Popular Political Economy: Four Lectures Delivered at the London Mechanics' Institution ... [Book I]

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HARVARD
COLLEGE
LIBRARY

/

• r

POPULAR

POLITICAL ECONOMY.

FOUR LECTURES

BSLfVE&ED AT TH£

LONDON MECHANICS' INSTITUTION.

BY THOMAS ^DGSKIN,

FO&MXRLT HONORA&Y SECRETARY TO THE IK8TITUTI0K.

y " Tlie laws which determine the prosperity of nations are not the work of
man ; they are derived from the nature of things. We do not establish ; we
discover tJiem.** \ /. B. Say,

LONDON:

PRINTED FOR CHARLES TAIT, 63, FLEET STREET;
AND WILLIAM TAIT, 78, PRINCE'S STREET,

EDINBURGH.

1827.

-I<^T> H\%3

f .- \

• '

■-.. ^' . ' •

/ z'

LONDON
PRINTED BT S. AND R. BENTLEY, DORSET STREET.

TO

GEORGE BIRKBECK, ESQ.

M.D., F.C.S., M.A.S.

President of the London Mechanics Institution, of the
Meteorological and Chemical Societies, and of the Medical
and Chirurgical Society of London; Honorary Member
of the Literary and Philosophical Society of Bristol, 6(c. S^c.

MY DEAR SIR,

• In requesting you to accept the dedi-
cation of this little work I am actuated by
no mean ambition. I. wish to bear in this
public manner my humble but sincere testi-
mony to the great importance of your servi-
ces in promoting the advancement of sound
knowledge, and to the generous zeal which
leads you to devote much of your time, and
I am afraid, to sacrifice your health, to the
accomplishment of this great object ; and
I wish at the same time, thus publicly to
express the pride I feel at being numbered
among your acquaintance and fellow-labour-
ers in this field of true honour.

Frpm the beginning of the London Me-

A 2

IV DEDICATION.

chanics' Institution, which it is, I believe, our
common pride to have originated and sup-
ported, though with very unequal powers and
unequal efficacy, I have witnessed the un-
wearied diligence, the never sparing exertions,
with which you have laboured through good
and through evil report, sometimes publicly
misrepresented, but always esteemed and
honoured by those who knew you best, to
enlighten and improve its members. I have
frequently heard with delight the choicest
truths of science explained by you in the
happiest language and most engaging man-
ner, and I have marked with deep interest
how the taste of your audience has been
gradually refined by your example, while
their understandings have been enlarged by
your acquirements.

The Members of the Institution are already
indebted to you for numberless lectures on
some of the most interesting branches of ex-
perimental science, always recommended by
beautiful illustrations, and always made the
means of enforcing some moral truths.
Never wearied with well doing, after having

DEDICATION. V

explained the mechanism of the larger masses
of inorganic matter, you are now about to
begin a course of lectures on the more refined
mechanism of organised beings. You mean
probably to imfold to the members the won-
ders of our physical existence, and by con-
vincing them that the structure and functions
of our body cannot be understood, nor, if
disordered, restored to health, unless we are
minutely acquainted with all its parts, you
will prepare the way for the extinction of
that prejudice which still, unfortunately,
attaches to scientific dissection. Nobody
can wish that the respect and affection we
all naturally entertain for the hallowed re-
mains of dear relatives should be lessened,
or that dissection should become here, as it
is in some parts of the Continent, the mere
butchery of a carcase; but we are all interested
that no useless impediments should be laid in
the way of prosecuting this arduous and impor-
tant study, and that those to whose care and
tenderness we must trust our lives and our
health, should not have to begin their medical
education by violating the sanctity of the

VI DEDICATION.

grave. They are not made more humane by
being compelled, as at present, to have re-
course to some unlawful means of procuring
the dead, in order that they may relieve the
living.

The success of your former exertions is a
fair augury for your promised undertaking.
Not only has the parent Institution in Lon-
don given rise to numerous similar institu-
tions in the suburbs of the metropolis, and in
the greater number of our manufacturing
towns ; but it has been the exciting cause
for establishing similar institutions in France,
Belgium, and Germany : not only has the
extension of demand for scientific information
called into existence in this country several
cheap and useful treatises, it has also induced
several clever men to publish such works on
the Continent, some of which have been
wisely added to our own stock. It has been
said of Newton and La Place, and very pro-
bably may be said of every man who zea-
lously devotes himself to accomplish some
great and useful object, as for example, Mr.
Watt, and Mr. Wilberforce, that they enjoyed

;*

DEDICATION. VU

their reputation. Their celebrity wa§ not
altogether posthumous. And you, my dear
Sir^ having kept a" good object zealously in
view, are also honoured and imitated ; you
have the satisfaction of seeing your exer-
tions crowned with success, and of knowing
that the respect and admiration of your au*
ditors spring, in part, from the improved, the
kind, and endearing moral feelings you have
excited in their minds, while you have im-
parted to them scientific instruction.

Like many other persons, I felt a wish to
imitate your conduct, but I also felt, as I ex-
pressed in my first discourse, a great diffi-
culty in addressing an audience whose taste
had been refined by your lectures, aid who
had been almost spoiled for any less gifted
teacher. I felt that it was a perilous under-
taking to speak to them on a subject, gene-
rally considered dry and repulsive, and un-
susceptible of illustration by experiment ;
but being honoured on each occasion by your
attendance, the Members of the Institution
were attracted to the theatre by your pre-
sence ; they seemed to transfer to me a por-

VIU DEDICATION.

tion gf that deep respect they always enter-
tain for you, and I had the satisfaction of
delivering my lectures to numerous and at-
tentive audiences.

^ I had, moreover, the satisfaction of observ-
ing, that there was nothing in the subject
which the audience could not comprehend ;
and there was much in which they took a
lively interest. That it is one in which
sound information is more especially necessa-
ry, the proceedings of every day, and in every
part of our country, testify. TThat the laws
which regulate the production of wealth form
a part of the system of the universe, is now
generally admitted ;^that I have successfully
explained them, it is not becoming in me to
assert, but that we are all deeply interested
in ascertaining them, no man can deny. You
will, I trust, my dear Sir, remember, that in
my lectures I only explained the phenomena
of social production, as far as they form part
of a natural science ; I took no notice of
the eflfects of political regulations ; nor have
I departed from this principle in my book.
But when we learn from this science to ex-

DEDICATION. IX

tend our admiration of Nature from the phe-
nomena of the material to those of the^
moral world, it is impossible that we should
on all occasions curb our indignation and
prevent our tongues or our pens from over-
flowing with maledictions against those po^
litical systems and institutions which seem to
have turned the bounties and blessings of
nature into the direst curses.

The natural science of wealth relates only
to man, and knows nothing of the distinc-
tions between nobles and peasants, kings and
slaves, legislators and subjects ; and if we are
led to conclude at every step of our investi-
gations, that the fundamental principles of
political society as well as the administrative
acts of most governments are hostile to the
principles of this science, must we wilfully
suppress our conclusions,- must we turn
aside from the light of truth, that the wisdom
of our ancestors^ or the peculiar wisdom of
the few hundred beings in whose hands the
different governments of the world are
lodged, may remain for ever the only objects
of human adoration? I think not: and

A 5

X DEDICATION.

therefore, in endeavouring to unfold the
natural laws which regulate the progress of
nations in wealth, I have never hesitated
in my book to affirm, that we are indebted
for all civilization to that desire of providing
for our wants or of bettering our condition,
which arises naturally in aU human beings,
and which political systems have only de-
graded into low cupidity, or inflamed into
mad ambition. In this book I have ven-
tured to contrast in stronger colours than
might have been proper when addressing a
large meeting of the working classes, the
^boundless reverence due to the Author of
T)ur natural affections and instincts, which,
unwilled by us, lead to the present beauti-
ful and comprehensive system of social pro-
duction, with the little respect due to hu-
man institutions, which appear to me little,
if at all, calculated to promote the general
welfare. J ^

I need not remind you, my dear Sir,
that the wisest of mankind were for asfes
ignorant or unobserving of those natural
laws which Dr. Smith first remarked as

DEDICATION. XI

determining the prosperity of our race ; nor
need I call your attention to the obvious
fiact, that the wisest of all existing men are
quite incompetent to guess from the few of
these laws yet known to us what will be the
future condition of mankind. It is, however^
quite plain, that /the course in which our
race is carried forward by natural passions
and affections is so opposed to all human
institutions, that they must be changed or
abolished day after day in order to adapt
them to a state of things they are intend-
ed by the lawgiver, but vainly intended, to
prescribe. Society continually outgrows and
casts off the swaddling bands with which
the wisdom of our ancestors swathed its in-
fancy J Those persons who stand at the helm
of affairs are continually made sensible that
the human race is hurried along by a rapid
current which they cannot stem, and can
scarcely divert from its course. Their view
of the past is limited by the acts of their
predecessors, of the future by the probable
results of their own enactments. In the
mfEfan time, that civilization of which they

XU DEDICATION.

take no note, and one great branch of which
you have been, so instrumental in promoting,
proceeds onward in a steady course, under
the influence of general laws ; and no class of
men live in such a state of perpetual amaze-
ment and alarm at the occurrence of events
which they did not foresee, and being quite
unprepared to meet, attempt to check by
violence, as those statesmen who pretend to
direct the march of nations. Notwithstand-
ing, they continue to look on human society
as a machine put together and regulated in
all its movements by the politician ; and they
endeavour to make us believe that it would
fall in pieces if it were not for the preserving
power of his master hand.
l^ The view I take is totally different. (^Man
being placed on the earth by a power greater
than himself, and society being founded in
• natural laws, is regulated by them in every
minute part, and at every period of its exist-
ence. To provide for geiiei^al social welfare
seems to me an object much more beyond
the power of man than to estimate the bulk
and density of the planets.? However admi-

/

DEDICATION. XUl

rablymie faculties of each individual are
adapted to provide for his own wants, they
are quite incompetent to grasp, much less to
regulate the complicated relations of society ;
and these relations, growing more compli-
cated as our race multiplies on the earth,
make the puny ambition of lawgivers appear
every day more and more contemptible. I If
this be novel doctrine, it is dictated by the
altered circumstances of mankind. Events,
which continually, but more especially of
late, have set at nought the anticipations and
wisdom of legislators, must be responsible for
it. Mankind naturally multiply on the
earth, and naturally extend their wants ; the
produce of manufacturing and commercial
industry, which springs from these two
sources, naturally increases in value and in
quantity much faster than the produce of
agriculture ; the manufacturing and commer-
cial classes of society, consequently, come
naturally to out-number and to surpass in
wealth those whose support is derived from
agricultural labour ; and this has necessarily
altered, and is continually altering, in the

1^

XIV DEDICATION.

natural progress of society, the basis of power
in all governments, founded, as those of Eu-
rope originally were, on the principle of
giving all political power to the owners of
land, because they were then the owners of
all wealth. This circumstance sets in a
dear light the opposition between the natu-
ral progress of civilization and all existing
governments; and this circumstance, my
dear Sir, I need not inform you, has been
made more evident in our times than for-
merly, by those beautiful and ingenious me-
chanical contrivances, the structure and
movements of which I have heard you so
eloquently describe, and which in our time
have multiplied to an astonishing extent the
products of manufacturing and commercial
industry.

But I must stop. I have less occasion
indeed to dwell at present on this circum-
stance, because some farther observations on
it will be found in the following pages ; and
I only advert to it now as a justification of
some of the sentiments contained in them.
I wish to inform you, that I have a settled

DEDICATION. XV

and sincere conviction, whether right or
wrong is another question, that^overnments
generally are founded on principles directly
in opposition with the natural progress of
civilization A I trust our countrymen are
now much too liberal and enlightened to be
offended with the honest expression of such
an opinion : I do not court either persecu-
tion or martyrdom for my political faith, if
there be now any men so attached to exist-
ing systems, as to think that he who does not
believe in their efficacy ought to be hanged
or burned ; and it is only under the con-
fident assurance that no man by our liberal
countrymen, and under a soi-^isaiit liberal
government, will be persecuted on account
of opinions, that I venture to place your re-
spected and honoured name at the head of
some that are at variance, I am afraid, with
the political creed of the great majority of

men.

I am, my Dear Sir,

With the most unfeigned respect,

Your obliged and obedient Servant,

Thomas Hodgskin.

Pentonville^ April 19, 1827.

PREFACE.

This book not being exactly a transcript of t"he
Lectures delivered by the author at the London
Mechanics Institution in 1826, he thinks it is^
right to point out in what respects it resembles or
differs from them. The first lecture, on the
Influence of Knowledge, consisted of the
second, and part of the third chapters of the pre-
sent work, with one or two passages of the In-
troduction. The second lecture, on Division of
Labour, is here transformed into the fourth, fifth,
and sixth chapters. The seventh chapter, on
Trade, formed the third lecture; and the chap^
ters on Money and Prices contain the substance
of the fourth lecture. The greater part of the
Introduction, and of the third chapter, with the
first and tenth chapters, formed no part of the
Lectures. Some few passages, alluding to events
connected with the Institution, have been sup.

XVm PBEFACE.

pressed, though with some pain to the author,
because they were appropriate only when men-
tioned in the presence of those who could judge
of their correctness. Many passages also have
been added, even in those chapters which are
most literally a transcript of the Lectures. To
those who did not hear them, the view here taken
of Peoduction will probably appear to have some
little novelty in it ; and those who did, should they
look into the book from the expectation of finding
something to read more than they heard, will net
be disappointed.

Some of the added passages may appear un-
suitable to the mixed and popular assembly in
which the Lectures were delivered ; and on ac^unt
of them, those persons' who have assumed the
guardianship of the national intellect, carefully
shielding it from the contamination of philosophy,
and drilling it into servile obedience to human in-
stitutions, the only proper objects, in their opi-
nions, of worship and veneration, will be prone to
condemn the managers of the Institution for al-
lowing the Lectures to be delivered. The author
being willing to bear all the blame that may
belong to such passages, and being anxious to
guard the Institution against the possibility of its
being misrepresented, regrets very much that he
is unable to designate them, — they have become by
revision so blended with the original matter,— or

PREFACE. XIX

he should have thought it due to those gentlemen,
to mark in the following pages, as is done by
plays, the passages omitted in the representation.

The term Popular is not used in the Title from
a notion that the thorny discussions of Political
Economy are made amusing, and that its abstract
doctrines have been reduced to light reading ; but
from a notion that the principles here expounded
are more agreeable to popular prejudices than
those which have been made prevalent, though
still unpopular, by the writings of Mr. Malthus.
Our feelings are hostile to his theory; and with-
out pretending to controvert it, the Author has
endeavoured to show, that the true principles
of production justify the prejudices of mankind,
and strengthen that confidence the most enlight-
ened of our species were most disposed, prior to
the unhappy celebrity obtained by The Essay
ON THE Principle of Population, to place in
the wisdom and goodness of that Power, which
sustains, informs, and regulates the moral as well
as the material world.

Though popular in this sense, the book makes
no pretensions to be what is called practical.
The author is even afraid that its principles may
be regarded as more remote from the business of
life than those of most treatises on Political Eco-
nomy. He discusses none of the subjects on which
the people are in the habit of petitioning Parlia-

XX PUEFACK.

ment ; and, as far as legislation is concerned, the
book contains no practical applications whatever.
But if the view of the science here adopted be cor-
rect, there already exists a ode of natural laws, re-
gulating and determining the production of wealth ;
and although they influence the conduct of indi-
viduals, in a national point of view, they are only
susceptible of being known. To know is to ap-
ply them. Though they dictate no immediate and
positive enactments, they may, nevertheless, be as
worthy of the attention of mankind, as the vain
and ignorance-begotten schemes of human legis-
lators.

It will be found moreover, on a close examina-
tion, that the human lawgiver only attempts to in-
fluence the production of wealth by altering its dis-
tribution. The reason urged in favour of our corn
laws, for example, is, that they encourage agricul-
ture, and increase the production of corn : but
they do this by raising its price to the consumer,
and thus compelling him to give more of his own
produce than he otherwise would to com growers.
In the same manner, bounties, monopolies, com-
mercial prohibitions, alterations in the currency,
taxes, and, in short, the greater number of all those
social regulations which influence production,
whether they promote or retard it, only operate on
1 1 by first altering distribution. Accordingly, all
legislative measures relative to the production of

PREFACE. XXI

wealth, all the petitions of different classes in the
community, have no other immediate object, like the
petitions of the agriculturists for the continuance of
the corn laws, or like the petitions of the manufac-
turers for the abolition of them, but to take or keep
from one class and give to some other ; or, in other
words, to alter the distribution of wealth. As the
present Volume is strictly confined to developing the
natural laws which regulate production only, and
as the author purposely avoids discussing legisla-
tive measures, the reader will see that he does not
touch on those subjects which are supposed to con-
stitute the practical part of the science. It is his
intention, however, should his efforts meet any en-
couragement, to examine, in a subsequent volume,
the natural laws which regulate the distribution of
wealth. But, even should he succeed in develop-
ing these laws, he may still, perhaps, be liable to
the reproach of not being a practical man ^Ifor it is
strictly consistent with his views of social pheno-
mena, not to dictate or recommend any legisla-
tive measures whatever, but to leave mankind
at large, free from the restraint of positive insti-
tutions, and clear from the disturbance of view
caused by them, to find out and to follow the laws
which Nature has dictated J

It was his intention also to have noticed some
of the errors of the great Masters of the science,
which would have enabled him, as moral feeling

XXtl PEEFACE.

and scientific truth must always be in bannony
witb each other, to trace to its source the re-
pugnance now felt to some of the doctrines of
Political Economy. Men turn away disgusted,
not from truth, but from errors dogmatically
enforced. Being obliged, however, for the cdn-
veniency of publication to choose between point-
ing out errors and displaying truth, he has pre-
ferred the latter, and has contented himself in
general with giving what appears to him, as far
as it goes, a correct view of production, to con-
yy^ troverting the opinions of others. TOn this branch
of the science, the writings of Dr. Smith's suc-
cessors are chiefly defective ; — they are erroneous
chiefly on the subject of distribution. That great
man carefully distinguished the natural distri-
bution of wealth from the distribution which is
derived from our artificial right of property. His
successors, on the contrary, make no such dis-
tinction, and in their writings the consequences
of this right are stated to be the laws of Nature!
The falsity of their doctrines relating chiefly to
distribution, the author has the less reason to
regret that he has been obliged to alter his in-
tended plan ; for should his book be received
with only a small part of the favour shown to his
Lectures, he may have a future opportunity of
explaining the cause of the general aversion from
this not unpleasing and very important science.

PREFACE. XXIU

fA knowledge of the natural laws which re-
gulate the production of wealth, and consequently
the progress of civilization, is equally, if not more,
essential to the welfare of man, than a knowledge
of any other part of the wide creation\ All other
sciences and every art are only subsidiary parts
of that great whole, the master principles of
which it is the object of PoUtical Economy to
discover and describe. That the science is in-
complete, and as yet in its infancy — those who
profess it di^ering among themselves as to its first
principles — ^is generally admitted ; and supposing
it be of great importance to our welfare, the
author concludes that any work which either
familiarizes the knowledge already possessed, or
adds to it in the smallest degree, does not require
to be ushered into the world by an apology. His
book may not accomplish either of these objects ;
but having aimed at both, he commits his labours
to the judgement of the reader, without making
any apologies for adding one more to the many
books already published on what is generally con-
sidered an unreadable subject.

CONTENTS.

INTRODUCTION.

OBJECT AND SCOPE OF POLITICAL ECONOMY.

Diversity of opinions as to the utility of the science^ Reasons for
defining it. Mr. M'Culloch's definition. Consumption discard-
ed. Dr. Smith confined the science to production and distri-
bution. Phenomena to which the science relates, illustrated
by a reference to the United States of America and New Hol-
landy to the contment of Europe, and to the ancient empires
of Asia ; and by a reference to the productive power of savages,
and of civilized man. Land, and all other physical circum-
stances, not belonging to man himself, excluded from the sci-
ence. The science is confined to the consideration of labour,
which produces all wealth ; and it embraces all the natural
and social circumstances which influence the production and
distribution of wealth, discovering the former and examining
the latter. Dr. Smith only examines, and does not prescribe

sodal regulations. Page 1 — 44

b

•

XXVl CONTENTS.

BOOK I.

NATURAL CIRCUMSTANCES WHICH INFLUENCE
THE PRODUCTIVE POWER OF LABOUR.

CHAPTER L
MENTAL AND BODILY LABOUR. — PRODUCTIVE LABOUR.

Two species of labour ; the labour of observmg the laws of the
material world, and of carrying the means suggested by obser-
vation into • execution. Illustrations oi both. Both equally
useful. All labour productive which procures the labourer his
subsistence. Opposite opinion and practice. Page 45 — 52

CHAPTER n.
INFLUENCE OF OBSERVATION AND KNOWLEDGE.

influence of knowledge not noticed by economists till very lately.
—Mr. Say's opinion. Knowledge necessary to preserve exist-
ence. Its influence in agriculture. Example of fallows, and
green crops. Potatoes. Heir effects on population, particu-
larly in Ireland. Source of agricultural improvement. Wheat
and other grain not found growing wild. Subsistence aug-
mented by the discoveries of Beukels, as to curing herrings.
Increase of productive power by improvement in navigation,
exemplified by the price of tea. Effects of our increased know-
ledge of magnetism. Economical advantages of the safety
lamp. Steam-engines. The cotton manufacture. Gas-lights.
All improvements depend on observation. Page 53—75

CONTENTS. XXVll

CHAPTER III.
NATURAL LAWS WHICH REOULATB THE PROGRESS OF

SOCIETY AND KNOWLEDGE.

Political economists have not inquired into the natural laws re-
gulating the progress of knowledge. It does not depend ex-
clusively on division of labour which is preceded by inventions
and discoveries, lliis fact illustrated by Hindostan and other
countries. Progress of knowledge depends on general natural
laws. Uniformity of the progress of civilization. Influence
of necessity as caused by an increasing population. Illustration
from agriculture. Individual genius the result of the general
progress. Illustration of Mr. Watt. Manual dexterity must
be united with observation. Natural and necessary increase of
knowledge from an increase of people. Influence of govern-
ments in adding to knowledge. Page 7^ — 99

CHAPTER IV.
INFLUENCE OF THE DIVISION OF LABOUR.

Extended division of labour one characteristic of civilized man.
Connexion with productive power in England, Russia, and the
United States. Explanation of its advantages. Comparison of
making nails by the hand, and by machinery. Further division
of labour among established trades. All the advantages of
division of labour naturally belong to labourers. It takes place
under every kind of political institution, and must therefore
originate in some natural principle. Page 100 — 1 10

CHAPTER V.

CAUSES WHICH GIVE RISE TO, AND LIMIT,
DIVISION OF LABOUR.

Division of labour between the sexes. Diversity of age, talents,
and disposition. Division of labour arises from difference of

XXVIU CONTENTSfl

organization. Subdivision of labour ^m this cause as society
advances. Does not arise from barter. Necessity of barter.
Limits to division of labour. Extent of the market synony-
mous with number of labourers. Division of labour extended
by the multiplication of mankind. Dr. Smith held a similar
opinion. Principle illustrated by England, Russia, and Ame-
rica. By improved modes of communication. Present con-
dition of the labourer no proof that his productive power does
not increase with an increase of people. Ireland an apparent
exception. 'Fhe causes of its poverty all centre in misgovem-
ment. Doctrine here stated not a contradiction of Mr. Mal-
thus's principles. Page 111 — 126

CHAPTER VI.

TERRITORIAL DIVISION OF LABOUR. — LIMIT TO DIVISION
OF LABOUR FROM THE NATURE OF EMPLOYMENTS.

Limit to division of labour from the nature of different employ-
ments. Is continually extended by inventions and discoveries.
Limit to division of labour in agriculture depends on territorial
division of labour. Territorial division of labour explained
and illustrated. Originates in natural circumstances. Ex-
change necessary to its completeness. Has no connexion with
the political dirisions of the earth. Effects on agriculture of
restrictions on territorial divL<Hon of labour. Division of la-
bour not the cause of the labourer's poverty and degradation.
Influence of social regulations on division of labour.

Page 127—139

CHAPTER VU.

TRADE.

Trade, a branch of business like agriculture and manufactures.
Does not form a part of this science. IVeason for explainmg

CONTSNTf. XXIX

the Utility of wholesale and retail dealers. Home trade residts
from individual, foreign trade ^m territorial division of labour.
Natural drcumstances which give rise to retail trade. Dif-
ferences in the nature of commodities, and in the times of their
production. Advantages of the present mode of paying retail
dealers. Natural circumstances which give rise to wholesale
trade. Territorial division of labour is necessary, or only ad-
vantageous. Examples. The benefits of trade illustrated.
It adds to employment and promotes dvilization. It is a part
of the natural system of production, and grows up independent
of governments. Its advantages not limited nor regulated by
political distinctions. Example of the provinces of France
and the American States formerly under the government of
this country. Merchants necessary to our obtsdning these ad-
vantages. The principle of buying and selling with a view to
gsun tends to prevent fluctuations in the condition of society,
Merchants a disUnct class from speculators and gamblers.

Page 140—177

CHAPTER VIII.

MONET.

Definition of money. Natural circumstances which occasion the
invention of money. Different substances which have been
used as money. The precious metals now universally adopted.
Reasons for the preference given to them. They are natural
or universal money. Difference between money and wealth.
Circumstances which determine the value of the precious me-
tals, and the quantity of money m circulation. Governments
cannot alter the value of money, nor the quantity necessary.
Origin of coining. It does not alter the natural relation of
value in the precious metals. Frauds practised by Govern-
ments by means of the coin. Money is regulated in minute

XXX CONTENTS.

detail by natural drcumstances, and does not, therefore, re>
quire to be regulated by goveraments. Origin and evils of
govemment paper-money. Origin of commercial paper-money.
Promissory notes and bills. Vast amount of these now in
circulation. Advantages of this species of money. Natural
circumstances which give rise to banlters. llieir promissory
notes form only a small part of 4;ommercial paper.money.
Advantages of bank notes. Their disadvantages result from
the interference of Government. Amount of the issue of coun-
try bankers. Natural circumstances control and regulate paper
money. Page 178 — 218

CHAPITR IX.

PRICES.

Distinction between money price and natural price, and between
natural and social price. Opinion that natural price rises iu
the progress of society, stated and examined. It was not Dr.
Smith's opinion. Corn is a manufactured article. The labour
necessary to procure it, does not increase in the progress of
society. Price of wheat has not increased as our population
has multiplied. Is less in well peopled than other countries.
Effects of demand and supply on natural and on money
prices. Money price regulates consumption, and indicates the
most profitable production. Page 219—235

CHAPTER X.
EFFECTS OF THE ACCUMULATION OF CAPITAL.

Security of property, and accumulation of capital, sidd to influence
production. Reasons for not noticing the former, and for noti-
cing the latter. Definition of capital. It is a part of the na-
tional wealth, used for the sake of the profit it brings its owner.
Capital considered under three classes of circumstances. If

CONTENTS. XXXI

made and used hj the same persons, it aids production. If
made by one set of labourers, and used by another, they appro-
priating the whole produce between them, it aids production.
If the owners of it be not labourers, it impedes production.
The latter is the present state of society. Difference be-
tween instruments and wages. Popular language one cause
of the prevalent error as to capital. Question, Would there be
any motive for an increase of wealth were there no interest on
capital ? considered. Conclusion. Influence of Political
Economy on our happiness. Importance of studying it. Illus-
tration ^m the general poverty. That is generally attributed
to nature : but here it is supposed to be caused by social in*
stitutions. Page 236«-268

POPULAR POLITICAL ECONOMY,

&C.

INTRODUCTION. %

OBJECT AND SCOPE OF POLITICAL ECONOMY.

Diversity of opinions as to the utility of the science — Reasons
for defining it. — Mr. M^Cullock*s definition. — Consumption
discarded. — Dr. Smith confined the science to production and
distribution. — Phenomena to which the science relates, illus-

*

trated by a reference to the United States of America and New
Holland, to the continent of Europe, and to the ancient empires
of Asia ; and by a reference to the productive power of savages,
and of dvilized man. — Land, and all other physical circum-
stances, not belonging to man himself, excluded from the sci-
enoe^— The science is confined to the consideration of Labour,
which lEioduces all wealth ; and it embraces all the natural and so*
dal dicumstances which influence the production and distribution
of wealth, discovering the former and examining the latter. — ^Dr.
Smith only examines, and does not prescribe social regulations.

Two very different opinions prevail in society re-
garding political economy. On the one hand it is
described as the most important of all the sciences,
and indispensable to the welfare of society. It is said
to explain the laws which regulate our condition, and

^ DIFFERENT OPINIONS OF POLITICAL ECONOMY.

teach us how it may be improved. " Its object," we are
told, '' is to point out the means by which the industry
of man may be rendered most productive of necessa-
ries, comforts, and enjoyments." ''There are few
branches of human knowledge," says Mr. Malthus,
" in which false views may do more harm, or just views
more good." Persons who entertain these opinions,
would have the principles of political economy, incul-
cated at school, like the most common branches of edu-
cation, and made the basis of all legislation. So ^Eir do
they carry theur respect for its doctrines, that by them
they would rebate the intercourse of the sexes, and
all the relations of social life.

On the other hand, there is a large class of persons
who never mention political economy without a sneer.
They deny that any such science does or can exist ;
and deride those who undertake to teach it. '^ Some
of its doctrines," it is stated by Mrs. Marcet, one of its
most distinguished ornaments, ''are repugnant to the
impulse of the heart, and the feelings of uninformed
benevolence ;" and all the class of mere sentimentalists
cannot bear to hear them enunciated. They say it
degrades the labourer to a machine, and calcu-
lates the price of his bones and thews, as if they were
parts of a steam engine ; that it takes no account of
man, "the head, the heart, and tongue of all," but as
he is a portion or " doze " of capital ; and all his noble
faculties are only noticed, in this science, as they con-
vert him into a more powerful instrument for producing
wealth. They turn with disdain from political econo-
my, because it makes individuals selfish, and corrupts
our national councils. No calamity falls on the coun-
try, no alteration takes place in the course of trade, no

REASONS FOR DEFINING THE SCIENCE. O

Struggle ensues among workmen to obtain higher
wages, no discontent breaks into open day, no dis-
tress overwhehns the manufacturer, no affliction falls
on the peasantry, which is not or has not been attri-
buted to the influence of political economy, over the
minds of the legislature.

It is impossible to reconcile these contradictory views;
but as both are prevalent, being repeatedly met with
in the public journals, and continually reproduced in
Parliament, as well as among all classes of the people, it
seems desirable to make the reader thoroughly aware
of the object and scope of that natural science, which
has received the erroneous name of Political Economy ;
— demonstrating its possible existence ; describing, in
the course of the work, its present boundaries ; and
showing briefly, but distinctly, in what manner it has
been confined far within its legitimate range, or per-
verted from its peculiar object. If, on the one hand,
there be a natural science of national wealth, there can
be no more wisdom in despising it, than in despising
the natural science of astronomy or botany ; if on the
other, it be incomplete and imperfectly known, we
shall understand why the presumption of those who
have undertaken to regulate society by their opinions,
should excite both indignation and contempt. Whe-
ther the aim of disarming mockery, and exposing pre-
sumption, be accomplished or not, I may at least hope
to prevent the reader from indulging an exaggerated
notion of what the science can perform, or encourage
him to conquer his prejudices, and seek for extended
information in more elaborate works.

" Political Economy," is defined by Mr. M'CuUoch,
to be '^the science of the laws which regulate the pro-

B '2

M£MMit,

"■ii..

^ IT 18 THE SCIENCE OF THE PRODUCTION

duction, distribution^ and consumption of those articles
or products which have exchangeable value^ and are
either necessary^ useful, or agreeable to man.* Many
very useful articles, such as air, light, and water, un-
der some circumstances, have no exchangeable value,
and are not included in the term wealth. Whenever la-
l>our is required to produce a commodity it receives,
and most commodities, which are the product of labour,
possess the quality of exchangeable value, and are in-
cluded under the term wealth ; commodities not pro^
duced by labour, and which no labour is required to
obtain, do not possess exchangeable value. To this
doctrine, land forms a remarkable exception. Labour
improves and fertilizes it; but it possesses, in most
cases, exchangeable value independent of the labour
vested in it ; and in all cases more exchangeable value
than is measured by that labour. How land comes
to form this exception, will be hereafter explained;
but as all consideration of land, with its varied degrees
of fertility, will be expressly excluded from this Work ;
as exchangeable value is, in all other cases, given by
labour, the science of which I am to treat, is strictly
and exclusively confined to labour and its products.
The distribution of wealth contemplated by politiical

* " Principles of Political Economy," page 1. This defini-
tion seems, in one respect, to be rather at variance with the tenor
and spirit of Mr. M*Culloch's writings. In many parts of them
he carefully distinguishes between natural circumstances and
social reg^ulations ; but the definition confounds under the one
term laws, those eternal and invariable laws which he elsewhere
says are the same, both in republics and monarchies ; and those
varying enactments which forbid durix^g one, what is enjoined in
the subsequent session of Parliament.

AND DISTRIBUTION OF WEALTH. O

economists is, according to the same author, " the pnf-
portions in which the various products of labour are
distributed among the different classes in society ;'* or
it is the appropriation of the products of labour, and is
quite distinct from the actual distribution of commodi-
ties made by trade. Those to whom much is distri-
buted, or who have the power of appropriating much,
will consume or use much; or they may give it to
others to consume, ^vith a view to subsequent profit, or
for the pleasure of giving. The particular manner iu
which they dispose of what they receive, may ulti-
mately affect production ; but their consumption or use
will be co-equal with what they receive. Landlords
and opulent capitalists will fare sumptuously every day
themselves ; they will keep a number of servants to
minister to their luxuries, or they will set labourers
to work for the sake of obtaining a profit on their la-
bour. On the contrary, those who receive or own lit-
tle, canno^consume much. Labourers have a bare sub-
sistence, ^he mode in which wealth is distributed,
has a vast influence on subsequent production ; but for
all practical and scientific purposes, distribution and
consumption are precisely the same. In consuming
wealth, the object is to support life, or give a zest to
existence ; and the most agreeable methods of con-
sumption must be settled by the taste of each indivi-
dual. If they be in any respect the subject of scientific
consideration, they do not fall in the department of the
economist, but in that of the cook, the physician, or the
moral philosopher. Consumption may, therefore, be
discarded from political economy, and we thus arrive
at a more simple, and equally comprehensive definition.
It is the science of all the circumstances or laws

6 CONSUICPTION NOT INCLUDED.

which influence the productive ppwer of labour, and
which regulate and determine the distribution of all
the products of labour. y

This limitation agrees with the writings of Dr.
Smith. He has no where accurately defined or defr>
cribed that science which is now called political econo-
my ; but it is generally admitted that all the scientific
part of his great Work, " The Wealth of Nations," is
comprised in the first book, which relates exclusively
to the ^ Productive Powers of Labour," and to ^'the
order according to which its produce is naturally distri-
buted among the different ranks of the people." Not
one word is said in the title of this book of consump-
tion; nor is there one chapter of the "Wealth of
Nations" dedicated to this subject. Consumption,
therefore, has been needlessly fastened on the science
by Df. Smith's commentators and disciples; and by
discarding it we return to his more simple, and equally
comprehensive arrangement.

Perhaps the reader may form a more distinct notion
of the interesting sort of phenomena to which political
economy relates, and certainly the importance of the
science will not be diminished in his estimation, by
briefly adverting, in the first instance, to some histori-
cal events. I allude more particularly to the progress
made, almost within our own recollection, by North
America and New Holland, in population and wealth,
— the nearly stationary state of some nations, and the
decay and ruin of others.

More than three centuries have now elapsed since
the discovery of America ; but it was only at the com-
mencement of the seventeenth century that the first
English colony was permanently established in the

ILLUSTRATIONS. — THRIVING NATIONS. 7

northern part of that continent ; the only inhabitants
of which, prior to that period, were a few tribes of In-
dians> who wandered over the whole country^ and ob-
tained^ by hunting and fishing, a precarious subsist-
ence. Their descendants have continued ever since
their wandering mode of life, and seem to have de-
creased in numbers as they have been narrowed in
their hunting limits by the children of the first co-
lonists. The Europeans, on the contrary, after they
had overcome the immense difficulties attendant on a
settlement in a foreign and new country, rapidly in-
creased in numbers ; they occupied and used all the
land in the immediate neighbourhood of their first
establishments, and have since gradually spread them-
selves over a large part of that continent. The pre-
sent dominions of the United States, east of the Mis-
sissippi, contain about 900,000 square miles ; and the
€h>yemment claims a still larger territory west of this
river. But though they claim, they do not occupy all
this territory. Before the colonies separated from the
Mother Country, they contained nearly 2,000,000
souls.* By the census of 1820, the population of the
United States amounted very nearly to 10,000,000;
and at present, in the year 1827, it will probably be
upwards of 12,000,000. A small part only therefore
of that immense continent, which formerly supplied,
and scarcely supplied, a few wandering Indians with
the necessaries of life, now maintains, in unprecedent-
ed general opulence, this mighty people. In the his-
tory of the whole world there is no other well authen-
ticated instance of such a powerful nation being formed

* Warden*! United States of America.

8 THRIVINa NATIONS.

in so short a time> without conquest or usurpation.
It has not subdued and incorporated with it contend-
ing tribes^ and nations already populous v it has grown
up naturally to its present strength. Under the be-
nignant influence of European knowledge and arts^ its
people have increased so rapidly^ and have advanced
with such giant strides in the career of national power
and prosperity, that they have put to shame those old,
and now, thank God, almost superannuated schemes for
adding to national prosperity by fraud and violence ;
and even those more modern, but perhaps not much
less absurd plans for accomplishing the same object, by
numerous restrictive regulations.

Towards the close of the last century convicts were first
sent from Great Britain to New South Wales ; and at
the beginning of the present century, free settlers first
went to that colony in considerable numbers. Already,
however, two or three flourishing towns have been built ;
and a very small nook of that island, which is so large as
to have been called, by some geographers, a fifth quarter
of the globe, and which, when first discovered by Euro-
peans, only supplied the means of subsistence to a few
straggling savages in the very lowest state of degrada-
tion and destitution, who dragged on a miserable exist-
ence, subject to numerous privations, being hardly able
to perpetuate their race, now supplies an abundance of
food for several thousand persons, and is capable of en-
abling many millions to subsist. The only want there
is of human beings, who know how to make use of the
rich bounties of nature.

In Europe, most of the continental nations make a
very slow progress in wealth, and are nearly stationary
in opulence and population. With the. exception of

STATIONARY NATIONS. 9

the neighbourhood of their respective capitals^ and
isome few spots in France, there is hardly a country on
the continent of Europe where new buildings are met
with. The revenue of the monarch, who takes to
himself all the disposable produce of his subjects,
being spent in adorning his own residence, creates a
demand for more habitations in his immediate neigh-
bourhood; but, in general, and the fact is so well
known, as not to require proof, the greater part of the
continental nations increase very slowly in wealth and
population.

The whole of Europe is supposed, by the author of
the article Europe, in the Supplement to the Encyclo-
paedia Britannica, to double its population once in about
90 years ; J3r. Smith says once in 500 years ; while,
iu the United States, the population is doubled once in
every 25 years. In Britain, Russia, Silesia, and some
other countries, says the author of the same article,
the increase has been more rapid than in the rest
of Europe. This increase, slow as it is, the reader
must be made aware, has no relation whatever, as is
generally supposed, to extent of country, or fertility of
soil ; for the increase has been much more rapid in
Britain within the last fifty years, where the people
amount* to 158 on every square mile, than in Poland, —
if^ in fact, the population of that country have in-
creased at all, which is doubtful, — where the number of
persons to each square mile is only 59 ; and it has
been probably, on the whole, as rapid as in Russia,
where the number of persons to each square mile is
only 21.

As some nations have risen, and are rising to opulence
and power, and as some are nearly stationary, so others

B 5

10 NATIONS FALLIMO TO DfiCAT.

wliicb have received tbe fairest portions of tbe earth fSor
an inheritance, are fast sinking, or have sunk, from the
possession of wealth and splendour, into poverty, weak-
ness, and decay. None of my readers can require to be
reminded of the ancient empires of Assyria, Persia, and
Egypt, of ancient Greece and Rome, or of Italy and
Turkey ; the once populous and flourishing condition of
these parts of the earth being attested in many places,
even to this day, by the ruins of several vast cities, by
splendid monuments of ancient art, and by the moul-
dering parts of gigantic works, which the most power-
ful of modem nations would shrink from undertaking.'
Man has, in one age, exhibited his wonderful prolific and
creative powers, apparently, only to prove in the next,
that they were not more than equalled by his power to
destroy. His hand fertilizes and adorns the fieioe of
the earth, which he also reduces to a melancholy ruin.
In the eastern and most anciently -known part of the
world, we find unerring proofs of the power of labour
to improve, and of ambition to devastate. If we could
not account, and satisfactorily account for this alter-
nation of prosperity and misery, by the prevalence of
one conspicuous error — the reverence of man for the
very authority which works his ruin, — ^we might be
tempted to believe, that there was no permanent de-
sire of happiness implanted in his bosom, or that the
world was not adapted to his capacities. But the go-
vernments of the Sultan in the east, and of the Pope in
the west, which are more honoured by their subjects
even than the Divinity, have converted the once bloom-
ing parts of Asia and Italy into deserted wastes.
Rome, it is conjectured by Gibbon, formerly contained
not less than twelve hundred thousand inhabitants, but

INDIVIDUAL AND NATIONAL OPULENCE CONNECTED. 1 1

at present^ they scarcely exceed a tenth part of that
number. ** In the ancient registers of imposts/' we
are told by Volney^ ^' 3200 villages were reckoned in
the district of Aleppo ; but at present^ the coUector can
scarcely find 400." All history convinces us> that the de-
vastations of war^ the effects of plagues, of inundations^
and of all natural calamities, are soon cleared away by
the hand of industry, whenever man is not brutally igno*
rant, and government not desperately oppressive. Do-
mestic oppression is a more certain source of national
ruin than foreign conquest. It is not a change of
tyrants, but continual, even though legitimate, tyranny,
which extinguishes a people. The sultan, with his pa-
chas, muftis, cadies, and janissaries, are the only instru-
ments capable, by appropriating the produce of the la-
bourer, and destroying the hope of enjoyment, of putting
an end to production, and of stifling or exterminating liis
subjects. If there be, therefore, as America and New
Holland testify, na^ura/ sources of national greatness,
there are, as the whole of the eastern and most parts of
the western world prove, social causes of depopulation
and national decay.

Not only do nations increase rapidly under some cir-
cumstances, while under others they fall into decay ;
but they differ very much as to the comfort and opu-
lence enjoyed by the individuals who compose them. It
is distinctly ascertained, for example, that in the United
States of America, the great majority of the people are
abundantly supplied with the means of subsistence .
they are weU fed, comfortably clothed, active, enter-
prising, intelligent, and moral ; while, in those eastern
countries, the great mass of the people obtain only a
meagre and wretched subsistence ; they are the victims

12 DlfFERENCE OF TROfaUCTIVE POWER

of eontinually recurring plagues and want ; and are ig*
norant^ slothful^ revengeful, blood-thirsty, and barbarous.
Individuals must be able to obtain with tolerable faci-
lity the means of subsistence to increase in numbers ; so
that the natural growth of national greatness, such as we
witness in America, and the prevalence of individual
comfort and morality, are strictly coincident. On the
other hand, when nations cease to increase in numbers,
when they begin to decay, we may be quite sure the
power of the natural principle of population is so great,
that in them the mass of the people cannot easily ob-
tain the means of subsistence. Individual poverty, a
scanty population, its slow growth, or national decay,
also accompany one another.

It may be easily anticipated, that the increase of a
nation, or its stationary state, will be accompanied by
different degrees of productive power. *' Among the
savage nations of hunters and fishers," such as were the
only inhabitants of America and New Holland, before the
Europeans went to those countries, " Every individual,"
says Dr. Smithy " who is able to work, is more or less
employed in useful labour^ and endeavours to provide,
as well as he can, the necessaries and conveniences of
life for himself and such of his family or tribe as are
either too old or too young, or too infirm, to go a hunt-
ing and fishing. Such nations, however, are so miser-
ably poor, that from mere want, they are frequently re-
duced, cr at least think themselves reduced, to the ne-
cessity of sometimes directly destroying, and sometimes
abandoning their infants, their old people, and those
afflicted with lingering diseases, to perish with hunger,
or to be devoured by wild beasts. Among civilised and
thriving nations, on the contrary, though a great number

ILLUSTRATED BY GREAT BRITAIN* 13

fffthe people do not labour at all, many of whom consume
the produce of ten times, frequently of a hundred times,
more labour than the greater part of those who work ;
yei the produce of the whole labour of the society is so
great, that all are often abundantly supplied; and a
workman^ even of the lowest and poorest order, if he be
frugal and industrious^ may enjoy a greater share of the
necessaries and conveniences of life than it is possible
for any savage to acquire."*

Taking our own country as an example and illustra-
tion*, only a part of the females, of the children, and
youth, though this part is much too large, labour for
the support of society. There are, moreover, all the
officers of government, all the persons connected with
the administration of justice, the army and navy, the
clergy, the landlords, with all those who live on their
property, U^ther with a long list of professional men,
who in no wise directly contribute to the subsistence,
the clothing, or the comfort of the community.

From the population returns of 1820, it appears, that
the number of feimilies employed in agriculture in Greats
Britain was 7^8,656, the number of families engaged
in trade and handicrafts was 1,350,239, and the number
of fieanilies engaged in neither of these two occupations
was 612,488. This account does not include, I believe, '
the army and navy, and a large class of professional
men, not being housekeepers. According to this enume-.
ration, however, Mr. Rickman states, that 333 families
out of every 1000 are employed in raising subsistence
for the whole society.f It is difficult to ascertain what

* Wealth of Nations, book i. chap. i.

•\ Introduction to Population Returns. Vide Pari. Papers.

14 PROPORTION OF PEOPLE WHO LABOUR.

proportion of the society actually provides all the food
and clothing we consume^ because many of the fetmilies
described as engaged in handicrafts serve only to mi-
nister to the luxuries of a few ; and because there are no
means of knowing what number of persons in each fa-
mily actually labour. In some trades, that of the cot-
ton spinner for example, both the parents and some of
the children are constantly employed ; while, in other
trades, such as those of the carpenter and the smith,
only the man labours. There are also a large number of
persons who do not labour, on account of age or infirmi-
ty. To conjecture what number of individuals actually
provide for the comfortable subsistence of the whole, we
must add to the families engaged in {^iculture those en-
gaged in trade and handicrafts ; and we must subtract
those members of each family, such as the extremely
young, and the extremely aged, the sick and the imbecile^
in short, all those who are either incapable of labour-
ing, or are excused from labour by the customs of the
society. If we suppose that two persons in each family
do not labour, which is a low estimate, we shall con-
clude that less than one-sixth of the people are engaged
in agricultural pursuits, and that not above one-fourth of
our whole population provides every thing which is con-
sumed by us all. Among savages all the men and wo-
men labour ; their labour barely supplies the necessa-
ries of life, and they increase very slowly, if at all, in
numbers ; while in civilized society the labour of only
a small part of the people supplies numerous conveni-
encies and luxuries, and the society grows in population
and power.

These passages have, I hope, placed distinctly before
the reader two remarkable contrasts, in both of which

REMARKABLE CONTRASTS. 15

the comfort and opulence of individuals is closely con-
nected with increasing national greatness. Under the
same circumstances of climate, soil, and situation, we
see, on the one hand, that nations increase rapidly in
wealth and power, and in them the mass of the people
are comparatively opulent ; on the other, that they do
not increase or actually decay, and the people are com-
paratively poor. In the two states of society there is
a prodigious difference in the productive power of in-
dividuals : the labour of each, in one state, subsisting a
great number of persons; in the other, barely procuring
food for himself. Now we want to know all the circum-
stances which influence the productive power of labour,
the prosperity or decay of nations, and, in a general
sense, the opulence and poverty of individuals ; and to
ascertain all these circumstances is the great object
of political economy. ,

It is, however, not a little remarkable thatAee may ^""^
at once reject from our inquiries all the physical cir-
cumstances, and all material things not inherent in
man himself, and not created by labour, which are sup-
posed in general to influence most strongly the pros-
perity of our race. Climate and situation, however
apparently influential, have in reality so slight a de-
gree of power, and their peculiar effects depend on
causes so little known to us, that at present they are
inappreciable.! They were the same, we have every
reason to believe, in the eastern world three or four
thousand years ago, as at present ; and certainly they
were the same for the American Indians, and for the
savages of New Holland, as for the Europeans; and
they are the same in modern as in ancient Italy ; ex-
cept, indeed, that it seems to be satisfactorily proved.

^y

A^

16 LAND EXCLUDED FROM THE SCIENCE.

that the climate of al) countries is improved by the
multiplication of people^ and deteriorated by their de-
crease and decay.

f The land falls not within the limits of the science
any more than the sea or the air. It was as exten-
sive for the Indians in America as for the Europeans ;
and the dimensions of Asia have not been curtailed
since the days of its splendour. There is no reason to
believe that it is less fertile now than when it nourished
the inhabitants of the vast empires already mentioneoj
Little as the continent of America yielded to the savage^
it yielded even that little only to his labour ; and ex-
cluding from our view the different kind.3nd degree of
labour exercised by the two races^ it now yields as
much to him as to the civilized European. In fact> the
spontaneous productions of the most fertile districts, do
not amount to the ten thousandth part of what civilized
man can obtain from the soil. (Labour, enlightened,
well-directed labour, converts the sterile rock into a
fertile field ; and it is no exaggeration to say that it
gathers bread from the salt wave J

To show more distinctly the inefficiency of fertility,
and the immense power of labour, let me remind the
reader of the wealth and comfort formerly enjoyed by
the inhabitants of the marshes of Holland, and of the
poverty and destitution suffered by the people, gene-
rally, of the South of Europe, but particularly of Italy
and Spain. The soil, and the ships, and the houses ;■
the villas, the gardens, the mills, of the industrious and
once mighty people of the former, may all be said to
have been won from the bosom of the ocean ; while the
possession of a large tract of the most fertile land of
Europe cannot give comfort, power, or splendour to

FERTILITY AN INSIGNIFICANT SOURCE OF WEALTH. 17

the latter. The dominions of the Sultan would make
several Englands ; they are traversed by some of the
finest rivers of the old world ; they contain many ad-
mirable situations for commerce ; they easily commu-
nicate with Europe and India ; they are placed in a
temperate climate ; and if mere fertility could give
wealthy all their inhabitants might be delightfully opu-
lent : but the great mass of them are poor and wretch-
ed, and the nation is impotent and degraded.

