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PRINCIPLES OF
POLITICAL ECONOMY

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WITH

SOME OF THEIR APPLICATIONS TO

SOCIAL PHILOSOPHY

BY

JOHN STUART MILL

WITH A SPECIAL INTRODUCTION BY
ARTHUR T. HADLEY, LL.D.

PRESIDENT OF YALE UNIVERSITY; UNTIL 1899,
PROFESSOR OF POLITICAL ECONOMY

REVISED EDITION

VOLUME I

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Copyright, 1899,
By the colonial PRESS.

JUN 5 1956

SPECIAL INTRODUCTION

THERE are very few scientific books whose permanent
place in literatvire seems so well established as that
of John Stuart Mill's " Principles of Political Econ-
omy." Even though it be true that Adam Smith was a more
suggestive writer, Malthus a more original one, Ricardo a more
logical one — the fact yet remains that Mill knew how to sum
up the discoveries of all three, and give them coherence in the
popular mind. His greatness lay not in the discovery of new
truths for future generations, but in the full expression of
present truths on which the men of his own generation were
relying. Whatever changes may be made in economic theory
as a whole, Mill's book will always have monumental impor-
tance as a record of the particular economic theories which
inspired the political development of the first half of the nine-
teenth century. Whatever we may think of its soundness as
an analysis of human conduct, there can be no question of its
surpassing value as a historic document. Perhaps it gives
an imperfect or false picture of the way in which men act ;
but there is no doubt that it gives a wondrously perfect and
true picture of the way in which intelligent men in the middle
of the nineteenth century supposed themselves to act.

The best introduction to Mill's book is an account of the
influences under which it was conceived. For, just as the
Elizabethan drama depended on its audience for no small part
of its inspiration, and reflected in its character the spirit of
Drake and Raleigh, no less than that of Marlowe or Shake-
speare, so the Victorian economics was inspired by the nine-
teenth-century English public and reflected the spirit of those
statesmen, who in the first half of that century, had laid the
foundation for English commercial empire.

Mill's "Political Economy " was issued in 1848. Not quite
three-quarters of a century had elapsed since the appearance
of the only other book on the same subject which has rivalled it

iii

iv POLITICAL ECONOMY

in public influence — Adam Smith's " Wealth of Nations." The
contrast between the two books is instructive ; all the more
so because of a certain similarity of character between their
authors. Both Mill and Smith combined the training of the
philosopher with the taste for practical affairs. Each valued
theory as a means of influencing political and commercial ac-
tivity ; each, in studying the motives for such activity, found
that his theory gave him a wider vision than that of his fellow-
men. But Smith's vision was that of the prophet ; Mill's, that
of the philosophic historian. Smith was forced to prepare a
way for his theories ; Mill spoke to an audience prepared to
welcome such theories as the embodiment of human wisdom.
Since Smith's day, his reasonings had been worked out in prac-
tice by two generations of English statesmen ; they had formed
the basis of the activity of men like Canning and Huskisson,
Cobden and Peel ; they had been verified by legislative suc-
cesses of unexampled brilliancy. Among the champions of
this progress Mill's whole life had been passed. His father
had been a leader of the first generation ; he himself had
fought in all the battles of the second, and had been honor-
ably associated with its political life. He had been a participant
in that great struggle which resulted in the abolition of an
erroneous system of public charity ; in a reform which had
placed the national currency on a sound basis ; in the estab-
lishment of free trade as England's fundamental policy; and
in the development of a system of colonial empire more en-
lightened in principle and more beneficent in its results than
any which the world had ever seen. To an audience dazzled
by these successes came John Stuart Mill, accredited by the
share which he had already borne in producing them, and still
more decisively accredited by his success in formulating the
ideas which underlay these political movements as part of
a comprehensive scheme of social philosophy.

It was a dangerous position for a mortal man to hold. Had
Mill been less great, it would probably have destroyed his
chances of permanent influence. The man who is the uni-
versally accredited master of one generation is apt to be cor-
respondingly discredited in the next — perhaps even more so
than he deserves. The same age and conditions which pro-
duced a Mill in political economy, produced a Mendelssohn in
music and a Macaulay in belles-lettres; men who knew almost

SPECIAL INTRODUCTION v

everything which the past had to give, and suspected Httle or
nothing of the future. " I only wish I were as cocksure of
anything as Tom Macaulay is of everything," sighed old Lord
Melbourne, who had seen too many things to believe that all
the wisdom of the world was culminating in a single genera-
tion. The future has wreaked its revenge on those who tried
to ignore it. Mendelssohn is perhaps as much underestimated
as he once was overestimated ; Macaulay's cocksureness has
led people to apply to his writings the well-known epigram,
" Other things being equal, I always prefer a lively liar to a dull
one."

