tenare of oar Indian possessioDS.

110 POLITICAL ECONOmr.

succeeded in obtaining a full recognition of
hereditary right to their patrimonial posseasio!
which the royal investiture gave more of <
ment than sanction. ** From the death of Ch
magne the kingdom of France was a bund]
fiefsy and the king little more than one of a :
ber of feudal nobles, differing rather in di,
than in power from the rest."*

The independence of the Grerman aristoc
reached its height towards the middle of the
teenth century. Since that period the soven
found it necessary to strengthen themselves ag
their nobles by calling in the aid of their pi
and particularly of the commercial and man
turing towns, which, with this view, they fosi
by immunities, privileges, and protection fron
extortions of the neighbouring counts and ba
From these elements sprung the political c<
tion of the European states, which unquestioc
owe the freedom they enjoy to the necessity n
drove the sovereign to conciliate the niass oi
people as a counterpoise to a powerful aristoci

The land, meantime, was cultivated almost ii
ly by hereditary slaves, who were bred and tri
in all respects like cattle. Their numbers '
also recruited by the prisoners taken in war,
to a certain extent, in the most turbulent time
freemen, who were actually driven to enrol tl
selves among the slaves of powerful chieftaii
order to preserve their lives ; a petty freemai
ing a common prey to all parties, whereas
slaves of a chief were of course protected by
from all others. There were some distinc

* Hallam, j., jv 244.

rOUTICAL ECONOMY. Ill

UDOQg slaves — not, however, of much importance.
Some were certainly saleable like cattle, and might
be severed from the land ; others were, by cus-
tom, or perhaps in virtue of the original bargain
Hnder which they or their ancestors had submit-
ted themselves as slaves to the chief, attached to
the soil (adscrvpU gleba), and could only be al-
ienated with it. They derived their subsistence
by cultivating for their own use small tracts of
land allotted to them by the lord for this purpose
(a cheap contrivance for making them maintain
themselves), and for the remainder of their .time
they laboured on the demesne land, or portion re-
served for the lord's own use, the produce of which
formed his revenue. Even the kings of France
and Lombardy supplied the expenses of their rude
courts from their demesne lands. Charlemagne
himself was a farmer, and regulated the economy
ef his farms with the minuteness of a steward.*"

Nearly the whole of Europe was at one time
cultivated in this manner by slaves, or, as they are
generally called, serfs. But the labouring classes
of the Western states have, by slow degrees, con-
trived to emancipate themselves from personal bon-
dage, and to obtain the invaluable natural right of
either working on their own account, or of disposing
of their services to the highest bidder. Among
several of the Northern and Eastern nations serf-
ship still prevails ;']* in some, as Russia, for exam-
ple, in its unmitigated form ; the owner having al-
inost unlimited power over the persons of his serfs ;

* Hallam, chap, ii.* part ii.

t In most of Russia, m Poland, Bohemia, Hungary, and part«
•if Austria.-- JSi.

112 POLITICAL ECONOMY.

beating, mutilating, and even putting them to death
at his will.

The disadvantages of a system of serfship or
villeinage are obvious, and are attested by the low
state of civilization, the poverty, and the imperfect
cultivation of the countries in which it prevails.
The labour compulsorily exacted from tenants on
the grounds or on behoof of their landlords, is
sure to be performed in a very slovenly manner.
Men do not exert themselves with spirit or effect
unless they are working on their own accountf
and are allowed to reap the advantages of their
superior industry. It has been proved that one
Middlesex mower will cut as much grass in a day
as three Russian serfs. And the necesary ab*
sence under such a system of all improved imple.
ments or processes of husbandry, augments the
comparative inefficiency of serf- la hour. Indolence
and carelessness are the habitual characteristics
of a peasantry in this condition ; their want of
skill, means, and energy must have a disastrous in-
fluence on the annual produce of the land and la-
bour of their territory, and must tend to keep the
country they inhabit in a state of poverty and po*
litical feebleness, from which it will be impossible
for it to emerge while so deleterious a system is
suffered to prevail. These disadvantages are, in
fact, very generally recognised by all the enlight*
ened classes in serf countries, and they have givea
rise to the numerous attempts now going on to
substitute payments of produce or money in Ilea
of labour as the rent of land. The great end io
view is, of course, to encourage the industry oi the
cultivator, by placing him in a position to improve

POLITICAL ECONOMY. 113

Ids own circumstances, as well as those of his land-
lord, by increased skill and exertion. For the do-
tails of these efforts and their varied success, we
must refer to the valuable work of Mr. Jones.*

III. The system of serf-cultivation, though for-
merly common through a very large extent of Eu-
rope, was not universal. In some countries, from
a very early period, the landowners have accepted
from the cultivators of their estates a share of the
froduce as rent. The existence of such a state
of things indicates a more advanced condition of
society than that which accompanies the serf sys-
tem. The serf, in fact, is a mere slave, compelled
to till his master's land, and cheaply maintained by
the permission to cultivate for himself a patch of
soil barely enough to provide him with subsistence.
The tnStayer (as he is termed in Italy), on the con-
trary, is, in all respects, a voluntary tenant, who
enters into a sort of joint-stock partnership with
his landlord ; the latter finding the land, and the
seed, tools, and stock necessary for its cultivation ;
the former the equally necessary labour. The
produce is divided between them, generally in
equal shares, from which division the name (me-
tayer, medietarius) is derived. This form of hold-
ing is to be traced very clearly to Greece, whence
it was introduced among the Romans, and has per-
petuated itself, in some degree, in most of the coun-
tries which were formerly provinces of that em-
pire ; though partly superseded by that of serfship
ind villeinage, which, as we have seen, grew up

• Jones on Rent, 1831.

114 POLITICAL ECONOMY.

under the feudal system. In Italy, Savoyt ud
Spain, metayer tenancy is common ; and in Fraoo^
before the revolution, four sevenths of the whdb
surface was occupied en metairie* Even noW| in
spite of the multiplication of small proprietors con-
sequent on the revolution, this class of tenauts are
supposed to cultivate one half of France, and the
greater part of Italy and Spain.

Though the metayer has many apparent advfun*
tages over the serf, in his personal freedom, and in
the power he enjoys of cultivating his farm as ho
pleases, freed from the tyranny and irksome super
intendence of the proprietor, yet he is founo^ in
practice, to be very little, if at all, more advan^
tageously situated. It would seem, at first sigh^
that the reward pf his toil, consisting in a definite
share of the produce, would increase with his in-
dustry and skill, and therefore stimulate him to ex*
ertion. But the shortsighted covetousness of the
proprietors has almost everywhere prevented this
by inducing them, when they could not by agree
ment directly increase their share, to do so ind'
rectly, by throwing the government taxes on tl:
tenant, and by claiming for themselves an exem
tion from all imposts. By this and other simil
contrivances, the share of the m6tayer has b€
generally so reduced as to leave him but a h
subsistence, and no hope of bettering his condit
by any exertion of industry. The m6tayers
France are described by Turgot before the rev
tion, and by other writers of the present daj
existing in the depth of misery, always in ai
to their landlord, and consequently entirely a
mercy, from their utter inability even to live

POLITICAL ECONOMT. 115

thdr half of the produce of their farms. This
niseiy, of course, reacts injuriously upon their
laodlords' interests, by giving a careless, slovenly
character to their mode of cultivation, and putting
aoything like energy or a spirit of improvement
out of the question.

Again, the divided interest which exists in the
produce is a bar to improvement. The tenant is
uowilling to listen to the suggestions of his land,
lord ; the landlord to intrust additional means to
an ignorant, prejudiced, and careless tenant. When
ftock is to be advanced by one person and used by
another^ some waste and neglect in the receiving
party, great jealousy and reluctance in the contrib-
uting party, naturally ensue. Hence the imple-
ments and stocks placed at the disposal of the me-
tayers are, in general, very scanty, and of an in-
difierent quality ; and their land, on the whole, is
very imperfectly cultivated. These disadvantages
must continue severely to affect the condition of
countries in which this imperfect system of land-
occupation prevails. Their agriculture must be
exceedingly unproductive, as compared with the
capacity of the soil and the amount of labour ex-
isting upon it ; and since the produce of land forms,
as we have seen, the substratum of all other wealth,
the production of the aggregate stock of the means
of enjoyment must be proportionately slow, lan-
guid, and contracted.

IV. Such, with very trifling variations, are the
inaperfect systems on which land has been occu-
lt for the purpose of cultivation throughout Ihe
^tire continent of Asia and nearly the whole of

116 POLITICAL ECONOMY.

Europe. In Great Britain, Holland, and the NeAh
erlands, a different mode has been adopted, to whidi;
in a great measure, is to be ascribed the extraordi
nary comparative progress which agriculture bai
made in this corner of Europe.

At a very early period, as has been already men*
tioned, the stipulated services of the villeins or nft-
norial tenants in England began to be commuted fi)f
annual payments in money. About the same time^
it became not uncommon for the lord to lease old
for the duration of certain lives, or for a term of
years, upon payment of a money fsM^ portions of
the manorial waste to such persons as were deaii
rous and able to reduce it to tillage. As these
leases expired, the lands, whose value had increased
through the cultivation bestowed on them, weni
relet for an augmented fipe, or at an annual money-
rent ; frequently for both. And the lord in time
found it much more convenient to lease out in this
manner his demesne lands likewise, than to &rm
them himself through a bailiff. In this manner, the
greater portion of the land of England came to be
occupied by tenants on lease. Many small plots
were still cultivated by their owners, the Kheri lot-
entes, or freeholders, who had acquired them by
purchase, or by descent from the freemen and
military tenants of the feudal era. Other estates
still remained in the hands of the descendants or
purchasers from the ancient villeins, holding, as it
was called, at the will of the lord by copy of court
roll (the record of such grants). To the latter
tenure, custom, and the indulgence of the lords of
manors in never resuming the grant, in process of
time, gave a prescriptive right, recognised by the

POLITICAL ECONOMY. 117

cjuits as a valid claim according to the common
(oi customary) law of the land. But even of these
lOiolIer properties, many, when they fell into the
liatnls of minors or women, or were purchased by
persons engaged in trade or otherwise, were in
(beir turn leased out to tenants williug to pay their
owners a money-rent for their occupation. So
that, by degrees, nearly the whole surface of Eng.
land, as well the small estates of the inferior class
of land-owners as the extensive domains of the
lords of manors, the nobles, the crown, or the
church, came to be cultivated in portions of mod.
erate extent, by tenants who undertook to farm
these portions on leases for certain protracted pe-
riods, stipulating for payment to the owner of an
annual rent.

Now it is immediately evident that such a sys.
tern of occupation must afford much scope for the
development of industry and economy. A culti-
vator, secured by a lease in the possession of all
that he can raise off his farm over and above the
rent he has stipulated to pay its owner, in many
respects stands for the term of his occupation in
the position of its owner. Though not induced to the
same prospective calculations and investments as
if he were proprietor, nor having the same motive
to economy and self-dependance, his interest will
still prompt him to steady and systematic effort.
ft is to the assiduous industry of these leasehold
tenants, and the smaller occupying freeholders,
that England is indebted for the great advances
she has made in agricultural skill, and for the fer-
tilization of almost every corner of her surface
whCre the plough can enter. To their steady

118 POLITICAL ECONOKT.

economy she owes the accumulated mam of agf^
cultural capital which renders the labour of Brit-
ish farmers so greatly more elective than that (^
continental cultivators.

The advantages inherent in the leasehold ByBtem
of occupation would, however, have been inefiec*
tual but for the protection which the law extended
to the tenants from the rapacity of their landlord^
and the countenance which the courts of Britaia
have, with very rare exceptions, at all times liber*
ally afforded to the efforts of the industrious claasei
of society to emancipate themselves from the thraL
dom in which they had been bound by the feodal
system. Perhaps it is to the spirit of independence
and love of Hberty uniformly inspired by commercial
pursuits, that we are to attribute the success which
at so early a period attended the efforts of the
English, the Dutch, and some other maritime 8takee»
to free themselves from the shackles of feudalism.
Serfship was almost wholly extinguished in Elngland
in the time of Elizabeth. While the cultivators
of nearly all Europe were abject slaves, subjected
to the whip, knot, or gallows of their feudal lords,
the merry and stalwart yeomen of England had
rights recognised by law, which they well knew,
and, ** knowing, dared maintain." They tilled the
fields of proud and wealthy barons, not on such
terms as a master imposes on his slave, but on
those of free contract for mutual benefit, such as
left the lord as much indebted to his tenant as the
tenant to his lord. In gaining this high compara-
tive condition, the cultivators of England were as-
sisted by the sovereign, who felt the adyantase of
being backed by their honest and hearty lo^^ty in

POLITICAL KCONOHY. 119

AM disputes with disloyal nobles ; and also by the
fi^i^ of the law-courts appointed by him, them*
*^ves sprung from the people, and naturally in-
cfioed to favour the liberty of the subject. Black-
■tone truly 8a3rs that ** the law of England has aU
ways been ready to catch at anything in favour of
liberty."

One other remarkable circumstance contributed
to favour the advance of the class of English
farmers in wealth and independence, namely, the
continued fall in the value of money during the
three successive centuries which followed the dis.
covery of America. The abundance of gold and
silver flowing from the New World into the Old
lowered their value, and with them that of money.
The sovereigns, during the same period, frequently
resorted to the trick of debasing the coin of the
realm, in order to pay their old debts in money of
less intrinsic worth. And the consequence was,
that leasehold tenants, who had contracted at the
beginning of a long term of occupation for pay-
ment of a fixed annual rent, proportioned in
amount to the value of money at that time, profited
greatly as its value was subsequently lessened, and
the money- price of every product of their farms
proportionately increased. .The landowners were,
of course, losers in the same proportion ; but the
nation at large benefited to an extraordinary de-
gree. For, had this diflerencc passed into the
hands of the landlords, to whom in equity, perhaps,
it was due, it would have been spent by them as
revenue on more sumptuous clothing, furniture, and
feasting, and on larger trains of menials ; whereas,
in the hands of their tenants it was econornizeci

120 POLITICAL ECONOMT.

and accumulated into capital^ beiog expended fay
them in the more vigorous cultivation of tlieir
farms, in bringing fresh lands under culture, in the
erection of farm buildings and in other permanent
improvements, by which the general productive-
ness of the national soil was increased.

V. In the northern division of the New World
we may see a system in practice very difierent
from any of those we have been employed in con-
templating ; a system approaching, perhaps, as
nearly as is desirable to the natural and equitable
law of land. proprietorship. These vast territo-
ries, throughout which man, up to a very late pe-
riod, was a comparative stranger, offered an almost
boundless extent of surface for his occupation.
The adventurers that migrated from the Old
World to settle on these fair shores, bringing with
them both a knowledge of the arts of civilized
life, and the habits and maxims of regulated free-
dom, found on their arrival no powerful monopo-
lists, claiming, on the plea of ancient grants or
modern conquest, to exclude them from their just
place at the bosom of mother earth ; no arbitrary
despot proclaiming himself, by right divine, lord of
earth and all that is therein ; they had

** llie world before them where to choose,
And Proyidence their guide."

fiach took possession of as much land as he found
h convenient to cultivate, and rejoiced to find oth-
ers fixing their choice in his immediate vicinity,
and sharing with him the well-known advantages
of a division and exchange of labour. As the se*

POLITICAL ECONOMY. 121

dements advanced, and it was found to be for the
common interest that the occupation of fresh land
should be regulated in a systematic manner, for
the sake of more efiectually securing proper com-
munications and measures for internal security and
external defence, the state was appointed proprie-
tor of all the unoccupied lands, but only with the
▼iew of their being dealt out to all who might wish
to settle, upon such terms and in so regulated a
manner as would ultimately be most conducive to
the benefit of the settlers themselves.

Here was a practical adoption, through an ex-
tensive tract of country, of those simple and natu-
ral principles which we have shown ought every-
where to regulate the appropriation of land, the
common bounty of the Creator. We see its re-
sults in the extraordinarily rapid increase of wealth
and population among the settlers wherever the}
enjoy internal tranquillity and the protection of wise
and equal laws, as in the United States. In the
provinces formerly colonized by Spain and Portu-
gal, civil dissension, combined with the prevailing
want of intelligence and moral culture, has unhap-
pily marred the lot of their inhabitants ; while in
the British Provinces, the colonial policy of the
mother country has produced, though in a much
less degree, the same melancholy effect.

Political economists are in the habit of explain-
feDg the high wages and prosperous condition of
the cultivators of the United States by the single
circumstance of these newly-settled countries pos-
sessing vast tracts of uncultivated land, from which
it is easy for any industrious man, by the labour of
his own arm, to procure a comfortable subsistence

122 POLITICAL ECONOMY.

for himself and his family. But the fact is, that
many of the most ancient states of the Old World,
as well as all parts of the New, contain an ahnost
equal abundance of untilled lands, of high oaturai
fertility, and provided by nature with every reqoi^
site quality for the occupation and enjoyment of many
upon the sole condition that he exert the powers
with which she has furnished him in the develop-
ment of their productiveness. It is to the vices of
the governments and institutions of these countries,
not to the deficiency or exhaustion of its rich, and,
through a vast extent, yet virgin soils, that we must
attribute whatever is to be found of misery in tbe
condition of their people. It is by the strong re-
maining taint of feudal slavery, the weight of de-
spotic tyranny, the unnatural restraints imposed on
industry by invidious legislation, and the ignorance,
vice, and bigotry which a long course of systemat*
ic oppression has engendered in both people and
rulers, that the development of their natural re-
sources is impeded. There can be no stronger
proof of this assertion than the comparatively un-
improved condition in which the Spanish and Por-
tuguese colonies have stagnated, though planted
for centuries on new and highly fertile soils ; while
the Northern states of America have made, in a
third part of the time, such rapid progress as to
present already to the delighted friend of humanity
one of the most powerful, wealthy, prosperous, and
civilized nations of the globe. The difference can
be attributed to nothing but the different poUtieai
insUiutions and moral training prevailing in those
countries.

POUTiCAL scoNomr. 188

CHAPTER VIII.

CAPITAL.

The Result of previous Labour— Not affixed to Land— Nor in-
corporated with Human Ability— Nor reserved for private
Consumption— But employed, or reserved for Employment,
in Production, with a View to Profit from sale of its Produce.
•—Necessity of so restricting the Meaning of the Term. —
Utility of Capital.— Profit on Capital.— Nature of Profit, and
Natural Rignt to its Enjoyment. — Mistaken Views of those
who declaim against the Profits of Capital. — Fixed and Cir-
culating Capitals.— Elements of Profit.— Net Profit, or Inter-
est of Money. — Inequality of Gross Profits.- Equality of Net
Profit in the same Country.

•

Labour, as we have seen, without the assistance
of the powers of nature as developed on the sur-
&ce of the earth, can do nothing. But neither
can labour do much, even with the possession of
land, and the aid of all the powers of nature, in
the absence of much previous preparation, the re.
suit of preceding labour ; and especially of a stock
of tools to work with, of materials to work upon,
and of food, clothing, and other necessaries for the
maintenance of the labourer while at work. A
few berries from the bush, water from the spring,
and now and then a stray animal, taken by supe-
rior swiflness of foot, must compose the sol^ sub-
■istence of the man who has within reach no pre-
pared reserve, either of food, or of instruments for
obtaining it. The poorest savage generally pos-
aesses some stores of this nature, the products of
previous labour, nor always depends for his daily

124 POLITICAL EcoNomr.

meal upon the chance of obtaining it by hia daily
exertion. But, in an advanced state of societji
few things can be produced and prepared for con*
sumption except by processes which require much
time— days, months, often years— during which the
labourers employed must be supplied with food,
clothing, and other necessaries of subsistence* A
variety of tools, instruments, and machinery are
equally necessary, as well as a stock of materials ;
all of which things have to be provided at an ex-
pense of much time and labour, before any of the
ordinary operations of industry can conunencek
Stocks of all these things, it is evident, must -be
accumulated somewhere at hand, for the use of the
various classes of labourers, or production o£ no
kind could be carried on. The agricultural bf
bourer could neither turn the soil, nor deposite a
grain in it, if he were unprovided with the spade,
plough, harrow, and other implements of husband-
ry. The smith and the carpenter must cease to
work unless they can find somewhere a stock of
iron and timber prepared to their hands, as well w
the fuel, forge, and workshop, with the tools an
instruments peculiar to their trades. And thest
and all other classes of labourers, depend likewif
for their daily sustenance and comforts on the di
provision of food, clothes, furniture, and housf
either in their own possession or within their reac
The results of previous labour, accumulated
any country, constitute, with land, its stock of wer
or of the materials for producing wealth,
of these results a very considerable portion i
far incorporated with, or affixed to the soil, a
be by law, custom, or necessity, inseparable 1

FOLITXCAL ECONOMY 125

it. Such are the permanent improvements which
have been made upon the land at various times
since its first occupation, with the view of aug-
menting its productiveness ; such as fences, dura«
Ue manures, roads, canals for irrigation or traffic,
plantations of fruit or forest trees, and buildings of
various kinds ; all of whicii are ranked by law and
custom, together with the land to which they arc
affixed, in the general class of '* immoveables," or
landed property ; and the returns derived from
them are merged in rent. Nor can Political Econ-
omy, when taking a general view of the sources of
wealth, without inextricable confusion, depart in
this generic nomenclature from the established
usage*

Another portion of the accumulated results of
labour resides in the acquired skill and knowledge
of individuals, in the acquisition of which much
time and trouble has been expended. The entire
body of the useful arts and sciences forms a part,
and the most valuable part, of the stock of society.
It is the accumulated result of intense preceding
labour on the part of the great benefactors of man.
Idnd, for ages back, preserved to us through suc-
cessive generations, and with continual improve,
ments, by tradition or writing. These treasures
of knowledge, however, before they can be pro-
hctioehf applied, must be appropriated by Individ,
oais with additional labour on their part, and so
&r mixed up with their natural qualifications as to
become personal to them. This kind of stock,
therefore, enters into the category of ability or hu-
nao powers of production, under which head we

126 POLITICAL ECONOMY.

have already considered it. Its returns properly
fall under the appellation of wages.

The third and remaining portion of the aggie*
gate stock of a community consists of the nuUarkl
products of previous labour, that are separable
from the soil as well as from individuals ; and it
is therefore properly designated as *^ moveables/* mt
moveable stock.

Moveable stock is itself to be distineiiiBhed into
two great divisions, according as it is kept or used
for the purpose of producing wealth, or oimply for
individual gratification without any ulterior object.

The ^5^ division comprehends the various toolflb
machinery, materials, necessaries of subsisteiiee^
or other things provided for sale, or for the con-
sumption and use of labourers while employed in
the production of saleable commodities ; and is
properly designated, as we have already explained,
by the term capHal. The remaining portion of
moveable stock, which is not kept for sale, or con-
sumed with the view of facilitating farther produc-
tion, but only for that which is, in truth, the real
end and object of all production — the gratification of
its owner — is indifferently called revenue, wealth,
property, goods and chattels, <&^c. ; but must not
be confounded with capital.

Though it may be difficult in all cases to deter-
mine of every particular object, whether it is pro-
ductively engaged, and, therefore, to be reckoned
capital or not, yet this need no more prevent our
distinguishing the whole moveable stock of a coun-
try under two great heads, according as it is em-
ployed with a view to the reproduction of more
wealth, or only with a view to immediate gratifica*

POLITICAL ECONOMT. 127

tion, than we need be interdicted from classifying
natural objects into minerals, vegetables, and ani-
mals, because there are some few intermediate
species which can be with difficulty referred to ei-
ther class. No useful conclusions can possibly be
come to upon what is going forward in society,
if we do not distinguish between those masses of
wealth which are habitually consumed in a pro-
ductive manner — in such a way, that is, as to pro-
dcce an equal or greater quantity of wealth — from
those which are consumed unproductively, or so as
to leave no equivalent behind. When an individ.
ual consumes a certain quantity of his stock with
DO other aim or result than the gatification of
himself or his friends, the mass of wealtii is pro
tanto diminished ; and, though gratification is the
ultimate end of all production, yet, since a portion
of the means of gratification is destroyed, and no
similar portion produced, such consumption is ev-
idently unproductive.* What is consumed in this
way is usually said to be expended as revenue.
When an individual, on the other hand, purposely

* Id whatever de^ee the desire of such gratification stimu-
lates the labourer to increased efTorts that he may have the
means of procuring it, in the same degree does it conduce to
production, and hence such consumption ought not to be re-
garded as wholly unproductive, unless it tends to disable the la*
Doarer from future efforts. For instance, the desire of using
sugar as a luxury may incite the labourer to more strenuous and
tobetter-directed efforts, and may thus render him a better pro-
ducer. Such, generally, is the tendency of innocent gratifica-
tions, more especially those of an intellectual and moral char-
acter. On the other hand, such a taste as that for spirituous li-
quors, though it may prompt to occasional efforts in order to get
means of indulgence, has a direct tendency to lessen m the la-
bourer both the ability and the disposition for steady employ-

12d POLITICAX ECONOMY.

expends stock in such a way as that its consum]
tion is the means of producing an equal or greati
quantity — as, for example, the consumption of sei
and husbandry implements by a farmer — no po
tion of the aggregate of wealth is destroyed; be
on the contrary, there is, in almost every case, i
increase, which forms what is usually ccdled prai
and is the motive for such expenditure. ^
should therefore define capital as that portion e
moveable stock which is employed, or reserved Ji
employment, in production*

* The term capital is employed, we think, by Smith and mc
Dther economists in far too extended a sense, and requires to I
more strictly limited than it usually is by writers oa tne subjec
if we desire to preserve any distinction between this and tl
other main elements of production, land and labour. We ca
not acknowledge acquired skill, for instance, to be propei
called capital, unless by metaphor. Otherwise, what is po
labour 7 The mere brute force of man is rarely, if ever, ezei
ed without some little skill to aid its application, a skiU a
quired by practice or precept. I'here is no occupation so m
chanical, not even that of carrying a load, or breaking stones <
the highway, m which some skill may not be acquired, so as
enable one man to do more work than another who is less ski
ed. It is true that much capital is often expended by laboure
in the acquisition of skill and knowledge, which eventual
bring in to their owners an increased return ; but when capit
has been thus incorporated with man himself in the increase
his productive powers, we must consider it more accordant wi
usage, and less likely to Create confusion, that it should thenc
forward go by the name of ability y not capital ; and its retur
be called wages, not profit.

Again, when capital has been expended upon the pennane
improvement of land, as in clearing, fencing, draining, and ft
tilizing it, in roads, canals, bridges, and buildings, we can i
longer think it properly designated as capital. It is incorpm
ted with land, so as to be inseparable from it, except by an c
tremely slow process ; and its returns are practically merged
rent. This portion of rent undoubtedly represents the profit <
the capital which has been spent on the land, just as the i
creasea wag^^is of an actiticer represent the profit of the CKffA

POLITICAL ECONOMY. 189

No labourer, we have said, can work a1 anything
but with the aid of capital, either produced by him-

MMided in teachlDg him his trade ; and we need not forget
£•, though it may be more convenient and more accordant
with Qsage, instead of calling them both prohts, to call one
rent, the other wages. If labour, land, and capital are to be
distinguished by any intelligible line of separation, we think it
can only be by including, under the first term, all the produc-
tiTely engaged powers of man, natural or acquired ; under the
second, Uiose of the soil and the things permanently affixed to
it ; under the third, those of the moveable substances man has
stored up with a view to production. Ii> Political Economy
much labour has been expended in vain, and great confusion in*
troduced, where all is really plain enough, by over refining, and
by ill-judged endeavours to give a mathematical accuracy to
definitions and propositions which, from the nature of their sub-
ject, can pristend to no more than the grouping of phenomena
Kcoiding to their most striking general characters. If, as the
definitions and language of some economists would contend,
everything on which capital has been expended unth a view to a re-
iHriftis stiU to be called capital, there is an end to all distinction
between the three primary elements of wealth. All labour,
theOr is capital, and all land. The labourer must be reared on
ca|»tal for years before he can do any work ; he must be fed
daily an capital, or his ability vanishes ; land must be cleared
tnd cultivated by capital, or it will produce nothing. Both la-
boar tnd land are, therefore, by tnis rule essentially capital,
and wages and rents are in fact profits ! And so, indeed, says
Mr. M'Cnlloch, with all gravity (Principles of Political Econ-
omy, p. 118), quite regardless of the circumstance that every
one of his works, even that in which he comes to so startling a
conclusion, is entirely made up of a series of disquisitions on
the reciprocal influence of land, labour , and capital, rent, wages, and
pnfit. We need hardly observe that things which are identical
can have no reciprocal action on each other. The same spirit
of ultra refinement has driven him into the equally monstrous
inconsiBtency of defining labour to be " any sort of action or op-
eration, whether performed by man, the lower animals, ma-
chinery, or natural agents, that tends to bring about a desirable
result** (Edition of wealth of Nations); thus making laboui
tnclade both capital and land. Again, his definition of capital, as
'* aU that can be made to aid in production," includes in it land,
liboar levenue, and profit itself: while his astounding declara-
tion that bubble-blowing and turtle-eating are productive occu-
DBoesttrily foUi^s from these premises. If such defi-
le

130 POLITICAL ECONOMT.

self or procured from others. But productioa
could advance only with the utnnost slowness if er*
ery labourer were to endeavour to fabricate for
himself the tools he works with, and to raise from
the soil the materials he employs and the food he
consumes. At a very early period in the progress
of improvement, it must have been discovered by
experience to facilitate greatly the object of all li^
hour, production, for some classes of labourers to
occupy themselves exclusively in making took and
machinery of different sorts for the use of the re-
mainder ; others in the cultivation and preparation
of the different kinds of raw material required for
the several processes of industry ; and others, again,
in the growth and provision of the food, clothings
and various articles which are necessary for the
subsistence of the whole.

.The stock of these things which an individual
has produced, not for his own use, but with a view
to their employment or consumption by others, arc
of course as much his properly as if he had intend
ed them for his own use, and he has the right t
dispose of them to those who want them on tl
most advantageous terms he can make. He cf
either sell them outright ; or, if it be more conv
nient both to him and to those who wish to empl
the things, lend them, on condition of receivin/
stipulated remuneration for their loan, in addit
to the repayment of the things themselves, or tl
equivalent. Or, as a third alternative, he may
tain some portion of his capital in his possess
such as machinery and implements, and with

nitions are adopted, Political Economy becomes at once f
ble of meaningleM phrases.

POLITICAL BCONOMT. 131

Mher portion, consisting, perhaps, of the necessa-
ries of subsistence, or tiieir equivsAent, purchase the
labour of such individuals as are willing to work
for him, employing his capital.

If the entire capital a labourer works with be-
bng to himself, whether by right of purchase or
production, the whole produce of his labour will
likewise properly belong to him. But if he works
with the capital of another, it is evident that a part
of the produce which results from the joint employ-
ment of his labour and the other's capital belongs
of right to the owner of the capital. Thus if A
rapplies B with either food, or tools, or materials,
upon which to work at making any article, it is clear
that a proportionate part of the article or of its value
rightfully belongs to A. What this part should be
^-what, in short, should be the several shares of the
labourer and the capitalist in any case, must depend
on the relative value of the capital supplied by the
one and the labour furnished by the other ; and this
can only be equitably settled by previous agree-
ment between the parties, voluntarily entered into
by both for their mutual advantage.

The share of the labourer is the remuneration of
ius labour, and forms his wages. The share of the
capitalist goes, for the most part, to replace that
portion of his capital which has been consumed,
damaged, or worn out in its employment. But
there must remain to the latter some surplus be-
food this ; for it would be worth no man's while to
employ his capital productively, if he can gain no-
thing by so doing. The surplus which accrues to
the capitalist after his capital has been replaced, is
ink only remuneration for its employment, and if

133 POLTnCAL ECOliOMT*

called its profit. Profit is the inducement of the
capitalist to emplcy his capital in productibo, justa*
wages form the inducement of the labpqrer to exert
his skill and strength in the same manner, Tbe
former has obviously as much right to be paid for
the use of his capital, as the latter for the use of his
labour. Both have combined to produce a joint re-
sult, which could not have existed in the abseooe
of either. Without the capital, the labour would
have been nearly unproductive ; without tbe laboufi
the capital must liave remained dormant and uuio-
creasedy even if secure from waste. The right to
possess and freely dispose of capital, and to receive
whatever return or profit is to be obtained by ac-
commodating other parties with its loan, or by em-
ploying the hired labour of others in rendering it
productive, stands evidently on precisely the same
ground as the right to possess or dispose of any
other thing, equally the produce of labour. The
expediency of protecting the free use and employ-
ment of property as capital, that is to say, produc*
lively, and the free enjoyment of its returns, is evi-
dent from the simple consideration that, in the ab-
sence of such protection, no one would produce
such things as are necessary for aiding pr<xluo-
tion ; at all events, no more of them than he want-
ed for his own use. Every labourer must then
make his own tools, and raise from the earth his
raw materials and his food. There would be an
end at once to all that vast increase of the general
stock of the nieans of enjoyment which results from
the division of labourers into the various classes of
tool-makers, growers and preparers of raw mate-
rial and of food, house-builders, furniture-makerSf

POLITICAL ECONOMY. 183

ibanafacturers of clothing, ornamentSy &c. Soci-
ety would be resolved into its first elements. Each
man must betake himself to the cave or hollow tree
for shelter, his nails for tools, berries and game his
sole food, skins his only clothing ; and famine and
want must rapidly cut down the numbers of man-
kind to the meager hordes that could alone support
themselves on such terms.

The profit obtained by the owner of capital from
its productive employment, whether in his own
hands or those of another party, to whom it is lent,
is to be viewed in the light of a compensation to
him for abstaining for a time from the consumption
of that portion of his property on his personal grat-
ification ; and the compensation is, therefore, pro-
portioned to the time during which his capital is so
engaged, instead of being spent upon himself as rev-
enue. It has been said time is a mere word — a
sound ; can do nothing, is nothing ; and can there-
fore neither have nor give value.* This is a very
great and extraordinary mistake. What gives
▼alue in exchange to labour ? Only that no one
will, under a free system, give his labour for no-
thing, and, consequently, those who require the la-
bour of others must pay for it. But the same cause
gives value to time. No one will sacrifice time
by allowing it to operate on his property — will sow
his wheat, for instance, and allow it to remain a
twelvemonth in the ground, or leave his wine in a
cellar for years, instead of consuming these things,
or their equivalents, at once — unless he expects
them to acquire additional value in proportion to

* If Callocb, Political Economy, p. 3) 4 ; Mill's Elements of
Pditiesl ScoQomy, p. 0.

134 POLITICAL ECONOICY.

the Ume during which they are so kept unconsumed.
That they do thus acquire additional value, owing to
certain natural laws — the sown wheat multiplying
itself in its crop, the kept wine improving in flavour
— ^is notorious. And if this additional value were
not to he allowed to their owner in the price heob
tains on parting with them, it is evident there would
be no inducement to him to employ his property in
this productive manner. Wheat would not be
sown for a future crop — ^wine would not be placed
in cellars to improve. Were it not for the certain
prospect of the profit to be obtained at a distant
time by the productive employment of capital, and
that the profit, too, will be proportioned to the time
which elapses before the production is completed,
no one would employ any portion of his wealth pro-
ductively, except for the relief of his own immedi-
ate wants ; no one would accumulate wealth in a
productive shape, except for his own consumption.
Capital, in its true sense, would almost cease to ex-
ist. If, under these circumstances, property were
accumulated, as no doubt it still would be, through
the influence of the strong natural passion for ac*
cumulation which exists in most minds, it would be
hoarded in the form of substances that could be kept
by their owners without injury, but without utility :
gold, jewels, plate, pictures, furniture,

*' Rich stuffs and ornaments of household."

And, in fact, in barbarous ages, when there existed
a prejudice against the taking of interest onpropertjf
lent, these were the forms exclusively assumed by
accumulated wealth. The owner of such treas-
ureA might perhaps occasionally gloat over them

POLITICAL ECONOMY. 135

with a miserly satisfaction, but still with less grati-
fication than if they had been increasing through
a^ir producthe employment, while to none but him-
self could they be of any service whatever. And
thus they remained locked up in chests and closets,
without contributing in any degree to the benefit of
any person, until, perhaps, the strong temptation
they offered to the cupidity of the robber or the ty-
rant caused the destruction of their possessor and
the dbpersion of his treasure into other hands, there
to lie equally useless, or to be wasted in riot and
debauchery.