Perhaps, however, the different progress made by the
United States of America, and the Spanish colonies in
the Southern part of that continent, afford the best il-
lustration of tke total inefficacy of a boundless territory
and of inexhaustible fertility, in making individuals
wealthy and nations powerful. The Spanish colonies
were established in America nearly a century before the
British colonies were settled in the North of that con-
tinent ; they found there two extensive and populous
nations, whom they conquered and employed as slaves
to add to their own wealth. The fertility of that coun-
try is such, that we are told by Humboldt,* ^' A spot
of ground in New Spain cultivated with bananas, is
sufficient for the subsistence of more than fifty persons ;
while an equal space in Europe cultivated with wheat,
would not nourish above two." ** The labour (and it
is rude, untutored labour) of one individual, two days in
the week^ is there sufficient to support a numerous fami-
ly. In Mexico, maize yields on an average one hundred
and fifty fold, while in Europe, the farmer thinks his crop
excellent if he obtain eight bushels of wheat for the
one he sows.'* But it is well known that the Spanish

* Humboldt^s Travels in Equinoctial America*

1 8 PROGRESS OF SPANISH AND ENGLISH COLONIES.

colonies in this favoured situation, have no); increased
in wealth, power, and population, equally with the
British colonies, now the United States. I have al-
ready mentioned the number of their people ; but to
enable the reader to form a more accurate comparison,
I shall add, that when Humboldt wrote he estimated
the number of Whites inhabiting them to be 8,575,000,
while the whole number of Whites in all Spanish Ame-
rica was only 3,276,000.* All the supposed advan-
tages of fertility, and of an open country, belong to the
Spaniards ; but the enlightened industry of the Anglo-
Americans has far more than compensated for these
advantages, and has enabled them to ihultiply much
faster than the Spaniards.

Nor does the vast fertility of Mexico save the people
from fttmine : " The streets of the capital," says Hum-
boldt, " are crowded with between twenty and thirty
thousand unfortunate wretches, who pass the night
without any shelter, and lounge in the sun by day,
entirely naked, or only covered with a blanket. They
never ask charity, and if they labour one or two days
in the week, they earn as much as they require to pur-
chase maize, or some of the ducks which abound on
the lakes of Mexico, and which are roasted in their
own fat." " Famines," he adds, " are very common
in almost all these regions, and occur whenever a great
drought, or any other local cause, injures the harvest
of maize." With an almost boundless extent of good
fertile land, a people may suffer from famine, which is
never experienced in countries less favoured by these

* For these extracts from Humboldt, the reader may see
" Principles of Political Economy," by Mr. Malthus, p. 382, et
sub. ; or the original work, ^^ Essai Politique sur la Nouvetle
JEspagne.**

FERTILITY DOES NOT PREVENT FAMINE. 19

ph3r8ical circumstances, f Land> therefore, however fer-
tile^ does not create wealth, any more than sunshine
and rain ; and as well as these^ it may^ both as to di-
mensions and fertility, be entirely overlooked without
t^e chance of falling into an error.\

I beg the reader to recollect that l do not asserts that
wnat we call fertility in soils^ which is in allcases> how-
ever^ a quality relative to our knowledge at the moment
we speak, has no influence whatever on the quantity of
labour necessary to procure subsistence; but that influ-
ence is so unimportant, compared to the effects of know-
ledge-guided labour, that it may be neglected^ Thus,
rejecting situation, land, and fertility, the most im-
portant physical circumstances which are supposed to
influence the prosperity of our race, we may reject
firom the science all other physical circumstances^ ex-
cept the powers and faculties of man, and what he
creates.

It must always be remembered, though it seems
hardly necessary to state it, that all wealth is created
by labour^ and there is no wealth which is not the pro-
duce of labour* '^ The annual labour ," says Dr. Smith,
'* of every nation, is the fund which originally, and at
all times, supplies it with all the necessaries and conve-
niencies of life." '^ What is bought by money or with
goods is purchased by labour^ (i. e. the labour of ob-
taining the money, or manufacturing the goods) as
much as what we acquire by the toil of our own bo-
dies." " Labour was the first price, the original pur-
chase money that was paid for all things. It is not by
gold, or by silver, but by labour that all the wealth of
the world was orginally purchased."* Such language

* Wealth of Nations, book i.

^0 ALL WEALTH THE PRODUCE OF LABOUR.

appears much at variance with the commonly received
opinion, that land is the great source of all wealth ;
which makes it, in this country, be erroneously regarded
as pre-eminently deserving the name of property. But
the reader may be satisfied, by Dr. Smith's authority, as
well as my arguments, that land, like atmospheric air
and sunshine, is only one of the material elements in-
dispensable to the production of food. With them, it
gives us food as labour directs the fructifying power
that is the result of their combined operation. Even
its wild and spontaneous productions, which alone give
it the characteristic of wealth, must be gathered and
appropriated by labour. " Place us," says Mr. M*Cul-
loch, " on the banks of a river, or in an orchard, and
we shall infallibly perish of thirst or hunger, if we do
not, by an effort of industry, raise the water to our
lips, or pluck the fruit from the parent-tree.*'*

Familiar and correct as the principle, that all wealth is
the produce of labour, may appear, the opinion just refer-
red to, that land is the source of wealth — which is the
fountain of much injustice towards individuals, and
much national animosity, it having been the occasion of
several wars, and the excuse for muchusurpation — shows
that this principle is not universally recognized. As it
is the only safe basis, however, on which the legislator
can establish a right of property — if he be at all called
on to establish what exists naturally ; as it is not only
the source of all wealth, but the guide to just distribu-
tion, serving at all times to set straight the consciences
of individuals when led astray by self-interest, and to
rectify the policy of legislators when perverted by false

* Article, " Political Economy." Supplement to the Encyclo-
piedia Britannica.

ALL WEALTH THE PRODUCE OF LABOUR. 21

views of expediency ; the reader may not be displeased
at my quoting the following accurate and striking illus-
tration of it: —

If I abstract from my watch/' says M. Canard,
by means of reflection, all the labour which has been
successively applied to it, there will remain nothing but
some grains of mineral placed in the interior of the earth,
whence they have been extracted, and where they had
no value whatever. If I decompose in the same manner
the bread which I eat, and separate successively all
the labour which it has received, there remains only a
few stalks of a gramineous herb scattered in the uhcul-
tivated desert, and destitute of value."*

Perhaps as striking an illustration may be drawn
from what is at this moment taking place before my
eyes. Opposite to me are some bricklayers and carpen-
ters building houses, and the chief materials they em-
ploy are bricks, mortar, and wood. The instruments,
tools, and nails they use, being chiefly made of iron,
may be referred, like the materials of M. Canard's
watch, to their primitive situation in the bowels of the
earth. The bricks are made of refuse ashes, that were
an incumbrance before they were used for this purpose ;
—of day, that was removed to make a road, and which,
in like manner, tiU its conversion into bricks, was an
impediment to performing other operations, and was
worse than valueless. The fuel used to burn them was
originally hidden some fathoms beneath the surface of
the earth, and even to get at it required a great deal of
labour. The mortar is composed of sand dug up to
make a foundation for the houses, and must have been re-

• Principes d*£conomie Politique, p. 6.

22 ALL WEALTH THE PRODUCE OF LABOUR.

moved^ whether put to this use or not ; and of lime^ which
previous to being converted by the hand of labour into
this substance^ was hungry barren chalk, the object of the
farmer's maledictions. A few months back, the wood,
encumbered the ground in Norway or in America ; and,
if in the latter, was probably thought such a nuisance,
that the people were thankful to any body who removed
it. Till the ground was cleared of trees, it was of no use
to them. But out of these valueless, and worthless
materials, the combined labour of the brickmaker, the
bricklayer, the sawyer, the carpenter, the tool-makers,
&c. &c. constructs valuable dwellings, which shelter
their owners from all the inclemencies of the seasons ;
or, if other persons use them, add to their annual
revenue. That mighty mass of wealth, therefore,
which stands around Saint Paul's, constituting this
great and splendid Metropolis, has been made by la-
bour, and by nothing else than labour, from common
clay, from barren chalk, and from trees that men were
obliged to root out, before they could obtain a head of
cabbage or an ear of grain, from the soil. Beautiful
as they are, trees only encumber the ground which the
agriculturist must cultivate.

Mr. M^Culloch, from whose writings I extracted the
passage quoted above, may well say, therefore, " labour
is the talisman that has raised man from the condition
of the savage — ^that has changed the desert and the
forest into cultivated fields— that has covered the earth
with cities, and the ocean with ships — ^that has given us
plenty, comfort, and elegance, instead of want, misery,
and barbarism."

To me it is always pleasant to find the language of
science confirmed by the authority of the poets, who.

x^

INFLUENCED BY TWO CLASSES OF CIRCUMSTANCES. 23

obtaining popularity only by describing or appealing to
the general feelings and sentiments of mankind^ may
be supposed to be their most accurate representatives.
Supporting the scientific view just taken, Thomson
says —

" All is the gift of industry ; whate'er

£xalts,^embellishe8, and renders life

Delightful"

{Having thus established the principle, that all wealth
is created by labour, it follows that the whole differ-
ence between the productive power of a tribe of savages
and of a civilized society, between a community in
which every individual is opulent, and one in which all /-^
are in a state of destitution, between a nation rising into
power and one stationary or sinking to decay, must
be referred to the different modes in which labour is ap-
plied and its produce distributed. J And thus the whole
science of political economy is comprised, as already
stated, within the circumstances which influence the
productive power of labour, and determine the distri-
bution of its products.

The whole of these circumstances may be divided into
two classes ; Jirsty natural circumstances, or laws
not dependent on, or derived from government, — such
as the passions and faculties of man, the laws of his
animal existence, — and the relations between him and
the external world; and, secondly, social rroula-
TiONS, depending on, or originating with governments, — •
such as those permanent laws which appropriate the
soil of a country, or which bestow on it a constitution,
establishing a diversity of ranks among its inhabitants ;
as well as the laws for the regulation of trade and the
acts of the Administration, many of which are expressly

24 NATURAL CIRCUMSTANCES.

intended to add to the wealth of society, or determine
its distribution.

It was customary, not many years ago, with philoso-
phers, and with the people generally, to ascribe na-
tional prosperity and individual opulence exclusively
to forms of government and modes of administration.
Every social blessing was then supposed to flow from
wise laws well administered.

^^ To scatter plenty o*er a smiling land,
And read their history in a nation's eyes,'*

was flatteringly said to be the attribute of statesmen ;
and, in general, they received credit with the world
for being able, not only to confer abundance^ but to

\y promote virtue and secure happiness. ButA^hen the
colonies of North America, consisting of grubbers and
back-woodsmen, with a scorn of all regulations except
those the people hewed out for themselves, — with a
complete individual liberty, and few or none of the
shackles of a paternal or politico-economical govem-

^^ ment, became the mighty people of the United States,
increasing still more in prosperity and power as they
got rid of the protection of a European government, —
men plainly saw that the pretended wisdom of legis-
lation had no effect in producing national prosperity
whatever might be its influence over national decay j
and they were obliged to seek for i;he causes of ge^
neral welfare in the benevolent provisions of nature.
About the same period there arose in France a sect of
philosophers, called the Economists, " who proceeded,"
says Mr. Dugald Stewart, " on the supposition that
social order is, in the most essential respects, the re-

NATURAL CIRCUMSTANCES. 25

suit of the wisdom of nature^ and not of human con- .
trivance." Dr. Adam Smith seems to hare embraced
the same opinion. Having examined numerous social
regulations, but particularly the laws which regulated
the trade between Britain and its colonies, and hav-
ing found that these laws had injured the prosperity
of both countries, he was compelled to seek other
causes for the growth of that opulence, which could
not be denied, than the wisdom of government ; and he
found them in the interests, passions, instincts, and
affections of mankind. He taught, that the division of
labour among individuals, and the wonderful co-opera-
tion of different classes of labourers to produce a com-
mon result, by which the productive power of the
whole is amazingly increased, are not the result of
human or legislative wisdom, foreseeing and willing
the sublime, and for us most important, effect of general
opulence, but of an instinct in man, by which he takes
to this peculiar practice, as a duck takes to the water
and a fox to his cave. It is with these natural inte-
rests, passions, instincts, and affections, and with their
consequences, — they not being suspended at any mo-
ment, and continuing to operate as powerfully when
society is in its most advanced state as at its com-
mencement, — that political economy principally deals.
To them this book will be almost exclusively confined ;
on them, and on their permanency, together with the
permanency of those laws by which the material world
excites similar sensations in us, at all times and places,
is founded the natural science of national wealth. In
every subsequent page they will find a prominent
place. At present^ therefore, I shall confine myself to

26 PRINCIPLE OF POPULATION.

giving the reader one or two examples of them^ points
ing out the principle on which they are assumed as the
basis of the science.

■ The foundation of all national greatness is the in-
crease of the peoplel but unless there existed^ at all
times and places, a natural and almost irrepressible
tendency in the human species to increase, and a na-
tural capability of providing for their wants, how
could they have spread themselves over so large a por-
tion of the globe, — founding, in times past, those mighty
empires already alluded to ; which, though they may
have been aggrandised by conquests, must have found
human beings to subdue as well as soil to appropriate,
and must have contained human beings as the agents
of appropriation and conquest ? Or how could the fb*
rests of Germany have been cleared, and the marshes
of Britain drained, had not the people outgrown the
spontaneous means of subsistence which adorned the
ground, sparkled on the hedges, or dropped from the
stately tree ? when they,

— *' Sad barbarians, roving, mixed
With beasts of prey ; or for their acorn meal
Fought the fierce tusky boar." —

Or how could the forests of America be now cleared,
and European manners and civilization spread from
the Atlantic to the Pacific, did Europe not pour out
its superabundant people on America ; and did not the
industrious inhabitants of the existing United States
multiply so fast, that their paternal acres will not
conveniently supply them with the means of subsist-
ence? Unless there was in the human heart a na-
turaT^ove of life, and an instinctive love of offspring.

"NECESSITY TO LABOUR. i7

which no privations can subdue, no labour extinguish ;
— unless tit(£tt)t(/iiaZ industry^ the only source of national
opulence^ had in general exceeded social oppression^
and been at all times greater than was necessary to
supply the individual's wants— how could any race of
people have multiplied and improved ; seeing that in
no country^ and at no time, not even in the United
States of America, far less in New Holland, have the
labourers ever enjoyed or been suffered to consume
the whole of their own produce? At all times and
places labourers have had a number of persons to main-
tain more than themselves and their own families.
Thus, originally and naturally, man is endowed with a
productive power commensurate to his wants ; and that
power enables individuals to rear up families, and
maintain in idleness and opulence a number of per-
sons more than themselves. This natural productive
power — the gift, not of governments, but of our Crear
tor — is the great source of individual opulence and of
national greatness.

But this power must be exerted ; and are there na«
tural motives, independent of the stimuli derived from
governments, for the exertion? There are. Man is
doomed to eat bread by the sweat of his brow ; and
naturally those who do not work can have nothing to
eat. If we do not l&bour, we can have no food, and
must inevitably perish. This is as certain as any
axiom of mathematics ; and the stimulus to labour in-
Tolved in it, comprehending our existence, is as great
as possible. " Industry," says Mr. M'CuUock, '' does
not require to be stimulated by extrinsic advantages ;*'
nor, I shall add, by punishments or p^alties. The
necessity for man to labour, existing ^d operating

c 2

28 CORRESPONDING LAW OF MATTER.

among the rudest as well as among the most civilized
people^ in Europe and in America, in past as well as
in present times — in short, in all countries and ages>
and among all tribes and races of men, is a law of the
universe, like the principle of gravity. It pertinently
and constantly influences and regulates the conduct of
all mankind, just as gravity influences all bodies, even
those which, like the water of a fountain, seem for a
period to bid defiance to its power.

But is there no law regulating the external world
corresponding to this necessity ? Or has nature imposed
the necessity on us, without making the material world
answer to our hunger-driven labour? Quite the contrary.
It is a law of our being, that we must eat bread by the
sweat of our brow ; but it is reciprocally a law of the
external world, that it shall give bread for our labour,
and give it only for labour. Thus we see that the
world, every part of which is regidated by unalterable
laws, is adapted to man, and man to the world. This
reciprocity, or rather uniformity of the laws, regulating
the conduct of man and the material world, connects
him at all times, however high may be his bearings,
and exalted his hopes, with the clod from which he
sprang, and with the vast universe which he has intel-
ligence to scan, and a soul to reverence. He is a part
of the wisely regulated creation. *

When nature stamped this law on us, and on the
external world, she undoubtedly regulated and deter-
mined, through the endless succession of time, all its
possible consequences. She left us to choose between
starvation and labour ; between holding the plough our-
selves, and carrying a whip to make another hold it for us;
between subsisting ourselves by our honest exertions, or

ALL ACTIONS CONTROLLED BY NATURAL LAWS. 29

basely or violently plunderijig some other persons ; but
she fixed beyond our control the consequences of our
choice. There is ample reason to suppose^ therefore^
that all the minute branches of the production and dis-
tribution of wealth, are regulated and controlled by
circumstances flo^ving from the necessity to labour; just
as every part of the material world is regulated and
controlled by natural laws. As gravity determines
the stability of bodies on the globe, their motion to-
wards the centre of the earth, and even the motion of
those which seem to resist its power — they being forced
upwards by the superior gravity of some other bodies —
and regulates also the motion of the globe itself, as
well as the motions of all the heavenly orbs ; so the
necessity to labour makes its influence felt, even in
those cases, such as the steam-engine, in which man
seems almost to have subdued Nature, making her per-
form the task she imposed on him. In such cases, the
powerful instruments are made by labour ; they require
continual repair, which is done by labour ; and they
must always be directed and set in motion, which is
also labour, by the hand of man.
. But certain classes, it may be said, do not labour.
The aged, the sick, the imbecile, and children, are
supported by the labour of their friends. The receiv-
ers of rent and profit subsist on the produce of other
men's labour ; so do those who live on taxes. One in-
dividual may plunder another, or he may persuade
him to give* him subsistence. Social laws may compel
some classes to labour for other classes, or • may even
give the whole annual produce to those who never la-
bour. If we admit that the members of the govern-
ment, and the ministers of the church, are labourers.

30 mSCESSART COMSEaUSNCS8 OF THESE LAWS.

who secure by their exertions the rights of other men^
we cannot say the same for the slave-owners of the West
Indies^ or the mortgagees of their then property in Lon-
don : we cannot say the same for the landlords and the
fund- holders of England^ and for other similar classes.
They are all subsisted and supported, supplied with all
their wealth, by the labour of the slaves in the West
Indies, or of the toil-worn and half-starved slave-de-
scended labourers of Europe. Admitting that men
have, to a certain degree, the power of throwing the
necessity to labour off their own shoulders ; as they may
alter the direction of the influence of gravity, in making
a fountain rise from the earth into the atmosphere; the
question occurs, will throwing off this necessity, by the
appropriation of other men's produce, not be followed
by certain and inevitable consequences ?

Now we know from all history, that unjust appro-
priation, that every long-continued attempt in one class
of men to escape from the necessity of labour imposed
on our race, that every infringment of a man's right to
use, consume, and enjoy his own produce, has ever been
attended with disastrous consequences. It is a viola-
tion of a natural law which never passes unpunished.
Domestic slavery, combined with systems of foreign con-
quest and usurpation, ruined the empires of antiquity.
The exactions of all the emissaries of the Turkish go*
vemment, the total and forced disconnexion in that
country between labour and its reward, are there the
causes of national decay. The population of the West
Indies does not increase. The almost unconquerable
love of life — and the almost irrepressible power in our
species to multiply and increase, are there subdued by
oppression, or by the slave-owner's appropriation of the

INVABIABLBNESS OF NATURAL Z.AWS. $1

labourer and his produce. Such appear to me to be some
of the natural and necessary consequences, for I have
said nothing of the vast moral influence on the idlers
themselves, of their attempts to escape from the ne-
cessity to labour. Let it be remarked, however,
that notwithstanding their wish, and the evil conse-
quences known to result from their conduct, they can-
not, in fact, escape from this necessity. They only
change the cheerful, healthy exertions of honest
wealth-creating industry, for the irksome task of com-
pelling slaves to toil. Slave-owners and rich men,
among a crowd of slave-descended famishing labourers,
lead probably a more anxious and toilsome life in pro-
tecting their property, and in enforcing obedience to
their orders, than the slaves whose labour they extort.

Should it be said, that this statement is erroneous, that
unjust appropriation does not invariably check production
and ruin nations; yet there is a principle in our nature
—a law of our mind, by which we at all times believe in
the invariability of the order of the universe. This law
applies to the moral as well as the material part of crea-
tion. By it we believe, for example, that the same
circumstances which led . in times past to the destruc-
tion of the ancient empires of Asia, and that are now
leading to the ruin of modern Turkey, would, were
they called into existence, efl^ect the ruin of the flourish^
ing states of North America; as, in fact, some such cir-^
cumstances have checked the prosperity of South Ame-
rica; and by it believe that the principles of our
animal constitution, which now spread people and ci-
vilization over the vast continent of America, are ex-
actly the same as those which, three or four thousand
years ago, carried the ancient empires of the world to

32 ON IT THE SCIENCE IS FOUNDED.

the height of their splendour. But both the principled
which lead to the ruin of empires^ and those which im-
pel them onward in the career of power and civiliza-
tion, operate through man himself> affecting individual
prosperity, and being only known by the influence they
exercise over his conduct. Be they what they may,
be their consequences what they may, their permanent,
their immutable influence, cannot be denied. They
have lived through all the known ages of the worM ; they
have operated, and we have a conviction that they will
operate, at all times and places. They may be ex-
tremely numerous ; it may be difficult .for us to discover
them ; they may be complicated and intricate ; they
may modify one another to an almost inconceivable
extent ; we may yet know very few of them : but we
know they exist ; they regulate or punish the conduct
of man ; they are co-extensive both in time and space
with the existence of our species ; and on their felt and
acknowledged invariability is founded that natural sci-
ence which has discovered some of them, which has for
its object to discover them all, as far as they influence
wealth, and which is known under the incorrect name
of political economy.

I had intended to have shown at some length the
close connexion between wealth and civilization, but
my work is of too brief a description to allow me to do
so ; one single observation, however, will satisfy the
reader, that fen inquiry into the laws which regulate
the production of wealth, is, in fact, an inquiry into the
f\ laws which regulate national prosperity and national de-
cay, civilization and barbarism.y It is now thoroughly
established, that mankind multiply at all times as fast
as they can obtain the means of subsistence ; nothing

CAN WE DISCOVER THESE NATURAL LAWS? 33

can add to the number of people which does not aug-
ment the means of subsistence ; nothing can check the
natural tendency to increase which does not check the
increase of the means of subsistence. But the means
of subsistence, and the material instruments by which
we facilitate the production of the means of subsistence,
are all included under the term wealth, f Thus an in-
quiry into the laws which regulate the production of
wealth, is an inquiry into the laws which regulate the
increase or the decrease of the people, and by their in-
crease or decrease we judge of national prosperity, "a

Without entering into any detailed examination or the
natural laws regulating production and distribution, for
the developement of them belongs to the body of the
work, I have pointed out the natural principle of nation-
al increase, and the natural law which is the basis of all
production ; and seeing that these are permanent and
immutable, believing also that all their consequences
are at all times as much regulated and controlled by
natural laws as any part of the universe, -^admitting
that they may be complicated and numerous,-^! con-
tend, as our welfare depends on a knowledge of them,
that we are as capable of discovering and arranging them
into a science) as we are of discovering and arranging the
laws, almost as complicated, which regulate the various
affinities of the material world ; many of which are at
present known and acted on with singular advantage ;
and our knowledge of which constitutes the science of
chemistry.

T-But social regulations, as well as natural laws, also
influence the production and distribution of wealth.
Both the permanent institutions of society, the form
of its government 1- as is illustrated by Spain and

-^ c5

34i SOCIAL REGULATIONS.

England, by Turkey and the United States of Ame-'
rica — and the varying laws for the regulation of trade,
the acts of administration intended to add to the wealth
of society^ or to regulate its distribution, have « mani-
fest influence, both on the quantity produced^ and the
manner in which it is disposed of. Taxes, when le-
vied, as is generally the case, to maintain in idleness
useless, or even worse than useless^ individuals— their
labour being more pernicious than total idleness —
lessen the natural rewards of industry, prevent produc-
tion, and alter the distribution of what is produced*
Commercial prohibitions compel us to employ more la-
bour than is necessary to obtain the prohibited commo-
dity. They also curb the spirit of enterprise, and im-
pede production, by checking the progress of know-
ledge and the acquirement of skill.

The corn laws of this country — to take an example of
a social regulation influencing both production and dis*-
tribution — compel all those who eat bread to give a
greater quantity of labour to obtain it than nature re-
quires ; or they make us pay from fifteen to twenty shil-
lings more for a quarter of wheat, than would otherwise
be necessary ; and they alter distribution, by putting;
(through the medium of exchange, it must be remark-
ed,) a part of the sum thus abstracted from the con-
sumers into the pockets of the landlords.

These examples have been stated only to prove thalf
there are two distinct classes of circumstances, — :or
natural circumstances, independent of all governments^
and social circumstances^ derived from government?^ —
which influence both the production and the distribu-
tion of wealth. \The science of political economy^ when
complete, embraces both these classes of circumstances^
and has no other limit than the whole of them. ' But

MODES OF TREATING NATDRAL AND SOCIAL LAWS. 35

with the latter I shall not concern myself. The regu-
lations resulting from government^ which influence the
wealth of society, are so numerous — there being, per-
haps, not one which has not this effect, that I must
necessarily act on the principle of excluding all notice
of them from this work, except as they may incident-
ally illustrate the natural circumstances, to the consi-
deration of which it will be chiefly confined.)
C It is necessary, however, to remark, that each of these
two classes of circumstances must be treated in a per-
fectly distinct manner. '^ The natural laws," says M.
Say, " which determine the prosperity of nations, their
wealth, and civilization," are not the work of man ;
by analysis and observation we discover, we do not es-
tablish them.* We have first, therefore, to discover all
the natural circumstances which influence production '
and distribution at all times and places ; and by them,
as a test, we examine the effects of social regulations.^
Before we can possibly tell what influence is exercised^
by the latter, we must ascertain all the former. '* They
domineer,'' says M. Say, " over the men who domi-
neer over others, and never are they violated with im-
punity." They ought to be the rule of our conduct,
and we must first ascertain the rule, before we can dis-
oover in wha^respect and degree it has been followed
or forsaken. fWe ought always to remember, that all
inquiries into \he production and distribution of wealth,
according to some present or pre-existing state of so-
ciety ; or as both may be limited and influenced by
regulations emanating from governments, or constitu-
tions of society, the offspring, perhaps, of some palpa-
ble violation of the natural laws of distribution, if not

* M. Say, TraiU d*£coii. Polit. 2 ed. tome 1. p. 99.

36 BOTH INFLUENCE WEALTH.

of production; though not wholly vain and unprofitable,
mu^t be shallow and imperfect, j
\^ ^W'e must make a distinction also, as to whether there
can be, or not, a science of these different classes of cir-
cumstances. Of the natural laws and circumstances
which regulate the production and distribution of wealth
— they being as permanent and ascertainable as any
other of the laws regulating the material world — there
may be a science ; but there can be no science of the
regulations of any one government, or of all govern-
ments, for they vary, according to no discoverable rule,
both of themselves and in relation to the ever alter-
ing circumstances of the people, for whom they are
made. There may be a science of the natural prin-
ciples by which legislators ought to regulate their con-
*duct, but there can be no science of their decrees^
C Both natural circumstances and social laws have, at
present, a mingled and a varied influence on every po-
litical economical question^ For example : a bad sea-
son, which destroys the crops, and the increase of po-
pulation, which obliges men to plough up heaths, to
cultivate moors, and to pulverise rocks into soil, are
both natural circumstances, which have a tendency to
enhnnce the price of the necessaries of life. But a
law forbidding the importation of grain from countries
where the season may have been more favourable, where
the land is more fertile, or corn from any circumstances
not so dear, has, it is plain, precisely the same tendency
v^x^ as a bad season or an increase of population, fit re-
quires, therefore, at all times, great care to distinguish
between the effects of natural andmnalterable circum-
stances, and of social regulations. Unless we do so,
it is not possible for any man to tell how much of the

NECESSITY OF DISTINGUISHING BETWEEN THEM. 37

misery we suffer, or the prosperity we enjoy, results
from the laws of nature, and how much from the in-
stitutions of the lawgiver .y Unfortunately, this dis-
tinction is seldom made with accuracy even by philo-
sophers, and it never is made at all by the great mass
of mankind. We are, therefore, perpetually liable to
praise or censure our rulers without just reason, and to
call on them to interfere where they cannot possibly
do any good. They always profit by such calls to ex-
tend their power ; and in the great majority of cases
men are doomed to servitude by their own ignorance
and their own impatience.

It is from not carefully distinguishing, which is ne-
cessary at all times, between these two classes of circum-
stances, that most of the disputes, and many of the mis-
takes relative to political economical questions arise.
Men attribute to nature the evil which is caused by social
institutions, and are led by their reverence, or rather
their idolatry of the wisdom of their ancestors, to doubt
the wisdom of the Deity, f It is the mingled influence,
also, of these two classes "of circumstances, they mo-
difying, correcting* and controlling one another, in
modes more numerous than observation has yet dis-
covered and classified, which makes political eco-
nomy — independent of the passions and powerful in-
terests which are wounded by its discussions — the most
complicated, perhaps, and difficult of all the natural sci-
ences. Whatever may be the operation and effects of
natural laws and circumstances, which is what we are
principally interested in knowing, — whether beneficial
or otherwise, — it is almost impossible to discover them,
because they have never been permitted fully and
fieurly to operated In truth, their plain, straight-for-

38 DIFFICULTY OF DISTINGUISHIKO.

ward effects, by which alone we can discover themj
have not been called into existence. Kings and law-
makers, thinking themselves wiser than Nature, have
disdained to consult her decrees ; and without inquir-
ing into them^ have checked^ limited, controlled, and
perverted them. To distinguish, therefore, between
the effects of the natural laws regulating the progress
of wealth, which are at no time easily discovered, re-
quires now, when they are blended with the effects «f
legislative enactments, the most diligent and careful
scrutiny. The former, like a deep and mighty river,
flow, when uninterrupted, so smoothly onward, that we
are not apt to notice their progress, and must set up
marks, or cast something on their surface, to be sensible
of their course. The latter, like the giant rocks which
hem the river's fertilizing flow, inform us, terribly in-
deed, by poverty, misery, and social convulsions, of
the interruptions to the course of nature; but what-
ever comes into collision with the two elements is de-
stroyed by their conflict, and we cannot distinguish
whether the cause of the mischief is the impetuosity of
nature's stream, or the stubborn resistance of the legis-
lative rocks.

To have established the fact that two classes of cir-
cumstances influence the production and distribution of
wealth ; and to have pointed out two different modes
of treating them ; proving the possibility of forming a
science of the natural circumstance, and the impossi-
bility of constructing a science of human laws, enables
us to relieve political economy from some of the odium
^0^ cast on it of late. ^It is not, as is generally supposed,
a meddling, faction^, ambitious science, — not a political
science, prescribing regulations for society, or dictating

POLITICAL ECONOMY PRESCRIBES NO LAWS. S9

duties to men ; it only examines such regulations as
have an influence on wealthy and it speaks no con-
demnation but what nature commands, leaving men to
obey or not> as they list.l It does not pretend to say
what men will do, but inays the consequences of their
actions^ some of which it endeavours to trace, are in-
evitable, fit aims at ascertaining the natural circum-
stances which regulate the production of wealth, and
it records some of those instincts which lead man, like
other animals, to seek happiness by means appropriate
and peculiar to his condition. It presumes not to
direct these instincts, but expressly declares that this
is a matter for private judgment, and must be left to
private men. ) It takes no notice of the arts of life ; it
does not pretend to explain the principles of mechanics>
agriculture, or chemistry ; it does not therefore point
out, as is said by some authors, the means by which the
industry of man may be rendered most productive.
To find these means is the great object of all the arts
of life, which all united, cannot, in fact, accomplish. No
man can say how industry may be rendered most pro-
ductive ; for this is the continually varying result of
the practical knowledge of all mankind. Rejecting all
notice of the arts, political economy can never inform
us how the hand may be made skilful. The science
observes the close connexion between individual gain
and the general welfare ; but it does not pretend to
direct the operations of the merchant, the trader, or
the farmer, any more than those of the engineer ; nor
the labour of the ship-owner, any more than those of
the shipwright and smith. The utmost extent of its
utility in promoting opulence is, that statesmen may
learn i&om it, if they, being among the most bigoted.

40 DR. SMITH PRESCRIBED NO LAWS.

ignorant, and presumptuoas of mankind, are capable of
learning any thing, how they may cease to check that
production, which they, like the science itself^ cannot
possibly promote.

I take leave also to say distinctly, in opposition to
the conduct of those who, of late, have carried political
economy into Parliament, and endeavoured to substi-
tute, as the basis of legislation, their imperfect know-
ledge, for the much more imperfect knowledge, I am
ready to admit, of previous legislators, thatflhis view of
the science corresponds strictly with the writings and
views of Dr. Smith. The Wealth of Nations msj he
considered as consisting of two parts : in the first, the
author expounds, as far as he had discovered them, the
natural laws which influence the prosperity of indivi-
duals and nations ; and, in the other, he examines the
effects of a great number of social regulations.) He be-
gins, by describing the effects of division 6f labour,
which, he says, springs from a " natural propensity to
truck or barter, peculiar to the human animal."* He
insists, in various places, on the love of saving and
accumulation ; and on the general desire for happiness
and comfort, as correcting the errors of the legislator.
" Men,*' he lays it down as a principle, *' natural^
exert their industry, when they are secure of enjoying its
fruits, to better their condition, and to acquire, not only
the necessaries, but the conveniences and elegances,
of life." In other parts of his work he examines the
laws of primogeniture and entail, corporations, boun-
ties, colonial regulations, the mvigation acts, &c. &c. ;
and we find him censuring such laws and systems,

• Wealth of Nations, Book I. Chap. I. and II.

OBJECT OF HIS BOOK. 4l

as Oppose the " natural course of opulence" but
he never once takes on himself the functions of a legis-
lator^ and prescribes laws for the regulation of society.
Having discovered in the division of labour^ at least one
natural source for continually increasing productive
power, for he says, " all things would gradually have
become cheaper," — " with all those improvements of
productive power to which the division of labour gives
occasion," had it not been "for the appropriation of
land, and the accumulation of stock,"* he inferred the ex-
istence of natural laws, regulating, prescribing, and con-
trolling, in the most minute detail, the vast subject of
the production and distribution of wealth ; to which the
principles adopted by the human legislator, except that
they may cause infinite mischief, bear the same rela-
tion as the astronomical theories of Ptolemy and Des-
cartes bear to the laws which regulate, also in minute
detail^ the motions of the planets. His book treats
imperfectly, I readily admit, of an important part of the
natural history of the animal man. It describes some
of his social habitudes and instincts, and their beneficial
eflfects, as other natural philosophers describe the gre-
garious habitudes and instincts of the bee and the
beaver. He never thought of correcting or controlling
these, but only of discovering and recording them. He
laboured philosophically to show, that individual and
national prosperity have their source in the natural
wants, passions, and affections of individuals ; and as-
suming that nature willed the happiness of our species,
he endeavoured to prove, that in contriving the means,
she did not wait for the doubtful help of Kings and

• Wealth of Nations, Book I. Chap. VIII.

42 OBJECT AKD LIMITS OF THE SCIENCE.

Parliaments. Nay, more, he demonstrated, of every
one of their laws and regulations which he examined*
that they had Impeded, and in some cases, ruined the
prosperity, they benevolently or ambitiously pretended
to promote.

Thus the object of political economy is to discover
ALL the natural laws and circumstances, which influ-
ence and regulate the production of wealth. It has no
other limit or scope than all these laws. Having dis-
covered them, it examines by them the consequences of
social regulations as far as they influence wealth ; but
warned by the experience of the injury already inflicted
on our race by the regulations of the best and wisest law-
givers, it presumes not to dictate laws for the govern-
ment of society. It looks on man as a part of the great
system of the universe, and supposes that his conduct
is influenced, regulated, and controlled or punished, in
every minute particular, by permanent and invariable
laws, in the same manner as the growth of plants, the
chemical combinations of matter, and the motions of the
heavenly bodies. This supposition may be erroneous,
and, if true, it may not be possible for us to discover
these laws ; which is what I understand to be main-
tained by those, if they have any meaning in their words,
who assert, that there can be no such science as po-
litical economy. A difference of opinion, teeming with
more important and numerous consequences, including,
in fact, every question which can ever be mooted con-
cerning the organization of society, does not exist. I
trust, however, that I have already satisfied the reader
of the possible existence of the science ; and I hope,
therefore, he will feel no reluctance to follow me in my
future endeavours to develope the natural laws regu-

IS NOT THE SCIENCE OF VALUES* 4$

lating production and distribution ; some of which are
universally known^ others are acknowledged and acted
on, and of all^ the existence is implied in every attempt
to show, that the regulations of government, the grant-
ing of monopolies and bounties, the imposing heavy
duties and prohibitions, interfere with and disturb the
na^tira/ icourse of national prosperity.

It would be wrong, perhaps, were I to conclude the in-
troduction without informing the reader, that the view
here given of the foundations of the science differs very
much from that of late adopted in this country. Here it
is now generally called after foreign authors the science
, of values; a most limited, and, perhaps, even useless de-
finition ; confining the science, were the definition fol-
lowed, to only a small part of it, and affording no expla-
nation whatever of Jts most interesting phenomena.
This view originated, I believe, in France ; and it is not
a little curious, that both the name and the arrangement
given to the science by Dr. Smith, should have been
superseded in his own country, and even among those
persons who are proud to call him their master and the
founder of the science, by the name and arrangement of
his French commentators. It appears still more curi-
ous when it is recollected, that Dr. Smith has endea-
voured, in one part of his great work, to combat the
then existing systems of political economy ; — showing,
in fact, that the science which pretended, under this
name, to add to the wealth of the people through the
instrumentality of government, had and could have no
existence.

Of the vast importance of political economy, as I
have explained its object, I shall not at present say one
word. If in the course of developing its truths, as far as

44 IMPORTANCE OF THE SCIENCE

they are known^ I cannot make it appear of importance
to the reader ; if I do not bring before him circumstances
in which he finds himself personally interested ; if I
cannot rouse in him a conviction, that it relates to facts
with which his duty towards himself and his fellow
men require him to be acquainted ; I, for one, shall be
content to believe, that the science is of less conse*
quence to mankind than good novels, and not half so
amusing.

BOOK I.

NATURAL CIRCUMSTANCES WHICH INFLUENCE
THE PRODUCTIVE POWER OF LABOUR.

CHAPTER I.

MENTAL AND BODILY LABOUR. — PKODUCTIVB LABOUR.

Two species of labour ; the labour of observing the laws of the
material world, and of carrying the means suggested by obser-
ration into execution. — Illustrations of both. — Both equally
useful. — ^AU labour productive which procures the labourer's
subsistence. — Opposite opinion and practice.

It has been shown in the Introduction, that labour
creates all wealth ; and also^ that the law which con-
demns us to eat bread by the sweat of our brow^ is in
so far imprinted on the material world, that it gives
wealth and bread to labour, and to labour only* [Thus
we have at once two species of labour to which it be-
hoves us to attend ; viz. the labour of observing and
ascertaining by what means the material world will give
us most wealth, and the labour of carrying those means,
when ascertained, into execution. For the sake of dis-
tinction, I shall call the former mental, the latter bo-
dily, or muscular labour .\ Unless we keep this distinc-
tion in view, and are at^ times aware of the equal
necessity for observing the laws of the material world,

^^

46 ILLUSTRATIONS OF MENTAL

and for carrying observation into practice, we shall not
comprehend the complicated phenomena of production.
Those also who work chiefly with their hands^ may be
apt to over-estimate their share in producing wealth ;
and those whose business it is chiefly to observe, may
look down, as, in fact, they now do, with somewhat of
disdain on those who execute what observation dictates,
f But beyond observing the laws which regulate the ma-
terial world, and carrying those observations into exe-
cution by manual labour, there is no other element
necessary to produce wealthA

The folly of exalting either of these species of labour
at the expense of the other, as is done by literary
people, and patronising governments, may be made evi-
dent, by remarking, that both of them are equally
necessary to production, and are practised by almost
every individual. The most familiar and, perhaps,
useful example of mental labour, which leads to tJie
production of wealth, is the continued attention re-
quired for months or years, to learn any manual art,
but for which there would be neither skill nor dex-
terity. Mental labour frequently terminates in mus-
cular adroitness ; as for example, in the case of a adlk-
weaver, who, after a long apprenticeship and consi-
derable practice, becomes able to weave all kinds of
patterns : or it may terminate in adding to the powers
of the mind itself; it may give, for example a capa-
city to invent machines, after a man has laboriously
studied the laws of mechanics, observed the powers of
external nature, or diligently ascertained the pr<^r*
ties of different bodies. Unless there be mental labour,
there can be no manual dexterity ; and no capability of

AND 07 BODILY LABOUR. 47

*

inventing machines. It therefore is essential to pro-
duction.

After the weaver has acquired his skill, has ascer-
tained the tenacity of silk^ and best modes of weaving
it, he sits down at his loom^ and by muscular labour^
combined with continued observation and attention, he
produces a portion of that beautiful manufacture. The
machinist, in like manner, makes the instrument he
has before only thought of ; or makes a model of it ;
repeated essays and multiplied observations being re-
quired before he can realize his theoretical conceptions
in solid materials. These are examples of bodily la-
boar : and it is unquestionably as necessary to complete
the production of a piece of silk, or any other commo-
dity> or a machine of any description, as mental labour.

As the facility or difficulty of acquiring the power
to exercise different speciei of labour is sometimes
mentioned as a reason why there should be different
rates of wages ; it is of some consequence to remark,
that both mental and bodily labour are practised by al-
most every individual. Thus the statesman, the law-
yer, or the physician, each of ^vhom derives his salary
principally from his mental exertions or mental skill,
also labours with his body, though in a less degree than
a ploughman or a shoemaker. One writes his orders,
another his opinion, or he goes into court and speaks ;
and the third, after feeling his patient's pulse, writes
a prescription. Thus also the ploughman, the cotton-
spinner, or even the man who breaks stones on the road,
each of whom derives his salary principally from his
bodily exertions, labours, though in a much less de-
gree, with his mind. The ploughman must note that

•= I. v

48 • EASY LABOUR IS TRANSMITTED SKILL.

his furrows be straight ; the cotton-spinner must watch
his pirns, and tack the broken thread together by his
mind guided hands; the stone-breaker must exert a
considerable degree of slcill and dexterity in breaking
all the stones^ of nearly the same size, and he must
carefully observe that they are spread equally over
every part of the road.

The meanesl labourer must use some mental exer-
tion, and much of the most common labour is now ren-
dered easy of acquisition by the transmitted habits,
knowledge, and skill of former generations ; or it ap-
pears easy because acquired in youth. There is, there-
fore, much less reason than is sometimes imagined for
different species of labour being differently rewarded.
Easy labour is only transmitted skill. The parents
and ancestors of common labourers served an appren-
ticeship for them, and hailed down to them their dex-
terity as an inheritance. For this they are as much
entitled to a remuneration as other men are for trans-
mitted property ; or for the time they employ in learn-
ing an art, which, from its comparative newness, is not
so easy of acquisition.

We find, in the progress of society, that men confine
themselves to different species of mental and bodily la-
bour. One man, for example, attends only to chemis-
try, and another to mathematics ; a third does nothing
but guide the plough, and a fourth busies himself only
in making perfumery. In consequence of this separ
ration of employments, a question has been raised, as to
what species of labour is productive ; and long before
any rational solution was offered of the question, go-
vernments, with that pre-eminently ignorant pre-
sumption for which they have ever been distinguished^

CRITERION OF PRODUCTIVE LABOUR, 49

b^gan to encourage, or lepress, different species of la-
bour. Under some circumstances they have given
bounties to promote the cultivation of {he ground ; un-
der others, to stimulate the bringing commodities from
abroad^ or to the exportation of those made at home ;
under others again, they have endeavoured with all
their power, to make their subjects manufacture the
raw produce of their own or of foreign countries. The
monstrous folly of this interference is fully provisd, bv
its' having been shown, that all labour, in which indivi-
duals voluntarily engage, is productive to them and the
state.

" All wealth," says a French writer,* *' is at present
the result of two or more different species of industry.
Without mutual assistance there could be no complete
production, and the respective products of each la-
bourer cannot be compared, because neither is complete
without the other. Bread is the result of the industry
of the reaper, the thresher, the miller, and of the
baker^ as well as of the industry of the ploughman and
of the sower. Without the mutual labour of the flax-
dresser, the spinner, and the weaver, the flax, which
also costs the farmer much and diversified trouble to
produce it^ could not be converted into linen, and it
would be thrown aside as a noisome pestilential weed.
The inquiry to ascertain which of these species of la-
bour is most productive or most advantageous, is like
an inquiry to ascertain which of our two legs is of most
service in walking."

^ It is impossible, therefore^ to distinguish which of
the various species of industry practised in a well-peo-

• The Marquis Garnier.

\"^

50 CRITERION OY PRODUCTIVE LABOUR.

^, pled country is most productire, or most nsefol. I All

^ of them seem equally necessary, and every specif of

labour^ whether mental or bodily, most equally be'

^ called productive, if it procure a subsistence for him

who practises it. y

Of such labour as is intended for the labonrei^a owtt
immediate gratification^ which constitutes, in an ad-
vanced state of society, a very small part of the idbole,
nothing can be said in a political-economical pdnt of
view. It may be wicked or it may be wise ; it lOBjr b0
frivolous or it may be important ; but it has its be|pui-
ning and its termination with the individual; mnd
though the moralist may think it worthy of remark, the

V^ economist rejects it from his science. Hn general, liow-
ever, labour is directed towards the producti<m of aooie
commodity for sale, and whenever it procures the indi-
vidual his subsistence, it is productive to him : it sup-
plies his wants, and it must supply some of the wants*
or afford some gratification to others, or they would not
buy its products J Whenever labour is voluntarily paid
for, or its products are freely purchased, and the la-
bourer can live by his labour, we must presume that iC
is productive both to him and the buyers. No in-
dustry is unproductive but that, the produce of whidi no
person will buy, and which does not contribute to the
individuaFs subsistence or gratification. This descrip-
tion includes nations as well as individuals. If a na-
tion reward any species of industry, it is plainly pro-
ductive to those who exercise it ; and what better cri-
terion can we possibly have of its being productive to .
the nation, than that the nation thus rewards it?. ^

It will be found of importance to establish the prin-
ciple of all labour being productive, which enables the

'' ^ ■' til

OPPOSITE OPINION 4ND PRACTiqS. 51

labourer to subsist, v^he object in labouring is to sup-
ply tbe individual's wants. Nature gave him his fa-
culties and powers for this purpose ; for this purpose
only^ and not for the ])urpose of supplying the wants
of other men whom she equally endowedJ If his labour^
IN ADDITION to Supplying his own wants^ will supply
the wants of other persons, will enable him to rear up a
family, and pay taxes^i rent, and profit, so much the
better ; the society may increase the faster; but if his
labour is not so productive, if it only enable him to
sabsil^, replacing whatever tool^, seed, com, &c. he
may use in the preparation of his subsistence, includ*
ing, of course, his clothing, house, furniture, &c., so
that his condition is not gradually deteriorated, his ]a*
boor is productive. More than comfortable subsist^iee
is not required, and Nature probably intended that
each individual should subsist himself an4 his family.
As long as his labour produces his subsistence, he may
live on, and may enjoy life till the natural period of its
difltolntien. Fortunately, indeed, productive power is
teldom 80 Ihnited, and never when men labour in con*
junction. fEaoh labourer, in all civilized societies,
maintains many persons. The importance of establish-
ing the principle that j^ labour is produetiye which
nifansts the labourer, arises from th e prevalent theories
relative to capital, and the universal practice of capi*

Usts^

It 18 matntainedy for example, that labour is not
pftiductive, and, in hct, the labourer is not allowed to
work, unless, in addition to replacing whatever he uses
or consumes, and comfortably subsisting himself, his la^
bour also gives a profit to the capitalist on all the capital
which he uses or consumes, while engaged in produo-

D 2

\

52 NATURE AND SOCIETY AT VARIANCE.

ing ; or unless his labour produces a great deal more^
in the present state of society, than will suffice for
his own comfortable subsistence. Capitalists becoming
the proprietors of all the wealth of the society^ as it is
produced^ act on this principle, and never — as the
rule — ^will they suffer labourers to have the means of
subsistence, unless they have a confident expectation
that their labour will produce a profit over and above
Iheir own subsistence. This is so palpable a violation
6f the natural principle above stated,— it is so com-
pletely the principle of slavery! to starve the labourer,
unless his labour will feed hiarmaster as well as him'-
self , that we must not be surprised if we should find it
one of the chief causes, wherever it exists, and it exists
almost universally, of the poverty and wretchedness of
the labouring classes. To develope this truth belongs,
to another part of this book ; but it was impossible to
speak of productive labour without pointing out its
extreme limit, and without adverting, as well to the
opposite theory, as to the social practice, which con-
demns men to starvation, unless their labour will pro-
duce much more than they require for their own use or
consumption.

Having brought before the reader the equal utility
of mental and muscular exertion ; and having esta-
blished the fact, that all labour is productive which
subsists the labourer ; I shall proceed to point out the
important effects which, in the progress of society, are
produced by mental labour or observation; and en-
deavour to explain the natural law by which it in-
creases productive power^ and by which knowledge isi
continually augmented in society.

53

CHAPTER II.

INFLUENCE OF OBSERVATION AND KNOWLEDGE.

Influence of knowledge not noticed by economists till very lately.
— BIr. Say*8 opinion. — Knowledge necessary to preserve exist-
ence. — Its influence in agriculture.— Example of faUows, and
green crops. — Potatoes. — Their effects on population, particu-
larly in Ireland. — Source of agricultural improvement. —
AVheat, and other gp*ain not found growing wild. — Subsistence
augmented by the discoveries of Beukels, as to curing herrings.
— Increase of productive power by improvement in navigation,

- exemplified by the price of tea. — Effects of our increased know-
ledge of magnetism. — Economical advantages of the safety
lamp.— JSteam-engines. — The cotton manufacture. — Gas-lights.
—.All improvements depend on observation.

\^In The Wealth of Nations there are numberless scat-
tered remarks^ which show that Dr. Smith was aware
of the influence of knowledge in adding to productive
power ; yet he has not dedicated any part of his book
expressly to this subject. He has made no attempt
whatever to explain the natural laws which regulate the
increase of knowledge ; and he has not examined the
enactments of the legislator, with a view to ascertain
in what respect or degree they promote or retard our
acquaintance with the laws which regulate the material
worldJ His successors in this country have humbly
imitated his example. Some brief -observations may be
found in their writings, particularly in Mr. M'Culloch's

54 M. say's opinio v.

last work, " The Principles of Political Economy," on
the influence of knowledge^ but they have never treated
of it as a' distinct and leading principle. The single
circumstance which Dr. Smith brought prominently
forward, as adding to productive power, was divi-
sion of labour, to which his successors have added,
accumulation of capital, and no farther progress was
made up to a late period, in explaining the natural
laws which influence and regulate production.