Mill treated the future with more respect and has received
correspondingly better treatment from it in return. There are
few men, indeed, who have stood the test of popularity as well
as he. He was preserved from its most insidious dangers by
possessing in the very highest degree the two qualities of
reverence and sympathy. A course of education such as is
described in his " Autobiography," which with a lesser man
might have stifled both these feelings, served, with him, only
to make them more independent of external circumstances. His
sympathy kept him from complacent optimism ; his reverence
prevented him from being puffed up by the flattery of any
human audience or from accepting its judgments as final. And
if, here and there, the book is marked by a somewhat magisterial
tone — as in the celebrated passage where its author says that
in the fundamental laws of value there is little or nothing left
for subsequent writers to remodel — the wonder is, not that such
assumptions of authority should occur, but that they should
occur so rarely.

While thus avoiding many of the temptations incident to
his position as a master. Mill was able to make good use of
its advantages. He has the sureness of touch of a man who
knows his audience. He does not have to begin, as did Adam
Smith, with historical disquisitions which would prepare the
minds of his readers for the strong meat of his system. He
finds them at once prepared and hungry. The conception of
public or national wealth, which Smith had to create, lies
ready at Mill's hand for analysis. To Smith's readers, wealth
naturally meant a sum of money values ; and he has to take
constant pains to disabuse them of this idea. To Mill's readers,
it means something much more than this. Familiar as they

vi POLITICAL ECONOMY

are with the masterly speeches of Peel and Cobden, they have
been taught to distrust the purely mercantile theories of na-
tional policy, and to regard the nation's wealth as an aggregate
of commodities available for human happiness. How these
commodities are produced, how they are distributed, how they
are exchanged — these are the topics which form the theme of
Mill's investigation. He had but to analyze data which were
given him by the dominant social philosophy of England in his
day. He brought to this analysis not only a power of arrange-
ment but also a breadth of view superior to that of any of his
contemporaries ; yet it was from those contemporaries that he
took without question the conceptions with which he dealt. His
predicates were his own ; his subjects were, for the most part,
taken from the current and almost commonplace thought of his
day.

How strong and at the same time how subtle was the in-
fluence of those current conceptions can perhaps best be seen
in the works of men who, like Carlyle or Kingsley, at-
tempted to take a position hostile to Mill. Underlying the
thought of these writers, there is the sound and healthful idea
that material wealth ought not to be elevated to the position
of an independent entity, dissevered from the happiness of
those who are to enjoy it. But it would seem that neither of
them really formulated this protest in valid shape. Instead
of rejecting Mill's conceptions, they inveighed against his
conclusions. Like him, they took their subjects ready made;
like him they made their own predicates ; but, being possessed
of less than his power in logic and patience in study, their
predicates were less correct than his. And what is seen in
Kingsley or Carlyle is seen also in Lassalle and Marx.

Nearly a generation elapsed before any very vital criticism
was directed against Mill's methods and assumptions. It is
true that the writers of the " historical school, " first in Ger-
many and then in England and America, made great show
of protest. But their divergence from Mill was far less than
appeared on the surface. They complained that Mill had taken
certain institutions and modes of action peculiar to his day,
and treated them as though they existed for all time. A very
able example of this sort of criticism is Bagehot's " Postulates
of English Political Economy." But this does not go to the
root of the matter. The weak point in the political economy

SPECIAL INTRODUCTION vii

of Mill's day was not so much that it treated particular forms
of wealth as absolute and independent subjects of thought ;
but that it treated any form of wealth in this way. The first
real forward step was taken by Jevons and his contemporaries ;
who analyzed, not a supposed inherent utility of things, but
the conditions of their utility to man as a living being. In
the twenty-eight years that have elapsed since the appearance
of Jevons's " Theory of Political Economy," this has been a
dominant and distinctive note in the work of the younger in-
vestigators ; and it has given to their analysis new inspiration
and new breadth of treatment.