Buty when freedom is afforded to the employ,
ment of capital, and security to the enjoyment of
its returns — when no impediment is offered by
mistaken legislation, grasping tyranny, or vulgar
prejudice, to the voluntary and mutually beneficial
agreement of two parties, one of which is desirous
of productively using for a season what the other
has painfully produced or carefully saved — ^in such
case, every one who is able to save is anxious to
give his savings a productive form, by lending them
out in the shape of tools, buildings, materials, ma-
chinery, &c., to labourers, on condition of receiving
far their use a share of the increase of wealth they
assist the latter in producing. In this way the
miser of former days is converted into the em-
ployer of labour, and the promoter of every useful
and valuable branch of industry. And thus those
selfish feelings of our nature, which prompt to the in-
crease and accumulation of wealth — not as a means
merely, but an end — are enlisted in behalf of the
general happiness. The miser of the present day
may yet, like lus prototype in the dark ages, gloat

136 POLITICAL EcoMomr.

over his wealth ; but he now keeps it by him in
the form, not of gold ingots, jewels, and costly stuffi,
but of bills, bonds, and securities, the repreMiils-
Uves of that substantial wealth which, instead ot
rotting in close coffers, is employed in the handi
of ceaseless industry, levelling the forest, and cul-
tivating the plain, quarrying the mine, giving mOb
tion to the loom, and ploughing the ocean, taking
a thousand shapes, perhaps, but in each aiding man
to avail himself of the prolific powers of nature, and
multiply his means of subsistence and enjoyment.
True it is, this capital would produce no increase
without the skill and labour of those who employ
it ; but it is equally true that their skill and labobr
would produce nothing — nay, that they could not
even maintain their existence, without the capital
which they employ, and that by which they are
maintained while at work. The wealth which is
produced by the union of capital with skill and la*
hour, is evidently, as we have already said, the
joint property of the owners of the capital and of
the skilled labour. Each has contributed to its
production, and each has a right to a share of it*
If the capitalist were to be unjustly denied his
share, accumulated property would thenceforth
never take the form of capital, except that small
portion which each man could employ by himself
and for his own immediate purposes.

All this seems so obvious to the most ordinary
capacity as hardly to be worth dwelling upon*
And yet there are persons who still — ^in the pres.
ent light of civilization, in the nineteerith centuryi
and in the midst of all the evidence which is a&
forded, wherever we turn our eyes, of th<8 prodi*

FOUTZCAL BCOKomr. 187

giou8 part which capital is playing in the produc-
tioa of the necessaries, comforts, and luxuries of
hoinui life— declaim against capital as the poison
oi society^ and the taking of interest on capital by
its owners as an' abuse, an injustice, a robbery of
the class of labourers !* Such blindness is to me
truly unaccountable. That those who observe the
prevalence of great misery among the inferior
classes of workmen in some wealthy countries —
who witness and deplore the fact, that, in spite of
all the manifold improvements which are continu-
ally adding to the productiveness of labour, the
share of the gross production which falls to the
eominon labourer does not increase, perhaps even
diminishes — ^that, on viewing this anomaly, they
should conclude something to be wrong, is no source
of astonishment to me, for I arrive at the same
necessary conclusion from the same observation.
But that any sane person should attribute the evil to
ike exUtenee of capUal — ^that is, to the employment
of wealth in aiding the production of farther wealth,
instead of being unproductively consumed, almost,
if not quite, as fast as it is created, or unproduc-
tively hoarded to satisfy the lust of the miser — is
indeed wonderful. Why, without capital, the Isl.
and of Great Britain would not afford subsistence
to a hundredth part of its present population. De-
stroy the security for the free enjoyment or disposal
of capital, deny its owner the privilege of accept-
ing what any one may find it for his advantage to
gi¥a for its use, and every individual will soon be

ktObd

See Hodg8kin*8 Popular Political Economy, " Labour de-
tf hgainat the Claims of Capital," and other works of the
leifcuBBr*

138 POLITICAL ECONOUr.

reduced to his unaided resources. He will find
nowhere any store of food on which to live while
he is digging, and sowing, and protecting his im*
mature crop ; no stock of tools with which to work»
or of clothes and other necessaries of existenoe.
All trades would stop at once, for every trade is
carried on by means of capital . Men would at onoe
be reduced to the isolation and helplessness of bar-
barism.

But perhaps it is in the imagination of these
schemers that there should not be a general dfr-
struction, but only a general dtvisioiij of the dqi*
ital now existing among the present race of hu
bourers; so that each, it is thought, would for
some time, at Least, be provided with a stock of
food, clothes, and tools, with which to continue the
business of production. We suppose something
like this is contemplated. But, putting out of sight
the injustice, confusion, and attendant horrors of
the frightful scramble which is here disguised under
the smooth name of a general division of property
(a scramble which, in the extremely complicated
and artificial state of society characterizing a coun-
try like ours, must be attended with infinitely more
violence, convulsion, and disturbance than any po*
litical catastrophe on record), how, we must beg to
ask, is production to go on afterward ? In a very
short time, a large part of the population — all Ike
idle — and in such a crisis there can be but little
industry — will have consumed their share of the
plunder in riot and excess. Admitting that otheiB
have gone to work industriously in the production
of the things they require, each for himself; have
ploughed and sown, and spun and wove; have

POLITICAL BCONOMY. 139

ed com in their granaries, and cattle in their
lesteadsy and fuel, and clothing, and comforts of
OQS kinds in their lofls, and cellars, and ware-
•esy what is to become of all that large body
S faiaTing squandered away their share of the
sral booty, will have left no means of main,
tnce ? It is clear that one of two things must
ir. Either they will, if sufficiently numerous
strong, call for another division of property^ that
nee more plunder the bams, granaries, home-
ds, and warehouses of the industrious ; or, if
r are not strong enough to attempt this, they
humble themselves to the owners of these same
IS and warehouses, and petition for food and
hing in return for all they have to offer, their
w ; that is to say, they will apply to them for
hyment and wages. If the owners of property
ise their petition, starvation and disease must
idly carry them off; not, however, before they
robbed, and plundered, and done all the in-
• to the remainder of society which their despair
destitution will prompt. If their request is ac-
sd to, the old system of masters and men, cap*
8ts and labourers, will recommence; and the
ety — at least whatever portion of it we can sup-
i to have survived the shock of such a convul-
" — will be reconstituted on its old and natural
ciples, ,to recommence the difficult march of
rovement, and with the feeble hope of regain-
aAer the lapse of years, perhaps of ages, the
ated position we are at present so fortunate as
ccupy, as yet unscathed ; to reproduce slowly
painfully the vast stock of accumulated capital
:h it once possessed, but which, in a fit of pop-

140 POLITICAL ECONOMY.

ular insanity, had been broken down and scattered
to the winds.

The security of property, and the liberty of con-
suming or employing it in whatever way the owo-
er pleases or finds most for his interest, is, as has
been truly observed, the first of the rights qfmdui'
tn/y and the essential condition of its progressive
activity. But of all modes of employing property^
the very last which it would occur to an enlighten-
ed friend of humanity to obstruct, is its ernploy.
ment in aiding production — that is, as capiiaU It
is quite clear that the profit or interest to be gained
by the employment of capital is the principal motive
to its accumulation, and the only one to its employ,
ment in furthering production. It is quite clear thalf
if the owner of capital is not allowed to make what
profit he can upon it by lending it to others, no one
will accumulate more capital than he can use him*
self; and nearly all savings would thenceforward
be hoarded in cellars and closets, instead of aiding
industry and facilitating production.

Adam Smith and other economists distinguish
two kinds of capital, fixed and circulating. The
latter is defined to consist of such things as are
continually going from and returning again to their
owner, and afford a profit only on being parted
with : such is the money which a master keeps by
him to pay his workmen, his stock of materials
and of worked-up goods, and the stock in trade of
all wholesale or retail tradesmen. Capital is saii
(o be fixed which is invested in buildings, machin-
ery, implements for facilitating labour, improve*
ments of land, roads, canals, bridges, railways

POLITICAL ECONOMY. 141

&c. ; things which yield a profit. Dot hy being
parted with, but while remaining in tiieir owner's
hands, and employed in producing other things.
Smith considers as fixed capital the acquired skill
and ability of the members of society.

It is doubtless serviceable to distinguish those
kinds of capital which are rapidly circulated, that
is, ooDsumed and replaced within brief periods, as
a year, for example, from capital of a more dura-
ble nature. But it may be surmised that, except
in the time during which they remain unconsumed
in the employer's hands, there is no real distinc-
tion between the two classes of capital here men-
tioned. The capital laid out by a manufacturer,
&rmer, or tradesman in the payment of his labour-
er's wages, circulates most rapidly, being turned
perhaps once a week (if his men are paid weekly),
by the weekly receipts on his bills or sales. That
invested in his materials and stock in hand circu.
lates less quickly, being turned perhaps twice, per-
haps four times in the year, according to the time
consumed between his purchases of the one and
sales of the other, supposing him to buy and sell
on equal credits. The capital invested in his im-
plements and machinery circulates still more slow-
ly, being turned, that is, consumed and renewed,
on the average, perhaps but once in five or ten
years ; though there are many tools that are worn
out in one set of operations. The capital which is
embarked in buildings, as mills, shops, warehouses,
bams, in roads, irrigation, <kc., may appear scarce-
ly to circulate at all. But, in truth, those things
are, to the full, as much as those we have enumer-
Btedy consumed in contributing to production, and

142 POLITICAL ECONOMY.

must be reproduced in order to enable the producer
to continue his operations ; with this only dififer-
ence, that they are consumed and reproduced bj
slower degrees than the rest. The continual re-
pairs they require attest their consumption and re-
production ; and the capital invested in them may
be turned perhaps every twenty or fifty years. I(
then, the terms fixed and circulating capital are to
be retained, I would confine the latter to such por-
tions of capital as are renewed or repurchased, and
consumed or parted with toWiin a year; that of
fixed capital to such as remain more than a year
with the person who employs them for profit.*

In some trades the whole capital embarked is
turned or circulated several times within the year.
In others a part is turned ofiener than once a year,
another part less often. It is the average period
which his entire capital takes in passing through
his hands, or making one revolution, from which a
capitalist must calculate his profits. Suppose, for
example, that a person engaged in a particular
business has one half of his capital invested in
buildings and machinery, so as to be turned only
once in ten years ; that one fourth more, the cost

* The futility of Smith's distinctiou is seen in his efforts to
separate a farmer's stocic into fixed or circulatiiu^ capital, ac-
cording as it is kept by him or parted with for profit. Thus the
cattle and sheep a farmer milks and shears are said to be fixed,
those he grazes and breeds, circulating capital. The seed he
throws into the ground to produce next year's crop of com is a
fixed, the hay he feeds his breeding or lean cattle upon to produce
next year's crop of lambs or fat beef, a circulating capital. The
truth is, that with a farmer as with any other producer, of the
capital which the extent of his business requires, part circulates
more, part less slowly. The average period in wnich his entire
capital is turned, that is, parted with and reproduced, is the time
upion which his profit is calculated.

POLITICAL ECONOMT. 148

i tools, &c.y is turned once in two years ; and
remaining fourth, employed in paying wages
purchasing material, is turned twice in one
• Say that his entire capital is $50,000.
1 his annual expenditure will be,

$25,000-T-10=$2,500
12,500 -r 2= 6,250
12,500 X 2=25,000

933,750
7| per cent, on $50,000= 3,750

•37,500

wnich sum his annual sales should amount
rder to clear seven and a half per cent, profit
is capital, and for this end he must charge a
it of ten per cent, on the valve of his goods ; the
n term in which his capital is turned being six-
months.

iake another case, in which the fixed capital re-
ed bears a smaller proportion to that which cir-
tes rapidly. Say that one fourth of the entire
tal circulates in ten years, one fourth in one
', and one half twice in the year. Then the
lai expenditure will be,

$12,500-r-10=8l,250
12,500 = 12,500
25,000 X 2=50,000

$63,750
H per cent, on 850,000= 3,750

Annual sales .... $67,500

144 FOLIIICAL ECONOMY.

In this case a profit of little more than five and
a half per cent, on the value of the goods will bring
in to the producer seven and a iialf per cent, of an-
nual profit. upon his capital ; tlit; entire capital cir<
culating iu a mean period of less than nine months.

Should the greater part of the capital embarked
circulate still more rapidly, a much smaller per
centage on the articles sold will pay a fair profit
on the capital. Should the capital, for instance,
be turned five times on the average in the year, a
profit of one per cent, on the sales will bring in
five per cent, annual profit on the capital.

The higher the profit that can be obtained on
capital, the greater, of course, the encouragement
to its accumulation and employment.

But, before we can speak of profits as high or
low, we must learn to distinguish matters which,
in ordinary language, go by the name of profits,
from the interest or net profit on capital.

Many capitalists are themselves personally en-
gaged in productive occupations. The manufisu^
turer, the merchant, the tradesman, the farmer, the
master.mechanic, are all capitalist-labourers. The
surplus by which the sum they realize from the sale
of their produce exceeds the sum they have expend-
ed in its production, is in common language called
their profits, or living profits. But some porti6n of
this is unquestionably of the nature of wages, the
recompense of their personal labour, skill, and in-
genuity. Another portion often consists of gains
arising from the possession of exclusive advantages,
such as secret processes, patent instruments or raa-
chinery, superior connexions, information, facilities
of local position, &c. Another portion consists of

POLITICAL ECONOMY. 145

a compensation for the peculiar risks incident to
the business in which the capital is engaged. It ia
the remainder only that properly forms the net
profit or interest of capital ; that return for its
temporary use which can be got without personal
labour or extraordinary hazard. This is usually
calculated as a per centage on the value in money
of the capital employed. And it is itself made up
of, 1. Compensation for the sacrifice of immediate
personal gratification; 2. Ensurance against the
risk of loss through circumstances which may af.
feet the general security of property. The latter
element of interest depends on the internal tran-
quillity of the country ; the chance of foreign inva-
sions or political convulsions, such as endanger
property , the efficacy of the laws which enforce
contracts ; the pure administration of justice, and
other similar considerations, varying in an extreme
degree in diiTerent times and places ; insomuch
that a half per cent, in England will be perhaps a
fuller compensation for such risk than two per cent,
in Ireland, three per cent, in Russia or France, and
ten per cent, in Turkey.

Under similar circumstances of political risk, the
interest of money, or net profit of capital, will vary
adcording to the quantity of capital seeking employ-
ment as compared to the demand for it. The sup-
ply and the demand of capital depend on the rela-
tive force of two powerful principles in human na-
ture continually opposed to each other ; the desire
to consume, and the desire to save or amass. Were
every individual in a country to consume the whole
of his income, whether derived from rent, wages,

146 POLITICAL ECONOMY.

or profiti the amount of capital would remain sta-
tionary. Were the owners of capital to coosuma
annually a portion of their stock, while the labour-
ers consumed the whole of their wages, and the
landlords the whole of their rents, capital would
decrease. The history of nations, however, teach-
es that, wherever institutions exist affording any
tolerable security to the peaceful possession and
enjoyment of property, the saving principle is sure
so far to prevail over its antagonist (chiefly among
the industrious classes) as to cause a continual in-
crease of capital, through the accumulation of por-
tions of income abstracted from revenue to be em-
ployed as capital.

But not only does the rate at which capital in-
creases, and, therefore, its supphf, depend on the rel-
ative predominance of the saving over the spending
passion, but the demand for it is influenced, in the
inverse sense by the same circumstance. If we
suppose the passion of saving carried to excess in
any country — were every member of society to con-
tent himself with the mere necessaries of life, and
endeavour to employ as capital all the remainder
of his income — it is evident that the home demand
for commodities would be limited to the bare ne-
cessaries of life for that number of individuals. All
the various productions which art and ingenuity
now supply to gratify the infinite wants and ca«
prices of mankind, would glut the market without
a purchaser. The demand for capital would shrink
almost to nothing, and profits fall to the merest
trifle. This, however, is an extreme supposition,
which can never be realized; for, if profits fall

POLmCAL ECONOMY. 147

through the competition of increased capital, the
inducement to save is weakened, while that to
spend is increased. It may, therefore, be safely
lefk to the mutually counteracting influences of the
two passions we have spoken of, to determine that
current average rate of net profit which is the
measure of the degree in which the owners of cap-
ital prefer prospective gain to present enjoyment.
From what we have now advanced, it is evident
that no conclusion can be come to upon the rela-
tive advantages of any two trades, or ways of em-
plo3ring capital, from a mere statement of the gross
profits returned by each. One may return twelve
per cent., the other only six ; yet the net profit, or
real advantages derived from the capital embarked
in each by its owners, may be, in reality, equal.
The gross profits of the first business may be swell-
ed by the circumstance of its requiring a much
higher class of ability to exercise it (as the trade
of making chronometers compared to that of ma-
king wooden clocks) ; or through its being carried
on with the help of some secret process, patented
machinery, or peculiar advantage of position (such
as the vicinity of coal or iron mines, canals, rail-
roads, or other facilities of transport) ; or by rea-
son of the greater comparative risks to which the
business is subjected, as that of gunpowder-making
or ship ensurance, over occupations not so exposed
to casualties ; or of trades in which long and large
credits are given (a London tailor's, for example)
over those in which the returns are quick and sure.
If the two trades whose profits are compared are
not carried on in the same country, or under the

148 POLITICAL ECONOMY.

same laws and government, then the variation in
their gross profits may be still farther swelled by
the difference of the risk each is subjec:ted to from
political circumstances affecting the security ol
property in general ; as in the instance of Ireland
and Great Britain. Nothing, therefore, can be
more fallacious than the idea that the amount of
the profits realized in any business (in the vulgar
meaning of the term, in which it has likewise
been used by most political economists) forms a
just measure of the real surplus returns of the
capital engaged in it ; nor can any proposition be
more erroneous than that there ever will or can
be anything like an equalization of the gross profits
of every business.

Making abstraction, however, of all the above-
mentioned extraneous circumstances of risk, trou-
ble of personal superintendence, or peculiar advan-
tages, it is evident that the net profit, or interest of
capital to be realized from different modes of em-
ployment in the same country or under the same
political circumstances, will always tend towards
equality. And for the reason that, as fresh capital
is being continually accumulated from fresh savings,
there will be a number of persons continually on
the look>out for the means of employing their cap-
ital to the greatest advantage ; and if any one oc-
cupation promised a higher return than others,
making allowance for its peculiar compensatory
risks, difficulties, labour, and other circumstances,
it would be chosen in preference by so many of
these speculators, as by the competition of their prod-
uce in the market must soon bring down the returns

POLITICAL ECONOMY. 149

of that particular trade to the general level, perhaps
for some time below it. There is, in fact, a con-
tinual oscillation of this sort going on in the returns
of capital in most employments, about the mean
level or average of net profit^ and it is accompanied,
or rather caused, by sin analogous oscillation in the
market value or selling price of commodities about
the mean cost of their production. These are mat-
ters into which, now that we have obtained a tol-
erably clear notion of the nature of the primary el-
aments of production, labour, land, and capital, we
must enter with more detail.

CHAPTER VII.

VALUE.

f dae necassarilv ReIative.~No real Value.—General Value.—
Means " Purcnasing Power." — Elements of Value. — Monop-
oly.— Costa of Production. — Rent, the Result of Monopoly. —
Ekies not enter into Price. — Distinction between good and bad
Monopolies. — Demand and Supply. — Their Variations and re-
ciprocal Action. — Cost of Production. — Consists in Labour,
Ci^ital, Time, Monopoly, and Taxation. — Competition of Pro-
ducers, by which Supply and Demand are kept nearly Level.
— Different Investments of Capital and Labour. — Partial Glut
— General Glut impossible, except through a Scarcity of
Money.

Much confusion has attended the use of this word
in political economy, which a simple analysis of
its meaaiDg might have obviated. In common lan-
guage, everything which is desirable, as health, wit»

150 POLITICAL ECONOMT.

beauty, goodness, is said to have value. But po-
litical ecoDomy meddles only with things which are
the subject of exchanges ; and in the discussions of
the science, value therefore must mean alwajrs
commercial value, or value in exchange. In tlus
sense, in order to have value, it is not enough that
an object be desirable. Many things are highly
desirable for their useful or agreeable qualities (as
air, light, and water, for example) ; but yet, under
ordinary circumstances, have no value, because,
their supply being unlimited, and no trouble re-
quired from any one to obtain as much of them as
he can want, no one will give anything in exchange
for them. The moment their supply &lls short of
the quantity required — in other words, of the de-
mand^-^T that it becomes necessary to take some
trouble to obtain the quantity required, they ac-
quire an exchangeable value. On board ship, in
the deserts of Africa, and in other places where
the stock of water falls short of the quantity re-
quired, it obtains a value, which rises with its scar-
city. In cities, water is habitually sold at a con-
siderable price ; and this price is generally propor*
tioned to the trouble necessary for supplying the
quantity required.

When, then, we speak of the value of anything,
we must always have reference to some object of
comparison or exchange. In ordinary phrase,
money is the understood object of reference. But
money being merely, as has been said, some one
commodity selected for particular qualities to be
used as a general measure of ^lue and medium of
exchange, is itself liable to vary in value ; it is
therefore clear that value is not in strictness to be

POLITICAL ECONOMY. 151

determined by quantity of money. When employ«
ed alone, in scientific arguments, without reference
to money or any other single specific object, com.
mercial value must be understood to mean ex-
changeable worth in the general market, or what
Adam Smith called " purchasing power." An ob-
ject, in fact, whether gold, silver, cotton, or any
other article, is said to have risen or fallen in value
when it will command in exchange a larger or a
smaller quantity of other things in the gross than
before. The expression is purely relative. Nor
can there be such a thing as positive, absolute, or
real value.*

* Smith and his followers have insisted much on everything
having a reai value, which they define to consist of the quantity
of loAour.required to produce it ; and they accordingly call labour
the natural standard or measure of value. But it is indispensa-
ble for a standard measure to be something both definite in its
nature, and as nearly as possible invariable in value.

But what can be more vague and indefinite in its meaning, ot
more variable in its value, than labour? In some countries labour
10 habituaUy far more severe and unremitting than in another ; so
that aday's labour in each by no means expresses an equal quan-
tity of exertion. Again, an hour's labour of one man may in the
same place be worth a year's labour of another. It is impossi
faie that anything so variable in meaning and value can be fitly
employed as a fixed general measure of the value of other things.

It has, however, been urged, that the exchangeable value of
anything will always depend on the quantity of labour necessary
to procure or produce it, and on this ground it is proposed as the
best measure of value. One would have supposed that the com-
monest facts might have sufficed to prevent the promulgation of
itaa position. What causes the workmanship of one artist to
sell for ten times as much as that of another ? Certainly not the
greater proportion of labour bestowed on it. Why will a statue
of Chantrey, a portrait by Lawrence, a novel by Scott, bring
twenty times the money which the productions of inferior la-
bourers will command f Why, again, is an acre of land at Bat-
tsnea more valuable than one on Dartmoor ; a diamond than a

162 POLITICAL ECONOMY.

WheD a desirable commodity is to be obtained
in any quandty that can he required by a praportim-
ate outlay of labour, like water from a copious
spring, or stone from an inexhaustible quarry, its
value will, in the long run, be determined solely by
the comparative labour required to procure it. But
many commodities can only be obtained at all in

bit of glass ; an antique brass coin than a modem gold one f Not,
surely, because of the greater quantity of labour worked up m
them. It is true that these writers sometimes attempt to quali^
their rule by admitting exceptions in the case of those commodh
ties whose supply is limited by monopoly, or the ezclnsive facili-
ties for the production of which is possessed by certain individ-
uals. But is there any commodity which is not more or lets a!^
fected by monopoly? Is there any in the production of whicfc
superior advantages are not enjoyed by some parties over otben,
enabling them to raise its price in the market? Ail land,*to be-
gin with the primary source of every commodity, is, in nearly aU
civilized societies, monopolized. And the superior advantafOi
of position or quality belonging to one tract ofland over oUienb
enable its owner to place a far higher value on its prodii<» thaa
will just cover the labour of production. All mines of coal and
metal, quarries, woods, water-power, &c., are in the same pie-
dicament. And if we reflect that there is no commodity whidi
is not, in part or altogether, made up of materials produced un-
der these monopolies, we shall be led, perhaps, to conclude tbit
the proposition of the economists in question is the very reverts
of the truth ; and that there is scarcely any commodity the value
of which is solely determined by the quantity of 2a&our required
to produce it.

The fact is, that all these attempts to identify value with la-
bour, or to distinguish real from relative value, are founded in a
misconception of the nature of value, which, as we have said
above, like length, weight, bulk, or any other quality suscepti-
ble of measurement, has essentially a relative miTy, not a positive
meaning. What is real lengthy or real weight, or real bulk ? Just
as unintelligible as real value. Value is "comparative esthna-
tion as an object of exchange f and, when used without refinp-
ence, expressed or miplied, to any particular conunodity as its
measure, means general value, or value in exchange againit
goods in general ; as Adam Smith phrased it, " purchasing potr*
er m the general market."

POUnCAL ECONOMY. 158

1 quantities ; and when the quantity required,
i demand, exceeds the quantity produced, or
ppfyt their value is proportionately enhanced.
)ermanent scarcity, or rarity, as it is called,
cause of the greater part of the value of all
lus stones and metals, superior works of art,
) and fine wines, antiquities^ and curiosities
sorts. The increased value which the own-
such objects are enabled, from their rarity, to
I for them, beyond the mere cost of labour or
1 by which they may have been procured or
oed, is sometimes called monopoly value. The
r of the vineyard which produces Johannis-
ia in possession of a monopoly which enables
3 put a much higher price on his wine than
9 obtained for the produce of other vineyards
sited with the same expenditure of labour and
1. A person passing through the streets of
a is struck by a stained and dirtied piece of
8S at a broker's door. He buys it for a trifle,
I it with a little labour and expense, and it
8 to be a Claude or a Raphael, worth a hun-
imes, after this discovery, what it was before,
he rarity of fine pictures by such artists that
-s a monopoly value on them. Objects which
vique of their sort are oflen of great value in
quence. When there are but two known
I of a scarce work, it has happened that the
3Sor of one has bought the other at an extrav-

price, for the purpose of destroying it ; his
I copy being, in its unique state, of greater

in the market than the two were before,
ipecies of value arises likewise from other cir-
Ances of considerable moment, and particu*
from the following :

154 POLITICAL ECONOMT.

Many commodities — indeed, the larger proportiOD
of goods in every market — can be supplied in in-
creased quantities only by an increased proporikm'
ate outlay. This principle teems with very impor-
tant consequences, and follows necessarily from a
very simple circumstance, which, if it had received
the attention it deserved from political econoDoists^
might have prevented their falling into no little
confusion and error.

Value, we must beg our readers to observe, has
a strict relation to Ume and place. The value of
a thing is the quantity of other goods or of money,
that is, the price it will command at a particukar
time and at a particular place, A thing may have
a high value at one time, as ice in the dogdays;
and no value at another, as the same ice in Janu-
ary. Again, that which is of little value in one
place is of great value in another, as the old
proverb about coals at Newcastle teaches. When,
therefore, the value of anything is spoken o^ ref-
erence is generally had to some particular time
and place ; and when value in tho general market is
spoken of, the average of local markets is intend-
ed ; and, unless otherwise expressed, the present
time.

Few objects are either sold or consumed at the
time and place in which they are created. Near-
ly all articles require more or less of both time and
labour, not merely to grow, prepare, and put them
in marketable condition, but likewise to bring them
from the spot where they are prepared to the mar-
ket or place where they are sold. In fact, the
greater proportion of the most important objects of
commerce — those which compose the food of man,

POUTICAL ECONOMY. 155

and the raw materials of his clothing, comforts,
and luxuries — are raised by cultivation from the
surface of the earth. But the process by which
they are raised is one which requires much time —
one season at least, often many — as well as an ex-
tennoe surface of soil ; and a very small propor-
ticm of them are consumed on the spot where they
are grown, or immediately upon their production.
Consequently, the cost or expenditure necessary to
produce these things for the bulk of their consu-
mersy must consist not only of the labour of raising
them, but likewise of the time consumed in their
growth and preservation, and also of the time and
labour employed in bringing them to market.

The veilue added to goods by the time necessary
for preparing, preserving, and bringing them to
market, is, as we have seen, charged under the
name of profit on the capital expended. That the
cost of carriage of goods from the spot where they
are prepared to the market where they are sold, is
likewise a main element in their value, will not be
disputed* In some articles, as stone, coals, water,
&c., it makes up by far the greater part of their
cost. In order to diminish this as much as possi-
ble, the demand of a particular market for any
things which are raised by cultivation of the soil,
will be supplied from the soils nearest at hand
that are most fitted for the purpose. But it is ob-
vious that, as the demand in that particular spot
increases, the supply has to be procured at an in-
creased cost, either from more distant soils — caus-
ing an increased expense of carriage to market-
er from such soils as, though nearer at hand, are
of inferior productive quality to those first taken

156 POLITICAL ECONOMY.

into tillage, that is, which require a greater
diture of labour or capital upon them to ensure the
same quantity of produce.

It is, however, certain that there cannot be two
prices (or values) for goods of the same qualitj in
the same market and at the same time, since no
seller will take less from one buyer than he can
get from another, and no buyer will knowingly
give more to one seller than another will take for
the same article. The competition of buyers and
of sellers with one another in the same markety
will always bring the value of articles of the same
quality in one market to the same leveL It f6L
lows, then, that as the demand in a market fiff
such objects as are produced under the circum-
stances just spoken of increases, the value in that
market of the whole supply of them must keep up
to the level of the value of that part of the supply
which is produced in the market at the greatest
coet. If this portion of the supply could not com-
mand that price (excluding, of course, the results
of temporary and accidental miscalculations), it
would not be brought to market. And if that por-
tion can command that price, so will all the rest of
the quantity sold. The producers of this last por-
tion will be reipsiid precisely for the labour and time
they have consumed in growing or fabricating their
article and bringing it to market (in other words^
the costs of its production — the capital employed in
producing it being replaced with a profit, and the
labour repaid at ordinary wages). But the pro-
ducers of all the other portions, which were pro-
duced under easier circumstances, will get a mt-
plu8 beyond, the costs of production. And

POLITICAL BCONOMT. 167

•orpins will be the greater in proportion to the
greater comparative advantages of proximity to the
market, of quality of soil, facility of communica.
ticm, or other favouring circumstances.*

Rent, however, it must be recollected, includes,
in its ordinary acceptation, many other things be-
sides the gain arising in the manner we have de-
scribed from natural or casual advantages, whether
of soil or position. A vast amount of labour and
capital has been, laid out by its successive owners
or occupiers ; much of which remains permanently
invested in the soil, adding to its value and pro.
duotiveness. And the portion of rent, which is at-
tributable to these acquired or artiJiciaZ advanteiges,
oiQst be considered as representing the profit on
the capital so expended. If the expenditure were
to be calculated which has been from first to last

* We beg the reader to obsenre that, whenever we employ
0M wofd to produeet or any of its derivatives, producer, prodac-
tioB, and produce, we have reference to the production of an
ntide of tht market where it it offered for sale. It would be very
MDfenient, and tend materially to settle many disputed ques-
lioiis of political economy, if all writers would bear in mind and
adbaie to thia rale in their employment of the term. The pro-
dMer ci com is properly not the farmer alone who raises it
fnm the soil, but also the person, whether farmer or corn-deal-
9, who prodmcet it at the market. The fanner is the grower
dmply, anttt he, or some other for him, brings it to market and
mi, i e., produces it for sale. The cost of production in-
dodea the coat of carriage to market as well as of the growth
of the com. In manufactures, it is not the man who weaves
fti cloth or cotton that is its producer, but the person who,
Itaniag defina^ed the costs of the raw material, the manufacture,
■d the carnage to market —of the whole operation, in short, to
tducb its existence is owing, produces it there for sale. So the
pradncer ci an article, rais^ or fabricated abroad to be sold in
tUi eoon^, is not the foreign grower or manufacturer, but the
pmon, whether foreign or native, who produces it for sale in
sirmaiketa. (To produce, v. a., to offer to notice ; to exhibit
HtlMpablJc ; to brmg forward.— /oAnson. )

158 POLITICAL ECONOMT.

laid out in permanent improvements of the land of
this country, for example, in the original clearing
and enclosure, in drainage, making of roads, fkrm-
huildings, fences and gates, water-courses, plantSf
tions, irrigation, &c., it would appear that by for
the larger part of the rent received for landed et*
tates consists of the necessary profit on this outlay.
Of the remainder, part accrues from peculiar ad*
vantages with respect to proximity to markets or
manures ; part from superior natural fertility of
soil. It is to this last portion only of the ordinaiy
rent of land that the greater number of political
economists have confined their attention ; and this
exceedingly narrow and imperfect view of the na-
ture of rent has necessarily led them into much in*
consistency and error.*

* " Rent," says Mr. Ricardo (and Messrs. M'Calloch, Mill,
and many other economists have adopted his definition), ** Rent
is that portion of the produce of the earth which is paid to tki

excludes all that large portion of rent which we have nocieed
above as resulting from artificial improvements, as well as all
that other large portion which is the consequence of faToanble
position with respect to markets, commuuicatiiNia, mamuaiL
6cc. The '* original indestructible powers** of the British sofl
were the same m the time of the Heptarchy as they are now.
How is it, then, that they brought in no rent, or next to noDS^
at that time t If rent depends solely on natural fertilitr of soil,
why do some acres of land in England let for ten pottnas a ysar,
while an acre of equal fertility in Canada wiU not command a
sixpence of rent ! While this school ofpolitical economiits do*
clare rent to be solely owing to the *' difference in natural fiNtil-
ity of soils," and build their whole science upon thia prine^ls
or " theory of rent," as they call it, other writers have sst op
another in its place, viz., that rent is solely owing to ths
** pressure of population against produce, caosing a rise in
Nices." — (Westminster Review ; True Theory of Rent, ftcj
This explanation, however, is not much nearer the tmlh thai

POLITICAL ECONOMY. 159

Besides the peculiar gains which are derived in
husbandry from superior fertility of soils or from
proximity to market, manures, &c., there are anal-
ogous gains which, in every branch of industry,
result from secret processes, patented machinery,
extraordinary powers of body or mind, advanta-
geous connexions, and, in short, from every instru-
ment of production which is not universally access-
ible. Each of these affords a revenue quite dis-
tinct from that which is yielded by the capital and
labour employed in' producing an article. For the
sake of convenience, this species of revenue has
been termed, as we have said, a monopoly gain ;
bat the term is unfortunate, inasmuch as it conveys
to most minds the impression that the advantage
enjoyed is at the expense of others, and has been
obtained by unfairly excluding them from competi-
tkm* It is evident, however, that, in many instan-
ces, this is not the case. One who has been en-

tki otlisr. Rent may certainly exist in a society whose numbers
are in no degree excessive ; nay, it may increase, at the same
tinMp with an increase in the productiveness of agriculture, and
in the Bliare of its produce falling to each individual inhabitant;
joik MM it may arise and increase where all soils are alike in fer-
tility. It is, in fact, the simple consequence of an increased
heA dttnmnd requiring an increased local supply, which supply
■msi be procure either from inferior soils close at hand, or irom
the belt soils at a greater distance. It may and does often hap-
pen, tbmt the increased supply can be sold, through continued
inqjTOvements in agriculture or the arts, at a less pricey or can be
commanded by the individiial consumers in greater quantity than
It an eerlier period : and yet there will be an increase of rent
irising from the superior advantages of position or quality, &c.,
of some lands over others, for supplying the actual demand.
Root ccmsists, then, of the difference between the expense of
prodacing that portion of the required supply which is produced
under tlw least favourable circumstances, and that produced
bum the land which yields the rent.