Monsieur Say, a well known and deservedly cele-
brated political economist, has at length placed the
effects of observation and knowledge in a proper point
of view, and claimed for them that pre-eminence they
justly deserve, as the great elements of augmenting
productive power. In one of his latest publications, he
says, ^* I do not pretend to dispute the great importance
which Mr. Storch, following Adam Smith, attributes
to the division of labour. Its advantages in satisfying
the wants of man are immense. But there is another
and a more efficient cause of the fruitfulness of pro*
duction, viz, , the art of profiting by the powers of na-
ture, — by that gratuitous action which is lost i^ most
cases, but which is so fruitful in results when we know
how to employ it.*

It is obvious, that till some knowledge has been
obtained of the laws which govern the material world,
it must be difficult to preserve existence, and impossible
to augment wealth. Men must have observed the
habitudes of plants, and the qualities of different soils,
before they could successfully have cultivated the
ground. They must have carefully noted the natural

* Notes to M. Say's edition of Cours eTEconomie Politique, by
Henri Storch, toL i. p. 167*

INFLUENCE OF KNOWLEDGE |N AGRICULTURE. 00

return of seed-time and harvest, and have become sen-
sible of the probable effects of casting grain into the
eftrthj before they could anticipate^ from what at first
appears to be only waste> a rich return at the end of a
few months. Possessing a knowledge, however^ of the
CQurse of the seasons^ of the nature of plants, and of
th^ properties of the soil, as well as of the processes by
which the effects of the sun, of light, and of air, may
be made most efficacious in promoting vegetation, we
can> with comparatively little muscular exertion, pro-
cure a great abundance and variety of vegetable food.
As all the animals which we consume live on vege-
tables, we are able by this same knowledge, knowing
also their instincts and properties, to obtain a great
quantity of animal food. A people acquainted with
the art of agriculture, must, it is plain, be better able
to nourish themselves with ease, and to obtain the raw
materials of several most important manufactures,
than a people ignorant of this art. On account of its
great utility, the discoverer of a new and useful plant,
the inventor of an improved agricultural process, the
importer of some better and cheaper method of cultiva-
tion, or of some before unknown vegetable, has, in all
ages of the world, been regarded as a general bene-
factor. Though agriculture does not supply us with
the most striking examples of observation adding tu
productive power, yet even in this neglected and gene-
rally speaking, slave-practised art, we may find nu-
merous examples of the hand of the labourer having
been rendered productive by the observations of the
philosopher.

To say nothing of those improved means invented
within the last fifty years, for procuring, smelting, and

56 FALLOWS AND GREEN C&OF8.

forging iron ; the results of our progress in chemical
knowledge.[which have diminished to a great extent the
labour necessary to make all agricultural instruments,
of which iron is one of the materials; and to say
nothing of those machines^ the fruit of observation,
such as improved ploughs^ threshing-machines^ drills,
etc., by which the labour necessary to grow and prepare
com for the market, has been abridged^ — ^though it
seems that many useful processes^ such as drilling, by
which much seed corn is saved, and horse-hoeing, by
which the ground is kept clean, and only those plants
suffered to vegetate which are of use to us, could not
be practised except in a country where the art of the
smith had attained a singular degree of perfection, —
to say nothing of these circumstances, though it is at
all times worthy of observation, that improvement in
arts, apparently the most remote from each other, tend
materially to lighten labour in both ; let us only con-
sider what has been effected in modem times by the
introduction of new crops and new methods of tillage.

" An intelligent agriculturist/' says M. Say, " after
having for many years allowed his fields to remain idle
every third year, took it into his head, that the land
might, during that year, give him a supply of green
crops, which without exhausting the soil, would enable
him, to fatten sheep to manure his land, and to have
both wool and mutton for sale. He was indebted for
this improvement to his conception of a better method
of employing the powers of the soil, which supplies
different nourishment for wheat and for beet-root, or
turnips ; so that the nourishment for the wheat is re-
stored and augmented at the same time that the soil is
producing green crops. The result of this conception

INTRODUCTION OF POTATOES. 5?

is, that the whole produce of the land, under this species
of management, has been increased one third."*

M. Say is wrong, perhaps, in ascribing this improve-
ment to a chance conception. It was the result of
continued observation; and its advantages had to be
Bhown by repeated experiments, before it was adopted
on those soils where fallows can be dispensed with.
He also estimates much too high the advantages of
the conception : for farther experience has shown, that
£dlows csmnot always be advantageously dispensed
with on all soils. But there can be no doubt, by
the agriculturist having recourse to them much less
frequently than formerly, together with the introduc-
tdon into husbandry of several different green crops,
by which a greater number of cattle can be kept at all
times, and subsistence secured for them through the
winter, ensuring the agriculturist against the loss of
them ; by which, therefore, not only the quantity of
animal food, but also the quantity of manure, and ulti-
mately the quantity of corn are increased,— that the pro-
dace of what is sometimes ridiculously called our old
worn-out soil, has been augmented, without adding to
labour, fully one^third within the last century.

The introduction of potatoes into European hus-
bandry is another example of improvement effected in
agriculture by observation and knowledge. They were
brought fifem America to Europe, either by Sir Walter
Raleigh or under his influence, it is generally supposed,
about the year 1586.t An acre of land cultivated with
this root, will yield, it is stated by competent autho-

* Notes to Coun d*£conomie, vol. i. p. 167.
f History of Cultivated Vegetables, by Henry Phillips. Art.
Potatoe.

d5

S8 tJTILltlr OF POTATOES.

ntj^* rather mmre than twice as much food as when
cultivated with wheat. We are indebted^ therefore^
to the observation^ that potatoes were good food^ and
to the consequent introduction of them into Europe,
ioar a capability of doubling the quantity of subsistenoe^
raised from a given space^ with about an equal quantit j
of labour. This comparison^ be it remarked also^ is not
made with the spontaneous productions of the ground,
but with its produce, under a species of cultivation^
which is itself the result of numberless observations,
and ages of practice ; and of knowledge handed down,
increasing as it descended, &om generation to genera-
tion, and transmitted from country to country.

But this view does not show all the advantages of
introducing potatoes into European husbandry. They
are supposed to be better than either turnips or cab-
bages for fattening cattle, and they can be secured
against the severities of winter, which are apt to de*
stroy both the others. The nourishment they contain
for man can also be easily extracted, preserved in a dry
state, and if necessary, be transmitted, like flour, from
one place to another. Moreover, they are very useful
as a first crop for land, which has not before been cul-
tivated; and but for them, much of that which has
been brought under tillage in this country, within the
last century, would, from not affording a profit, have re-
miained a neglected waste.

The introduction of this root into husbandry has had
no inconsiderable effects, therefore, on the power and
resources of this empire. By its use, which is now ge-
neral nearly throughout Europe, population has been
everywhere increased : but in Ireland, which possesses
a climate and soil peculiarly favourable to potatoes, it

• Encyclopaedia of Agriculture, by J. C. Loudon, p. 784.

FFIBCTS ON FOPULATIO?^. 69

Im beien astonishingly muUipUed* In 1672, the po^
pulation of that country was estimated at 1,320,000;
in 1821, it was very little short of 7,000,000 ; a rate
of increase hardly anywhere met with except in the
United States of America. The greater number of
these people live aluiost exclusively on potatoes; so
that they ^e indebtecl for their nourishment, and even
inthfiir ei^istenpe, to a root originally brought from the
vtikidr side of the Atlantic Ocean.*

I say nothing of the effects, both moral and commer-
ciftl^ of the great majority of a nation consenting to
subsist, without seeking greater comforts and enjoy-
ments, on the smallest possible quantity of the cheapest
possible food, to which the misery of the Irish peasan-
try is €ittributed ; though to suppose that the great ma-
jority of any people, do or will voluniarilif consent to
jsny such degradation, is directly at variance with the
desire inherent in the human heart of obtaining more
^nd more enjoyment ; I only quote the increased return
for labour^ the result of some voyager bringing potatoes
fjRom America, as an example of the influence of ob»

I * Should I hereafter satisfy the reader that the increase of ^^
pojiiilation is the chief natural circumstance which promotes
the increase of knowledge, and which extends division of labour ;
thus sogmenting productive power, not merely in the simple
ratio of the increase in the number of labourers, but in the com-
.pciun4 rstio of this increase, multij^iied by the effects of know-
Ictclge, 4ind diyiiion of labour^Whatever they may be, he will then
•perceive, that every improv.^ent, which, like the introduction
of potatoes into husbandry, augments the means of subsistence,
is a cause, by increasing the number of people, of multiplying to
ah astonishing degree the productive power of our species.
Consequently, the view given in the text of the advantages of
tudi i9iprovanents, as add to our means of subsistence, is essen-
tially incomplete, and faUs far short of what actually occurs.

60 EFFECTS IN IRELAND*

servation and knowledge in adding to productive
power. To guard against being misunderstood, I must
remark, however, that the unhappy situation of the Irish
peasantry has no connection whatever with the food they
sabsist on. The peasantry and the labourers of every
country of Europe, whether their productive power be
great like that of the labourers of England, or small like
that of the peasantry of Poland; and whether they have
been accustomed to subsist on wheaten bread as in France^
or on potatoes as in Ireland, are all in a nearly equally
destitute condition. The poverty of the Irish labourer,
therefore, is not caused by his living on potatoes. •

To obtain food at the least possible cost, is the great
object of all agricultural improvements ; and in this
respect, potatoes, as a crop, are to be preferred to wheal,
as agriculture itself is to be preferri^. to fishing and
hunting. That this general natural principle should
seem not to hold good as to Ireland,' is not a reason
for condemning it ; but for our setting ourselves dili-
gently to work, to find .out those social causes, which, in
that country, turn what are in every other country the
bounties and the blessings of Nature into curses. I shall
not enter farther into this subject than to quote a
passage of which I approve ; and I should not have
adverted to it, had I not been anxious to guard against
the supposition that a natural principle can, under
any circumstances, lead to misery, unless its conse-
quences be misdirected by ambitious legislation. '^ Un-
der the government and political institutions of Ireland/*
-it has been remarked, " the population of that country
would have been equally redundant, though much smalleir
than it now is, if they had lived on oats or rvheaten bread.
The introduction of the potatoe may be the cause why

ORIGIN OF THESE IMI*ROV£MF.MTS. 61

the population is now six in place of three millions^ but
it is not the cause why^ during the whole period of the
ificreasey the numbers of the people have been greater
than under the existing circumstances could be com-
fortably maintained.*'* In fact, the poverty and mi-
sery of individuals in Ireland^ was as great before as
since the general use of potatoes.

*Mo8t of the roots and grasses lately or formerly in-
troduced into our husbandry^ such as turnips^ potatoes^
and clover^ are not originally the produce of our country.
Before any person could think of removing a root like
the potatoe^ from one country to another, or of recom-
mending turnips or clover as an agricultural crop,
he must have known, or conjectured from what he had
previously learned, that the root^ or the seed, would keep
80 long as to permit its transport ; he must have as-
certained some of its properties, and have formed hopes
from some similarity of climate or soil, that it would
flourish in his own country ; and he must have been
aware of some utility or agreeableness in adding a fo«
reign vegetable to the thousands which teem from almost
every soil, before the thought of importing it from a
remote comer of the globe could have been rationally
entertained. Accordingly, we find that learned travel-
lers like Sir Walter Raleigh^ and Sir Richard Weston,t
in former times, were the means of introducing pota-
toes, turnips, and clover^ into England from foreign
countries: and such men as Lord Kaimes, Arthur
Young, Mr. Dawson, Mr. Coke, and other intelligent

* Encydopaedia Britannica, article Ireland.

f Afterwards Lord Treasurer, created Earl of Portland in the
teiga of Charles I.

62 WHEAT CREATED BY ART.

^ntfeemen^ have been in our day the meaps either of
introducing improvements into agriculture, or of spread-
ing a knowledge of them through all parts of the coun-
try. But for their observation, the potatoe might
now, like so many other vegetables, only have added to
the perennial waste of America ; and our Flemish neigh-
bours might have been the only people on the globe
who knew the utility of clover as an agricultural crop.
Had such improvements been blundered on by chanoe,
they might have been confined to ihe spots and indivi-
duals with whom they originated ; but the knowledge
of them being conveyed over Europe and America, now
tends, and will for ever tend, to multiply the {»roduoeof
more millions of acres than my arithmetic can calculate.

If the reader should imagine that knowledge inform-
ing skill only multiplies the means of subsistence, he
will have a very inadequate idea of what it actually
performs. It may be almost said to create both the
aniiwRla and vegetables on which we subsist. We can,
indeed, trace out the parent stock of our oxen and sheep,
but so different in their wild state from the large flesh
and wool-bearing and milk-giving animals that are
nourished by the art of the grazier, into almost gig^-
tic magnitude, that it may be doubte^d if the natural
historians of antiquity, could they now see our oxen
and sheep, would recognize in them the animals which
in their time bore corresponding names. But the origin
of our most useful vegetables is not so well known.

" There is scarcely," says Dr. Paris, " a vegetable that
we at present employ that can be found growing na-
turally. Buffon states that our wheat is a factitious
production, raised to its present condition by the art of
agriculture. Rice, rye, barley, or even oats^ are not to

EFFECTS OF DISCOVERIES IN FISHING. 63

be found wild ; that is to s&y, growing naturally in
any part <^ the earth ; but have been altered by the
industry of mankind^ from plants not now resembling
them even in such a degree as to enable us to recognise
their relatives. The acrid and disagreeable apium
graveokns, has thus been transformed into delicious
celery ;-«nd the colewort, a plant of scanty leaves^ not
weighing altogether half an ounce^ has been improved
into cabbage^ the leaves of which weigh many pounds,
or into a cauliflower of considerable dimensions, being
only the embryo of a few buds, which, in their natural
state, would not have weighed many grains. The po-
tatoe again, the introduction of which has added many
millions to our population, derives its origin &om a
small acrid bitter root« which grows wild in Chili and
Monte Video."*

Fishing being, like agriculture, one of the arts earliest
leemt by man, we may proceed to draw our next illus-
tration from it. '' The resources which this art offers,'
eays M. Storch, '^ are limited by the necessity of con-
earning near the coast the greater part of its products^
If every species of fish could be transported to a dis-
tance without spoiling, fishing would be more favourable
than it is to the increase of population. BeukeLs hav-
ing taught the Dutch the art of packing herrings, and
thus of preserving and sending to a distance this abun-
dant supply of food, the means of subsistence has been
augmented wherever they have been carried, and pro-
fits wherever they have been caught and prepared. Se-
vered millions of men are indebted to Beukels for their

* A Treatise on Diet, etc., by J. A. Paris, M. D., F. R. S.
page 8.

64 IMPROVEMENTS IN NAVIGATION.

txistenct ; and we, therefore^ have no reason to be sur-
prised at the honours the Dutch have bestowed on his
memory.'**

But it must be well known to the reader^ that the
resources with which the observation and knowledge of
Beukels endowed Holland, though they for many years
contributed to her maritime ascendency^ were not 11*
mited to that country. Curing herrings^ and salting
cod, ling^ tusk^ and other fish^ have long added to the
food and wealth of Great Britain^ and of several other
countries ; and it appears by a late parliamentary pa-
per^ that the former branch of industry exceeded in
this country in 1826^ its greatest amount in HoUand,
when the fisheries of that country excited envy in every
other maritime state of Europe.

If we turn to some other arts^ we shall find in them^
perhaps, even more striking examples of improvement
effected in productive power, than in agriculture and
fishing. A ship derives all her vast utility, all that
power which she possesses of distributing equally the
gifts of nature, to recorded knowledge. By means of
this valuable instrument, the supposed fertility of dif-
ferent spots, or rather their produce, belongs, in fact, or
may belong, to the whole globe ; every region being tri-
butary to those persons who are skilful and industrious.
To say nothing of that transmitted skill which must be
possessed by so many hundred different labourers, be-
fore a ship can be built, equipped, and sent to sea,—
but for the observation first made by so obscure an
individual, that his name and country are almost un-
known, that a magnetised piece of iron, when freely sus-.

• Cours d'Economie Politique, vol. 3, page 319.

IMPROVEMENTS IN NAVIOATIOX. 65

pended^ always pointed due North, and but for the re-
corded observations of geographers^ astronomers^ and
travellers, — the fruit of many years close attention, — ^by
which the mariner is enabled to shape his course straight
across the pathless ocean, the utility of this most mag-
nificent of all the time-improved inventions of our race,
would have been very limited. Even -after much of this
knowledge was acquired, or one hundred and fifty years
ago, two and even three years were consumed in go-
ing to and returning from India ; since the year 1800,
that voyage has been completed within seven months,
and may be performed with ease in less than one year.
The effects of this more rapid navigation, on the pro-
ductive power of labour, may perhaps be best illustrated
by the iteration which has taken place in the price of
tea, since it became in Europe ape of the luxuries, if not
one of the necessarie.^, of life, ftlie price of any commo-
dity, the reader will remember, may in general be taken,
in a rough way, as an index both to the quantity of
labour required to brii^g it to market, and to the quan- ,
tity of labour those who want it must give to obtain it.}
When tea was first brought to Europe, about the
year 1610, the price — the chief cost consisting in the
expense of bringing it — ^was from 61, to 10/. sterling,
the pound weight. It continued to sell in this country
for OOi. per pound, the price at Batavia being then
2#. 6d. or Ss., till towards the year 1700 ;* and at pre-
sent the retail price in the shops is between 5^. and
16$. This includes a heavy duty on tea ; it includes
the retailers' and merchants' profit, and it includes a
still heavier tax even than that paid to the government,

* Phillipt*t History of Cultivated Vegetables. Art. Tea.

J

66 PRICE OF TEA AT DIFFERS]^ PERIODS.

levied on us by the East India Company's monopoly.
At New York, in North America, and in Amsterdam,
the wholesale price of tea is £rom 1^ . 3d, to Ss, Id, per
pound, or one half less than here; so that we may
really take the reduction of freight on tea, since the
year 1700, to have been at least fifteen fold. This re-
duction in price has been caused by improvements in
the knowledge and skill of the navigator, and .of the
nipnberless artisans who prepare all the inaterials for
ship-building, and who build ships and make th«n
ready for sea, and by the recorded observations of the
geographer and astronomer. I give it only, as an exam-
ple ; but the real price of other articles has suffered a
siihilar reduction. It is probably not too much to say^
owing to an increase of knowledge, that the labour ne-
cessary for obtaining nearly all commodities has been
diminished, like the price of tea, fifteen fold since the
route to India round the Cape of Good Hope was dis-
covered, by those adventurous Europeans, who had the
honour and the danger, leaving the benefits of the dis-
covery to posterity.

It is a well known principle, that the average profits
in all trades and occupations must compensate for losses
and risks ; and in al money prices such a compensa-
tion is included. Whatever lessens risk, therefore,
like an actual reduction in the quantity of labour ne-
cessary to produce commodities, lessens price. When
the ship-owner or merchant is liable on an average to
lose both vessel and cargo every tenth voyage, the price
at which he sells his goods must cover the expense of
an insurance calculated on this probability. In conse-
quence, however, of increased knowledge and improved
skill, the premiums on the insurance of vessels have

MARIK£rV COMPASS. — SAFETY LAMP. 67

been gradu^ly decreased. In some cases^ when the
knowledge of the seas is vety accurate, as for example,
in the trade/ between London and Leith^ |;he dianoes
0£ loss are very small, and the premium of insurance
almost nothing. But even this premium will be less-
ened^ probably^ by the improved knowledge of the pro«-
perties of the magnet acquired in our times. Mr.
Bain, Mr. Barlow^ and some other gentlemen, hare
lately discovered in the attraction of the iron fEwten*-
jngB of ships, a cause before unobserved, for variations
in the compass, which very often led to disastrous eon«
teqaeno^. The latter gentleman has pointed ont a
•imple and admirable remedy for the evil ; and hence-
forth the chances of shipwreck being diminished by
thtt discovery and invention, though in what degree it
is net possible to say, the labour and cost of bringing
the required supply of any commodities from a distance
by sea will be lessened.

The economical advantages of the safety-lamp, one of
the most happy applications of a scientific discovery to
a aseftil purpose ever made, must be estimated on the
same principle. It is not for me to expatiate on its
glMrions results for humanity, I have only to inform the
reader of its commercial advantages. The probability
of calamities occurring in mines, compels the consumer
^ ooals to pay a premium of insurance equal to the
risk ; but this premium has been already lessened, and
win be so hereafter in a still greater degree, by the inven-
tien of the safety-lamp. Every accident which occurs in
mines caoaes an addition to the quantity of labour ne-
eemary to bring the whole requisite supply of coal or
other mineral to market; and whatever diminishes
those accidents, diminishes the quantity of labour by

68 EFFECTS OF THE STEAM BNOIME.

wliich we obtain coals. Such an increase in the produc-
tive power of labour^ and such a lessening of ooet^ are
the results of the observations and discoveries of ^
Humphry Davy on the nature and properties of flame.

Steam-engines must be considered as the result of a
close and attentive examination of the properties of
steam^ and of the effects^ firsts of applying heat to W8ter>
and then condensing its product;— «f the weight of the
atmosphere, and of the tenacity of certain metals, — as
these various propejlies had been made known to us by
several generations of inquirers. The expansive power
4>f steam has been known almost as long as history can
trace back the existence of our race ; but an immense
reach of intellect, numberless observations, a prodi*
gious quantity of knowledge, gathered in all the ages of
the world, and a vast variety of experiments, were ne-
cessary to devise this engine in its present admirable,
but not yet perfect form. Of the addition it has made
to our power I can give no illustration equal to that
contained in the following passage : —

" All the world," says a writer in the Quarterly Re-
view, " is more or less acquainted with those immense
masses, the pyramids of Egypt, which were considered
among the wonders of antiquity. The materials of
which the largest of them is constructed, were dug out
of the earth at a considerable depth ; and at no small
distance from their present situation. They cover more
than eleven English acres; and are piled up to the height
of about 700 feet. According to M. Dupin's calculation,
their volume is equal to about 4,000,000 of cubic
metres ; their weight is 10,400,000 tons ; which raised
to the height of eleven metres from the bottom of the
iquarries to the surface of the earth, and of forty-nine

,m

WONDERFUL INCREASE OF POWER. 69

more as their mean elevation above the basis ; in all
sixty metres above tHe original level — ^give 624^000^000
tons raised to the height of one metre. Now the steam-»
engines employed in England are equal to the force of
330,000 horses (1820), and can raise 862,800,000 tons
to the height of one metre in twenty-four hours. But
624,000,000 tons being less than than three-fourths of
this quantity, it follows, that the steam-engines of
England could have raised the materials of which the
great pyramid is constructed out of the quarries, could
have conveyed them to their present place, and heaped
them up in their present form, in less than three**
fourths of one day, that is to say, in less than eighteen
hours. According to Diodorus Siculus, this building
employed 360,000 workmen ; according to Herodotus,
100,000 workmen, during twenty years. Whichever of
these estimates be nearest the truth, it is certain that.
one of the most powerful monarchies of remote anti-
quity applied its whole disposable resources in the con-
struction. Therefore the mechanical power of British
steam-engines was, in 1820— and it has much increased
since that time — to that of the Egyptian monarch
Cheops, inversely as the times necessary to each to per-
form the same task ; that is to say, as twenty years to
eighteen hours, or about 10,000 times as great.*

It is more than probable," adds the Reviewer,
that the (productive) power of England is at this mo-
ment (June 1826) 2500 times as great as was that of
Egypt at the period when the pyramid was construct*.
ed." — " By the power of steam every machine to which
it 18 applied receives, not an addition, but a multipli-

* Quarterly Review, No. Ixrii, for June 1826.

THE COTTON MANUFACTURE.

cation of foree. The power thus produced in 1820 was
computed to be equal to 320,000 horses, or about
2^40,000 men. At this moment steam, on account of
its many new applications, and the improvements mads
in the manner of employing it, may perform the inA
of near three millions of men, in the United Ki n gdom/'

Perhaps, however, the effects of knowledge ia in-
creasing productive power, may be still more strikingly
displayed by referring to the cotton manu^otnre of this
country. The raw material of every species of cotton,
fr<Hn the finest net lace or flowered muslin, to tlie csa*
vass which, when it forms the sails of a ship, resista the
most violent storms, is the downy nest provided by N^
ture for the seeds of a plant which grows to advanti^
only in tropical climates. At present it is chieAy.CBl-
tivated in the East and West Indies, and in the soodi*
em parts of the United States of America. The peopio
who cultivate the plant, and pick and sort the wocd,
must be acquainted with a branch of agriculture quite
distinct from any of the common practices of JSurope,
and they must have learned one part of the manufac-
ture. To bring it hither from those distant countries
the whole art of navigation must lend its assistance,
and it is impossible for me to describe the vast va-
riety of knowledge in numberless workmen, and the
innumerable discoveries, which have contributed to the
present perfection of this art. Again, to clean and
pick the cotton, to spin it into yam, and weave it into
cloth, to bleach, dye, print, and embroider it, a vast
variety of knowledge is necessary, which, if lost or for-
gotten in any one branch of the manufacture, would ex-
tinguish the whole.

Before men could apply and regulate the first mov-

THE COTTON MANUFACTURE. 7^

iag power^ whether it be wind^ water, or steam, which
sets in motion the various and complicated machinery
for cleansing^ carding^ spinning, and weaving cotton,
the knowledge acquired by centuries of experience was
necessary. To construct all this machinery men must
know the properties of metals, the methods of soften-
ing, melting, and fashioning them; and they must
have an intimate acquaintance with the mechanic powers
before these materials can be put together. So admir-
able, however, is this knowledge-made machinery, that
the fibre of the cotton is not bruised nor rent, though
it be spun as fine as a gossamer -thread, and wove into
a web as delicate as the curious production of the
spider. To bleach, dye, and prfnt it, other sets' of ma-
chines are used, requiring different knowledge to con-
stmct them; and to perform these operations, the
whale science of chemistry is summoned to the aid of
th^ workman.

In IJ65, cotton, as an article of trade, was scarcely
known in this country, and the whole manufacture,
wfaidi was very limited, was confined to the supply
of the home market. Cotton clolh then cost consi-
dermUy more than linen, and cotton stockings were then
nettrly as dear as silk. In 1767, Richard Hargreaves
invented the spinning jenny, and in 17^9, Mr. Arkwright
invented his power-spinning frame. In 1779, the mule,
m still more efficacious spinning instrument, was in-
vented ; and from that time to the present, improve-
ments in cotton-spinning and weaving machinery have
been continually and successively made.

To iUnstrate the effects of these improvements, I can
do no better than quote another passage from the ar-
tiele in the Quarterly Review, from which I have

72 EFFECTS IN AUGMENTING WEALTH.

already largely borrowed. ''The various machinery
now used in manufiEurturing cotton has enabled one man
to perform the work of one hundred and fifty. Now
the lowest computation supposes 280,000 men — some
say 350^000 men — to be employed in it. Hence the
work now performed in this single branchy would —
half a century ago— have required 42,000,000 of men
— according to some 53 000,000 ; that is to say, at the
lowest computation, more than twice as many men^
women^ and children, as now people the British islands. ^
Now supposing the labour of each of these men to cost,
at this hour, the very moderate sum of one shilling per
day, or 18/. per annum, the pay of 42,000,000 of
labourers would be 7^6,000,000/. per annum, or a little
more than thirteen times the annual revenue of Eng^
land. ' Deducting from this sum the pay of the labour-
ers now really employed at the above annual rate,
(280,000 X 18/.=5,040,000/.) and allowing the enormous
sum of 50,000,000/. sterling for the wear and tear of
machinery, buildings, and incidental expenses ; the re-
sult is, that the machinery employed in the cotton
manufactories saves 700^000,000/. sterling to the Bri-
tish nation ; or, in other words, that, without machinery
and steam, the prodigy of British industry and civiliza-
tion would still have been wanting to honour mankind."
The conclusion drawn by the author of this article
from these statements, which is well worthy of every
man's attention, is, that the manufacturing industry of
England may be fedrly computed as four times greater
than that of all the other continents, except Europey
taken collectively ; — " and that the average productive
power of our people may he estimated as one thousand to .
one acer the average productive power of mankind at

i

GAS LIGHTS. 73

large"* This most wonderful increase^ by which the
productive power of England is 2500 times as great as
was that of Egypt^ and by which one man here may
do the average work of a thousand labourers in the
world at large^ is the magnificent result of that beauti-
Bil machinery^ which the skilful hand of our artizans
has been taught to fashion by the combined observa-
tions and experience of ages. In the particular case of
the cotton manufacture^ being of comparatively recent
origin, and hardly known above sixty years, though
now of the annual value of thirty millions sterling, we
can trace every step and every cause of its improve-
ment ; — and that cotton is now so much cheaper than
silk or linen — they also, being at present made at a
much less expense of labour than formerly — that the
productive power of all those engaged in manufacturing
cotton has been so astonishingly increased, is entirely
owing to the knowledge and inventions of Richard
Hargreave, James Watt, and their fellow labourers,
and successors.

The advantages and cheapness of illumination by gas
are well known, but these advantages never could have
been realized without considerable knowledge. Long
before we had gas lights, it was ascertained that coal
supplied an inflammable substance ; but till Priestley
had invented pneumatic chemistry, this gaseous matter
could not be confined, and was only regarded as a
noxious vapour. As produced from coal, it is contami-
nated by various substances, and to chemistry we are
indebted for the means of purifying it. The properties
of the gas itself, and of the metallic conduits through
which it has to pass, the pressure of the atmosphere^,

• Quarterly Review. No. 67. p. 93.

£

74 OAS LIGHT!.

and the greater expansire power of the gm, mnst hftve
all been known^ and a great deal of dcill in adaptiiig
this knowledge to this particular purpose must ha^e
been in existence, before this beautiful inyeatioB could
have been brought to its present state. The effects of
this contrivance are not limited to suppljrintg l^bt at a
less cost than before. The great brilliancy, almest
equal to day-light, protects the peaceable and iadiis-
trious citizen from the nightly burglar ; and gives all
classes a degree of security, not to be attained ev&i by
the most vigilant police. Persons otherwise disposed
are obliged to have recourse to honest industry ; and
gas l^hts — a result of modem chemistry ^-augment the
national wealth, not only by the labour they save, but
by what they compel men to perform.

I might expatiate on many such subjects as these,
but it would be an unwarrantable waste ai the reader's
time. He has only to cast his eyes around him^ and
lie will find that every skilful operation he performs,
or which is performed by others, has at some time or
other depended for its success on a close observation of
the laws of nature and the properties of matter. The
most simple instrument in use, such as a connnon
spade, a carpenter's gimlet, or a sewing needle, by
the help of which labour is not merely ^Eicilitated, bat
without which several most useful and necessary daily
operations could not possibly be performed, were at one
time unknown ; and probably required as close obser-
vation of the properties of iron and steel— of the form
and powers of the human body, so as to adapt tiie
digging and sewing instruments to its capabilities — and
the gimlet to the purpose of boring rapidly through
wood, and bringing to the surface the little pieces it

PRINCIPLE OF THESE IMPROVEMENTS. ^5

cuts away^ — as the invention of the steam-engine at a
later period required of the properties of caloric^ and
of the weight of the atmosphere. We have been
taught the arts which our ancestors learnt by observa-
tion^ and are apt to forget that they^ like the new
discoveries of our own times^ which are to be the means
hereafter of facilitating the labour of our descendants^
were the result of a close and attentive examination of
the external world.

E "J

CHAPTER III.

NATURAL LAWS WHICH REOULATE THE PROGRESS
OF SOCIETY IN KNOWLEDGE.

Political eoonomitu have not inquired into the natural law* re*
f^ulating the progress of knowledge.^It does not depend ex-
clusively on division of labour which is preceded by inventions
and discoveries. — This fact illustrated by Hindostan and other
countries. — Progress of knowledge depends on general natural
laws. — ^Uniformity of the progress of civilization.— Influence
of necessity as caused by an increasing population. — Illuatration
from agriculture. — Individual genius the result of the general
progress. — Illustration of Mr. Watt — Manual dexterity must
be imited with observation.^ — Natural and necessary increase of
knowledge from an increase of people. — Influenoe of govern-
ments in adding to knowledge.

I QUOTED in the last chapter more instances of
knowledge and observation adding to productive power,
than would have been necessary, had not the vast
effects of mental labour been in general either over-
looked in works treating of political economy, or as-
cribed to some other causes. Its influence, in fact^ is
so obvious and familiar, that it seems on this account
to have been thought not worthy of philosophic in-
vestigation. Numberless observations are scattered
through the pages of the economists on the subject ; but
by no one of them has it been treated of with a view to
explain pr discover the general laws which influence,
regulate, and limit the progress of knowledge, f " In

DR. smith's opinion. 77

the means of increasing our subsistence/' says an
author whose book is written to express his doubts of
the prevailing political-economical theories^ '* as in
every thing else^ knowledge is, in the strictest sense of
the word, power. It introduces new modes of cultiva-
tion; it converts the barren soil into a garden ; and
calls forth the hidden powers of nature, which might
otherwise have slumbered on for ever useless and un-
known/^ But the author seems to have been satisfied
with string this^jtruth, as one objection to the com-
pleten^ of ceitain prevalent theories, and he has not
traced out its consequences; not supposing, apparently,
that jihe increase of knowledge was as much regulated
by general natural laws, as that increase of the means
of subsistence which it so efficaciously promotes.\

Dr. Smith was not ignorant, I admit, of the effects

oC knowledge and observation in adding to productive

ppwer ; for he has remarked, 'V that one of the circum-

liances which distinguished the colonists of North

America from its former inhabitants was, that they

ica^ed with them a knorvledge of agriculture, and other

/ useful arts superior to what can grow up of its own

/ accord in the course of many centuries among savage

! and barbarous nations. ^'f But he seems not to have

I

; been thoroughly sensible of their importance ; and to
i have supposed, I think erroneously, as mental labour-
\er8 subdivide their employments in the progress of
aety, as well as bodily labourers, that the effects of
ition and knowledge might all be referred to his

A Few Doubts as to the Correctness of some Opinions gene .
nlly entertained on the Subjects of Population and Political Eco-
nomy. By Piercy Ravenstone. London, 1821.
t Wealth of Nations.

78 THE P]U)G&E8S OF KNOWLEDGE NOT

favourite principle. " The invention/' he says, *^ of
all those machines by which labour is so much facili-
tated and abridged, seems to have been originally owing
to the division of labour." * In consequence of this
opinion, while Dr. Smith has developed at great length
the influence of the latter principle, he has done little
or nothing towards explaining the more important laws
which regulate the increase of knowledge, and its in-
fluence over productive power. nVhenever his suc-
cessors mention the subject, and few of them ever
think it worthy of notice, they treat of it under the
head of accumulation and employment of capital. But
I have no doubt I shall be able to show, that the laws
'vdiich regulate the accumulation and employment of
capital are quite dissimilar to and unconnected with
the laws regulating the progress of knowledge.^

This general neglect adds much to the difficulty' I
feel in endeavouring to develope the natural laws which
regulate this progre8S,-~-which stimulate observation,
and lead to the numberless happy inventions that conti-
nually arise in the progress of society ; and that seem,
by recurring at unequal periods, by diflering in degree
as to utility, and by being again occasionally lost or for-
gotten, not to be under the influence of permanent
natural laws. The supposition that these improve-
ments may all be traced to division of labour, imposes
on me, on the other hand, the task of contending against
it. I shall clear my way by beginning with the latter
subject ; and, in order to make the reader thoroughly
sensible of the necessity for inquiring into the laws
which regulate the progress of knowledge, I shall first

* Wealth of Nations, book 1, chap. i.

DEPENDENT ON DIVISION OF LABOUR. 7^

show that it does not depend, as stated by Dr. Smith,
and tacitly adopted by his successors, exclusively en
division of labour.
TThe question at issue between Dr. Smith and his
fimowers and myself, is, whether a knowledge of the
materifd world, and inventions in the arts, including the
invention of machines, are, or are not, originally owing
to the division of labour. I maintain they are not. I
admit, that a progress in knowledge, and division of
labour, mutually promote each other ; that observation,
introducing new practices, leads to extended division of
labour*; and extended division of labour, allowing those,
whose principal business it is to make observations, to
confine their attention to some small part of the material
world, enables them, and of course enables society at
large, more speedily to become acquainted with it : but
'I eontend, that observation must have preceded divi-
sion of labour, and some progress must have been made
in a knowledge of the external world, before men could
hsre thoYight of devoting themselves to different em-
pioymentaJ Undoubtedly they Had learned to make
bows and arrows, to catch animals and fish, to cultivate
the ground and weave cloth, before- some of them
dedicated themselves exclusively to making these in-
stroments, to hunting, fishing, agriculture, and weav-
ii^. I take this to be strictly consistent with Dr*
Smith's own principles ,* for had men laid themselves out
fior particular emplojrments, before those emplojrments
were invented, it would prove that division of labour
was the fore-planned result of human wisdom to lighten
labour, which he expressly denies.

In the savage state all men learn some of or all these
1^ heSttt they begin to devote themselves exclusively

80 INVENTIONS CAUSE DIVISION OF LABOUR.

to one or two of them. Between savages and the
most civilized people there is no difference as to this
progress. Inventions always precede division of labour^
and extend it^ both by introducing new arts and by
making commodities at a less cost. The art of work-
ing in metals^ leather^ or wood^ was unquestionably
known to a certain extent^ before there were smiths,
shoemakers^ and carpenters. In very modem times,
steam-engines and spinning mules were invented,
before some men made it their chief or only business
to manufacture mules and steam-engines. That nu-
merous class of men called engineers (journeymen,)
together with those who practise several other modem
callings of a novel description, who are rising into
notice in every part of the country, — such as those,
for example, who make or who work only with power
looms, — ^breaking up some other trades, and giving
a death blow to corporation and apprentice laws, which
do not apply to them — have been separated from, other
workmen by those numerous modern inventions which
have called into existence the new arts they practise. Mr. .
Windsor introduced the practice of lighting our streets
with gas, to give one additional illustration, before a
set of men dedicated themselves to the business of mak-
ing gasometers and fitting up gas-apparatus. (lilthough
division of labour promotes art and skill, it is not the
parent of those species whi<;h are most important. In-
vention and knowledge precede it to a certain extent
in all cases, and are to be considered, rather than it, the
chief causes of those new arts which add so much to
productive power J

That division of labour is not the cause of inven-
tions may be illustrated by experience. In Hindostan,

ILLUSTRATION OF HINDOSTAN. 81

fbr^example^ nnd in some other parts of Asia, it is^ in
some arts, carried to as great an extent as in Britain^
and has been longer established. But the inhabitants of
those countries are said to make at present little or no
prc^ess in wealth, and none in knowledge ; and they
invent few or no machines. The Indian weaver makes
the finest muslin by stretching his warp sdong over
two rough stakes under the -shade of a tree ; he digs
a bole in the ground for his feet, and all his weaving
apparatus does not exceed in value a few shillings. Man
is there the only machine ; and although he acquires
exquisite tact and skill in his particular calling, he is
incapable of inventing any thing new. There is good
reason to believe, -that the weavers in India have con-
tinued to use the same sort of loom, -without any im*
provement, since the days of Alexander the Great.

Some countries nearer home will exemplify the same
principle. There can be no doubt but division of la-
bour began much sooner on the neighbouring continent,
and was carried much farther at a former period, par-
ticulaily in Italy, France, and Germany, than in Bri-
tain. At this time division of labour is as extensive in
some of these countries as in England. For example,
literature, as a business, is probably more subdivided
in Germany than here ; as are also, or were up to a
late period, probably, all the professions considered as
businesses or trades, of music, painting, and sculpture,
in Italy and France. But those countries have-not
made a progress equal to this country, during the last
century, in a knowledge of the arts which create wealth.
They have endeavoured, and often, I believe, in vain,
to import the inventions and the arts which. have oiigi-
' nated in Britain ; but, except some improvements made

B 5

82 ME. say's OPIIIIOH.

in France since the peace — such^ for ezample« as a
better loom for silk-weaving, whioh lias liowerer, i| is
said, been equalled or surpassed by one invented in
Britain — these countries have of late had compnrativelj
few inventions or discoveries of their own to aend ns
in exchange.

I must contend, therefore, and it will be found tbat
the principle is of great importance, inasmodi as it
removes far off the supposed natural limits to diviaion
of labour, that the invention of useful maohinea and
discoveries in the material world, facilitating produc-
tion and abridging labour, are not the exclusive reank
of Dr. Smith's grand principle.

^^ Another person," says Mr. Say, " observes^ that
water expanded into steam is capable of raising an
enormous piston ; and this steam, condensed by a jet
of cold water, leaves a vacuum which causes the pjaton
to descend with a force equal to that of twenty, thirty,
or forty horses; — whence results a power which may
be applied to every purpose, and hence the employ-
ment of steam-engines. Is this improvement to be
attributed to the division of labour ? No. The wei^t
of the atmosphere, which causes the piston to descend,
has existed since the commencement of the worlds and
been allowed to lie idle for sixty centuries. The pro-
gress of knowledge, the art of observing, led to the
discovery j and the human race has been enriched by all
the wealth this power has enabled them to create
during the last forty years."*

To develope the natural laws which regulate the pro-
gress of our race in knowledge, (the subject being one
not much explored,) is more difficult than to show> as I

• Notes to Storch.

IMPROVEMENT DEFEl^DS OK NATUB^C LAWS. 83

think I have done^ that it does not depend escclusively
cm division of labour. I am afraid it is too generally^
and I am sure it is idly supposed^ that this progress is
not regulated by any general and permanent law. AU
saxh. phenomena are closely connected with the will
of man ; and whatever is connected with or depends
on it^ we imagine to be given up to boundless caprice.
This is. not the place to enter into a metaphysical ar-
goBient^ to show that the will, or rather the desires of
men, are as much regulated by general natural laws —
tfaongk the circumstances which influence these de-
arer are so numerous that they have not yet been
classified by us — as any other part of the creation;
noi even to advert to those general social phenomena,
such as the number of births, marriages, letters daily
transmitted, by the post, etc. etc. which, though they
depend on individual will, are plainly regulated by
some general laws,—- for we find, by extending our ob-
servations to loi^ periods, that the average number of
births, and marriages in a given district, either does not
vary, or varies according to some rule and under the
inflnence of some natural circumstances which are
eadlly ascertained : I say, this is not the place to enter
into a metaphysical argument of this nature ; and I shall
therefore content myself with briefly referring to the
unifimn progress of our race, to> satisfy the reader,
eapricioas and unregulated as the will or desires of
individuals may appear, that the will and conduct of
nffltwm of men — and the more numerous they are, the
more evident and certain is the truth — are regulated by
pearmanent natural laws.

Thus, when we call to mind the uniformity fof the
piQgcess of civilization in its early stages^-man having

B4 UNIFORMITY OF OUR P&00BE8S.

everywhere^ as far as history reaches^ gradually passed
successively through the state of a naked savage living,
on wild fruits^ of a hunter feeding on flesh, ahnost
as wild and ferocious as the wild beasts with which he
contended for prey, of a shepherd domesticating and
rearing the animals he found it difficult to catch by
hunting, and ultimately of an agriculturist^ raising
vegetable food for himself, and for the animals he
destines for his own use, — acquiring therefore succes-
sively, in all places, the knowledge which enables him first
to hunt and ensnare wild animals, next to domesticate
them, and finally to cultivate the ground j. when we
recollect this uniformity in the progress of our race, we
can hardly fail to suppose that it must be regulated
by some general natural law. When we advance farther
in the scale of civilization, and observe in almost all
countries, whatevier may be their form of government
and whatever their situation, manufacturing industry,
and of course the varied knowledge which is necessary
to it, succeeding to agrieulture ; and commerce, with a
knowledge of the art of navigation and constructing
ships, whenever a people live near the borders of that
ocean which washes the whole habitable globe, suc-
ceeding to manufactures ; and when we observe, that
wherever this natural progress is not arrested by the
violent hand of lawless ambition, the growth of manu-
factures and the increase of commerce necessarily beget
extended cultivation, stimulating to new discoveries in
agriculture and introducing new crops, calling also in
turn some new manufacturing skill into existence,
and increasing the commerce of the world ; we are
compelled to believe, though the belief belongs, I
admit, rather to wonder and admiration than to accu-

INFLUENCE OF NECESSITY. 85

rate detailed knowledge^ that this uniform progress is
the result of some permanent natural law.

Although it is not possible to point out in detail the
circumstances which in every case led to the important
inventions briefly aUuded to> there can be no doubt
that they are the result of that necessity to^ labour^
which is the law of our being, and • of the natural
increase of population. Thus^ the spontaneous pro-
ductions of the earth being exhausted, hunger stimu-
lated the ingenuity of man, and he became a hunter
or a fisherman, as his lot was cast amidst boundless
plains, or near waters which he saw teemed with fish.
As the number of men multiplied, these resources also
were insufficient, and the same want led to farther
improvements — led first to a rude species of agriculture,
then to a rude species of manufacture, and subsequently
to a refined cultivation, atid to the wonderful inventions
of our own times. This principle operates now as well
as formerly, and the natural progress of our race is ever
in the same direction. Thus the increase of people
in this country within the last century, by creating a
great demand for agricultural produce, has led not
merely to extended cultivation, to inclosing commons
and breaking up heaths, but also to those improved
agricultural processes to which I have alluded. The
stimulus most :generally present to the mind of
every inventor, and which may be said to be the im-
mediate cause of the invention, is the natural but in-
satiable desire of providing for his wants or bettering
his condition. But, were population not to increase,
there could be no additional wants to provide for. The
labour of the past year would be more than sufficient
to supply the wants of the next ; and but for the con-

86 IMPBOYBMSNTS IK AGRICULTURE

tinual increase of people^ there would not now be,, tb^re
never would hare been> a stimulus to inventioa and
to the increase of knowledge. Whoever they stop
increasing^ a stop seems also to be put to the increase
of knowledge. ^Thus^ although we may fail to observe
how the law operates in each particular case, we may
be certain that the cause of that progress in knowledge^
which is isL its turn the cause of a perpetual inci^eas^
in our productive power^ is the natural law whi«h
dooms us to labour^ and which is kept perpetually in
operation^ at its greatest extent, by the active princi|^
of population!^ Necessity is the mother of inventioa;
and the coiltinual existence of necessity can only be
explained by the continual in^ease of people^ j

Modern agricultural improvements offer all iUustrar
tion of thi& principle. They have in general tended to
augment the quantity of our food, by increasing the
number of cattle. The green crops cultivated ave in-
tended for fodder, and by cultivating them an increased
number of animals has been reared and fed; their-flesh
has added to our means of subsistence, and the ma-
nure obtained by keeping them has increased to a great
extent the quantity of corn. Dr. Smith has remarked
that '^till the price of cattle has got to such a height as
to render it profitable to cultivate land for the sake
of feeding them, it seems scarcely possible that the
greater part even of those lands which are capable of
the highest cultivation, can be completely cultivated.***
But the price of cattle can only rise permanently from
an increase in the number of people ; and they having
wherewithal the produce of their own labour to g^ve
for cattle. Thus^ the rise in the price of cattle is

• Wealth of Nations.

CAUSED BT INCREASE OF PEOPLE. 87

caused by an increase of people and by an increase in
their manufacturing or other produce. Again^ the rise
in the price of cattle leads to cultivating food for them^
augmenting manure^ and occasioning that increased
quantity of produce which has been stated to amount^
in this country^ to nearly one third of the whole. But
for the increase of people, therefore, all that fruit-
fulness of the soil which has been made manifest in
our day and generation, by cultivating food for cattle,
would have remained dormant and unknown.

The endeavour to trace the discoveries and inven-
tions of individuals to general natural laws, is not flat*
tering, I am aware* to that vanity which loves to think
itself, by th6 possession of some peculiar genius, dis-
tin gniah ftd from the common herd of mankind. But
let us not injure society and vilify nature, tha^ we may
set up some palpable objects for reverence, lit is plain
that every individual, be his singularities anohis intel-
lectual powers what they may, has his character, his a/
a^timents, his thoughts, his passions,— yea, even his in-
tellect itself, — fashioned by the time at which he lives,
and by the society of which he is a member ; so that /

any thing which is peculiar to himself forms but the
snudlest part of the whole man. Whatever may be his
natural endowments, and some philosophers have doubted
if there be originally any difference among men, every
man is chiefly indebted for whatever he possesses of
knowledge, of skill, of inventive power, to the know-
ledge and skill of other men, either living or dead. The
influence of society over eve^ individual mind, is pa-
maoont to all other things. |Perhaps, of the last cen-
tury, there is no man who ^nds higher as a philoso-
phttr and a mechanic than James Watt ; but he was

4

88 GENIUS THE RESULT OF THE

indebted for most of his scientific and mechanical know-
ledge> for 'every things indeed, ivhich constituted his
talents^ and which contributed to his glorious success,
to his having been bom in Britain in the 18th cen-
tury. Were it ]>ossible, which it evidently is not, for
a mind richly stored ^like his, to be nourished into such
inventive maturity amidst the rude peasantry of Ire-
land, or the still ruder Guachos of South America, he
could never have invented so sublime a machine as the
steam-engine. No possible motive could there have ex-
isted for the invention ; it being of no utility except in
crowded countries, in which fuel is plentiful and maiia-
factures established ; or having invented it, if- it were
possible, there would be no body to make or use it, no
purpose to which it could be applied, and the invention
could only be realised by the patient labour of the in-
ventor himself, and on the shape of a model in his own
hut. Under such or any similar circumstances, fin-
stead of adding immensely to the power of our race, it
would have been a mere philosophical toy, contributing,
perhaps, to the amusement of the ingenious indivi-
dual, but of no use to mankind.
fit is quite clear, also, that Mr. Watt could not have
invented the steam-engine to any purpose a century
before : society was not prepared to adopt such an in-
vention, hsdiT^eSTmaSETnorcould he then have pos-
sessed the requisite knowledge, nor ^und the means
for putting his invention into practice, J He mighthave
made some random « conjectures, and have been the
author, perhaps, of another *' Century of Inventions,"
but he could not have invented and made steam-engines.
At the very time when he began to think and to plan,
a vast flood of light, proceeding in scattered rays £rom

Qti^BRAL PBOO&E88. — MR. WATT. 89

every ^pital and almost every town of n6te Ih Europe,
Its generality proving that it depended on some ge-
neral low^ was spreading itself over the hitherto un-
known world of chemistry. Bergman, and Scheele,
in a remote town in Sweden, Klaproth, at Berlin,
Rouelle, Lavoisier, and Berthollet, in France, and
Black, Cavendish, and Priestley, in England, are a few
only of the very eminent individuals who had, just as
Mr. Watt came to maturity, contributed, by a series of
splendid discoveries, to fix the attention of all the ob-
serving part of mankind on their favourite science.
" When Dr. Cullen," says Dr. T. Thomson, " became
professor of chemistry in Edinburgh, in 1765, he kindled
a flame t)f enthusiasm among the students, which was
soon spread far and wide by the subsequent discoveries
of Black, Cavendish, and Priestley, and meeting with
the kindred fires which were already burning in France,
Germany, Sweden, and Italy, the science of chemistry
burst forth at once with unexampled lustre, "* Mr. Watt,
therefore, ought, I think, to be considered like Colum-
bus, like Bacon, like Newton, like Luther, and like
the inventor of printing, as one of those master-spirits
who gather and concentrate within themselves some
great but scattered truths, the consequences of num-
berless previous discoveries which, fortunately for them,
are just dawning on -society as they arrive at the age of
reflection. They, have the happy art to connect, by some
little additional discovery of their own, the various
truths lately brought into day ; and they apply, them to
elucidate some unexplained phenonema, to establish
some general law, or to bring forth some invention that
is to add to the wealth, the power, or the reputation of

* A System of' Chemistry, Introduction, page 9, 6th edit.