Nevertheless there is no book by any of these younger men
which can be said to have displaced Mill. Their work is still
in the formative period. It has the virtues of growth ; it also
has its vices. " Es irrt dcr Mcnsch, so lang er strcbt " — in other
words, effort for something better involves a good many pos-
sibilities of missing the road before you attain it. No modern
writer on economics has either Mill's repose or Mill's sureness
of touch. Those who seek the most recent discoveries, the
profoundest suggestions of future possibilities of development,
seek them elsewhere than in Mill. But for that larger number
of readers who are not ambitious to become explorers ; who
prefer to tread the old paths until they are sure which of the
new ones will lead them to their destination ; who want the
conclusions of the fathers rather than the speculations of the
sons — Mill's "Principles of Political Economy " still holds its
place of authority.

^j^u^^y^<='^>^

MILL'S PREFACE

THE appearance of a treatise like the present, on a subject
on which so many works of merit already exist, may be
thought to require some explanation.

It might perhaps be sufficient to say, that no existing treatise
on Political Economy contains the latest improvements whicn
have been made in the theory of the subject. Many new ideas,
and new applications of ideas, have been elicited by the discus-
sions of the last few years, especially those on Currency, on
Foreign Trade, and on the important topics connected more
or less intimately with Colonization : and there seems reason
that the field of Political Economy should be resurveyed in its
whole extent, if only for the purpose of incorporating the re-
sults of these speculations, and bringing them into harmony
with the principles previously laid down by the best thinkers
on the subject.

To supply, however, these deficiencies in former treatises
bearing a similar title, is not the sole, or even the principal ob-
ject which the author has in view. The design of the book is
different from that of any treatise on Political Economy which
has been produced in England since the work of Adam Smith.

The most characteristic quality of that work, and the one in
which it most differs from some others which have equalled
and even surpassed it as mere expositions of the general prin-
ciples of the subject, is that it invariably associates the prin-
ciples with their applications. This of itself implies a much
wider range of ideas and of topics, than are included in Polit-
ical Economy, considered as a branch of abstract speculation.
For practical purposes. Political Economy is inseparably inter-
twined with many other branches of social philosophy. Except
on matters of mere detail, there are perhaps no practical ques-
tions, even among those which approach nearest to the charac-
ter of purely economical questions, which admit of being de-
cided on economical premises alone. And it is because Adam

X PREFACE

Smith never loses sight of this truth ; because, in his appHca-
tions of Political Economy, he perpetually appeals to other and
often far larger considerations than pure Political Economy
affords — that he gives that wrell-grounded feeling of command
over the principles of the subject for purposes of practice, ow-
ing to which the " Wealth of Nations," alone among treatises
on Political Economy, has not only been popular with general
readers, but has impressed itself strongly on the minds of men
of the world and of legislators.

It appears to the present writer, that a work similar in its ob-
ject and general conception to that of Adam Smith, but adapted
to the more extended knowledge and improved ideas of the
present age, is the kind of contribution which Political Economy
at present requires. The " Wealth of Nations " is in many
parts obsolete, and in all, imperfect. Political Economy, prop-
erly so called, has grown up almost from infancy since the time
of Adam Smith : and the philosophy of society, from which
practically that eminent thinker never separated his more pe-
culiar theme, though still in a very early stage of its progress,
has advanced many steps beyond the point at which he left it.
No attempt, however, has yet been made to combine his prac-
tical mode of treating his subject with the increased knowledge
since acquired of its theory, or to exhibit the economical phe-
nomena of society in the relation in which they stand to the
best social ideas of the present time, as he did, with such ad-
mirable success, in reference to the philosophy of his century.

Such is the idea which the writer of the present work has
kept before him. To succeed even partially in realizing it,
would be a sufficiently useful achievement, to induce him to
incur willingly all the chances of failure. It is requisite, how-
ever, to add, that although his object is practical, and, as far
as the nature of the subject admits, popular, he has not at-
tempted to purchase either of those advantages by the sacrifice
of strict scientific reasoning. Though he desires that his trea-
tise should be more than a mere exposition of the abstract doc-
trines of Political Economy, he is also desirous that such an
exposition should be found in it.

CONTENTS

PAGE

Preliminary Remarks i

BOOK I
PRODUCTION

Chapter I. Of the Requisites of Production.

1. Requisites of production, what 23

2. The function of labor defined 24\

3. Does nature contribute more to the efficacy of labor in some ■'

occupations than in others ? 26

4. Some natural agents limited, others practically unlimited, in

quantity 2y

Chapter II. Of Labor as an Agent of Production.