160 POLITIC AX BCONOMT.

dowed by nature with extraordinary powers^ or htm
acquired superior skill by patient applicatioiiy and
perhaps at much expense, is clearly entitled to
whatever benefits he can compass by a fidr exer*
cise of such powers or skill. So he who has spent
years, and laid out thousands in perfecting a ma-
chine or process by which one man can do the
work of ten, ought to be repaid for his labour aad
expense ; and hence the equity of protecting him
by law (or patent) in the exclusive use of his in-
yention for a term of years. If the law cannot or
will not interpose for this purpose, he has evidently
a right to protect himself by keeping his inventioQ
a secret. This is not only just, but eminently
useful to the public. Production is facilitated, and
the advantage of this must be experiei^ced by oth-
ers as well as by himself. Such peculiar advan-
tages, too, when possessed by one person, provoke
to emulation. They hold up to view the prizes
that are to be gained by excellence of any kind ;
and thus each producer is stimulated to increase
to the utmost his own advantages over others.

It is not easy to define accurately in words the
distinction which separates beneficial or harmless
from injurious monopolies. Generally speaking
that which results from superiority, acquired and
exercised in a fair and open manner, is beneficial ;
such as are obtained or supported by fraud or force
are publicly injurious. No one blames Chantrey
or Lawrence for charging as high a price as they
can obtain for their productions. No one disputes
the general advantage of allowing the grazier who
produces the best ox, or the farmer who brings up
the finest sample of corn, in the market, to carry

POUTICAL ECONOMY. 161

away the topping price. No one doubts the right
of a merchant, who, from superior sagacity, has fore-
■een the probable future deficiency of some article ,
in the market, and provided a stock of it against the
time* to make what extra profit he can of iiis spec-
ulation* So no one quarrels with great landed pro-
prietors for charging as high a ground-ren! as they
can obtain, even though it reach five guineas a foot,
for their land in the vicinity of wealthy and populous
towns. But if the owners of such land, not content
with the extra price or rent they may freely com-
mand for its employment as building-sites, pleas-
ure-grounds, market-gardens, accommodation-pas-
turesy and from the saving in the expense of con-
veyance of its produce to market occasioned by
its proximity — ^if, we say, not content with these
accidental and natural, but just and fair advanta-
ges, they were to attempt to enhance the value of
their monopoly, supposing them to have the power,
Ij any legislative interference with the freedom of
tradcy as, for instance, by interdicting the inhabi-
tants of the town from obtaining their supplies of
vegetables, meat, butter, &c., from other lands —
rach monopoly would undoubtedly be one of a most
onfiur and pernicious character. It would be no-
thing less than a conspiracy to raise the price ot
the necessaries of life.

Another hurtful kind of monopoly is that obtcdn-
ed by the combination or conspiracy of parties, who,
being enabled to command the entire supply of any
article to a market, use this power for the purpose
of putting an extraordinary price upon it, restrict-
ing the supply to the community in order to enhance
ils valuei and, consequently, to increase their surplus

162 POLITICAX ECONOMY.

profits upon their expenditure. An instance of tfalf
is the combination of the great coal-owners of the
.north of England, which was exposed in a late conH
mittee of the House of Lords. Another, that of
the companies by which London is supplied with
water, who have divided the town among them*
selves, engaging mutually to confine themselvafl
within their several districts ; by which they are en-
abled, without fear of competition, to charge the pub-
lic an exorbitant price for this most necessary arti-
cle, and to clear extravagant profits for their share*
holders. If any attempt is made by a stranger to
compete with these banded monopolists, they caHi
by their combined influence, and by a temporary
relaxation of their prices, deter him efiectually
from the vast outlay of capital which would be ne-
cessary before he can even commence his compe-
tition, and, having thus driven him away, they can
return to their old charges. So that the public are
completely at their mercy.

For several centuries there prevailed a strong
prejudice against the forestallers of grain and oth-
er provisions : dealers, that is, who, in the appre-
hension of a scarcity, buy them up with the inten-
tion of obtaining a monopoly of the market, and
being able to retail (regrate) them out afterward
with a high profit. But the growing enlighten-
ment of the age has placed within the comprehen-
sion of nearly every one, that such a process, un-
less the result of combination, is, on the whole, faf
more beneficial than hurtful to the people who con-
sume the provisions. And this because the fore-
Btaller, anticipating the dearth of provisions at an
earlier period than others, by his demand raises

POUTICAL ECONOMT. 163

their price, and thus discourages their coosump*
tion and waste, and diminishes the severity of the
subsequent scarcity. The forestaller may gain a
high profit by selling dear that which he bought
cheap ; but if his sagacity had not led him to spec-
ulate on obtaining this high profit by large purcha-
ses and reserves, the probability is that there would
have been no supply at all for the public ; at all
events, much less than has been secured by his
providence. In fact, such speculating provision.
dealers tend, by their operations, to distribute the
supply pretty equally throughout the year, which,
without their aid, would be necessarily so irregular
as to occasion profusion and waste at one period,
and dearth and famine, as their consequence, at
another.

The true rule, therefore, with respect to monop-
olies, seems to be, that every one should be left at
liberty to avail himself of whatever peculiar advan-
tages fall to him by accident, or through his own
exertionsyotrZj^ and freely exercised in concurrence
with other competitors ; but that no one be permit-
ted to increase his own superiority by destroying
or unfeirly restraining the powers of others. And,
likewise, that the law (except in cases when the
public benefit is unquestionably interested) should
abstain altogether from either conferring exclusive
advantages, or breaking them down when adventi-
tiously established and not unfairly exercised.

DEMAND AND SUPPLY.

What we have advanced on the elements of val-
ue makes it evident that the value (or selling price)
of an article at any time and place is determined

164 POLITICAL ECONOMT.

by the jn'oportion of the demand to ike supply at ihA
time and place. And it is a change in that propor-
tion which occasions the rising or falling of prices.
The extent of the demand for, and supply of arti-
cles, and, consequently, their relation to each other
in any market, is liable to be afl^ted by a variety
of circumstances, some temporary, others more or
less permanent in their operation.

I. The extent of the Demand for a thing dependi
on the intensity of the desire for its possession
among a larger or smaller number of persons, and
likewise upon their means of purchasing^ it. At
Adam Smith long since said, '* Every beggar may
desire a coach and six ;" but to be effectualy to make
itself sensible as a demand to the coachmakers, the
desire must be accompanied by a power of pur-
chase ; that is, by an equivalent supply of money
or money's worth.

The demand for those objects which are employ-
ed as the principal subsistence and necessary com-
forts of a people varies least of all, being chiefly
determined by the number of the population to be
supported, which is not liable to sudden changei
and to their habits, which, though varying in Uie
course of long periods of time, are equally unsus-
ceptible of sudden fluctuations. A deficiency in
the means at the disposal of the mass of the pop-
ulation for purchasing the necessaries of life, such
as is occasioned by a sudden rise in their price, un-
accompanied by a proportionate rise in the wages
01 labour, cannot but diminish the eflectual demand
for them ; not, however, in the proportion of the in-
creased price ; every other possible sacrifice being

POLITICAL scoNomr. 166

naturally made to obtain a sufficiency of necessa-
ries. A fail in the price of these things, on the oth-
er hand, does not occasion a fully proportionate in-
crease of demand, except in those countries, and
they are unhappily many, the bulk of whose inhab-
itants are at all times ill supplied with necessaries,
and are, therefore, limited in their demand for them
only by a deficiency of their " power of purchase."
The demand for articles of ornament and conve-
nience is liable to much more rapid and frequent
changes. The caprice of man exercises, it is well
known, a far more powerful sway over the intensity
of his desire for superfluities than over his neces-
sary wants. FcLshion prides itself on singularity,
and is ever in search of novelty. So that change
is of its very essence. And such changes must oc-
casion a proportionate fluctuation in the demand
for these articles, as well as for all such as are con-
sumed in their production and supply. The intro-
duction of a new article which obtains favour with
the public, will suddenly give rise to a new and ex-
tensive demand for that particular commodity, and
proportionately diminish the demand for some oth-
er whose place it takes. Thus cotton or Berlin
gloves have of late been very generally substituted
for leather gloves, to the great temporary detriment
of the makers of the latter article, and the propor-
tionate benefit of the cotton hosiers. The gilt-but-
Um-makers have been severe suflerers from the gen-
eral introduction of the fashion of covered silk but-
tons. At one time printed cotton goods are the
universal wear, and the next year silks, perhaps,
are in almost equal vogue. A general mourning
in Boglandy occasioned by the death of one of th«

166 POUTICAL EOONOMT.

rojal family, raises the demand for all darkgoodii
and depresses that for the gayer fashions. For-
tunately for the producers of such articles of dreMf
these changes of taste, though often yery rapid in
a particular class, rarely occur simultaneously
throughout all the classes of society. A nuxle of
dress which has gone out of fashion among one
class, will perhaps be just introducing itself in
another, to descend, when the latter have worn it
out, to the lower and more numerous. So that the
demand, when slackening in one quarter, is usually
increasing in another. And the stuffs which have
been long discarded by those whose caprice origi-
nates a ^hion, are for a considerable time after-
ward in full demand among a herd of tardy imita-
tors.

II. The supply of goods is determined by ths
circumstances that affect their production, and is
subject to still greater variations than the demand.
Those things which are raised directly from the
soil by agriculture, comprehending not only food,
but the raw material of nearly all manufactures,
are liable to great and frequent fluctuations in sup<
ply, from the variable character of the seasons.
Abundant crops, occasioned by favourable seasons,
cause the market to overflow with a quantity of
such commodities far beyond the average supply.
Unfavourable seasons create a general deficiency
below the average. Other obvious circumstances
often affect for a time the supply of a market with
particular commodities, such as the early setting in
of a frost, by which the harbours in high latitudes
Are Mocked up before l\ieNQaa&\a V^»>d^v£^\.bj^tQ can

POLITICAL ECONOMT. 167

get away ; the imposition of an embargo on the
exporting harbour ; or the interruption of the com-
.merce between different countries by the breaking
oat of war.

These causes of variation in the supply of goods
ire more or less temporary and c€isual in their na-
ture. The circumstances which • determine per-
manentlyy and on the whole, the average supply of
goods to meet the demand for them, are those
which may be included under the general designa-
tion of their necessary costs of production.

The cost of producing any article comprehends,
1. The labour, capital, and time required to create
and bring it to market in sufficient quantity to
meet the efiectual demand for it. 2. The addi.
tional charges occasioned through the entire sup-
ply being produced under monopoly of any kind.
3. Whatever additional charges are occasioned by
the amount of taxation, to which it, or any of the
materials employed in its production, may be sub-
jected by the authorities possessing that power.

1. That portion of cost which consists of the
labour, capital, and time required for creating and
bringing to market a sufficient supply of the article,
is by far the most important. The money cost of
the requisite labour will depend on the current or
ordinary remuneration of such labour at the sev-
eral places where it may be required. Thus the
expense of producing corn in Great Britain or the
United States will materially depend on the current
wages of agricultural labourers in those countries.
Any general fall or rise in the wages of any class
of labourers engaged in production, goes to lower
or raise the money coat o£ the articles \\i<^^ \(i^

168 POLITICAI. ECONOXT*

duce. Hence one reason of the struggle which fO
often arises between labourers and their empkyen
as to the rate of wages ; it being the apparent in*
terest of the employer to diminish this main iten
in his expenses, with the view of increaaing hit
share of the sum for which he expects to fleU hit
commodity.

Again, the money cost of the capUal consumed
will depend, not on its amount only, but also on
the time during which it is engaged, the risks to
which it is exposed, and the current rate of inter-
est which its owner will, of course, expect to re-
ceive for its employment.

But the real cost, or actual amount of laboofi
capital, or time required for the production of any-
thing, will vary with the greater or less skill, knowl-
edge, and appliances of all kinds available in aid
of it.

Every improvement in the processes by which
commodities of any kind are produced, contributes
towards the great end of lessening the producing
costs of commodities by the saving of time, capi-
tal, or labour. Every step that is made in any of
the arts and sciences subservient to production,
tends directly to increase man's power over na-
ture ; to render a fixed amount of his labour more
efficient, that is to say, productive of a larger
amount of the objects of his desire. Some of the
most striking of such improvements are those con-
tinually made in the means of communication*
The formation of new roads, canals, and rail-
roads, with the introduction of steam navigation,
have been most conspicuous among the causes
which have ooerated of late y(;ars to reduce the

POLITICAL ECONOMY. 169

ooflt and facilitate the supply of commodities, par-
ticularly of the more bulky articles. An instance
in point fs afibrded by the vast increase in the traf.
fie between Ireland and the western coast of £ng-
hnd since 1824, the period when steamboats were
fint employed in the Irish channel. The markets
of England have thus received a prodigious' addi-
tion to their supplies of provisions. Lancashire
has especially profited, from the contemporaneous
opening of her great railroad, which, receiving the
Irish produce from the vessels at Liverpool, car-
ries it forward with the utmost expedition, and for
a trifling charge, to Manchester and its neighbour-
hood. Fresh meat, eggs, and butter are thus con-
veyed, with almost miraculous cheapness and ce-
lerity, from the very centre of Ireland (whence ca-
nals take them to Dublin) into the heart of the most
populous manufacturing district of Britain. The
cost of provisions in these latter places must be
proportionately diminished.

The capital employed in production consists
chiefly of appliances of various kinds for facilita-
ting labour. The main object of the invention of
tools and machines of every description is the
economy of iabour, with a view to diminish the
real cost of production. It is chiefly to the won-
derful progress made of late years in the arts of
mechanical invention that we are indebted for the
superiority of modern society over that of earlier
ages, in the abundance of luxuries, comforts, and
conveniences at the disposal of every class. The
immense wealth that has been produced and accumu-
hted is to be ascribed almost entirely to the stui^eii«
dous inventions and discoveries of WaW, V^ v^.^^-

170 POLITICAL ECONOmr.

woody Hargraves, Arkwright, Fulton, ComptoDf
Cart Wright, Whitney, and a few others. « These
added so prodigiously to our capacities of produc-
tion, that we went on rapidly," says a British wri*
ter, '* increasing in population and wealth, notwith-
standing an expenditure of blood and treasure \m»
paralleled in the history of the world. It is be-
lieved that an individual can, at this moment, bf
means of the improved machinery now in use,
produce about two hundred times the quantity of
cotton goods that an individual could produce at
the accession of George III. in 1760 ! The im-
provement in other branches, though for the most
part less striking than in the cotton manufacture,
is still very great ; and in some, as in the lace
manufacture, it is little, if at all, inferior.'** The
loom is one of those inventions which have most
signally advanced the productive capacity of man.
" Ulloa mentions that the Indians of South Amer-
ica have no other mode of making cloth than by
taking up thread after thread of the warp, and
passing the woof between them by the hand ; and
he adds that they are thus frequently engaged for
two or three years in the weaving of hammocks,
coverlets, and other coarse cloths, which a Euro-
pean would, by means of his loom, produce in as
many days, or probably hours, "f

Facts like these strongly illustrate the immense
benefits derived by society from improvements in
machinery, by which the real cost of consumable
goods, or the time and labour required for their
production, are diminished. The prejudice against

* Edinburgh Review, No. czii., p. 314.
t Ibid., p. 315.

C9LITICAL ECONOMT. 171

maehinei^,. «ti(l prevalent among the ignorant, and
iHttch has often shown itself in outrage and rioting,
arises from the circumstance that any change in
the mode of production of particular goods throws
out of employment for a cime many of those who
were occupied on the superseded method; and
who are unfitted, by their habits, situation, want
of skill, and other circumstances, to supply the de-
mapd which must immediately spring up, some-
where or other, for labour of another kind, to be
employed in the improved method. The pressure
of such changes (like those we have traced to
changes in fashion and demand) is often very se-
vere and enduring ; as in the instance of the un-
fortunate hand.lopm weavers, who have, for twenty
yeara past, in Great Britain, been engaged in a
hard but unavailing competition with the improve-
ments of the power-loom. And these sufferings
ought undoubtedly to be mitigated at the expense
of society by direct relief, but still more by the
adoption of means for raising the standard of edu-
cation among the labouring population, and also
for facilitating the transition of labourers from one
branch of employment or one locality in which
they are no longer wanted, to other employments
or places in which the demand of labour is brisker.
Any interference with improvements from which
society at large profits so greatly, for the sake of
proieding those whose employments are about to
be superseded, is obviously indefensible.

Interference has often been asked for by the suf-
ferers in these cases and their advocates. But
such a principle, once admitted, it is evident, would
tend directly to stop all improvement; it would

178 POLITICAL ECONOMT.

have necessitated ^he prohibition of printing for
the protection of manuscript copyists ; of steanu
boats for the protection of saiimakers ; and of
bridges for the protection of ferrymen ; it would
go to prevent the employment of every contrivanoe
by which human labour is aided in any branch of
industry, and reduce us, as was well observed by
a Glasgow operative before a committee of the
House of Commons, to the teeth and nails as the
sole instruments of production. The sure resuU
of every improvement in machinery is an increased
production of the means of enjoyment. Whatever
partial evils attend that beneficial result, may and
ought to be mitigated by other means than by pla«
cing obstacles in the way of the n^arch of improve*
ment.

Capital which consists in tools or machinery is
more or less durable, and will usually aid in the
successive production of a large quantity of com-
modities before it is wholly consumed. The por-
tion of such capital that is consumed in production
enters as an element into cost, together with the
current rate of profit upon it for the time during
which it has been advanced. Thus the cost of
one hundred quarters of corn to the grower in-
cludes, besides his labourers' wages and his own,
the value of that portion of his stock (viz., seed-
corn, ploughs, harrows, and other implements,
horses, horse-provender, manure, &c.) which has
been consumed in raising his crop, togelher with
the current profit on the value of every several
portion of this capital for the time during which it
has been employed in the production of his corn.
Hence, improvements which save any part of the

POUTICAL BCONOMT. 173

time necessarily consumed in the business of pro-
ductioDy effect a reduction in the cost of the pro-
duce* by lessening the amount of profit chargeable
00 the capital employed, as well as the amount of
wages chargeable for the labour of those who as.
98t in, or superintend the work. The improve.
ments we have just noticed in communications of
every kind, and, above all, the extraordinary ac-
celeration which has taken place of late years in
the conveyance of both public and private intelli-
gence throughout this and other countries, have
contributed, in a remarkable degree, to diminish
the producing costs of many objects, by enabling
their producers to save much of the time which
was formerly wasted in the intervals between the
different stages of the process of production, as
well as between its completion and final sale. If
a manufacturer is able, through such circum.
stances, to turn his capital twice in the year where
formerly he could have turned it but once, that
portion of the producing cost of his article which
consists of the profit on the capital employed, and
of the wages of himself, and perhaps several of his
assistant labourers, his clerks, &c., will be but half
what it was at the former period.

2. When the entire supply of a commodity, or
of any of the elements necessary to the production
of a commodity, is produced under a monopoly,
the extraordinary charges which the owner of the
monopoly is thereby enabled to make, go to swell
the amount. of its cost. Thus the proprietor of a
patent or secret process, by which a particular ar«
ticle is exclusively produced, has it in his power to
duurge for his article, beyond the amount of the

174 POLITIGAL SGONOMT.

ordinary wages and profits on the labour and ovf*
ital consumed in its production, a sum sufficienf to
defray the cost of invention. So the owner o* a
vineyard, which exclusively produces frUit of a ps-
culiarly fine quality, is enabled to raise tile priix
of its produce to those who buy of him far beyont
the ordinary remuneration for the capital and la^
bour expended upon it. And these eztrao«'dinai>
charges enter into the producing cost of the nrticle
because their payment is the necessary condition ot
its production for sale. Unless their terms are
agreed to, the monopolists may decline to produce
or sell the article at all. This remark applies, of
course, to all commodities which, in any stage of
their production, or in any one of their necessary
elements, are subject to similar charges for exclu-
sive powers or privileges. But it must be observed,
that the payment of all such monopoly charges is
wholly voluntary on the part of the consumer, who
has no right to complain of its exaction so long as
he is left free to purchase or procure the article in
any cheaper manner, if he can.

When, however, only a portion of the entire sup-
ply is produced under a monopoly, the necessary
cost of the article is not affected by such monopoly,
but consists solely of the labour, time, and capital
required to produce that portion of the supply which
is brought to market under the least favourable
circumstances to its producers, and, consequently,
under no monopoly. Though the parties concern-
ed in the production of the remaining portion of the
supply receive a monopoly profit, they do not there-
by raise the price of their article. It is out of their
power, by refusing to pxodvxce oi Vj ^k^ ^>2DfeT

POUTICIL ECONOMY. 175

means, to raise the price one jot beyond that at
which the commodity can be supplied by other par-
ties who will be content to get the current profit on
capital and wages of labour. The proprietor of a
peculiarly rich or well-situated coal-mine, for ex *
ample, obtains a monopoly profit upon his produce,
consisting of the difference between the cost of pro-
ducing the article from his mine, and the cost of
the same article from the poorest or worst situated
mine of all by which the market is habitually sup.
plied. But the price of the entire supply of coal
is determined by the cost of this latter portion, and
is therefore in no degree raised by the superior ad-
vantages enjoyed by the owner of the best mines.
The same law, as we have already seen, applies to
all raw produce derived from land ; the cost of
which is in no degree afiected by the rent of the
best lands, but is determined by the labour, capital,
and time required for its production from the least
fiivourably situated lands of all that habitually sup-
^ply the same market.

8. It is obvious that the amount of taxation to
which a commodity is liable, in itself or in any of its
component elements, must add just so much to the
cost of producing it for sale in the market, together
with the current rate of profit on the sums so paid
for the time during which they have been advanced.
A diminution of the customs' duties on foreign prod-
uce,* or of the taxes levied on articles of home

* Such has not been the case in the United States. It has
been often remarked, that the repeal of a duty on foreign goods
18 followed here, not by a/oZ/, but by a rise in price. Two rea-
■ons for this will readily occur lo-the reader : Ist. The duty has
the effect of inducing a greater number of capitalists to engage
in the production oi the article, the competition between whom

176 POLITICAL ECONOirr.

growth or manufacture, or on any of the materiali
employed in their production, has the effect of di-
minishing their cost to the producer. So also the
breaking out of a war, by increasing the premium
on marine ensurances, adds to the producing co0t
of all imported goods.*

keeps the price down. When the duty is repealed, manj of
these witharaw. 2dly. It is part of the policy of British maim-
facturers to gliU American markets with such articles as we an
endeavouring, by the aid of duties, to produce. This thej ars
enabled to do by manufacturing a surplus of goods beyond their
orders ; and this surplus being produced at little comparatiTa
cost, it is thought to be good policy to throw it into Unniga
markets, where they are trying to build up domestic manofi^
tures, and to sell it so lov^ that the native goods will be driTen
out. When a duty is repealed, the motive to this course ceases,
the supply is diminished, and the goods rise, till they pay both
the costs of production and a good profit to the foreign maun-
facturer. — Ed,

* The majority of political economists, in pursuance of the
fallacy alreaay exposed of identifying value with labour, resolve
cost of production into the quantity of labottr only required for
producing the article. It is scarcely necessary to say more in
refutation of so palpable an error. Land and capital must unite
with labour in the production of everything, and the owners of V
land and capital, no less than the owners of labour, have the
power of demanding, and are in the habit of receiving, a share of
the value of every commodity in return for what thev contrib*
ute towards its production. And even though we should ex-
clude from consideration all monopoly charges, and view the
value of land and capital as the result merely of anterior labour,
yet it would be in the highest degree irrational to refuse to dis-
tinguish the labour that enclosed and cleared a field, planted an
oak, or raised a building centuries ago, or that which built a
ship, or framed a machine several years back, from the labour
which is employed at the present time in using the land, build-
lug, timber, vessel, or machine, in the preparation of something
for immediate sale. Nor even, though we admitted all land and
capital to owe their value to labour, would this suffice to resolve
cost ultimately into labour. For it will not be denied that proju
is a constant element in cost. And this, as we have proved, is
a compensation not for labour, but for the time during which the
owner of capital has allowed it to be employed productively with
a view to ultimate remuneration, instead of consuming it unme

POLITICAL ECONOMY. 177

It is quite evident, that the cost of producing any
article must, in the long run, determine its price (or
selling value). For, unless a price can be obtained
sufficient to cover this cost, no one will continue to
inoduce it for sale.

A sudden increase of demand, or a casual defi-
ciency of supply, will frequently raise prices above
this level ; as a diminished demand, or an acci.
dental increase of the supply beyond the demand,
will lower them beneath it. Such effect is, how-
ever, but temporary. The constant tendency both
of demand and supply is to come to an equilibrium,
and the point about which they oscillate is that sell.
ing price of the commodity which will just cover
the cost of its .production at any particular time
and place.

Should the price fall below this level, producers
find that particular branch of industry a less ad-
vantgeous mode of employing their capital and la-
bour than others, and some are therefore led to dis-
continue it ; or those who were on the point of em-
barking in it are led to prefer another occupation.
The supply is thus generally diminished, until it
is brought down at least to the level of that extent
of demand which will pay the producing cost.

When, on the other hand, the supply is deficient
as compared to the demand, the price rising in
consequence above the cost of production, produ-
cers are encouraged, by an increase of profits, to
enlarge their business, and invest additional capi.

diately on his personal gratification. It is also clear, as has
bem shown above, that monopoly charges, as well as taxation,
wherever they exist, are included in costs of production, togeth
tr with the ordinary elements.

178 POLITICAL ECONOUY.

tal and labour in that particular trade, until the in*
creased supply meets the demand, and brings down
the price to the level of the producing cost.

These oscillations of price about the mean kyel
of the costs of production are continually taking
place; the circumstances which influence supply
and demand being of so complicated a character,
that the one can never, for a length of time, remain
exactly adjusted to the other. The producers can
never anticipate with precision the extent of the
demand, and will therefore usually be something
within or beyond it. Moreover, as we have aeeOf
supply and demand act and react on each other.
An increased supply, by lowering price, not only
tempts those that employed the article previouslj
to enlarge their consumption, but likewise bring*
it within reach of a wider circle of consumers,
who acquire a taste for it, which usually continues
even when the price has again risen. Hence a
permanent increase of demand is generally estab-
lished by a temporary fall of price. An increased
demand, by augmenting profits, attracts fresh spec-
ulators into the business, and, in turn, raises the
supply.

The competition of individual producers is in this
way constantly tending to equalize the supply and
demand. Each acting in his own sphere, and ac-
tuated by the instinct of self-interest, endeavours to
produce as much as he can sell with a fair profit,
and yet to produce no more than he can so dis-
pose of: each and all endeavour, for their several
interests, to keep the supply full, hu to prevent ex*
cess.

Competition is, indeed, the soul of industry, the

POLITICAL EOONOltY. 179

•nimating spirit of production, the ever-presentt
all-pervading elastic principle, which, like the pow-
er of gravitation on the atmosphere and ocean, fills
every vacuum in the market of exchanges, equal.
ixes the quantity for every commodity to the nv-
eessity for it, and preserves their relative values
at the mean level of their comparative estimation
in the regard of the great body of consumers. Ev-
ery one who sees his neighbour getting an advan-
tage which lies open to himself — a higher profit or
a larger wage — anxious to share in the benefit,
•tarts as his rival, if it be possible for him to do
to ; and the number of competitors who thus throw
themselves into any peculiarly advantageous busi«
nessy must speedily reduce its profits to the gen.
eral level, and its prices to the necessary costs of
production.

■ Monopoly and competition are antagonist prin.
ciples, working constantly against each other, but
in such a way as to benefit society by the result
of their joint forces. The object of the monopo.
Hst is to control the supply, either permanently or
for a time, in order to raise the price. The strug-
gle of competitors to share the advantages of the
monopolist tends to increase the supply, and there-
fore lowers the price. The first principle befriends
the public by holding out high encouragement to
invention, skill, and improvement ; the other, by
reducing the price the public have to pay for such
improvements to the lowest point consistent with
their sufficient encouragement.

The mode in which the principles we have been
analyzing determine the direction and extent of

180 POLITICAL ECONOMY.

productive operations, will be seen, perhaps, with
greater clearness, if we examine briefly some of
the simplest habitual modes of employing capital
and labour.

Suppose A. to possess property to the value of a
thousand pounds.

1. If he realize J that is, sell it for a thouaand
pounds in money, it is then in that form which
combines, perhaps, the greatest security and con-
venience, as enabling him to make whatever use
he pleases of it ; to remove with it to any part of
the world ; to expend it on his own gratificatioo ;
or to employ it in any productive investment which
offers at the moment the highest advantages. Bat,
so long as he retains it in the shape of money in
his pocket or his chest, it is of no other advaOi
tage to him than what he may derive from a feel-
ing of its security, and of his power of command*
ing, through its means, an3rthing in the market up
to that value. If he wish to make a profit of hu
money, as a source of revenue, he must change its
mode of investment.

2. He may, for example, lend it to some one who
is in want of money, on securities of a private na^
ture, such as bills, bonds, mortgages of land or
buildings, &c., or of a public nature, as govern*
ment stock, canal and railroad shares, &c. The
latter class of securities are readily available ; that
is to say, the owner may realize, or turn them again
into money whenever he chooses ; but they fluctu-
ate in value, and may sell, therefore, for more or less
than was given for them. All bear the current in-
terest on money, with a difference determined chie^

ly by the nacre or leas o^ i\^V ^x\.^QiN\fe^ \.^ ^<^ch»axu]

POLITICAL ECONOMY. 181

>re or less of trouble and expense attending
ransfer.

ise moneyed investments are all mere debts, or
t representing money expended (often unpro-
ely), but for which some productive property
pledged. They may, therefore, be consid-
18 part-ownerships in the property so bur-
. Some, as mortgages and government stock,
L claim for a definite return which is prior to

* all other owners. Some, as canal and com-
ihares and bank stock, are subject to similar
itions in value as the capital embarked in
3 concerns.

perty of this kind, consisting in money obli-
8, is clearly quite distinct from capital^ though
equently confounded with it in common con-
ion* It brings interest to the owner, but is
dductive as regards the community generally,
rely represents the claim of one party to a
Q of the returns of the land, capital, or labour
le others. If these claims were reckoned in
ulation of the national capital, they would be
id twice over ; once in the hands of those
ay the interest of the debt with which their
1 is burdened, and again in the hands of the
or who receives that interest. The national
>f England, for example, is not capital, but
' the reverse. It is a burden upon the capi.
d industry of the nation, which are pledged
payment. If that debt and all other money
ties were abolished to-morrow, there would
ther more nor less capital in the country than

• But the profits of capital and the wag(^ o^

' would be raised by the anQihilaliorv of a c\^\!ca

188 POLITICAL ECONOMY.

upon the aggregate produce which is prior to that
of the producers themselves. At the same time,
the injustice of such a ** sponging" process is man.
ifest. The creditors have given, and the debtors
have received, expended, and profited from what
both parties considered an equivalent to the claim*
The former may be looked upon as ** sleeping part*
ners" in the business, which the latter are enabled
to carry on by m6ans of the advances of capital or
other necessary aid which have been made to them.
And the right, therefore, of the national (or any
other) creditor to his stipulated share of the na«
tional produce is as strong, and rests on the same
grounds of equity, as that of the land-owner, the
capitalist, and the labourer to their stipulated por«
tions of whatever they have voluntarily combined
to produce.

3. But, instead of moneyed securities, A. maj
prefer to invest his thousand pounds in some prod^
uctive business; in supplying, or aiding the sup-
ply of some market with goods. He may do this
as a " sleeping partner ;" in which case he will ex-
pect only to make a profit on his capital little greater
than the current interest of money, afler allowing
for all the risks to which the business in which it
is embarked is exposed. Or he may engage per-
sonally in the business ; in which case, besides this
profit on his capital, he will expect to gain a re-
muneration for his labour. Perhaps he will spec*
tdate, as it is called, in goods — buying one day^
when he considers the prices low and likely to TiMj
to sell again after an interval — or, as a whohsak
dealer, he will purchase of the grower, or mann*
facturer, or importer of an article, and sell to tha

POLITICAli ECONOMT. 168

tetail dealers — or, as a retail dealer purchasing of
the wholesale dealer, he will sell to the consumers
in such quantities as are required for immediate
uie. In every case he acts with a view to profit,
by selling for more money than he gives ; and this
profit must, on the average, be sufficient to pay
him interest on his capital during the time it is
employed ; to repay, moreover, his personal trouble
and skill, as well as all expenses incurred between
the purchase and sale, as carriage, shop and ware-
house rent, taxes, &c. ; and likewise to cover the
risk j¥hich he takes upon himself of damage to his
goods while they remain with him, and of a fall in
the market-prices. It is evident that, to cover all
these items, a very considerable per centage of
gross annual profit on his capital must usually be
necessary. In such engagements, however, the
capital is seldom long in being realized, or turned
mm into money. Most capitalists of this class,
mich comprehends all merchants, wholesale deal.
en, and slwpkeepers, turn their capitals more than
oncey often several times, in the year. So that, as
already remarked, a small profit on the price of
each article sold may afiTord a very large annual
profit on the capital employed.

4. Perhaps it may suit the views of A. to expend
his capital in the acquisition of the skill and knowl-
edge, or dbUihfy requisite for some professional bu-
siness ; in studying the law, for instance, or medi.
dnet or surgery, or divinity, or commerce, and fit-
ting himself for the practice of one of these pro-
fessioiis. These are modes of investing capital
tulNeet to much risk, not the least of which is that
»f dsaUi or sickness, by which the value of the ao*

184 POLITICAL ECONOMY.

quired ability may be annihilated at once. But in
proportion to the number of blanks is the greatoe«
of the prizes, so that there is never any want of
competition in such occupations. Capital so ex-
pended in the acquisition of personal qualifications
or advantages, loses its name, and assumes that of
ability. Its returns can no longer be properly
called profit, but wages, salary, or professiona]
gains.

5. Or A. may prefer to invest his thousand
pounds in the purchase of land. This is gener-
ally reckoned the most permanent and secure oi
all investments, as being less exposed to loss by
commercial or political convulsions ; and it con-
sequently returns, on the average, a less interest
than any other. But it has its disadvantages, par-
ticularly in the difficulty of finding a purchaser for
land at any time when its owner wishes to sell,
owing to the variety of tastes respecting situation,
residence, &c.

When A. has purchased land, he may either let
it to those who will pay him, in the shape of rent,
the interest on the capital he has so invested ; or
he may cultivate it himself, for which purpose he
will require an additional capital.

6. Let us suppose that, instead of purchasing,
he employs his capital in cultivating, or, as it is
called, " hiring" land. For this he must lay cot
a part in the purchase of tools and implements of
husbandry, called dead stock ; part in cattle, sheep,
pigs, horses, &c., or live stock ; and part he will
keep by him in the shape of money, with which to
pay the wages of his labourers and other current
expenses. He now looks for his profit and pe^

POUTIGAL BCONOmr. 185

•oual remuneration to the surplus of the sum for
which he sells the annual produce of his farm, be-
yond what is necessary to pay his rentf and main-
tain his capital at its full former value ; in other
words, to compensate for the wear and tear of his
deady and to replace his live stock, and, moreover,
to cover his average risk of loss from casualties,
bad seasons, &c. His rent will be a matter of
agreement between himself and the landlord be-
^re he enters on his occupation. But he will not
be likely to agree to pay more than what will, ac-
cording to the best calculation he can make at the
time of the probable produce of the farm, leave
him a decent maintenance in return for his own
exertions, and a net profit on his capital equal to
the ordinary rate which he could have obtained in
other lines of business or moneyed investments.
Nor, on the other hand, is the owner of the farm
likely to let it for less than such a rent, which it is
evident he could make for himself by cultivating it
on his uwn account, either personsdly or through
an honest agent. For these reasons, the average
rent of land equals, and may be said to consist of,
that surplus of its average annual produce which
remains after replacing the capital required to cul-
tivate it, and paying the current profit upon that
capital, and the current remuneration of farming
labour.

If A. rent his farm at the toill of his landlord,
t. e*y from year to year, he will usually take care
to expend no more upon his land every year than
what he can get off it within the year. But if he
rent on a lecLse for a term of years, or occupy his
own land— or, in some rare cases of confidence in

186 POLITICAL ECONOMT.

his landlord, even when occupying as tenant at will
only — he will probably lay out some of his capital
in durable improvements of his farm ; for example
in draining wet lands, clearing fresh soil, adding to
the farm- buildings, or in such a system of manu-
ring and cultivation as can only be expected to re-
pay the outlay within a period of some years.