90 NECESSITY FOE BOTH OBSBBVATION

that society, to the previous progress of which they
are indebted fo^their knowledge^ their genius^ and
their intellect. H'beir acquirements^ their schemeSto
and their thoughts are closely and inseparably linked
with the acquirements^ the projects^ and the thoughts
f^ of their predecessors^ and of all around thena; and
their inventions and discoveries are the necessary^
consequences of preceding inventions and discoveries. J
They are only parts of the general system. Suclr
minds and such men arise naturally and necessarily
from the general progress in knowledge ; as a Borgiay a
Cromwell, and a Napoleon^ are sure to spring up when<»
ever great mistrust of existing authority, in conjunc-
tion with a general disposition to obey^ and a rever-
ence for whoever is most impudent and assumes the
most^ furnishes an opportunity for the gratification ef
unbridled^ bloody, and ferocious ambition.

The circumstance just mentioned^ of chemical scien^
having, about the period of Mr. Watt's inventioBiv,
made as great a progress on the continent of Curc^
as in this country/ "without having led to anry in-
vention similar to that of the steam-engine^ shows
that what is called learnings is comparatively of little
advantage unless it be connected with other things*
Among the "Numberless persons of undoubted eminence
wIk) then cultivated knowledge^ there were probably
many as well acquainted as Mr. Wattj^dth niechanic8»
\ ^,^ and with the laws of heat and vapour.flt is not enoug^>
therefore> for an individual to be endued with geoiiu
/ and talents^ if the circumstances of society do not affer
y0 the means of applying them. On the continent there
wa» not the same commercial demand for means of
abridging labour as in this country ; nor were there the
same mechanical means previously prepared for carry-

AND MANUAL DBXTERITY. 91

ing such mventions into execution.j Even at present^
when ourcontinental neighbours have all the advantages
of our previous experience, when they are just as well
acquainted as we are with the theory of steam-engines^
and potsess all the information on the subject which
description can convey, they are nearly incapable of
ereeting a steam-engine without the assistance of Eng-
lish workmen. Although Mr. Watt may have found
it necessary, as it is said he did, to instruct workmen
£or faifl particular views, yet he must have met with a
vast deal of practical manual skill ready formed to his
hands, which needed only some peculiar direction, or
he could not have succeeded in manufacturing his own
inyentions. In addition, therefore, to the commercial
demand for means of abridging labour, which was
felt in this country, there also existed a great degree of
manual dexterity among workmen ; or a considerable
number of skilful millwrights, founders, smiths, and
carpenters, were ready formed, by whose assistance Mr.
Watt was enabled to realize his conceptions. This is
one of the circumstances, arising from the time and
place of his birth, to which he is indebted for his cele-
brity. It shows, I admit, how ignorant we yet are of all
the causes which promote wealth-creating knowledge ;
but it also shows, that without practical manual skill,
the most elaborate learning may be of no use, and that
without dexterous workmen^ the most ingenious con-
trivsneea must be classed merely as visionary dreams.
There is an absolute necessity for observation and prac-
tiee> for mental and bodily labour to go hand-in-hand,
neither preceding nor staying behind the other. All
encouragement consequently , given to one species, of
labour, all bounties on a particular art or particular
kind of learnings may be highly delightful to royal and

92 IMPORTANT NATURAL LAWS.

noble patrons^ but on society at large they inflict ii^uiy,
by promoting one kind of knowledge at the expense ef
some other.

It is impossible for me to take notice of all the na-
tural circumstances which influence the progress of our
race in knowledge, or which determine its kind and
degree; sueh^ for example, as diversity of organizatum
among tribes and races of men, for there can, I think, be
no doubt that such a diversity exists, and influences bodi
the species and the degree of knowledge acquired; —
as peculiarities in geographical position, for it is evident
that as a people inhabit an inland or maritime con&try,
the sort of knowledge they acquire will be different^
as language, for ' this is the instrument «f thought^ and
as it is perfect, the acquisition and difiusion of know-
ledge will be easy and correct ; — ^but there is one natural
circumstance to which I have already alluded^ of such
paramount importance, when viewed in connexion
with some prevalent theories, that I cannot pass it hj
without farther illustration. It has of late been «o

* It may be as well just to remind the reader, that all oar
vast maritime knowledge and maritime power, which have in
genei^ been most absurdly attributed to some misb^iotten,
ill-tempered regulations of Oliver Cromwdl and Charles IL
(which have been more often suspended than enforced,) may all
be very easily traced to the gepgraphical nature of our country.
Exclusive of colonies, we have four times as much sea coast as
France, and four times as large a mantime population. This is
the natural and simple source of our maritime power, which 'Oor
celebrated navigation laws, commercial restrictions, and most
abominable naval regulations, have done much to weaken. It is
most gratifying to trace our national prosperity, and greatness to
a higher point than the wisdom of our lawgivers ; and in tbe
unalterable circumstances of our geographical position, we have
the strongest possible guarantee for our future prosperity and
greatness.

INFLUENCE OF POPULATION. 93

much the £E»hioii' to look only at one side of the great
question of population^ — and to look at it with reference
only to its operation under the perverting control of
human institutions and an unjust distribution of the
products of labour ; and so much have the leading men
of society delighted to find in this natural principle, an
excuse for the consequences of their own rapacity, it
supplying a plea on the one hand for the continuance
of usnrpalaon^ and on the other for unenquiring sub-
mission^ -that the doctrines ascribing all the miseries of
our species to their too great power of increase have
been widely adopted^ weakening and even destroying in
these latter times the confidence of man in the wisdom
of Gk)d. ^liat principle, I have already shown^ is the
source of all national greatness worthy of the name, and
of much individual exertion ; it is probably also the
source of those improveiilients which are said to spring
from necessity ; and I think I shall now satisfy the
reader that it is the chief source of that increase in
knowledge which gives n^ power and dominion over
the external world. ^ fOPOl.\\r'J) M

No one doubts that the rapid communication which
may now be had from every part of this country to
every other part, contributes both to the increase of
knowledge and of wealth. The discoveries made in
London, Manchester, or Glasgow, are known in either
of these other towns, and are spread over the whole
island, in a few days. (Numbers of minds are instantly
set to work even by a hint ; and every discovery is in-
stantly appreciated, and almost as instantaneously im-
proved. The chances of improvement, it is plain, are
great in proportion as the persons are multiplied whose
attention is devoted to any particular subject. It ap«

94 INFLUENCE OF POPULATION

pears to me, theref(Nre» that an increase in the niunbei
of persons produces the same effect as commumcation ;
for the latter only operates by bringing numbers to think
on the same subject.^

To illustrate this by one example : Mr. Scheele, a
celebrated Swedish chemist, first remarked the bUaek'
ing power of chlorine ; BerthoUet, in France, first applied
it as a manui^turing agent, and first suggested its
probable utility in the arts. Mr. Watt, I believe, ifl-
troduced the practice into England; and Mr. Tennant,
some time afterwards, first suggested a mode of unit-
ing chlorine with pulverulent lime, " one of the great-
eat improvements,'* says Dr. Ure, " in practical bleach-
ing which has ever been made." The united expenesce
and knowledge of 'at least these four persons^ and, in
fact, of the experience and knowledge of a great num-
ber of others, was necessary before chloride of lime
could be advantageously employed as a bleaching agent.
/The proverb says that two heads are wiser than* one,
and in this case four heads completed what one did not.
On the same principle, each one of four thousand heads,
and of four million heads, wHl necessarily have still
more wisdom and still more knowledge than when
there is only one head in existencey '^

One generation is wiser and possesses more know-
ledge than the generation which preceded it. This is
not merely from being later in the world. Time is a
mere personification, and adds nothing to wisdom. The
last generation is wiser than the generation whieh pre-
ceded it, because it adds, where language is in use, and
particularly where writing and printing are known, all
its own observations to the knowledge of the generation
which went before. There have been more eyea to see.

IN AUGMENTING KNOWLEDGE. 95

mote hands to practise^ and more minds to treasure up
and record observations and practices. TAs the world
grows older, and as men increase and multiply , there is
a constant, natural, and necessary tendency to an increase
t» thevr knowledge', and consequently in their productive
power.

This principle seems to be amply confirmed by expe-
rience. Almost all discoveries and improvements have
been m|de in crowded cities and in densely peopled
comrtriey It was amidst the populous cities of an-
cient Gtc^, and not among the few wandering tribes
of the desert, that the arts, both for creating wealth
and adornii^ existence, were in the old world cultivated
with such singo^ success. It was in the populous
cities of modem Italy^ of Holland, and of Germany,
that the arts again sorang up in the middle ages. The
discovoy of America/sby supplying Europe with many
desirable commodities, and by providing it^with a large
market, has probably aoHad on the whole upwards of
fifty millions of people to t^e mass of human beings
communicating with each otJ^r. Since that event,
there can be no doubt that the inliabitants, both of Eu-
rope and America^ have made a ve^ sreat progress in
a knowledge of all the useful arts. M.t no period of
our hist(Hy was Great Britain ever so populous as at
present ; and it has been within these last fifty years
that seme of those most useful and surprising im-
provem^its, in agriculture, in practical chemistry, and
in the mechanic arts, to which I have alluded, have
been made^ finally, it was not till the year 1823, when
England i^ne numbered eleven millions of people, and
this metropolis and its environs contained upwards of
a tenth of this number^ that Mechanics* Institutions

96 INFLUENCE OF POPVLATIOM^

were established. Unless there had been a great many
persons to profit by such establishments, they could not
have succeeded. In whatever light other persons may
regard such societies, I can but look on them as the
germs of greater improvements in the arts than the
world has ever yet seen.

'' More discoveries/' says Mr. M'Culloch> speaking
of them, *' will be made, according to the d^ree in
which more individuals are placed in. a. situation to
make them. And it is neither impossible nor at all im-
probable, that the lustre which uqw attaches to the
names of Arkwright and Watt, may be dimmed,
though it can never be wholly effaced, by the more
numerous, and it may be more important discoveries,
that will at no distant period be made by those who
would have passed from the cradle to the tomb in the
same obscure and beaten track that had been trodden
by their unambitious ancestors, bad not the education
now so generally diffused, served to elicit and ripen
the seeds of genius implanted in them for the general
advantage of mankind."*

The principal object, I must here remind the reader,
which I have in view, though I am sensible it must be
very imperfectly executed, is to develope the natural
laws which determine the progress of our race in opu-
lence. Accordingly, I have first attempted to show
from facts the influence of knowledge on productive
power, and next to point out the natural circumstances
which determine the increase of knowledge. The con-
clusion I come to, and I wish to state it plainly, that
whether true or false, right or wrong, it may not be mis-
understood, is>fthat independent of all governments

* Principles of Political Economy, page 118.

NATURAL PROGRESS OF KNOWLEDGE. 97

and of all their regulations, there is in the universal
necessity to labour a universal stimulus for all men
to exert those natural faculties with which 9II are en- ^
dowed ; that this stimulus is at all times the cause of
observation, and that observation brings knowledge;
and that there is a natural and necessary tendency, in-
dependent of all and every sort of social regulations,
to a gradual increase of knowledge as the world
grows older, as generation follows generation, and as
mankind are multiplied on the face of the earth. Our
natural facidties, under the influence of this stimu-
lus and this influence of increasing population, lead,
without our willing it beforehand, without our ever
conjecturing what will be the result, to all those grand
and sublime and beneficial consequences-^which we
call in one comprehensive word, civilization j) To com-
plete the subject, it would be necessary to mquire into
the eflTects of social regulations — and to ascertain dis-
tinctly> not only what their effects have been, but
slao, if it be possible, by any and what social regulations
to promote knowledge, and thus add to productive
power. Into such an inquiry I do not mean to enter,
bat the subject demands it, and we cannot know, till
it be gone into and finished, what are the laws which
regulate the progress of opulence. Those books, there-
fbre> called Elements, Principles, or Systems of Poli-
tical Economy, which do not embrace and fully deve-
loper as not one of them does, the whole influence of
knowledge on productive power, and do not exjilain the
mtaral laws which regulate the progress of society in
k]iowledge> are and most, as treatises on Political Eco-
ncmy, be essentially incompletes

Without departing from the principle I have laid

98 INFLUENCE OF GOVERNMENT.

down^ of confining myself to the natural laws wliicli re-
gulate production, an4 of not taking any notice of the
influence of governments ; I must, however, observe,
that unless we take into the account the vast influence
of the adopted religion and the constitution of society,
of every form of government comprised between perfect
freedom and abject slavery, whether it be to living men
or parchment statutes, — ^the worst species of slavery, —
as well as the influence of temporary laws on the in-
crease of wealth^creating knowledge, it is impossible
for us to explain the diflferent progress of different
nations in opulence. Division of labour, security of
property, and most of the other circumstances usually
supposed to be the chief means of promoting national
opulence, are, or were a few years back, nearly equal in
all the countries of Europe. The religion, the govern-
ment, the commercial regulations of all, were in princi-
ple so similar, that the influence they exercised over the
1^ production of wealth, must have been nearly equal, iw
that European country, however, which of late sas
made the most rapid progress in wealth, the people
have been the freest to inquire. The press, and with

7 that the mind, has been less shackled in Britain than
in any other great country of Europe. This probably is
the sole source of her superior opulence. Every part of
knowledge is intimately and closely connected with every
other, and men cannot be impeded or restrained from
inquiring into one branch without their progress being
ultimately checked in every other. Governments may,
in their pretended wisdom, think, by what they call
wholesome restraints, that they are only lopping off se-
dition or pruning heresy, but experience convinces us,
that without meaning it, they at the same time, like

ABSURDITY OF LIMITIMO INQUIRY. 99

unskilful gardeners^ cut away fruit-bearing branches^
and stint in every direction, the growth of wealth-
creating knowledge^ The restrictions imposed by go-
vernments on comnrercial enterprize and individual ex-
ertion, have been, it is now generally admitted, greatly
injurious to the welfare of man ; but this seems as no-
thing when compared to the extensive mischief, caused
by that frightful mental debility which has ensued,,
whenever a few men, as ignorant as the meanest of
their fellows, have been suffered to set bounds to in-
quiry, and to say, when its consequences cannot by any
possibility be known beforehand, this species of know-
ledge will be injurious, you shall not taste of it ; that will
be healthful, and the mind of man shall have no other
nourishment. TSo gross an absurdity can have none but
fatal consequences ; and whenever the rulers of a so-
ciety have dictated what their subjects shall not study,
they have, against their own wishes, rendered the
slayes whom they only prize as tax-paying machines,
incapable of making that progress in knowledge which
is the dictate of nature, which takes place in less
governed and restrained countries, and which is the
chief means of adding to the productive power and
wealth of man.\

n

F 2

iOO DIVISION OF LABOUR

CHAPTER IV.

INFLUENCE OF THE DIVISION OF LABOUB.

£xtended division of labour one characteristic of civiliied
man. — Connexion with productive power in England, Russia,

and the United States. — Explauation of its advantages. Com- ^

parison of making nails by the hand, and by machinery.—
Further division of labour among established trades. — All the
advantages of division of labour naturally belong to labou-
rers.— It takes place under every kind of political institutioD,
and must therefore originate in some natural principle.

In the Introduction, the reader was made aware of
the great difference between the productive power of
individuals living in civilized society^ and of savages.
One cause of this, and one distinguishing characteristic
of the former state of society, is that in it no man
makes for himself all the commodities which -he re-
quires or consumes. The carpenter and the bricklayer
go to the smith or the tool-maker for their tools ; and
the smith, never attempting to build a house for him-
self, dwells in one built by the combined labours of the
carpenter and bricklayer. A tailor never makes shoes
for his own use, he buys them of the shoemaker; and
the shoemaker buys all the clothes he requires from the
tailor. All these labourers find that they can most
easily and readily procure whatever they want by each
one labouring only at his own trade. The people who

CHARACTERISTIC OF CIVILIZED MAN. lOl

went from Europe to North America and New Holland,
and there, in contact with the savages whom they sup-
planted, proved the superior productive power of civi-
lized man, carried with them the arts and practices of
Europe, and were of different trades. Among these
savages, however, they found few or no persons having
distinct occupations. Each provided as well as he
could for his own wants, and practised all the arts
known among this rude people. In all uncivilized
societies each individual provides himself with food, and
makes most of the inefficient instruments he uses. He
builds his own hut, and hews out his own canoe, with
the stone hatchet he has previously made ; he makes
the line or net— or perhaps it is made by his wife~
with which he ensnares fish ; and he kills the ^vild
animal which will form probably his only food, by
means of a bow and arrow fashioned by his own hand. *
The appropriation of men to distinct and separate oc-
cupations, the establishment of different trades, the ex-
elusive businesses pursued by individuals which takes
place in civilized society, is called, in the language of
Political Economy, division of labour.

In almost all countries it seems to bear a close re-
lation to their wealth. Savages, among whom there
is no division of labour, are wi'etchedly poor : on the
contrary, the inhabitants of this densely-peopled empire,
amounting to twenty-two millions, produce, it is said,
as much wealth annually as the eighty-eight millions
of people who are, comparatively, sparingly scattered
over the United States of America, the empire of
Russia and the kingdom of France ; and there can be
no doubt that in these three countries, particularly the
two former, division of labour is not carried to such

102 DR. smith's EXPLAKATrOK .

an extent as in Great Britain. This statement rests on
public documents published in each country^ though
probably it is somewhat too favourable for Britain^ from
the valuations having been made from custom-house
returns, and perhaps in a depreciated currency. It is
particularly deserving of attention as far as the United
States of America and Russia are concerned, because
they are comparatively new or lately-peopled countri^
while Great Britain is an old country ; and becausw
is generally said that productive power decreases sb
the land is used, and as people are crowded together.
Such an opinion is quite erroneous, from its not taking
into account the effects of division of labour, and of the
progress of knowledge. It looks only at the land ; of
^ the capabilities of which^ as an instrument aiding pro-
duction, we know as little as we did of the productive
powers of the atmosphere before the steam-engine was
invented.!

To show in detail, the effects of division of labour,
I shall prefer extracting a passage from the writings of
Mr. M^Culloch and Adam Smith, to offering any illus-
trations of my own. The latter has explained these
effects so ably, that all subsequent writers have done
little more than copy his remarks : something has been
added by Mr. M*Culloch, and I therefore take a pas-
sage from his book, in which his own observations are
embodied with those of Dr. Smith.

*' Dr. Smith," says Mr. M*Culloch, " who has treated
this subject in the most masterly manner, has classed
the circumstances which conspire to increase the pro-
ductive powers of industry, when labour is divided,
under the following heads : — Firsts to the Increase of
the skill and dexterity of every particular workman;

OF ITS ADVANTAGES. 103

second, to the saving of time^ which is commonly lost
in passing from one particular employment to another ;
and, third, to the circumstance of the division of em*
plo3nnents having a tendency to facilitate the invention
of machines, and of processes for abridging and saving
labour.

" \sU Respecting the improvement of the skill and
dexterity of the labourer. It is sufficiently plain that
when a person's whole attention is devoted to one
branch of business, when all the energies of his mind
and the powers of his body are made to converge, as it
were, to a single point, he must attain a degree of pro-
ficiency in that particular branch, to which no indi-
vidual engaged in a variety of occupations can be ex-
pected to reach. A peculiar play of the muscles, or
sleight of hand, is necessary to perform the simplest
operation in the best and most expeditious manner;
and this can only be acquired by habitual and constant
practice.

** To take an example therefore, from a very trifling
manufacture, but one in which the division of labour
has been very often taken notice of, the trade of a
pin-maker : a workman not educated to this business,
(which the division of labour has rendered a distinct
trade,) nor acquainted with the use of the machinery
employed in it, (to the invention of which the same
division of labour has probably given occasion,) could
scarce, perhaps, with his utmost industry, make one
pin in a day, and certainly could not make twenty.
Bnt in the way in which this business is now carried
on, not only the whole work is a peculiar trade, but it is
divided into a number of branches, of which the greater
part are likewise peculiar trades. One man draws out

104 ILLUSTRATION OF PIN-MAKIKO.

the wire; another straights it; a third cuts it; a
fourth points it ; a fifth grinds it at the top for reoeiying
the head : to make the head requires two or three dis-
tinct operations ; to put it on is a peculiar business ; to
whiten the pins is another ; it is even a trade by itself
to put them into the paper ; and the important business
of making a pin is, in this manner^ divided into about
eighteen distinct operations, which, in some manui^o-
tories, are all performed by distinct hands, though in
others the same man will sometimes perform two («
three of them. I have seen a small manufactory of
this kind, where ten men only were employed, and where
some of them consequently performed two or three dis-
tinct operations. But though they were very poor, and
therefore but indifferently accommodated with the
necessary machinery, they could, when they exerted
themselves, make among them about twelve pounds of
pins in a day. There are in a pound upwards of four
thousand pins of a middling size. Those ten persons
therefore, could make among them upwards of forty-
eight thousand pins in a day. Each person, therefore,
making a tenth part of forty-eight thousand pins, might
be considered as making four thousand eight hundred
pins in a day. But if they had all wrought separately
and independently, and without any of them having
been educated to this peculiar business, they certainly
could not each of them have made twenty, perhaps not
one pin in a day ; that is, certainly, not the two hundred
and fortieth, perhaps not the four thousand eight hun-
dredth, part of what they are at present capable of
performing, in consequence of a proper division and
combination of their different operations.**

So far Dr. Smith : — I have been informed, that in the

EFFECT IN SAVINO TIME. 105

metropolis each pin-maker can make nearly double
four thousand pins a day ; and also, that the attempts
hitherto made to manufacture pins by machinery have
all failed. For this purpose no machine has yet been
invented which equals the dexterity and despatch of
the workman ; and in general, those machines which
have been used, form the head of the pin by com-
pressing a small portion of the metal, which renders the
tiny instrument brittle, and, when complete, less fit for
the many purposes to which pins are put.

" The effect,'* continues Mr. M'Culloch, " of the
division of labour, in preventing that waste of time in
moving from one employment to another, which must
always take place when an individual is engaged in
different occupations, is even more obvious than the
advantage derived from the improvement of the skill
and dexterity of the labourer. When the same indi-
vidual carries on different employments, in different
and perhaps distant places, and with different sets of
tools, it is plainly impossible he can avoid losing a
considerable portion of time in passing between them.
If the different businesses in which a labourer is to be
engaged could be carried on in the same workshop, the
I068 of time would be less, but even in that case it
would be considerable. * A man,' as Dr. Smith has
JQStly observed, ' commonly saunters a little in chang-
ing from one business to another. When he first
bi^ins his work, he is seldom keen or hearty ; his mind
is said not to go along with it, and for some time he
rather trifles than applies himself in good earnest.
The habit of sauntering, and of indolent and careless
application, which is naturally, or rather necessarily,
acquired by every country workman, who is obliged to

F 5

106 EFFECT IN FACILITATING INVENTION.

change his work and his tools eveiy half hour^ and to
apply his hand in working different ways almost every
day of his life, renders him almost always slothful and
lazy^ and incapable of any rigorous application^ even
on the most pressing occasion. Independent^ there-
fore^ of his deficiency in point of dexterity, this cause
alone must always reduce considerably the quantity of
work which he is capable of performing.'*

" 3d. With regard to the effect of the division
of employment in facilitating the invention of ma'
chines and processes for abridging and saving labour^
it is obvious that those engaged in any branch of in-
dustry^ must be more likely to discover easier and
readier methods for carrying it on, when the whole
attention of their minds is devoted exclusively to it,
than if it were dissipated among a variety of objects.
But it is a mistake to suppose, as has been sometimes
done, that it is only the inventive genius of workmen
and artificers that is whetted and improved by the
division of labour. As society advances, the study of
particular branches of science and of philosophy becomes
the principle or sole occupation of the most ingenious
men. Chemistry becomes a distinct science from natural
philosophy ; the physical astronomer separates himself
from the astronomical observer, the political economist
from the politician, and each meditating exclusively,
or principally, on his peculiar department of science,
attains to a degree of proficiency and expertness to
which the general scholar seldom* or never reaches.'^

I have already mentioned the reservation with which
the statement, that division of labour promotes the in-

• Wealth of Nations, i. p. 14.
-|- Article, Political Economy, Supp. Encyclop. Britt.

ILLUSTRATION FROM DAILY PRACTICE. 107

vention of machines ought to be adopted. It con-
tributes to the progress of knowledge as society ad-
vances; but knowledge and invention^ to a certain
extent, in every age, precede and give occasion to
division of labour. Great part, indeed, of the bene-
ficial effects of the latter arise from its promoting our
knowledge of particular objects ; but that manual skill
or sleight of hand which it bestows, seems, in general,
not equal in its effects to mental labour. '^ A ma-
chine," says Mrs. Marcet, " has been invented in the
United States of America, for the purpose of cutting
nails out of iron, the iteration of which is so rapid,
that it forms two hundred and fifty perfect nails in the
space of one minute, or fifteen thousand in an hour."*
The accuracy of Dr. Smith's remarks on the bene-
ficial effects of division of labour, must be perceptible
to every man, and some of my readers are probably
acquainted ^vith more striking examples of these bene-
ficial effects than those I have quoted. All men seem
folly aware of the advantages of one person being a
farmer, another a carpenter, and a third a weaver ; and
in daily practice, the division of labour is extended
beyond the limit at which it is settled by rule. When
two or more men of the same trade are employed about
the same job, each undertakes some separate part : in
house-building, for example, one carpenter planes up
and prepares the wood, while another mortices the
parts of the window-frames together, instead of each
completing a window-frame by himself, though to do
the whole of such a job is only a part of the business of
a carpenter. This division of labour, which individuals

* Conversations on Political Economy.

\-

106 ITS BENEFITS BELOKO TO THE LABOUKEE*

find enables them to complete a given task in less time,
or with greater ease, must be propordonably beneficial,
when acted on in all trades and in society at large.

It is however indispensable to remark, that all the
benefits of this practice naturally centre in the labourer;
belong to him, and coniribute to his ease or add to his
opulence. It increases hh skill, by allowing his atten-
tion to be uninterruptedly fixed on a single operation ;
it saves his time, by making no change of tools or of
employment necessary ; and it facilitates hU invention
of those machines that are adapted to the single and
simple operations, which, in consequence of division of
labour, constitute the whole task of each individual.
By no single machine, perhaps, except man himself,
could we perform the whole process of manufacturing a
piece of cloth out of the raw material ; but when the
complicated process of shearing the sheep, cleansing
the wool, carding, spinning, weaving, dressing, and
dyeing it, has been separated into distinct operations,
performed by different individuals, — machines can be,
and are, made to execute most of them, even with more
precision than can be done by the unaided hand. fWhy
labourers actually reap no benefit from division of la-
bour, why their tasks seem rather to augment than
lessen, with all those improvements which add to their
skill and productive power, in such a degree even as to
have given rise to an opinion, that division of labour
inflicts on them a serious injury, cannot, in this part of
the book, be explained. But as all the advantages
derived from division of labour naturally centre in, and
naturally belong to the labourers, if they are deprived
of them, and in the progress of society those only are
enriched by their improved skill who never labour, —

NOT THE OFFSPRING OF LEGISLATION. 109

this must arise from unjust appropriation ; from usurp-
ation and plunder in the party enriched, and from con-
senting submission in the party impoverished.^

If we could not learn from an inquiry into tK origin
of this practice, and into its limits^ in what manner
numberless social regulations ch&ck division of labour^ —
and how much more benevolent and kind to man is the
Author of his instincts and passions than the legislator
who pretends to protect and save him from their con-
sequences, — the mere statement of its advantages^ out-
weighing the benefits conferred on our race even by
the wisest lawgivers^ must kindle in us a lively cu-
riosity to know whence it arises and where it ends.
Though it is not equal in all countries, yet it takes
place among all the tribes of men^ and all the nations
of the earth, whatever may be their religious creed or the
form of their government ; in whatever state of society
they may exist ; and whoever may have been their legis-
lators. It has no connexion, therefore, with positive in-
stitutions, and is in no respect the offspring of legislation.
In the free republic of the United States of America,
and in despotic Russia, in enterprising England, and
in retrograding Turkey, among the careful and indus-
trious Dutchmen, and the proud and indolent Spa-
niards, under the varying laws of Europe, and the
almost invariable institutions of Asia, in Aj&ica, where
life is held on the insecure tenure of some miscreant
emperor or king's caprice, and in countries where it is
sacrificed according to some misnamed regular^ but not
less revolting because cold-blooded, proceedings of what
is called law, — in all countries, and under all kinds of
political institutions^ division of labour takes place ; and
men, unbidden by their rulers, follow the beneficial

110 IS A NATURAL PRACTICE.

custom of each confining his attention and exertions to
some particular department of industry. " The prac-
tice/' says Dr. Smithy "is common to all men, and to be
found in no oth^r race of animals. It is not the result
of any human wisdom, which foresees and intends
that general opulence to which it gives occasion:"*
it must therefore arise from some universal and natu-
ral principle, like that which compels man in every
climate, and on every soil, to eat bread by the sweat of
his brow. He ascribes it to an instinctive propensity to
barter ; but it has, I think, a more obvious source ; in
which, when rightly understood, we may find one
example of the many beautiful and simple contrivances
by which nature seems to have provided for the con-
tinued prosperity of our species, — proving, to use the
language of Mrs. Marcet," that the hand of Provi-
dence, which we are chiefly accustomed to trace in the
natural (material) world, is no less conspicuous in
moral life."

• "Wealth of Nations, book 1, chap. i.

DIVISION OF LABOUR. Ill

CHAPTER V.

CAUSES WHICH GIVE RISE TO, AND LIMIT, DIVISION

OF LABOUR.

Diviaion of labour between the sexes. — Diversity of age, talents,
and disposition. — ^Division of labour arises from difference of
organization.~JSubdivision of labour from this cause as society
advances. — Does not arise from barter. — Necessity of barter. —
Limits to division of labour. — ^Extent of the market syno-
nymous with number of labourers. — Division of labour ex-
tended by the multiplication of mankind. — Dr. Smith held a
similar opinion. — Principle illustrated by England, Russia, and
America. — By improved modes of communication. — Present
condition of the labourer no proof that his productive power
does not increase with an increase of people. — Ireland an ap-
parent exception. — The causes of its poverty all centre in mis-
government. — Doctrine here stated not a contradiction of Mr.
Malthus^s principles.

Although we find in some stages of society, that
each individual makes for himself nearly all that he
requires or consumes ; being, as circumstances dictate,
a fiaherman, or a hunter, building his own hut, con-
structing his own canoe, or making the rude tools he is
afterwards to use, yet there is no 9tate of society, pro-
bably, in which division of labour between the sexes
does not take place. It is and must be practised the in-
stant a family exists* Among even the most barbarous
tribes, war is th^ exclusive business of the males ; and

112 DIFFERENCE OF THE SEXES.

they are in general^ the principal hunters and fishers.
The man takes to himself the perils and pleasures of
the chase^ and the woman labours in and about the hut
Different employments for the sexes may be traced in
all communities^ in every age of the worlds and in every
history^ whether fabulous or true. In modem as well
as ancient times^ in the most civilized as well as in
the most barbarous societies^ we find the men, as the
rule, taking the out-door work to themselves, and leav-
ing to the women most of the domestic occupations.
This primary division of labour springs from sexual
difiTerence of organization, it has its foundation in the
difiTerence of our physical constitution, in the different
parental duties required of the sexes, and is co-exten-
sive with the existence of our race.

The aptitude of the sexes for different employments,
is only an example of the more general principle, that
every human being, by the circumstances of age, health,
bodily or mental powers, is better adapted than another
to some particular occupation. In the present state
of society, it often happens that a man is compelled
by the circumstances of his situation, and principally
from a regard to the pecuniary advantage of his chil-
dren, to breed them up to his own trade ; but whenever
there is a liberty of choice, a predilection for certain oc-
cupations is recognized, and the liking of a youth is con-
sulted before he is bound for life. Children are never
tasked like grown persons, and the aged and the feeble
perform services disdained by the youthful and robust.
Among those who differ neither in sex, nor in age,
nor in strength, we find peculiarities of constitution
which makes each select in preference, some particu-
lar occupation. " The talents and tastes of men,"

DIFFERENCE OF DISPOSITION. 113

says M. Stordi^ who also dissents £rom the doctrine of
barter giving occasion to the division of labour^ ^^ vary
so much^ that no society is known^ however small^ in
which this diversity is not observable. Each man de-
votes himself by preference, to that occupation for
which he has a taste^ and if each follow his natural dii"
position, the division of labour is established."*

" In a tribe of hunters or shepherds/' says Dr. Smith,
himself recognizing this principle^ " a particular person
makes botvs and arrows, for example, with more readiness
and dexterity th^n any other. He frequently exchanges
them for cattle or for venison with his companions ;
and he finds at last^ that he can in this manner get
more cattle and venison than if he himself went to the
field to catch them. From a regard to his own interest,
therefore^ the making of bows and arrows grows to be
his chief business, and he becomes a sort of armourer.
Another excels in making the frames and covers of their
little huts or moveable houses. He is accustomed to
be of use in this way to his neighbours^ who reward
him in the same manner with cattle and venison, till at
last he finds it his interest to dedicate himself entirelv
to this employment, and to become a sort of house car-
penter. In the same manner a third becomes a smith
or a brazier^ a fourth a tanner or dresser of hides or

8kin8."t

This principle operates in an advanced state of so-
ciety, as well as at its commencement, and is made
palpable to us by its results every day. A Mr. Le
Mann for example, finds that he has some superior skill
in making biscuits, and he confines his business to this

* Coon d*Eoonomie Politique, torn. I.
\ Waalth of Nationi, book I. chap. II.

114 NECESSITY OF BARTER.

branch of baking. In this metropolis there are a great
number of persons who have been brought up smiths,
carpenters, or cabinet-makers, and who^ finding they
can make some particular kind of instruments, tools,
or furniture, better than other men, employ themselves
exclusively in making this one article. Some surgeons,
though they go through the long course of study requir-
ed to follow their profession in all its branches, attend
only to the teeth ; others attend only to the eyes, and
others again apply all their skill to the organ of hear-
ing. The difference of sex, of age, of bodily and mental
power, or difference of organization, is the chief source
of division of labour, and it is continually extended in
the progress of society by the different tastes, disposi-
tions, and talents of individuals, and their different ap-
titudes for different employments. The numberless ad-
vantages of the practice, sanction and confirm it. In
these circumstances it has a more obvious origin than
is supplied by the supposition of an occult propensity
to barter. In fact, barter is the consequence not the
cause of division of labour ; and the latter must have
been introduced before the instinctive propensity, if it
exist, could have been called into exercise.

If there were, however, an aversion to barter, if men
could not supply all their wants more easily by dedi-
cating themselves, each to one occupation, than if each
were to make every thing he requires, — if they could
not exdiange the products of their different species of
industry for one another, division of labour could not
be carried beyond the appropriation of the different
members of a single family, to those different employ-
ments by which they provide and prepare the subsist-
ence and comforts of the whole. If, for example, the

lim;[T8 to division of labour. 115

nail-maker, or the pin-maker^ found nobody to give
him bread and meat for nails and pins, he must either
starve, or, giving up his exclusive business, take to
producing bread and meat* Barter, therefore, or a
mutual exchange among all the different classes of
labourers, of what each produces, is necessary to division
o£ labour ; and must be equally advantageous.
uTuB LIMITS TO DIVISION OP LABOUR are defined,
according to most political economists, by two circum>-
stances, viz., the extent of the market, and the nature
of different employments. As this is one natural source
for the increase of productive power, it is of importance
for us to be thoroughly sensible of its natural limits.
I propose, therefore, to say a few words on each of
these circumstances.

Extent of market is, I take it, to most people an am-
biguous phrase, meaning in reality, nothing more than
a greater or less number of persons desiring the com-
modity for which there is said to be a market, and
having something, the produce of their own labour or
of the labour of other men, to give in exchange for the
commodity they desire. A market does not consist in
mouths to be fed or backs to be covered ; not, there-
fore, in consumers merely, but in the circumstance
that each labourer shall be able to sell the produce of
his own labour, and thereby obtain what he himself
desires, of the produce of other men's labour. The
shoemaker, for example, exchanges shoes for money,
and with the money he buys bread, meat, beer, and
clothing. In the same manner^ the baker, the butcher,
the brewer, and the tailor, each sells his respective pro-
duce for money, and with the money he buys the pro-
dace of these other labourers, including the shoemaker.

116 EXTENT OF THE MARKET.

If the shoemaker^ the baker^ the butcher^ the brewer^
or the tailor^ could not obtain the produce of the othi^
labourers by the sale of his own> either there could bgt
no possible motive for men making shoes> bread, beer,
and clothes^ or each labourer must make them all for
himself. The desire to obtain the produce of other
men's labour^ money being only the intervening instru-
ment for making the exchange, and the certainty that
by procuring it^ other things may be obtained^ con-
stitutes in each of these labourers the motive for his
confining his exertions to his own business. Thus the
commodity produced by one labourer, the shoes for ex-
ample> constitutes in reality and ultimately^ the market
for the commodities produced by other labourers ; and
they and their productions are mutually the market
for one another. But all commodities being the pro-
duce of labour, must be plentiful as labourers are mul-
tiplied, or as their productive power increases. The
extent of the market, therefore, means the number
of labourers, or their productive power; and rather
the former than the latter, because the wants of each
one are circumscribed, and unless they were to in-
crease in number, there would be neither motive nor
means for augmenting production. If this be a cor-
rect view of the phrase " extent of the market," we
remove at once to an indefinite distance, this limit to
the division of labour. It is co-extensive with the
number of labourers communicating with each other,
and to that number it is impossible for us to foresee or
to state any conceivable bounds. ;:

To avoid misconception, it miist here be noticed, that
in the present state of society, the rich who do not la-

INFLUENCE OP POPULATION. 117

bour^ ate the actual and immediate customers of most
tradesmen^ and are generally considered as constituting
the market for the commodities of the labourer. But how
do those who do not labour pay for what they consume ?
All wealth, including gold and silver^' is the produce of
labour ; and those who do not labour cannot have any
thing to pay their tradesmen with, which is not the pro-
dace of labour. They therefore obtain^ havings in fact,
a legal right to receive^ the produce of some labourers,
and this is what they give their tradesmen. But if they
had no claim over this produce, the labourers would have
so much the more ; and each of any two classes, the
batcher and the baker for example, would obtain the
produce of the other class at a cheaper rate. There
would be more to be mutually exchanged by and
amongst labourers, and a proportionate extension of
the market and division of labour.

According to this explanation of the phrase, division'
of labour may be extended as labourers or people gene-
rally are multiplied ; which is a cause for its perpetual
and indefinite extension. Were there only one person
in existence, he would be obliged, like Robinson Crusoe,
to provide for all his wants himself, and there could be
no division of labour. Were two persons in existence,
however, division of labour might begin ; it might be
extended as more grew up to maturity, and it could not
be extended unless men did multiply. Different tastes
in individuals, their different aptitudes for different
employments, even inventions and discoveries, were
population stationary, would only cause a change of
employment and no farther division of labour. I'hese
circumstances exist in Asia as well as in Europe, but

118 DIVISION OF LABOUR

there population and division of labour seem both alike
stationary.

In the following passage^ Dr. Smith has distinctly
pointed out the increase in the number of labourers,
as the cause for extended division of labour. " The
number of workmen in every branch of business^ gene-
rally increases with the division of labour^ or rather it
is ike increase qf their number which enables them to class
and subdivide themselves in this manner"*

To illustrate this principle, I may remark that divi-
sion of labour is always most extended in densely-
peopled countries, like England ; in manufactures, the
produce of which being of a durable nature, of general
utility, and of easy conveyance, commands an extensive
market, whether many persons live or not on the spot
where it is made. At the beginning of the last chapter
it was mentioned that the produce of England was
greater or more valuable than that of Russia and the
United States of America, and it is well known that in
those countries division of labour is not carried nearly
so far as in this. For this fact as to Russia, we have
the testimony of M. Storch, who resided long in that
country. t In some parts of America every man must
be a jack of all trades. He must send his corn twenty
miles to be ground ^ he must go as far to obtain medical
assistance, or find a carpenter to repair his house, — or
he must be farmer, miller, doctor, and carpenter him-
In a somewhat similar manner in the remote
villages of England or Scotland, one man does all the
work which is to be done in wood, and another every
thing that is to be done in iron, while the trade of

• Wealth of Nations^ book ii., lutroductioti.
-)- Cours d*£conomie, book 1. ch. 8.

DEPENDS OM THE NUMBER OP LABOURERS. 119

carpenters and smiths are divided in the populous dis-
tricts> and in our large towns into numerous branches.
In country places^ one shopkeeper sells every commodity
that the people require^ and can hardly obtain a living,
while in this metropolis princely fortunes have been
made by dealing in the single article of ham or shoe-
blacking. The manufacture of pins^ which are easily
transported, nearly indestructible and of frequent use,
has been selected to show the extent to which division
of labour can be carried. Knives, watches, and other
metallic articles, being, like pins, of general utility and
easily transported, command an extensive market, and
in the manufacture of them division of labour is almost
unlimited; the tempering and burnishing watch-
springs, and the annealing knife-blades being the
exclusive business of some individuals.

Improved methods of conveyance, such as rail-roads,
steam-vessels, canals, and indeed, all the means of fa-
cilitating intercourse between distant countries,* have,
as £ar as division of labour is concerned, the same
effects as an actual increase in the number of people ;
they bring more labourers into communication with
• each other, and more produce to be exchanged. In
this point of view, the discovery of America and the
modem application of steam to the purposes of navi-
gation have had important effects. "A cotton-mill,"
says Mr. M'Culloch, '* could not be constructed in a
small country, which had no intercourse with its neigh-

• It may be worth while here, to remind the reader that
these means of facilitating intercourse are the results of inven-
tion and discovery ; thus, such inventions promote division of
labour — not only as they give rise to new employments, but by
bringing more human beings to communicate with each other.

120 PRODUCTIVE POWER INCREASED*

bours. The demand and competition of both Europe
and America have been necessary to carry the ma-
nufactures of Glasgow, Manchester, and Birmingham,
to their present state of improvement."*

The conclusion from these remarks, is that division
of labour is only limited by the number of labourers,
and tends continually and indefinitely to extend itself
as they are multiplied. Labour is the sole source of
wealth, and even if the productive power of individuals
were not susceptible of augmentation, the more labour-
ers were multiplied, the more force would the spring
"j rise with, which overflows the land with fertility. But
f Wl have shown that an increase of laboiirefs also tends

necessarily to augment knowledge and extend divisicm
of labour. As the number of labourers increases there-
fore, the productive power of society augments in the
compound ratio of that increase, multiplied by the
effects of the division of labour and the increase of
knowledge J The labouring classes of society will, I am
afraid, be slow to believe, when their poverty is in ge-
neral attributed to their multiplying too fast, and per-
haps justly attributed when that multiplication is only
compared with the want of the capitalist for their ser-
vices — that this vast increase in their productive power,
is the result of their augmenting in number. Why
they reap no benefit from it, why, when nature seems
to have provided for the perpetual prosperity of socie-
ty — there should be among one class indescribable and
never ceasing distress — and among another, perpetual
apprehension for their opulence, — how it happens that
all the produce of increiasing skill and knowledge^ falls
into the power of the rapacious landlord^ the usurious

* Principles of Political Economy, p. 91.

Bt INCREASE OF PEOPLE. 121

capitalist, and the profligate dependants on, and pro-
fligate supporters of, profligate governments, swelling
their wealth to an enormous amount, increasing the
number of idlers in society, and checking its progress
by checking division of labour and the progress of
knowledge, must be explained, if at all, in a subsequent
part of this work. I only advert to them now, to show
the reader that the actual poverty of the labourer, is no
argument against the principle I have endeavoured to
establish. On the contrary, the immense revenue
levied by our government, augmenting from year to
year; the enormous and increasing amount of the
sums annually paid to the pretended servants of a be-
nevolent Deity ; the increased wealth of the capitalist,
and the yearly augmenting revenue of the owners of
land, — all arising horn the annual produce of labour,
are indisputable pjoofs of that vast increase in produc-
tive power, the natural well-head of which is an in-
crease in the number of labourers. When so much has
of late been written against the principle of popula-
tion^ it is consoling to find any circumstances con-
nected with it, like the division of labour and increase
of knowledge, which appear to relieve the wise provi-
sions of nature from the odium cast on them by the
shortsighted and corrupt theories of interested men ;
^ving us reason to suppose, that there is in these cir-
cumstances, at least an adequate compensation for that
increasing difUculty of procuring the means of subsist-
ence, which is said by most political economists to be
the necessary consequence of an increase in the num-
bers of mankind.

There is one apparent exception to this consoling
view, which could it not be explained by a reference

6

122 IRELAND AN APPARENT EXCEPTION.

to counterbalancing social causes, might make «8 d'^ubt
the correctness of the explanation : — Ireland is one of
the most densely peopled countries of Europe, and that
one in which population has made the most astonishing
progress, yet Ireland is at this time conspicuous for
the ignorance and poverty of the mass of its people.
This is, however, only an apparent exception. We
learn from Spenser the poet, and Sir John Davis,
who are unquestionable authority, that in the reign of
Elizabeth, the Irish were absolute savages. When
Swift lived and wrote, they were not much better and
were certainly more poor and wretched, though not so
numerous as at present. In fact, since the reign ^6f
Elizabeth, they have improved considerably ; but cift
off by their peculiar language and still more by theft
political condition, from free communication with the
rest of the empire, even with that part of their nomi-
nal countrymen who speak the English language and
hold dominion over them — their commerce and manu-
factures annihilated by the trading jealousy of England,
and professing a religion proscribed by the ruling party,
the Catholics of Ireland have not advanced equally
with the English and Protestant inhabitants of the
empire. If I have rendered it probable, however, that
an addition of heads and hands naturally multiplies
productive power ; if it cannot be doubted, that an in-
crease of population clears the forests of America, and
improves the agriculture and manufactures of Britain ;
if it roll the tide of civilization over the New World,
from the Atlantic to the Pacific, and improve the arts,
though it may not add to the comfort of the labourers,
in the Old ; if it be a source of happiness in America,
where a family, to those who are willing to labour for

CAUSES OF THIS EXCEPTION. 123

its support^ is not a curse, but, as nature intended, a
blessing, — increase of population cannot be the origin
of poverty, wretchedness, and misery in Europe : and
either we must reject all idea even of unity of design
in the creation, and uniformity of principle in the moral
government of the world, or we must seek for other
causes of the poverty and distress which afflict the
labourers of Europe generally, and particularly those
of Ireland, than that principle by which man multi-
plies on the earth, and makes the material elements the
instruments and the handmaids of his will.

In the case of Ireland, we have not far to seek for
tliose causes : they lie on the surface ; and when we
ve called on, — as the people of this country are daily
and practically, on occasions of the deepest interest to
us all — such as that of submitting to forced emigration,
and of paying annually for a large standing army to
keep the Irish obedient — to choose between the dis-
pensations of Providence and the institutions of man,
we cannot hesitate which to condemn. Whatever may
be the respect due to the latter, it ill becomes us to
misrepresent or calumniate the moral order of the uni-
verse, that they may retain our undiminished venera-

It is admitted that no part of Europe, though ge-
nerally misgoverned, and too much governed, has been,
since the time of Queen Elizabeth, so frequently
plundered and so grievously oppressed as Ireland.
Confiscation, for a long series of years, followed con-
fiscation in rapid succession, and the whole property
of the country changed hands more than once. The
kio^om was occupied by two parties, contending for
the mastery, and was one continued scene of strife*

6 2

124 THESE CAUSES ARE ALL SOCIAL.

When internal commotion ceased^ which it can
hardly be said to have done up to the present tirne^
it was only by the power of England maintaining a
minority in their usurped dominion. The Irish were
a conquered people^ and have ever been so considered
and treated by the English masters of the soil, and the
English Protestant government. They had no other
privilege than that of maintaining out of their own
resources, their own priests, in addition to being com«
pelled to support the most extravagant and useless
hierarchy that ever plundered mankind in the name
of a merciful God, and inflicted ignorance and misery
on those it pretended to enlighten and improve.
Their landlords were in many cases unknown to them,
and without bearing the name of slaves^ to interest
benevolence in their favour, they were mercilessly
given over without appeal and without protection to the
club of the Orangemen, the bayonet of the soldier, the
scourge of the middle-man, and to the ecclesiastical
courts of the tithe-proctor ; they were without re-
dress. The laws were made against them^ by and in
favour of their oppressors ; animosity and hatred per-
vaded every bosom ; and Ireland was the seat of anar-
chy. When the passions and intellect and time of all
classes were thus occupied in maintaining usurped
power, or in evading and resisting it, there were no
means of improvement. A disposition to establish
manufactures and to engage in trade was shown, but
it was repressed by the jealous policy of England.
Without examining in detail the effects of the penal
laws against Catholics, of the restrictions imposed by
our legislature on the commerce of Ireland, and of the
people having two extravagant churches to support.

IRELAND IS IMPOVERISHED BY MISGOVERNHENT. J 25

when in general one has been found amply sufficient
to stay the natural progress of nations in prosperity,
it is abundantly evident that the causes of the igno-
rance and poverty of the Irish all belong to that class
I have denominated social, and may a]l be expressed in
the one comprehensive word, misgovernment.

When by showing the natural consequences of an
inbrease of people, we have rescued the order of the
universe from the misrepresentations of ignorance
and selfishness, we are enabled more correctly to
appreciate the consequences of social institutions.
The numerous population of Ireland, instead of
giving strength and opulence, and multiplying pro-
ductive power in the ratio of their numbers, as nature
dictates, is a serious misfortune to every part of the
empire. The Irish labourers are now pulling down to
their own level of wretchedness and ignorance, the
people of the country who have been instrumental in
dqprading them. Misgovernment, therefore, poisons at
its source the natural spring of healthy existence, and
turns the principle of life into disease and corruption.
Under its withering, its demoniac influence, the na-
tural principle of population, the origin of aU present
national greatness, and the promise of all future na-
tional power, teems only with poverty and wretched-
ness — continually threatening present disasters, and
leading inevitably to future commotion.

The reader will observe, that I only notice here the
natural effects of an increase of mankind on productive
power without referring to the effects of the increase
of any one class on the distribution of wealth. It is,
however, chiefly in this latter point of view that the
increase of labourers has been in general considered.

126 DIFFERENT VIEW OF THE ECONOMISTS.

The principle I have endeavoured to establish is^ that
an increase in the number of labourers^ including those
who work with their heads as well as those who work
with their hands, naturally and necessarily promotes a
knowledge of wealth-creating arts and extends di-
vision of labour. Mr* Malthus and other writers con-
tend that an increase in the number of labourers, com-
pared with the amount of profit the capitalist, who
may or may not also be a labourer, can expect to
make on their labour, and consequently compared with
the quantity of employment he can or will give them,
has a necessary tendency to lower wages and debase the
condition of the labourer. Both these propositions
may be true, for they are not contradictory ; but am-
founding them as one, leads I believe to many mistakes.
The sentimental part of mankind look only at the
view here taken; the Political Economists confine
themselves to the relation between labour and capital
Mr. Malthus points out the effects which an increase
in the number of labourers has in lessening the share
which each one receives of the annual produce, — the
portion of that distributed amongst them being a de-
finite and determinate quantity, not regulated in any
degree by what they annually create, — I have only en-
deavoured to describe the effects of that increase on the
productive power of the whole.