1. Labor employed either directly about the thing produced, or in

operations preparatory to its production 29

2. Labor employed in producing subsistence for subsequent la-

bor 31

3. — in producing materials. jii

4. — or implements 35

5. — in the protection of labor 36

6. — in the transport and distribution of the produce 2)1

7. Labor which relates to human beings 40

8. Labor of invention and discovery 41

g. Labor agricultural, manufacturing, and commercial 42

Chapter III. Of Unproductive Labor.

1. Labor does not produce objects, but utilities 44

2. — which are of three kinds 45

3. Productive labor is that which produces utilities fixed and em-

bodied in material objects 47

4. All other labor, however useful, is classed as unproductive. . 49

5. Productive and Unproductive Consumption 51

6. Labor for the supply of Productive Consumption, and labor

for the supply of Unproductive Consumption 52

Chapter IV. Of Capital.

1. Capital is wealth appropriated to reproductive employment. . .'^4

2. More capital devoted to production than actually employed

in it 56

3. Examination of some cases illustrative of the idea of capital. . 59

xi

xii MILL

Chapter V. Fundamental Propositions respecting Capital. j,agk

1. Industry is limited by Capital 62

2. — but does not always come up to that limit 64

3. Increase of capital gives increased employment to labor, with-

out assignable bounds 65

4. Capital is the result of saving 68

5. All capital is consumed 70

6. Capital is kept up, not by preservation, but by perpetual repro-

duction "j^,

7. Why countries recover rapidly from a state of devastation. .. .74

8. Effects of defraying government expenditure by loans 75

9. Demand for commodities is not demand for labor 78

10. Fallacy respecting Taxation 88

Chapter VI. On Circulating and Fixed Capital.

1. Fixed and Circulating Capital, what 90

2. Increase of fixed capital, when at the expense of circulating,

might be detrimental to the laborers 92

3. — but this seldom if ever occurs 96

Chapter VII. On what depends the degree of Productiveness
of Productive Agents.

1. Land, labor, and capital, are of different productiveness at

different times and places 99

2. Causes of superior productiveness. Natural advantages 100

3. — greater energy of labor 102

4. — superior skill and knowledge 104

5. — superiority of intelligence and trustworthiness in the com-

munity generally 106

6. — superior security iii

Chapter VIII. Of Co-operation, or the Combination of Labor.

1. Combination of Labor a principal cause of superior produc-

tiveness 113

2. Effects of separation of employments analyzed 115

3. Combination of labor between town and country 1 18

4. The higher degrees of the division of labor 120

5. Analysis of its advantages 121

6. Limitations of the division of labor 128

Chapter IX. Of Production on a Large, and Production on a
Small Scale.

1. Advantages of the large system of production in manu-

factures 129

2. Advantages and disadvantages of the joint-stock principle... 134

3. Conditions necessary for the large system of production.... 139

4. Large and small farming compared 142

Chapter X. Of the Law of the Increase of Labor.

I. The law of the increase of production depends on those of

three elements. Labor, Capital, and Land 152

CONTENTS xiii

PAGE

2. The Law of Population 153

3. By what checks the increase of population is practically

limited 155

Chapter XL Of the Law of the Increase of Capital.

1. Means and motives to saving, on what dependent 159

2. Causes of diversity in the effective strength of the desire of

accumulation 161

3. Examples of deficiency in the strength of this desire 163

4. Exemplification of its excess 170

Chapter XIL Of the Law of the Increase of Production from
Land.

1. The limited quantity and limited productiveness of land, the

real limits to production 173

2. The law of production from the soil, a law of diminishing

return in proportion to the increased application of labor
and capital 173

3. Antagonist principle to the law of diminishing return; the

progress of improvements in production 177

Chapter XIII. Consequence of the foregoing Laws.

1. Remedies when the limit to production is the weakness of

the principle of accumulation 186

2. Necessity of restraining population not confined to a state of

inequality of property 187

3. — nor superseded by free trade in food 190

4. — nor in general by emigration 194

BOOK II

DISTRIBUTION
Chapter I. Of Property.

1. Introductory remarks 196

2. Statement of the question 198

3. Examination of Communism 200

4. Examination of St. Simonism and Fourierism 208

Chapter II. The same subject continued.