That part of his capital which he expends in this
manner is fixed to the soil, and cannot, like his
moveable stock, live and dead, be realized by taie*
He can only expect to get it back by degrees^
in the form of an increased annual produce from
his farm ; which increase, if the improvement be
of a permanent nature, assumes thenceforward the
character of rent, and, upon the termination of the
lease, accrues to the landlord in an increase of bis
rent. If the improvement is fitted only to last a
certain term of years, as the lime-manuring of
land, temporary farm-buildings, and improved ro-
tations of crops, the increased return must be suf-
ficient to replace the capital expended at the end
of the term, and pay the usual profit, or the farmer
will not be induced to lay out his capital in effect-
ing it. Capital expended in the latter way is pre-
cisely on the footing of that laid out in perishable
implements or dead stock, except in the circum-
stance of its not being removeable. And a hun-
dred pounds laid out in implements which may be
expected to last ten years, ought to bring in the
same gross return as a hundred pounds laid out in
manuring a field in a mode of which the effect may
be expected to last the same time.

It is clear that lasting improvements on land
cannot be expected from farmers who have no

POLITICAL ECONOMY. 187

leases ; and hence, where tenancy at will prevails,
as it does at present over the greater part of £ng-
landy the repairs, as well as all permanent improve.
ments, have to be undertaken by the landlord, if at
all. It is more than doubtful whether, under such
a system, the land is cultivated so well, or render-
ed so productive, as under a system of leases. But
the uncertain prices of late years have naturally
indisposed landlords to put their land out of their
own disposal for a long term; during which, if
prices rise, the tenant reaps the entire benefit ;
whereas, if they fall, the landlord finds himself
obliged to remit the stipulated rent, lest his tenant
ruin his farm by a deficiency of capital for its
proper cultivation. Hence leases, in times of great
iSuctuation in the prices of agricultural produce,
are a protection to the tenant, but not to the land-
lord.

7. Should A. prefer the business of a manufaC'
tureTy he, perhaps, lays out a part of his capital in
buildings and machinery, fixed, more or less, to
the soil, like some of those in the case last con-
sidered. Another part of his capital is employed
in the occasional purchase of raw material, tools,
&c., and another in the frequent payment of the
wages of his workmen. Or he may rent the build-
ings, machinery, &c., and employ his whole capi-
tal in the latter forms. His returns must in this
case, as in that of the farmer, be sufficient^ besides
recompensing his own trouble and skill, to replace
his floating capital — that, namely (as already ex-
plained), which circulates within the year — with
the ordinary rate of profit ; to replace his fixed
or more durable capital at the end of the term

188 POLITICAL EcoNomr.

which it is calculated to last, with the same profit ;
and, moreover, to cover all the risks peculiar to the
business, such as that of the article he fabricates
being superseded by a change in the taste, and,
consequently, in the demand of the public, or the
machinery he employs by a new and superior in-
vention. The risks of these kinds attached to
manufacturing operations are (for reasons we
have, in part, already given) much greater than in
agriculture ; and hence the compensation or ensu-
rance against such risks must be proportionately
large. It has not been uncommon, of late, for
buildings and machinery, on which thousands of
pounds had been expended, to fall in value in a
very brief period, through changes in the demand
of the market, the introduction of improved ma-
chinery,* or a general depression of trade, to lit-
tle or nothing. In times of depression, indeed
(such as we have seen but too often), it is not un-
common for manufacturers, rather than shut up
their factories or works (which would, in that state,
rapidly go to decay), to renounce the idea of get
ting any return from their fixed capital, and to

♦ " Machinery for producing any commoditjr in great demand
seldom wears out ; new improvements, by which the same op-
erations can be executed either more quickly or better, gener-
ally superseding it long before that period arrives : indeed, to
make such an improved machine profitable, it is usually reck-
oned that in five years it ought to have paid itself, and in ten to
be superseded by a better." " The improvement which took
place not long ago in frames for making patent net was so great,
that a machine in good repair, which cost 1200/., sold a few years
after for 601. During the great speculations in that trade, the
improvements succeeded each other so rapidly, that machines
which had never been finished were abandoned in the hands ot
iheir makers, because new improvements had superseded their
utility." — Babbage, Economy of Manufactures, p. 233,

POITICAL ECONOMT. 189

work on, even under a loss upon their floating
capitaU in hopes of better times.

8. Persons who embark their capital in working
mines, in building houses or ships, and in a variety
of other productive investments, are circumstanced,
in all essential points, like the farmer or manufac
turer just described. A part of this capital is fixed
in more or less durable objects, and ought to bring
in a sufficient annual return to replace the wear
and tear, and maintain the value of the capital ;
part is floating, or circulating within the year, in
the purchase of materials and stocks of goods, and
the payment of wages, taxes, rent, (Sz;c.

None of these different modes of employing cap.
ital, it is quite evident, would be undertaken if they
did not hold out a fair expectation of such returns
as wopld pay the ordinary rate of profit upon the
whole capital employed for the time required for
its circulation, and enable its owner to replace it
at the end of that term, as well as remunerate him
for his skill and trouble, according to the standard
of remuneration generally expected by his class.
No business would be entered upon that did not
fairly promise this. And, therefore, for a market
to be habitually supplied with any commodity, the
necessary condition is that it sell, on an average,
for a suflScient price to repay these, the elementary
costs of its production.

When the supply of any goods in any market ia
in excess over the demand, so as to reduce their
selling price below the elementary costs of produc.
tion, there is said to be a glut of them. This glut
may be partial, as when confined to one market ;

k90 POLITICAL £CONOMT.

in which the evil soon cures itself by a transfer of
the goods to other markets, where the demand is
brisker. Or it may be general with respeot to
the markets, but confined to a single articie.
This likewise is, for the most part, speedily cor-
rected, by a portion of the producers transferring
their labour and capital to some other and more
profitable occupation.

But can there be a general and simultaneous
glut in all the markets of a country, not of one
or a few articles only, but of a large majority, or
the great mass of commodities ? This is a ques-
tion which has been much and hotly disputed by
political economists. That goods of all kinds are
frequently sold below their prime cost, is but too
well known to commercial men. Forced sales,
caused by the bankruptcy or temporary embar^
rassment of the owners, are continually occur*
ring ; and a certain proportion of goods thus con-
stantly find their way into the consumer's hands at
less than cost price. In times of general embar-
rassment and of a scarcity of money in circulation
(such as we have witnessed almost periodically
for some years past), still larger quantities of
goods continue to be produced and sold for some
time at a continual loss to their producers. This
is chiefly owing to two circumstances : 1st. The
impossibility of realizing fixed capital at such times,
so that those who have a large proportion of their
property embarked in buildings, machinery, stock,
or implements, must continue to employ it in pro-
duction, though at a tremendous loss, rather than
let their fixed capital lay wholly idle, and their
buildings, machinery, &c., go to decay for want

POLITICAL ECONOMT. 191

of use and repairs. 2d. The very distress caused
by a want of remunerative prices in some trades
tends to increase their production. Workmen, in
consequence of the fall in their wages by the piece,
work the harder in order to obtain a higher pay
by the day. And capitalists likewise, in their
struggles to avoid ruin, try to make up for dimin-
ished profits by increased sales.*

All this increase of production, by adding to the
glut, tends to cause a yet farther fall in prices, and
to occasion farther losses to the producers. But
in the economical, as in the moral and physical
worlds, there are few evils that do not sooner or
later work out their own cure. Even in the ap.
parently desperate state of things we have been
describing, there are elements in operation of a
nature to bring about an improvement. The ex-
traordinary cheapness of goods produced in in-
creased quantities at a continual loss, opens their
consumption to a lower and more numerous class
of purchasers. They make their way into new
markets, and are employed in substitution for other
goods, or for purposes to which they had not previ-
ously been applied. A new and enlarged demand.
thus springs up ; and, in the mean time, the anxiety

♦ Mt. T. Attwood, of England, in his Examination before the
Ckmunittee of Secrecy on the Bank Charter Question in 1831,
■ays, ** Nothing is more common than for manufacturers to in-
crease their establishments at the very time they are upon the
toad to ruin. In the iron trade, for example, if they have two
fomaces, they will build a third, because the loss upon the two
foniaces is lOs. a ton, but upon the three it will be reduced to 58.
a ton. Within the last live or six months, when the iron nnas-
ten and manufacturers generally are all going to ruin, and in a
state I do not like to describe, they are, many of them, enlarging
their works, not to partake of profit, but to prolong the path to
win by dimmishing their general charges."— 5654-5.

192 POLITICAL EC0190MT.

of the producers to diminish their expenses forces
them to task their ingenuity to the utmost in the
invention of new machines or processes by which
a saving of cost may be effected ; so that it often
happens, by the time a new and enlarged demand
has been established through the sacrifice of large
stocks of goods at losing prices, that the producers
find themselves enabled to supply this demand at
these same prices with a profit. We believe the
history of the silk, the iron, the glove, and the cot-
ton trade, and perhaps of many more, within the
last few years, affords decided instances of an jex^
tended beneficial demand having been thus boughl
by temporary sacrifices.

It is, however, strongly to be suspected tbatsndi
epochs of general embarrassment and distress
among the productive classes, accompanied — ^in-
deed, brought on — by a general glut or apparent
excess of the stocks of all goods in market— of
which excess sad experience has, of late, too fre-
quently attested the real existence, in spite of what
theory may urge as to its impossibility — it is to be
suspected, we say, that such phenomena are anom*
alies, occasioned, not by the simple and natural laws
of production, but by the force of some artificial dis-
turbing cause. A few words will explain our
meaning as far as we think it necessary to proceed
in the development of this important principle in
this place.

We have hitherto spoken o^ price as synonymous
with value. But, in truth, this is only on the as-
sumption, which is the basis of all commercial in-
terchange, that money is a true measure of value.
Unhappily, this assumption is far from well-found-

POLITICAL SCOKOMT. 198

ed. Money, whether of intrinsic value, as coin, or
the representative only of value, as bank-notes, is,
like every other changeable commodity, liable to
vaanf m voZiie with changes in the relation of its de«
mand and supply. Grold and silver money, freely
coined, must vary in local value with every altera-
tion (and they are very frequent) in the local sup-
ply and demand of the precious metals. Bank pa-
per, payable on demand in coin, must vary precise-
ly in value with the metal into which it is by law
convertible at the option of its possessor. Incon-
vertible paper-money will vary whenever the quan-
tity in circulation is either beyond or within the
quantity which is required at the time for the ex.
igenees of commerce in the country through which
the paper circulates. And as these exigences are
continually fluctuating, and there exists no test by
which their extent can be at any time gauged, this
kind of money likewise must be frequently varying
in value.

Bearing in mind this instability of value inherent
in money of all kinds, we cannot fail to perceive
that a general glut — that is, a general fall in the
frke9 of the mass of commodities below their pro-
ducing cost — ^is tantamount to a rise in the general
exchangeable value of money ; and is a proof, not
of an excessive supply of goods, but of a deficient
supply of money, against which the goods have to
be exchanged. Suppose every article in the mar-
ket to have fallen in price fifly per cent. This is
DO proof that any one article has fallen in value ;
that is, in general estimation as compared with the
lest. Still less is it any proof that there has been

194 POLITICAL ECONomr.

an over-production of all goods (which is, in ftic
unintelligible proposition, for how can there hi
great an abundance of all good things 7 Can
desires of man ever be sated?). It is simp
proof that the value o^ money has risen one hun<
per cent.

But money, being employed as the measiw
value, ought itself to be essentially invaria
Hence the duty of governments, while enibn
the employment of money of any kind as a m
um of exchange, to take all possible precauti
against its liability to vary in value, and to gt
in every way against fluctuations which tend to
range the whole course of trade, to vitiate all mo
contracts, and convert, as we have witnesaec
late years, the triumphs of invention, the succec
industry, the very abundance of produce of ev
description, into a source of suffering to every c!
of producers !

FOUnCAL EOONOMT. 195

CHAPTER IX.

DISTRIBUTION OF WEALTH.

atmral and necessary Inequality of Conditions and Property.
—Adventitious Advantages. — Natural Right of Succession to
Property by Will or Inheritance.— Variety of Conventional
Rules. — Test of their Equity. — Natural Distribution of new
'Wealth— among Labourers, Land-owners, and Capitalists —
can be determined only by the Principle of free Exchange. —
The same Principle tends to the greatest Increase of distribu-
taUe Produce. — Limitation of Interference of Government to
the aecaring of Persons and Property.

In as far as we have hitherto traced the natural
iws which determine the production of wealth, it
as, we think, heen apparent throughout that the
ooditions most favourable for its increase are
encral education, both moral and intellectual, and
le free and secure enjoyment by every adult indi-
idual of his personal liberty, natural advantages,
nd acquired property ; conditions which necessa-
ily include freedom of industry and exchange, and
le free use of the spontaneous bounty of Heaven.

There would have been good reason for pre-
uming d priori that the general rules which tend
> bring about the greatest aggregate of produc-
ion are the most favourable to the interest of all
onsumers. For the more there is to divide, the
irger, it is prohahle, will be the share of each.

But we are not left on this point to a mere bal-
ncing of probabilities. For it may be made man-
'est that these great and abiding principles, at the

196 POLITICAL ^COKOMT.

same time that they swell the amount of wealth,
tend likewise to distribute it in the most aquitable
manner among the various classes of individuals
who have in any way co-operated in its production.
The latter tendency is, indeed, the condition and
cause of the former. The certainty of freely and
fully enjo3ring the fruits of productive labour and
ingenuity, is the most efficient stimulus to the ezer^
tion of these powers and the increase of their re-
sults. It is the main object of this work to prove,
that the greatest aggregate production of weahh
flows from the same plain and simple principles of
natural right which ensure its most equitable dis-
tribution, and which tend at the same time to the
production of the greatest aggregate of human
happiness."'

We say the most equitable distribution. Great
was the mistake of those philanthropists who have
interpreted an equitable distribution of the good
things of life to mean their eqtuil distribution. No
two conditions can be more incongruous than these.
Any attempt to effect an equality of property among
men, instead of approaching to equity, would in
volve the extreme of injustice ; instead of being

* This is in no degree inconsistent with what was urged in
an earlier chapter (p. 64), as to an increase of wealth bemg no
measure of the increase of happiness. Wealth may, /or a timt,
be increased at a great sacrifice of human happiness, as in the
instances we there gave ; though, in the long run, such eacrifioei
will be found to have occasioned a diminution of the aggregate
productiveness, by checking the growth of population, and the
improvement of the arts and sciences, which require aconditioB
of ease, leisure, and plenty, freedom both of the physical and
mental faculties, the stimulus of hope, and the prospect of an
indefinite amelioration of our circumstances, for tneir full devel
opment.

POUTICAL ECONOMY. 197

consonant to the law of nature, such a state could
only be maintained by the continual infraction of
that law.

The difference naturally existing between the
bodily and mental powers and dispositions of indi-
▼idualsy must necessarily, under the natural law of
production and distribution, create great inequality
in their several possessions and stations. How-
ever equal their position when they began the
world, the industrious, sharp-witted, intelligent, ac-
tive, energetic, ingenious, prudent, and frugal must
speedily leave behind the idle, slow, stupid, care-
less, improvident, and extravagant. The former
will acquire considerable property under circum-
stances in which the latter will scarcely procure
a maintenance. But any attempt to counteract
this, the natural law of distribution, which awards
to each workman the produce of his own exertions,
must proportionately check the disposition of each
to avail himself of his natural capacity, or to ac-
quire additional powers, and would, therefore, bo
no less impolitic than unjust.

Accidental circumstances add, no doubt, to this
natural and necessary inequality of conditions.
Yet would it not be safe or right to interfere with
their influence, since it is almost impossible to
separate the advantages that an individual derives
by accident from those which are the consequence
of foresight and enterprise. A man's property
may certainly be improved by accident ; as, for ex-
ample, by the discovery of a productive vein of
metal or coal, or a valuable quarry on his estate.
But who is to determine whether his discovery was
not in a great degree uerhaps wholly, the result of

198 POLITICAL SCONOMT.

laborious study and research ? Were the right of
property denied or iifterfered with in such things
as appeared to derive a value from accident, it it
obvious that much of the ingenuity and enterprise,
which form one of the mainsprings of economical
improvement, would be deadened by the uncertainty
of obtaining their reward.

It has been proposed, as an exceedingly just
mode of raising a national revenue, that the reve^
nue from land should be directly taxed ; or, at
least, that portion of it which is the result of aedm
dents of position. The same objection (and it is a
very strong one) applies to this proposal. It is very
true that the value of a landed estate sometimfis
rises enormously without any evident exertions on
the part of its proprietor, but in consequence either
of its fortuitous proximity to a flourishing manufac-
turing or commercial town ; or of a new canal or
railroad being carried through it ; or of its soil or
situation being found peculiarly adapted to the
growth of some valuable products. But is it cer-
tain that the proprietor of land under such circum-
stances is wholly passive, and takes no part in pro-
moting and encouraging the improvement which is
likely to confer on him so special a benefit ? We
do not dispute that, in the case of growing towns,
it is the duty of every government, acting for the
interests of the public, to make an early and suffi-
cient reservation of tracts of land in their immedi-
ate neighbourhood, to be applied to purposes of
public health and convenience. But farther inter-
ference, even in such an extreme case, would prob-
ably be deleterious. In the improvement and ex«
tension of towns, in the construction of new canal%

POLITICAL ECONOMY. 199

railroads, and turnpike roads, it is usual to see the
proprietors of land, whose interests arc likely to be
advanced by such measures, take a very prominent
part ; and any tax upon the increased rents de-
rived from such general improvements would be
certain to delay and discourage their execution.

Of the causes of inequality in the economical
condition of men, there are none more strikingly
obvious, or more frequently declaimed against as
artificial and unjust, than the laws of inheritance
and succession to property.

Id speaking of the natural right to property as
founded on the labour by which it is appropriated,
we purposely deferred the consideration of the ques-
tion as to the transfer of the right on the decease
of the individual labourer. It would clearly be
quite contrary to the interests of society, that prop-
erty, on the death of its owner, should cease to be-
long to any one ; since this could not fail to renew
all the dangerous personal struggles and ceaseless
contentions which it is the object of the primary
institutions of society to prevent. It is equally ev-
ident that, since the perfect and complete owner-
ship of property, necessary, as we have seen, to
stimulate its production, includes the power of free-
ly disposing of it hy sale, loan, or gift, in any man-
ner the owner pleases, it must, in reason, include the
power of disposing of it after death. For a denial
of that power, or any serious restraint upon it,
would be easily evaded by disposing of the proper-
ty by gift or sale during life, instead of by testa-
mentary bequest. The liberty to appoint a suc-
cessor to property after dejith is therefore part
and parcel of the natural right to its ownership and

200 POLITICAL ECONOMY.

free disposal, and cannot be reasonably or safely
separated from it. That it has ever been so con.
sidered by the unprejudiced sentiments of mankind is
shown by the almost universal prevalence, through
every age and nation, of a law or custom, giving a
dying person the power of disposing of his proper-
ty by will.

In the absence of testamentary disposition, the
natural rule is clearly inheritance ; that is to say,
that the property devolve on the children, or, in
default, on the nearest relatives of the deceased
owner, upon the reasonable presumption that, if be
had not neglected to make a will, or had not been
prevented from doing so by casualty, he would
have disposed of his property in that manner.*
The necessity is veiy obvious, that the rules of in-
heritance or succession should be strictly laid down
by law, in order to prevent that confusion which
any doubt as to ownership must occasion.

The rules established on this ground in different

♦ Blackstone calls " the permanent right to property," as well
as that of children to the inheritance of their parents, " not a
natutal, but a civil right." His learned commentator. Professor
Christian, justly corrects this error. " The notion," he safs,
" of property is universal, and is suggested to the mind of mao by
reason and nature, prior to all positive institutions. If the laws
of the land were suspended, we should be under the same monl
obligation to refrain from invading each other's property as from
attacking each other's persons." Again : " The affection of pa-
rents towards their children is the most powerful and universal
principle which nature has implanted in the human breast; and
It cannot be conceived, even in the savage state, that any onei«
so destitute of affection and of reason as not to revolt at the po-
sition that a stranger has as good a right as his children to the
property a of deceased parent. Hcsredes successoresque sui libtri
seems not to have been confined to the woods of Germany, but
to be one of the first laws of the code of Nature." — Bladc^ont,
vol. ii., p. 11.

POLITICAL ECONOMY. 801

countries have varied grecitly ; and ail these varie-
ties cannot be equally accordant with natural right,
that isy with the permanent interests of society.
Some, indeed, are manifestly impolitic, from inter-
fering too much with the natural laws of distribu-
tion, and with that free disposal of the products of
industry which is so essential to its encouragement.
Others err in the opposite sense, by permitting the
owner of landed property to determine its descent
not merely to an immediate successor, but to an end-
less succession, through continued generations.*
To confer such a power on any individual is evi-
dently unjustifiable. Property, landed property
especially, requires continual protection, repairs,
and expensive management. The land-owner
who, during a long occupation, has, at much pains
and cost to himself, preserved or increased the val-
ue of his estate, has earned as equitable a right to
dispose of it at his death as any of its former pos-
sessors! even sis he who may have originally res-
cued it from a state of waste. To deny him this
power is to lessen his interest in doing justice to
his property. It is, in fact, acting in opposition to
the very principle which sanctions the establish-
ment of a right at all to property in land — the expe-
diency of encouraging its improvement. There are
many other strong grounds of objection, both politi-
cal and moral, to endless entails ; perhaps to any
kind of entail, and also to the right of primogeniture ;

* The law of France may be instanced, perhaps, as an exam-
ple of the first error, that of Scotland of the last. By the pres-
ent French law, a parent is obliged to divide his property equally
among his children, except that, having made as many shares aa
there are children, he mav give two of these shares to a favourite
ordeeerringone.

202 POLITICAL ECONOMY.

but we forbear to dwell on them, as likely to lead n
too far from our subject. It is sufficient to hayi
shown that their tendency is opposed to the ver
principle on which the right to property in land i
founded. The true course which legislation should
endeavour to steer is to afford to Individuals sucl
power of disposition over their property as may en
courage them to preserve and improve it, and, a
the same time, to discourage, if not prevent, the ty
ing up in mortmain"** of large properties, and tb
excessive accumulation of landed estates in feif
hands.

It is clear, from what has been said on this point
that the mode in which wealth distributes itself bn

the free operation of the natural laws of productio]
necessarily occasions great inequalities of proper
ty and position among the members of every soci
ety. Under this natural system of distrioution—
which will be that of all just and wise legislation-
some may possess wealth beyond what their ow:
exertions have produced, and which has devolve
to them by gift or bequest ; but all who have coc
tributed to the production of new wealth will b
confirmed in the enjoyjnent and free disposal c
whatever they have created.

Let us take a rapid survey of the different chan
nels into which all newly-created wealth will spon
taneously distribute itself.

There are, as has been shown, but three ele
mentary sources of wealth, labour, land,*)* and cap

* Property is said to be in mortmain (i. e., dead hands) whe:
its possessor cannot alienate it.

t It may be proper to remark here (having omitted to do •
in the proi)er place), that this enumeration of the elements o
wealth is incomplete. Besides labour, land, and capital, thsr

POLITICAL ECONOMY. 203

ital ; and these, in European countries, are generally
owned by more or less distinct parties : whence it
has become convenient, and is usual, for writers to
divide the general body of those who co-operate in
production and share its results into three principal
classes ; namely, labourers, landowners, and cap.
italists.* Between these parties, their joint prod-
uce naturally divides itself in the manner and ac
cording to the laws we have already in part noticed,
under the name of the wages of labour, the rent of
landf and the profit of capital; and the share of
each class constitutes its income or revenue.

This general classification is useful, as facilita-
ting the analysis of the phenomena of society. It
18 obvious, however, that the three classes are by
DO means nicely distinguishable. On the contrary,
there are many individuals who partake, more or
leasy of two, and some of all three, characters.
The labourer, for instance, in this and some other
countries, is often the owner of the land he culti-
vates, as well as of the tools, live stock, and other
amall capital with which his labour is aided. In
this case, his wages, profit, and rent will be mixed
together so as to be indistinguishable. Few labour-
ers, in any country, are without some little capital

m another and a very large source of wealth noticed in a prece-
ding chapter, viz., the exclusive possession of instruments and
processes, of extraordinary skill, powerful connexions, &c. As
these owe their origin in many instances to nature or accident,
they are analogous to land ; and hence, instead of making land
one of the principal elements of wealth, it should rather have
been consioered as a species, of which all these natural and ad-
▼entitious advantages would have formed the genus. — See, on
this subject, Mr. Senior, in Whately's Logic, p. 320.— Ed.

* It is a happy thing for the American people that this separa-
tion, so fruitful m jealousy and strife, has not yet become pievtr
lent amoiQg them.

204 POLITICAL ECONOMY.

in the tools of their craft. Again, the owners of
considerable capital are, for the most part, labour-
ers. Merchants, manufacturers, wholesale and re-
tail traders, and ship-owners, personally superin-
tend the employment of their capital ; and the re-
muneration of their labour, as we have before seeiiy
is vulgarly included in the gross profit of their
capital, under the term living profits. A man of
superior abilities or experience will often employ
his capital in such a way as to bring in twice ai
large a return as that cleared by his duller neigh-
bour ; and it would be no less difficult than lume-
cessary to determine whether this is to be reckon-
ed increased profit or wages.

The class of landowners is, in England, rathtf
more broadly distinguished from the others, though
not a few, as has just been said, cultivate their law
by their own skill and industry, as well as with
their own capital. Even the great body of wealthy
land-owners of that country, though not personal^
engaged in the business of cultivation, are in the
habit of expending much capital on their estate^
in erecting and keeping up fences, drains, roads,
farm-buildings, dec, the cost of which is usually
defrayed by the landlord. Capital, however, so
expended, as has been already explained, becomes
no longer distinguishable from land, and its return
merges in rent.

The proprietors of canal, bank, and joint-stock
company shares, as well as all of what are called
sleeping partners, from their not being personally
engaged in business, are pure capitalists ; their in-
come being solely derived from the net profit a
interest of their capital.

POLITICAL ECONOICT. 805

Mortgagees, pensioners, proprietors of govern-
ment stock, and other owners of fixed money in-
comes, form a class apart from any of the three
which we have heen considering. They are sim-
ply creditors, and can scarcely be called capitalists
in any accurate classification of the owners of
wealth. Their property is not capital until it be
naUxed : it is merely a debt secured by law upon
the land, capital, or labour in the ownership of
other parties.

In whatever proportions the several classes of
labourers, capitalists, and land-owners contribute
their quota to the production of wealth, in that
proportion have they clearly an equitable title to
we it. But by whom and by what rule is it to
be determined in what proportion any of the par-
ties concerned have contributed towards the pro-
faction of any portion of wealth ? No afler-anaL
pOM, however laboured, could pretend to discover,
vith any accuracy, the relative amount of these
vaiioos contributions. No tribunal that could be
Qitablished would decide the point so as to satisfy
^ the parties of the correctness of its verdict
There exists no test, no common measure of the
i<Blative value of labour, land, and capital, independ-
ent of the estimation of their owners. This can
be ascertained only at the time the contributions
ftre made or arranged, and by no other judges than
the interested parties themselves, and by no other
means than their voluntary settlement of terms with
one another ; in short, only by previous bargain or
contract inter se.

In one word, the principle oi free exchange can
alone bring about a fair adjustment of their reU

206 POLITICAL EcoNomr.

ative claims on their joint produce. Take, for ih
lustration, the simplest case : Suppose A. a labour-
er, to have raised a hundred bushels of wheat bj
cultivating the land of B., C. having advanced him
on loan the necessary implements, and D« the food
on which he subsisted while at work. What pos-
sible guide can there be to the determination of the
equitable share of A«, B., C, and D. respectively in
the value of the wheat, except the terms which
they shall freely have agreed upon with each oth-
er at the commencement of the undertaking ? And
if this be true in the simplest cases, it is equally
true of the more complicated ; which it would be
still more impracticable for any foreign party to
adjudicate.

Custom will, indeed, establish a sort of standajtf
by which these questions may be determined, in
the absence of previous agreement : as, if a mas-
ter hire a labourer without specifying the wages
he intends giving, those ordinarily given for labour
of that class by the custom of the country will be
understood by both parties ; and custom will, in the
same manner, determine the fair rent of land of a
certain quality, and the fair interest of money.
But the custom itself consists only of the average
of the free and voluntary agreement of parties
similarly circumstanced through the neighbour-
hood. Any attempt to tie down such agreements
generally, as by a law, establishing either a mMt-
mum or a maximum of wages, interest, or rent, de-
stroys the only criterion of their just amount, and
substitutes a blind and arbitrary power, without
any possible clew to guide it to a correct decision.

While the principle of free exchange of property

POLITICAL ECONOMY. 207

and services can alone be depended on for securing
aa equitable distribution of wealth among the sev-
eral classes who contribute to its production, such
free exchange is equally indispensable to the en-
couragement of all in the work of production, and,
consequently, to the increase of the aggregate pro-
duce to be distributed.

If, for example, the otoner of land were in any
way restricted from freely disposing of his land to
his greatest advantage — as by letting it out to farm
to the highest bidder, or in portions of such size as
he finds most profitable — ^he would have the less
inducement to employ it, or allow it to be employ.
ed, in production. He might, by such restrictions,
be induced to prefer keeping it in a state compar-
atively unproductive and unserviceable to society.
If he continued to cultivate it, he would be less
likely to make any sacrifice for its improvement,
by expending a portion of his rents in drainage,
buildings, planting, or other endeavours to increase
its productiveness. The same consequences would
follow if, on the other hand, he were restrained by
a tax or penalty from laying out any part of his
domain in park or pleasure-ground, according to
his taste. He would be less likely to purchase or
reside upon an estate ; and its general productive-
ness would probably, in the long run, be diminished
rather than increased by such restriction.

Again, in whatever degree the capitalist may be
interfered with in the free disposal of his property
to his greatest advantage (as is practically done, to
a great extent, throughout most European states,
by vexatious and embarrassing regulations, muni-
cipal and general, respecting the production, or re-

208 POLITICAL ECONOMT.

iDOval from place to place, of particulai commodi-
ties, and as has been proposed in England by those
who would have the law dictate to farmers what
number of labourers they should employ, and how
they should cultivate their farms), in that degree
wilt he be less desirous of accumulating capital^
less eager to discover and avail himself of openings
for its profitable employment, and less capable of
making a profit upon it ; he will be less productire
and less economical, and, consequently, a less use-
ful member of society.

And the labourer^ in his turn, unless left free to
make the best bargain he can with his employer,
and to carry his labour to the best market. Wher-
ever it may be ; if interfered with by regulations
confining him to particular occupations or partic?]-
lar places in which to exercise his industry, will
never fully put forth his energies ; but, in propor-
tion to the restraint he suffers, will assume more
or less of the sulky, idle, careless, and revengeful
character of the slave ; will feel himself injured and
ilUtreated ; at all events, wanting one of the essen-
tial conditions of industry — freedom of choice in
its direction — will be less productive, as well as
less happy. Attempts to regulate wages, whether
by fixing maxima or minima, or to regulate em-
ployment by dividing society into caates, each con-
fined to an exclusive occupation, as well as the an-
cient municipal regulations with regard to appren-
ticeships, servitude, &c., appear to have always
produced the effect of damping the exertions of the
labourers, and diminishing their productiveness.*

* The author refers here to certain absurd and oppiesiifB
regulations which formerly prevailed in Europe in regira to tiM

POLITICAL ECONOMY. 209

Interference of any kind, in short, in the spon-
taneous direction of industry, and the free employ-
ment by their owners (subject, of course, to moral
law) of the great agents in production, labour, land,
and capital, has the certain effect of benumbing
their powers and lessening the sum of production,
aady consequently, the shares of the producing par-
ties, as well as of needlessly, and, therefore, unjust.
iy curtailing their freedom of action.

The only interference allowable is that which
can be shown to be indispensable for the great ob-
ject of securing the persons and property of every
class, and of giving a wise direction to their pro-
ductive energies. The law need, and ought to do
no more. This comprehends the sum and sub-
stance of all the duties of a government with re-
spect to wealth. Subject, therefore, to this condi^
tion, and to this only, perfect liberty in the volun-
tary exchange of the property and services of indi-
viduals is the only means of giving full play to the
development of their productiveness, and of in-
creasing, to their utmost extent, the amount of
their several shares. Such liberty is, on this
ground, the absolute right of every member of so-
ciety.

wages and distribution of labour. By one law, the precise
amoant which was to be paid the labourer per day, as well as
his diet and clothing, were prescribed. By another, justices of

Eiace were empowered to^ the price of labour eyery Easier and
ichaelmas by proclamation. By a third, the removal of ser-
vants or artisans from one place to another was prohibited. So
the number of persons who could pursue a particular trade in
any town was fixed, and no one could offer his services as a
journeyman, much less as a master, unless he had served a reg*
alar apprenticeship, and been licensed by the guild or trade cor-
>ration. These restrictions will be noticed more particularly
r, when we come to the subject of Trades' Unions. — Ed.

210 POLITICAL ECoin>inr.

The limitation introduced includes, of ciiaiiBe, all
such appropriations of private property, and such
directions of private action by the government, as
are necessary for securing the persons and prop*
erty of all, as well as those measures which seem
necessary to protect and encourge native labour
and capital in their unequal competition with those
of a foreign land. Of this nature are the taxes
imposed by law for the support of government, the
land and other property taken from individuals in
laying out roads and canals, and the duties imposed
by a government for protecting the industry of its
own citizens. The extent to which these powers
ought to be exercised will be the subject of dis*
cussion in a future volume.

CHAPTER X.

PRODUCTIVE INTERESTS.

Agriculture. — Manufactures. — Commerce. — Progress, Subdi-
visions, and Utility of each.— Their community of Interest,
and equal Importance. — Preference awarded to Agriculture,
owing to the unnatural existing relations of Population and

Subsistence.

The various branches of industry into which
the business of production resolves itself in a civ-
ilized and highly advanced community, are nearly
infinite in number. They are ordinarily classed,
however, for more easy consideration, into three
great departments, or, as they are called, " nUer*
estSf^' viz., the agricultural, the manufacturing, and
the commercial or trading interest.

POUTICAX ECONOMY. . 811

1* The AgricuUural interest includes all whose
land, capital, or labour is employed in the growth
of food and the raw nmte rials of manufacture.
The history of agriculture is a subject of great in-
teresty for which^ however, we must refer our read-
ers to the works especially devoted to this subject.
Of all arts, it is perhaps that in which the least
improvement has been made in the course of the
historical ages, notwithstanding its pre-eminent
utility. Still its progress has been considerable,
especially within the last half century, during which
time, owing to the adoption of turnip-husbandry,
the rotation of crops, the substitution of green
crops for fallows, and the great extension of sheep-
&rming, the produce of superior soils has been
more than doubled, and large crops raised off
thousands of acres of poor land which previously
would bear nothing to repay their cultivation.

A field is here still open for improvements, to
which no probable limit can be assigned. The
science of agricultural chymistry is yet in its in-
fancy. Its farther progress will, no doubt, enable
us greatly to multiply the produce of a limited
tract, and, perhaps, to bring the most barren sur-
faces into profitable cultivation. Even now, a de-
ficiency of manure is almost the only check to the
productiveness of any soils, and yet one of the
most copious sources of supply of the most valuable
of all manures — the sewerage of great towns —
is almost wholly neglected. By taking the neces-
sary steps for securing and applying this, a great
start might probably be given to the agriculture of
densely-peopled countries.*

• Sea Mr. J. Martin's Plan for Purifying the Air and ^Water
of tlis Matropolis. London, 1833

212 POLITICAL ECONOMY.

2. It is the business of Manufadiurera to work
up for use the raw materials raised at home hj the
preceding class, or imported from abroad ; giving
them the shape of clothing, houses, household for*
niture, machinery, tools, and a variety of conve-
niences and ornaments. They compreiiend numer-
ous branches ; such as the iron, the woollen, the
cotton, the silk, the leather, the stocking, the glove,
the hat, the carpet, the lace, and the soap trades,
the house and ship builders, cabinet-makers, gold
and silver smiths, watch-makers, brass ornament
makers, cutlers, printers and publishers, engineers,
&c. ; and each of these separate trades is subdivided
into many distinct avocations. Tiiere are many
to whom the term manufacturers is not ordinarily
applied, who would yet be reckoned as such in any
general classification of the entire body of pro-
ducers : such are tailors, shoemakers, carpenters,
joiners, smiths, plasterers, bakers, maltsters, cur-
riers, &c., with the entire class of artisans em-
ployed in these several trades.*

The economical history of manufactures is a
subject of very considerable interest to the student
of political economy, but would, if fully gone into,
occupy a much larger space than can be afforded
to it in this little volume.