OTHER LIMIT TO THE DIVISION OF LABOUR. ]2*J

CHAPTER VI.

TERRITORIAL DIVISION OP LABOUR. LIMIT TO DIVI-
SION OF LABOUR FROM THE NATURE OF EMPLOY-
MENTS.

Limit to diYision of labour from the nature of different employ-
ments.— Is continually extended by inventions and discoveries.
—Limit to division of labour in agriculture depends on territo-
rial division of labour. — Territorial division of labour eiq)lained
and illustrated. — Originates in natural circumstances. — £x-
diange necessary to its completeness. — Has no connexion with
the political divisions of the earth. — Effects on agriculture of
restrictions on territorial division of labour. — Division of la-
bour not the cause of the labourer's poverty and degrada-
tioii—-Lifluence of social reg^ulations on division of labour.

The Other limit to division of labour to which I now
proceed, is the nature of different employments. It
would seem, for example, that there cannot be any
further division of labour in turning, than that it should
be the exclusive occupation of one man to guide a file
or a chisel, as the block to be shaped or polished revolves
rapidly before the instrument. As knowledge advances,
however, new inventions cause in many arts this appa-
rent limit perpetually to remove farther off. Machines
are made which both guide the file or chisel, and cause
the Uock to revolve ; and the whole business of the tur-
ner consists in regulating his machine. Such inventions
complicate business, as it were, in the first instance;

128 DIVISION OF LABOUR EXTENDED BY INVENTIOKS.

or at least enable one man to perform those seyeral
parts of a productive operation which before required
two or three ; but in the progress of society these se-
parate parts again fall, each>of them^ to be the exclusive
business of some one individual. The ap plication of
steam-engines to working power-looms^ enables one
man to perform the operations of several ; or to weave
as much cloth as three or four persons can weave by
the hand-loom. This is a complication of employments.
But if things are allowed to take their natural course,
this complication will be again separated, and it will
become in a short time the business of several hands
to perform what one now performs. The different
parts of power-looms and of steam-engines, which are
at present perhaps all made by one or a few persons,
will each, as the demand for them increases, be made
by a different person, and the making of these different
parts will become separate and distinct trades. The
application of the pouer to the weaving instrument will
be another business, and the actual business of weav-
ing will all be comprised in looking after the working
of a machine, which is made and set in motion by
almost numberless distinct tradesmen. In many arts,
therefore, we find, in consequence of new inventions,
a perpetual complication and subsequent simplification
of the productive processes performed by individuals ;
or a perpetual renewal of occasions for the farther
division of labour.

This beneficial effect^ it should perhaps be noticed^ is
the necessary consequence of the invention and em-
ployment of machines. By their use, food and clothing
are obtained with less labour ; and the whole quantity
of labour not being diminished^ more food and clothing

UNIMPROVED STATE OF AGRICULTURE. 129

may be produced. If there be more food and clothing
there will also be more people, increased demand, or
extended markets^ and farther division of labour.

This limit to the division of labour from the nature
of employments^ indefinite and progressively removing
as it appears, has caused some theorists either to mis-
understand, or has tempted them wilfully to misrepre-
8ent> the phenomena of our social existence. It is said
to be sooner reached in agriculture than in other art8>
which is assigned as a reason by those who are pleased
to detract from that excellence they do not compre-*
hend^ why the means of subsistence cannot be made
to keep pace with the increase of the people. ^' While
the Romans were quite ignorant of most of our arts,
their agriculture," it is said, *^ was equal to ours."

Com can be grown as cheap, or cheaper," it is added,

in unimproved as in improved countries.* Agricul-
ture may well be called the master-art of life, it being
that art by which we obtain the chief part of our food,
and the raw materials of most manufactures; and
refraining at present from calling in question the alleged
cheapness of cultivation in unimproved countries, I
shall direct the attention of the reader to some other
circumstances, which seem to me to have had fully as
much or more iniluence in checking the progress of
agriculture as the natural limit to the division of
labour in this important art. As a preliminary step,
I must bring under his notice what Political Economists
have called.

Territorial Division of Labour. Independent

* For these statements the reader may see the writings of
Dr. Smith, Mr. Storch, and of those economists who have con-
tentedly repeated the doctrines of their great master.

o 5

it

130 NATURAL 0BI61N OF TERBITOHIAL

of the different aptitudes and capacities in* those who
work^ giving rise to the species of division of lalioor
already considered^ there are^ if I may so express my-
self, different aptitudes and capacities in the natural
instruments they work with. Diversities of soil^ cli-
mate, and situation, and peculiarities in the spcm-
taneous productions of the earth, and of the minerals
contained in its bowels, adapt certain spots to certaiii
arts. In one place an ever-bright sun brings to per-
fection grapes, oranges, pomegranates, pine-apples,
and other delicious fruits; in another, continual moi»-
ture makes grass grow in rich abundance, and gives
great facilities for rearing and fattening cattle^ ani
for making butter and cheese. In fertile plains com
is a luxuriant crop ; and on mountains, where com wiU
not grow, pasturage is excellent. Placed on the banks
of a river, or on the sea-shore, a man becomes a fisher-
man ; while he becomes a hunter if his native land be
Mrild, mountainous, and woody. Such a diversity ei
occupations, dictated by peculiaries of situation, takes
place in the infancy of society, and is continued at
every period of its progress. At the present day, as in
remote antiquity, ^we find the inhabitants of Holland
and all the coast of the North Sea, are skilful fisher-
men and sailors, while the Swiss and Tyrolese still
continue, as at the first dawn of their history, to be
enterprising sportsmen and hunters. Hemp or fiax
must have been a spontaneous production where linen
was first made ; and sheep must have been plentiful
before woollen-cloth could have been manufoctured.
That country must have been rich in ores, where
working in metals was first discovered, and they must
be plentiful, whenever a nation contains^ like Great

DIVISION OF LABOUR. 131

Britain^ a vast number of miners, founders, cutlers^ and
smiths. In consequence of these natural differences>
certain arts cannot be practised in some places, while
in others nature forces them, as it were> on the atten-
tion of her pupils man. The different arts and dif-
ferent species of cultivation^ which grow up in different
climates and situations from their natural peculiarities^
are called territorial division of labour.

To foUow the dictates of nature^ in this respect^ the
mutual exchange of the products of different districts,
or of the different arts which are favoured by these
natural peculiarities^ is as indispensable as barter is to
division of labour among individuals. Territorial divi-
sion of labour must exist, however^ whether this ex-
change take place or not. Certain arts can flourish
only in certain situations^ and some products can only
be obtained under certain peculiarities of soil and cli-
mate. If the inhabitants of districts favoured by pecu-
liar circumstances^ will not mutually exchange their
respective products, the enjoyments of each will be
limited to what their own skilly under their peculiar cir-
cumstances, can call into existence. In order, therefore,
that both may have increased enjoyments — they must
make this mutual exchange. Territorial division of
labour grows up naturally and necessarily iirom a per-
ception of its advantages, like division of labour among
individuals ; and mutually to exchange the different
products resulting from this natural principle is bene-
ficial to all.

This species of division of labour is not confined or
limited, or in any way connected with the political
separation of mankind into different nations. Thus
the great roine district of Europe, extending from the

132 NOT CONNECTED WITH STATES.

latitude of 47**, to the southern extremity of this conti-
nent, embraces within its limits, part of Germany, most
part of France, Spain^ Portugal, and Italy, excluding
England, Sweden, and Denmark, and all the states to
the north of this latitude. On the other hand, in each
of these political divisions of the earth, we find districts,
like the banks of the Rhine, and the golden vale of
Thuringia in Germany; and like the banks of the
Rhone, and of the Graronne, and the plains of Normandy
and Picardy in France ; which are peculiarly adapted,
the former to the cultivation of the vine, the latter to
the cultivation of wheat : and it may be doubted if
the inhabitants of these districts could obtain both wine
and bread, were they not each to limit their exertions
to cultivating those products, mutually exchanging
them, to which their respective countries are peculiarly
adapted. It is, however, quite certain, that by doing
this, which they in fact do voluntarily and freely, they
both obtain a great deal more bread and wine by means
of less labour, than they would do if the inhabitants of
each district were to endeavour to grow both.

Our country — the politically organized state of Great
Britain — offers numberless examples of territorial divi-
sion of labour. The districts which abound in coal, for
example, are the seats of our most important and valu*
able manufactures; while the cultivation of com is
carried on with great success in Norfolk, Suffolk, and
Cambridgeshire. The growth of hops is confined
nearly to Kent, Sussex, and some parts of Hereford
and Worcester shires. The rich plains of Cheshire,
and Gloucestershire, supply us with cheese, which is
never made in Kent and Sussex ; and the inhabitants of
these different districts find it mutuallv for their ad-

TERRITORIAL DIVISION OF LABOUR IN ENGLAND. 133

vantage to cultivate or manufacture only these parti^
cular products^ and buy what they do not produce
from the inhabitants of different soils and climates.

Of the influence of such natural advantages as I
have mentioned over the seat of the arts^ I can^ per-
haps^ give no better proof than what has occurred with
respect to the iron manufacture ir this country^ almost
within the last century. . In the memory of persons
still living, Kent and Sussex, abounding in timber^ the
species of fuel formerly most used, and supposed to be
best adapted to manufacturing purposes, had very consi-
derable manufactures, both of iron and woollens, but at
present, in those parts, there is no such manufacture in
existence. The iron railings about St. Paul's Cathedral
were made, it is said, in the weald of Kent, where there
is not at present the vestige of a foundery or a furnace.*
Since coal has come so much into use, all these manu-
fiustures have forsaken the wooded for the coal dis-
tricts ; without leaving in the former a hope of ever
recovering them. Coals afford so many advantages^
that the parts of England in which they abound^ or to
which they are easily transported, are now the chief
seats of all our manufactures. They have increased^
comparatively^ much more rapidly in population and
wealth, than the other parts of the empire^ and parti-
cularly than those exclusively devoted to agriculture. It
18 a curious illustration of the principle, that Jabour,

* At a village caUed Horsemonden, now only celebrated for
hops and fine scenery, there is a large piece of water, which bears
to this day the name of the Furnace Pond, and in the neighbour.*
hood of it, the iron railings mentioned in the text were made.
Beyond a common smith, there is not at present, either at
Honemonden, or any of the adjacent villages, a single worker in
ivoli to be met with.

134 DIVISION OF LABOUR IN AGRICULTURE

not land^ creates wealthy to see the black minerals of
the interior of the globe, the utility of which^ a few
centuries ago, was unknown, even if the minerals them-
selves were then discovered, thus converted by the
hand of man into a source of wealth and happiness,
more fruitful than the most fertile soils.

Returning now to the division of labour in agricul-
ture, it must be obvious, that it depends on the agri-
culturist using the different natural capabilities of the
soil in the most advantageous manner. That it may be
carried as far as possible, the produce of different cli-
mates and soils, must be freely and unrestrictedly ex-
changed for each other. If, for example, the barley of
Norfolk could not be given for the hops of Kent, the
farmers in both counties must grow both hops and bar-
ley, or neither could have any beer : and to prohibit the
exchange, would cause a complication of labour in both
cases. But since man subjected his destiny to the
control of one or a few men, the legislator looking only
at political distinctions, has at all times and places laid
restrictions on the intercourse which might and which
would, but for him, have taken place between the inha-
bitants of different districts and climates ; and never has
it been possible for the agriculturist, owing to these re-
strictions, to push division of labour in his art, as fat as
would be generally beneficial. This view is confirmed
by the different degrees of progress made in agriculture
in the different countries of Europe.

Up to the period of the French revolution, when
numerous restrictions on the interior commerce of that
kingdom were abolished, when all the provinces were
first taxed in one uniform manner, there was no part of
Europe, of equal extent with Great Britain, and contain-
ing an equal number of people, and there is not at pre-

CHBCKBO BY POLITICAL RESTRICTIONS. 135

sent any part, except France^ whether forming the
same political state or not, all the inhabitants of which
enjoy a free and unrestricted commercial communica-
tion with each other. Dr. Smith attributes on the one
hand the great comparative prosperity of England to
the freedom of our interior commerce; and he attri-
butes the ruin both of the manufactures and the agri-
culture of Spaiuj to the restrictions laid on its interior
commerce.* In this country the different species of
cultivation^ adapted to different soils^ owing to our
free internal communication, is better understood and
practised than in any other country of Europe. In
Spain and in Germany, the produce of different pro-
vinces or states cannot be freely exchanged ; — in both,
therefore^ the people must produce most of what they
require^ and cannot possibly devote themselves ex-
clusively to that species of cultivation which is most
pn^table. The slow progress of division of labour in
tigriculture^ and of the imperfection of the art^ have
been partly caused therefore by those political regula-
tions which have impeded the intercourse between the
inhabitants of different climates, soils, and districts.

If to this we add the maimer in which land is appro-
priated and entailed throughout Europe, locking up in
a few hands this great instrument, and thus necessarily
preventing the division of labour, we shall see another
cause for the slow progress of the art. The effects of
this appropriation have been so ably described by Dr.
Smith, that there is no occasion for me to do any thing
further than recommend his remarks to the readers at-
tention. With that appropriation, however, was con-
nected the slavery of the agricultural labourer; who
llat ever been in a worse condition, politically speaking^

• Wealth of Nations, Book 5. Chap. II.

136 IS CHECKED ALSO BT BONDAGE.

throughout Europe^ than the manufacturing and com-
mercial labourer. We have seen^ that division of labour
is extended by men following their natural tastes and
propensities, and it cannot be extended if men are not
in a state of freedom. M. Storch^ who resided long in
Russia, and was an eye witness to the effects of personal
slavery in that country, says it is one of the most de-
plorable consequences of servitude, that it prevents the
division of labour. In the political condition of the
agricultural labourer, we have, I think, a more efficient
cause for the slow progress of improvement in this art
than even in the restrictions which government have laid
on traffic. Slavery, indeed, would lose half its hateful
qualities, if it were not as injurious to national wealth
and national power, by checking the division of iabonr
and the progress of knowledge, as it is afflicting to
humanity and ruinous to social happiness.
{^^ f The great importance of relieving every natural prin-
ciple from any imputation cast on it, in order to know
coneplly what are the causes of social miserj^makes me
advert to another case in which division or labour has
been made the scape-goat for theorists and statesmen,
and has borne the blame for the evils caused by their
institutions. It is a common complaint, to adopt the
language of M. S torch, among both these classes, *' That
it is a miserable condition to be only employed in mak-
ing the eighteenth part of a pin. The workman who
carries a whole trade in his single arm, may go where he
pleases to exercise his industry, and find the means of
existence ; the maker of the eighteenth part of a pin, is
only an accessory, who, separated from his comrades, has
neither capacity nor independence, and is obliged to re-
ceive the law which may be dictated to him. This evil

ALL LABOURERS MUTUALLY DEPENDENT. 137

is more particularly felt in England, primarily because
the regulations on this subject are there of a vexatious
nature ; and secondarily^ because the division of labour
is carried farther in that country than in any other."*

But this idea of dependence arising from one man's
performing only one part of a productive operation^ or
being an accessory to others, is common to any and
every species of industry in the present state of society,
as well as making pins. The phrase of '^ carrying a
whole trade in a single arm" is very pretty, but in the
sense here employed^ it is not true. It must be ad-
mitted^ that a man who has learnt any one established
traddy may be said to carry it in his single arm ; but no
one tradesman completes of himself any one commo*
dity. A carpenter does not grow wood, nor fell timber,
nor saw it into planks, nor bring it to the spot where
he uses it,, nor does he make his own tools or nails. A
shoemaker, neither tans skins, nor curries leather, nei-
ther grows flax, nor makes threads, nor lasts, nor awls.
For their tools and materials these workmen are de«
pendent on other men, and both are only accessories in
building houses or making shoes. Each labourer, let
his task be what it may, only performs a part in the
great work of civilized social production, and separated
from his comrades, from other productive labourers, he
has little or no wealth-creating power. If there be
any man who completes a commodity of himself, it
is the agricultural labourer, who is just as poor,
wretched, and dependent, as the pin-maker, — if there
be any labourer who does not complete of himself the
work of production, it is a merchant trading with foreign
countries. He requires the assistance in two countries,

• Cours d'Economie Politique, vol. 1

138 THE POVERTT OF LAB0UEIK8 HOT

of. at least, those two classes of labourers who make the
articles he exports and imports^ and he requires the as-
sistance of all those labourers who make and prepare
his vehicles^ and of the seamen or carriers who actually
transport the goods he orders. Without the assist-
ance of every one of these workmen, amountix^> per-
haps, to many hundreds, he could not possibly carry on
his business. As feur as division of labour is concemed^
therefore, he is more dependent on other men for his
revenue or support, than the man who only does the
smallest and meanest part of pin-making. He per-
forms much less, in truth, than the eighteenth part of
that productive operation by which he subsists ; but he
never has any sentiment of painful dependence^ n«r is
he ever the object of pity and commiseration. In
the same manner the landlord or the capitalist^ who
perhaps derives all his revenue from the labours of the
pitied and despised pin-maker, is never regarded as
dependent, and never feels that he is miserable and
degraded. The dependence complained of and mourn-
ed over, therefore, is the dependence of poverty and
slavery, and not the mutual dependence occasioned by
division of labour.

This practice is one great means of adding to the
productive power of the labourer, and, of course, to the
sum of wealth he is capable of producing, and actually
produces. It is therefore a manifest contradiction to
attribute the poverty and wretchedness of the pin-maker
to his labouring in conjunction with other men. What-
ever it may be which makes the reward of the pin-maker
so small, and his toil so excessive, it is not division of
labour, for that makes his task easy, and his produce
great. We are thus compelled to fix our attention on
the other cause mentioned by M. Storch, and to affirm.

■\*.

CAUSED BY DIVISION OF LABOUR. 139

that not a part^ but the whole of the poverty which he
and ofliers have attributed to division of labour^ is caused
by *' vexatious regulations.* j As far as I see my way
in this complicated question^ I should say that division
of labour is an admirable means by which each person
may know all things; while to enable him to subsist^ he
is required to perform only one small part of social pro-
dnction.

^nPo complete the subject of division of labour, I ought
noWy were I treating the science fully, to proceed to
the examination of the effects of social regulations in
impeding or promoting this beneficial natural practice ;
and I ought to examine if governments can by any pos-
sibility promote it ; that they can retard it needs, un-
fbrtnnately, no proof ; but I have expressly excluded this
part of the science from my work ; and had I not, the
examination would be almost an endless task. On
looking closely at the matter, it will be found that there
is hardly one social regulation, — from that fundamental
law which estabb'shesa right of property, nay, even
from that original frame of political society, which sets
apart a body of men, or one man, to make laws for the
whole, — to the statute of apprenticeship, or the most
trifling mercantile or administrative regulation, which
does not influence the division of labour. I shall con-
tent myself, therefore, with warning the reader of the
incompleteness of my book as a scientific whole/ Un-
fortonately he will find, that in works of much greater
pretensions this subject is equally neglected. Very
few writers appear to have formed correct notions either
of the principles which give rise to division of labour,
or of its natural limits ; and few, therefore, have been
competent, or have attempted^ to explain the effects on
it of social regulations.

MM

Uj

140

TRADE ONE OF THE ARTS OP LIFE,

CHAPTER VII.

TRADE.

Trade, a branch of business like agriculture and manufactures.

Does not form a part of this science. — Reason for explaining
the utility of wholesale and retail dealers. — Home trade results
from individual, foreign trade from territorial division of labour.
— Natural circumstances which give rise to retail trade. — ^Dif-
ferences in the nature of commodities, and in the times of their
production. — ^Advantages of the present mode of paying retail
dealers. — Natural circumstances which give rise to wholesale
trade. — Territorial division of labour is necessary, or only ad-
vantageous. — Examples. — The benefits of trade illustrated. —
It adds to employment and promotes civilization. — ^It is a part
of the natural system of production, and grows up independent
of governments. — Its advantages not limited or regulated by
political distinctions. — Example of the provinces of France
and the American States formerly under the government of
this country. — Merchants necessary to our obtaining these ad-
vantages. — The principle of buying and selling with a view to
gain tends to prevent fluctuations in the condition of society.
— Merchants a distinct class from speculators and gamblers.

Trade, whether wholesale or retail, is to be consi-
dered like agriculture or manufactures, as only one of
the three chief heads under which the manifold em*
ployments and businesses of individuals in society,
arising from division of labour, have been classified.
Each of them embraces a great variety of separate em-
ployments. The cattle-breeder, for example, follows a
distinct occupation from the hop-grower ; and the cul-

AND NOT A PART OF POLITICAL ECONOMY. 141

tivators of madder, of wheat, of the vine and the olive,
are in general different persons, though they are all
agriculturists. The whole business of working in iron
is quite distinct from that of making cloth, and each
of them, both being classed under the head of manu-
factures, consists of a great number of distinct em-
ployments. In like manner there is both wholesale
and retail trade ; and each of these separate branches
is subdivided into numberless businesses. We have
Baltic, West India, and Turkey merchants, each of
whom confines his trade to the North of Europe, to
the great American islands, or to the countries within
the straits of Gibraltar ; and we have tea-dealers,
cheesemongers, and mercers. Trade, therefore, is only
the general name for the business of dealers and mer-
chants, as agriculture and manufactures are the general
aames for the two other important branches of that
combined system of social" production, by which the
o(»nfbrt and enjoyments of all are augmented.

In general all the occupations of individuals are con-
sidered as their own business, they are classed as the
arts of life, and are purposely excluded from the science
of national wealth. Some branches of trade, however,
are generally included in the science, making a distinc-
tion between them and other occupations, for which I
can see no good reason whatever ; particularly as agri-
culturists and manufacturers are also merchants and
dealers, buying seed corn, and lean stock, and cotton and
silk^ and again selling them when their peculiar labour
has added to the value of these raw materials. Not-
withstanding the example set by political economists,
and the very undue importance attributed by them and
by governments to trade, being convinced that it stands

142 REASONS FOR NOTICING IT.

in the same relation to the science of political economy
as every other useful art, I should not have taken any
notice of it, were it not, that there yet exists in society,
I believe, some unfounded prejudices against the per-
sons engaged in it, which it may be advisable in us to
correct ; and under the influence of the hope that I may
partly accomplish this, 1 shall endeavour to explain* as
distinctly as I can, the natural circumstances which give
rise to such occupations as those of wholesale merchants
and retail dealers, and in what consists their utility
to other labourers. Treatises on the art of trade are
the proper books for discussing all the complicated ques-
tions connected with the principles which determine in
every case the profits of the merchant, and induce him
at any moment to export or import commodities.

It is a consequence of division of labour, that no <me
person completes of himself, and without assistance from
other men, any one commodity. Every thing we now
use or enjoy, is the result of joint and combined labour.
Tools are made by one, raw materials are grown or col-
lected by another, transported from place to place by a
third, and fashioned, by means of the tools made by the
first Avorkman, into their ultimate form by a fourth. I
here merely state the principle ; but for the production
of many commodities, several hundred difierent work-
men must act in concert, or work into each othar's
hands, and the mutual exchange of their different pro-
ducts is indispensable to complete production.

It has been shown, that there are two species of divi-
sion of labour — one arising from difference of organi-
zation, and difference of taste and disposition, amdng
the individuals of our species, and the other arising from
difference of soil, climate, and spontaneous productions.

SOURCES OF HOME AND OF FOREIGN TRADE. 143

The exchange of commodities^ necessarily resulting
from the former or division of labour among indivi-
duals, is usually confined to neighbours^ or the inhabit-
ants of the same district and place^ and may be called
the HOME TRADE ; the exchange of commodities result-
ing from territorial division of labour^ takes place/ on
the contrary^ between the inhabitants of different and
distant countries^ whether they have or have not dif-
ferent governments, and a different political organiza-
tion, and will here be called foreign trade. In ge-
neral the words home trade are applied to all the ex-
changes, including many derived from a territorial di.
▼ision of labour, — such as the exchange of the young
cattle lured on the Scottish hills, for the hops of Kent,
or the barley of Norfolk, — carried on between all and
each of the parts, and between all the inhabitants of
the same politically organized country, or between
all the subjects of the same government ; while the
tesnoA foreign commerce are applied to eVery species of
exchtoge made between countries not under the same
government. Thus applied, the meaning ai these
phrases is quite unscientific. I prefer, therefore, re-
stricting the phrase home trade, to the exchanges aris-
ing from individual division of labour, and extend-
ing the term foreigb trade, to all the exchanges aris-
ing fipom territorial division of labour, though the dif-
ferent districts which carry it on, be under the same
goiremment. We shall thus get rid of the arbitrary
bounds and limits to thought, set by such chance-be-
goCten things as governments and states, — we shall get
rid^ also^ of some of the prejudices with which they are
connected,"— and have a clear distinction^ not liable to
alteration; derived from the nature of things.

144 RETAIL AND WHOLESALE DEALERS.

As there are two distinct species of trade^ there
are, of course, two distinct classes of person^ who carry
it on ; viz. wholesale and retail dealers. A retail
dealer buys goods from the wholesale merchant, from
the grower or manufacturer of commodities, living at
or near the same place where he lives, and he sells
them in small parcels to the persons who live in liis
own neighbourhood. There may be many exceptions
to this description, — many retail dealers, who order
commodities from a considerable distance, uniting with
the retail a wholesale trade; but in general they
procure what they retail in their own neighbourhood,
and seldom extend their speculations to other districts
and countries. Their occupation is the result, there-
fore, of division of labour among individuals.

Wholesale dealers or merchants, on the contrary,
rarely or never deal in commodities manufactured or
obtained on the spot where they are consumed, unkss
they are at the same time manufacturers and re-
tailers. The wholesale druggists and furniture-
makers of the metropolis, who supply the retail tra-
ders, both in town and country, are also manufacturers
and retailers. As the rule, therefore, wholesale mer-
chsints trade with commodities manufactured or pro-
duced at a distance from where they are consumed,
and their occupation is a consequence of territorial
division of labour.

Both wholesale and retail traders, are distinct from
the carriers of goods, whether by land or water. The
latter, it is obvious, perform a very useful part in the
exchange of commodities between distant places, and if
the exchange be beneficial their utility and produc-
tiveness must be admitted. I understand by the erm

NATURAL ORIGIN OF RETAU. DEALERS. 145

traders^ men who merely buy and sell with a view to
gain. The hardy navigator who is eternally buffeted
by the storms of our own seas, or whi) braves all the
vicissitudes of climate between the ice at one pole^ and
the ice at the other, — and the patient-plodding wag-
goner who is a-foot and on the road long before even
the industrious artisans of the city have left their
beds, are, it is plain, labourers, and do not belong to the
class of traders on whose occupations exclusively I
wish to fix the reader's attention.

Retail Dealers shall first be treated of. In ge-
neral, the natural qualities and properties of the va-
rious products of labour are not taken notice of in
writings on Political Economy. It will be found, how-
ever, that many of the phenomena of the science, such
as the invention of money, the utility of various sub-
divisions of labour, the dependence of all classes of
labourers on one another, and, in particular, the almost
extreme dependence of those who own and cultivate
the land on other men, which is a most important cir-
dunstance, can only be explained by attending to the
difiTerenoes in time required to produce commodities,
and to some peculiar properties in the different pro-
ducts of labour. Dr. Smith has, indeed, remarked
the influence of the size and bulk of commodities, and
the necessity of dividing them to suit individual con-
mmption. On this principle he explains the utility
of retail dealers. " If," says he, " there were no such
trade as a (retail) butcher, every man would be obliged
to purchase a whole ox or a sheep at a time. This would
generally be inconvenient to the rich, but more so to the
poor. Nothing can be more convenient to such per-
ionSj than to be able to purchase their subsistence

H

146 IMEQUAUTY IN THE TIMES OF PRODUCTION.

from day to~day> or even from hour to hour^ as they
want it."* The same feet is equally true of webs of
cloth^ whole cheeses, casks of butter^ &c« &c. Or it is
found by experience^ that the form and quantity of
commodities in which it is most convenient to produce
them^ is not that form and quantity best adapted to
individual consumption. To suit them to this^ is there-
fore another branch of labour which is performed by
retail dealers.

After division of labour has taken place> it^ soon be-
comes evident^ also^ that the productive operations of
different labourers^ or the commodities they makei ^
quire different periods to complete them. IProm tbe
period, for example, of beginning to prepare the groond
for wheat in this country till the harvest is gathered
in, full eleven months elapses. In this statement liie
time required to clear, drain, and inclose the land,
and to work the fallow through the summer, if fJEdlow-
ing be the practice, is not included. To grind and
sift the wheat, or to make flour into bread, may be
done in a few hours. To construct a canal or a bridge,
several months are in general needed ; but the pick-
axes and other instruments used in executing these
works may each be made in less time than a day.
Some weeks are necessary to make a plough, or build
a house, but a pair of shoes, or a* suit of clothes, may
be made in less than twenty-four hours ; and hundreds
of nails are completed by one man in the same time.
The labours, therefore, of the farmer, the miller, Ae
baker, the engineer, the builder, the tailor, and of ev«y
class of workmen, are completed ; or their respectire

• Wealth of Nations, book 2. chap. 5.

UNSQUAL DURABILITY OV COMMODITIES. 147

commodities are prepared for sale or uae, in unequal
times.*

Commodities of all descriptions are moreover of
unequal durability. Bread and meat> without some
additional labour, cannot in general be kept more than
a few days. Com, with some little care> may be pre-
served far many months ; and a bridge or canal, if it
be kept in order, will last for ages.

But though the products of different species of
labour are completed in unequal times, and are of
such imequal durability, that some must be imme-

* I take the difference of time required to complete the pro-
ducts of agriculture, and of other species of labour, to be the
main cause of the great dependence of the agriculturists. They
cannot bring their commodities to market in less time than a
year. For that whole period they are obliged to borrow of the
shoemaker, the tailor, the smith, the wheelwright, and the
various other labourers, whose products they cannot dispense
with, but which are completed in a few days or weeks. Owing
to this natural circumstance, and owing to the more rapid in.
crease oi the wealth produced by other labour than that of agri-
cnUnre, the monopolizers of ail the land, though they have also
monopolized legislation, have not been able to save themselves
and their servants, the farmers, from becoming the most depen-
dent dass of men in the commimity. They can no longer pros-
per without continued legislative protection. The length of
time required to complete agricultural productions, causing the
dependence of those who cultivate the ground on other men,
takes from them the power, wherever labour is in the least free,
which they might otherwise possess, of starving the rest of the
commanity. The observation may be extended to different
communities as well as to the members of the same community,
and convinces me, that those politicians who dread the depen-
dence of our manufacturers on foreign agriculturists have never
formed a correct notion ot the phenomena of social production.

H 2

148 DISCREPANCY BBTWEBN PEODDCTIOH AVD APPETITE.

diateJy sold and consumed^ idiile others can be kept
from the market for months^ the appetite of each la-
bourer is renewed daily^ and must every day be satis-
fied. If we were aware of these natural laws» infla«
encing both us and the materials of our subsistence,
and if we at the same time knew that the great ma-
jority of the operations carried on in society, were,
in the long run, of equal utility, each being necessary
to the completion of the others, and that civilized
society probably could not exist, and certainly could
not flourish, wanting any of them, should we not think
ourselves bound to take measures by which he whose
useful task could not be completed and its produce
brought to market for several months, might be able
to obtain his daily bread ? I am surprised, indeed^ that
our parliament-men, who delight so much in complet-
ing what Nature leaves imperfect, have not before now
discovered her neglect in not enabling us to produce
every commodity in the precise form, and at the pre-
cise time it is wanted ; and have not taken measures
to ensure all classes of labourers, however long a time
may be required for their products to reach the mar-
ket, their necessary daily subsistence. This, however,
is one great branch of social economy, which grows up
unperceived and uninfluenced by them. That it is as
well performed as what they prescribe, must not, I
suppose, be asserted. Dealers, however, know very well
the utility of different commodities, and they conjecture,
with tolerable accuracy, the different periods in which a
given quantity will be consumed. They buy, therefore,
from the various classes of labourers or manufacturers
their different products, and share them out as is most

RETAIL DEALERS APPORTION DEMAND AND SUPPLY. 149

suitable to the wants of all. They reconcile the apparent
incongruity of nature^ and while labouring for them-
selves are useful to others. The important business of
actually distributing the wealth of society in such pro-
portions as individuals can buy it, so that the daily
wants of all classes^ even of those whose produce is not
completed for months or years^ may be conveniently
supplied^ is^ in fact, performed by retail dealers. (They
take to their business, I am aware, with no such high
object in view ; they are led to it by an instinctive view
of their own interest ; and they are just as unobserving
of those great natural circumstances which give rise to
their occupation, and as ignorant of the great utility to
society at large of that sub -division of labour they carry
into practice, as those individuals who pretend that
nature regulates nothing, and that, but for their order-
ing wisdom, society could not exist. J

Supposing men to have money to procure articles
as they have occasion for them, ^' it would be very in-
convenient," says Mr. Mill, " to repair in each instance
to the several manufacturers and producers of each, who
may often live at a considerable distance from one
another. A great deal of trouble is saved to con-
sumers when they find assembled in one place the
whole, or any considerable portion of the articles which
they use."* But the manufacturers of each article re-
quire their undivided attention for their o^vn business
of production. In the great majority of cases they
may form a tolerably correct estimate of the quantity
of their goods, which twelve or a score retail dealers

* Elements of Political Eoonoxny, p. 84.

150 ILLUSTRATION FROM ARTIFICIAL SOCIETIES.

will require ; though it would be difficult, if not impossi-
ble, for them to judge of the wants of almost number-
less indinduals. But retail dealers, who make it their
principal business to find out the extent of consumptioii,
do ascertain this, each in his particular neighbourhood,
in a rough way, and by their instrumentality the ma-
nufacturer and producer is enabled to judge of the
quantity of commodities he is Hkely to sell with advan^
tage. Retail dealers seem to me to be indispensable
agents, in adjusting the supply of commodities to the
demand and to consumption.

This view of their utility is confirmed by what takes
place in societies formed and regulated by men. In
communities, with property in common, it is not in
general accessible at all times to every individual
Monks and nuns, for example, have servants or assist-
ants, lay brothers or sisters, whose business it is to dis-
tribute among all the members their respective shares
of the common stock. Every regiment of soldiers hai
Quarter-masters, or some corresponding officers ; every
ship of war has a Purser and assistants, who deal out
to every soldier or sailor his allowance of provisions.
Even in Mr. Owen's establishments, in which retafl
dealers are regarded as an evil, and rejected as a
nuisance, there must be some persons to take care of
the food and clothing, and distribute it among the in-
habitants of his parallelograms, or the members of hii
co-operative communities. Retail dealers, therefor^
perform such offices for society at large, as quarter-
masters perform for soldiers, and pursers for sailors,
and which somebody must perform for Mr. Owen's
pupils. They are not appointed to this office except

RETAIL DEALERS PREVENT WASTE. 151

by nature V but they are quite as useful as if tbey acted
under the directioif of Mr. Owen, or by the King's
warrant.

Retail dealers receive no wages for their services.
They are paid by making a profit on what they sell ;
and on this account they are generally objected to.
Tliey are sometimes described as sucking the marrow
out of the bones of the poor labourers. But were they
paid by a salary or wages^ what interest could they
have in taking care of the common stock ? At present,
as they can only make a profit by the greatest economy
in distributing commodities^ they must^ for their own
sakes^ buy as cheap as possible ; and if they are negli-
goit or wasteful^ no additional price they can ask will
remunerate them. They have now a direct interest in
performing their task well, and strong motives for that
watchfolness which is beneficial to the whole society.
So impressed are most men with the utility of such
motives, that we may find numberless instances of re-
gulations made expressly to produce them. To en-
courage Pursers, for example, to watch over the distri-
bution of the provisions entrusted to them, they are
allowed a per centage for every thing saved, and are
compelled to pay a high price for any deficient articles.
Under the influence of self-interest, buying and selling
only with a view to their own profit, retail dealers
distribute the whole wealth of society in the most
economical manner possible. They find customers even
for refuse ; and it may be doubted if there is as much
food actually wasted in this great metropolis in one
year, as by a single tribe of Esquimaux or other sava-
ges in a successful season.

]52 WHOLESALE DEALERS.

In making the distribution^ retail dealers have no
nettled scale^ no rations for each individual appointed
by governments, which seem only to have known of
their occupation to tax and vilify, to licence and de-
range it ; they take voluntarily to their business, and
other men voluntarily go to them to buy what they
want. This particular subdivision of labour is in no
respect, therefore, the offspring of legislation ; it is a
]Kirt of the social polity of nature ; and so nicely is it
regulated, that all the different classes of labourers,
whatever period may be required to bring their com-
modities to market, and whatever may be the dura-
bility and the bulk of them, are in general enabled to
])rocure, by labouring only at their own business, any
assignable quautity of any useful commodity.

Wholesale Dealers, of whom I now proceed to
speak, derive their occupation from territorial division
of labour. Before I can fully satisfy the reader, how-
ever, of their utility, I must explain the utility of that
exchange they are the instruments of making. We
may first distinguish two kinds of territorial division of
labour : one, which in the present state of our know-
ledge is unavoidable ; the other is not absolutely un-
avoidable, it is only highly advantageous.

As examples of the former, I may mention that bark,
which is an admirable febrifuge in every quarter of the
globe, is the produce of only a small district of America.
For us to have it, some persons there must collect it ;
and though we can purchase it at a small price by our
own productions, no art could enable us directly to
produce it. Cotton, which forms so healthy and con-
venient a covering for the body in every climate, grows

UTILITY OF FOREIGN TRADE. 153

only in countries situated in or near the tropics ; and
though the plant which bears it^ by dint of hot-houses^
can be nourished here into puny existence^ yet^ in
countries nearer the pole, to rear it is not possible.
Tea, though it refresh and delight the people both of
Europe and America, is obtained only from China, and
hitherto numerous attempts made to cultivate it in
other countries have not succeeded. Bark, cotton, and
tea, therefore, are the products of very limited spaces,
but they are highly useful wherever any portion of the
human race lives, suffers, or enjoys.

Whether wool could be produced in large quantities
in tropical climates or not, seems doubtful, the cover-
ings of most animals in such climates degenerating into
long straggling coarse hair. At present, however, it is
chiefly obtained in the temperate parts of the globe ;
but the woollens of England have long formed the chief
part of our exports to India ; and a blanket, as I know
from personal experience, is one of the most tempting
articles of traffic which can be offered to the negroes of
the Western coast of Africa, who live in the hottest
r^on of the globe. The inhabitants of Norway, the
produce of which is chiefly fir-trees^ the sea-coast con-
sisting of an immense multitude of bleak, barren, and
rocky islands, can of necessity do little else than catch
fisL, and saw trees into planks. Fortunately, they find
in this opulent and industrious community a market
£ar their lobsters* and their planks, and we are equally

* Norway planks are not exactly excluded from our market,
bat they are burdened with a heavy duty, in order to impose on
thote who use planks the additional labour of bringing them from
Canada. It is, perhaps, fortunate for the Norwegians, that lob-

H 5

154 ILLUSTRATIONS. — LOBSTERS^

fortunate in having the useful articles they produce ot
procure plentifully supplied to us. I do not say merely
that catching lobsters and sawing trees into planks, are
the most advantageous occupations the Norwegians can
pursue ; I say no art that we are at present^icquainted
with, could enable them to grow com in any quan*
tity, or have fine rich velvet pasture, like the low
flat land of Holland, though by catching lobsters,
and sawing trees into planks, they can purchase the
grain, and butter and cheese, for producing which
the most fertile land is chiefly useful. There is one
species, therefore, of territorial division of labour, which
must take place whether the inhabitants of diflTerent
districts mutually exchange, or not, their respective
products.

There is another species of territorial division of labour
not strictly necessary, but highly advantageous. In
general, for example, the continent of Europe is chiefly
supplied with sugar and coffee from the West Indies ;
but in France, during the late war, when that country
was excluded by Buonaparte's decrees, and our blockade
system, from all communication with tropical climates,
the people succeeded in making sugar from beet-root,
and in finding several substitutes for coffee. The cost,
however, of producing the former, with all the help of

sters were formerly considered a great luxury, and were chiefly
consumed by the rich. They, with turbot, another article of
luxury, were accordingly, under our much praised Navigation
laws, allowed to be imported into this country in the vessels of
any nation, I believe, while the importation of every other species
of fish, which might have contributed to the subsistence of the
people^ was strictly confined to British vessels.

VNS

.^

SUGAR, 0RANGB8, KNIVES. 155

science and art> was at least four times as great as the
cost of producing it in the West Indies, and bringing it
to France ; and the substitutes for the latter were at
once so miserable and so dear, that they were instantly
given up when real coffee could be procured. It would
not be absolutely impracticable to make sugar or grow
rice in England, but it would be amazingly disadvan-
tageous, compared with the practice of buying both with
our hardware, and bringing them from Carolina or
Jamaica. It would be nearly intolerable, though not
impossible, for the West Indians, who have no coal, to
cast and forge their own cutlery, and other iron and
steel instruments, which, in return for their sugar, they
can procure at a comparatively small cost. Wine, which
may be purchased in France, Spain, or Portugal, for
twopence, fourpence, or sixpence a bottle, and brought
hepe at a very small additional expense, could not be
made in England for four times the sum. Sour and half
ripened oranges, -though rather for ornament than use,
are made to grow in this country at a very great cost,
hy means of the forcing-houses of our opulent gentry ;
but they may be purchased in Portugal, or at the
Azore islands, for threepence a score. To make such
knives in these islands, as are sold at Birmingham for
twopence a-piece, and with which, perhaps, the oranges
are bought, would probably cost twelve times twopence
if they could be made at all.

The mutual exchange of such objects as can only be
produced in districts and spots, but more abundantly
in those spots than their Inhabitants require, and of
which the utility is universal, must be conducive to
the enjoyments and welfare of all concerned. The

156 ILLUSTRATIONS. — COTTON, SILK.

manifold advantages of such an exchange, — of our
giving woollens for tea, and knives for bark,— -can no
more be doubted than the advantages of the division of
labour, or of the due cultivation of both our mental
and bodily faculties.

The advantages of mutually exchanging those dif-
ferent productions which are only favoured by difference
of climate and soil, may be made, I think, equally evi-
dent. Many of our most useful and valuable mann^-
tures could not exist, except we made such an exchange.
We do not possess more than enough land in our imme-
diate neighbourhood to supply us with the bulky articles
of provision^ such as cattle, potatoes, com, which cannot
so conveniently be brought from a distance ; and where,
then, could we find the means of growing cotton, the
raw material of our most extensive manufacture ? At
present, this is conveniently brought from several dis-
tant parts of the earth, and working it up gives em-
ployment and subsistence, including the sailors who
bring it, and the persons who make the machinery for
manufacturing it, to at least one-tenth part of our whole
population.

Silk, manufacturing which, employs a great, though
not an equal number of our people, and enables them
to subsist comfortably, is also a foreign production. It
might be, and is, produced in England, but in such small
quantities, and at such a great expense, that if we did
not import it from climates enjoying a warmer sun and
brighter sky, our spinnmg-mills would fall to ruin, our
looms would be idle, the cheerful shuttle, with its ac-
companying hum of human voices, would no longer be
heard, and our numerous silk manufacturers, with all

MUTUAL DEPENDENCE OF ALL LABOURERS. 157

their skilly intellect, and happiness, would be gradually
annihilated.*

* It, may be worth observing, that our people are quite as de-
pendent for subHstence on these foreign products, as if they con-
stituted their actual food. Were the supply of silk and cotton
to be cut off, it would as surely annihilate all our silk and cotton
manufacturers, as if the food necessary for their subsistence could
no longer be produced. They would then have nothing to give for
food, and the landed gentry and farmers would most certainly not
allow them to have food without an equivalent. There is no class
of men, however, interested in preventing the importation of cot-
ton and silk, and, therefore, this species of dependence never ex-
cites any sinister forebodings. No apprehension is entertained of
our people being starved by the supply of cotton or silk being
withheld ; but we are told, though the thing seems impossible,
that were we to eat foreign com, we should be reduced even to a
worse state of bondage, than that sought to be imposed on us by
the lords of our soil. To me the dependence, and of course the
danger, if there be any, arising from so many of our people sub-
sisting by working up cotton and silk, seems far greater than
would arise from importing food. Cotton and silk are the pro-
ducts of comparatively limited spaces; but food of one kind or an-
other, and even wheat, is the produce of almost all the climates
of the globe. We can find almost numberless substitutes for
any particular kind of food : if one nation will not allow us to
have wheat, we can procure rye, or barley, or flour, or maize,
from some other ; but if our supplies of cotton and silk were with- ,

held, what could we substitute for them ? po me it is plain, ^^
that the dependence of men on men, whether they live under the
same government or not, is the necessary consequence of the be-
neficial practice of division of labour ; and politicians, unless
they abolish this practice, cannot prevent the mutual dependence
of nations ; though, by their ill-timed jealousies and absurd re-
strictions, they may sow strife where Nature meant to teach
kindness, and they may bring into jeopardy the existence of '
several millions of industrious men.

158 ILLUSTRATIONS. — MAHOGANY, FIGS,

Gachineal> indigo^ and various other substances used
in dying, are not the produce of Britain ; they, or sub-
stitutes for them> could perhaps be procured or made
here> but at such a cost as would check, if not ruin^ se-
veral of our most flourishing manufactures. Much of
our furniture^ and even the frames of our houses, are
made of foreign wood. Our chair and cabinet makers,
and our house carpenters^ are as dependent on the
forests of Honduras and Norway^ as the cotton manu-
facturers are on the cultivators of Georgia^ for the raw
materials they work into beautiful furniture or invalu-
able dwellings.

Our breakfast, and by common consent^ it seems the
best we can have> is prepared from a plant brought
from the fiEirthest part of Asia, sweetened by the juio9
of a cane cultivated most successfully in the West
Indies. We might, undoubtedly^ live on oatmeal, or
beer and meat, or something else which grows or is
made in England, but we do not, because we like tea
better. Our meat is seasoned with spices^ the pro-
duce of islands in the Indian Ocean ; and the sweet-
meats, such as figs, prunes, etc, with which we indulge
our passion for niceties, or which we give our children,
on account of their cheapness and gratefulness, come
from Germany, France, Spain, and Turkey. The
oranges that are so plentifully hawked in our streets,
in the winter part of the year, which moisten the
speaking organs of our law mystifiers and of our law-
makers, as well as the bawlers in the upper gallery at the
theatres ; which relieve the parched palate of the fever-
sick patient, and gratify the apparently natural longing
of all classes for a little fresh vegetable acid^ when no
other fruit can be procured ; are brought thousands of

PLUM-PUDDING. 159

miles^ are purchased, by our hardware and cloths, and
could not be procured in any quantity except by this
mutual exchange.* Our roast beef, the Englishman's
fare — would to God that every one of our countrymen
could command its daily enjoyment ! — is indeed a native
production ; but its companion, plum pudding, — exdu-
sively an English dish, — derives its name and its savou-
riness from the produce of foreign climates. Raisins are
brought from Malaga and Smyrna, and currants from
the Greek Islands.

I have purposely selected these few familiar illustra-
tions, in order 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 products of
different countries and climates. The humblest man in
this community, the common beggar, to say nothing of
our industrious labourers, solaces himself with tobacco^
or refreshes himself with tea. If this mutual exchange
were confined to such things as are only enjoyed by a
few opulent and luxurious nobles and merchants, as is
sometimes supposed ; if nothing could be brought from
Italy but a few antique pictures and modem statues ;
nothing from India and the Brazils, but diamonds and
topazes ; if nothing could be obtained from France but
a small quantity of very costly but delicious wine ; fo-
reign trade would not be deserving of the high place
it ought to have in our esteem, as a means of adding to
the wealth and comfort of mankind. If, instead of con-
tributing to universal enjoyment, it merely gratified

* Oranges, cheap as they appear, pay a duty of 15«. the 1000, or
75/. per cent, on their value ; or 2s, Gd, per hox, containing 5000
cabic inches. See Act 7? Oeo. XV.

160 OENERAL ADVANTAGES OF TRADE.

the almost bloated desires of a few for an endless suc-
cession of luxuries, it would be no more worthy of our
approbation than an emasculated singer, or than any
other of those unsightly excrescences which grow from
our present diseased and unjust distribution of wealth.
The few commodities^ however, by which I have illus-
trated the advantages to us of that exchange which
results from territorial division of labour^ constitute
only a small part of those imported from countries not
under our government, which are used by the great
mass of the people, which contribute to their subsist-
ence, or to which the industry and skill of our labourers
give additional value. Numberless persons and very
important interests in this country, are connected with
and benefited by such trade, — ^in all cases it is volun-
tarily carried on ; we may therefore be sure that it is
beneficial to all parties. The persons who receive our
cutlery, hardware, woollens, and cottons in exchange
for their sugar, raw cotton, oranges, raisins, etc., could
not obtain these necessary and valuable articles so
cheaply by any others means. Must it not be as plea-
sant to the inhabitants of Portugal, of Turkey, and of
Spain, to procure by the cultivation of their own idnes,
fig-trees, and olives, the instruments and the clothing
manufactured in this country, as it is for us to obtain,
by making these articles, the refreshing produce of a
brighter sun than in general shines over Britain ? Pro-
ductive labour, be it also remembered, is that which
procures the labourer his subsistence ; and if the la-
bour employed in making the commodities to be ex-
changed was not productive, no man would or could
continue it. We have thus a direct proof that such

IMPORTING GOODS ADDS TO EMPLOYMENT. 161

trade is beneficial and produc ive to both the parties
who actually carry it on.

It is said> indeed, that importing commodities from
one district into another, lessens employment in the
importing district. On this principle most of the re-
strictions on the trade carried on between different states
have been imposed and justified. But the people from
whom we obtain commodities, of whatever description,
do not give them to us. On the contrary, they receive
for them an equivalent, or what they esteem more
than an equivalent, for they prefer it to the commodities
they exchange for it. But this equivalent, be it what
it may, is made or purchased by our own industry.
There is no species of wealth which is not the produce
of labour ; consequently, to produce or obtain the equi-
valent commodities requiries' about as much labour as is
necessary to create the commodities imported at the
place whence they are brought. An individual not
supported by the labour of others, pays with his labour
for his subsistence or his luxuries ; and so does a trad-
ing nation. For every pipe of wine imported from
Portugal, for example, a quantity of woollens or hard-
ware, corresponding in value to the wine, must be made
here and exported to pay for it. Unless the exchange
were made, there would be no market and no payment
for the wine and the woollens ; there would be no hope
of any enjoyment from pru' ucing these commodities,
and neither would be produced. The wine is not
wanted in Portugal, the woollens are not required here ;
and both are only made in order to be exchanged for
erne another. If the exchange were prohibited or pre-
rented^ there would be so much less industry and

162 ADVANTAGES OF HAVING

wealth in two districts^ and so much less enjoyment in
the world.

We know from very long experience^ that in pro-
portion as commodities are obtained by trifling ex-
ertion they are sold for a small sum. What comes
light goes lights is applicable in trade as well as in
the other concerns of life. But I have^ I hope, satisfied
the reader that the means of obtaining commodities at
a small expense consist principally in the increase of
knowledge and division of labour. We may expect,
therefore, that we shall obtain commodities at a cheap
rate, from those countries vidth which we trade, in pro*
portion as they are there cheaply produced, and they will
be cheaply produced as the people of those countries in^
crease in knowledge.* From this circumstance we
learn, that it is for the interest of every nation .that
every other should make the utmost possible progress
in knowledge and civilization, in skill and in all the
wealth-creating arts ; and it demonstrates the utter
foolishness of that national jealousy and rivalry which
politicians love to foster and encourage.