1. The institution of property implies freedom of acquisition by

contract 213

2. — the validity of prescription 214

3. — the power of bequest, but not the right of inheritance.

Question of inheritance examined 215

4. Should the right of bequest be limited, and how? 221

5. Grounds of property in land, different from those of property

in movables 224

6. — only valid on certain conditions, which arc not always real-

ized. The limitations considered 226

7. Rights of property in abuses 230

xiv MILL

Chapter IIL Of the Classes among whom the Produce is dis-

• tributed. page

1. The produce sometimes shared among three classes 231

2. The produce sometimes belongs undividedly to one 232

3. The produce sometimes divided between two 233

Chapter IV. Of Competition and Custom.

1. Competition not the sole regulator of the division of the

produce 235

2. Influence of custom on rents, and on the tenure of land 236

3. Influence of custom on prices 239

Chapter V. Of Slavery.

1. Slavery considered in relation to the slaves 241

2. Slavery in relation to production 242

3. Emancipation considered in relation to the interest of the

slave-owners 245

Chapter VI. Of Peasant Proprietors.

1. Difference between English and Continental opinions respect-

ing peasant properties 246

2. Evidence respecting peasant properties in Switzerland 248

3. — in Norway ' 253

4. — in Germany 256

5. — in Belgium 261

6. — in the Channel Islands 266

7. — in France 268

Chapter VII. Continuation of the same subject.

1. Influence of peasant properties in stimulating industry 272

2. — in training intelligence 275

3. — in promoting forethought and self-control 276

4. Their effect on population 277

5. Their effect on the subdivision of land 285

Chapter VIII. Of Metayers.

1. Nature of the metayer system, and its varieties 289

2. Its advantages and inconveniences 291

3. Evidence concerning its effects in different countries 294

4. Is its abolition desirable? 303

Chapter IX. Of Cottiers.

1. Nature and operation of cottier tenure 305

2. In an overpeopled country its necessary consequence is nomi-

nal rents 308

3. — which are inconsistent with industry, frugality, or restraint

on population 310

4. Ryot tenancy of India 312

Chapter X. Means of abolishing Cottier Tenancy.

1. Irish cottiers should be converted into peasant proprietors. .. . 315

2. Present state of this question 3,23

CONTENTS XV

Chapter XL Of Wages. page

1. Wages depend on the demand and supply of labor — in other

words, on population and capital 328

2. Examination of some popular opinions respecting wages 329

3. Certain rare circumstances excepted, high wages imply re-

straints on population 334

4. — which are in some cases legal 338

5. — in others the effect of particular customs 340

6. Due restriction of population the only safeguard of a labor-

ing class 342

Chapter XII. Of Popular Remedies for Low Wages.

1. A legal or customary minimum of wages, with a guarantee of

employment 345

2. — would require as a condition, legal measures for repression

of population 347

3. Allowances in aid of wages 351

4. The Allotment System 353

Chapter XIII. The Remedies for Low Wages further con-
sidered.

1. Pernicious direction of public opinion on the subject of popu-

lation 357

2. Grounds for expecting improvement 360

3. Twofold means of elevating the habits of the laboring people :

by education 364

4. — and by large measures of immediate relief, through foreign

and home colonization 366

Chapter XIV. Of the Differences of Wages in different Employ-
ments.

1. Differences of wages arising from different degrees of at-

tractiveness in different employments 369

2. Differences arising from natural monopolies 374

3. Effect on wages of a class of subsidized competitors 378

4. — of the competition of persons with independent means of

support 381

5. Wages of women, why lower than those of men 384

6. Differences of wages arising from restrictive laws, and from

combinations 386

7. Cases in which wages are fixed by custom 387

Chapter XV. Of Profits.

1. Profits resolvable into three parts; interest, insurance, and

wages of superintendence 388

2. The minimum of profits; and the variations to which it is

liable 390

3. Differences of profits arising from the nature of the particu-

lar employment 392

4. General tendency of profits to an equality 394

xvi MILL

PAGE

5. Profits do not depend on prices, nor on purchase and sale. . . . 399

6. The advances of the capitalist consist ultimately in wages of

labor , 401

7. The rate of profit depends on the Cost of Labor 402

Chapter XVL Of Rent.