The division of labour which takes place in a

* The tenii manufacture is nsually applied only to establish-
ments on a large scale ; and those who produce the same article
on a small scale are called makers rather than manufacturers :
but in a scientific treatise, and when employed to designate a
class of operations in contradistinction to agriculture, the term
must be extended, so as to embrace all those occupations by
which the raw productions of the earth are worked up into obi
jects of uae or ornament, whether by the labour of one indiTid*
ual or of many.

POLITICAL ECONOMY. 213

very rude state of society must, even in the infan-
cy of every nation, have effected a certain separa-
tion between the classes who occupy themselves in
tilling the soil and gathering its crops, and those
who are engaged in working up these crops or the
other raw products of the earth, and fitting them
for general use, in the form of tools, raiment, orna-
ments, houses, furniture, 6sc,

A farther subdivision of this class of industrious
occupations among different trades or crafls, each
giving employment to distinct ranks of artificers,
seems likewise to have taken place at a very early
period in the hislory of art. The goldsmiths, the
jewellers, the workers in iron, in brass, in wood, in
stone, in pottery, in woollen, and in linen ; the shoe-
makers, the tailors, the carpenters, the plasterers,
and the masons, are spoken of in the Jewish Scrip-
tures and other early records, and appear to have
followed exclusively their several avocations from
the first dawn of civilization. A common profes-
sional education, a -common interest in the advance-
ment of their art, and a desire, by combination and
monopoly, to exclude competition and obtain a high-
er return for their labour, seem, in most countries,
to have occasioned the union of the artisans follow-
ing any one of these several trades into a frater-
nity, sometimes sanctioned by charters, like the
guilds of the European states. Some of these
fraternities unquestionably attained a very high
excellence in their particular departments of in-
dustry. The association of freemasons, to whose
migratory labours it is generally supposed that we
are indebted for nearly all the rich and beautiful
ecclesiastical and domestic edifices which were

214 POLITICAL ECONOMY.

reared through Europe during the eleventh and
five succeeding centuries, evinced a purity of taste
and fertility of conception in architectural design,
as well as a power of execution, which the builders
of modern tinnes have vainly attempted to rival*
Nothing can exceed the workmanship of the ar-
morers, or of the goldsmiths and jewellers, of the
fifleenth century ; and carving rn both wood and
stone was carried, about the same time, nearly to
equal perfection. The gorgeous silks and velvets
of the same period probably could not be imitated
by any artisans in the present day ; and tapes-
tries and other productions of the loom were then
wrought with an excellence which has never been
surpassed. The art of staining glass may be men-
tioned as another in which modern artists are de-
cidedly inferior to those which preceded them some
centuries back.

On the whole, however, manufacturing industry
has of late years accomplished an extraordinary
advance in its productive capacities, and in its im-
portance as compared with agriculture. In former
ages, every village probably had, as now, its inferior
handicraftsmen — its smith, mason, carpenter, tai-
lor, and shoemaker; while the more important
branches of industry were carried on in towns, in
which the manufacturers of valuable goods cluster-
ed together, for the purpose of mutual protection
against the tyranny of the great and little robbers
of those unsettled times, or along such streams as
afforded the necessary aid of water-power. But,
though the articles of clothing and ornament which
ministered to the luxuries of the wealthy Were fab-
ricated by artisans of this description, the more

POLITICAL ECONOMY.

216

homely wants of the humbler classes were still
chiefly supplied by the exercise of their owa rude
industry. The coarse clothing of the greater pro-
portion of the people, woollens as well as linens,
were, till within a very recent period, both spun
and wove, or knitted at home by the wives and
children of the agricultural labourers. Many ob-
iects of ornament and convenience were made in
the same simple manner by the farmer and his
&mi]y. It is chiefly within the last fifty years, and
since the introduction of the steam-engine, power-
.loom, and cotton-gin, that manufacturing industry-
has so developed itself as to work a great and stri-
king change in the habits, the manners, the rela-
tions, and the employments of our population.
The number of persons at present engaged in the
various branches of manufacture in Great Britain
nearly equals that of the persons employed in agri-
culture.* In that country they are, for the most

* ANALYSIS OP OCCUPATIONS IN GREAT BRITAIN.

{From MarsfuUTs Statistics of the British Empire.)

DBscmrnoH.

1. Agricultural occupiers .

2. A^icultural labourers .

3. Mining labourers . . .

4. Millers, bakers, butchers

5. Artificers, builders, &c.

6. Manufacturers ....

7. Tailors, shoemakers, hatters

8. Shopkeepers . . .

9. Seamen and soldiers . .

10. Clerical, legal, and medical

classes

11. Disabled paupers . . .
18. Pioprietors and annuitants

Totals

Nmnber of Families.
Ib2l.

250,000
728,956
110,000
160,000
200,000
340,000
150,000
310,239
319,300

80,000
100,000
192,888

2,941,383

1831.

250,000
800,000
120,000
180,000
230,000
400.000
180,000
359,000
277,017

90.000
110,000
316,487

3,303,504

Persons.

1831.

1,500,000

4,800,000

600.000

900,000

650,000

2.400,000

1,080,000

2,100.000

831,000

450,000

110,000

1,116,398

16,537,398

216 POLITICAL XC0N0M7.

part, concentrated in large and populous towni,
many of which have grown up with astonishing nu
pidity upon those points where coal and iron mines,
water-carriage, or other facilities are found for the
fabrication of any peculiar commodity. The ex-
istence of this portion of society is closely connect-
ed with the very variable condition of manufactures ;
and when war, impolitic restrictions on commerce,
changes of taste and fashion, improvements in ma-
chinery, or any of the other casualties to which
such trades are exposed, occasion a stagnation in
the demand for their labour, large bodies of men.
are liable to be thrown out of work, and placed,
for a time, in a state of suffering and idleness,
which, in the absence of wise precautionary ar-
rangements, cannot but threaten great danger to
the public peace. On the other hand, the agricul-
tural part of the population, while in many respects
greatly benefited by manufactures, has also suffer-
ed from the failure of those occupations which were
formerly subsiaiary to their principal one, and
which afforded them the means of profitably em-
ploying every idle hour, and nearly every member
of their families, male or female, young or old.
The loss of the minor domestic manufactures, for-

From this table it appears that the agricultaral and mining
classes compose about 7-17ths of the whole population ; the
manufacturing class S-lTths; the commercial class 2-17th8;
the professional class, including the army and navy, and the non-
producing class of proprietors and paupers, making up, in nearly
equal moieties, the remaining 3-17ths. The decennial censusea
that have been taken since the commencement of the present
century show the great change that has taken place in tne em-
^^'^yment of the people. In 1801 , nearly one half the entire pop
ion of England was engaged in agriculture. In 1831 tba
...^portion had fallen to about one third.

POLITICAL ECONOMT. 217

merly carried on by the agricultural labourer, forms
an ofiset to the benefit he derives from the increased
demand which has been created for his products by
the growth of manufactures, and from the dimin-
ished price at which he can now purchase many
of the necessaries and comforts of life. These
evils, to which the vast, and, we believe, on the
whole* beneficial progress made by our manufac-
turing system has unquestionably exposed us, it
remains foi* the government, and for private indi-
viduals and societies to mitigate, so far as is prac-
ticable. This is to be done in part by such ar-
rangements as are fitted to encourage and facili-
tate the free migration of labour and the free ex-
change of its produce, but yet more by strenuous
and Well-directed efibrts to improve the intellectual
and moral condition of the labourers.'*'

d* The Commercial class consists of persons
whose business it is to facilitate the operations
both of the agriculturists and manufacturers, by
supplying them with what articles they require,
and taking of them what they have to dispose of.
They are the agents in all the manifold exchanges
that are going on between the different classes of

♦ The pictare drawn by Dr. Kay (in a valuable tract of his)
of the moral and physical condition of the working classeR em-
ployed in the cotton manufacture in Manchester, together with
the &ct8 brought to light by the Committees of the House of
Commons on the employment of children in factories, add some
irightful features to the character of the English manufacturing
system ; so frightful that they might lead us to regret that it
was ever introduced, if we were not certain that these horrors
are by no means the necessary result of the system, but chiefly
of the dijQ&culties brought on by unwise legislation, and, above
all, by the sad neglect m that country, for many years, of proper
eifinU for the religious instruction and general welfare of the
labonriog classes.

218 POLITICAL ECONOMTr

producers and consumers ; conveying goods (
kinds from place to place, so as to equalize
supply with the demand ; purchasing whater
to be sold, and selling whatever is required
bought. Commerce divides itself, first, intc
foreign^ and internal or home trade ; and the li
into the wholesale and rei4iil trades. These i
branch out into almost numberless subdivifl
characterized by the nature of the article dea
or the particular line of business carried on.

There are several other classes, which dc
neem to be easily referrible to any of the'1
principal heads ; as the persons engaged in mi
and quarrying, in the fisheries, 6sc«

All these multiform subdivisions of employ
are wholly spontaneous, the offspring of no
concerted arrangements of the statesman o\
legislator, but springing from that ever-activc
inquisitive spirit of enterprise and ardour for
by which individuals are urged to seize every <
ing for the employment of their ability or c£
that promises Remuneration. The result is i
culably beneficial to society, by reducing the
and improving the quality of all that it const
If any saving can possibly be made in the co
producing any article by a subdivision of th
cessary operations, it is immediately effecte
the agency of this searching spirit ; and the
petition of producers is sure very shortly to s<
all the benefit of the saving to the public at 1
in a proportionately reduced price of the arti«

The vast utility, for example, of the whol
and retail dealers, who adjust the supply of

POLITICAL ECONOMY. 219

modities of all kinds with the utmost piecision to
the demand, is obvious on the slightest considera-
tion. Acting under the influence of self-interest,
and with a view principally to his own profit, each,
knowing the probable wants of his peculiar mar-
ket, is strongly interested in selling as much as ho
possibly can, and yet equally interested in causing
nothing to be wasted through its remaining un-
sold. Each striving to carry away the custom of
his rivals, by tempting the public with newer, bet-
ter, more varied, or more alluring articles at the
lowest price, they effect collectively the distribu-
tion of the whole wealth of society in the most
economical and most convenient manner possible.
And yet, because they make a profit on what they
sell, that is, get paid for their labour and the time
during which their capital lies locked up in goods,
and the risk it runs of damage, and for their shop
and warehouse rents ; because they charge a prof-
it on their sales sufficient to cover these necessary
expenses (and that it is barely sufficient for this
end their mutual competition secures), they are
described by Mr. Owen and his followers as suck-
ing the marrow of the poor labourers, and inter-
fering hurtfully between the producer and consu-
mer, to raise the cost of all things to the latter. Mr.
Owen has of late put his theory to the test of
practice, by endeavouring to dispense with these
intermediate parties, and to bring producers and
consumers into contact with each other. By this
time, therefore, it is perhaps tolerably clear to
such of his disciples as retain the power of dis-
crimination, which system is the more economical
of the two ; that which, if pursued to its necessary

SSO POLITICAL ECONOMY.

consequences, would force every labourer to
duce for himself almost everything he needi
send us back to the caves and woods of our a
eating ancestors, or that which has carried u
ward from those wilds and caves to the high
of civilization and refinement which, by tHe I
ing of Heaven, has been attained. With re
to Mr. Owen's clumsy contrivance of labour,
and a labour exchange, by which the banMU
tendency of his principle is meant to be conc<
it is evidently but a bank connected with a
wholesale warehouse ; in which the arbitral]
uation of a salaried clerk regulates the tern
each sale and purchase, instead of the ooe
principles of competition among the sellers
self-interest in the buyers. The scheme of la
notes, moreover, is founded on the erroneous i
that labour is the just and true measure of '%
But can any plan be more likely to discoura(
genuity, industry, and the acquisition of skill,
one which determines the reward of each i
labour, not by the intensity of his applicatic
the amount of its produce, but by its dura
thus giving to a slow, careless, and indolent la
er the same pay as to an active, ingenious, an
ergetic one ?

The whole system of society, as at present a
tuted, is ONE GREAT LABOUR EXCHA1>
in which the services of individuals are bar
by voluntary and mutual agreement. The |
ress of knowledge has suggested a variety of
divisions, not only of the labour by which
Qiodities are produced, but likewise of the If
required for exchanging them. An attempt 1

POLITICAL ECONOMY. 221

rid of these intermediate parties to the exchanges
of labour would put a stop to by fur the greater
proportion of exchanges, which could not, by possi-
bility, be conducted between the principals, and thus
it would render their labour itself valueless. Could
the coal-miner of Newcastle directly exchange the
produce of his labour with the corn-grower of
Lincolnshire, the cheese- maker of Gloucestershire,
or the cloth-weaver of Yorkshire ? And if there
must be intermediate parties to carry on these and
nmilar exchanges, experience and reason prove
that they will be conducted more cheaply and ef-
Actually by the competition of private speculators,
than by any organized contrivance for this purpose
that the ingenuity of man could frame. The idea
of these visionaries is, that the profit made by the
mtennediate parties would be saved to the princi-
paU. But, in order to a profit, there must be a
capital. If the producers of commodities are
possessed of capital, they will get as high a profit
on its employment in the business of production
as the other parties get in the business of ex-
change. If they have no capital, they can cer-
tainly divide no profit, under any possible contri-
Tance.

The vast utility of the class of retail dealers, who
are the immediate distributors of the principal ar-
tides of consumption, must be apparent to every
one. Not less useful and important to society, in
its peculiar functions, is the class of wholesale deal-
ers or merchants ; who are the primary agents in
the exchanges that take place between producers
who live at a distance from each other, in different
districts, countries, or oerhaps climates, and the

22d POLITICAL EcoNomr.

general carriers of goods from place to p]
throughout the world.

The advantages of commercej that is, of an in
change, between the inhabitants of different pla
of the goods which their peculiar circumstance
skill, position, soil, minerals, or cHmate enable tl
to produce with the greatest facility, need bar
in this age and country, be dwelt upon. It is
division of labour on a large scale, and appliec
districts instead of individuals. Nature has i
gested this territorial division of labour even a
obviously than the personal. One district, for
ample, possesses rich alluvial plains, fitted for gn
ing grain ; the soil of another is more favoun
for grazing cattle ; that of a third for pastai
sheep ; a fourth offers a bleak and bare surfi
but is fertile in mineral wealth — in coal, perh
and iron; a fifth is covered with timber, an
sixth is washed by a sea abounding in fish.
must be impossible for the inhabitants of these i
eral districts to have any continued intercoi
without perceiving the great mutual advants
they have it in their power to secure, by appl]
themselves exclusively to the production of tl
commodities for which nature has adapted t
district, and exchanging them with each ot!
Whether the several places between which s
commerce is carried on happen to be conne
under the same government or not, ought evide
to make no difference in the amount of mutual I
efit each derives from the intercourse. The
change^ in reality, takes place between individi
although the subjects of different states, and W(
not be undertaken by each party if it were not 1
eficial to both.

POLITICAL ECONOMT. 223

A strange notion seems to have prevailed till to-
wards the middle of last century, even among those
who were practically conversant with commerce,
namely, that the commercial gains of one nation
were always made ut the expense of that with
which she traded ! Since foreign commerce is as
freely and voluntarily undertaken by individuals
as that between inhabitants of the same state, and
for no conceivable purpose on either side but indi-
vidual gain, it is evident that it would not be car.
ried on at all, unless, in its immediate results, it
were beneficial to both parties, and, through them,
to both nations. If any of the commodities dealt
in are of a pernicious character, then, of course, the
trade becomes injurious, in its ultimate effects, to
the nation consuming them. But this arises not
from any inequality in the nature of the exchange ;
it is rather to be attributed to the vitiated tastes
and habits of the people, which lead them to prefer
pernicious to useful gratification. Thus the opium
trade in China has been considered by the parties,
and with reason, to be reciprocally profitable in a
pecuniary point of view, though in its ultimate ef-
fects, owing to the prevalence of depraved tastes,
it has been most deadly.

The profit, however, of the merchants on either
side constitutes evidently but a very small propor-
tion of the entire benefit derived by the exchanging
countries. If France sends to the United States
silk to the value of a million in exchange for an
equivalent in cotton, the mei chants on either side
may perhaps clear a profit of $50,000 by the trans^
action. But, in addition to this, twice as much is
probably expended in the employment of the ship*

284 POLITICAL ECONOMY.

ping and internal carrying-trade of each coontij ;
a considerable sum is likewise );ut into the treasury
of each ; and last, but by no rn(;ans least, the in-
habitants of either country wiiu consume ailk or
cotton goods are supplied with these commodities
at perhaps two thirds the cost at which they could
have procured them of equal quality at home, i(
indeed, they could have procured them at alL
Many things, now considered of first necessity, are
not to be obtained without foreign commerce.
Te«i, the favourite daily meal of perhaps every
family in the land, is grown in China alone, and
no attempts to raise it in other countries iiave
been successful. Cotton is the produce of a warm
climate ; and, if left to their own resources, manj
countries could not obtain an ounce of that mate-
rial, which forms so cheap, healthy, and comfortable
an article of clothing for the great body of their
population, male and female, as well, perhaps,
one of their principal staples of export. Sugary
another absolute necessary of life to the present
generation, many nations might possibly grow at
home, but of a very inferior quality, and at mudi
greater cost. Cochineal, indigo, and the variov
other substances used in dying are not the prod-
uce of Britain, and but few of them of the United
States. The quantity of indigo annually consumed
in the United States is about ten times greater than
that annually raised in the same country. Near-
ly every drug or balsam employed in medicine
is of foreign growth, and could not be obtained
by any efforts at home. Oranges, so delicious to
the sick and palatable to all, are purchased from
abroad by our flour and cloths, anr^ could not be

POLITICAL ECONOMf. 225

procured except by this mutual exchange. ** Roast
beef^" says a British writer, "the E:iglish man's
fore— would to God that every one of my coun-
trymen could command its daily enjoyment ! — is
indeed a native production; but its companion,
plum-pudding, exclusively an English dish, derives
its name and its excellence from the produce of
foreign climates. The raisins are brought from
Smyrna, the currants from the Ionian Islands."*

These familiar illustrations have hcen selected
to bring the fact clearly before the reader, that all
classes and conditions of men derive enjoyment
or benefit from the mutual exchange of the prod,
ucts of different countries and climates. If for.
eign trade introduced only such things as are en-
joyed by the opulent and luxurious ; if it only en-
abled our modern Sybarites to clothe themselves
in silks instead of linens, and drink French wines
instead of pure water, it would not be deserving of
the high place it ought to hold in our esteem, as
the means of adding to the comfort and enjoyment
of mankind. But the few commodities we have
mentioned above constitute only a small part of
those imported from abroad, which are used by the
great mass of the people, and contribute to their
■ubsistence, or give additional value to their indus.
try and skill. Without foreign commerce we
•hould be destitute of a very large proportion of
the necessaries and comforts, as well as luxuries,
which we now possess ; while the price of the few
that might remain to us would, in most instances,
be very greatly increased. Nor are the benefits
We derive from an extended intercourse with the
• " Political Economy," by T. Ho<lg8kin.

220 POLITICAL ECONOMT.

Other branches of the human family mono
by ourselves. The persons who receive ou
ware, flour, fish, and cotton, in exchange fc
sugar, silks, drugs, cutlery, &., could not
these necessary and valuable articles so c
by any other means. ** It is as pleasant," si
English writer just quoted, '< to the inhabiti
Portugal, of Turkey, and of Spain, to proc
the cultivation of their own vines, fig-tre(
olives, the instruments and clothing manufi
in this country, of a superior quality, by t
our fertile mineral wealth and mechanical ing
as it is for us to obtain, by making these a
the refreshing produce of a brighter sun th«
shines over Britain."*

" But the influence of foreign commerce,*
been well observed, " in multiplying and ch
ing conveniences and enjoyments, vast as i

* Hodgskin's Political Economy, p. 160. Dr. Cba!
his recent work on Political Econonny, amon? many oil
doxes, has attempted to prove that it is " a delusion" to
that foreign trade adds anything to the wealth of a nat:
productive of any advantage " beyond a slight increaf
joyment, the substitution of one luxury for anothei
wme-trade he has discovered only produces wine, th
trade sugar, the tea-trade tea, and so on. It is evident i
argument would apply to our internal trade and comm«
to the division of labour itself. The shoemaker only
shoes, the clothier cloth, the cutler cutlery, &c. Bui
** trifles make the sum of human things," so, in the aggn
the several branches of trade, foreign and internal, pr<
that there is in the country of wealth, comfort, taste, b\
civilization ; all that distinguishes us from a horde of ba
clothed in skins, and tolerably provided with coarse food
over, the extension of commerce reacts upon agricul'
tends greatly to increase the production of food likew
Chalmers himself admits that this was the case in forn
and his reasons for considering the effect to have ce
xetf inconclusive.

POLITICAL ECONOMY. M7

inly is, is perhaps inferior to its indirect in*
36, that is, to its influence on industry, by in-
ig new tastes, and stimulating enterprise and
tion, by bringing each people into competition
iriendly intercourse with foreigners, and ma-
them acquainted with their arts and institu-
1" Adam Smith and Robertson have both
raced the economic change which took place
^hout Europe at the termination of the mid-
;es, in virtue of the new tastes and habits in-

in the owners and cultivators of the soil by
esentation to their notice of those articles of
lour and luxury which manufacturers had
ced and commerce brought to their doors,
ame effect continues in the present day. It
constant principle of human nature that our

increase with the means of gratifying them.
veW is it that we are so constituted. Were
the sober and easily contented being that
ists have sometimes, with false views of hu-
velfare, attempted to make him — did a mere
r from the weather, and a sufficiency of
some food and coarse clothing satisfy his

" Content to dwell in decencies for ever,"

3cies would probably have remained for ever
ondition little superior to that of the cattle
lave domesticated. Art, science, literature,
pleasures of refinement, taste, and intellect-
cupation, would have been unknown : more
his, the ingenuity by which the gifls of na-
nd the enjoyments of mere animal existence
lulti plied and heightened, would never have
jailed into action ; and the prospect which*

228 POLITICA.L ECONOMY.

in spite of local and temporary checks, seems
us continually brightening, of a progressive and i
definite amelioration in the circumstances of ma
kind, would have been closed at once. But it
not so. Every augmentation in the number ai
variety of the means of human gratification has t!
certain effect of increasing the number of hunu
wants and desires, and of stimulating industry aj
mgenuity to satisfy them by increased labour i
skill. The improvement of our manufactures, ai
the increase of our foreign and internal trade, bai
not only a stimulating influence on our own agi
culture, thus adding to our supplies of home-grov
food, but, by offering novel gratifications to the ii
habitants of other countries, more fertile or geni)
in climate than our own, they excite them to grea
er industry in the creation of those agricultUF
products of which we stand in need.

These several productive classes, or " interests
which it is sometimes the fashion to oppose and coi
trast with each other, are far from being separate
by any broad line of demarcation. They are, (
the contrary, closely entwined and enlaced toget
er, forming the warp and woof in the web of soc
ety. Their interests, consequently, are identica
and any attempt to advance that of one at the c
pense of the others, must be equally prejudicial
all. In fact, the business of each branch is tosu
ply the wants of the others, so that any falling c
in the means of one mtist cause a proportionate d
dine in the occupation and resources of the other
The agriculturists raise raw produce for the man
/acturers and meicWivXs, ^wVvvle the latter fabrica
and import articles o^ tvc,c.^-^\V'^^^aw^\x\^\SiRR,^v

POLITICAL ECONOMY. 220

ornament for the use of the former. Whatever,
consequently, contributes to promote or depress the
industry and enterprise of one class, must have a
beneficial or injurious influence upon the others.
*^ Land and trade," to borrow the just and forcible
expressions of Sir Josiah Child, <* are twins, and
have always, and ever will, wdx and wane together.
It cannot be ill with trade but land will fall, nor ill
with land but trade will feel it." Hence the inju-
rious consequences that result from every attempt
to exalt and advance one species of industry, by giv-
ing it factitious advantages at the expense of the
lest.

It has been a question much disputed whether
any one of these branches of industry should hold a
higher rank in the general estimation than another.
Many writers have contended for the pre-eminence
of agriculture over manufactures and commerce.
M. Quesnay and the French economists were fol-
lowed in this, to some extent, by Dr. Smith. But
the reason assigned by them for this preference,
namely, that in agriculture labour is most produc-
tive, as being exclusively assisted by the powers of
Nature, is an evident fallacy. The manufacturer
and the merchant avail themselves of the useful

Sualities of the mineral, vegetable, and animal king-
oms to the same extent as the cultivator ; and Na-
ture affords her aid as bountifully and as gratuitous-
ly to the one as to the other.

Though these authors have failed in giving a sat-
isfactory reason for the rank they would assign to
agriculture above the other useful arts, it is not,
however, the less true, that a marked preference has
boen awarded, in all times anii ^ovxtv\.\\fe^^ \a ^Cssia

230 POLITICAL ECONOMY.

branch of industry ; and it is difficult to belieie
that so prevalent a feeling can have its origin in
fallacy. A little reflection will enable us to ac-
count for it. The true source of the peculiar ven-
eration in which agriculture has been always heldy
lies partly in its benignant influence on the health
and spirits of those who pursue it, and yet more in
the consciousness that it is to this art man is indebt-
ed for the staff of life, Food ; while the rest serve
only to minister to his convenience and luxury^ or
to his less urgent necessities. However iniportaot
to his comfort may be the greater number of objects
which commerce and manufactures place at his dis-
posal, every one must feel that he is yet more deep-
ly indebted to that art which furnishes him with the
main support of his existence, without which be
could not survive the day. He feels that he could
spare most of the products of the former arts, but
not of the latter. Even if we must consider this a
prejudice, it is at least a natural, and may well be a
general one. But it is not a prejudice. So long
as there are thousands of our fellow -creatures in axvi
part of the world starving for want of necessarieSi
the art which occupies itself in supplying them will*
in the estimation of every friend to humanity, bear
the palm over those which are engaged in providing
superfluities ! While there is Famine on the earth,
every man of human feelings will desire to encour-
age the manufacture of corn in preference to that
of cottons, silks, or muslins ; to stimulate the pro-
duction of bread, even though at the expense of toys
and trinkets.

But why should there be any lack of the neces-
saries of life 1 Hoy/ \s \\. \)cv^X\4^\ic>^«tof the mul-
tiplied inventions and \m\)xoNexcv^Tv\a <il cXx^SosioKS^

POLITICAL ECONOMY. 231

I haying armed man with an immense increase of
txluctive power, if it be true that they have not
It enabled him to procure a sufficiency of neces-
ries for the bare support of his existence 7 In a
ndition of barbarism, with nothing to depend on
t his natural resources, his existence is necessa-
Y precarious ; hunger and misery his occasional,
rhaps frequent, visiters. But every step that he
ikes in knowledge and art, in the improvement of
faculties and the enlargement of his resources,
fht to remove him farther and farther from the
ich of want. And it would be strange, indeed,
ifter ages spent in successive victories over mat-
, and in accumulating the means of yet farther
iquests ; after he has not only compelled whole
;es of the inferior animals to his service, but
ight the very elements, each and all, to do his
ding, with superior docility and far greater pow-
; when invention after invention, one more per-
t than the other, have multiplied his powers of
MJuction in every branch of industry to a consid-
ible, and, in some, to an almost incalculable ex-
it, it would be indeed strange, if, in spite of all
s, man were still unable to escape the grasp of
int; still incapable of procuring a full sufficiency
en of the coarsest necessaries on which to main-
n life.

We are thus brought to one of the most inlerest-
r questions of political economy. Several of the
icussions to which it leads must be reserved for a
ure volume. The remaining chapter of this vol-
le will be occupied with some reflections on the
ndition of labourers in the United States, and on
jasures which have been ptoipoaftd fet XVsavt Vsraec*

SUPPLEMENTARY CHAPTER.^

THE CONDITION OF LABOURING MEN IN THE

UNITED STATES.

I. THEIB CLAIMS.

The condition of those classes of society usual,
ly, but in this country very inaptly, denominated the
forking Classes, presents a subject for profound
and anxious consideration. No one whose sympa-
Ihies are with man rather than with his accidents,
^ho is more concerned about the amount of hap.
piness enjoyed by his fellow-creatures than about
their rank, can look with indiflerence on that which
involves emphatically "the greatest happiness of
the greatest number." For the Christian to do so
would be flagrant inconsistency. It is the glory of
his religion that its mission is " to the poor." Its
promises and encouragements belong especially to
those who have not " received their consolation"
in this world. While it never ceases to plead tvith
others in their behalf, it at the same time inculcates
principles which will enable them most certainly to
maintain and advance their own interests.

The people of this country, however, are urged
to attend to this subject by something which is apt
to be more powerful than charity. It is regard to
their own safety. With us, laws are but emana-
tions of public opinion, and public opinion is little
more than the avowed will, for the time being, and,

* The substance of this chapter was contribated two or three
years since to one of our leading periodicals in the form of a re-
view.

234 POLITICAL ECONOMY.

however elicited, of a numerical majority. NczzzDif^

though we abhor the doctrine that the multiti zade

are essentially depraved and sottish, it by no me^^a^
follows that we are bound to regard them as in £kl»
lible, or as beyond the reach of corruption. Ve
must be blind to the light of all history who does^
not perceive that the people are usually what thei^
social, political, and religious institutions mak^^
them. If their training is in an atmosphere ^-^^
impurity ; if they are looked upon by politiciao^^^
as mere puppets, to be moved and mancBuvred fof^^
private ends , if, instead of being purified and exalt- -^^
ed by religious faith, they are taught to regard its ^
restraints with indifference or contempt, the result ^
is not doubtful. The retribution which they will ^^
wreak on their betrayers and on themselves will be
as awful as just. It is, to our minds, the darkest,
and among the most incomprehensible of the omens
that threaten our land, that the more opulent and fe-
voured of our people evince so little solicitude on
this point. The multitude are invested with a con-
trol over life, liberty, and property, which is limit-
ed by nothing but their own pleasure, or by paper
barriers which they can prostrate at will ; and yet,
in order to accomplish some unworthy purpose, pol-
iticians are ready (and even count it evidence o
skill) to inflame their passions almost to madness,
and to engender or encourage the mpst vulgar an
virulent prejudices. On the other hand, not a few,
even in this land of democracy, filled with compla
cent satisfaction at the view of their possessions^
rarely condescend to bestow a thought on the great:^
body of the people, appearing to think, with the an^
cient Fablier, that " it is fit that noble chevaliers

POLITICAL JiCONOMT. 235

ihould enjoy all ease and taste all pleasure, while
he labourer toils in order that they may be nour-
sfaed in abundance — they, and their horses and
heir dogs."

n. UNEQUAL DISTRIBUTION OF PROPERTY.

We do not propose to examine this subject, at
iresent, in all its bearings. There is one question
ibout which republics have always been agitated,
Lod which, to most of them, has proved the too pro-
ific source of dissension and ruin ; we mean (he
UttribuUon of jprojperty. Without instituting prop-
;rty, and securing to each one, as far as possible,
he fruits of his industry and foresight, society can
nake little progress ; and yet, in giving that inter.
»t« provisions are made which are not only liable
o abuse, but which, in the course of ages, become,
ilmost invariably, the instruments of oppression.
This is equally the case whether such provisions
emanate from the whole people, or only from the
dass called proprietors or capitalists. In the lat-
;er case, forgetting that their own welfare is bound
ip with that of the industrious classes, legislators
ire apt to exonerate themselves from public bur-
lens at the expense of the labourer ; and not only
JO, but to appropriate the revenue thus collected
n such a manner as still farther to depress Indus-
;ry. Witness England, which taxes enormously
ilmost every article of subsistence used by the la-
K)uring population, and every tenement occupied
>y a tradesman ; while the palace of the nobleman,
lis carriages, wine, servants, probates, &c., pay
jomparatively nothing ;* collecting millions annu-

* Sir Henry Pamell estimates that the higher classes do not

236 POLITICAL ECONOMT.

ally in the form of poor-rates, and then dispensing
fhem 80 aei to discourage industry, paralyze inde-
pendence, and, in effect, pay a bounty on pauper-
ism.

On the other hand, let the tenure and distribu-
tion of property be regulated by a whole people,
and the door is thrown open for a di^rent, but
scarcely less grievous kind of oppression* Burke
has well said, that '' in a republican govemnieot
which has a democratic basis, the rich require aa
additional security above what is necessary to then

paf more than six millions out of fifty. Mr. Bulwer, in Ui
** England,** &c. (p. 187, toI. l), says : ** By indisputable eaten*
lation, it can be shown that every working man is now taxed to
the amount of one third of his weekly wages ; supposing the
operative is to obtain twelve shillings a week, he is taxed, tiMM:^-
fore, to the amount of four shillings per week ; and at the end «f
six years (the supposed duration of Parliament), he will conse-
quently have contributed to the revenue, from his poor energies,
tne almost incredible sum of 62Z. 3s" By a calculation in tb6
Metropolitan for July, 1833, it is shown that a citizen of London,
having an income of 200/. a year, out of which he must support
himself, wife, three children, and a servant-maid, would have to
pay above 601. of it to government. The following are vpec^
mens of the manner in which the bouse tax is assessed :

Swoni an*
DtulTalne.

A shop in Regent street, 21 feet by 75, own- ) ^qq, im ^9A

ed and occupied by a tradesman . f ^^ ^^' *^

The palace of the DtJee of Buckingham, prin-S

cipal front 916 feet, Corinthian columns, ( oaa 40 |a
saloon paved with marble, towers, obelisks, f *

parks, &c. )

Blenheim, owned by the i?u/:eo/'JlfaW6orow^A, ) o^n ^o in

with a park of 2700 acres, &c., &c. J ^w 44 lU

In like manner, the window-tax is so adjusted, that the ricli,
by multiplying the windows on their estates, can obtain them
at about one third the rate of tax paid by the middle and poonr
classes. When the number is over 180, the charge is but m
and sixpence apiece. Under that number, it is at an average d
be. apiece

POLITICAL ECONOMY. 837

Id monarchies* They are subject to envy ; and,
through envy, to oppression.'' Such additional
security, however, is hardly to be expected from
those who feel this envy, and who may hope, by
contracting the gains of others, to get profit to
themselves. Hence the fact, that in the history of
republics, property, in order to protect itself, has
been so often compelled to appeal from the laws
to bribery and corruption. Regulations lessening
its sacredness, limiting the extent to which it might
tccumulate, restricting expenses, partitioning lands,
bestowing largesses, have ministered successively
to an all-grasping and unscrupulous cupidity, until,
It lasty all other sentiments have been absorbed in
I general scramble for spoils. Witness Rome in
ker downward career, when direct and studied ap-
peals were made to the poor agsdnst the rich, and
the possessions of the latter were held up as fit ob-
jects for pillage. " From that time," says the his-
torian, " the good old customs and regulations fell
gradually into disuse. The people would no long.
er obey ; all things were obtained by gold ; no
crinne in war seemed disgraceful if profit was con-
nected with it. Those who were poor and with-
out patrons had more to fear from the courts of
justice than opulent criminals ; and assassinations
and deaths by poison became common."* Thus
does " even-handed justice commend the ingredi-
ents of our poisoned chalice to our own lips."
The poor begin by preying upon the rich, and end
by being their victims.

The desire for property, coupled, as it too often

* Von Muller, Univ. Hist., book vi., sec 19.