To make the advantages of having skilfril and opu-
lent neighbours more apparent, I beg leave to remind
the reader of what England has lately done, and is
now doing for the rest of the world. Though other na-
tions may envy her prosperity, they eagerly borrow her
aits. By her example they are stimulated to make
greater exertions, and they are clothed by her hands.
British cottons and woollens, that are so cheaply ma-

• The principle stated in the text, obviously holds good through-
out all countries under the same government ; and if it do not
hold good in countries not under the same goyemment, the
cause of the variation is political — not natural.

INTELLIGENT CUSTOMERS. 163

xui£Eu;tured, in consequence of our increased skilly are
almost as cheap in Russia and South America, as in
London ; which is as advantageous to the inhabitants
of those countries as to our own people. Steam-
engines^ as well as various other equally useful ma-
chines^ are almost exclusively our inventions and im-
provements^ but they add to the wealth and power of
otber nations. They oughts consequently, to be de-
lighted with our increased skilly for it supplies them
with cheap commodities and useful instruments. And
for what reason should we not reap similar advantages
were all our neighbours as skilful as ourselves. I
do not recollect any useful art we have imported from
Russia, or from the slave coast of Africa, or from the
West India Islands ; but, to say nothing of the various
improvements we adopted from Italy, France, Flanders
and Germany^ in the 15th, 16th, and 17th centuries,
they being then the most opulent and skilful nations
of Europe, — from France we have lately introduced an
improved silk loom^ from Flanders the Hainault scythe,
and from North America lightning conductors, and
several improvements in steam -boats. From ignorant,
poor^ and unskilftil people, neither knowledge, wealth,
nor ingenuity, can be brought ; wherefore it is for the
interest of all nations to have enlightened, wealthy, and
ingenious neighbours.*

• The following passage from IMr. D. Hume's Essay, " Of
iheJealoitsy of Trade ^''^ may perhaps not be without interest as
confirming the view taken in the text, and exemplifying the
Bfieat alteration which has taken place since a period somewhat
prior to the time he wrote, in the relative situation of this coun-
try to the surrounding countries. " I go farther," he 'says,
'^ and observe that where an open communication is preserved

164 TRADE ADDS TO ENJOYMENT, AND

The immediate pecuniary advantages which accrue
to all the parties concerned^ in exchanging the product
favoured by one climate, for those favoured by another,
gives but a feeble notion of the benefits conferred on
mankind by trade. The animal appetites of man are
soon gratified, and unless he be then roused by some
terrible and destroying passion, he sinks into inglorious
repose. The savage passes his life contending with wild
beasts, or with his wilder fellow savages, for food, or in
gluttony and sleep. The skill and knowledge requi-
site at any time to provide for our animal wants, must

among nations, it is impossible but the domestic industry of
every one must receive an increase from the improvements of
the others. Compare the situation of Great Britain at present
with what it was two centuries ago. Al| the arts of agriculture
and manufactures were then extremely rude and imperfect.
Every improvement we have since made, has arisen frmn our
imitation of foreigners^ and we ought so far to esteem it happy that
they had previously made advances in arts and ingenuity. But
tills intercourse is still upheld to our great advantage ; notwith-
standing the advanced state of our manufacturers, we daUy adopt
in every art the inventions and improvements of our neighbours.
The commodity is first imported from abroad to our discontent
while we imagine it drains us of our money. Afterwards the art
itself is gradually imported to our visible advantage ; yet we con-
tinue still to repine that our neighbours should possess any art,
industry, and invention, forgetting that had ihey not first in-
structed us, we should have been at present barbarians ; and did
they not still continue these instructions, the arts must fall into
a state of languor, and lose that emulation and novelty which
contribute so much to their advancement.'* At present Britain
has become the teacher of her former teachers, and although we
require the competition of other nations to stimulate us onward
in our career, the instruction we at present derive from them is
so little that there can he no fear, though it should wholly cease,
of the arts falling into languor.

PROMOTES CIVILIZATION. 165

be small, and did not some other stimulus intervene^
all the ingenuity and faculties of civilized man would
remain dormant, or be much limited. No reflections
on onr intellectual nature or high destiny, did they ever
occur, could rouse the barbarian from his sloth, or wean
him from his sensuality. Such motives have been
employed by missionaries, but have been found in-
effectual to overcome indolence. But present him
with the solemn pageantries of Catholicism ; offer him
some glfttering bawble to adorn his person ; show him
the utility of some wealth-creating arts ; let him taste
the enjoyment of some new productions of human skill;
and you will infallibly excite his exertions. He wilj
give you every thing he already possesses for mere
bawbles ; he will endeavour for the sake of a dram or a
musket to collect more elephants teeth, and kill more
far-bearing animals ; nay, for glittering and sometimes
pernicious presents, he will sell himself or his dearest
relations. Precisely the same motives, though they
are not so perceptible, and do not lead to the same ex-
cesses, in consequence of our enjoying numerous foreign
commodities from the beginning of our existence, oper-
ate also on all classes of the most civilized community ;
and after our mere animal wants are gratified, we still
labour, and are happy when labouring, to obtain some
other, and generally foreign productions.

** Flourishing cities," says Dr. Paley, ^^ are raised
and supported by trading in tobacco : populous towns
subsist by the manufacture of ribands, A watch may
be a very unnecessary appendage to the dress of a
peasant ; yet if the peasant will till the ground in
order to obtain a watch, the true design of trade is
answered ; and the watch-maker, while he polishes the

166 TRADE 18 A NATURAL AND

case or files the wheels of his machine, is oontributing
to the production of com, as effectaally, though not so
directly, as if he handled the spade or held the plough.
The use of tobacco affords a remarkable example
of the caprice of human appetite, yet if the fisherman
will ply his nets, or the mariner fetch rice from foreign
countries, in order to procure himself this indulgenoe^
the market is supplied with two important artides ef
provision by the instrumentality of a merchandisej
which has no other apparent use than the gratifi^tion
of a vitiated palate."*

The mutual exchange of the products of different
climates, is a great means, therefore, of promoting ci-
vilization. It offers additional enjoyments, and to
procure them it incites to additional exertions. It is
the parent, consequently, of much of our skill. T»
obtain its gratifications, gives a perpetual but gentle
stimulus to our passions, saving us both from the weari-
ness of idleness, and from those violent emotions whick
are followed by painful lassitude, and end in speedy
when not self-destruction. A number of innocent de-
sires fill up, with an equable flow of happiness, the
time of our existence; and foreign trade is even a
greater good by the stimulus it gives to thought and
exertion, than by the enjoyments it immediately
bestows.

All these immense advantages arise naturally from
men acting, as we know from all history they are dis-
posed to' do, on a perception of the advantages to be de-
rived from the mutual exchange of the products of differ-
ent climates. There are numberless instances of go-
vernments checking and prohibiting the natural trade

■ Moral Philosophy, vol. ii.

NOT A LEOISLATIVE RBSULT. 167

idiidi> but for their interference^ would be carried on
between different countries; there is no instance of
their calling any beneficial trade into existence, and no
instance of a people^ unless prevented by their govern-
ment, refusing to engage in such a trade. Thus trade,
in all its vast ramifications, and with its immeasurable
benefits, is a natural phenomenon growing out of na-
tural differences in the soil, climate, and spontaneous
productions of the earth. Merchants at present re-
gulate their proceedings by the money price of goods,
by the rate of exchange, by the enactments of the law-
giver, and by that forced state of things which these
enactments have brought into existence. With all
these considerations, the science of Political Economy
has no more to do than it has with the motives which
induce the farmer to sow wheat or plant hops. To
judge of them is the business of the merchant. The
science contents itself with enumerating some of the
advantages of trade, and stating its natural source.
The ultimate regulating principles of all foreign trade,
whether it be carried on between countries under the
sway of the same king or not, are the great natural
circumstances mentioned; and any interference, whether
by governments or individuals, to impede or prevent
the mutual exchange of those commodities which can
be only or most advantageously produced in limited
spaces, is a violation of the order of nature, equal in
pirinciple, if not in degree^ to an interference to prevent
men dedicating themselves to separate employments.

The advantages, moral and physical, of trade, are
unknoiim to the rulers of mankind ; or at least, in their
estimation, they are of no importance in comparison
with the preservation of their power. Under the in-

168 OUGHT NOT TO BE INTERFERED WITH.

fluence of ignorant ambition, they have, in almost all
cases, prescribed regulations for that trade which has,
and prohibited much of that which might have been,
carried on between different states. Any thing more
meddling or impertinent cannot be imagined. The in-
dividuals who are willing to make an exchange: say for
example, of French wme for English cutlery^ find it
mutually advantageous; and no third party, whether
he be a rival manufacturer or merchant, a monopolizing
trader or landlord, a theoretical politician or a practical
statesman, can, under any circumstances, be Entitled to
say such an exchange is mischievous, or lay any im*
pediments in the way of this species of honest, honour'
able, and productive industry. Unfortunately, tbis
principle is not yet ge lerally recognised, and the busi*
ness of the merchant has been interfered with, pre*
scribed, and regulated, in a manner which is tolerated in
no other branch of social production. We are all in-
terested in checking this absurd conduct ; for unless
we stop the interference of one man, or a class of men,
with the business of another, at its very commenee-
ment, by a positive and complete denial of its utility,
there is no point short of entire slavery where we can
arrest it. Ambition is insatiable, and all history tells
us, in regulating kingdoms as well as regulating dubs,
that those whom we permit or request to assume for
some trifling purpose the office of legislators, never
rest satified till they obtain the power of prescribing
our speech, our behaviour, and our thoughts.

Why should the advantages resulting from territorial
division of labour, and the consequent exchange of com«
modities between districts of the earth differently si-
tuated, be confined to countries acknowledging the

NOT AFFECTED BY OIFFEUENT OOVERNMENTS. 169

same master^ and why should they not be universally
enjoyed ? Why should any individuals of this country
not be freely permitted to exchange all or any part of
the produce of their industry for the produce of some
other industrious men living in France or Spain, as
well as for the produce of the unhappy slaves in our
colonies ? It is found to be very advantageous for the
cotton spinners in Lancashire to buy wheat from the
Irish, by means of their own produce^ for the manu-
fetctiirers of Birmingham, and the farmers of Cheshire^
mutually- to exchange hardware and cheese, for the
graziers of Scotland to give cattle for barley, and for
the English to trade with China and America, — ^andfor
what reason would an exchange of commodities with
neighbouring countries not be equally beneficial ; and
what has the fact of their having different governments
to do with their trade, that it should be restrained or in-
terdicted ?

If it be good for individuals to confine their exertions
to one branch of business^ for the tailor or fisherman,
for example, to do nothing but r make clothes or catch
fishy baying whatever he may need with the produce of
his peculiar industry ; if it be advantageous for the
miners of Durham and Cornwall, to be only miners,
having their knives, pickaxes, and gunpowder brought
from Birmingham and Hounslow ; if it be advantageous
for the inhabitants of the Scotch hills, to attend only to
rearing cattle, importing cutlery and doth from York-
shire, — ^it must also be advantageous for the people on
the south coast of England, to exchange their produce
for the produce of the people on the opposite side of
Uie Chuinel, with whom they are naturally and geo-
graphically much closer connected than with Ireland

170 ILLUSTEATIONS. — ENGLISH POSSESSIONS IN FRAKCE.

I

or Scotland; — and it must also be advantageous for the,
inhabitants generally of this foggy^ moist country,
abounding in coal^ to exchange the commodities of which
the production is favoured by these circumstances, ftr
the apples and wheat of Normandy^ the raisins of Pr»-
venpe^ and for the brandy and wine of Grascony. The
English Channel can make no more difference in this
respect^ than the Irish Channel or than the Tweed. U,
in fact, the provinces of France, which once bowed be-
neath the sceptre of our Plantagenets, now acknow-
ledged the sway of our Guelphs, if they were regulated
and taxed by laws made at Westminster, if their af»
fairs were administered by our Eldons, Liverpools, and
CanningSi a free commercial intercourse with them
would be considered as advantageous as such an intern-
course between Yorkshire and Suffolk*

Fortunately for us, and fortunately for the world,
when our colonies in America thew off the yoke of the
British Parliament and King, and formed themselves
into the United States, the trading bonds of connexion
between the two countries were so numerous, their
want of each other was so urgent, and something like a
free communication between them was so necessary to
the prosperity of both, that whatever may have been
the wish of statesmen, — and it has been plainly mani-
fested by many jealous and unwise regulations in both
hemispheres, — ^it was not possible to interdict the trade
between Britain and America, and declare it a nuisance,
as the trade between this country and the ancient do-
minions of our kings on the neighbouring continent,
has been interdicted and declared. To a certain ex-
tent, the trade between the United States and Great
Britain has been permitted^ and has contributed largely

SEPARATION OF THE UNITED STATES. l?!

to the prosperity of both coantdes^ — ^teaching the world
that the organization of men into different political
aocietieSj or into little hordes and knots of slaves^ has
nothing whatever to do with their progress in wealth,
exoept to impede it ; and that the trade which is benefi-
cial when carried on by the subjects of the same state,
IB equally beneficial when they have different masters.

No man can suppose that the chance which made
our former continental dominions a part of the patri-
mony of the Bourbons, instead of their adding to the
almost numberless dependencies of the Guelphs, — or
that the wisdom which took the people of North Ame-
rica £n>m under the dominion of our sporting squires,
intriguing statesmen, and greedy capitalists, which^
God knows ! we find enough burdensome, — can alter in
the smallest degree those natural and eternal laws
which regulate production, and by which the mutual
exchange of the varied products of different climates,
stimulates industry, adds to enjoyment, and bestows,
Hke Charity, a double blessing, for it blesses those who
buy and those who sell.

J£ the reader is now sensible of the benefits of fo-
reign trade, a few words will elucidate the utility of
the wholesale merchant. It is plain that the producers
(^ commodities to be exchanged, whose business it is to
sfoduce as much with as little labour as possible, can-
not attend to the wants of mankind in distant parts of
the world- The wine-maker must be acquainted with
the principles of fermentation, and the cloth-maker must
know the arts of weaving, fulling, and dying ; but to send
either wine or cloth to a suitable market, requires a
knowledge of the wants and tastes of different commu-
nities. Such knowledge is quite distinct from that

I 2

172 MERCHANTS ARE PRODUCTIYE LABOURERS.

necessary for the production of the commodities to be
exchanged : to acquire it, both time and attention must
be bestowed ; and/the art of the merchant must be
\^ learned like any otlier branch of business. He is a la-
bourer^ but his labour is chiefly mental ; and his occu-
pation is one branch of the division of labour. By
finding a market for the commodities of two producers,
living at a distance from and unacquainted with each
Q other^ he relieves them both from this trouble. He

produces neither wine in Portugal nor cloth in York-
shire^ but by ascertaining that one can be advantage-
ously exchanged for the other^ and being the chief
agent in making the exchange^ he contributes^ like the
watchmaker mentioned by Dr. Paley^ to produce both
cloth and wine.^ If these commodities, as I have al-
ready stated, would not be produced unless they could
be exchanged for each other, the merchant must be as
instrumental in producing both, as the actual wine and
cloth makers. He is quite as useful, therefore, but
not more useful, than those who make cloth and wine.
His occupation could not exist but for them, and it
springs from one of them being able to produce a
greater quantity of wine, and the other of cloth, than
they require for their own use.

All wealth, it must be remembered, has a relation to
our wants. The rich and luscious pine-apple^ that
annually ripens and decays in the wilds of Afi*ica, and
the majestic trees which flourish and fade, century after
century, in the unexplored forests of America, almost
unseen and untouched by a single human being, are
not wealth. Transport them, however, into Covent-
garden market, or to the banks of the Thames, and
they would instantly acquire that relation to the wants

PRINCIPLE OF THEIR REMUNERATION. 173

of some persons^ which gives to a material object the
characteristics of wealth. This is an extreme case ;
bat the business of the merchant is to give^ in a degree,
this characteristic of wealth to every object he deals
with. |He removes commodities from where they
possess^ttle^ to where they possess much value ; from
where there are few or no persons requiring them, and
they are of little use, to where they are of more use,
and where the demand for them is greater ; and as far
as this relation of material objects to the wants of man
is concerned, he creates wealth as much as the man
who, by converting wool into doth, adapts it to the
purposes of clothing. |

He is not paid by smy salary or wages for these valu-
able services, but by the increased price the commodi-
ties fetch in consequence of being removed to the spot
where they are most required. From this mode of
payment, we see that his principal object must always
be to buy when and where commodities are cheap, and
sell when and where commodities are dear. This is
the principle of his operations, $nd therefore they
tend to equalize prices at all times and places. It is ac-
cordingly found, as, for example, in Holland, where
for many years the price of grain has been compara-
tively steady, that whenever trade is. free and govern-
ments leave it to its natural course, fluctuations in.
price are of little extent. The mode of paying mer-
dUDits, and the object they must necessanly have in
view, shows that trade instead of causing, as is usually
stated^ alternations of prosperity and decay, and fluc-
tuations in the condition of a society, tends, in fact^ to
raise it above all such fluctuations, and even to secure
it against the effects of variations in the seasons.

174 THEIB OPERATIONS PE£T£NT FLUCTUATIONS

That the seasons vary in fertility^ and that great
fluctuations consequently take place in prices, causing
perhaps some of the most grievous calamities by which
the very complicated mechanism of civilized society is
liable to be deranged, is very well known. But varia-
tions which appear very great when examined only in
relation to limited spaces and short periods, disappear
as observation is extended to a wider range. Nature
provides a remedy for the evils which might occur from
such variations, by making the fertility of one species
of produce, one district, climate, soil, or year, com-
pensate for the barrenness of some other yescr and
district, and the failure of some other crop. Sudi a
provision, however, requires that the surplus of the fer-
tile year be stored up against the coming of the barren
year ; and the luxuriant crops of one spot be conveyed
from the place where they are in excess, to where there
are mouths but no food. To ascertain all such circum-
stances, and to buy and sell accordingly, is one part of
the business of the merchant ; and but for his occupa-
tion, this beneficial arrangement of nature would be
useless. Let it also be remarked, that the evils of
such variations in the seasons would probably be less
felt as the earth was deficient in people; that they
would be augmented, and become terrific as men mul-
tiplied ; but as that multiplication goes on, division of
labour is extended, the business of the merchant is es-
tablished, and his occupation places the citizens of a
well-peopled country in this respect far above the level
of the thinly-scattered inhabitants of the most fertile
regions. Thus there have been no such enormous fluc-
tuations in price, and no such famines in this country,
within the last century, as occurred in the 14th, l5th.

AND NEUTRALISE VARIATIONS. 175

and 16th centuries^ and as now occur in South Ame-
rica ; and com never fluctuates in price in Holland to
the same degree as in , Spain. Trade, which is in a
great measure free in Holland^ and amazingly restricted
in Spain^ — which is now so extensive in this country^
and was formerly almost unknown, — is the great means
of preventing fluctuations in price, and the alternation
of dearth and ahundance.

The governments of some countries^ distinguished
for wisdom^ noticing the evils resulting from varia-
tions in the seasons, have established public grana-
ries to prevent them^ and to equalize the operations of
nature; butfthe merchant buying when and where
commodities are cheap, and only selling when and
where they are dear, does, in fact, perform, but infi-
nitely better than governments can, all the functions
of public granaries.^ But are not the magnificent store-
lioiises erected on the banks of the Thames pub-
lic granaries, exceeding in vastness and completeness
the national granaries of any other people ; andmould
any salaried servants of government have the same in-
terest as the merchant to watch and conjecture the
fluctuations of the markets ? The sharpsightedness
of his self-interest is continually on the alert, and he
can only obtain a profit as his operations tend to equa-
lise supply and demand* His motives are selfish, but
the consequences of his proceedings are not the less be-
neficial. They are not prescribed by the legislator,
but they are a most important part of social order.
Trade supplies us with one of the many examples of
nature regulatinglmd prescribing our conduct, in cases
for which governments, — ^imagining she had turned us
•drift on the wide ocean of the universe, without com-

Him..,

176 MERCHANTS MUST BE

pas8> chart, or pilots — thought it was their business to
provide. The motives of the individuals may be called
trivial ; and perhaps some great sea and land captains
may say they are unworthy and inglorious ; but nature
nevertheless effects by them a purpose of far more im-
portance to mankind than all their victories. fThe Ope-
rations of the merchant^ though they arise irom the
most selfish motives^ have a direct tendency^ whenever
they are freely permitted, to neutralize the variations of

f V the seasons, and to spread with an equal hand the
means of subsistence and enjoyment over the whole
civilized world, and among all classes and conditions
of men.

I beg the reader to recollect that I speak only of the
natural effects of the conduct of merchants, having fat
their object to buy when and where commodities are
cheap, and to sell when and where they are dearj
Such a class of labourers being highly useful to w
rest of the community, it must be deeply lamented
that in our time their honourable name and charactv
have been usurped by gambling speculators. As they
acquire wealth by dealing in commodities, the pro-
ducers of which are very often in a state of destitution,
they are liable, under the most favourable circum-
stances, to excite envy and hatred ; but this usurpation
^yidll bring their name and occupation into contempt
lln our time, unfortunately, owing to our immense tax-
ation, the burden of which every man tries to throw
on his neighbour, and to the variations in the value of

I I paper money, which is sometimes exchangeable for
gold, and sometimes not, as suits the conveniency of
the government, — a low cupidity, and the spirit of lot-
tery contractors have become the animating principles

DISTIK0UI8HBD FROM GAMBLING SPECULATORS. 177

of all traders. A hocus-pocus system of multiplying
wealth has been adopted throughout the community^
and our merchants generally seek to become rich by
time bargains and gambling speculations. Industry
loses all its charms when affluence may be acquired by
a lucky hit. At present the order of nature is re-
versed^ and opulence^ instead of being the result only
of pains-taking labour^ is the reward of some chance
speculation^ Among the numberless evils created by
our natiomu monetary^ and borrowing systems, there
is none greater perhaps than the abstracting a large
number of persons from industrious occupations, who^
under the name of merchants, rely for their prosperity
on effecting by various falsehoods and tricks, a turn in
the markets, or a rise or fall in the price of the Stocks.
The business of the real merchant is totally different.
His occupation springs from the natural circumstance
of different climates giving rise to territorial division
of labour ; and in its effects it equalizes prices, and neu-
tralizes the variations of the seasons. He is an indis-
pensable member of the complicated, but well com-
bined and nicely arranged system of social production,
which grows up naturally and independent of all
legislative regulation as our species is multiplied ; and
which renders civilized man so much more opulent,
happier^ and better than the savage.

I 3

178 DBPINITION Of HOVET

CHAPTER VIII.
Money.

Definition of money. — Natural drcumstances which occasion the
invention of money— Different substances which have been used
as money. — The precious metals now universally adopted. —
Reasons for the preference given to them. — They are natural
or universal money.— Difference between money and wealth. —
Circumstances which determine the value of the precious metals,
and the quantity of money in circulation. — Governments
cannot alter the value of money, nor the quantity neceaaary.
— Origin of coining. — It does not alter the natural ^rdation of
value in the precious metals. — Frauds practised by Govern-
ments by means of the coin.-— Money is r^^ated in minute
detail by natural circumstances, and does not, therefore, re-

<juire to Ikj regulated by governments Origin and evils of

government paper-money. — Origin of commercial paper-money.
— Promissory notes and bills. — Vast amount of these now in
circulation. — Advantages of this species of money. — Natural
circumstances which give rise to bankers. — Their promissory
notes form only a small part of commercial paper money.— Ad-
vantages of bank notes. — Their disadvantages result from the
interference of government. — Amount of the issue of country
bankers. — Natural circumstances control and regulate paper
money.

'* Money/' to use the definition of Dr. Smith, " is the
instrument or means by which every individual in the
society has his subsistence, conveniences, and amuse-
ments regularly distributed to him in their proper propor-
tions." It is, in fact, only the instrument for carrying
on buying and selling, and the consideration of it no more

NOT PROPERLY INCLUDED IN THIS SCIENCE. 179

forms a part of the science of political economy^ than
the consideration of ships or steam-engines ; or of any
other instruments employed to facilitate the production
and distribution of wealth. It is different from all other
instruments^ in respect to its being used by the whole
community ; and not being exclusively the property of
any individual. It affords also a very instructive proof
of the manner in which the general laws of nature ope-
rate on the minds of individuals^ producing a unifor-
mity of conduct^ equal in regularity to any of the move-
ments of the planets. Governments have meddled in-
cessantly with money^ which in our time has been the
fruitful parent of intricate discussions and painful
changes. Money has accordingly attracted much
learned attention ; and the principles which regulate
it have been the subjects of much dispute. On these
accounts it is worthy of a brief no^ce^ though having of
itself no stronger claims to be treated of in political eco-
nomy than any of the other instruments or merchan-
dizes useful to man. Into thehistorv of the alterations
made in it by our government, or into an examination
of the conflicting opinions and schemes of theoretical
-writers and practical dabblers in legislation^ I have no
wish to enter ; and I shall^ therefore^ confine my obser-
vations to the natural circumstances which gave occasion
to the invention, Jirst of metallic, and afterwards of
paper money, and which regulate the quantity and value
of both.

I have already mentioned the natural circumstance
of all cc^mmodities being produced in unequal periods,
while the wants of the labourer must be supplied daily.
This circumstance influences the conduct of mankind
at all times and places, after a division of labour has been

180 NATUEAL CIRCUM8TANCBS WHICH

introduced. In the mdest state of society^ the fisher-
man or hunter may obtain a supply of food in one ex-
cursion^ but the maker of bows and arrows, canoes or
stone hatchets, must employ some days to complete his
task. So at present, the produce of the baker, the
butcher, or the shoemaker, can be brought to market in a
few hours, while the farmer, the tanner, or the grazier,
must wait weeks, months, or even years, before he can
offer his produce for sale. This inequality in the time
necessary to complete different commodities^ would
cause the hunter or the baker to have a surplus of game
or bread, T»efore the maker of bows and arrows^ or the
grazier, had any commodity completed to give for the
surplus game or bread. No exchange could ' be made ;
the bow maker or the grazier, must be also a hunter
and a baker; and division of labour, could its advantages
have been conjectured, would only have been r^arded
as the visionary scheme of some hot-brained enthusiast.
The obvious utility of division of labour suggested the
means of getting over this difficulty, which consisted in
the invention of money.

Another natural circumstance which influenced the
invention of money, was the inequality in the value of
commodities which cannot be divided. A bow and
arrow could at no time have been precisely equal in
value to each of such different things as a hut, a canoe,
or a hatchet ; or to an ox, a deer, a hare, or a salmon ;
and these things could not be exchanged for one an-
other, without some measure to determine how much
or how many of other commodities were equal in value
to those which could not be divided without destroying
them. This measure also, be it what it may, is money.
" One man," says Dr. Smith, " we shall suppose has '

.viO^tlt*

OCCASION TBS INVENTION OF MONET. 181

more of a certain commodity than he himself has occa-
sion for^ while another has less. The butcher has
more meat in hia shop than he himself can consume,
and the brewer and the baker would each of them be
willing to purchase a part of it* But they have no-
thing to offer in exchange except the different produc-
tions of their respective trades; and the butcher is
already provided^ with all the bread and beer which he
has immediate occasion for. No exchange can in this
case be made between them. He cannot be their mer-
chant, nor they his customers ; and they are all of
them less mutually serviceable to each other." '^ To
obviate this diflftolty," Dr. Smith adds, " each of them
would endeavour to obtain possession of some (addi"
tional) commodity, which he knew would be received by
others at all times and places;"* this commodity is'
money.

The language used by Dr. Smith might almost
make us suppose that he regarded the invention of
money as a chance occurrence ; or, at least, that he had
not formed any accurate idea of those specific circum-
stances which give rise to the employment of some one
commodity as money, whenever the division of labour
is introduced. Those circumstances are inequalities
in the periods necessary to production, inequalities in
the value of indivisible commodities, and one man not
producing what another desires, while he desires what
that other possesses. Owing to these natural circum-
stances, labourers cannot possibly supply their mutual
wants by barter. The invention of money, therefore,
or the employment of some one commodity as a mea-
sure of the value, or means of exchanging all commo-

* Wealth of Nations, bo<^ i., chap. 4.

182 DlfFKRENT AETICLSS USED AS MOHBT.

dities^ is a natural and necessary step in the ^vogress
of society ; is introduced by division of labour^ being
essential to the continuance of this practice ; is as
equally useful, therefore, as it, and as generally
adopted.

Metallic money will first engage our attention, and
we shall consider only the precious metals. For al-
though some particular commodity, as a measure of the
value of other commodities, has been used since the
beginning of history, tnd amongst most of the nations
of the earth, just as they have all had some measure of
capacity and of linear extent; yet, as one nation
selects a yard and another a metre as the measure of
length, so different commodities have been employed
as money at different times and places. In the early
ages of the world, the articles most generally useful,
such as cattle, salt, iron, cloth^* and in cold climates,
among the ancient Russians for example, furs,t were
used as money ; in the West Indies, sugar ; in New-
foundland, salt fish ; and in some parts of Africa, small
shells, — have been the currency. On the western coasts
of this continent it is still customary, as it was for«

• Wealth of Nations, book i. chap. 4.

•f Court d^Economie Politique. The armour of Diomede is
said by Homer to have cost nine oxen, but M. Garnier has
shown, according to M. Say, Notes to Storch, that this valuation
was made in a species of metallic money having an ox or a bull
stamped on it, and so called from this circumstance ; just as we
call a. certain coin a sovereign, from its bearing the image of the
King's head. There is no reason to suppose that the King's
head is stamped on the gold because it is worth about twenty
shillings, but an ox was probably about equal in value to the
piece of metal on which it was stamped, and was selected because
oxen had previously lieen used as money.

Ai

REASONS FOB ADOPTING THE PaSCIOUS METALS. 183

merly in Virginia^ to reckon in rolls of tobacco or bars
of iron ; and in Bornou^ Major Denham informs us
in bis recent travels^ that gubkas, or narrow strips of
clotbj constitute its money. The precious metals^ how-
ever, or gold and silver, are now, and have been for
ages^ the money not only of all Europe^ but of the
greater part of Asia, Africa^ and America^ and they are
willingly received at the islands of the Pacific Ocean.
As natural circumstances dictate the use of some one
commodity as a measure of the value of others, or as a
means of exchanging them, so we may be sure that
the preference universally given to the precious me-
tals^ has its source in some obvious natural circum-
stances.

These natural circumstances are the peculiar propers-
ties of the metals, and they are stated by Mr. M'Cul-
loch to be, Jirst, the capacity of almost infinite divisi-
bility^ so that they can be made to represent com-
modities of almost every degree of value ; second, great
durability, so that they are not deteriorated by time ;
third, great value in small bulk, so that they can be
cheaply transported ; fourth, sameness, so that pieces
of metal of the same size and denomination, are always
equal to one another ; and ^^h, steadiness in value>
without which they would not serve to measure the
value of other commodities. It is not affirmed that the
value of gold and silver is invariable, but it is less
variable than that of most other things. The other
qualities mentioned also belongs in a higher degree, to
the precious metals than to any other known sub-
stances ; and these qualities have operated with such
uniformity on the mind of man^ at all times and places^
that they have always induced him to act in a uniform

184 THIT ARB UHITEBSAL MONBT.

manner, and employ the predous metals as numey.
The power of the mightiest conqueror the world ever
saw, lasted only for his life; and his influence ex-
tended only over a very limited space, while the use
of the precious metals as money, has been known for
many centuries, and is now nearly universal. The
employment of them as money, therefore, and it ought
never to be forgotten, b^an, like division of labour,
without the interference of any legislature. Metallic
money is not like an army of ruffian soldiers, the off-
spring of law, and the creature of governments, it is
something instinctively adopted by the human race.
''It has not been,'' says the philosophic Turgot, 'Mn
consequence of any agreement among men, or by the
intervention of any law, but by the nature and force of
things, that the precious metals have become universal
money."

It is sometimes supposed that money and wealth are
synonymous, which is indeed true of individuals, but
not of nations. During the late war, for example, when
the notes of the Bank of England were declared by the
legislature to be good and sufficient money, the precious
metals were nearly banished from circulation. Not-
withstanding the loss of our gold and silver, and not-
withstanding a more profligate waste of public treasure
than even the subjects of our most extravagant go-
vernment ever before witnessed, the nation increased
in population, power, and wealth. An individual gets
all the money he can, and is said to be rich in propor-
tion as he possesses or can procure a great deal of it ;
but the wealth of nations is exclusively measured by
the conveniencies, comforts, and luxuries enjoyed by
all their inhabitants. The money possessed by an in-

WHAT DETERMINES THE VALUE OF MONET. 185

dividual may be called his wealth, because he can buj
with it whatever he wants; the money in any one
country will in general circulate as money only there>
and the bullion^ like cloth or com, will only buy com*
modities from other countries, or exchange for them in
proportion to its intrinsic value* We can hardly sup-
pose, as natural circumstances dictate the employment
of some one commodity as a measure of the value of
others, and forcibly recommend the adoption of the
precious metals for this purpose, that the quantity of
money possessed or required by any country at any
one time, is not also regulated by some natural circum-
stance. As money is not the offspring of legislation,
80 it is not by laws that its quantity or value are re-
gulated. Two natural circumstances which exist quite
independent of governments, though they interfere
with and derange them ; viz. the quantity of labour
required to obtain or purchase the precious metals and
other commodities, and the number of exchanges to be
completed in any given time and place, always deter-
mine the relative value of these metals to all other com-
modities^ and what quantity of them must be in circu-
lation.

(As all commodities are exclusively the produce of
labour, there is no other rule, and can be no other rule,
for determining their relative value to each other, but
the quantity of labour required to produce each and all
of them]^ This circumstance establishes between the
precious metals and all other commodities a natural
relation^ subject only to such variations as may be
caused by an increased difficulty or facility of pro-
eoring any one commodity, including the precious me-
tals. I do not say that governments cannot alter and
disturb this relation ; that they may not^ by prohibi-

o^

186 THE VALUE OF THE PRECIOUS HSTALS

dons or bounties^ enhance the difficulties of procuring
some certain commodities ; and that they may not> by
particular taxes^ derange the proportions in which they
would naturally exchange for each other ; but I say
different quantities of labour are naturally necesssoy to
procure^ and different degrees of difficulty are naturaUif
met with in procuring all commodities^ and these differ-
ent quantities of labour^ these different degrees of dif-
ficulty, establish in' our minds a natural relation of Take
between all commodities^ including the precious metals,
which^ though it may vary^ exists at all times and places,
quite independent of any human laws whatever. The
precious metals, therefmre^ have a settled value, both
in relation to each other, and in relation^ to all other
commodities, which is always determined by the quanti-
ty of labour necessary to produce each and all of them.*
Thus when the harvest is short, the quantity of la-
bour employed in preparing the ground and gathorii^
in the crops, being about the same as if the harvest
were abundant, more labour than usual has been em-
ployed in producing a given quantity of com, and com
accordingly rises in value in relation to all other com-
modities. The apprehensions of scarcity may inter-

* It is perhaps necessary for me to notice that some authws
reject labour as the exclusive standard of value ; and add profit
and include rent. With their trifling, verbal, and nonsensical dis.
cussions, I have no wish to take up the reader's time, particolariy
as all the observations in the text apply only to the relative value
of commodities, which is, for all commodities, equally affected by
rent and profit ; which, therefore, as far as the relation I am
considering is concerned, may be rej^ted, even on their theories,
without leading to any error. Thifreasoning would be wrong,
certainly, if I were to include labour^ the creator of all wealth,
as they most erroneously do, under the term commodities. \k

REGULATED BY THE COST OF PRODUCTION. 187

vene and raise this price £ar beyond what remunerates
the agriculturist for his labour ; but, independent of
this apprehension, the corn would necessarily rise in
value, because more labour had been expended on a-
giyen quantity. On the same principle, it is well
known that the successive improvements introduced
into the manufeu^ture of all metallic articles and most
articles of clothing within the last century, having di-
minished the quantity of labour necessary to produce
them, they have all fsdlen in value. On the same prin-
ciple also, the discovery of America lowered the value
<^tlie precious metals throughout Europe. The con-
sequence of that discovery was to supply us with gold
and silver, particularly the latter, by means of less
labour than was necessary to obtain them from the
mines of Europe. Accordingly, gold and silver in a
few years fell so much in value, that the period of the
4iaoovery of America has become aj remarkable era in
the hist<Hy of political economy, as well as in the more
extensive history of mankind. After that period it
became necessary throughout Europe, to give more
than three times as much silver as was before given
for com.* This alteration was co-extensive with the
use of the precious metals as money ; and confirms to
d^nonstration the statement, that their value in rela-
tion to other commodities is determined by natural
circumstances.

Having established this principle, we see clearly an-
other principle which determines the quantity of money
required in any country. Gold and silver are used for
many other purposes besides money ; and they are ex-
pensive articles. As money they facilitate the ex-

* Wealth of Nations, book i. chap. U.

188 WHAT RROULATES THE QUANTITY OF MONEY.

changes which are necessary to the continuance of divi-
sion of labour. Miners will not supply these metals
without an adequate payment^ and other men will
not pay miners unless they require the preckms
metals. Their want of money is regulated by the
number of exchanges to be made or the quantities of
goods to be bought and sold ; and thus the quantity of
money required at any time and place^ is always deter-
mined by the number of exchanges to be made. Of
course the relative value of the precious metals to other
commodities determines how much of them must be
given for other things ; and the number of sales to be
made within a given period, determines^ sb hx 9B
money is the instrument for effecting those sales^ — ^the
quantity of money required.

Government? may indirectly^ but not directly influ-
ence the quantity of business, and thus the- quantity <^
money necessary in a country. They may for example^
by exorbitant taxation check all industry^ and extin-
guish many productive enterprises, but producing no-
thing themselves, they have no power whatever to in-
crease business ; and, therefore, no power to influence
or determine the quantity of money required in any
country. I At all times, however, they have endeavour-
ed to rebate both the value of the precious metals
when used as coin, and the quantity of money in cir-
culation. Not to enter any further into the history of
their proceedings than is necessary to explain the prin-
ciple and source of their interference, I shall here only
remark, that whenever they have by their regulations
departed from the standard established by the natural
circumstances just pointed out, the tendency of things
to regulate themselves by these natural circumstances

ORIGIN OF COINING. 189

is 80 much more powerful than all the restraints of the
l^islator^ that sooner or later it has mastered his laws^
and occasioned frightful convulsions in property, j

When the precious metals were first used as money>
they were always weighed like any other commodity; a
practice still continued in China and some other coun-
tries^ and still adopted in all countries with foreign
coin. " Abraham," we are told, " weighed to Ephron
the silver which he had named in the audience of the
sons of Heth, four hundred shekels of silver, current
money with the merchant."* '* The revenues of the
ancient Saxon Kings of England are said to have been
paid, not in money but in kind, that is, in victuals and
provisions of all sorts. William the Conqueror intro-
duced the custom of paying them in money. This
money^ however, was for a long time received at the
Exchequer by weight, and not by tale."t At present, if
we carry foreign coins, or even guineas, to a money
changer, he weighs them to determine their value.
The plan of dividing the metals into small pieces,
certifying the weight and value of each piece by. a
stamp or mark, was an after invention ; the utility
and conveniency of which, as a means of telling
every body that the metal was genuine, and what it
was worth, must soon have forced themselves into
notice. The visible characteristics of the precious
metals are possessed by other substances, and it re-
quires the art of the goldsmith or assayist to ascer-
tain their genuineness. For every man to go through
this process in buying and selling would be impossible ;
and even to weigh each piece of metal, would be almost

* Genesis, chap, xziii.

•f Wealth of Nations, book i. chap. 4.

190 GOVERNMENTS THE ONLY COINERS.

an endless task. By the bullion being assayed in large
quantities^ then divided into small portions^ each por-
tion being marked to signify that it contains a certain
weight of metal of a specific fineness^ individuals were
spared the trouble of assaying and weighing the metals.
Such a process is therefore very useful, and accordingly
coining has been introduced wherever the predons
metals have been employed as money.

Governments having perceived the use which might
be made of taking this process into their own hands,
forbad individuals to coin money, and declared them-
selves the only lawful coiners. From money being
used by the whole society also, it is not the peculiar
business of any one individual to regulate and arrange
it, though I have no doubt, had the matter not been
interfered with, that in the progress of society thee
would have arisen a class of labourers deserving the
confidence of society, whose exclusive business it would
have been to have supplied metallic, as such a class of
men now supply paper money. It having been sup-
posed, however, in this as in numberless similar cases,
that unless the legislature made regulations, there
would be only disorder and confusion, governments
accordingly assumed the power of coining. Moreover,
those who are allowed to coin money must necessarily
enjoy the public confidence, which governments have
generally done, — whether justly or not, the reader must
determine for himself, — or they have been able to com-
pel obedience to their decrees, and having assumed the
power to coin, were either trusted or obeyed. To me
there seems no other grounds for governments taking
on themselves the charge of providing the community
with coined money.

EFFECTS OF COINING ON VALUE. 191

Coining, the reader will recollect^ does not and
t»iinot alter the natural relation of value which exists
between the precious metals and all other commo-
dities, except that it adapts them better to perform
the functions of money^ adding to their utility^ and
giving them a slight increase of value in proportion to
the labour of assaying and coining them. We should
immediately see the absurdity of any endeavour to alter
the relative value of commodities^ were the attempt
made with any thing but money. If the government^
for example^ should decree that an ox should be given
for a sheep, and a sheep for a hat or a pair of stock-
ings> its folly would be laughed at, its unjust inter-
ference would excite our indignation, and its decrees
would be despised and disobeyed. The same would be
the case with aU other similar commodities ; and what
is there then in the nature of gold and silver which
should release them &om this general law, and enable
governments by a fiat of theirs, to establish a relation
of value between them and other things which does
not naturally exist ? There is nothing ; and when it
has been ascertained, for example, that a piece of gold
as large as a sovereign is equal in value to a quantity
of silver containing twenty shillings ; or when it has
been resolved to coin gold into pieces weighing a cer-
tain number of grains, the King's head, and the royal
arms^ or whatever else may be the chosen marks, are
only intended to testify this fact to the community, on
the authority of the sovereign. It is a declaration that
the piece of gold is worth twenty shillings. Formerly
it was the custom to mark on each coin its weight and
value, in relation to some other commodity, and this
good custom is still kept up in some of the nations on

192 FRAUDS OF GOVERNMENTS.

the Continent. A piece of gold in France, thoagh
called a Napoleon, or a Louis d^or, tells you, or told you
on the reverse side, up to a late period^ — ^fbr the present
government has substituted the lilies of the Bourbons
for the words of common sense^-^that it was worth twenty
pieces of silver or francs. In this country the people
are informed by a proclamation of the value of the
coin ; and his Majesty's head, and the royal arms, or
Britannia^ or George and the Dragon^ are substituted
for some plain expressions which we can all understand.
When the reader is aware that governments have
no power to alter the natural relation of value between
the precious metals and other commodities, and that
they have only assumed the power of certifying tUs
relation by issuing coin, in order, as they say, to guard
the people against imposition and fraud, he will form
a correct opinion of their honesty, honour, and tnut-
worthiness, when he also recollects or is informed, that
all governments have frequently used this power to
delude and defraud their subjects. They have either
mixed the precious metals with baser materials, or they
have divided them into smaller pieces, certifying at
the same time by their public seals, or by the busts
of their chiefs, that the coin remained of the same
value. It would carry me a great deal too £ar, were
I to enter into a history of the proceedings of the
different governments of Europe in debasing the coin
of their respective dominions, endeavouring to cheat
their subjects by tricks unworthy of the meanest
sharpers : — though I know not if the whole history of
the erring confidence of mankind affords a more in-
structive lesson ; and I must content myself, therefore,
with mentioning the single example of the English

FRAUDS OF GOVERNMENTS. 193

pound and penny, which had been so adulterated by
siiccessive governments, that when Dr. Smith wrote,
they contained about one-third only of the quantity of
metal they originally contained.* It has been quite
in vain, however, that governments have tried to give
a value to their coin different from that of the pre*
dous metals they contained, settled as that is in our
minds, by what Dr. Smith calls the " higgling of the
market ;** or rather by the labour required to procure
them and all other commodities. Whether they have
altered the denomination of the coin, while the quan-
tity* of metal in it has remained the same ; or whether
they have lessened the quantity or deteriorated the
quality, and have preserved the same denomination ;
all the efforts of successive governments here and on
the Continent, to keep the public coin in circulation
at a ficti|;ious value^ have been quite fruitless : and
whether the standard were a pound as in England, a
tivre as in France, Sijlorin as in Austria, it has always
oome» in a very short period, to exchange for the value
of the precious metal it contained, and no more. The
universality of this fact establishes to demonstration
the uniformity as well as the universality of that law
which settles and determines in the minds of aU men,
at all times and places, the natural relation of value
between all commodities.
Were it suitable to enter in this short treatise into

* For the illustration of the statement in the text, I must refer
to the " Wealth of Nations," book 1. chap. 4 ; to Mr. Storch's
Cours d'Economie Politique, vol. 4, Note on " Banking ;" and^to
an admirable article by Mr. M'Culloch entitled '^ Money** in the
Supplement to the Encydopsedia Britannica. Such writings
teach real practical wisdom.

K

194 GOVERNMENTS OUGHT NOT TO BE COINERS.

the question whether governments should have the
power of coining money or not ; and were the question
worth discussion^ which it hardly seems to be ; for paper-
money issued by private individuals^ whatever may be
the opinions and practices of legislators on the subject^
will unquestionably supersede^ even to a greater degree
than at present, metallic money, — I think I could shew,
as money is not^ like an order of nobility or a regiment
of dragoons, the invention and creature of governments,
that they have no occasion to regulate the co\n of any
country. I am sure I could satisfy every reasonable man,
that no individuals are so utterly and completely unfit
for this purpose as those who possess and exercise poli-
tical power. Experience tells us^ that of all fedse coin^
none have so sported with the confidence of mankind,
under the pretence of protecting them from &Ise
coiners, as governments. By making alterations in the
coin^ they have altered all the relations of property,
and have produced longer confusion and more varied
misery in every country of Europe^ than could by any
possibility have been caused by their subjects resolving
not to submit to their power. In practice, moreover,
the question seems already settled. To supply the
necessary quantity of bullion is unquestionably a far
more important part of the whole process than as-
saying it and certifying its value by a stamp. As the
rule, our government never interferes with the supply
of bullion ; leaving it to individuals, who import or ex-
port bullion according to tde state of the markets. The
mint merely stamps what they bring, most injudiciously
charging them nothing for the labour of coining ; and
taxing the nation for the benefit of those who deal
in money. It would seem therefore, both in theory

•a-'-

MONEY REGULATED BY NATURAL CIRCUMSTANCES. 195

and practice^ that the best way of keeping the me-
tallic currency of any country steady in value^ and to
have a proper quantity in circulation^ is to allow both
bullion and coin to be freely imported and exported
like all other commodities, and freely dealt with by
all classes and conditions of men, like the equally
useful articles of hats and shoes.*

In all the works of Nature we may observe a de-
lightful uniformity of purpose, a harmony in executing
that purpose which never permits any collision, and a
completeness which leaves to our $nite understandings
nothing to be -desired. There are never any' harsh
interruptions of the general order : and as natural
circumstances dictate in one stage of society the use of
the precious metals as money, regulating both their
value and quantity, it would be inconsistent with that
general order to imagine that Nature ceases her in.
stmctions at this point, and leaves the numberless
other circumstances connected with a safe and sound
currency to be regulated by chance, or by the ignorant

* There is abundant reason to believe that the practice of
coining originated with individuals, and was carried on by them
before it was seized on and monopolized by governments. " In
many countries," says Mr. Storch, ^^ the care of ascertaining the
weight and stamping the metals was left to individuals." — '^ Such
was for a long time the practice in Russia." IThe Royal prero-
gative of coining therefore, about which so mnch has been said
in Parliament, is of no remote antiquity. It smacks much more
of usurpation than the practice of issuing bank-notes. Indi-
vidual coiners would always be responsible to the public ; but the
individuals who possess the powers of government are in almost
an countries irresponsible. -They alone may defraud the com-
munity uncontrolled ; they therefore ought not to have t^p-
tation laid in their way, by being the only privileged coiners.\.

k2 ^

196 MONET REGULATED BY NATURAL CIRCUMSTANCES.

presumption of ambitious men. Though money is
sometimes supposed to be the invention of statesmen,
and to require their control more than the other parts
of that wonderful system of combined production which
takes place in civilized society^ I know no part of it
which affords^ better than money, an illustration of the
important fact^ that this system is regulated in its
minutest details by natural circumstances; vMoney^ we
have seen, is a universal, and therefore a natural inven-
tion ; and the precious metals are universal or natural
money. Their value is determined by that natural law
by which labour produces all wealth, and is the sole
measure of value : and having a determinate natural value
in relation to other commodities, the quantity of them
required at anytime and place is regulated by the quan-
tity of produce to be exchanged, or of commodities to be
bought and sold^ A certain chemical proportion in allow-
ing the metals must be observed, to make them answer
the purpose of money in the best manner, and mathe-
matical laws dictate into what aliquot parts they ou^t
to be divided ; though hitherto these latter circum-
stances have formed no part of the scientific researches
of those who have discussed the theory of money, or
have vainly attempted to regulate it by their decrees.

In tracing the origin of money, I have mentioned
its chief utility. It aids production, by facilitating
barter and contributing to division of labour. *' When
money," says M. Storch, " supplies the place of all
other commodities, every man can more readily give
himself up to one exclusive occupation; rejecting
all other means of providing for his wants, than that
of procuring, by the sale of his own produce, as much
money as possible, being fully assured that with money

OOVEaNMENT PAPER MONET. 19?

he can buy every thing else/' As a man can dispose
of small portions of produce that is corruptible, for
what is incorruptible, he is under no temptation to
throw it away ; and thus the use of money adds to
wealthy by preventing waste. The disadvantages some-
times eloquently attributed to it by poets and moral-
ists, arise not from the convenient use of stamped
pieces of gold and silver^ but from the passions of men ;
they are examples of profusion or ambition^ of fraud or
avarice^ or of the power possessed by some over the la-
bour of others, of which money is only the sign, the
representative, and the servant.

Paper Money, one kind or another of which is
used in the greater part of the civilized world, is now
to be treated of. We may distinguish two species of
it, each of which possesses very different characteristics,
and has very different effects ; viz. paper money issued,
regulated, and controlled by governments ; and paper
money issued and circulated by merchants, bankers,
and tradesmen, for the purposes of commerce.