1. Rent the efifect of a natural monopoly 405

2. No land can pay rent except land of such quality or situation,

as exists in less quantity than the demand 405

3. The rent of land consists of the excess of its return above

the return to the vi^orst land in cultivation 408

4. — or to the capital employed in the least advantageous cir-

cumstances 409

5. Is payment for capital sunk in the soil, rent, or profit? 412

6. Rent does not enter into the cost of production of agricul-

tural produce 416

BOOK III

EXCHANGE
Chapter I. Of Value.

1. Preliminary remarks 419

2. Definitions of Value in Use, Exchange Value, and Price.... 420

3. What is meant by general purchasing power 421

4. Value a relative term. A general rise or fall of Values a con-

tradiction 423

5. The laws of Value, how modified in their application to retail

transactions 424

Chapter II. Of Demand and Supply, in their relation to Value.

1. Two conditions of Value: Utility, and Difficulty of Attain-

ment 426

2. Three kinds of Difficulty of Attainment 428

3. Commodities which are absolutely limited in quantity 429

4. Law of their value, the Equation of Demand and Supply 430

5. Miscellaneous cases falling under this law 432

Chapter III. Of Cost of Production, in its relation to Value.

1. Commodities which are susceptible of indefinite multiplica-

tion without increase of cost. Law of their Value, Cost

of Production 434

2. — operating through potential, but not actual, alterations of

supply 436

Chapter IV. Ultimate Analysis of Cost of Production.

1. Principal element in Cost of Production — Quantity of Labor. 440

2. Wages not an element in Cost of Production 442

3. — except in so far as they vary from employment to em-

ployment 443

CONTENTS xvii

PAGE

4. Profits an element in Cost of Production, in so far as they

vary from employment to employment 444

5. — or are spread over unequal lengths of time 446

6. Occasional elements in Cost of Production : taxes, and scarcity

value of materials 449

Chapter V. Of Rent, in its Relation to Value.

1. Commodities which are susceptible of indefinite multiplication,

but not without increase of cost. Law of their Value,
Cost of Production in the most imfavorable existing cir-
cumstances 451

2. Such commodities, when produced in circumstances more

favorable, yield a rent equal to the difference of cost 454

3. Rent of mines and fisheries, and ground-rent of buildings... 456

4. Cases of extra profit analogous to rent 458

CHOICE EXAMPLES OF BOOK ILLUMINATION.

Fac-similes from Illuminated Manuscripts and Illustrated Books

of Early Date.

DESCENT OF THE HOLY GHOST.

This fac-simile is a page from a Livre d'Heures by Jacques de Bregilles, and
was probably executed at Brussels in T442.

ILLUSTRATIONS

FACING PAGE

John Stuart Mill (Portrait)
Photogravure from a steel engraving

Descent of the Holy Ghost .

Fac-simile Illumination of the Fifteenth Century

Hermes

Photo-engraving from the original bronze statue

Title Page by Holbein . . . . ,

Fac-simile example of Printing in the Sixteenth Century

Early Venetian Printing . . . .
Fac-simile of a title-page printed at Venice in 1523

Frontispiece

XVUl

98

< •

172

. 418

PRINCIPLES

OF

POLITICAL ECONOMY

PRELIMINARY REMARKS

IN every department of human affairs, Practice long precedes
Science : systematic inquiry into the modes of action of
the powers of nature, is the tardy product of a long course
of efforts to use those powers for practical ends. The conception,
accordingly, of Political Economy as a branch of science, is
extremely modern ; but the subject with which its inquiries are
conversant has in all ages necessarily constituted one of the
chief practical interests of mankind, and, in some, a rnost un-
duly engrossing one.

That subject is Wealth. Writers on Political Economy
profess to teach, or to investigate, the nature of Wealth, and
the laws of its production and distribution : including, directly
or remotely, the operation of all the causes by which the con-
dition of mankind, or of any society of human beings, in respect
to this universal object of human desire, is made prosperous
or the reverse. Not that any treatise on Political Economy
can discuss or even enumerate all these causes ; but it under-
takes to set forth as much as is known of the laws and principles
according to which they operate.