238 POLITICAL ECONOMY.

is, with a feeble sense of justice, prompts men to
try, in the language of Franklin, " to get something
for nothing ;" to grasp gains without paying the
prescribed equivalent of labour and frugality.
This single principle will explain much of the in*
vidious and unequal legislation in regard to prop*
erty which has characterized every age and coun*
try. Under one government it leads to guilds,
corporations, and trading companies, which are
often but little better than stupendous monopoHes,
engrossing for a favoured few all the profits of a
lucrative trade or an important craft. In another,
the same passion stimulates the people to perpetual
changes in the tenure of property ; sets aside vest-
ed rights ; pulls down one branch of industry to
build up another ; passes laws under pretence of
benefiting the poor, but, in reality, to advance the
rich. In each case the result is about the same.
The few are enriched at the expense of the many,
and by similar means. The demagogue knows
that " thrift follows fawning" quite as well as the
courtier. Both have at hand the plea of the " pub-
lic good," and both take occasion to smile at the
eager simplicity with which, for the thousandth
time, the bait is swallowed. It must, however, be
admitted, that the recipient of a royal charter has
some advantages over the self-styled champion of
"equal rights." The one is likely to enjoy long
and securely his ill gotten gains ; the other often
discovers, when too late, that his success has been
his destruction. " He has but taught bloody in-
structions, which, being taught, return to plague
the inventor." The fate of Licinius, among the
first to suffer from the law forbidding the accumu-

POLITICAL ECONOMY. 239

iation of large estates, which he had himself pro-
cured to be enacted, should teach these modern
patriots that it is vastly easier to raise an evil
spirit than to lay it again ; and that there is a
marvellous difference between being a martyr to
one's principles, or rising by them to place and
power.

How to prevent the evils growing out of these
extreme systems of legislation has long been a
question* Moses, by Divine direction, prescribed
the remission of debts and the reversion of landed
estates at certain fixed periods ; measures which,
though they had doubtless other and higher ends,
contributed also to equalize property, but in a
manner too violent for any except a temporary
and peculiar dispensation. Other lawgivers, such
as Solon and Servius TuUius, endowed the rich
with privileges, but imposed on them more than
corresponding burdens. The consequence, how.
ever, was, that society was broken up into cosies
more or less hereditary ; which, by creating a per-
manent distinction between rich and poor, obstruct-
ed that free and healthy movement of mind, and that
cordial co-operation among all classes so necessa-
ry to the utmost improvement of a people. In our
own country, everything like hereditary distinction
or privilege has been abolished. Property can be
perpetuated in no family except by enterprise and
virtue ; while there is nothing in theory, and but
little in the practical operation of our laws, to pre-
vent the humblest citizen from reaching the high-
est eminence of wealth or power. There is here
DO class of rich or poor. Through improvidence
and vice, the children of the opulent are perpetu-

240 POLITICAL SCONOICT.

ally descending from their elevation, to leain, in
the school of poverty, tho necessity of diligence
and prudence ; while, at the same time, the indi-
gent and unfriended rise to occupy their places.
In such a state of things, industry and thrift cease
to he derogatory ; they become associated in the
minds of the people with merit ; and, strangely as
it may sound in foreign ears, there are parts of this
country where an idler, however affluent, could
with difficulty maintain his place in society.

Yet, even with such institutions, we shall not be
able to escape the taint of imperfection which
cleaves to everything human. Evils which in older
countries have been the result of unequal and he-
reditary privileges, may here be the consequence
of the action of the popular will. One instance of
this we have in the system of taxation which is
prevalent among us, and which is, in some respects,
scarcely less exceptionable than that which prevails
in Great Britain. There is among the mass of the
people such an aversion to what is termed direct
taxation — that is, to assessments levied directly by^
the government — and so much difficulty has bee
experienced both in imposing and in collectin

them, that our rulers have been but too ready t
resort to the less obnoxious system of indirect tax^
ation : a system by which revenue is derived, not^
from property, but from consumption, and that, too^
the consumption of necessaries rather than of lux-
uries. Thus, as in England, the elegant indul-
gences of the rich are subjected to only a nominal,
tax, while the provisions used by a labouring man
are increased in cost nearly one third by taxation
and monopoly : so in this country. Imported coal

POIITICAL ECONOMY. 241

pays a duty of six cents per bushel, candles of from
five to six cents per pound, iron from ten to twenty
dollars per ton, salt ten cents per bushel, and flour
fifty cents on the IQO pounds ; while coffee, tea,
iried fruits, and spices are admitted free, and wine
^nd silks at the very lowest duties.

This, however, is far from being the sorest evil
Under which we suffer. Of the disadvantages in-
cident to a popular government, perhaps the most
^^rious is that untiring spirit of change which i?
^-pt to possess the people, and which involves in
Uncertainty all investments of capital, and almost
^very description of industry. Never satisfied
'^Vith our materials of happiness, disappointed in
^ach new acquisition, and bent, therefore, on farther
Experiments, there is danger lest at last despair take
"^lie place of hope, and we rush, like those who have
^^ne before us, from the extreme of licentiousness
'^o that of despotism. From this, the danger of all
democratic governments, the people of this country
^^re not free. We have compassed, it is thought,
^he most distinguished blessings by departing from
"%he institutions of the Old World ; and the too hasty
^K>nclusion is, that the farther we carry this depart-
tire, the nearer we shall approarh the perfection of
the social state. And this feeling is sedulously
cherished by many who would call themselves
statesmen. Whoever pants for office finds his
account here in evoking the spirit of discontent.
Things, he assures us, must not remain as they are,
or the country is ruined. Golden visions are held
up before all who will go for the putting down of a
party or the repeal of a measure. Some policy to
which the country has barely had time to conforn*

242 POLITICAL ECONOMY.

itself, which has givep a new direction to millioni
of capital, and to vast amounts of talent and enter-
prise, and from which we are just about to reap
abundant returns, all must be prostrated, that some
new reformer may mount into power.

Lower down, but not less -active in the work of
agitation, is another class of politicians, for whom
it seems to have been reserved to disclose to our ar-
tisans and labouring population the astounding fact
that they are already ground down by oppression.
They can talk of nothing but the social and politi
cal degradation of their brother- workmen, the enor-
mous profits of the capitalist, and the growing
aristocracy of wealth ; while they insist upon a
new principle of division, by which the labourer is
to share in the gains of trade, without sharing ei-
ther in its hazards or its losses.* With such men,

* That this is no exaggeration of the doctrines now indastn*
ously spread among the labouring population of our country >*
well as of England, will be obvious to all who have observed the
proceedings and publications of Trades' Unions. As an exaos^
pie, take the fdllowing from the Preamble to the Constitution
of the Trades' Union of the city and county of Philadelphia*
*' It is an incontrovertible truth, that those who do not labour to
produce are supported by those who do^ and it is therefore obvioOS
that those who are thus supported, will and do, through the
impulse of self-interest, endeavour by every possible means to
decrease the just demands of the manufacturer and producer."
It should be understood, that by " producer," and " those who
labour to produce," is meant those only who are engaged in
manual labour ; so that merchants, tradesmen, bankers, magiS'
trates, lawyers, physicians, &;c., as well as mere ** capitalists,"
are *' supported" by the labouring class, and are ** endeavoor*
ingt hy every possible means, to decrease the just demands ci
the producer !" It is constantly affirmed, and, we doubt nod
believed by these men, that they " are the producers oi ali
wealth ;" that " the capital of those who employ them would be
a dead weight without their labour ;" and that to them, there*
for*, belong the principal share of what are now the pit>iit8 ot

POLITICAL ECOKOMY. 843

I rights mean, not an equal title to the protec.
of law ; not equality of privilege, but equality
3nditioD. It is said that the champions of
lity in France, when they undertook to carry
Lheir principles in the reconstruction of the
rament, commenced by causing the kingdom
) resurveyed, and divided into square depart-
» of exactly the same size. It was not to be
Qciled with their notions of equality that there
Id be one province or one commune geomet-
ly larger than another. So with these philos-
rs. A foot rule and a little arithmetic would,
eir estimation, suffice to adjust the most con-
Qg claims, and the nicest problems in Political
lomy. ^

III. INEQUALITY UNAVOIDABLE.

it if these men really hope to banish inequali-
om civil society, they would do well to begin
radicating it from the constitution of Nature
the dealings of Providence. So long as the
ral endowments of man are unequal, so long

II need more than the skill of a Marat or a
3spierre to equalize their condition. Society

resolve itself into its original elements. It
forego all the blessings of civilization. It
bring back the boasted simplicity and free-
of patriarchal times : and what then ? Why,
should find ourselves as far as ever from any
tical equality. The wiliest and strongest-
best hunter and the bravest warrior — would
lord it over the rest. One portion, from hap-

nployer. It does not seem to occur to them, that without
employers* capital there would be no demand for labour.

244 POLITICAL EcoNomr.

py talents or happy circumstaDces, would rise t&
tbe top, another sink like dregs to the bottom, llie
history of every savage tribe proclaims that cor-
poreal or mental superiority always confers an as-
cendancy on its possessor ; and that, despite the
theories of a pseudo-philosophy, the most untutored
mind will own and respect it.

It may be, however, that, in order to retain the
blessings of civilization without its inconveniences
(if inconveniences they may be called), these re-
formers would merge the individual in the mass,
and renew the experiment so often exploded of a
community of goods. And what has been the his-
tory of these associations ? We have had them,
in every gradation and of every phase, from the
republic of Lycurgus to the Nouveau ChristUau
isme of the Count de St. Simon. We have had
them springing from, and pervaded by, every spe-
cies of enthusiasm : political, philosophical, and
religious. We have had them administered by
the wisest men, and according to the most artifi-
cial rules ; where all communication with the rest
of the world has been proscribed, and children
have been taught, from their earliest infancy, to
sacrifice the feelings of nature to the claims of the
community. What has been the result? They
have been able to exist at all only within small
limits, and then only by weakening or sundering
family ties ; by renouncing the use of money, and
the pursuits of commerce and letters ; and by
causing the individual to lose sight of his own high
welfare in sustaining and extending the communi-
ty.* Their boasted equality, as far as we can dis-

* In this remark we except, of course, the commonitr flf

POLITICAL SGONOlir. 845

covery has been an equality of servitude, where
lome Jolio of Leyden or Owen of Lanark has
urielded an undisputed, and, too often, a sordid su.
premacy. Look, for example, at the Reductions
of Paraguay, where the Jesuits professed to have
realized the fair idea of a Christian commonwealth,
and of which the Abb6 Raynal says, c^esl la seule
soeieii sur la terre ou les hommes aientjoui de ceite
egalitif que est le second des hiens ; car la liberU
est le premier. Historians inform us, that this
equality w&s little better than a dead level of ser.
Vitude, which kept the inhabitants without progress
in the lowest state of civilization ; that the society
evidently aimed at the establishment of an inde-
pendent empire, which might ultimately extend its
donriinion over all the southern continent of Amer-
ica ; and that, to this end, they cut off all inter-
course between their subjects and surrounding na-
tions, permitting them to have no conversation
with any foreign trader or functionary, nor even to
he in the same apartment with them without the
presence of a Jesuit. Look at the Anabaptists of
Munster, who in the sixteenth century filled all
Europe with alarm by their fanatical opinions con-
cerning property and religion. By dint of visions
and prophecies, this people were induced to consti-
tute their leader King of Sion, to clothe him with
supreme power, and offer him the most abject hom-
age ; and they then '* launched, by his direction, into

goods mentioned Acts iv., 32. That appears to have been a
voluntary arrangement, entered into from considerations purely
religious, by a small and proscribed body ; not intended to in-
terfere witn their duties as citizens; confined to Jerusalem:
never enjoined even upon the Christians of that church, and
continued by them for only a short time.

246 POLITICAL ECONOMY.

every excess of which the passions of men are ca«
pable, when restrained neither by the authority of
laws nor the sense of decency."* Even in Sparta,
where this principle of common property was only
partially introduced, and where we have the most
wondeiful example ever yet seen of the triumph
of political institutions over the instinct of the hu-
man heart, to what did its boasted equality amount ?
Let the condition of the Helots answer ; and the
fact that, in the course of time, all the landed prop-
erty in the republic was engrossed by a few in(ti«
viduals, of whom two filths were women. The
genius of this memorable and too often lauded con-
stitution has been well, though somewhat paradox-
ically, described by Montesquieu : " Lycurgus, by
blending theft with the spirit of justice, the hardest
servitude with excess of liberty, the most rigid
sentiments with the greatest moderation, gave sta-
bility to his city. He seemed to deprive her of all
her resources, such as arts, commerce, money,
walls : ambition prevailed among the citizens
without improving their fortune : they had natu-
ral sentiments without the tie of a son, husband, or
father ; and chastity was stripped even of modesty
and shame."

We do not suppose, however, that there are
many politicians who seriously contemplate taking
to pieces the institutions of property in order to
reconstruct them on the basis of a metaphysical
equality. What such men too frequently seek is
not equality, at least for themselves. They seek
rather some convulsion which shall heave them
above the surrounding mass ; and, well aware that
* See Robertson's Charles Y.

POLITICAL ECONOMY. 247

tliere aro in every community elements of discord
lud discoDtent, and that it needs but malignity and
assurance to stir them up, their province is to agi-
iaU* With such spirits it would seem idle to rea-
son except through their fears ; and for them there
is abundant occasion for fear. History ought not
to have recorded the fate of their prototypes in
fain. They have to consult that great Teacher
but a moment, and they will find that agitation is
a game at which more than one can play ; and
that the first to stake is not always the last to win.
We should like to know how many great anar-
chists have died peaceably in their beds, or have
kept masters of the field to the end. There are
always liardier and more desperate spirits to catch
the latest pressure of the times ; to purchase pop-
ular favour by outstripping all who have gone be-
fore them, in the impudence of their pretensions
and the atrocity of their measures. Girondists,
Brisaotines, Jacobins, Terrorists — these are al-
ways ready to chase each other from the stage,
like spectres in a dream, until, drunk with carnage
and tired of revolution, the people welcome the re-
pose of despotism.

But if professed agitators are beyond the reach
of appeals higher than these, it is not so, we trust,
with the multitude they flatter, nor with the hon-
est but too visionary statesmen who, unable as yet
to find their beau ideal of a well-governed state, al-
ways hope something from change. Can they for-
get that professions of exclusive regard for the
people are the old and standing pretexts of those
who would rule or ruin ? " Ye shall be as gods"
waa the promise of the arch-deceiver when he

248 POUTICAL £CONOMT«

would thwart the purposes of Heaven by betraying
a world. And what now, in every nine out of ten
cases, are patriotic promises and protestations but
the cloak under which the demagogue prosecutes
his private purposes? What are the people to
gain by perpetual changes in the distribution of
property, and in the relations between capital and
industry ? Does not law derive its chief value from
being known and established ? Does not all expe-
rience prove, that where change is ever going on, it
is at the instigation of an interested few ; that the
body of the people are allowed to understand little
either of its progress or objects ? " Your dema-
gogues," said Demosthenes, in his Oration againsit
Timocrates, " your demagogues, citizen judges,
would make new laws, solely for their own conve-
nience, almost every month : if you do not punish
them, the people at large will soon be enslaved by
these wild beasts." If such was the case in a re-
public, the citizens of which were sworn never to
acquiesce in any division of property destructive
of private rights, and where it was a maxim " that
we ought to maintain the laws of our country, and
respect them as certain secondary divinities;'**
what may we not apprehend where reform is the
great watchword, the catholicon to be applied,
without measure or discrimination, to all political
maladies whatever ?f The inevitable effect must

* Stobaeus, Serm. xxxviit., p. 229.

t Bacon, who lived in the age of reformation in religion, and
was himself a great reformer in philosophy, yet says of ** new
experiments in the political body :" " It is improper to try tbeoB,
unless the necessity be urgent or the utility evident Great
care must be taken that the desire of reformation may occasJon
the change, and not the desire of the change plead for the refor-

POLITICAL ECONOMT. 249

be to lessen the security of property, discourage
enterprise, and keep out capital. On this point,
let the sage of radicalism himself be heard : " It is
the security of property," says Bentham, " that has
overcome the natural aversion of man from labour,
that has given him the empire of the earth, that
has given aim a fixed and permanent residence,
that has implanted in his breast the love of country
and of posterity. To enjoy immediately — to en-
joy without labour — is the natural inclination of
every man. This inclination must be restrained ;
for its obvious tendency is to arm all those who
have nothing against those who have something,*

mation. Again, let all novelty, though it cannot, perhaps, be re
jected, yet be held suspected. And lastly, as the Scripture di-
rects, let us stand upon the old paths, and see and ask for the
good way, and walk therein." See Essays, XI. So also Aris-
totle: "Slight imperfections," says the Stagirite, "therefore,
vrhetber in the laws themselves, or in those who administer and
execute the laws, ought always to be overlooked, because they
ainnot be corrected without occasioning a much greater mis-
chief, and tending to weaken that reverence which the safety of
fll governments requires that the citizens at large should enter-
tain, cultivate, and cherish for the hereditary institutions of their
coantry. The comparison drawn from the improvement of the
arts does not apply to the amendment of laws. To change or
improve an art, and to alter or amend a law, are things as dis-
similar in their operation as different in their tendency; for
laws operate as practical principles of moral action ; and, like
all the rules of morality, derive their force and efficacy, as even
the name imports from the customary repetition of habitual
acts ; and the slow operation of the laws therefore tends to
subvert that authority on which the persuasive energy of all
laws is founded ; to abridge, weaken, and destroy the power of
law itself."— Aristot., Pol., b. ii.

* In the last report of the Directors of the Connecticut State
Prison, the chaplain states that " thieves and robbers, the most
hardened and dangerous, frequently attempt to justify their do-
ings on the ground that one man has no right to hold more prop-
erty than another ; and when they steal and rob, they mean to
take from the rich only, and thus equalize what, before, was
onjusily unequal."

250 POLITICAL ECONOMY.

The la^v which restrains this inclination, and whieh
secures to every individual the quiet enjoyment of
his industry, is the most splendid achievement of
legislative wisdom — the noblest triumph of which
humanity has to boast."

The truth is deeply impressed, we would hope,
on the minds of the American people. They all
either possess, or hope to acquire property ; and
they can hardly fail to see, that whatever tends to
lessen its security, must in the end operate to their
own injury. There is one circumstance, howeyer^
which may well awaken alarm : it is the assiduity
with which the press and rival politicians appeal to
the vulgar jealousies of the poor, and the eagerness
yk^ith which they seize every opportunity of fasten-
ing on their opponents the stigma of being rich.
No terms seem fraught with more political reproach
than those which indicate that their object is the
proprietor of large estates. Once property might
have rendered its possessor an object of jealousy,
because it conferred exclusive political privileges.
But, now that the right of suffrage has been ex-
tended to all, wealth seems to be growing odious.
We are far from being advocates of great or per-
manent inequalities in the distribution of property.
They are prejudicial alike to the indigent and the
affluent ; exposing the one to the temptations of
want and dependance, and the other to that haugh-
ty spirit which goeth before a fall. But such ine-
qualities ought to be redressed, not by bringing down
the rich, but by lifting up the poor. Let the poor
be endowed with an intelligence and moral worth
which will enable them to work their own way. If
the rich are disposed to be exacting or oppresaiva^

POLITICAL ECONOMY. 231

correct th» evil, not by surrendering their posses-
sions to plunder under colour of law, but by inspi*
ring them with a larger justice and humanity, and
especially by teaching them (what they are too
ready to forget) that their own interests are indis-
solubly united with those of the labouring classes.

IV. COMBINATIONS OF LABOURING MEN.

There is another fact which may well inspire
solicitude. It is the existence, throughout our
cities and larger towns, of combinations, profess-
ing to aim at the correction of grievances sustained
by the labouring population, and proposing to effect
this, not so much by legislation, as through a sys-
tern of joint and wide-spread agitation. Capital
and labour are, among farmers, substantially in
the same hands ; and it is felt that both alike need
encouragement and protection. In the country,
too, men are likely to find their proper level, and,
aware of this, as well as of the difficulty of arran-
ging and maintaining an active confederacy among
a sparse population, they rarely make the attempt
except on great emergencies. In populous places
it b otherwise. The division of employments is
here carried to such an extent, that, while one class
supply only capital, another contribute only labour.
These classes come together too often as com-
petitors. They come, too, from opposite extremes
of the social scale, and under circumstances calcu-
lated to inflame, in the minds of the less favoured,
a painful sense of inferiority. When to this we
add the real grievances to which the poor are sub-
jected by the arrogance of the rich, by their re-
missness in discharging their obligations, and their

252 POLITICAL ECONOHY.

abuse of the power which results from their siUnu
tion, we cannot wonder that a great city should
become the focus of discontent. Besides occasioa
for confederacies, it furnishes, in the density and
clannish character of its population, and in the
presence of factious and desperate men, who make
a trade of agitation, tempting facilities for orga-
nizing them.

These facilities have not been neglected. Asso-
ciations, called Trades' Unions, have been formed
in every considerable town in the United States;
and they threaten, in connexion with other causey
to bring on that struggle which has been so oAea
seen in other countries, and which, to the impartial
observer, must seem alike unnatural and ruinous^*
the struggle between labour and capital. Indicar
tions of it are apparent in the '' strikes" which mul-
tiplied so rapidly a few years since, and in the
scenes of violence with which they were generally
attended. That these attempts to control the mar-
ket of labour must, however well organized, ulti-
mately prove fruitless, is evident, one would think,
at this time, when men who, in 1834, resolved
that wages should never be reduced below the rate
then paid,* are glad to obtain employment on al-
most any terms. It may be thought, too, that con-
vulsions in trade, like those through which we have
just passed, must dissolve these societies, or leave
nothing to be apprehended from their future efforts.
They who suppose so, however, know little of the
virulence of that disease which preys on the body
politic, and which has so often proved the immedi'

* At the General Convention of Trades' Unions held in tht
of New- York.

FOLITICAX. ECONOMY. 258

ubUe vulnus. The dissatisfaction of the ignorant
K)or, and the machinations of those whose busi*
less it is to foster it« are never more rife, though
ess observed, than at such seasons. The orga-
lization, too, of which we are speaking, is pre-
erved, and its doctrines are disseminated with in-
lefatigable industry and through a multitude of
;hannels. It will be well if the effect of these
nd other causes is not seen in a growing aliena-
iaa between the two. great classes that compose
he population of our cities and manufacturing
owns. Of all things, such an alienation is most
be deprecated. To counteract the tendency

it which is now but too evident, there must be

1 higher tone of intellectual and moral instruction
imong all classes of our people. Those who have
iroperty, and would preserve it, must put forth spe-
jal efforts to redress the real grievances of work-
aen, and to convince them that, between their
ights and interest and those of their employers,
here is not only no actual variance, but the utmost
larmony and identity.

In undertaking to examine the nature and claims
►f Trades* Unions, and of other similar combina-
ions, we would guard against misapprehension.
i¥e have been drawn to this task by no desire to
irejudge the controversy in which they are en-
;aged. So far as we had at the outset any predi-
ections, they were favourable. Perceiving that
he number of mechanics and labouring men was
apidly increasing in our country ; that they were
exposed to many trying temptations ; that on their
irtue and intelligence depended the well-being of
mr townsy and that they imbodied a large share

254 POLITICAL ECONOMY.

of the active talent and political inflaence of thd
time, we had conceived a lively interest in their
welfare. We had been especially anxious to see
societies for mutual improvement formed among
them ; and when we heard that, in England, socie-
ties had long existed in the several trades which
were in the course of being transplanted to Amer-
ica, we hoped that they might prove powerful in-
struments for this purpose. That we might judge
fairly of their structure and -tendency, we went for
information, not fd the publications of their adver-
saries, but to documents which they had put forth
in their own name ; to the proceedings of their
Unions and Conventions, and the files of their
newspapers. Having derived our facts from such
unquestionable sources, the conclusions to which
we may arrive can be erroneous only through
some fallacy in our reasoning. Should such fal-
lacy escape us, we may trust that it will not escape
our readers.

It may be proper to say a word here of the his-
tory of these associations.

" The most ancient examples," says Mr. Wade,
in his History of the Middle and Working Classes,
"of the Unions of workmen, were the trading
guilds or fraternities, remains of which still exist
in many of the principal towns of England and on
the Continent. Traces of these societies may be
found under the Roman emperors, and during the
times of the Anglo-Saxons, when they formed a
separate and favoured portion of the community,
possessing exclusive grants and immunities. Com-
binations, in the modern sense, of workmen against
their employers, could have no place in these asso-

POLITICAL ECONOMT. 255

dations ; each constituted a distinct incorporation
of all those engaged in the same mystery or occu-
pation; they were governed by by-laws, which
regulated the taking of apprentices, the admission
of new members, the prices of their manufactories,
^. : in short, they performed all those functions
in common that are now performed separately by
masters and journeymen ; and the only combina-
tion that existed was tiiat formed by the union of
both against the community. The monopoly thus
established against the public was the cause of
their downfall, and at an early period made them
an object of legislative enactment. In the 1 st Stat.
9 £dw. III., it is declared that the franchises of
guilds are * prejudicial to the king, prelates, and
great men, and oppressive to the commons.' By
the gradual abridgment of their privileges they
lost their municipal government : stranger work-
men were introduced into the trades, who did not
acknowledge the authority of masters and ward-
ens ; and, finallj, the fraternities resolved into the
great and independent divisions of masters and
journeymen; the former finding the capital, the
latter the labour for their co-operative industry.
From this transition may be derived the first origin
of Trades' Unions for the express purpose of keep-
ing up the rate of wages."

The earliest notice which we have of worknien
combining in England is in the year 1548, when
an act of Parliament (2d and 3d Edw, VI., c. 15)
states in its preamble that " artificers, handicrafts-
men, and labourers havQ made confederacies and
promises, and have sworn mutual oaths, not only
that they should not intermeddle with one anoth-

256 POLITICAL ECONOMY.

er's work, and perform and finish that another hath
begun ; ' but also to constitute and appoint how
much work they shall do in a day, and what hours
and times they shall work, contrary to the laws
and statutes of this realm, and to the great hurt and
empoverishment of his majesty's subjects." Sub-
sequently these combinations undertook to dictate,
not only where workmen should engage, and how
long they should work daily, but also what wages
should be paid ; and from the year above men*
tioned down to 1824, laws were frequently passed
to protect employers against them. These laws,
however, proved, as in such cases they usually do,
nearly powerless, prosecutions under them serving
to exasperate rather than to deter ; and in 1824 they
were all repealed, and an act substituted to pre-
vent the use of violence by such combinations, and
protect independent workmen. From the evidence
taken before a committee of the House of Com-
mons in 1824, it appears that all the trades in Lon-
don were at that time in some degree organized ;
and that through the kingdom, especially in the
manufacturing districts, associations were in ac-
tive operation. By their agency in Manchester,
not less than 15,000 people were in 1818 induced
to refuse work for the space of several months ;
and " the district," says Mr. Wade, " has at no pe-
riod, for several years, been without the excite-
ment and confusion of tumults caused by these as-
sociations."

The most recent and striking example of their
9ower was presented at the potteries in Stafford-
shire (England). More than 30,000 operatives,
constituting the entire force of those establish-

POLITICAL ECONOMY. 257

mentSy were in 1837 nearly six months without any
employment, owing to the Unions. The introduc
tion of these clubs in 1833 marked the beginning
of controversies between the masters and work-
men, which continued till August, 1836, when, by a
decree of the Union, several manufactories, em-
ploying in all about 3000 hands, were suddenly
cleared. Upon this, the whole body of employers,
who, in anticipation of such a movement, had pre-
viously formed themselves into a Chamber of Com-
merce, resolved, that since the men, at the instiga-
tion of the Union, must have a partial turn-out,
tiiey would insist upon its becoming general. In
consequence, every proprietor closed his works ;
the whole population were left without work, and
it was not till the January following that the diffi-
culty was adjusted and the men restored to their
places.

These associations are formed and confederated
in the following manner. As many of the jour-
neymen of the same craft in a town as are willing,
form a society. From each of these societies or
lodges delegates are convened at some central
point, who form a General Union of Trades ; and
again, by delegations from these Unions, a Greneral
Convention, representing all the trades in the Uni-
ted States, is formed and meets annually. By the
monthly contributions of each member, a fund is
created to pay the expenses of these delegates, aid
necessitous members, especially during strikes, and
meet other charges. When in any district the
controversy of workmen with their employers ap-
proaches a crisis, a Board of Management is crea«

258 POLITICAL ECONOMY.

ted, to conduct negotiations, prescribe termsy and
dictate the extent and duration of strikes.

V. TENDENCY OF COMBINATIONS.

What would a reflecting man expect of sudi
combinations ? Associated action is powerful ; and
when it enlists great numbers, so situated that they
combine easily and intimately, its power may be
all but overwhelming. And to this, provided the
power be used rightfully, it is not our purpose to
object. The world owes, to the union and associ-
ation of good men for worthy objects, some of its
best and noblest inheritances ; and since the very
essence of civilization lies in co-operative effort,
and the motive and means^for applying such effort
are constantly multiplying with the progress of
freedom and intelligence, it is idle to think of ar-
resting the tendency to it which characterizes our
age. In every department of human affairs — be it
financial, literary, or philanthropic — it will, for good
or for evil, have its course. But it must be watch-
ed. Criteria must be fixed by which we can dis-
tinguish its safe and beneficent movements, and
guard it against perversion. Few scourges have
been more dreadful than those wielded at times by
well-disciplined and extended confederacies. Is
there, then, in these leagues called Trades' Unions,
anything calculated to awaken suspicion, or to fur-
nish just ground for alarm ?

We hold that the power lodged with associations
is safe from great and dangerous abuse only when
their objects are clearly avowed and their proceed-
ings substantially public ; when their composition
is so far promiscuous as to secure them from a

POLITICAL ECONOMY. 259

clannish spirit and an anti-social policy ; and when
the influence on which they rely is of a purely
[Doral nature, appealing to something higher than
S5ar. Allow them the use of violence, or even of
intimidation, and they will soon usurp the place of
aw, and erect themselves into the most intolerable
>f all tyrannies. Sufler them to imbody but the
members of one profession or class, and those but
)f one sex, and they will evince an exclusiveness
ind identity of feeling, and be liable to ebullitions
yf passion, which will render them always trou.
i>le8ome, and, in seasons of great danger or excite-
ooent, doubly so.* And, finally, permit them to
[noceed in secret, and for purposes not fully known
3r explained, and the temptation to convert them
into instruments of oppression for political or re-
ligious ends will be nearly irresistible.

What, then, is the character of Trades' Unions
ii these respects ? In regard to the objects which
liey propose to accomplish, such as redress of
pievances, vindication of rights, security against
iggression, &c., it must be evident that these are
luite too indefinite ; such phrases admitting of
my construction that convenience may require, and
laving been often used as pretexts for sedition.
3o with respect to their proceedings, without a
mowledge of which the public can never be secure

♦ " Leagues thus formed and strengthened may overawe or
rrerset the power of any state ; and the danger is greater in pro-
lonion as, from the propinquity of habitation and intercourse of em
iUyment, the passions ana counsels of a party can be circulated
viui ease and rapidity. It is by these means and in such situ-

ttioDS that the minds of men are so affected and prepared, that

I slignl

ions. "When the train is laid, a spark will produce the ezplo

be most dreadful uproars often arise from the sli|[htest provoca-
ions. "When the train is laid, a spark will p
ion." Paley'8 Mo. & Pol. Phil., b. vi., c. ii.

260 POLITICAL ECONOICT.

against machinations and disturbances. Whenever
the members are about to engage in a contest with
their employers, the Board, which is clothed with
the power of dictating its form, extent, and contin^
uance, sits, in almost all cases, with closed doors
its members being unknown. For example, in tho
late difficulty in the potteries of Stafibrdshire.whra
from 15 to 20,000 families were deprived of the
ordinary means of support, the Board of Man-
agement, which, by one of its rules, <' had a controll-
ing influence over all the lodges in matters of im-
portance," and, through the lodges, over each iiK&
vidual member, such member being required, on
admission, to pledge himself that, '^ so long as the
society should continue, he would in all things ad-
here to its rules, and never act contrary to its
spirit and constitution ;" this Board, we say, com-
posed of over sixty members, which dictated turn-
outs, proscribed intercourse between workmen and
their employers, levied fines and taxes, and dis-
missed recusant members, was so completely in-
visible, that " scarcely a member of the Union ei-
ther knew, or pretended to know, more than some
one or two of its members." Such a fact speaks vol-
umes in regard to the true character and tendency
of these associations, and can hardly be lost on a
people so jealous as we are of our liberties. S©.
cret confederacies, it must be evident, are often
fraught with more real danger than open sedition,
inasmuch as they are more likely to draw to their
support well-disposed but inconsiderate persons.

It is also worthy of remark, that Trades' Unioni
are composed of persons belonging to but one
class — that of journeymen. To say nothing here

POLITICAL ECONOMY. 261

of the incendiary spirit which is apt to reign in the
ooonsels of men thus isolated from the rest ot' so-
dety, and united hy sympathy, proximity of situa-
tion, and similarity of condition ; nor of the facil.
ities which exist among them for combination, and
the narrow views, even of their own interest, which
they are apt to acquire by exclusive communion
among themselves ; there is to this feature of their
constitution another, and, in this country, still more
serious objection. It tends to arrest among jour-
neymen the spirit of improvement, and to fix them
in a condition of permanent inferiority. One of
the great advantages of a state of society like that
which exists in this country is, that as every man
may^ so does almost every man expect to, improve
his condition. Until recently, no journeyman was
satisfied with the prospect of remaining a journey.
man through life. He was looking forward to the
time when he should become an employer; and he
felt urged, therefore, not only to industry and good
conduct, but to an active interest in maintaining the
lights of employers. But let him become an active
member of these Unions ; let him anticipate some
influence and fame as the reward of his services,
and from that moment he feels as if he had cast in
his lot for life with journeymen. He gets, by de-
grees, to regard employers as a hostile class ; fosters
feelings and avows doctrines which shut him out
from their sympathy, and renders it constantly more
diliicult to leave the party he has espoused, and join
another he has so often and so loudly condemned.
If we desired to alter the whole genius of American
•ociety ; to resolve it into classes separated by bar-
liers almost impassable, and to condemn tlie largest

262 POLITICAL ECONOMY.

portion to lasting inferiority, we should cerl
recommend some such expedient as Trades' Ue
They appear to us to be perfectly calculated I
spire the poor, not indeed with contentment
with a spirit which is much more likely to
them down, and to deprive them, not only o
sympathy and good- will of the rich, but of all
and generous ambition. On this point we fully
cur in the sentiment put forth, though with diff
views, in the address of the President of the Ge:
Trades' Union of the city of New- York : " I
been avowed with great truth, that all govemn
become cruel and aristocratical in their chart
and bearing in proportion as one part of the <
munity is elevated and the other depressed,
we regard it to be equally true, that, in proporti
the line of distinction between the employer
employed is widened, the condition of the lattc
evitably verges towards a state of vassalage, i
that of the former as certainly approximate
wards supremacy." — p. 10.

There is another fact entitled to some nc
These Unions profess to have been formed ii
der to promote, among other things, the intelle
improvement of their members. We could
that, in pursuing that object, they had not so ei
ly overlooked another and yet more important
However desirable it may be to ameliorate the
ward condition of men and to enlighten their ui
standings, it must be admitted to be inconceii
more desirable to raise the tone of their deport
and moral sentiments. In increasing their ph}
and intellectual resources merely, we may bi
crease their misery, and the mischief which

PbLITICAL ECONOMY. 263

flict on their families or the public. No bodj
n is more dangerous than one raised in influ-
ibove the mass of those engaged in similar
ts, and constantly busied in inspiring jealousy
romoting agitation. That such is the case
lese Unions we do not affirm. But it is wor-
notice, that their leaders are generally from
i, and that their doctrines respecting labour
ipital are often propagated in close connex-
th tenets held by Mr. Owen respecting Poli-
id Religion. Now we know something of
^le and spirit of the literature which thrives
such tenets. The Halls of Science estab.
under the auspices of Mr. Owen push their
ches into the realms of atheism and sedition,
have little taste for anything farther. So
Trades' Unions. They convene their mem.
> hear of " equal rights," " rapacious capital.
* grinding employers." But we are inform-
no libraries that they have established ; of no
38 that they have instituted ; nor, indeed, of
easures for the dilOTusion of useful knowledge,
were not already prevalent and of easy ac-

, if working men are aggrieved, some one may
^hy not allow them the means of redress?
Jan they hope to rise without union and con-
To such questions we reply, that, in order to
deed, they ought to aim, first of all, at the ex-
n each of his own individual character. To
eal and permanent advancement to a class,
the individuals who compose it are degenera-
nust be a vain attempt. And we reply yet
r, that it ought hardly to be assumed, and that.