Paper money of the former description has been
issued by almost every government of Europe, either
directly by its authority, or by some bank^ the funds of
which it has appropriated to its own use, while it has
forcibly kept the notes of the bank in circulation. On
the Continent, the sovereigns have generally issued
their own paper, for the express purpose of supplying
their wants by this mode of levying a tax on their sub-
jects; or as a substitute for metallic coin. In this
country the government, after borrowing the funds of
the Bank, passed a law to make its notes a legal tender,
and relieved it from the responsibility of paying in
specie. So far it acted on the same arbitrary principles

• ^^Si

108 AKTIQUITT OF TKS OrYBHTIOK.

M the governments of the Continent. It converted the
Bank into a state machine fat emitting and keepbg in
circulation a forced and depreciated .paper money. The
reasons which should make us refuse to governments
the privil^e of coining money^ have tenfold fytce
against their becoming bankers and issuers of paper
money of any description. '^The payment of their notes
depends/' says Mr. Storch^ " on the will of the go?em-
ment, which cannot be compelled, like individuals, to
fulfil its engagements."* However they may debase
the coin> it still possesses some value^ and cannot be
issued in boundless excess ; but paper money, which
cannot be exchanged for specie^ is quite valueless : and
as there can be no limit to its issue, it confers on the
individuals who possess the government a boundless
power of working mischief.

The invention of this sort of paper money is of great
antiquity^ and its use is of wider extent than the reader
may probably suppose. " It was invented," says Mr.
Storch, " long before the first bank of circulation was
established. That of Saint George of Genoa, the most
antient we know of, was not founded till 1407, while
Koblai, the grandson of Genghis Khan, introduced
paper money into China towards the end of the thir-
teenth century, — an example which was immediately
imitated by his cousin Kaigatou, the Khan of Persia.
Both were, however, soon obliged to abolish it, in con-
sequence of the great disorders it produced in their re-
spective states. I do not on this account,'* Mr. Storch
continues, '* pretend to affirm that paper money was
invented among the Mongols ; on the contrary, the
invention was so easily made, that it was probably

* Cours d*£conoinie Politique, book vi. chap. 14.

A CAUSE OF GREAT DISORDER. 199

brought into use long before this period. Since that
time/' he adds, ^'the Chinese government has again
introduced paper money into its dominions, and I
possess a Chinese assignat, which was given me by a
Russian traveller on his return from China."* It
seems also, from the same author's statements, that
paper money is used in Turkey.

Paper money issued by governments is, therefore,
▼ery extensively known, and has been long in use. Of
this description of paper money I have only to say,
that it never is issued but for the purpose of surrep-
titiously and fraudulently levying a tax on the people.
It is a complete cheat and a nuisance ; and from the pe-
riod when it was invented by the Tartar robber Koblai,
it being the worthy offspring of Mongol rapacity, till
the acts of the last session of our Parliament, or its
authorised issue of Exchequer bills during the present
session, paper money, issued, regulated, or controlled
by governments, has ever been as at first, and in all
countries, as in China and Persia, a source of innume-
rable disorders.

Commercial paper money is something very differ-
ent ; promissory notes to pay certain sums of money at
specific periods, arc probably the most ancient species
of commercial paper money, and must have come into
ose almost as early as the invention of writing and the
beginning of trade. The merchant who undertakes a
long voyage, or the manufacturer who plans an exten-
sive project, requires the means of subsistence and
of continuing his operations till his produce can be
brought to market. He accordingly borrows the goods
which he needs daily, or the money to buy them, pro-

* Coun d*£conomie Politique, vol. 4. note zvi.

200 COMHIRCIAL PAFSK MOKET.

mising payment at some specific time> or when his own
produce is sold. Persons are willing to sup]dy him
with this accommodation^ because his future produce
will be his only means of payment, and in &ucX the
only commodities produced to exchange for what he im-
mediately requires, and of course the only market for
it. Such was probably the origin of promissory noteSf
and, in their most legitimate form, they are merely a
happy invention, like metallic money, j for exchanging
conunodities requiring different periods to complete
them ; which, without such an invention, could never
have constituted the market for each other, and neither
of which, consequently, would ever have been produced.
It is, however, to be considered as chiefly resulting from
those long commercial undertakings, which extend over
months or years before they produce any thing for
sale, of which there are no examples in the infancy of
society.

All trade, though nominally transacted by money, is
in fact the exchange of one commodity for another.
The London merchant buys wine at Oporto for so many
milreas, and the Portuguese merchant orderis cloth from
London to the amount of so many pounds sterling ; but
in fact, the wine pays for the cloth, and the cloth for the
wine. The Portuguese merchant obtains from his neigh-
bour, the wine-grower, for a proper consideration, an
order to receive the price of his wine from the London
importer, or the latter procures from the cloth-manufEic-
turer an order to receive the price of his cloth from the
Portuguese importer ; and, by such an order, each of
these merchants is enabled to pay his creditor, on the
spot where he lives, without using money. The order
to receive such a sum is called a bill of exchange. In

PROMISSORY NOTES. BILLS OF EXCHANGE. 201

fact, therefore, the cloth is bartered for the wine^
money being used to reckon the value of each without
any being transmitted^ or even employed to effect the
payment.

Such orders or bills^ it is obvious, are not confined to
making payments between, politically speaking, foreign
countries ; they are also used to make payments be-
tween individuals of the same state. To enable the
person on whom they are drawn to provide for the pay-
ment of them, this depending principally on his selling
or completing the article, on account of which credit
has been given to him, they are made payable at or
after some specific period. Like promissory notes, they
have a settled and fixed term of payment, — ^and, in
general, represent commodities on their way to the
market.

Those who received promissory notes or held bills
not yet due, might require to make purchases or pay-
ments when they had no money. In this case they
would make over the notes or the bills to their creditors,
pledging their credit as the credit of the issuers of the
promissory notes, or- of the acceptors of the bill, was
already plied gd for its payment ; and thus both pro-
missory notes and bills of a long date would pass through
many hands, and be the means of making many pay-
ments before they were finally discharged. In general
all honajide commercial bills and notes orignated in a
well-founded expectation of having the means at a sub-
sequent period, by the pi^oduction or sale of commo-
dities, to take them up, or pay them. At least, they
were in the vast majority of cases duly honoured, and
thus they came to be considered as of equal value to the
money they were to entitle the holder to receive at a

K 5

202 EXTEN8IVB USB OF BILLS.

certain time or place. As long as they are so consi-
dered, and as long as they are in circnlatioD, or pass-
ing from hand to hand, they perform all the fxtnctions
of money.

'* Bills of exchange" says Mr. Burgess, ** bare long
ceased to be merely an instrument of commerce to
render perfect a mercantile transaction between coon'-
try and country, and internal bills have become
gradually more and more a part of our circulation ;
they have ceased to be so currently used by the ma-
nufacturers in payment of small sums under ten
pounds as they were thirty or forty years ago, owing
to the high rates of stamps upon small sums. Bills
above the value of ten pounds form now as com<»
pletely a part of the currency as bank of England
notes. They are used to pay for minerals — for all
kinds of raw produce used in manufactures — for all
the principal articles of food or clothing, and recently,
in some cases, for mere labour. If a butcher in the
north of England buys cattle, he pays for them partly
in these bills, and partly in country bank notes. If a
miller buys corn, or a mealman or a baker flour, he
does the same. If a Yorkshire wool-buyer purchase
wool of the farmers in the country, or in Northumber-
land, or in Lincolnshire, he pays for it partly in these
bills, partly in country bank notes, or sometimes wholly
in one kind, and sometimes wholly in the other. In
the manufacturing districts of Yorkshire and -Lan-
cashire, no man, generally speaking, thinks of paying
for any commodities above the value of ten pounds,
otherwise than by a bill after date. This practice is
now very general through the northern and midland

AMOUNT IK CIRCULATION. 203

counties, and is increasing in other parts.*" ^' A bill
at three months is considered in Lancashire and part of
Yorkshire, which as regards bills is almost half the
kingdom, to be a money payment.^' Mr. Burgess then
proceeds to make some conjectures as to the amount
of such bills which are continually in circulation. The
data on which he proceeds seem worthy of confidence,
and he concludes that the amount of such bills con-
tinually in circulation, continually performing the
functions of money, is not less than three hundred
millions sterling. Whether this statement be strictly
accurate or not, it cannot be doubted by any man in
the least conversant with the present mode of manag-
ing business, that bills and promissory notes issued
and circulated by manu&cturers, merchants and trar
ders, do at present constitute by far the greater part
of the circulating medium, understanding by that the
instrument used for buying and selling, of this com-
mercial and enterprising country.

This species of money is comparatively of such mo-
dern origin, and has grown up with such great ra-
pidity, that governments have not. yet thought of
regulating its issue except by levying a stamp duty
on bills and notes ; we are all therefore fully sensible
that this valuable instrument is not the offspring of
legislation. It may be even doubted if there be any

* A Letter to the Right Hon. G. Canning, &c. &c. By
Henxy Burgess, Esq., page 19.

•f- Ibid, page 24. This letter is evidently written by a man
weH acquainted with the commercial districts of England ; and
the statement deserves, I am informed, the confidence of the
reader.

204 NECESSITY OF COMMERCIAL PAPER MONET.

possibility either to regulate or control it by law
Mrithout such an interference with prirate business as
would not be tolerated. Whether the few presump-
tuous beings who call themselves, and who get a mul-
titude of beings as umvise as their masters are pre-
sumptuous, to call them the state, sanction the issue of
commercial paper money or not ; whether they permit
bankers' notes for every sum, or limit them to a spe-
cific amount, paper money must and will form the prin-
cipal part of the circulation in every well-peopled and
industrious country. It grows up in all countries, fbr
it is in use in every part of the civilized world, un-
willed by the legislature and almost unknown to it;
and seems as necessary a step in prc^essive improve-
ment as t^at metallic currency, which it has already
superseded to a vast extent, and seems destined almost
* wholly to supersede. It is not a question of theory,
whether paper can be substituted for gold and silver;
it is not a proposed arrangement of some individuals,
or of the legislature, to employ paper for metallic mo-
ney ; it is not a scheme of some hot-brained projector,
but it is found in practice and by general agreement,
that by far the greater number of exchanges can be
and are actually made without using metallic money.
The costly commodities of gold and silver may there-
fore be dispensed with in the progress of society, and
all the labour necessary to keep a money of the pre-
cious metals in circulation, amounting to several mil-
lions sterling per annum, in this country alone, may,
by the happy invention of commercial paper money,
be directed to produce commodities adapted to supply
our animal wants or add to our enjoyments.

The promissory notes issued by bankers, commonly

BANKERS PROMISSORY NOTES. 205

known by the name of bank notes, are only one par-
ticular kind of commercial paper money. Properly
speaking, they no more fall to be considered in the
science of political economy, than the promissory notes
or bills of any other class of traders. They form alto-
gether, including the Bank of England notes> and all
the bank notes issued by private bankers^ not above
the sixth part of the commercial paper money of the
country. Why they should have so exclusively attract-
ed the attention of politicians^ and why they should
have been the subjects of so much censure, while every
other description of paper money, particularly that au-
thorised by governments, the very worst of all, should
have been unnoticed or praised, cannot be accounted
for on any scientific principles. But this being the
fact, I propose very briefly to explain the origin and
utility of private bankers^ and of the bank notes issued
by them ; from which we may probably learn, that they
are a necessary part of that great social system of pro-
duction which is not the offspring of legislation ; and
they therefore do not require, in any manner or degree,
to be regulated by the legislator.

With the exception of banks expressly established
by governments, like the Bank of Assignats, at St.
Petersburg, and the Bank of Stockholm, — and of
banks incorporated and authorised by governments, to
which they have granted exclusive privileges, like the
Bank of England, it is plain that the existence of such
a class of tradesmen as bankers can no more be attri-
buted to any act of the legislature, than the existence
of such separate classes as farmers and merchants. As
men multiplied, and division of labour was extended,
one class of men came to deal only in money, as ano*

206 ORIOIN AND UTILITY OF BANKERS.

tfaer class deals only in wine, or in Manchester goods.
As trade extended, the exchanges between different
states, and different parts of the same states, became
more frequent, and many transmissions of money or
bills of exchange became necessary. This species of
business fell into the hands of those who dealt ezda-
sively in money. In consequence, it was soon &imd
convenient to employ them in settling all accounts
between merchants living at different places, and even
at the same place. From the extensive connexion
they formed by this employment, they came to know,
better than any other men, the mercantile character
and credit of merchants and manufacturers : they
were, therefore, enabled to lend out money to advan-
tage ; and most of the persons who had money to lend,
placed it in their hands for this purpose. They ac-
cordingly became, and still are, the chief agents in
supplying money or capital to those who engaged in
useful undertakings, the produce of which could not be
immediately brought to market. (Thus arose that class
of men called bankers, who are still very important,
and have long been very useful labourers. We may be
satisfied of their utility by observing, that they are
found in every part of Europe, and that all classes and
conditions of tradesmen and dealers roluntariij/ employ
them. They first sprang up in Italy, then the most
enterprising and civilized part of the world ; they came
from that country to this, — Lombard Street, the great
seat of our banking establishments, deriving its name
from them, — and at present, while theirs is a branch
of business almost extinct in Italy, it is established in
every town of this country, now the great seat of com-
mercial enterprise, and the farthest advanced in the

OKIGIN OF THEIR ISSUE OF NOTES. 207

natural system of co-operating production. Their
business results naturally^ therefore^ from division of
labour^ and is extended as men multiply. Being only
one small^ though a necessary branch of this vast sys-
tem, why should their proceedings or business be in
any manner regulated by that legislative authority,
which had no hand in establishing, and is unable to
extend division of labour ?

In fact, there is only one small part of their business
with which our government does interfere, viz. the
issuing of promissory notes. Let us look, therefore, at
its natural origin. They receive money in deposit, and
they lend money. They are, as the rule, therefore,
persons of established credit, and worthy of confidence ;
and their promissory notes, on account of their trans-
acting all the money transactions of the neighbourhood,
are naturally much more acceptable than those of any
other tradesmen. Instead, therefore, of lending money
to a merchant or manufacturer to buy commodities,
they lent him their credit. They exchanged the large
promissory notes or bills of other tradesmen, for their
own small promissory notes. To the merchant, on
account of their established credit, these small notes
were as valuable as gold. The bankers have confidence
in the individual to whom they lend money, for the
whole length of time his bills are to run ; and their
promissory notes are, to all other persons, better than
his, on account of their general credit, and on account
of being made payable at sight ; while the large com-^
mercial bills drawn on account of commodities not yet
in the market, are always made payable at some specific
and distant time. Bank notes grew out of bills of ex-
change and promissory notesi and only differ from

206 BANK NOTES A PART OF THE NATURAL SYSTEM.

other species of commercial paper money, in being the
' promissory notes of a particular class of tradesmen de-
serving general credit ; and in general having the great
advantage of being payable at sight. The circmn-
stances which led to the invention of them are made
so palpable by these gradual steps^ and they are ob-
viously so useful, being adopted without the interfer-
ence of the legislature,— and^ generally, adopted in pro-
portion as the community advances in opulence,— that
we can, I think, have no hesitation in supposing them
also to be a necessary part of the great natural system
of co-operative production. I see no scientific reasuo,
therefore, why the issuing of promissory notes by bank-
ers should in any respect or degree be regulated, con-
trolled, or influenced by the legislature.

The astonishing extent to which the practice is car-
ried of settling accounts and making payments, without
the intervention of money, can hardly be known to the
great majority of the community. In London there is
a place called the Clearing House, at which the clerks
of the different banking-houses meet at one specific
time every day, to balance all accounts between these
houses ; and as almost all merchants and dealers of
every description make all their payments by means of
bills payable at some banker's, or by checks drawn on
a banker ; as they all have their money paid into a
banker's, and as a considerable quantity of business
originating in the country is transacted or settled for
in town, not only by far the larger quantity of all the
payments of every description arising from the trade of
the metropolis, but also from the trade of a large part
of the country, are made by the London bankers ; the
consequence is, that they have daily immense sums to

BUSINESS OJP THE CLEARING HOUSE. 209

pay to each other. In 1810, according to evidence
given before the Bullion Committee, the amount set*
tied on ordinary days at the London Clearing House,
between the different bankers, was at least five mil-
lions sterling; and on settling days, at the Stock
Exchange, this amount was frequently fourteen mil-
lions* fiy means, however, of the clerks of the dif-
ferent banking-houses meeting at the Clearing house,
and only paying the balance of their respective ac-
counts, 220,000/. was the whole amount of money or
bank notes required to pay the enormous sum of five
millions sterling daily. The bankers of the metropolis
are the agents for paying the greater part of the bills
in circulation ; so that, in fact, the chief money transac-
tions of all England are settled by the insignificant
sum just mentioned. Even this, it is supposed on
good grounds, may and will be dispensed with. Such
is a specimen of the natural and vast system of co-
operating production ; which, unknown and unmarked
by us, is continually extended, and continually simpli-
fied. So much nonsense is spoken in Parliament, and
written in the world at large, about bankers and bank
notes, that it is right to add, that this beneficial sim-
plification is the result of banking, and of employing
commercial paper-money. *

Briefly to enumerate the advantages of bank paper-
money. It seems to me to be such a useful instru-
ment for supplying the daily wants of those whosQ
products require a long time to perfect them, that it
can no more be dispensed with, as society advances,
than weights and scales. It is cheaper than coin ; and
the profits made by bankers in the first instance, arose
^m their substituting a cheap for a dear instrument.

210 ADVANTAGES OF BANK NOTBS.

Such profit^ however, can onlj be large while the pro-
cess of getting rid of the coin is going forward, which
most in its own natnre ever be very graduaL By no
possibility could paper be made all at once to supply
the place of the precious metals among a people aocos*
tomed to the latter as coin. Among a people once ac-
customed to paper«money, and who have again had s
metallic currency forced on them, it may, if drcnm-
stances permit, be suddenly substituted for gold. This
process of getting rid of the coin, and replacing it, our
government has renewed almost periodically; atone
moment ruining bankers, and at another temptii^
cupidity to turn banker, by the prospect of enormous
profits; permitting the issue of country bank notes for
small sums in 1822, and forbidding it in 1826 ; while
before 1836 it will most probably again be permitted.
In the measures which have been adopted or reonn-
mended as to issuing bank notes, it would be difficult
to find a single scientific principle. They are directly
and completely adverse from the regular progressive
and steady march of civilization.

The quantity of money, it has been explained, re-
quired at any time in society, depends on the quantity
of business. Now this necessarily varies %vith the
seasons. To keep money as much as possible steady
in its value, the quantity should vary with the business
to be done. As the rule, bankers only issue their notes
by discounting bonajide commercial bills, which are the
best possible data for judging of the quantity of busi-
ness. The issue of bank notes varying with the amount
of bills discounted, they being also in all cases returned
to the banker, if he put too many in circulation, is, per-
haps, the best method which can be imagined or devised

PREVENT' FLUCTUATONS IN VALUE. 211

to make the quantity of money in society vary with
the quantity of business. Thus bank notes^ when the
issue of them is freely permitted^ when no corporations
are endowed by the legislature with exclusive privi*
leges, when the issues of every banker are checked and
oocitrolled by the watchfulness of rival bankers, tend
ocmtinuaUy to prevent all those fluctuations in prices
which are occasioned by alterations in the relation be-
tween the quantity of business to be transacted, and
the quantity of money in circulation.

If little or no coin be used, it forms a nominal standard
not liable to deterioration from wear. Paper money
supplying its place, and being continually renewed at
the expense of those who issue it, suffers no deteriora-
tion. In this case coin becomes to paper what the im-
perial gallon deposited in the custody of the Speaker
of the House of Commons is to all the measures of
capacity in the kingdom, — an almost invariable stand-
ard, subject to none of the bruisings and batterings of
daily use, by which they may be, but by which paper is,
at any and all times corrected and reformed. Having
such a nominal standard as long as the circulation
of paper is entirely free, it seems to be a measure of
value which would be liable neither to depreciation
nor fluctuations.

The characters on paper-money are l^ble, and
every man capable of reading may tell its value ; but
to know whether coin be good or not, requires the skill
of the assayist. Bank notes are on this account also
better than coin. That they have been frequently forged
seems to me, in almost all cases, the result of the Bank
of England monopoly. Notes issued by private ban-
kers, who control and check each other, are rarely or

212 BVILS CAUtSD OF LATE

never furfi^ Their drcolation is so limited as to
spoce^ and they are, in the natural coarse of business,
so frequently returned to the issuer, that to forge them,
with any prospect of advantage, is almost impossible.
Of the credit due to a country banker, whose notes
supply the place of money only in his own iminediate
neighbourhood, almost every man in whose hands they
fall can judge; so that it is hardly too much to sup*
pose if the \vhole business of banking were left, like
the business of making hats and clothes, perfectly free,
if there were no government and national banks, that
bank notes could neither be forged nor issued to
excess.*

I beg the reader will recollect that I have only
endeavoured to ascertain the natural origin of com-
mercial paper-money, and that I mean the above
observations only to apply to that species of paper-
money which grows up among the productive classes

* If the statement in the text, as to the origin of paper-money,
and the source of its utility, be correct, we cannot condemn every
species of government paper-money too strongly; governments are
not producers, they have no commodities on their road to the
market, and can have no claim whatever to issue paper-money.
Even exchequer bills are wrong, they represent a revenue
hereafter to be received, but all the credit which can be rea-
sonably obtained on the commodities which will constitute that
revenue, is obtained and used by bills and notes of one kind oi '
another, while the merchants and manufacturers are preparing
these commodities, or bringing them to market. All bills drawn
and circulated on mere revenue by those who do not produce
commodities, although they may hereafter be entitled to receive
certain sums, are more than is required for the business of the
country, and are always issued that the issuer may obtain a share
of other men's produce before he has any legal daim to it.

BY PAPER MONET. 213

of society from the division of labour. That both
government and commercial paper-money have in our
time been productive of incalculable mischief, it would
be madness to deny. We have seen nominal prices
rise and fall twenty per cent, within a few years, — the
variations having been caused by an improper issue
of paper-money« Whole hecatombs of unfortunate
wretches have been sacrificed on the altars of the law
for imitating the names of those who were abusing pub-
lic confidence to a much greater degree than their vic-
tims who suffered the penalty of death for their guilty
avarice. Debts have been augmented or lessened, and
all money contracts substantially violated. One class
has been defrauded to enrich another ; and the whole
course of business has been diverted from its usual
channels. No man has in consequence been certain
of the amount of his income for two successive years ;
and confusion, dismay, and terror, such, perhaps, as
were never witnessed in any country not overrun- by a
victorious enemy, nor devastated by some great natural
calamity, have been caused in this, year after year, by
an alteration in the quantity and value of paper-money.
If such evils were inseparable from the invention,
whatever may be its natural advantages, they would
be &r outweighed by its social disadvantages, and it
would be impossible to condemn paper-money too
strongly. But the reader will find in the Wealth of
Nations, in Mr. M'Culloch s admirable article en-
titled Money, in the Supplement to the Encyclopsedia
Britannica, and in Mr. Storch's book, numerous ex-
amples of governments having caused, by tampering
with metallic coin, " a greater and more universal
revolution in the fortunes of private persons," to use

214 KOT NECESSARY CONSEaUEMCZS OF BANK NOTES.

the language of Dr. Smith on this subject^ ^^ than
could have been occasioned by a great public cala-
mity/' In consequence^ however, of the present ex-
tended use of paper-money, governments have lattarlyi
and since the publication of Dr. Smith's book, always
effected the same unhallowed purposes, by tampering
with paper-money ; and the present generation: ieeling
only present evils — ^regardless, apparently, or ignorant
of the economical history of Europe — has attributed
those fluctuations to the instrument itself, which have
been caused by the manner in which it has been
abused by the venerated governments of £urope. Such
fluctuations, caused by similar conduct, frequently oc-
curred when the whole circulation of Europe consisted
only of coin.

If from the abuse of paper-money we are to omdeoin
its use, nothing will escape our censure. What can
be more lovely or consoling than religion, and what has
been perverted to more detestable purposes ? In its
name are continually practised base hypocrisy, blas-
phemous iniquity, and shameless plunder. With the
perversion of a beautiful natural contrivance, with the
wrong-headed speculations of ignorant and designing
men, with the gambling and fraud of scheming pro-
jectors, with the ignorant cupidity of kings and states-
men, the natural science of national wealth has nothing
more to do than to point out in what manner their con-
duct is opposed to its principles ; though we must all
lament that infatuation in mankind, which refuses to
take counsel from experience, and continues, after re-
peated proofs of deceit, fraud, and treachery, to place
confidence where confidence never was merited. De-
clining on all occasions to examine in detail the effects

LOCAL BANKERS THE BR8T. 215

of social regulations^ I cannot explain the drcum-
stances which have led in this country to the perver-
sion of paper-money. I agree, however, fiilly with
Dr. Smith, '^ that private and local banks, and private
and local bank notes, which may be called natnral, as
contra-distinguished from legislative paper-money, are
attended with the most advantages, and the fewest
dangers." From the conduct of the governments of
England, Russia, Austria, France, Denmark, and Swe-
den, with respect to paper-money— of which an impar-
tial and not unfavourable account is given in Mr.
Storch'sbook — ^it is plain, that national and government
bank-paper, ought on no account to be tolerated. Go-
vernments have no commodities on the way to the
market, which is the natural guarantee of all paper-
money ; they cannot be compelled to make payment, and
they can know nothing of individuals, which knowledge
is the only secure foundation for giving them credit.

Much has of late been said against Country bankers,
and I readily admit, they deserve censure ; but whoever
takes into due consideration the vast extension of busi-
ness within the last fifty years, and the great demand
for bank notes, in consequence of the political state of
the country, giving immense profits to bankers, will
find numberless excuses for their conduct, which can-
not be made for other classes of tradesmen, who have
effected equal mischief by the circulation of their paper-
money. Banking, or at least the issuing of bank notes,
isy as it were, a new business, and while the tempta-
tions to engage in it have been very great, the correct
methods for carrying it on have been imperfectly known.
And after all that has been said against country bankers,
their issues of late have been far from extravagant. It

216 ISSUES OF COUNTRY BANKERS.

is proved^ for example^ by parliamentary documents,
that the issues of the Bank of England have beeu
trebled in amount since the year 1792, while the
amoimt of the issues of Country bankers were less, im-
mediately prior to the late revulsion in the latter end
of 1825, by seven millions, than they were in 1814, and
less by four millions than in 1807.* Nothing but co-
lossal power can work colossal mischief, and if that re-
vulsion and consequent distress were in any degree
caused by paper-money, they were so vast and extensive,
that nothing less than the immense power of the Bank
of England, which did actually vary the amount of its
jssues one-sixth within a few short months> could have
caused them. Whatever may have been the real object
of the Acts of Parliament passed in the year 1826, to
put a stop to the issuing of bank notes for one and two
pounds, because Mr. Canning supposed, very ridicu-
lously, that country bankers were usurping the king's
prerogative of coining money, their effects have been to
injure country and local banks, which are the best
kind, and to augment the power of the Bank of Eng-
land, which has already done inconceivable mischief.
They are a direct violation of the principles of free
trade, which the ministers profess ; but as the Bank of
England is under the control of government, those
Acts have added to the power which it before possessed
over the currency of the country. By tampering with
it, the government has already inflicted vast misery on
us, and no man can expect, from this added power, any
other result than increased mischief, f

» See Edinburgh Review, No. 87. Article Commercial Revul-
sions.
f The consequences of Messrs. Canning and Huskisson, de-

BANKIKO REGULATED BY NATURAL LAWS. 317

That issuing bank notes and the business of banking,
must be conducted on some settled principles to make
them advantageous^ is quite certain ; but to expound
those principles, ift the duty of the persons who write
on the art of banking. As both the value and quantity of
metallic money are regulated by natural circumstances^
as the quantity of paper-money necessary is determin-
ed by the number of exchanges to be made^ there is
reason to believe, that the whole business of issuing
bank notes is subject in its minutest details^ to con-
troling natural circumstances^ many of which^ whe-
ther theoretically known or not^ are already acted on.

paHing in this instance from the liberal principles of free trade,
on which their popularity was founded, are now coming home to
them* By destroying country bank notes, they added to the
general distress, lowered prices, and increased the difficulties
they must at any time have encountered in amending the
.com laws, to which they stand pledged. On the one hand
they gave, by increasing the distress, additional urgency to the
cJaims of the manufacturing classes for the repeal of those laws ;
on the other, by lessening the quantity of the circulating me-
dium and thus lowering the price of com, they alarmed all the
agriculturists and all the landlords, who are under engagements to
pay specific sums, and roused such opposition and such dread of the
coDBequences of altering the com laws, that it is doubtful if they
can carry through their poor and spiritless measure ; and it is cer-
tain they can accomplish by it nothing beneficiaL To have ob-
tained a satisfactory modification of the com laws from the
landed gentry, it was necessary that prices should be high, that
they should have been threatened with an inundation of foreign
oom under the present law ; but this necessity, which b^;an to
exist, was in part removed by the illiberal measure respecting
country bankers, which thus supplied those who previously
hated both Mr. Canning and Mr. Huskisson with arguments
against them, and has tended to destroy their popularity and
ruin their reputation.

L

218 OUGHT KOT TO BE OONTROtLXD.

There can be no doubts for example, that there is a
point at wbicb it becomes disadvantageous to substi-
tute paper for coin. Some persons of good judgment
have stated, that one pound is bel#w this point ; and
this principle, though it has not been either scientifi-
^ cally or practic^y ascertained, has been made the basis
\^ of legislation. ^Banking, howevor, let us never foiget,
with the issuing of bank notes, is altogether a private
business, and no more peeds to be regulated by meddling
statesmen, than the business of paper making. In
fact, the impertinent interfar^ice of law-makers, their
pretended wise regulations, but in reality their tricks
and frauds, with the currency, have been the causes of
all the evils we have suffered within the last century
from variations in the value of metallic and paper
money! and nothing can rescue mankind from such
despeime fluctuations in prices, as have of late afflicted
all the countries of Europe, but allowing, both the
coining of metallic and the issuing of paper money, to
find, under the controlling influence of natural circum-
stances, their proper course and just level.

MONEY PRICE AND NATURAL PRICE, 219

«

CHAPTER IX.

PRICES.

Distinction between money price and natural price, and be-
tween natural and social price.— Opinion that natural price rises
in the progress of society, stated and examined. — It was not Br.
Smith's opinion. — Com is a manufactured article. — The labour
necessary to procure it, does not increase in the progress of
society. — Price of wheat has not increased as our population has
multiplied. Is less in well peopled than other countries. Effects
of demand and supply on natural and on money prices. Money
price regulates consumption, and indicates the n^ost profitable
production.

[ From what has been said on money, the reader will
see that the term " money price/' as applied to any
commodities, only signifies the natural relation which
exists at any given moment between them and a specific
quantity of bullion in coin, — the use of bank notes, as
long as they are payable on demand in the precious
metals, not altering this relation : natural or neces-
sary price means, on the contrary, the whole quantity
of labour nature requires from man, that he may pro-
duce any commodity, — the natural and necessary price
of money being determined, like that of aU other com-
modities, by the quantity of labour required to pro-
duce it^ Nature exacted nothing but labour in time
'paaXf she demands only labour at present, and she will
require merely labour in aU future time. Labour was

220 SOCIAL PRICE ILLUSTRATED.

the original^ is now and ever will be the only pur-
^^ chase money in dealing with Nature. tThere is ano*
ther description of price^ to which P shall give the
name of social, it is natural price eohanced by social
regulations. Whatever quantity of labour may be
requisite to produce any commodity^ the labourer must
always, iii the present state of society^ give a great
deal more labour to acquire and possess it than is
requisite to buy it from nature. Natural price thus
increased to the labourer, is social pricb. To un-
derstand the natural laws which regulate the pn^ress
of nations in wealth, and rightly to estimate the causes
which retard it, we must always attend ^0|the dif-
ference between natural and social price.% iLieaving^

* The following passages from Mr. Tooke*s book. On Prices,
set the distinction between natural and social price in a striking
point of view ; and though the political obstructions alluded to,
were of a more weighty nature than in general, yet some such ob-
structions exist at all times and places, and make all social much
higher than natural prices/ " During the late war," says Mr.
Tooke, " some silk came^ to this country through France,
and the charges of conveyance from Italy to Havre, and duty
of transit, amounted to nearly 100/. per bale of 240 lb. net
weight, exclusive of freight and insurance from Havre hither.
The whole expense of freight and insurance from Italy, does
not at present amount to more than 6/. per bale." " The
charges of freight and French licence on a vessel of little more
than 100 tons burthen, have been known to amount to 50,000/.
for the voyage merely from Calais to London and back : this
made the proportion of freight on indigo, amount to 4cS, &d. per
pound ; the freight at present is about Id. per pound." — " A ship,
of which the whole cost and outfit did not amount to 4000Z.
earned a gross freight of 80,000/, on a voyage from Bordeaux
to London and back." <( Among

MR. EICARDO'S OPINION OF NATURAL PRICE. 221

liawever, social price entirely out of view, I shall con-
fine my present remarks to natural price ; and I
should not have noticed it, were there not a theory
now prevalent, which assumes as its basis that natural
price necessarily rises in the progress of society.

'* In the progress of society," says Mr. Ricardo, the
great supporter of this doctrine, '^ the additional quan^
iity of food requited is obtained by the sacrifice of more
and more labour *'\ *^It is the natural effect of improve-
ment," says Dr. Smith, " to diminish gradually the
real (natural) price of almost all manufactures.*' I
have endeavoured to show, that extended division of
labour and increased knowledge are necessary conse-
quences of the progress of society. Mr. Ricardo him-
self states, that this " sacrifice of more and more labour
is happily checked at repeated intervals, by the im-

*^ Among the means de^sed by the ingenuity and enterprise
of adventurers, to elude or overcome the obstacles presented by
the decrees of the enemy, one in particular, which was resorted
to on an extensive scale, deserves to be mentioned, as illustrating
in a striking manner the degree in which those obstacles were
calculated to increase the cost to the consumer. Several vessels
laden with sugar, coffee, tobacco, cotton-twist, and other valuable
commodities, were despatched from hence, at very high rates of
fr^ht and insurance, to Salonica, where the goods were landed,
thence conveyed on horses and mules through Servia and
Hungary, to Vienna, for the purpose of being distributed over
Qermany, and possibly into France. Thus it might happen,
that the inhabitants of that part of the continent of Europe
most contiguous to this country, could not receive their supplies
i^rom hence, without an expense of conveyance equivalent to
what it would be if they were removed to a distance of a sea
voyage twice round the globe, but not subject to fiscal and
political obstructions,*^

223 DOSS PRICE NBCESSARILT INCREASE? ,

provements in machinery connected with the prodac-
tion of necessaries, as well , as by discoveries in the
science of agriculture, which enable us to relinquish a
portion of the labour before required." Supposing
that there does actually arise, in the progress of society,
a necessity for us to have continually recourse to soils
of less and less fertility, though we are completely ig-
norant of what constitutes a fertile soil, and that which
is fertile when we know how to employ its powers, is
barren when we are ignorant of the laws which regulate
vegetation ; yet it is plain, and it is admitted, that
there are numberless circumstances which compensate
for decreasing fertility. It is therefore equally plain,
that to ascertain whether these opposing circumstances
exactly neutralize each other in the progress of society,
or whether the necessary supplies of food be obtained
by a less or a greater quantity of labour, as men mul-
tiply, demands a wide inquiry ; and I must confess I
am astonished at the hasty and dogmatical manner in
which Mr. Malthus^ Mr. Ricardo, and their disciples,
have decided, on the single principle of decreasing fer-
tility, this most important, extensive, and complicated
question. I do not suppose that I shall induce the
reader to come to aMirectly opposite* conclusion, nei-
ther do I mean to enter fully into the question ; but I
regard the inquiry as of so much importance, that I
cannot avoid stating some of those circumstances, which
should make us at least hesitate in adopting a con-
clusion, which seems at variance with the general sys-
tem of the universe. / If nature do not demand more
labour for food as society advances, then may we sup-
pose that the difficulty which the labourer unquestion-

BE. SMITH SATS NOT. 223

ably experiences in obtadning food^ is the result not c^
natural, but of social circumstances. ^

The natural difficulty of procuring food, or natural
price^ depends so almost exclusively on increase of
knowledge and division of labour^ and consequently on
an increase of people^ that it seems to have a continual
tendency to diminish. In fact, it is admitted that^ ex-
cept as to the production of food, natural and necessary
price does fall in the progress of society. " In all
cases," says Dr. Smith/ ^^ in which the real price of
the rude materials either does not rise at all, or does
not rise very much, that of the manufactured comiAo-
dity sinks very considerably. This diminution of price
has, in the course of the present century, been most
remarkable in those manufactures of which the mate-
rials are the cocu*ser metals. A better movement of
a watch than about the middle of the last century
could have been bought for twenty pounds, may now,
perhaps, be had for twenty shillings. In the work of
cutlers and locksmiths, in all the toys which are made
of the coarser metals, and in all those goods which are
conunonly known by the name of Birmingham and
Sheffield ware, there has been, during the same period,
a very great reduction of price, though not altogether
so great as in watch- work. It has, however, been suffi-
cient to astonish the workmen of every other part of
Europe, who in many cases acknowledge that they can
produce no work of equal goodness for double or even
triple the price.* Since the Wealth of Nations was
published, numerous improvements have been made in
the very arts to which Dr. Smith refers, and could his

* Wealth of Nations, book i. cbap. 1].

224 FALL OF PRICE IN MANUFACTURES.

piercing mind now contemplate the skill of our contri-
vances, and the cheapness of our commodities, his con-
viction that natural price diminishes in the progress of
society would acquire tenfold force. The reader can-
not fail to remark, that the improvements mentioned
by Dr. Smith, and those subsequently made in the
same arts, arose in one of the most crowded communi-
ties of Europe^ and have been extended as the people
increased in number.

Dr. Smith extends this general principle to woollens^
to corn, and to all commodities which are the produce
of labour ; but he excepts game^ cattle, poultry, &c. &c.
which find food for themselves^ and are originally in
such plenty, that man obtains them by the labour of
killing them. In the progress of society, as it becomes
necessary to domesticate, rear, and nourish them by
labour, their price rises, but the price of all other com-
modities decreases. I have already mentioned, page
66 1 the fall in the price of tea : in the ^' Wealth of
Nations,'* book i. chapter XI, the reader will find many
examples of a similar fall in prices, which, though very
instructive, I do not think it necessary to quote, as the
book is easily accessible ; and |^^in all manufactured
cottons, the fall of natural price has been still more re-
markable, confirming to demonstration, the general prin-
ciple of natural price necessarily falling in the progress
of society.

Corn of every kind may be considered as a manu-
factured commodity, matured certainly by the aid of na-
tural agents, — as what can we mature without them ? —
but matured by means of a great deal of labour. Is
there any peculiarity possessed by manufactured com
which makes it, like game, or wild animals, or the

DIMINUTION OF LABOUR IN PRODUCING CORN. 225

spontaneous productions of the eaith^ an exception to
the general law ? If we do not exclusively fix our at-
tention on the single circumstance of men first occupy-
ing^ as it is supposed they do in all cases, the most
fertile lands, we must, I think, answer no. To pre-<
pare the soil for the cultivation of grain, requires, in all
cases, a series of operations, which need not afterwards
be annually repeated, though the harvest is gathered
every year. In America, for example, the ground must
now be cleared of fdrest trees, and when this labour
has been executed, the soil yields a crop annually, in
return for the mere labour of sowing and reaping it.
A field under-drained, to carry off superfluous moisture,
or intersected by numberless canals, that it may be ar-.
tificially watered, yields its rich returns every subse-
quent year, though it is not necessary to repeat these
labours. When houses and barns are built, when roads
and bridges are once made, they only require some
trifling annual repairs, and they facilitate the labour of
all succeeding generations, giving them, in fact, an
equal crop, for a continually diminishing quantity of
labour. Nor must we forget that our grain is the pro-
duce of art and industry ; and when once matured or
obtained, is a means of lessening the labour of all those
who provide the society with food. The same remark
holds good of cattle, which when once tamed and domesti-
cated> only require that man should provide them with
subsistence. Moreover, the mere sowing the seed, and
reaping the harvest, are only parts of the complicated
process of providing food. The ground must be cleared
and tilled, and the grain must be ground and prepared ;
and to perform these operations, as well as the operations
of sowing, and reaping, and carrying home, and housing

L 5

S98 Dunvunov of uibour nr raoDucno oour.

the grain^ nnmberlesB iiutnimeiits and marhiiiCT are ie«
qoisite, all of which have been invented and impragred^
as society has adyanced,— diminishing to an almost in-
eooceivable degree^ the laboor neeessaiy to pr o cure
meat m make bread.

It most also be remembered^ that those who are en-
gaged in agricoltnre must have clothing, and many
other things, as well as food and instmments. If the
instruments they use are made by less labour, it is plain
that the whole quantity of labour required to produce cora
is diminished. It is not, however, so plain, though it is
equally true, that if the cost of other necessaries re-
quired by the agriculturists is diminished, that also
will lessen to him the cost of producing com. He must
have clothing, and if he can obtain it by sacrificing a
tenth, instead of a sixth part of his crops, more remains
for his own use, ^nd the labour necessary to procure
his subsistence is diminished. If other people did not
make the clothing, he must make it himself, and all
the facilities he could invent for manufacturing clothing,
would enable him to devote more time to manufactu-
ring wheat. It makes no difference, in a general point
of view, that clothing is made by another set of labour-
ers ; all their improvements, supplying the manu^u:-
turers of com with clothing at a less cost, leave the
latter more com in return for their labour ; or dimi-
nish to them, and to society at large, the natural price
of that quantity of food required for subsistence.
I The opinion that the natural price of food lessens
rather than increases in the progress of society, seems
borne out by facts. \ If we take the two extremes of
savage and civilized^ociety, the natives ' of New Hol-
land and the people of England for example, if we

CONTRAST BETWEEN SAVAGE AND CITILIZED SOCIETY. ^SHJ

observe how the proportion of persons who raise no
raw produce, — including not only those who do not la*
boor at all, but also those who are engaged in the various
departments of manufactures and trade, as well as all
the ofEicers, dependents, and servants of government,
^-^-continually increases, forming, as I have already men-
tiimed, five-sixths of this community, — we must be
convinced, that in the progress of society food is ob-
tained by less and less labour. When we look also at
the varioas improvements continually made in the arts,
most of which tend, in some way or other, to diminish
the labour necessary to prepare bread and procure
meat, we must come, I think, to the same conclusion*
Those who have embraced the opposite opinion, have
been led into a mistake by confining their observations
to a short and single period ; and, perhaps, by looking
too exclusively at the immediate cause of extended
<niltivation, which is in all cases increased demand, and
temporary higher prices. Their opinion has grown up
within the last thirty years, and within that period
jthere was a considerable rise iti the price of com,
which, in this country, thrown back as it was by the
^xmduct of its rulers on its own resources, might be
distinctly traced to the increased difiiculty then ex- '
perienced in obtaining the necessary supplies of food.
Bat if we extend our observations over a longer period,
we shall find no proof of a gradual and general rise in
the price of com as population increases. <-

In Dr. Smith's valuable work, there is a table con-
taining the average price of wheat, calculated in our
present money, in the Windsor market for several cen-
turies. The invention of paper money, it will be re-
membered, has contributed to render metallic coin less

228 9BICB OF VHSAT

necessary than formerly. Various improvements also
in navigation^ in the art of mining, and of extracting
metals from the ore, have diminished the labour ne-
cessary to obtain gold and silver in Europe. From
these causes combined^ it is probable that the predoos
metals have fallen considerably in value. For the al-
terations which have been made in the nominal value
of our coin. Dr. Smith has allowed ; but for the quan-
tity of labour now required less than formerly to obtaio
and coin the precious metals, no man can make an act
curate allowance. If the quantity of labour neces-
sary to obtain money have been lessened, any given
quantity of it will now measure a less quantity of
labour than formerly, and of other things. If, for ex-
ample, it required, four centuries ago, three weeks
labour to obtain a pound of silver, which then ex-
changed, on an average, for a quarter of wheat; and if
a pound of silver be now obtained by fourteen days
labour, and it still exchange, on an average, for a quar-
ter of wheat, the latter must, like the former, be now
obtained by one third less labour. I am fully aware
that we have no accurate standard for former and pre-
sent values, and that tables of prices, extending over
long periods, are not much to be relied on ; but when
they confirm a theory, which seems on other grounds
to be sanctioned by experience, we. are entitled to place
some confidence in them.

On Dr. Smith's showing, it appears that the average

price of wheat in the Windsor market was per quarter.

Years. £, s, d.

From 1202 to 1286 2 19 1

1287 — 1338 1 18 8

1339 — 1416 1 5 9

AT DIFFERENT PERIODS. 229

Years.

£. s.

(L

1423 — 1451

1 1

3

1453 — 1497

14

1

1499 — 1560

10

After this period^ the eff(^cts of the discovery of
America^ and consequent cheapness of the precious
metals^ was felt on nioney prices; their value being
every where much lowered^ and money prices much
raised. Prior to the discovery of America^ the value
of silver^ it is supposed^ was gradually risings owing to
the increasing difficulty felt throughout Europe of ob-
taining the necessary supply. The average money
price of the quarter of wheat became subsequently
much higher^ and was as follows : —

». *. d.

Prom 1561

to

1601

2 7 5

1602

..^

1620

2 7

1621

—

1636

1 19 6

1637

■ —

1700

2 5 4

1701

—

1764

1 15 1

* 1766

1770

2 7 8

tl792

—

1796

2 19 6

. 1796

—

1801

4 10 10

1801

._

1804

3 5 6

Since the last mentioned period^ the price has varied
considerably. The average of five years^ ending with
1811^ was 96^. the quarter, while the average of ten
years, ending with 1823, during which time we have
had the corn laws in full operation, was 68^. Now, if

* This statement is taken from Principles of Political Eco-
nomy, by Mr. Malthus.

-f All the subsequent statements are copied from Mr. Tooke*i
work On Prices.

S30 FEICB FALLS IX THE PBOORBS8 OF SOCIETY.

these laws were repealed^ and the trade in com were
quite free, there can be no doubt that the quarter of
wheat would be sold in our markets for a sum consider-
ably less than 68^. Some authors say it would £eJ1 to
30f. the quarter, but none fix it higher than 64s,
There is no reason^ therefore, to infer from the price at
which com is now sold in this country, or at which we
might obtain it, as compared with former prices, that
com has gradually, naturally, and necessarily risen in
price. The average price of wheat in the thirteenth
century, was higher than the average price at any sub-
sequent period, except the period between 1792 and
the present time ; and for the extraordinary rise of
price during this latter period, from which alone Mr.
Ricardo and his disciples appear to have formed their
opinion, it is easy to account without having re-
course to the supposition that the difficulty of obtain-
ing food naturally and necessarily increases in the pro-
gress of society. The principal causes why the price
of grain rose subsequently to 1792, were, first, a succes-
sion of bad seasons; second, the political state of all
Europe ; and third, the vast increase which then took
place, owing to the invention of the steam-engine and
other useful machines, in the produce of manufactur-
ing and commercial industry. It is incompatible with
my present object to explain these causes in detail.
Fortunately also it cannot be requisite. It is plain
from the table, and from the price at which, but for
social regulations, wheat would now be sold in our
markets, and taking into consideration the circumstance
of money being gradually procured by less and less la-
bour, — ^that the price of wheat has a natural tendency
to fall, rather than to rise in the progress of society.

ILLU8TRATIOK 7H0M DIFFEREKT COUKTRIES. 231

This vi^w is confirmed also^ I thinks by what we
know of other eountries. In the returns^ for example^
recently made by liis Majesty's consuls abroad^ which
have been printed by the order of the House of Com-
mons> it is stated that the price of grain was higher in
1825, and generally is higher in Spain and Portugal^
than in France, in England, and in Holland, and
higher in France than in Holland. In Spain the num«
ber of inhabitants to each square mile^ is 55, in Portu-
gal 90, while in France the number is 143, and in
H<dland 212. Spain and Portugal, therefore, are less
densely peopled than France, and France is not so
crowded as Holland, As it is well known that these
retutns coincide with the general state of the market
in these countries, we have in them a cortoborative
proof, that the price of grain does not naturally and
necessarily rise as people are multiplied.

On this all important question, the political condition
of the agriculturist, and the manner in which land is
appropriated, have no inconsiderable influence: in
consequence of the latter, com has ever been at a mo-
nopoly money-price ; in consequence of the former, im-
provement has been comparatively slow in agriculture.
The price of its produce has not, therefore, fallen in
the same degree as the price of manufactures, witli
which alone it could be and has been compared. The
price of most other manufactured commodities, on the
contrary, has not been a monopoly price ; and generally
speaking, the manufacturers have been in a better poli-
tical condition than the agriculturists. They have been
collected in towns, have been able to protect their
rights, and have been superior to the peasantry in all the
drciunstances which increase knowledge and promote

332 ILLUSTRATION FROM MANUFACTURES.

division of labour. Knowledge and division of labour
have both increased amongst the agriculturists, but not
in the same degree as among manufacturers. It is
only, however, by comparing the price of agricultural
produce, \vith the more diminished price of manu-
fieustures, that any plausibility has been given to the
statement of a natural and a necessary increase in the
difficulties of procuring subsistence.

The natural price of food to a manufacturer and to a
manufacturing nation, is measured by the quantity of
labour, and nothing else, necessary to produce the com-
modities with which they buy food. The natural price
of food, for example, to the inhabitants of Manchester,
18 the quantity of labour necessary to make the cottons,
with which they can or might purchase at their own
doors, the wheat of Ireland or Poland, the flour of the
United States, the maize of Mexico, or the raw pro-
duce of any other part of the world. But the quantity
of labour necessary to manufacture cottons at Manches-
ter, and to grow wheat in America, and bring it to
Europe, has decreased wonderfully since America was
first discovered ; whence it is plain, that the inhabit-
ants of Manchester, numerous as they now are, might,
were it not for certain social regulations, obtain food
at a less natural price than one, two, or three centuries
ago. « Unfortunately, all commerce is so much regu-
lated by legislation, that all money price at present re-
presents social price ; and still more unfortunately, in-
dustry and trade have been so impeded by social re-
gulations, that it is not possible for us to form any idea
of the extent to which th^natural price of all things
would necessarily fall. (Restrictions and exactions
have been multiplied as the benevolent laws of nature
became manifest, and more and more has been conti-

INFLUENCE OF DEMAND ON NATURAL PRICE. 233

nually taken from the labourer^ as it was discovered that
his powers of production increased^ and that more might
be taken without putting him out of existence. By
his labour, and by nothing else^ is natural price mea-
sured^ but he never obtains commodities for the labour
of producing them. At present, therefore^ all money
price is not natural but social priced

IThe natural or necessary price of commodities is
only influenced by all those circumstances which make
'labour more or less productive. It is the prime but
not sole regulator of exchangeable value^ of money and
of social price. No commodity can in the long run be
exchanged for less^ though it may for more^ labour than
it cost. Natural price is therefore always the limit in
one direction^ but in only one^ to the money price of all
commodities. They cannot be sold for less labour than
they cost, but they may be sold for more, j

/?3ver natural price, the relation of the demand to
the supply, which is frequently said to regulate price,
s^ms in the long run to have a tendency to lower it.
The ingenuity of man being necessarily first and chiefly
directed towards supplying his more urgent wants, the
labour employed in supplying necessaries will be most
improved.^ Clothing, for example, is in this country
one of the necessaries of life. Owing to a variety of
circumstances, the manufacture of cotton is perhaps
less shackled by social regulations than any other, and
the reduction of the price of cotton within fifty years
has been most extraordinary; substantiating by fact
the assertion, that demand, when man is free to labour,
has a tendency to diminish the natural cost^ of the
necessaries of life.*

* In a former part of this work, page 86, I endeavoured to
explain the effect of necessity, or the increased demand arising

234 IKFLUEKCE OF DEMAND ON MONET PRICE.

^^ Over money or nominal price^ the relation of the
demand to the supply has a very powerful but varying
influence, comprising all the difference between the
price of food in a besieged city^ and its price when the
supply is greater than is required. Money> as well as
all the commodities of which it measures the value,
are subject to variations in their natural price ; and
most commodities, including money^ are unequally af-
fected by social regulations. The money price of all
commodities is consequently influenced by numerous

from an increase of people, in promoting the improvement of cul-
tivation, and lowering the price of com. As soon as division of
labour is introduced into society, or as soon as the principal part
of the agriculturist's produce is intended not for his own god-
lumption, but to be sold, this increased demand can onlybe
known to him by an increase in the price of com. Such an in-
crease is the immediate stimulus to his exertions, and the cause
of an increase in his ingenuity ; which, in the long run, tends in-
variably to supply us with agricultural produce by less labour,
and thus to lower price. If this be a correct explanation of what
actually and naturally occurs, it shows us how short-sighted was
that selfishness in the non-agricultural classes, which induced
them, in times past, continually to appeal to governments to keep
the price of corn from rising by artificial regulations ; and it
shows how perversely ignorant were those governments which,
in consequence of such appeals, actually fixed a maximum for the
price of corn and bread. The effect of such appeals, and of such
regulations, must have been the very opposite from what the par-
ties wished and intended. They must have diminished the sti-
mulus to agricultural improvements, have lessened the supply,
and have prevented that fall of price which I contend would na-
turally and necessarily have taken place. This observation is of
some practical importance, because there is yet a disposition to
call out for regulations to keep down prices ; and yet, not a few
parts of the world, where the governments endeavour to accom-
plish this by regulations.

EFFECTS OF VARIATIONS IK PRICE. 235

circumstances ; and it is by no means an easy task^ as
many persons suppose^ to detect the real cause of those
variations in price which are of daily occurrence. In
no case^ however^ is a fall of price beneficial^ unless it
be caused by a diminution of the labour necessary to
bring commodities to market. In all other cases the
fsiU. can be only temporary, and it takes place at the
expense of the producers.!

Variations in price have very important results. By
bringing commodities within, or carrying them out of
the reach of a certain number of persons, they regu-
late consumption. If the price of bread were not to
rise the instant it is ascertained, or even rendered pro-
bable, that the crop of wheat will be short, no persons
would be admonished in time to lessen their consump-
tion, or seek for other food than wheaten bread ; and
before the next harvest famine might ensue. On the
other hand, were prices not to fall when the cropris
abundant, there would be no stimulus to increased coii-'
sumption, and the bounties of nature, instead of caus-
ing joy and gladness, would turn to mouldiness and
corruption, ^oney price, as determined by the rela-
tion of the demand to the supply, ^* is the nicely poised
balance," says Mr. Buchanan, ^' with which Nature
weighs and distributes to her children their respective
shares of her gifts, to prevent waste, and to make them
last tiU reproduced." It is also the index to the
wants of society ; or it is the finger of Heaven, indi-
cating to all men how they may employ their time and
talents most profitably for themselves, and most bene-
ficially for the whole society.'.

^

236 NATURAL CIRCUMSTANCES NOT BEFORE NOTIC£]>.

CHAPTER X.

EFFECTS OP THE ACCUMULATION OP CAPITAL.

Security of property, and accumulation, said to influence produc-
tion. — Reasons for not noticing the former, and for notidog
the latter. — Definitions of capitid. — It is a part of the national
wealth, used for the sake of the profit it brings its owner.—
Capital considered under three classes of circumstances.— If
made and used by the same persons, it aids production.— If
made by one set of labourers, and used by another, they appro-
priating the whole produce between them, it aids production>
.-If the owners of it be not labourers, it impedes production*
— The latter is the present state of society. — Difference be-
tween instruments and wages. — Popular language one cause
of the prevalent error as to capital.— -Question, Would there be
any motive for an increase of wealth were there no interest on
capital? considered. — Conclusion. — Influence of Political
Economy on our happiness. — Importance of studying it. —
Illustration from the general poverty. — That is generally at-
tributed to nature : but here it is supposed to be caused by
social institutions.

The only circumstances at all deserving the epithet
natural, besides those already treated of, which have
ever been noticed in treatises on Political Economy,
on account of their influence over the production of
wealth, are security of property and accumulation of
capital.

Of the former, which must be considered as an
object to be attained by social regulations — though

SECURITY OF PROPERTY. 237

.^property itself, or a man's right to the free use of his
own mind and limbs, and to appropriate whatever he
creates by his own labour, is the result of natural laws-7*
I shall not say one word ; because it is necessary, before
we discuss the effects of security of property, to have
the right of property accurately defined, and we must
be quite agreed as to its basis. Not being disposed
to regard the existing right of property, with the same
respect as those who urge on mankind the necessity
of preserving it inviolate, in discussing it I should
have many difficulties to encounter, and might incur
some reproaches. /l admit that the sacredness even
of the present right of property, cannot be too stre-
nuously upheld against the aggressions and violations
of governments ; but as far as it ought to be held sacred
agsdnst the claims of the labourer to own whatever
and all which he produces, I entirely dissent from
the prevalent opinions. The power now possessed by
idle men to appropriate the produce of labourers, seems
to me the great cause of bloated and unhappy wea-
riness in the former, who, having their natural wants
provided for, necessarily live having no useful aim and
object, — and of poverty and wretchedness in the lat-
ter^ who being obliged to subsist many more than
their own families, have no time and no thought^ but
how to obtain the means of preserving an existence so
filled with toil and care as to seem scarcely worthy of
preservation. On account of the respect generally in-
culcated for iht right of property, and on account of
the intemperate and furious passions connected with
it, the free discussion of this important questkn is not
without danger. I must therefore pass it b]^merely
observing that the prevalent opinions of mos^)olitical

938 REASONS FOR NOTICIKO THB Bf PCCTS OF CAPITAL.

economists are directly at variance with their own
definition of wealth.

Dissenting, also, from the opinions prevalent among
them as to the utility of accumulated capital, I pro-
pose to make a few remarks on this subject. Not
wishing to give this little book a character of contro-
versy, I should have abstained also from treating of
capital, were it not of great importance to relieve, as
far as possible^ the wise system of nature from the im-
putations cast on it by erroneous theories^ and to
place the laws regulating production before the reader,
in all the clearness of their own simplicity. Both the
theory relative to capital, and the practice of stopping
labour at that point where it can produce^ in addition
to the subsistence of the labourer, a profit for the ca-
pitalist, ^eem opposed to the natural laws which
regulate production. Moreover, our ideas of just or
unjust distribution, will be materially modified by our
opinions of the mode and degree in which capital is
useful. The subject embraces also several practical
questions of considerable importance, if we may judge
from the frequency with which they are mentioned in
Parliament. And as there can be no violent passions
involved in the discussion of the abstract question of
the utility of capital, the above considerations have
induced me to treat of it. In a little work entitled
" Labour Defended against the Claims of Capital/'* the
nature and use of both fixed and circulating capital
have been, I think, accurately analyzed, which re-
lieves me, at present, from the necessity of doing any
thing more than briefly explaining in what sense the
employment of capital promotes production.

* Published in London by Knight and Lacy, in 1825.

DESCRIPTION OF FIXED CAPITAL. 239

Political Economists have distinguislied two species
of capital^ viz.^ fixed and circulating capital. The
former consists, according to Dr. Smith, of ^' Ist, useful
machines and instruments of trade, which facilitate
and abridge labour ; 2nd, of all those profitable build-
ings which are the means of procuring a revenue, such
as shops, warehouses, workhouses, farmhouses, with
their necessary buildings, stables, granaries &c.j 3rd,
of the improvements of land, or what has been pro-
fitably laid out in improving, jdraining, inclosing, ma-
nuring, and reducing it into the condition most proper
for tillage and culture, (in this category we may
probably include bridges, roads, canals; which are
both fixtures in the soil and instruments for abridging
labour) ; 4th, of the acquired and useful abilities of
all the inhabitants and members of the*society/'* 11
prefer Dr. Smith's enumeration of the articles whicn
constitute fixed capital, because it is far more com-
plete than any subsequent description, and it has the
great merit of not overlooking the most important part
of fixed capital, viz. the acquired and useful abilities of
ALif the members of the society .tl D'he definition of
circulating capital I shall borrow ^om Mr. MilL

* Wealth of Nations, book ii. chap. 2.

•f* It is somewhat extraordinary that many of the acquired and/
useful abilities mentioned in the text, are the only parts of the!
national fixed capital which never bring their owner a jNrofit,
while the produce of these acquired and useful abilities in the/
possession of the capitalist, obtains an ample reward. '^ Thej
national capital," says M. Storch, '^ includes the natural and
acquired faculties of the productive classes, the nature of in-
dividual capital excludes them. However gifted with sudi
faculties an individual may be, and however large may be the
revenue he acquires by them; it would overthrow all our

240 DESCRIPTION OF CIRCULATING CAPITAL.

/ " There is another portion of the articles," he says,
1/* subservient to production, which do perish in the
i using. Such are all the tools worn out in one set of
operations, all the articles which contribute to produc-
tion- only by their consumption, as coals, oil, the dye
stuffs of the dyer, the seed of the farmer, and so on.
Of this nature also are the raw materials worked up
in the finished manufacture. Under the same head
must be included the expense of repairing and keeping
in order the more durable articles of fixed capital;
such as repairing roads and bridges. The distinctive
character of all this portion of capital is, that it is ne-
cessarily consumed in contributing to production, and
that it must be reproduced, in order to enable the
producer to continue his operations. There is ano-
ther thing which is also constantly consumed, and con-
{ stantly needs to be reproduced, and that is the sub-
j sistence, or consumption, or* wages of the labourer ; and
that equally whether the labourer supplies it himself,
or whether he receives it from the capitalist in the

or wnetner ne receiyi
r^ shape of wages." * j
Taking into consi<

Taking into consideration that the articles above
mentioned are only given as examples, the two lists
include every species of material object which falls
within the most comprehensive definition of wealth.
In fact, Mr. Mc CuUoch has defined, in his latest work,
'' Principles of Political Economy,^* the capital of a

i received ideas to call him a capitalist, if he did not possess
\ besides this personal and unalienable capital, a capital com-
\ posed of transmissable valties^ " Cours d*Ec<momie PolUique"

vol. V. p. 60. This anomaly is not explained by any existing

theory of the distribution of wealth.

■ \ • Elements of Political Economy, by James Mill, Esq. second
L^^Edition.

f

CAPITAL IS WEALTH USED TO OBTAIN A REVENUE. 241

k oountry to be that portion of the produce of industry
Existing in it^ which can be made directly available,
either to the support of human existence^ or to thefacili-
toting production/* — a definition which embraces every
species of wealthy except that which serves merely for
ornament. There must^ therefore, be some accessory
idea, or some relation belonging to capital^, which
distinguis)ies it from national wealth under Qther re-
lations. I To me it appears that the single and only
circumstance which gives to any portion of the pro-
duce of labour the relation understood by the term
Capital^ is, that it be made, employed, or consumed, not
ibr the sake of any enjoyment it affords its owner, in
either the making, employing, or consuming of it, but
for the sake of some ulterior profit. It is a part of the
national wealth employed, to use the language of Dr.
Smith, to " procure its owner a revenue." \

Thus a steam engine to move cotton sfnnning ma-
chinery is made, and afterwards used — ^not for any
delight we have in the beautiful mechanical contri-
vance, but for the sake of the profit to be obtained on
the cotton yarn. Nobody keeps a shop in the Strand,
or a warehouse in Thames Street, except for the re-
venue he is to derive from either. The ground is
drained, ploughed, and inclosed, for the sake of the ex-
pected future produce, not from an idea that the fur-
row and the hedge add to the beauty of the landscape.*
He who uses dye-stuffs cares little or nothing about the

* It deserres to be remarked, that the claims now made by
landlords and farmers, to be allowed to tax the rest of the com-
munity for the capiteU vested in the soil, are neither more nor less
than claims to make us pay them for the labour they have ex-
torted from the parish-fed peasant. There is no other capital

242 ILLUSTRATIONS.

fascinating colours he ^xeB in silk or cotton : he only
uses them for ulterior profit. The money or goods
given by the capitalist, or owner of them, for the labour
of workmen, is given, that they, like the steam-engine,
or the draining of land, may produce him something of
greater value than their wages. These wages, on the
contrarjv sure not capital to those who consume thera to
support Hfe, or for the sake of enjoyment. All pro-
perty lent by one man to another, or to the state, for
which the lender receives interest, is called his capital ;
because he does not use it for his own immediate grati-
fication, but for the revenue it gives. In the same man-
ner each man learns, in most cases, some art, — that of
making shoeis for example; not for any pleasure he finds
in making shoes, but that he may ultimately obtain
his subsistence by practising this species of industry.
There are, perhaps, no arts learnt for the sake of the
pleasure they afford, though many give pleasure in the
learning ; and thus all the acquired and useful abilities
of the members of a society are not acquired for their
owTi sake, but for ultimate profit. Whatever an in-
dividual makes or acquires for the sake of after-pro-
duction — whatever he lends for the sake of interest —
whatever is used or consumed for the sake of profit,
comes under the denomination of fixed or circulating
capital.

fit would appear, at the first view, that the greater
tne quantity of the annual produce devoted to reproduc-
tion, or used with a view to procuring its owner a re-
venue, the more the annual produce would be increased.

rested in the ground, nor can there be any other than the labour
of the labourer ; and his task-master, having already grown rich
on it, now tries to exact a further reward for his oppression.

CAPITAL UNDER DIFFERENT CIRCUMSTANCES. 243

This idea is at the bottom of all which can be said in
favour of the productiveness of capital. Bat, though
every portion of capital brings a profit to its owner, it
depends on the nature of the capital itself^ whether it
assist -production. The capital of the national debt, or the
capital lent on mortgage, brings its owner a revenue, —
a share of the taxes, or of the rent of the estate, mort-
gaged, — as well as the capital laid out on steam-engines
and at the same rate of profit, but it has no wealth -
creating power. If every portion of capital were like
a steam-engine, or a carpenter's plane, made as well as
employed to aid producti^i, the whole annual produce
might be increased as capital increased. But a great
quantity of capital is always lent to share the revenue
or produce of others, and this portion can have no
beneficial effect on the wealth of the whole. What
enriches the individual capitalist does not necessarily
add to national wealthj

Taking only fixed ^pltal into our consideration, and
leaving circulating capital, particularly that portion of
it which pays wages out of view> — a manner of treat-
ing the subject most favourable to the idea of capital
aiding production, let us inquire if it really have any
such effect.ffFor this purpose we may distinguish three
classes of c^cumstances under which the effects of an
accumulation of capital will be very different. Finty if
it be made and used by the same persons ,* second, if it
be made and used by different classes of persons, who
share between them in just proportion the product of
their combined labour ; third, if it be owned by a class
of persons who neither make nor use it.

First, If the instruments, tools, dye^tuffs, etc., in>-
tended to promote production be made and used by one

M 2

244 CAPITAL MADE AND USED BY ONE PERSON.

and the same individual, we are bound to suppose that
he finds these labours advantageous, or he would not
perform them ; and that every accumulation in his pos-
session of the instruments he makes and uses^ facilitates
his labour. The limit to such an accumulation is
plainly the power of the labourer to make and use the
instruments in question. In the same manner, the
quantity of national capital is always limited by the
power of the labourers to make and use it with ad-
vantage. When capital, therefore, is made and used
by the same persons, when all which they produce be-
longs to themselves, too much cannot be said in its
favour.

Second. Capital may be made by one labourer and
used by another, and both may divide the commodity
obtained by the labour of making and of using the
capital between them, in proportion as each has con-
tributed by his labour to produce it. He who makes
the capital finds this employment productive to him,
or he would not continue it ; and he who uses the ca-
pital finds that it assists his labour, or he would give
nothing for it. . Under these circumstances, the accu- ,
mulation and- employment of capital is advantageous.^
I should rather express this fact, however, by saying/
that a part of the society employed in making instru-
ments, while another part uses them, is a branch of
division of labour which aids productive power and
adds to the general wealth. As long as the produce of
the two labourers, — and speaking of society, of the
two classes of labourers, — be divided between them,
the accumulation or increase of such instruments as
they can make and use, is as beneficial as if they were
made and used by one person.

MADE^ U8ED> AND OWNED BY DIFFERENT PERSONS. 245

mThird, One labourer may produce or make the in-
Bmiments which another uses to assist production —
not mutually to share in just proportions the produce
of their co-operating labour, but for the profit of a
third party. The capitalist being the mere owner of
the instruments^ is not> as such, a labourer. He in
no manner assists production. He acquires possession
of the produce of one labourer^ which he makes over
to another^ either for a time> — as is the case with most
kinds of fixed capital^ or for ever, as is the case with
tvages^ — ^whenever he thinks it can bemused or consumed
for his advantage. He never does allow the produce
of. one labourer^ when it comes into his possession, to
be either used or consumed by another, unless it is for
his benefit. He employs or lends his property to
share the produce, or natural revenue^ of labourers ; and
every accumulation of such property in his hands is a
mere extension of his power over the produce of labour,
aad retards the progress of national wealth. In this which
is at present the case, the labourers must share their
produce with unproductive idlers, and to that extent
less of the annual produce is employed in reproduction.

If there were only the makers and users of ca-
pital to share between them the produce of their
oo-operating labour, the only limit to productive
labour would be, that it should obtain for them and
their families a comfortable subsistence. But when
in ^(ddition to this, which they must have whether
they be uie owners of the capital or not, they must
also produce as much more as satisfies the capitalist, this
limit is much sooner reached. When the capitalist^
being the owner of all the produce, will allow la-
bourers neither to make nor use instruments, unless he

246 CAPITAL IMPEDES PBODDCnOK.

obtains a profit over and above the subsistence of tLe
labourer^ it is plain that bounds are set to productive
labour much within what Nature prescribes. In pro-
portion as capital in the hands of a third par^ is ac-
cumulated^ so the whole amount of profit required
hj the captalist increases, and so there aiises an
artificial check to production and peculation: The
impossibility of the labourer producing all which the
capitalist requires prevents numberless operations,
such as draining marshes, and clearing and cultivating
%vaste lands; to do which would amply repay the
labourer, by providing him with the means of sub-
sistence, though they will not, in addition, give a large
profit to the ca^ntalist. In the present state of society,
the labourers being in no case the owners of capital,
every accumulation of it adds to the amount of profit
demanded from them, and extinguishes all that labour
which would only procure the labourer his comfortable
subsistence. More than this, however, he does not
want ; and thus^ accumulation of capital in the present
state of society diecks production, and consequently
checks the progress of population, the division of labour,
the increase of knowledge, and of national wealth .\

The term Fixed Capital, includes some of the ^ost
noble inventions of man, which are indispensable to
the success of labour. Without machines and tools
the labourer could perform but few, and those very
imperfect operations. Without dye-stuffs he could
produceJip colours, and without coals he could not fuse
metals. TMachines, tools, and coals, imdoubtedly faci-
litate lalftmr ; but we must labour to prepare or obtain
them. That the labour employed in preparing them
facilitates subsequent production, no man can deny ; but

WAGES ARE PAID BT LABOUR. 24?

"When it is admitted that labour produces all things,
even capital^ it is nonsense to attribute productive
power to the instruments labour makes and uses. All
capital is made and used by man ; and by leaving him
out of view, and ascribing productive power to capital,
we take that as the active cause, which is only the crea-
ture of his ingenuity, and the passive servant of his wilL\

Among the articles enumerated as capital, we fiim
wages, or the subsistence of the labourer ; but ^vages
do not, like instruments, facilitate production. The
master cotton-spinner, for example, gives to his la-
bourers what is equivalent to an order on the neigh-
bouring butcher and baker to obtain a certain quantity
of meat and bread, and he redeems this order by giving
to the butcher and the baker a certain quantity of cotton
doth. If he give a quantity of money, he does not
pcOrhaps get that immediately from the butcher and
the baker with whom his workmen expend what he
gives thc^ but he gets it by selling his doth in the
market. | The real wages of the labourer do not consist
in mone^ but what the money buys. When a capi-
talist therefore, who owns a brew-house and all the
instruments and materials requisite for making porter,
pays the actual brewers with the coin he has received
for his beer, and they buy bread, while the journeymen
bakers buy porter with their money wages, which is after-
wards paid to the owner of the brew-house, is it not plain
that the real wages of both these parties consist of the
produce of the other ; or that the bread made by the jour-
neyman bakerpays for the porter made by the journey-
man brewer? But the same is the case ^vith all other
commodities, and labour, not capital, pays all wages, j^

If the master, in addition to being a cotton manufK-

248 ILLUSTRATIONS. PAPER-MONEY.

turer or a brewer, be also a banker, and supply tbe vici-
nity of his residence with paper-money, the case be-
comes still plainer. He then gives his workmen a
mere promise to pay a certain sum ; and, it should be
recollected, the greater part of what are called the ad-
varices of capitalists consists of such promises ; which
mere promise is taken in exchange for meat or bread
by the butcher or baker, who gives it to the grazier or
miller, who returns it back to the banker, either from
banking with him, or to remit money, perhaps, to Lon-
don, in payment of rent.* The master manufacturer
has either money or paper with which he pays wages ;
those wages his labourer exchanges frar the produce of

' :'* If the invention and employment of paper-money had done
nothing else but show the incorrectness of the notion, that capi-
tal is something saved, it would have led to one important
consequence. As long as the capitalist, to realise his wealth,
or command over other people's labour, was obliged to; have
in his possession an actual accumrulation of the precious metals
or of commodities, we might have continued to suppose, that
accumulation of capital was the result of an actual saving, and
that on it depended the progress of society. But when paper-
money and parchment securities were invented, — ^when the pos-
sessor of nothing but such a piece of parchment received an an-
nual revenue in pieces of paper with which he obtained what-
ever was necessary for his own use or consumption, uid not
giving away all the pieces of paper, was ridier at the end of
the year than at the beginning, or was entitled next year to re>
oeive a still greater number of pieces of paper, obtaining a still
greater command over the produce of labour, it became evident
to demonstration that capital was not any thing saved ; and that
the individual capitalist did not grow rich by an actual and ma*
terial saving, but by doing something which enabled him, accord-
ing to some conventional usage, to obtain more of the produce of
other men's labour.

WAOBS HATE VO FRODUCTIYS POW£R. 249

cxther labourers^ who will not keep the wages, whether
money or paper ; and it is returned to the manufacturer^
who gives in exchange for it the cloth which his own
labourers have made. With it he again pays wages,
and the money or paper again goes the same round.
In wages, take them in whatever shape we will, whe-
ther as stock or money in the hands of the capitalists,
or what the labourer consumes, I defy any man to see
the least particle of power aiding or facilitating the
operations of industry similar to that possessed by in-
stniments and machines.

If accumulation of capital be a source of wealth, as
the profit on circulating capital is equal to that on
fixed capital, we must conclude, however, that the
bread and meat the labourer eats, and the clothes he
wears, nay, even that the gin, porter, and tobacco he
consumes, because the capitalist has given him a right
to consume them, and derives a revenue from making
this right over to him, — facilitate labour like the most
refined and powerful machine ever made by the cun-
ning art and accumulated knowledge of man. For the
wretched hovel of the labouring cotton spinner or
weaver, though it scarcely aiford the brow-beaten and
downcast inhabitant a shelter from the inclemencies of
the season, the owner obtains as large a profit, in pro-
portion^ as from the use of a steam engine. To say
that there is in wages, and in instruments, a similar
productive power, because the capitalist obtains a profit
on both, seems to me a blunder of no ordinary magni-
tude. Had it been intentionally, made, it would have
been deserving our severest reprobation ; for its efiTect
is to justify the appropriation by the capitalist of that
large share he how receives of the annual produce. It

M 5

250 IlfPEOPfiR LkHfOVAOn Aft TO CAPITAL.

ascribes to his property merely ^ whether he employ it to
pay wages^ or whether it consist in useful instruments^
all that vast assistance, which knowledge and skiU,
when realized in machinery, give to labour.

I do not mean to notice the various sources of what
I conceive to be the error of the Economists, as to €»•
pital, though it is justly said, ^' to trace an error to its
source is halfway towards destroying it ;'' but the lan-
guage commonly in use is so palpably wrong, leading to
many mutakes, that I cannot pass it by altogeth^ in si-
lence. I We speak, for example, in a vague manner, of
a windmill grinding corn, and of steam engines doing
the work of several millions of people. This gives a
very incorrect view of the phenomena. It is not the
instruments which grind com, and spin cotton, but the
labour of those who make, and the laboor of those who
use them. The co-operating labours of the millwright,
for example, and the almost numberless other workmen
who prepare his tools and the materials, of which the
mill is fabricated, or who bring them from remote parts
of the earth, — they themselves using very complicated
machines for this purpose, which are prepared by the
combined labour of a vast number of persons, — in the
iirst instance construct the mill ; and then the labour
of the miller, assisted also by various instruments, mill-
stones, sieves, sacks, &c. which are made by some other
labourers, profiting by the force of the wind, and the
natural hardness of the stones, as compared to the
hardness of corn, grinds it, sifts it, and prepares it for
the use of the baker. So the united labours of the
miner, the smelter, the smith, the engineer, the stoker,
and of numberless other persons, and not the lifeless
machines, perform whatever is done by steam engines. )

MACHINES DO NOT LABOUR. 251

Fiimierly all spinning was done by the hand> and pro-
bably the spinner or the spinner's husband made with
a knife the rude distaif and twirls which were then the
only instruments used in spinning. When spinning
wheels were invented^ the co-operating labours of the
wheelwright and the spinner were necessary to com-
plete the thi^ead ; but the result was the production of
a mudi greater quantity of yarn than could before be
produced by any given quantity of labour. Subse-
quently those who make steam engines^ and set them
in motion^ and those who make mules and spinning
frames^ became the assistants of the spinner; and so
much more efficacious is this knowledge-guided labour
than the first rude mode of spinning, by twirling a
piece of wood between the finger and thumbs and
causing it to draw out the thready as it sinks towards
the earth, by its own weight, that one person can now
probably spin as much thread in a ^en time, as four
OT five thousand primitive spinners. [The fact is, that
the enlightened skill of the different classes of workmen
alluded to, comes to be substituted in the natural pro*
gress of society^ for less skilful labour ; and this en-
lightened skill produces an almost infinitely greater
quantity of useful commodities, than the rude labour
it has gradually displaced. By the common mode of
speaking, the productive power of this skill is attribu-
ted to its visible products, the instruments, the mere
owners of which, who neither make nor use them,
imagine themselves to be very productive persons ;
particularly, if they are at the same time . labourers,
planning and directing the operations of those who
make and use the instruments. Political Economists
have probably been led by this incorrect language ii^o

252 CAPITAL MOT EASILY REMOVED.

their mistake; and have accordingly attributed that
increased productive power, which has its source in
the increased knowledge and skill ^f society at large,
to the accumulation of fixed capital^

There is another obvious error leading to absurdities
and abuses in practice^ against which I must endea-
vour to guard the reader. It must be quite plain that
the greater part of the commodities constituting the
capital of a country, cannot^ under any circumstances,
be removed. The most common instruments and tools
are of no use without skilful hands ; and many of
them are fixed in spots and places^ or connected with
buildings which cannot be displaced. Shops and ware-
houses, farm-houses, stables^ and granaries, are nearly
as immovable as the soil itself. They may be de-
stroyed — not carried away. " The improvements of the
soil, the draining and manuring of it, are deeds of a man's
band^ done and completed, and irrevocable. Other la-
bours may make them useless, but nieither they nor the
benefit they confer on us, can be transported to France
or America. Bridges, roads, and canals, may be neg-
lected or suffered to fall into ruin^ or they may be
broken up ; but no one will be at the trouble of shipping
the materials off to Spain or the Brazils. The prin-
cipal part of circulating capital is food, which we im-
port ; and, consequently, not a particle of it could be ad-
vantageously sent to other countries. Neither can coals,
dye-stuffs, or any other raw materials of manufactures
be sent abroad in any greater quantity than at present
We are more generally importers than exporters of
such articles ; and of those that we can advantageously
export, as great a quantity is already exported as is
profitable. Thus, except the acquired and useful abili-

LAWS MADE TO PREVENT ITS REMOVAL. 253

ties of the labourers of a society^ and what they can
carry with them— for there are some few instruments^
such as ships^ easily transportable — ^no part of the capi-
talpf a country can be either driven or sent away.

Men may be^ and frequently have been^ forced from
tfi^r native land by arbitrary and oppressive* laws, by
religious persecution, or political tyranny, and by a
grinding and ruinous system of taxation ; but unless
men are, capital never is either forced or sent abroad.
To talk of sending away roadb, bridges, canals, and cul-
tivated fields, is a striking absurdity, and yet we hear
perpetually a sort of cuckoo song among members of
Parliament, who are capitalists themselves, or leagued
with capitalists, about the danger of forcing these
things under the name of capital out of the country. In
fact, to prevent them horn being driven away, as it is
said, laws against the combination of workmen have been
made in this country, quite as atrociqus in principle,
as the slave codes of the West IndiesJ It may suit
the views of those who imagine they are benefited by
keeping up our monstrous system of taxation, our com
laws, and church establishment, and our West and East
India monopolies, to ascribe all the evils of the country
to a demand for higher wages, and they may consist-
ently with their own selfish views, enact laws to keep
labourers obedient : I can understand their motives,
but I cannot comprehend how their statements can be
believed by society at large. While the industry of this
country labours^ under its present enormous burdens,
arising from social regulations, to attribute the fact
of our manufacturers being sometimes undersold in
the foreign market, to the high wages of our labourers,
is like omitting the influence of the moon, and attribut-

!)54 18 mrxfiEsT ok capiIal kbcbssart

ing the tides of the ocean to the sadden impetuosity
of ft few mountain streams.

In asserting that accumulation of capital in the
hands of persons who neither make nor use it^ impedes
the progress of society^ let me not be supposed to over-
look the statement^ that if there were no profit to be
obtained on the capitalists' stocky there would be no
motive to save, no spur to industry^ and no increase of
national wealth. I do not overlook this statement^ but
because I am sensible of its importance, I ^vill not
hastily and d(^matica)ly decide concerning it. It is
plain, however, that the assertion of interest on capital
being necessary to stimulate saving and industry, as
it can only be taken from the produce of the labourer,
is quite irreconcDeable with the assertion that labour
will be energetic and skilful in proportion as it is re*
warded. I can understand how a right to appropriate
the produce of other men, under the name of interest
or profit, may be a stimulus to cupidity ; but I cannot
understand how lessening the reward of the labourer, to
add to the wealth of the idle, can increase industry or
accelerate the progress of society in wealth. Interest
on capital was beneficial, when, feudal landlords being
then the absolute masters of all the slave labourers of
the country, it tended to reduce their power ; but it is
an error of no small magnitude to describe that as a ge-
neral law of nature, which is only applicable to remove
or lessen a particular usurpation.

We shall be led, I think, to a diflferent solution of
the question, '' whether or not society could advance
were there no interest on capital" than that generally
given, by reflecting on the principle of population in
union with our afl^ections, and by observing what takes

.^^aaii)

TO THE PROGREM OF NATIONAL WEALTH? 255

place in the wilds of America. The former will con^
vince us^ that the produce of erery labourer is aH re-
quired for the nourishment of his own family. To
bring up and provide for his children, is a sufficieiii
motive, in general, for the labourer to be industrious.
As they are brought up and provided for, and taught
some manual art, they become labourers, extend divi-
sion of labour, promote increase of knowledge, and add
in their turn to the population and annual produce of
society. In our present state, the savings of the capi-
talist are as much consumed, and generally by labour- \
ers, as any other part of the annual produce ; but first
passing into the hands of the capitalist, he takes a large
portion for himself, which would otherwise remain with .
the labourers and enable them to rear larger families, /
adding, which multiplying capitalists does not, to divi-
sion of labour. " The motives," says a writer in the
fVestminster Review, *' which operate to save, exist to-
tally independent of any addition which might be made
to the savings themselves." In parental affection, ther
is, I think, a source both for industry, and for that
saving from his own consumption, which enables a m
to rear up a family, by sharing with them the pr<
duce of his labour : and where there are rfiany famili
properly brought up, the nation increases in wealth an
people.

In fact it is a miserable delusion to call capital
something saved. Much of it is not calculated for
consumption, and never is made to be enjoyed. When
a savage wants food, he picks up what nature spon-
taneously offers. After a time he discovers that a
bow or a sling will enable him to kill wild animals at
a distance, and he resolves to make it, subsisting him-

IkiT

356 XKf £UBJI€B Of OUR ATVZCTIOKS.

self, «8 he must do, while the work is in progress.
He saves nothing; for the instrument never was made
to be consumed, though in its own nature it is more
durable than deer's flesh. This example represents
what occurs at every stage of society, except that the
different labours are performed by different persons-
one making the bow, or the plough, and another kill-
ing the animal or tilling the ground, to provide sub-
sistence for the makers of instruments and machines.
To store up or save commodities, except for short
periods, and in some particular cases, can only be done
by more labour, and in general their utility is lessened
by being kept, flhe savings, as they are cedled, of the
capitalist, are consumed by the labourer, and there
is no such tiling as an actual hoarding up of com-
modities.^

In filial affection we may also find, I think, a better
I security for the supply of our wants in old age,
'than any interest on accumulated savings can give.
Labourers, at least, should always remember that
the interest on savings, or capital, is paid by the
produce of labour. It merely gives them a power
over the labour of their own descendants, which
would be obtained, I hope, from affection if it were
not extorted by law. The natural and best method
(if saving against the wants of old age, is to rear,
educate and instruct our offspring. In their willing
contributions paying back to their parents^ when no
longer able to toil, some of those advances the pa-
rents had made in manhood, to support and rear
them, old age would find a certain subsistence derived
from a pleasing source. Those who would substitute
parliamentary decrees and social regulations, enforced
by punishment, for this mutual affection — looki

THE UKITED STATES THRIVE WANTING CAPITAL. 257

rather to them^ than to it^ for national prosperity, must
have more confidence in legislative skill than in the
wisdom of nature.

If we look to the wilds of America, where families
multiply very fast ; where most of what is raised or
produced is consumed in the family ; where, except in
the towns, no part of the annual revenue is saved and
put out to interest; where the lahourers have large
possessions, and many instruments which they use for
their own advantage ; but where there is comparatively
little labouring for the profit of the capitalist,— we shall
find, I think, this view confirmed. The United States
are increasing more rapidly in wealth, power, and
population, than any of the countries in which capital
has been extensively accumulated. Whether the pro-
gress of society depends or not on interest being paid
on capital, is a question, however, which comes home
to the feelings and private lives of individuals, and
rests for its solution on our affections. If parents are
generally willing to share with their offspring what
they produce, if they have natural motives for care-
fully bringing up their children and teaching them
the arts of life, we must conclude, that independent
of the wish to obtain power over the produce of other
men's labour, — independent of vulgar avarice, or the
vulgar ambition of what is called rising in the world,
and imitating the follies and vices of those who al-
ready lord it over their fellow-men, — independent also
of all gradations of rank and degrees of opulence, —
there are motives which continually tend to increase
the number of labourers. As their numbers are in-
creased, both increased production and consumption
take place, which is all that is ever meant by. the
terms accumulation or increase of national wealth.

258 imcompibtemess of political economt.

Conclusion.

That I have, by the foregoing remarks, exhausted
the vast subject of the natural science of the pro-
duction of wealth, or even glanced at numberless na-
tural circumstances which influence production, I
cannot suppose ; yet I have set before the reader
all those usually noticed in treatises [of Political Eco-
nomy. Moreover, 1 have included the influence of
knowledgei and have endeavoured to ascertain flie
natural source of its progressive increase. Justly to
appreciate the effects of natural principles, whidi
always operate by creating motives in us, we most
carefully separate them from social regulations, which
are also intended to create motives, and which seem to
have almost as powerful an influence on our destiny,
though in an opposite direction, as the laws of Nature.
-^Of all social regulations, the peculiar right of property,
which exists in each country, has perhaps the greatest
influence on production. I have not examined this
right and its effects. Other writers have been equally
timid, or equally prudent. Several other circum-
stances, to some of which I have already alluded, have
been in like manner totally neglected. I consider the
science, therefore, as extremely imperfecta If all the
natural laws regulating our welfare were known; if
we could always ascertain how much of our misery or
happiness springs from them, or from social institutions ;
if, the instant any new problem arose, it could be satis-
fiictorily solved, there would be no longer any disputes
among the most distinguished professors of Political
Economy, as to its first principles; and the science
would, I should hope, be taught at school like common

OBJECTS HRRE PalMGIPALLT COMSIDXIIED. 2S9

arithmetic ; and> like it^ would no longer stir up the
fierce passions of contending parties. But it would
then have no charms for the rising generation^ which
must be ambitious of adding to the stock of knowledge^
and will never be contented with the humble drudgery
of merely learning what others have discovered and
known.

My principal object has been to satisfy the reader^
by setting before him^ in the first instance^ the basis of
the science^ and by subsequently selecting only su^
phenomena as are uniform and almost umversal^ that
the pr(^ess of mankind, in all that yast branch of ci-
vilization which relates to the production of wealth,
is always determined and regulated by natural circuni"
stances operating on the mind of man. Whether the
impetus given by them to our race has been checked or
accelerated by the regulations of the lawgiver, is a
very wide question^ which it would be prudent in us
all to examine^ but which I do not pretend to decide.
As far, certainly, as the production of wealth is con-
cemedj it does seem that those regulations are in all
cases only burdens of unequal weight, retarding the
progress of all nations, but of some much more than
others. Whether the chief cause of the increase of
knowledge be, as I suppose, the natural principle of
population, is another question which deserves, un-
doubtedly, a more caxieful and minute investigatian.
On the ground of universality and uniformity, we are
also compelled to believe, that the division of labour
springs from a natural principle, which continually
extends and perpetually regulates it ; whether or not
my explanation of the origin of that practice, and of the
natural causes of its extension, be successful, the reader

800 VURTHBE PROOFS THAT THE PRODUCTION OF WEALTH

must decide. Over it legislators^ though in £act their
regulations check it to a very considerable extent^ do
not in general pretend to exercise any influence ; and
it fonns> and is acknowledged to form^ with all its
▼ast and dependent phenomena^ a great branch of the
natural history of our species.

In the chapters on trade and on money^ I have 011I7
endeavoured to trace some of these dependent phe-
nomena ; and I should hope I have been successful in
satisfying the reader, that both arise naturally in the
progress of society, and are always, and in every par*
ticular, as at their origin, controlled and regulated by
natural laws, although both have also been controlled
and regulated, to the great injury of mankind, by the
human legislator. As the will of man is the medium
through which these natural laws operate, we have, in
the comparative invariability of the value of the pre-
cious metals, in the great changes which have taken
place in their value, at certain periods^ all over the
globe, and in the comparative variableness in the value
of other commodities, which may, in all cases, be traced
to general principles, a proof, — corroborating the proofs
that have been drawn from numberless other pheno-
mena, that the will and conduct of man, capricious as
the will of individuals may seem, form a part of the
universe, controlled, like every other part, by general
and determinate laws.

We can never suppose, or believe, that a drop of water
trickles to the ground, that a feather floats in the at-
mosphere, or that the blood circulates in our veins,
under the influence of a law which extends beyond the
orbits of the planets, regulating their motions — and at
the same time suppose that the thoughts and will of

IS REGULATED BY NATURAL LAWS. 261

men, the proximate causes of their weal or their woe,
are released from the control of general laws ; we can
never believe that the inventions of aspiring genius^
and the success which follows close and continued in-
dustry^ — that the ambition which, when men consent
to be its instruments^ devastates the worlds and which,
finding no subservient menials, improves and adorns
it, — or that the desire for enjoyment, which under one
government prompts only to industry, and under an-
other is the parent of endless cupidity, — in short,
we can never believe that our passions and affeo^
tions, or the mighty power we call in one compre-
hensive word, the mind of man, is less controlled by
general laws than a trickling drop of water, a float-
ing feather, or than the red globules on the circu-
lation of which his life and intellect depend. |The/^
whole system of social production must be considered,
like the solar system, as a part of the universe, which
man may observe and know, but cannot regulate. He
may thwart for a time the benevolent views of his Cre-
ator, but is invariably admonished, by the misery which
ensues, of his having done wrong^ To him, indeed, is
given the high faculty of noting, weighing, and ad-
miring the complicated and harmonious whole, which is
the result of the instincts and self-interest of indivi-
duals ; but that whole, like the co-operatuig communities
of bees and ants, which have ever been the admiration
of the naturalist, springs from a higher source than
the foreplanning wisdom of man. Atike other animals,\
he acts from unerring instincts ; out his boasted reiki
son, and his glimmerings of knowledge, also influence i
his conduct^ and more often misdirect than guide it. 1
To what those instincts may ultimately lead,— to what

268 THEIR COKS£QU£MC£S NOT T£T DEVELOPED.

social perfection they will train mankind^ — into what vast
and benevolent system they are ultimately to develops
themselves, — is as impossiUe for any man to foresee or
imagine^ though his intellect be as comprehensive and
searching as that of Bacon and Newton combined^ as
it was for the savage to predict^ in the infancy of the
world, that the present system of co-operative produc-
tion, emlnracingboth hemispheres, would spring from the
circumstance that he and his wife, under the influence
of physical differences of organization, and in order
to provide for themselves and their offspring, selected
different employments. ^As it will undoubtedly be
regulated and oontroUed in every minute part, and at
1^ times, by the same hand that placed man on the
earth, and gave to the embryo of the forest tree a living
power to shoot upward, overcoming the ruling princi-
ple of all matter, there is reason to believe that it will
be perfect, like the Master Power from which it ema-
.. nates. The principles we have already traced are not
limited by time nor space ; and we may therefore hope
also, that this perfect system is intended to embrace
the whole community of man, and to extend over the
whole globe; to every part of which, whether it be land
or sea, mountain or plain, whether it be a burning
dimate, as under the equator, or a freezing one as at
the Poles, he alone, of all animals, seems physically
adapted. As a part, therefore, of the great system of
the universe, though perhaps doubly interesting be-
cause their effects are not yet completely developed,
the natural laws which regulate the progress of popu-
lation and wealth ought to be, like the instincts of bees
and ants, or like the motions of the planets, objects of
rational curiosity ; but when we know, in addition, that
on them the welfare of mankind depends, it is impos-

NECESSITY FOR T7S TO STUDY THESE LAWS. 263

sible to conceive any study more deserving of our undi-
vided attention.

That there is as yet a great diversity of opinion even
as to the principles and foundation of politick economy^
cannot be denied. But this circumstance, which is
sometimes made an argument for despising the science,
seems to me a strong reason why it should be studied.
It involves the domestic and dearest interests of all
classses^ coming home to the* business and bosoms of all
men ; its doctrines now exercise also considerable in-
fluence over legislation^ affecting all the relations of
life, and therefore they require to be illuminated by
the concentrated rays of the national intellect. Poli-
tical economy is a natural^ not a political science, and
must not be left exclusively to statesmen. It origi-
nated among practical men^ and it does not end in
barren speculation. We are called on daily to give an
active assent to its principles^ and make them the rule
of our obedience^ or the guide to our remonstrances. By
them legislators now propose to frsme their instituftbns,
and on them is founded the only reasonable justification
of the present order of society. We cannot acknow-
ledge^ therefore^ that we are incapable of ascertaining
and understanding the natural laws whicfi regulate the
progress of society^ without giving into the hands of one
class of men the power of interpreting them according
to their own views and interests. If vm will not in- ..
quire into these laws^ preferring a blind submissidii to
some of our fellow-creatures^ we surrender unto them
the disposal of all that is valuable in existence ; Mfti
we know from all experience, that such a power has
never been possessed but to be aba|ed. If I had any
merit in the undertaking which fed to the publica-
tion of this work^ it was only in supposing that the

I

364 CONNECTION BETWEEN THEM AND POVERTY.

members of a mechanics' institution were as capable as
other men^ constituted like themselves, and having no
patent monopoly of genius or knowledge^ — of compre-
hending whatever doctrines relative to the general wel-
iare philosophers may put forth, or whatever truths
they may discover. That su])position was not de-
ceived : the lectures were heard with unexampled atten-
tion ; and I shall have great reason to congratulate my-
self if that undertaking, or this book^ shall excite in
any one person a desire to examine into the natural
laws which regulate the prc^ess of national wealth.

To connect more distinctly these laws and the doc-
trines of political economy with individual welfare, let
me remind the reader of the wide-spread poverty and
distress which at present bear down to the earth all
the industrious classes of this country. The peasant,
who produces so much corn, that his master is ruined
by its reduced price, has not wherewithal to eat and
cover himself. The weaver, who supplies the world
witK' clothing, whose master undertakes perilous ad-
ventures to tempt savages to use his productions,
is perishing with hunger and nakedness in the midst of
an inclement season. In Parliament and out of Par-
liament the poverty of the labourer is said to be the
cause of numerous crimes. The established right of
property, — that right which denies bread and raiment to
[the labourer, in order to pamper those who do not la-
rbour with luscious viands and clothe them in purple
and fine linen, is daily violated to an alarming extent,
andits total subversion by violence seems near at hand.
Even those who cannot feel for the sufferings of others,
are alarmed for the continuance of their own pros-
perity. There is not a man, perhaps, in the country,
however exalted his situation, and however punc-

CONNECTION BETWEEN POVERTY AND SECURITY. 265

tually hitherto his incpme may have been paid^ who
does not feel that the security of his property, the hap-
piness of his family and friends, as well as the preser-
vation of our national institutions, are closely connected
with the condition, as to want or plenty, of the great
mass of the people. Such a feeling arises from no
theory, and is more frequently acted on than stated.
The legislature, the government, the administrators of
jilstice, the OAvners of land, the guardians of the poor,
the great capitalists, live as it were in a perpetual
struggle to repress or relieve poverty, or to punish the
crimes to which it leads. On the other hand, those
who labour for their subsistence, are called on to toil
through the greater part of the day, and many of them
find that excessive toil can scarcely procure them food.
Their hearts are filled with discontent and repining at
what some persons are prompt, without inquiry, to
enforce on them, as the dispensations of Providence.
The hopeless destitution which now characterises our
industrious and skilful people, combined too with inces-
sant calls on their industry, leads by no circuitous road
to a re^rdlessness of the rights of other men, and even
to scoffing at the justice of Providence — uprooting from
their hearts the principles of honesty and virtue. All
classes are deeply interested, therefore, in the inquiry
into the causes of general poverty. This is the agitating
topic for the present generation, before which, fr<Mn
its greater urgency, it seems likely, that the bra^Aings
of party politicians and the ravings of selfish and in-
tolerant fanatics will die away unheard and unnoticed.
By one party of reasoners, general poverty is attri-
buted to natural and unalterable laws ; by another it
is said to be altogether the result of social institutions.

N

966 POTKETT &SSULT8 HOT FROM

To effect either good or ill, the latter have no power
but what they derive from our assent ; and it is therefore
incumbent on us to distinguish between the effects of
bothj and not to call those evils the dispensations of
Providence ^i4iich we cause by our reverence for the de-
crees of men ; and by our obedience to those who make
the general welf^ the mere stalking horse to their
own ambition. MSuman society is not like a raiment
of dragoons or .^ cotton manufactory, an instrument
made and regulated by man. If the general welfare
be not willed by Him who created and governs the
world, legislators cannot achieve it ; if it be, their
interference is useless. The welfare of nations, or of
mankind at large, is plainly no object attainable by
human will; no purpose within human power to accom-
plish, — the means even by which it is to be accomplished
being unknown to us ; and no ambition is at once so
monstrously absurd in principle and so injurious in its
consequences, as that which aspires to regulate, not
only the present, but the future condition of society^

Political Economists in our time, far from imitating
the wise conduct of their master, have all participated
in this infatuated ambition, and have all aspired to be
legislators. They have also brought the science into
disrepute by siding with those who call themselves
the ministers of Providence, and who loudly proclaim
the doctrine, that the poverty of the labourer is one of
its ^spensations. They have thus thrown doubts
on the benevolence of the Author of Nature, and have
weakened that conviction of his goodness and justice
which is essential to our tranquillity, and which every
other part of the universe seems to enforce. I have
taken a different view from theirs, and cannot help

NATURAL BUT FROll SOCIAL LAWS« 26?

believing that we shall always find in the increase of
knowledge and exte^ided division oi labour^ — the na-
tural and necessary consequences of an increase of
people^ — a compensation^ or even more than a con^n-
sation^ for that decreasing fertility in soils> which is
said by Political Economists and Statesmen^ to add to
the difficulty of procuring subsistence as mankind
multiply. On an assumption of thid kind the latter
class found the necessity for their interference; and
the former describe as a natural phenomenon thi» pre-
sent distribution of wealth ; though it is in all its parts .
a palpable violation of that natural law which gives
wealth to labour and to labour only ; and though it is
only maintained by an armed force^ and by a system of
cruel and bloody laws. I have taken a different view,
which isj I thinks confirmed by the condition of this
country. Never were its people so numerous, and
never were their productive powers so great as at
present. Ever since our industry was released from
the impediments of war^ the 'complaint has been^ that
we possessed too much productive poww. The mar-
kets here and abroad have been glutted with produce.
Wheat has been rotting in Poland and other parts of
the worlds and the ground there has remained untilled
because the Polish labourers could find no consumers
for their produce ; while the power of producing those
commodities^ for which the owners of wheat would
gladly have exchanged it, has here been so great that
its operation, has very frequently been limited or
wholly suspended ; and those in whose hands this
power lies have perished for want of that wheat which
has rotted abroad. The distress our people suffer, |
therefore, Butt'. the poverty we all complain of^ is not(

368 THE OPPOSITE CONCLUSION INCORRECT.

' caused by nature^ but by some social iastitutions, which
1 either will not allow the laboorer to exert his pro-
Vductive power, or which rob him of its fruits. I
can* never^ therefore^ join with those Political Eco-
nomists, who seem even to be fond of calumniating
Nature in order to uphold our reverence for the in-
stitutions of man. All the arguments they have urged
in justification of their views, seem to be founded on
the effects of some social institutions, which they
assume to be natural lai^. They stop short of first
principles, and draw conclusions when they are ac-
quainted with only half the circumstances on which
a correct opinion can be founded. The laws regulat-
ing the production of wealth are a part of the creation,
in which generally we trace only benevolence in the
design and harmony in the execution ; and I willingly
therefore, adopt the language of Mr. Stewart, to
express my belief, " that in the moral as in the ma-
terial world, the farther we push our observations and
the longer they are continued, the more we shall
perceive of frder and design in the universe ;" — and
I therefore can have no d9ubt that the science of Poli-
tical Economy, which, from being imperfectly known,
has thrown doubt, dismay, and terror over the minds
of men, will be found when perfectly known, if I
may apply to it the language of our most sublime
poet, to—

" Justify the wayi of God to man."
END OF BOOK FIRST.

LONDON :
PRINTED BY S. AND R. BENTLEY> DORSET STREET.

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