264 POLITICAL ECONOMY.

too, as it generally is, without examinatioD, that in
this young republic, to which men are thronging,
from all quarters of the world, a:s to a land of prom-
ise and freedom, and in which every individual can
cause himself to be felt through the ballot-box — that
in such a country labouring men are already the vic-
tims of a grinding oppression. Least of all should
this be assumed at the bidding of men who have but
iust escaped from legal disabilities in their naiive
lands, and who, admitted here, not only to an asy*
/um, but to every political privilege, hasten to evince
their gratitude by abusing our institutions, and en-
deavouring to subvert the very power that welcomes
and protects them. We propose, however, to in-
quire for a moment what these grievances are, and
also how far Trades' Unions are likely to afford a
remedy.

VI. WAGES.

The great grievance complained of by these
Unions — the one, indeed, into which, in their esti-
dmation, all the rest may be resolved, is inadequacy
of wages. Though they have in some instances
demanded only a reduction in the hours of daily la-
bour, their claim has generally embraced, besides
such reduction, an advance of pay, and has thus
contemplated, in effect, two advances in wages.
The spirit in which this, their main object, is pur-
sued, may be inferred from the following resolu-
tion, adopted in the General Convention of Trades'
Unions held August, 1834 :

" Resolved, that we recommend to the several
Trades' Unions in the United States to oppose res-
olutely every attempt to reduce their wages, and to
hold fast any additions they may receive."

POLITICAL ECONOMY. 265

It thus appears that the rate of wages paid
through the country in August, 1834, was to be
Adopted by the Union as a minimum^ below which
no reduction should take place ; while an advance
was to be the object of their strenuous and unceas-
ing exertions. To give effect to such exertions in
the last resort, the great instrument relied on, as
our readers must be aware, is a strike, i. e., a gen-
eral and protracted refusal to labour. 1 he Union
having fixed on certain terms as the workmen's ul-
timatum, give notice to the employer, and apprize
hun that his men will leave him unless these terms
are complied .with. In case he declines, measures
are immediately taken to secure the co-operation
of journeymen who do not belong to the Union ;
the strike ensues ; an extraordinary tax is levied on
the members of other trades, and on those of the
same trade in other places ; and the proceeds, after
paying the expenses of management, &c., are ap-
plied to the relief of the unemployed. In this way
the strike is sometimes maintained for months to-
gether, and is at length terminated by a compro-
mise between the parties, or by the submission of
one of them.

That the wages of labouring men ought to be
high — as high, indeed, as the general welfare will
allow — must in this country be conceded by every
one. To attempt to raise them higher, and advance
the labourer at the expense of other classes, would
not only be unjust, but would surely terminate in in-
juring him. It becomes important, then, to ascer-
tain what are high wages 7

It is evident that this question cannot be answer,
ed by a mere reference to the money rate of wages ;

266 POLITICAL ECONOMY.

to their rate, that is, whea computed in doll/irs and
cents ; and this for the obvious reason that a given
number of dollars and cents is at one time worth moN
than it is at another, because it will give us a great-
er command over the comforts and necessaries of
life. It is to this that we are to look for the true
measure of wages. Money is valuable only as it
enables us to procure the purchaseable means of
gratification ; and if these decline in price, it is ev-
ident that the amount in money paid for oar labour
might be reduced in the same proportion, and yet
our means of enjoyment remain unchanged. When
we inquire, then, vrhether wages are high, we mere-
ly inquire whether they enable the labourer to pro-
cure a liberal supply of the requisite enjoyments.
He might, in fact, be improving in his relative con-
dition, notwithstanding a fall in his wages, provided
there was a yet greater fall in the commodities
which he has to purchase ; while, on the other
hand, no rise of wages would benefit him, if the ex-
pense of subsistence were at the same time advan-
cing in an equal or a yet greater proportion.

Now it is well worthy of remark, that the direct
tendency of the op(3 rations of Trades' Unions is to
advance the expense of living, materially, to the la-
bourer. In raisin^r the wages of workmen in the
different trades, they must advance the price of the
articles which those workmen manufacture, and
thus levy an indirect tax upon all who consume
them, of which class they themselves form the lar-
gest proportion. T'hrough the agency of tlieee
Unions, the carpente r, it is true, may secure in-
creased compensation ifor his labour ; but, then, in-
ftead of being suffered to retain it, it will be well if

POLITICAL ECONOMY. 267

he be not required to disburse all of it, and even
more, to his landlord, tailor, hatter, and shoemaker,
in the shape of additions to their prices. That
which he has to sell may by such means be made
to bring a higher price ; but so in like manner, and
for the same reeuson, will that which he has to buy.
There never was a greater error than to suppose
that wages can be regulated in one trade irrespec-
tive of the rate which they bear in others.

Whether wages in the United States are high,
may be ascertained, in part, by comparing the
means of subsistence and enjoyment which our
mechanics can command with those possessed by
the same class in other countries ; but more com-
pletely by comparing them with the wants of man
as an intellectual, social, moral, and progressive
being. By the former of these methods we shall
at once discover that the condition of American
workmen is such as to render them the envy and
admiration of their brethren in every other land.
By the latter we shall find that scarcely anything
is required for happiness, improvement, or useful.
ness, which is not attainable by the labouring pop-
ulation of the United States. How easily do they
procure the shelter of a comfortable roof, and an
abundant supply of wholesome food and raiment ?
How moderate a share of prudence and industry
ia yet sufficient to authorize the labouring man to
charge himself with the care of a rising family,
and thus to secure a happiness and a measure of
moral improvement to be found only amid the
doties and charities of domestic life ? Who among
them has not leisure (if he is disposed to improve
it) for the cultivation of his mind, by reading and

268 POLITICAL BCONOMT.

reflection, and by intercourse with others. Be-
sides providing for his daily wants, who may not
store away something against the time of sickness
and old age, and gather a little capital with which
to couple his skill and energies ? And then, has
he not, in common with the most affluent, freedom
of conscience, the unshackled privilege of forming
and uttering his own opinions, the equal protection
of the laws, and the solemn restraints, and high
incitements, and holy hopes of the Christian's
faith ? Could the factious and discontented be in-
duced to reflect dispassionately on their condition,
they could not but feel, that if with such advanta-
ges they are not happy and enlightened, and virtu-
ous too, the fault must be their own. They would
see reason to fear, that if with the wages which
they receive now they are. restless and dissatis-
fied, yet higher wages would only tempt them to
idleness and prodigality. It is a melancholy truth,
that in every country the best paid workmen are
usually the most thriftless and irregular. We do
not mention this fact as an argument against the
advance of wages, but as a proof that the highest
welfare of the labouring classes depends, after all,
upon themselves ; and that, without virtuous prin-
ciples and habits, no increase of compensation can
either enrich or elevate them. We see multitudes
among us who, from the humblest beginnings and
with low wages, have yet risen, by dint of honesty
and perseverance, to wealth and distinction. We
see multitudes also who, with every advantage of
high wages and powerful friends, have yet sunk,
for the want of these qualities, to the lowest deg-
radation ; and we conclude that, in this country

POLITICAL ECONOMY. 269

■t least, labouring men want nothing so much as
to be true to themselves.

It must be admitted, we think, that the wages
usually paid in the United States put the labourer
In possession of those advantages which are most
to be desired in a world like ours. There may be
places where, owing to the rapid growth of the
population, and the consequent demand for tene-
ments and subsistence, the expense of living has
increased in a greater ratio than wages. But, gen.
erally, the price of labour in this country is as high
now as it was forty years since ; and if we com-
pare the average money rate of wages for the last
fifty years with the average prices of food, cloth-
ing, &c., we shall see reason to infer that the rela-
tive condition of the labouring population has im-
proved. While the orators of the Union would
persuade the workman that the encroachments of
capital are constantly advancing, and that he is
hat sinking to a condition of ** white slavery,"
Worse than that occupied by the bondmen of the
cotton-field or the sugar-plantation, facts prove
that he is participating in the progress of the age ;
and that those changes in the right of sufirage
which have enlarged his political influence, are but
an index to the increased facilities which he enjoys
for improving his social and moral condition.

Still, these facilities admit of yet farther increase.
The great question, then, remains, are Trades'
Unions calculated to secure such increase ? Are
they so constituted as to promise any real and per-
manent advancement to those who unite with them,
and that without injury to others ? We say with-
out injury to others, because the first requisite, in

270 POLITICAL ECOXOMT.

every effort to advance the interests of a class,
must be that it does not infringe violently on the
rights or interests of other classes. We are thus
brought to consider the bearing which these asso-
ciations are likely to have, first, on the welfare of
those not members ; and, secondly, on the welfare,
and particularly on the rate of wages, of those
who are members.

VU. EFFECTS OF COMBINATIONS ON THOSE NOT

MEMBERS.

On the first point, we propose to show that a
degree of injustice is involved in the very concep-
tion of Trades' Unions, and that they can be main-
tained in no way without interfering with the
rights of other and important classes of the com-
munity.

1. In the^r*^ place, the rights of employers are
invaded by these associations. They are not per-
mitted to negotiate with their workmen on terms
of equality. They can do it, in times of excite-
ment, only through the medium of an irresponsible
but by no means impartial body : a body, indeed,
whose interests and whose prejudices are entirely
at variance with their rights. Measures are al-
ways taken, at such times, to prevent the employer
from supplying the places of those who, under the
protection of the Union, demand an advance of
wages ; and he is thus reduced to the necessity ei-
ther of closing his works, or of yielding to demands
which he feels to be oppressive.

The employers' rights are still farther invaded
by the measures of these Unions, because they
tend to disturb the proportion which ought to sub^

POLITICAL ECONOMY. 271

licit between the cost of producing articles and the
price of selling them. By raising the wages of
the labourer, we raise, of course, the prime cost of
the article which he is employed in making ; and
hf resolving, as was done in the Trades' Conven-
tion of 1834, that these advanced wages shall be
continued, we resolve to charge the employer for
ever with this increased cost. But how can we
ensure him that the prices at which he can dispose
of these articles shall not, in the mean time, de-
cline ? Perhaps he can, at present, secure but a
moderate profit ; and yet he is to be compelled by
the Union not pniy to advance the wages of his
workmen, but to do it the very moment the value
in market of the articles which he produces may
1)6 depreciating ; and the institution which- would
apply such compulsion claims to be the great and
almost exclusive champion of equal rights / Let
us suppose that the Legislature of the State of
New- York should enact that no journeyman shall
receive more than one dollar per day for his la-
bour, nor be employed less than twelve hours.
Are the hardy operatives of the shop and the mill
prepared to submit to such a decree 1 Who does
not know that they would swell the cry of resist-
ance from one end of the land to another, and that
legislators who should presume thus to intermeddle
between journeymen and their employers, and to
stand in the way of the largest liberty and pros-
perity of the working classes, would have to bid a
long farewell to all hope of popular favour ! But
if &e Legislature has clearly no right to prohibit
workmen from receiving more than a certain sum,
what right can the Union have to prohibit masters

273 POLITICAL ECONOMY.

from paying less than a certain sum ? Who gave
to the Union, more than to the Legislature, the
prerogative of fixing a tariff of wages, and decree*
ing when and how it shall he altered ? There if
between these two cases no difference, except that
the one has been attempted only by the legisla-
tures of dark ages,* the other is attempted by the
Unions of the 19th century. The one was rank
injustice towards the labourer, the other is injus-
tice no less rank towards the employer. It is, in
truth, the very same principle, abandoned by the
enlightened capitalist to be taken up by the unin-
structed and misguided workman. May we not
hope, that, in the progress of society, he too wiU
be brought to see its injustice in regard to others^
as well as its flagrant impolicy in respect to him-
self?

2. Trades' Uhions, in their zeal to promote the
interests of mechanics, encroach also on the rights
of the agricultural class. In advancing the wages
of the operative mechanic, they enhance the cost
to the husbandman of his tools, shoes, hats, &c. ;
while they do nothing by advancing his own wages
to enable him to meet this enhanced cost. The
remuneration which he receives for his labour is
already lower in proportion than that paid to any
description of journeymen, and the measures pro-
posed by Trades' Unions must, if carried out, have
the effect of imposing upon him yet more grievous
disadvantages. It should always be considered

* A statute of 1496 in England, prescribes the wages which
should be paid to labourers of various kinds, and provides that
if any unemploi/ed person refused to serve at the above wage$t he
might be imprison^ till be found sureties to serve according to
the statute.

POLITICAL ECONOMY. 273

ftt farm-labourers, scattered as they are over a
nintry, have no facilities for combination, and
in have no hope, therefore, by concert and co-op-
ftdon, to force an advance of wages.
6. The measures taken by Trades' Unions com-
omise still more seriously the rights of non-asso-
%ied workmen. Whatever right the members of
ch associations possess to fix a price upon their
bour, and to do it, too, by combination, ought
rely to be enjoyed by an individual labourer act-
g only for himself. If he chooses to work at
tea lower than those which they have prescribed,
\ does it in the exercise of a liberty of which they
kve furnished a striking example. It may be true
at the wages which he accepts are very low ;
It of that, may he not judge for himself? It may
\ true, too, that, by accepting such wages, he in-
rectly injures others ; but will that authorize the
Dion to compel him, by refusing them, to injure
mself, perchance to starve his family ? Here is
e radical error and vice of these combinations,
hey demand for themselves what they will not
•Dcede to others. "From early morn to dewy
e" they clamour for the right of making their
m terms with employers ; they dilate upon the
rongs which are heaped by these employers on
em — ^the weaker party; when they are them-
Ives busy in bringing the whole power of a se-
ct and irresponsible confederacy to bear upon
B poor workman, merely because he demands a
Hilar right for himself. An association which,
are than any other, cries out against oppression,
id that, too, the oppression of the poor, is en-
iged at every strike in perpetrating, towards the

274 POLITICAL ECONOMY.

most meritorious of the poor, an oppression of the
most unrelenting character. To prevent indus-
trious men, charged with families, and needing for
their support all the fruits of incessant labour, fipom
filling places made vacant by turn-outs, every ex-
pedient which ingenuity and malice can invent is
appealed to. If possible, such men are cajoled by
fair words ; if these fail, they are threatened ; and
if that does not succeed, they are then over-
whelmed with all the violence of a vulgar and re-
lentless persecution. However inofiensive, thej
are assailed on their way to work. They are
beaten — maimed, perhaps inc.urably — oil of vitrid
is thrown in their eyes — in some instances they
are made blind for life — in others killed.* All

* The following extracts will show what a spirit pervades
these associations both in Great Britain and the Unitea States.
Says Mr. George Rogle, when on oath before the British Par-
liament : " I have had several turn- outs. 1 will relate the cir-
cumstances of the last, which took place on the 16th of Octo>
ber, 1830, and continued till the 17th of January, 1831. The
whole of our spinners, whose average (weekly) wages were
21. \3s. 5d.y turned out at the instigation, as they told us, of ihe
delegates of the Union. They said they had no fault to find
with their wages, their work, or their masters, but the Union
obliged them to turn out. The same week three delegates
from the Spinners* Union waited upon us at our mill, and dic-
tated certam advances in wages and other regulations, to which,
if we would not adhere, they said that neither our own spinners
nor any other should work for us again. Of course we de«
dined, believing our wages to be ample, and our regulaticHii
such as were necessary for the proper conducting the establish
ment. The consequences were, they set watches on every
avenue to the mill, night and da>, to prevent any fresh hands
cominjg into the mill, an object which they effectually attained
by intimidating some, and promising support to others (whom I
got into the mill in a caravan) if they would leave their work."
Mr. Graham, another witness, adds : '• They will abuse any-
body that comes in the most shocking manner, even to takinff
their Ir^es if it were necessary. W^ithin a week before I left

POLITICAL ECONOMY. 976

been done, over and over again, as an ap-
e and necessary step in that series of

they beat a person, and he came back to the work
and alarmed, and he was obliged to go out. Some
there were several people almost destroyed by Titriol
•wn upon them by combing men."
w-York Journal of Commerce of February 26. 1636,
allowing : " On the 23d instant, the riggers and ship-
turned out m large numbers, and went about the
a a body, compelling such of their profession as thev
rork to quit the business in which tney were engaged,
nultaneously, a squad of day-labourers of another de-
chiefly foreigners, went through the burned district,
i their fellow-labourers about the premises to quit
Biuse they were receiving $1 a day instesd of $1 25,
b<) imported dictators had determined was the rightM

ew-York American of about the same date we find the
: *' A seafaring man, from exposure to severe weather,
is arrival in port, sent to the city hospital, where his
Milth was restored, but both feet were lost. Being
could no longer, by the rule of the hospital, be kept
; to send him forth such a cripple was to consign him
on. Some of the governors, therefore, caused artifi-
> be made for him at a cost of 70 dollars, and then, as
e had been accustomed on shipboard to handle the
!, obtained employment for him with a sailmaker, and
Q in special charge of the foreman of the loft, with
t that ne might be suffered to earn whatever he could.
le, happy and grateful, went to his new trade, and foi

was unmolested, as was his employers ; and it was
d that by such work he could earn enough to keep
3 wane. On the third day, a deputation from the
nion went to the saiiioft— forbade the employment of
iss sailor— forbade him, in like manner, to work — and
liged to relinquish the place. The governors of the
iceived him back within their wails, or he would have
vithout a meal or a place to lay his head."
i one more case ** In March, 1836, a number of
3n granite cutters, not memliers of the Union, were
• combine in order to protect themselves against its
3ns. In their manifesto they declare that the Unions
lly proscribed all journeymen who refused to join or

with it ; had undertaken to prevent such journeymen
ining employment in any town in the United Statet

876 POLITICAL ECONOMY.

measures which was to end in a triumph over the
employer. We are aware that it is often said that
these outrages are not to be charged upon the Sod.
ety ; that they are the unadvised acts of individuaM
misled by passion, and perhaps not connected with
the Union. But who will point us to a protracted
strike which was unattended with such outrages?
or who will say that it is not to protracted strikes
that the Union, when engagied in a controversy
with employers, always makes its ultimate appeal!
Indeed, who does not see that these acts of vio-
lence are the natural result of doctrines and sug-
gestions so incendiary as are those industriously
put forth by the orators and presses of the assod-
tions ? What better could be expected from mea
who are incessantly taught that they are cheated
and trodden on ; that their employers riot on the
hire which has been kept back by fraud from them ;
and that, unless they rise in their strength, and
quickly too, they must be irredeemably enslaved!
4. The policy of Trades' Unions is at wisir with
the rights of young men about to enter the trades
as apprentices. Early in life it devolves on every
young man to make choice of his profession ; and
it is a choice not only important, but, on many ac-

where Trades* Unions were established ; had, to use their own
phrase, ntdlified two yards, because their proprietors had re*
fused to discharge a foreman at the bidding of the Union ; had
threatened death, tar and feathers, battery, and every species o(
personal indignity, to those who might |)resume to labour hi
those yards ; and, to intimidate strange journeymen, had de-
clared that, unless they acquiesced, they would for ever be ob
jects of persecution ; had seduced apprentices from the nullifitc
yards, and forced them as journeymen upon others ; and thai
tfuch proceedings had caused contracts to the amount of
8250,000 to be removed to other states/'

POLITICAL ECONOMY* 277

(Hints, eventful. In this country, it has been thus
ir the peculiar privilege of our youth that they
ave had the " world before them where to choose,"
!*hey have been subjected to no galling restrictions,
ke those which prevail in other lands,* and which

* ** When you consider that no man can be a master printer
I France without a license, and that only eighty licenses were
ranted in Paris, it is by no means wonderful that the joumey-
len, forbidden by law to set up for themselves, and prevented
f tlie power-presses from gettmg work from others, should be
Beply dissatisfied.

.**In £nffland it is exceedingly difficult for a mechanic to get
hat is called a settlement in any town except that in which he
'18 bom or where he served his apprenticeship. The resort of
Mchanics from place to place is permitted only on conditions
ith which many of them are unable to comply. The conse-
oence is, they are obliged to stay where they were bom, where,
Biliaps, there are already more hands than can find work ; and,
om the decline of the place, even the established artisans want
mployment.

** In other countries, singular institutions exist, imposing op-
tMHTe burdens on the mechanical class. I refer now more
uticalarly to the corporations, guilds, or crafts, as they are
illed ; that is, the companies formed by the members of a par-
caUr trade. These exist with great privileges in every part of
larope; in Germany, there are some features in the institution,
I it seems to me, peculiarly oppressive. No one is allowed to
it up as a master-workman in any trade unless he is admitted
I a freeman or member of the craft ; and such is the stationary
jodition of most parts of Germany, that I understand that no
arson is admitted as a master-workman in any trade, except to
ipply the place of some one deceased or retired from business.
in^en such a vacancy occurs, all those desirous of being per-
dtted to fill it present a piece of work, executed as well as
ley are able to do it, which is called their master-piece, be-
ig offered to obtain the place of a master-workman. Nomi-
idly the best workman gets the best place ; but you will easily
Miceive that, in reality, some kind of favouritism must gener-
Uy decide it. Thus is every man obliged to submit to all the
tiances of a popular election whether he shall be allowed to
rork for his bread, and that, too, in a country where the people
re not permitted to have any agency in choosing their rulers.
lut the restraints on journeymen in that country are still
lore oppressive. As soon as the years of apprenticeship have

278 POLITICAL ECONOMY.

debar the young adventurer from various prh
crafts, and confine him, moreover, to one pi
abode. As they have been left free to make
selves masters of any preferred trade, so tb
at liberty to prosecute it, in whatever way ;
whatever place they may desire. And to tk
we ought, doubtless, to attribute much of ti
paralleled enterprise and prosperity of our cc
Mr. Grallatin, than whom, perhaps, no one n<
ing is more capable of forming, on this point,
rect opinion, uses this language : *' No caw
perhaps, more promoted in every respect th
eral improvement of the United States, thi
absence of those systems of internal restrictii
monopoly which continue to disfigure the st
l^ociety in other countries. No laws exist hi
rectly or indirectly confining men to a pari
occupation or place, excluding any citizen fro
branch he may at any time think proper t<
sue. Industry is in every respect free and
tered ; every species of trade, commerce, an
fessions and manufacture being equally open
without requiring any regular apprenticesh:
mission, or license. Hence the improvem<
America has led not only to the improvem
her agriculture, and to the rapid formation ai
tlement of new states in the wilderness, bi

expired, the young mechanic is obliged, in the phrase
country, to wandrr for three years. For this purpos
furnished, by the master of the craft in which he has sei
apprenticeship, with a duly authenticated wandering bo<
which he goes forth to seek employment ; and three yea
be spent in^this way before he can be anywhere admitt
master." — Essay on the importance to practical men ol
tific Knowledge, &c., by Edward Everett, 1831.

POLITICAL ECONOMY. 279

lave extended her commerce to every part
obe, and carry on with complete success
se branches for which a monopoly had
e been considered essentially necessary."
we object to Trades' Unions that they
destroy this freedom, which is the birth-
our people, and the great spring of their
y ; and to substitute for it a system of re-
more odious than any known in the rot-
ighs of England or the trading guilds of
\ Journeymen perceive that, if their num-
reduced, or if their masters, instead of
g a large proportion of apprentices, could
lied to employ only journeymen, or a much
roportion of them, the inevitable effect
to increase the demand for their serviceSt
bis means to raise their wages. Hence
•ns propose to limit the number, some-
journeymen, but, more commonly, of ap-
; and to allow no apprentice to become a
an till he shall have passed through a pro-
jrm of service. We are aware that the
1 Unions have not in all cases avowed
y, and that many of the more reflecting
condemn it. We should be amazed, in-
hey were prepared deUberately to trans-
;his free and generous soil the remnants
arism which can hardly be maintained in
rnment of Europe. Yet, averse as they
to it, they will be constrained, like their
!ors on the other side of the Atlantic, to
ice. " I was not aware," says a factory
oner in Scotland, " until I was engaged in
tigation at Glasgow, that the operatives

280 POLITICAL ECONOMY.

there haye so completely organized their associa*
tion as not only to prescribe the wages to be paid
to the members of the association, but to all other
persons, from whatever quarter they may come ;
that, farther, no male worker, not entered with thrnt
is allowed to work at all without their consent and
the concurrence of the association ; and never
without making a payment to them at the begin-
ning, and continuing a weekly payment at the same
rent as their own afterward : that females, however
able, are not allowed to become spinners, or to be
engaged as such ; and that it is hardly in the power
of a piecer, that is, of an assistant to a spinner, to
learn the business of a spinner unless he is related
to a spinner who will bring him forward ; that, in
short, the object of the Glasgow Association is to
make their company a close corporation, access-
ible only to those whom they choose to admit, and
not only to prevent all others from becoming spin-
ners by their regulations, but, by a system of intimi-
dation, which they successfully carry into execution,
absolutely by physical force." That the same sys-
tem has been pursued to a considerable extent by
many of the associations in this country, is evident
to every one acquainted with their proceedings, and
must be apparent, indeed, from the facts which we
have already stated. It cannot be necessary for
us to insist that it involves an infraction of the
rights of young men, and an injury to the commu-
nity even, more flagrant than those occasioned by
the ancient restrictions still maintained in Europe.
The latter originated at a period when the trades
needed some peculiar privileges to enable them to
command the services of a sufficient number of

*" POLITICAL ECONOMT. 881

rkmeDy and to make the requisite improvements,
ley are clearly defined by law, and cannot be
etched to suit the pleasure of any association ;
8t of all, to suit the pleasure of an irresponsible
nbination. The former, on the contrary, are
lecessary ; and they are so entirely vague, and
)lied by men so far beyond control, that there
not only room for, but constant invitation to
jse. When such attempts to fetter industry are
.de by an organized association in this age and
this land — made, too, by men whose warcry is
srfy, and who are always denouncing the op-
ission and hoary corruptions of the Old World—
s cannot but recall the language of a great states.
n when spesJcing of a kindred topic : ** Seldom,"
rs he, '* have two ages the same fashion in their
stexts, and the same modes of mischief. Wick-
less is a little more inventive. While you are
cussing the fashion, the fashion has gone by.
le very same vice assumes a new body. The
rit transmigrates ; and, far from losing its prin-
le of life by the change of its appearance, it is
lovated in its new organs with the fresh vigour
a juvenile activity. It walks abroad, it continues
ravages, while you are gibbeting the carcass
demolishing the tomb. You are terrifying your-
ves with ghosts and apparitions, while your
use is the haunt of robbers. It is thus with all
me who, attending only to the shell and husk of
tory, think they are waging war with intoler-
ze, pride, and cruelty ; while, under colour of ab-
rring the ill principles of antiquated parties, they
) authorizing and feeding the same odiou8 vice
di&rent factions, and pierhaps in worse."

282 POLITICAL ECONOMY.

We have thus far spoken of the mjustiee in«
volved in the very conception of Trades' Unions,
and the still greater injustice perpetrated by them
in their course of operations. And, of itself, this
would seem sufficient to seal their condemnation.
However efficient these associations might be in
advancing the working classes, it is a fatal objec*
tion that they can do so only by inflicting injury
on the community at large. How much more ob>
noxious, then, must they be to condemnation, if we
succeed in proving, as we propose to do, that they
must fail even in this, their most cherished end ;
and that, instead of promoting the pecuniary inter-
ests of working men, they must ultimately and se-
riously interfere with those interests. This con-
stitutes our second objection to Trades' Unions;
that they are working their own discomfiture by
contributing lo reduce, rather than increase, the ap-
propriate influence of the industrious classes.

VIII. EFFECTS OF COMBINATIONS ON MEMBERS.

They do this by disregarding a great and funda-
mental law of economics; by arraying, indeed,
the whole force of that law against the pecuniary
welfare of the labouring man. Men are strong
iust in proportion as they understand and respect
the inviolable and resistless laws of Nature, which
are nothing less than laws of Grod. While they
enlist such laws in their behalf, they are mighty.
When they undertake to thwart and resist them,
ultimate defeat is certain. Now the great law
which must regulate the wages of all labour is
found in the proportion between supply and demand;
OTf in other words, hetween the number of labounrs

POLITICAL ECONOMY. 288

and the quantity of employment. If there be many
labourers and little eniployment, as in sonie older
countries, wages will be low, because workmen, in
their competition for employment, will underbid
each other. If, on the other hand, there be much
employment and but few labourers, wages must,
for a corresponding reason, be high ; since em-
ployers will compete for hands, and, consequently,
overbid each other. If the number of labourers
should be sufficient to meet the demand, wages in
such case would be high or low, according to the
productiveness of the employment, or, in other
words, according to the amount of profit yielded by
it to the employer. If the number of labourers be-
come a little too great for the demand, wages must
be depressed, and that depression, being attended
by a kind of panic, will generally be too sudden
and great ; whereas, if the quantity of employment
be a little too great, there will, for a similar rea-
son, be too great and sudden a rise.

But little reflection is necessary to show that
this law must govern the rate of wages, in spite
alike of masters and men. Nothing can prevent
them from fluctuating but a combination of mas-
ters and men against the community, for the pur-
pose of regulating both the supply and the demand.
It is by no means in the power of the employers,
as the labourer may suppose, to prevent an occa-
sipnal fall in wages, any more than it is in the
power of a grocer to prevent the commodities in
which he deals from sometimes falling. A grocer,
doubtless, would like at all times to obtain for such
commodities the very highest price which was ever
paid for them. But he well knows that this is im-

284 POLITICAL ECONOMY.

possible: when the market is overstocked, and
every dealer is anxious to sell, nothing, it is evi-
dent, can prevent a decline in prices but a combi-
nation among merchants throughout the country ;
and such a combination would be justly regarded
by the public as little better than robbery. Hence
the merchant consoles himself, even though he selb
at a loss, by the reflection that the same law which
induces this loss, will presently yield him, in an-
other quarter, a corresponding gain. Who would
not resist, as equally inexpedient and unjust, any
attempt to fix at an unalterable rate the price <h
tea, sugar, or flour ? And who does not see that
the same principle must hold in regard to the price
of labour ? Suppose there is employment for but
eighty hands when a hundred are in quest of it ;
must twenty of these hundred be left unemployed, to
starve, that the remaining eighty may receive foil
wages ? Thus we are brought to the conclusion,
that if wages are too low, they can be raised per-
manently only by diminishing, on the one hand, the
supply of labour, or by raising, on the other hand,
the demand for it. Now we object to combina-
tions and turn. outs that they are not calculated to
do either ; nay, that in most cases they do, with
respect to each, precisely the reverse ; and thus
tend in two ways to aggravate the difliculties un-
der which journeymen mechanics are said to la-
bour. Instead of lessening the supply of labour,
they increase it ; and, instead of increasing the de-
Tnand for it, they lessen that demands . This is an
important point,

I. Combinations and strikes tend to increase the
supply of labour, and by that means to diminkh

POLITICAL ECONOMY. 885

wages. For a brief season these strikes mry be
successful, and may occasion an advance in wages.
Employers are unwilling to contend. It is against
fearful odds in respect to numbers, while it tends
to interrupt their business and occasion severe
losses ; and they submit, therefore, in the hope
that relief may soon present itself. Now what
must be the effect of the advance in wages which
is thus gained by the workman 1 Previously higher
than wages in other countries, or in other pursuits
in our own country, this advance makes them a
still more tempting mark. The consequence is,
that more foreign mechanics are attracted to our
shores to compete with domestic labour; more
young men are induced to abandon their farms,
and throng our towns and cities in order to learn
trades. And, farther, since these Unions operate
with the greatest power and success along the sea.
board, workmen linger there, waiting a rise of
wages, and carr3ring out a contest with masters,
when their own welfare and that of the country is
loudly inviting them to the West. Thus the very
success in which the Union glories, soon raises
round its members a large crowd of competitors,
and prepares the way for a humiliating reverse.

Such reverse can be averted in but one way,
and that is, by converting each trade into a close
corporation; putting up at its entrance barriers
over which no one shall be allowed to pass except
with the consent of its members. But this can
never be accomplished in America. It is too re-
pugnant to the spirit of the people. Indeed, the
very foreigners who come here to establish Trades*
Ihiions, and enlighten us in regard to our liberties

286 POLITICAL ECONOMY

and rights, would be the first to denounce such i
attempt ; while tlie great law which must alwa;
cause supply to follow demand, would be sure
defeat it. - Still the attempt may, and, doubtless, w
be made ; serving for a while to throw embarras
ments in the way of the young and enterprisio
but recoiling at last on its misguided authors.

IL The only circumstance which could cou
teract this tendency in Trades' Unions to occ
sion a decline of wages, would be found in the fii
that they increase the demand for labour, and tfa
they do this in a greater degree than they increa
the supply. Should it appear that such is, indee
their influence, then may they repair the evil whi<
they must otherwise occasion, and even leave tl
country better by their establishment. But whi
in this respect, is the fact ? We affirm that tl
whole tendency of strikes and Trades' Unions
to lessen the demand for labour, even while th<
add to the supply.

They do this in four ways :

1st. They lessen the ability of the community
buy the products of labour. The demand for ai
one of these products must depend, of course, <
the number of individuals who desire it, and wl
possess, at the same time, the ability to purcha
it. This number is diminished by turn-outs ai
combinations in three respects.

(a) A feeling of indignation is awakened, whi<
determines many persons to dispense with an a
tide altogether rather than submit to expedien
for enhancing its price, which they dislike.

(b) Again : since raising the wages of thoi
who are employed in producing an article usual

POLITICAL ECONOMY. 287

mises its price, it must have the effect of placing
that article beyond the reach of multitudes who
previously felt able to procure it, or, in other words,
lessens the demand for it. On the other hand, a
fall in the price of any desired article multiplies
purchases, and may thus be the means of advancing,
for a season, the wages of those who produce it.

(c) But a much more important consideration
is, tiiat strikes, by throwing labourers out of em-
ployment, and by converting them, for a time, into
mere consumers, contribute much to lessen the
whole amount of wealth in the community, and, of
course, to lessen its ability to buy the products of
labour. If one hundred men, whose services are
each worth a dollar per day, turn out, and continue
unemployed for thirty days, it is obvious that the
community suffers a clear loss of $3000, which falls
in part on the labourer, in part on the employer,
and in part on the public generally. In truth, the
total loss must amount, as we shall perceive here-
after, to much more than this sum ; and it evidently
goes to diminish, by its whole amount, the ability
of those who have been accustomed to buy the
products of labour to buy farther. If the example
of these men were to be followed by all labourers,
so that the whole community did nothing to repro-
duce, but became mere consumers, it is obvious
that all property would in the end be destroyed,
and there would be no capital either to employ
labour or to purchase its products. And the ef-
fect which would thus ensue on the cessation of all
labour, must inevitably ensue in part wherever there
18 a suspension of labour. It tends, by impoverish-
ing a people, to lessen the number of buyers, and, of

'^88 POMTICAL ECONOMY.

course, to diminish the demand for productive in*
dustry.

2d. Combinations and strikes lessen the demani
for labour^ by lessening the number and ability of
employers.

(a) The number of employers in any trade, i. e.,
the number of persons who invest capital and tal-
ent in it, will be proportioned to the ease, certainiy,
and extent with which profits can be gained. Now
all three of these are diminished by strikes. Busi-
ness can be conducted with little ease or certainty
when we are liable every week to have a contest
with our workmen : a contest in which our opera*
tions are suspended, our feelings harassed, and, per*
haps, most important interests sacrificed. Hence
those already in business are often led by these
controversies to embrace the first opportunity of
escaping from it; and others who are looking
round for a safe and agreeable investment, are
careful to shun one which is liable to such con-
vulsions. We have heard of several cases in
which large amounts of capital have been with-
drawn from Great Britain merely on account of
the losses and vexations occasioned by Trades'
Unions ;* and we doubt if any employer ever

* '* The practical examples which I could cite of detriment
to operatives from unreasonable or unjust pretensions, are nu«
merous. A considerable number of lace-frames were removed
from Nottinghamshire to the western counties in consequence
of the combinations of workmen. In the 4th Parliamentary
Report respecting Artisans and Machinery, it is related that
one of the partners of an extensive cotton factory at Glasgow,
fettered and annoyed by the constant interference of his work-

{»eople, removed to the State of New- York, where he re-estab-
ished his machinery, and thus afforded to a rival community at
once a pattern of our best machinery, and an example of the best

POLITICAL ECONOMT. 289

passed through the difficulties iucident to a pro-
tracted strike without conceiving a thorough dis-
gust for the place and for his business. Does this
augur well for the workman ? In diminishing the
number of employers, does he not diminish the de-
mand for his own labour? Suppose the branch in
which he is skilled should become the abhorrence
of all capitalists, so that no one could be induced
to invest in it. Would it not be fatal to him ? How
but injurious can it be, then, to render it odious to
many or to a few of them ? We should suppose
that prudent men, who looked beyond the gratifi-
cation of silly passion to a permanent improvement
of their condition, would desire to commend their
business and themselves to the good-will of every
capitalist throughout the land.

If we consider strikes as they operate on the
extent of profit, we shall find that the effect is the
same. They tend, and may be said to aim, to re-
duce the profits of the employer; to transfer a
portion of them from his pockets to those of the
workman. Now we do not contend that employ-
ers receive, in no case, too large a proportion of
the proceeds of a business ; that they in no case
prosper at the expense of the employed. But we
do say that it is by no means the interest of the
workman to reduce greatly the master's profits.
There never was a greater error than to imagine
that large profits are incompatible with high wages,
and that we can maintain the latter only by de-
pressing the former. The reverse is rather true 5

mode of using it. The croppers of the West Hiding of Yorkshire,
and the hecklers or flax-dressers, can ' unfold a tale of wo' on thia
very rat^ect."— Wade's History of the Working Glasses, p. 282

290 POLITICAL ECONOMY.

for, let it be coDsidered, what must be the natural
effect of high profits ? Evidently it must be to At-
tract other capitalists into the business, thus to mul-
tiply employers, and, by exciting a competition
among them in their demand for labour, to raise
wages. On the other hand, depress profits, and
you drive many from the business, while you deter
others from entering it. Facts demonstrate the
truth, as argument does the reasonableness, of this
doctrine. In no country has the employer and the
capitalist received larger returns than in this, and
in none has the labourer received higher wages.
As, on one hand, capital increases in a country in
proportion to the profits received from trade, man-
ufactures, &;c., so, on the other, whenever it in-
creases faster than the population, the demand for
labour will constantly rise faster than the supply,
and the rate of wages, reckoned by the comforts
over which they give the workmen command, will
gradually, though perhaps slowly, increase. Such
has been the case in this country, as Mr. Carey has
shown at length in his work on Wages. Though
there may be causes in particular places or coun-
tries, such as excessive competition, a sudden rise
in rents or taxation, to counteract the operation of
this law, yet its truth stands unshaken, and has re-
ceived among us the amplest confirmation.

{b) Thus, then, do strikes contribute to lessen
the demand for labour, and, by consequence, the
rate of wages, inasmuch as they lessen the num'
her of employers and the ariiount of capital invest-
ed in a trade. They tend yet farther to the same
result by lessening the ability of employers. By
every strike the whole community suffers h

POLITICAL ECONOMY. 291

Not an individual escapes. The workman is the
greatest loser in proportion to his means. The
emplc^er is vastly the greater loser in amount*
He loses interest on the capital which he has in-
vested in machinery, materials, &c., for a period
equal to the continuance of the strike. He loses
by the injury which this machinery and material
suffers from lying unemployed. He loses yet
fiirther by having his plans frustrated, his con.
tracts rendered void, and, perhaps, his credit shaken
or ruined. It is not to be denied that strikes do
give to workmen a great and fearful power over
the welfare and prosperity of employers. But it
is a power which they no sooner wield than it re-
coils with redoubled and fatal violeAce upon them*
selves. Workmen sometimes exult in the fact that
they can ruin their masters. But would it not be
wise for them to consider whether, in striking that
lAoWf they do not strike also at the foundation of
their own prosperity ? Suppose the work of ruin
shonld advance until all employers were prostrated,
and all capital destroyed or driven from their branch
of business. Would it be a victory to triumph
over ? Would not the very same note that sound-
ed that victory, sound yet louder the knell of their
own best hopes ? Where would the men be, if
there were no employers to hire and pay them I
And if the ruin of all the employers would inevi-
tably be the ruin of all the men, then surely the
ruin of some of the employers can hardly redound
to the advantage of any of the men.

It should never be forgotten, that the rate of
wages must always depend on the ability of the
Gommuaity in which the labourer lives, first to

292 POLITICAL ECONOMY.

produce, and then to buy, the fruits of his Indus*
try ; and that, since strikes tend directly to lessen
such ability, they must, in the end, lessen the de«
mand for labour, and, of course, its wages. There
is another way, also, in which this same tendency
must manifest itself. Much of the industry of this
country is employed in competing with foreign in-
dustry, i. e., in producing articles like those which
foreign nations pour in upon us ; and, of course, this
industry can be sustained only so long as it furnish*
es the native commodity at a rate cheaper than that
which must be paid for an imported one of the same
quality. But any material advance in the wages
paid to workmen would render this impossible;
employers would find it necessary to abandon such
branches of business, and the workman would be
left without occupation.

3d. There is another way in which strikes and
combinations tend to depress wages, and that is, by
the introduction of machinery. We are far from
believing that machinery has any permanent ten-
dency to injure the labouring classes or to diminish
the demand for labour. On the contrary, we be-
lieve, and all experience proves, that by cheapen-
ing the products of labour, and thus increasing the
demand for them, such improvements ultimately
put in requisition more hands than they suppress.
Still it must be admitted, that the immediate effect
of substituting automatic for manual labour is to
throw a number of men out of employment ; and, by
overstocking the market of labour, to occasion a tem.
porary depression in wages. And it is this imme-
diate effect of machinery which labourers so much
dread. Having neglected, in many cases, to make

POLITICAL ECONOMY. 29B

lion for the future, they can ill afford to wait
imote, and, as they think, impossible advan-
; and hence the deep dislike and alarm with
, they contemplate any proposed invention,
the point to which we would ask the partic-
attention of the Trades' Union is, that by
nation and strikes they inevitably multiply
inventions. Proprietors who have been once
;ted to the dictation of their men, will be
most anxious to replace those men by agents
;an neither strike^ nor tirCf nor murmur ; by
s, too, that move with a precision and a pow.
attainable by man. If such agents have not
een devised, science will be laid under con.
ions to furnish them, and money will be paid
', and even lavishly, to quicken the flagging
of invention. It is a fact, which ought to be
nted on the minds of these men, that some of
dblest triumphs of modern art have had their
1 in the oppressive and disorderly combina-
of workmen ; and that scarcely one memo-
strike has taken place in Great Britain with«
5 last twenty years, that did not give rise to
Production of new and important labour-sa*
machinery.*

During my late residence among the factories, several
[lustrative of the injuries inflicted on their own body by
lions pressed themselves on my consideration. The fine
rs in Manchester, who have long enjoyed the highest
of almost any class of workmen in the world, and are
i we have shown, liberally paid, were the first who began
ircise control over their masters, and to convert their
into an exclusive corporation in the rotten-borough style.f

recollect a tarn-out in 1802, which lasted IVoni fborteen to flfteen
• that was for wages ; and at that time a good male^pinnercoald
609. (914 to 15), and the cara-out was among them, aa it always

294 POLITICAL ECONOMY.

4th. We have thus pointed out several ways In
which these associations would ultimately operate

The masters finding, after many struggles renewed from time
to time, that a redaction of wages cummensorate with the fall
in the price of gooc i could not be effected, had recourse to an
expedient wbich the workmen could not decently oppose, be-
cause its direct tendency was to raise, or, at least, to uphold the
wages of each spinner, although it diminished tho numbers ne-
cessary for the same quantity of work. This expedient con*
sisted in enlarging the spinning-frames, so that one spinner
comes to manage a pair of mules containing from 1500 to 2000
spindles, and to supersede the labour of one or two compmnion
spinners. I am well assured that, but for the extravagant pre-
tensions of the ruling committee, this catastrophe would not
have befallen the operatives for many a day to come, for two
reasons ; Ix^ause, first, the extension of the mule is a very
costly affair ; and, secondly, it requires the line of spindles to
be placed parallel to the length of the apartments mstead of
their breadth— the position generally designed, and the one best
suited for throwing light on the yarns."

So in the factories for spinning coarse yam for calicoes, fus-
tians, and other heavy goods. *' During a disastrous strike at
Hyde, Stayley-bridge, and the adjoining factory townships, sev-
eral of the capitahsts, afraid of their business being driven to
France, Belgium, or the United States, had recourse to the cel-
ebrated machinists, Messrs. Sharp and Co., of Manchester, re-
questing them to direct the inventive talents of their partner,
Mr. Roberts, to the construction of a self-acting mule. The
problem did not puzzle him long ; for, to the delight of the milt-
owners, who ceased not to stimulate his exertions by frequent
visitations, he produced, in the course of a few months, a ma-
chine apparently instinct with the thought, feeling, and tact of
an experiericed workman. The news of this iron marit as the
operatives fitly called it, spread dismay through the Union ; and,
long before it left its cradle, so to speak, it strangled the Hydra
of misrule."

*' Another illustration of this truth occurs m modem calico-
printing. In the spirit of Egyptian taskmasters, the operative
printers dictated to the manufacturer the number and quality of
the appi entices to be admitted into the trade, the hours of their
own labour, and the wages to be paid them At length capital-
ists sought deliverance from this bondage in the resources of
science ; and the four and five colour machines, which now

ham been ; those who get moderate wages never tarn out"— Aanm
Bsq., io First Factory Comm. Report, D. 3, p. 91.

APOLITICAL ECONOMY. 295

to reduce wages, even if they were left to them-
selves. But this can hardly be hoped. There is
another result still more disastrous, to which they
clearly tend, and which already begins to manifest
itself. This is, the formation of hostile combina-
tions among the masters. None can reprobate
more heartily than we do confederacies among
those whose wealth gives them a commanding in-
fluence over the welfare and subsistence of the
working classes. But if they are in danger of
being the victims of a confederacy, it is not sur«
prising that they should seek to enlist in their de-
fence an instrument which is likely to prove so fa-
lal when directed against ttiem. In England this
means of protection has not always been resorted
tO| because proprietors are engaged in so active
and keen a competition among themselves as to
render concert and co-operation almost impossible.
But in this country, where competition is less close,
and is conducted on more generous principles;
where the workman, too, has so little just cause
for complaint, and is able to exercise so powerful
an influence, there is every motive which interest
or sympathy can supply to produce union among
the employers. It will be produced. Already

render calico-printing an unerring and expeditious process, are
the results."

** One day I observed placards posted throughout Manchester,
announcing that a considerable number of yam-dressers for
power-loom weaving were wanted at a well-established factory,
and I was led to conclude that some of the best-paid artisans
had become refractory. A short time after, on entering jthe en-
gineering workshops of Mr. Lillie, I descried the corollary of
the strike in the fonn of a new apparatus, preparing for the
purpose of making free labourers to dress warp as well as the
monopolists, and with threefold expedition." — Dr. Ure*8 Phi*
loBopny of Manufactures, p. 365, et seq.

296 POLITICAL ECONOMY.

the first steps are taken. In some trades and
places, the rallying-point has been established;,
and it is for the Unions to say whether there
shall not be a gathering of all master mechanics^
who would enjoy the privilege of controlling their
own concerns, and escape the tyranny of a dark
and irresponsible junto. Should such a contest,
so organized, ensue, we need hardly say what
must be its issue : a contest in which men with
capital, talent, and influence, upheld by the sup-
port and sympathy of all other classes of their
fellow-citizens— cheered on, too, we might add, by
the friends of liberty and good order throughout
the world, are arrayed against those who have no
capital, who are without sympathy even in their
own families,* and who have no power but the
reckless power of a mob. There may be violence
and wasting destruction. The torch of the incen-
diary may be applied to the shop, and even to the
dwelling of the master. It may become unsafe for
him to go forth by night, or even by day. Still
the issue is none the less certain. Workmen cannot
long subsist without food. Outrages such as we
have referred to cannot be perpetrated often, and
yet escape the arm of the law. In a country where
four fifths of the people belong to the agricultural
class, and find themselves injured by the proceed-
ings of Trades' Unions — where cities, too, are not
yet so vast and so corrupt as to place all law at
defiance, combined workmen have little to expect
in the way either of victory or of immunity. De*
feat, punishment, and abject submission must be the

* It is difficolt, we believe, to find advocates of Trades* Unioitf
unong the drives of the members.

POLITICAL ECONOMY. 297

result of a protracted and organized contest. Nor
will that be all. The men, by that contest, will have
taught their employers the fell power of a combina-
tion. They will have extinguished their kindly feeU
ings, and transformed them from friends into foes.
The public, weary at last of the din of the conflict,
may turn away, and leave both parties to seek mu-
tual redress and retaliation in one unending series
of wrongs. Is this a consummation to be wished ?
Is it well that diflerent orders of our people should
thus be arrayed in deadly feud ; a feud which must
make the poor poorer, and teach the rich to riot
and glory in oppression ? Of all states of society,
we can imagine none more lamentable or fatsd.
Let it once arise and continue, and servile classes
must be formed, servile wars ensue, castes, privi-
leged and unprivileged, be established ; and this,
the chosen land of freedom, become the land of
bondage and degradation. We do not contend
that all these evils are to be the consequence of the
present struggle between workmen and their em-
ployers. But we do say that such a struggle can-
not perpetuate itself, and be extended till it comes
to embroil men of all classes and pursuits, without
ending in a catastrophe too dreadful to think of.

It may be said, however, that all these evils
might be avoided if Trades' Unions could embrace
both masters and men, and thus arrange, by mu-
tual agreement, the rate of wages. In this way all
collision of interests might be prevented, and both
parties participate in due proportion of the profits
of business. And such, we appprehend, is the
hope and expectation of the more reflecting and
conscientious members of the Union, who have
joined it, not from factious motives, but from the

298 POLITICAL ECONOMY.

honest desire of advancing their own order. Bui
even to such a plan there are insuperable objec-
tions. All history testifies that such combinations
will, in the end, prove to be combinations of one
class against the rest of the community ; plans to
advance the interests of a part at the expense of
the whole. The experiment was tried for ages in
Europe. Boroughs, corporations, and. guilds were
all so many unions of masters and journeymen in
order to regulate the hours of labour, the number
of workmen, and the rate of wages ; and the con-
sequence was, that they "felt power and foi^t
right ;" exacted prices from the purchaser, and
placed restrictions in the. way of industry which
proved intolerable. The rise of Birmingham,
Manchester, Leeds, and other great trading towns,
is to be traced directly to the oppressive power
wielded by neighbouring boroughs ; a power which,
in effect, levied contributions on all the rest of the
community, and suffered no man to engage in trade
except as it suited their pleasure. Nor are such
combinations objectionable merely on account of
the injustice done to those not comprehended in
them. In the course of lime they call down retri-
bution on themselves. By enhancing the cost of
articles to the consumer, they impel him to dis-
pense with them if it be possible, and thus they
tend directly to diminish the value of the labour
which is employed in producing them. Take the
following case, in which the whole power of the
British Parliament was invoked to sustain such a
combination, and invoked in vain : " The mechan-
ics, connected with the mystery of drapers, incor-
porated in the town of Shrewsbury, complained

POLITICAL BCONOMT. 299

that artificers, neither belonging to their company
nor brought up to their trade, * had of late, wuh
great disorder, upon a mere covetous desire and
mind, intromitted with and occupied the said trade,
having no knowledge, skill, or experience of the
same, and do buy, commonly and daily, such Welsh
cloths and flannels as is defective, and not truly
made, to the impeachment and hinderance of 600
people of the art or science of sheermen or frizers
within the said town, whereby as well they as
their poor wives and families are wholly maintain-
ed.' The Legislature listened to this representation,
and expelled the rival artisans. (8 Eliz., c. 7.)
Six years after, the act was repealed, with an
avowal that * it is now likely to be the very greatest
cause of the impoverishing and undoing of the poor
artificers and others, at whose suit fhe said act was
frdcured ; for that there be now, since the passing
of the said act, much fewer persons to set them to
work than before.' (14 Eliz., c. 12.)"

We have thus spoken of the influence which
Trrfdes' Unions are likely to exert in lowering the
wages of workmen, involving them in contests with
their employers, and preparing the way for their
permanent depression. There is another evil re-
sulting from them which merits solemn consider-
ation. It is the moral debasement to which they
lead. They congregate workmen, night after
night, in tumultuous assemblies, where their pas-
sions are inflamed and their principles poisoned.
Possessed with the notion that the working class-
es are oppressed — that their sufferings are not the
consequence of their own errors or misconduct, but
of the injustice of others — these clubs make it the

300 POLITICAL ECONOMT.

interest and the duty of every member to strength*
en such impression in his own mind, and to com-
municate it to others. Hence come discontent and
insubordination. From discontent and insubordi-
nation come strikes ; and strikes take men from
their proper pursuits, to spend whole days in the
streets or at the alehouse. Thus habits of indus-
try are weakened or destroyed ; and the mechanic,
accustomed, meanwhile, to draw subsistence from
the treasury of the Union, loses that lofty spirit of
independence, and that provident concern for the
future, which are the best security against both op-
pression and want. Tippling and gambling, of
course, are called in to fill up the vacant hours ;
and it is a fact, that men pass through but one or
two strikes before they become careless in regard
to their families, neglectful of their business, and
dissipated in their habits. On this point the ten-
dencies are so evident, and the facts so numerous
and incontestible, that we need not enlarge.

We have dwelt at such length upon the char-
acter of Trades' Unions, because they appeeft* to
us to represent some of the most striking tendon-
cies, and to imbody some of the most dangerous
heresies of the age. They exhibit, on a small
scale, the disposition so widely prevalent in this
country, to substitute the power of associations or
parties for the authority of law, and to gain un.
righteous advantages by means of disciplined and
confederated numbers. They exhibit, too, the
alarming disposition which prevails among us, to
excite and foster jealousies between those who
ought to be perfectly united, and who, according
to the theory of our government, are all workmg

POLITICAL ECONOMY. 301

Men and all gentlemen. Their whole strength they
derive from the notion that there is an essential
opposition between the rights of capitalists and la-
bourers ; that the one class can be sustained and
advanced only by crippling the other. This error,
in which they take their rise, they contribute fear-
fully to strengthen and extend. We would hold it
up, therefore, to the consideration of the philan-
tnropist and patriot. If they would see the spirit
of misrule and licentiousness exorcised, they must
labour more strenuously to let in light upon its dark
retreats. They must themselves strive, and incite
others to strive, that the knowledge of correct
principles and the influence of Christian morality
be spread among all the people. The zeal for
monopolies has been shaken among the mercantile
class, because they have gradually acquired more
just and enlarged views of their own interests.
Could such views be more thoroughly dissemina-
ted among the labouring classes, they too would
discover that they need no protection from orga-
nized Unions ; and that they best consult their own
prosperity, when they most respect the rights and
prosperity of others. But, above all, should re-
doubled efforts be made to spread among our coun-
trymen the influence of pure and undefiled religion.
Without this, we are lost : we may be lost soon.
Even now there is much in this young and favour-
ed land to awaken melancholy forebodings. Load-
ed with blessings, which make us the envy and ad-
miration of labouring men throughout the world,
we are yet discontented and factious. Clamorous
in the praise of our peculiar institutions, we yet
seem to understand but poorly their true nature or

302 POLITICAL BCONOMT.

value, or the dangers to which they are exposed. '^
Dependant for all our order and future welfare on ^
the due administration of law, we are yet constant-
ly taking or submitting to measures which tend to
prostrate the influence of courts and to overthrow
the authority of magistrates. Allegiance to party
is getting to be rewarded, we had almost said hon^
cured, before allegiance to country ; while inde-
pendence of individual opinion and feeling is crush-
ed under the ruthless car of popular passion and
prejudice. Is there nothing in such a state of
things to excite alarm ? * Is it not time, more than
time, that all who love their country should com.
bine to stay the progress of dangerous errors, to
allay the violence of faction, to promote kind feel*
ings among the various classes of our people, and
to build about our lovely heritage the sacred de«
fences of piety and truth !

SUMMARY OF PRINCIPLES.

CHAPTER I.

DEFINITION AND LIMITATION OF THE SCIENCE.

1. Political Economy shows how the happiness
of a nation can be best promoted by the production
and distribution of wealth.

2. It is limited,

1st, By its object, which is happiness, only so
far as that happiness depends on, or is infliu
enced by wealth.

2d, By its emdence, which is probable or mor*
al, not certain or demonstrative.

CHAPTER II.

RELATION OF WEALTH, LABOUR, AND HAPPINESS.

1. Wealth comprehends whatever has exchange"
ahle value, or, in other words, <* all the purchascm
able means of human enjoyment."

2. Exchangeable value is given to different ob-
jects according,

1. To prevailing taste.

2. To proportion between demand and supply.

3. To amount of labour expended on their
production.

804 SXTMMART OF PRINCIPLES.

8. Usually nothing has exchangeable value
less labour has been applied to it.

4. Labour is exertion for the .sake of gain, v
creates new or adds to pre-exioting values.

5. Labour conduces to happiness not
through the values which it creates, but als
affording occupation.

6. The severity of particular kinds of labo
qualified in some cases by the peculiar taste o
individual ; in all by habit, and by increased
pensation, or by the little knowledge and m
effort required.

7. Labour, in order to conduce both to h
ness and production, must be,

1. Free in respect to direction and quan

2. Remunerated, Remuneration shoult
sufficient to supply food, clothing, com
and instruction to the labourer and his
ily ; and also to afford a fund for sick
want of employment, and old age.

8. The happiness produced by a nation's w
is to be measured, not by the aggregate amow
such wealth, but by the number of persons ¥
it subsists in comfort.

9. To subsist in comfort requires, not luxi
but a supply for our physical, intellectual, and
al wants.

10. Therefore the great object of Econoi
Policy should be to secure such a supply fo
greatest possible number of people.

SUMMARY OF FRINCIPI1X8 SOft

CHAPTER III.

CONDITIONS OR ELEMENTS OF PRODXTCTION.

Iiefle are:

!• LabauTf which has been discussed.

2. Private properijff as opposed to community of
xxls. This is founded,

1. In right; every man being entitled to ex-
clusive possession and control of the fruits
of his own industry.

2. Inexpediency; since men, if free to appro-
priate to themselves the results of their la«
bour, will be free also to select the occupa-
tion in which he can produce most, and will,
at the same time, be disposed to do more
work, and to do it better than if the pro-
ceeds were to go to the community.

8. Land, including all natural powers and agents
hich can be employed in production.
4. Capital, i. e., the results of previous labour
tved by abstinence from immediate gratification,
id employed (whether as tools, machines, mate-
als, subsistence for labourers, or money) in re-
roduction*

CHAPTER IV.

UANS OF INCREASINO THE FRODITCTIVENESS OF

LABOUR.

The general means treated of in this chapter is
o-oPBRATioN, which may be resolved into,

A A

M SUMMARY OF PRINGIPIS8.

1. Division of Labour. This is indispensable
to any except the most scanty production.

(a) It augments production :

1. By leading to increased skill and manual
dexterity in workmen.

2. By saving time tgid economizing power.

3. By occasioning the invention of tools, ma-
chines, and new processes.

These advantages hold with respect to intellect*
ua) as well as to manual labour.

(b) It arranges itself spontaneously under the
guidance of individual self-interest, di^., and
operates without jar or disturbance, as we see
in the supply of a great city with food.

. 2. Exchange. This is inseparable from dm-
sion of labour. It takes the form of,
(a) Barter^ i. e.^ exchange of commodity against

commodity.
(h) Currency t i. e., exchange through a common
medium called money,

For money, no substance is so good as the pre-
cious metals, because,

1. They best serve as a common metuure of
value, being liable to the least fluctuation.

2. They are best fitted as a circulating me-
diumf since they are

(a) universally esteemed :

(h) do not lose much value by use or time

(d) admit of convenient subdivision :

(e) can be stamped.

8UM1CAR7 OF PRINCIPLBS. 807

CHAPTER V.

COMPENSATION OF LABOUR, OR WAGES.

1. By wages we mean that portion of the joint
educe of capital and labour which falls to the la«
lurer's share.

Scholium, In this chapter we mean real, not
mey wages ; i. e., wages estimated by their pow-

of purchasing subsistence, not by their nominal
Qount.

2. As labour becomes more productive through
bdivision of employments, machinery, and facil-
ition of exchanges, wages ought to rise.

3. Such would be the case if labour and ex-
langes were not unnecessarily embarrassed by
w, by combinations, or by ignorance.

4. Under the most equitable system, however,
6 wages in different employments would be une*
ud. They must and ought to be proportioned,

I. To the productiveness of the labour, which
will depend,

1. On the labourer's ability, natural or ac-
quired.

2. On his moral worth or honesty, dec.

II. To the time and expense previously re-
quired to prepare and educate the labourer,

III. To the scarcity of such ability; which
scarcity tends continually to decrease from
spread of Icnow ledge, competition, &c.

&. When wages are permanently insufficient for
e comfortable support of the labourer, it must be
nng to his vice, ignorance, and improvidence^

808 SUMMARY OF rRINCIPLES.

which depreciate the value of his services, or to
defects in the laws and usages which regulate his
compensation. The first can be obviated only by
raising the character of the labourer ; the second
partly by legislation, but more by the efibrts of en-
lightened and philanthropic public sentiment*

CHAPTER VI.

LAND — AND THE CONNEXION BETWEEN ITS PRODUC-
TIVENESS AND THE TENURE BT WHICH IT IS HELD.

1« By land, Political Economists understand
whatever natural powers (whether of soil, miner-
als, or water) are attached to the earth's surface.

2. These powers become productive only when
combined with labour ; with labour they can be
combined to no great extent till they are appro-
priated. Hence,

3. Property in land is the first and most essen-
tial condition of all production.

4. This property is held by various tenures;
and, according to the tenures, other things being
equal, will be the productiveness.

I. In Asia, the proceeds of the soil are divided
between the occupant-labourer (or ryot),
the tax-gatherer (or zefiiindar), and the sov-
ereign. The two former have each an he-
reditary and transferable interest in the
produce. The sovereign, being absolute,
generally exacts as much as he can, with-
out destroying the labourer.
In theory^ the ryot may be considered as the

dF PRINCIPLBS. 809

owner of land : in practice^ it belongs to the sover-
eign.

II. In Europe, the power of the sovereign has
been limited, and the title to land during
the middle ages vested principally in lords
and barons. It was cultivated by serfs or
slaves, of whom some were saleable like
cattle, and might be severed from the land ;
others were attached to the soil, and could
only be alienated with it. They had the
produce of a small parcel of land for their
own subsistence, but were obliged to la-
bour, most of the time, on land, all the pro-
duce of which went to the proprietor.

« At present, this system exists only in the north-
eastern parts of Europe. Elsewhere it has been
succeeded hy free labour, and by a tendency to the
system of free ownership which exists in the Uni-
ted States.
The disadvantages are,

1. Idleness, carelessness, want of skill, and want
of honesty on the part of the labourer.

2. Idleness, prodigality, and tyranny on the part
of the master.

III. Ii\. the south and west of Europe, at an
early period, serfsJup was replaced by the
plan of sharing the produce between the
labourer and the cultivator. The latter
(called metayer) is a voluntary tenant, find-
ing labour to co-operate with the owner's
seed, tools, stock, and land.

The disadvantages of this system are,

1. Mutual jealousy.

2. Oppression on the part of the proprietor.

SIO SUMMARY OF >A1NCIPLX8.

8. Waste of stock, &c., by the tenant.
4. Want of capital.
IV« In Great Britain, Holland, &c., lan<
generally cultivated by tenants who occ
it for a considerable term of years 8
stipulated money'rent. These tenants h
been protected against the rapacity of h
lords by law, and have been aided by
gradual fall in the value of money.
The advantages of the system consist in the
ducement held out to the proprietor to be libe:
to the occupant to be industrious, frugal, and
terprising.

The disadvantages, in the want of motive to
tenant to make permanent improvements in ci
yation, and to rely upon himself.

V. In the United States, land is generally

cupied and tilled by the owner. Thus <

ital and labour, being in the same ha

co-operate without jealousy. The spir

enterprise and self-reliance is cultiva

and the utmost motive is held out to

dustry, economy, and intellectual impr<

ment.

The same system prevails in the British p:

inces and in South America. That it does

produce in them the same results, must be att

uted to the inferior character of the cultivators,

to the interference of unwise laws restraining

dustry.

SmCMABT OF PRUVCIPLI8. 811

CHAPTER VII.

CAPITAL.

1. Labour would be powerless unless aided by
Che accumulated results of previous labour.

2. These results are of three kinds :

I. Such as are affixed to land.

II. Such as are incorporated with human abil.
ity, and thus become personal endowments.

III. Material and moveable products ; of which
a part is reserved for gratification, and an-
other part is employed in reproduction.-—
The latter only is termed Capital,

8. Capital, then, is that portion of the moveable
stock of a nation which is intended to aid in re*
production.

4. Of tKis a part may be employed in reproduc-
tion by him who originally produced it. A large
part, however, must be sold or loaned to others.

5. If sold, the proprietor is, of course, entitled to
an equivalent ; if loaned, to hire or remuneration ;
if employed by himself, to revenue. The capital
being useful, he is entitled to be paid for such use,
whether in his own hands or in another's.

6. The great use of capital is to employ labour*
Hence it has a right to share with labour the pro-
ceeds of their joint agency.

7. The sum thus received for the use of capital
is called, generally, profit. When loaned to an*
other, however, it takes the name of interest,

8. The right to interest and profit is founded^
I. In right ; as we have seen.

8 BUXMARY OF PRlNCIPIiBS.

II. In expediency ; since no one would save,
or, if he did, would allow his savings to take
a productive form, unless he could be re-
munerated.

9. This interest or profit id paid,

I. For the use of the capital, or, in other
words, as a compensation for abstaining
from its immediate consumption.

II. For the general risk of losing it.

III. For particular risks growing out of the
character of the business, borrower, ^sc.

IV. For the time during which it is in use.

10. CircuJaiing capital is that which is con-
sumed and renewed within the year. All other ia
Jixed.

11. The disposition to spend, by lessening cap«
ital, diminishes production ; the disposition to save
by increasing it, tends, on the same principle, t<
augment production. Hence the advstntage to
nation of high proQts and a high rate of interest

12. The passion for saving may be carried t(

CHAPTER VIII.

VALUE.

1. By value here, we mean value in excha
or purchasing power.

2. This is relative, not real or absolute.

3. When the supply is abundant, and the a
in demand, its value will be proportioned to t
bour of production.

SUMMARY OF PRINCIPI1E8. 313

4. When the supply is limited, value will de-
pend on the ratio between supply and demand.

5. There can be no permanent supply unless the
market value equals the costs of production* These
costs include,

I. Wages of all the labour employed, whether
in makingt transporting^ preserving, or vend-
ing the article.
II« Capital consumed, with profit on the same

for the whole time.
III. Revenue for superior fertility of soil, ad.
vantages of position, secret processes, &c.
This last revenue is sometimes termed monopO'
fyi because the right to receive it is not equally ac
cessible to all.
This right, however, is founded,
L In equity ; unless it be the result of fraud

or force.
n. In expediency; since it encourages fore,
sight, invention, and personal improvement.

6. Since value depends on the ratio of supply
BQd demand, consider,

I. That DEMAND varies.

(a) If/or necessaries and comforts, with

1. The number of people.

2. Their tastes and habits.
8. Their means of purchase.

This demand is, on the whole, steady.

(h) If/or luxuries and superfiuiUes, with the
fashion. Hence this demand is very un«
steady.

II. That SUPPLY varies with,

1. Seasons.

2. Vicissitudes of war, peace, dec

S14 fiVMMAaY OF PRINCIPLES^

3. Amount of knowledge enlisted,

4. Current rate of wages and profits.

5. Monopoly charges.

6. Taxation.

7. The constant tendency is to equilibrium be«
tween demand and supply*

8 In regard to the effect of different investmenU
of capital on value, consider,

I. That money in hand is unproductive,

II. That, invested in private securities, sucli
as mortgages, bills, bank or railroad sharesj
it is available, but subject to risks, and not
constant in value.

ni. That, invested in productive business, i1
should yield a gross profit sufficient to pa]i
for both use and risk, for all labour o£ the
proprietor and others, for use of buildings
and all expenses.

IV. That, invested in personal knowledge,
professional skill, &c., it is subject to risk
from sickness, death, want of employment,
&c.

V. That, invested in land, it is more safe, but
less available.

VI. That, invested in the cultivation of land
owned by another, it must yield a revenue
sufficient to replace what is consumed, with
interest, and afford a fair profit on the re-
mainder.

VII. That, invested in manufacturing, mining,
or shipping, it must yield enough to replace
what is consumed, pay interest on the resi-
due, remunerate for personal services, 6ic,

Oi» When the supply of goods so far exceeds the

SUMIURT OF PRINCIPLES. 816

demand that their price falls below the costs of
production, there is said to be a glut.

10. Gluts are general or partial. A general
glut is usually owing, in the first instance, to a sud-
den rise in the value of money. It is aggravated
by the necessity many producers are under of con-
tinuing and even enlarging their operations, though
they sell at a loss.

It is alleviated by the withdrawal of other pro-
ducers from the business, by the new demand for
goods occasioned by cheapness, and by inventions
which cheapen the production permanently.

CHAPTER IX.

DISTBIBXTTION OF WEALTH.

1. The two principal means of increasing the
aggregate wealth of a country are Education and
Freedom.

2. The. same means tend also to increase the
portion of each individual who contributes to pro-
duction.

8. The portions which fall to different individu.
als may be equitable, and yet not equal; since, ow-
ing to diversity of talent, industry, &c., one will
necessarily contribute much more to production
than another.

4. Even accidental advantages, such as that of
soil, position, ^sc, entitle their proprietor to cor-
responding gains, since,

1. It is impossible to distinguish what is ac-
cidental from what is the result of effort.

816 BUMMABY OF PRINCXPUSS.

2. Because no one else can prefer so good a
claim to these gains.

5. The right of disposing of one's property by
will is involved in the very idea of ownership. It
also encourages industry and economy.

6. In some countries, as France, the law abridg*
es this natural right too much ; in others, as Scot-
land, it does not limit it sufficiently. Entails and
mortmain are impolitic, since, on one hand, they
perpetuate property independently of the indust^
and care of the owner, and, on the other, deprive
him too far of control over it.

7. The properly of intestates is given by law to
their nearest kin, on the presumption that such
would have been their own will.

8. Labourers, land-owners, and capitalists are
usually enumerated as the parties among whom
wealth distributes. These can hardly be distin-
guished, least of all in the United States. The la-
bourer is usually, to. some extent, a capitalist, and
vice versa.

9. The proportion which each receives can be
fixed justly only by free contract.

10. Law ought to interfere only to protect per-
sons and property, and to encourage production.

CHAPTER X.

PRODirCTIVE INTERESTS.

1. These are Agriculture^ Manufactures^ and
Commerce,

2. (a) Agriculture is the employment of all whose

SUMMABY OF PRINCIFI1E8. 817

laiidy capital, or labour is applied to the production
of food or raw materials.

(b) Improvement has, until lately, been slow,
and ought to be accelerated.

8. (a) Manufactures include all who apply labour
or capital to working up raw materials for use.

(h) They call for greater division of labour
than agriculture.

(c) In Europe, free and chartered associa-
tions, called guilds, trades, &c., contributed to per-
fect the arts, but not to multiply their products.

(d) The modern system of manufactures,
L e., of carrying on production in large establish-
ments, and with the aid of inanimate forces, has
contributed to multiply products, perhaps less to
perfect them.

(e) This system has, in England, with many
benefits, brought some evils :

1. To factory operatives.

2. To agricultural labourers.

4. Commerce includes all who contribute by la-
bour or capital to the free and rapid interchange
of products. g

(a) In proportion as they add to the value of
products to the consumer, by saving him trouble
and time, and securing him against scarcity, they
are entitled to remuneration in the shape of wages,
profits, or both.

{h) Foreign and domestic trade are alike use-
ful, by multiplying enjoyments, and by inciting to
industry, invention, and economy. Under certain
limitations, both ought to be free.

6. These three productive interests are mutual-

318 SUMMART 07 PRINCIPLES.

ly useful wad dependant, and should therefore en
operate.

If agriculture has been most esteemed, it is n<
because in it labour is most productive, but b
cause one of its chief products, ybod, is pre-en
nently necessary and useful.

TQB SRIK

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