Everyone has a notion, sufficiently correct for common pur-
poses, of what is meant by wealth. The inquiries which relate
to it are in no danger of being confounded with those relating
to any other of the great human interests. All know that it
is one thing to be rich, another thing to be enlightened, brave,
or humane ; that the questions how a nation is made wealthy,
and how it is made free, or virtuous, or eminent in literature,
in the fine arts, in arms, or in polity, are totally distinct in-

VOL. I. — I I

2 POLITICAL ECONOMY

quiries. Those things, indeed, are all indirectly connected,
and react upon one another. A people has sometimes become
free, because it had first grown wealthy ; or wealthy, because
it had first become free. The creed and laws of a people act
powerfully upon their economical condition ; and this again,
by its influence on their mental development and social rela-
tions, reacts upon their creed and laws. But though the sub-
jects are in very close contact, they are essentially different,
and have never been supposed to be otherwise.

It is no part of the design of this treatise to aim at metaphysi-
cal nicety of definition, where the ideas suggested by a term
are already as determinate as practical purposes require. But,
little as it might be expected that any mischievous confusion
of ideas could take place on a subject so simple as the question.
What is to be considered as wealth ? it is matter of history that
such confusion of ideas has existed — that theorists and practi-
cal politicians have been equally, and at one period universally,
infected by it, and that for many generations it gave a thor-
oughly false direction to the policy of Europe. I refer to the
set of doctrines designated, since the time of Adam Smith, by
the appellation of the Mercantile System.

While this system prevailed, it was assumed, either expressly
or tacitly, in the whole policy of nations, that wealth consisted
solely of money ; or of the precious metals, which, when not
already in the state of money, are capable of being directly con-
verted into it. According to the doctrines then prevalent,
whatever tended to heap up money or bullion in a country
added to its wealth. Whatever sent the precious metals out
of a country impoverished it. If a country possessed no gold
or silver mines, the only industry by which it could be enriched
was foreign trade, being the onl}^ one which could bring in
money. Any branch of trade which was supposed to send
out more money than it brought in, however ample and valu-
able might be the returns in another shape, was looked upon
as a losing trade. Exportation of goods was favored and en-
couraged (even by means extremely onerous to the real re-
sources of the country), because the exported goods being
stipulated to be paid for in money, it was hoped that the re-
turns would actually be made in gold and silver. Importation
of anything, other than the precious metals, was regarded as
a loss to the nation of the whole price of the things imported ;

PRELIMINARY REMARKS 3

unless they were brought in to be re-exported at a profit, or
unless, being the materials or instruments of some industry
practiced in the country itself, they gave the power of pro-
ducing exportable articles at smaller cost, and thereby effecting
a larger exportation. The commerce of the world was looked
upon as a struggle among nations, which could draw to itself
the largest share of the gold and silver in existence ; and in
this competition no nation could gain anything, except by
making others lose as much, or, at the least, preventing them
from gaining it.

It often happens that the universal belief of one age of man-
kind— a belief from which no one li'.as, nor without an extraor-
dinary effort of genius and courage, coitld at that time be free
— becomes to a subsequent age so palpable an absurdity, that
the only difficulty then is to imagine how such a thing can ever
have appeared credible. It has so happened with the doctrine
that money is synonymous with wealth. The conceit seems
too preposterous to be thought of as a serious opinion. It
looks like one of the crude fancies of childhood, instantly cor-
rected by a word from any grown person. But let no one
feel confident that he would have escaped the delusion if he had
lived at the time when it prevailed. All the associations en-
gendered by common life, and by the ordinary course of busi-
ness, concurred in promoting it. So long as those associations
were the only medium through which the subject was looked
at, what we now think so gross an absurdity seemed a truism.
Once questioned, indeed, it was doomed : but no one was likely
to think of questioning it whose mind had not become familiar
with certain modes of stating and of contemplating economical
phenomena, which have only found their way into the general
understanding through the influence of Adam Smith and of his
expositors.

In common discourse, wealth is always expressed in money.
If you ask how rich a person is, you are answered that he has
so many thousand pounds. All income and expenditure, all
gains and losses, everything by which one becomes richer or
poorer, are reckoned as the coming in or going out of so much
monev. It is true that in the inventory of a person's fortune
are included, not only the money in his actual possession, or
due to him, but all other articles of value. These, however,
enter, not in their own character, but in virtue of the sums of

4 POLITICAL ECONOMY

money which they would sell for ; and if they would sell for
less, their owner is reputed less rich, though the things them-
selves are precisely the same. It is true, also, that people do
not grow rich by keeping their money unused, and that they
miist be willing to spend in order to gain. Those who enrich
themselves by commerce, do so by giving money for goods as
well as goods for money ; and the first is as necessary a part of
the process as the last. But a person who buys goods for
purposes of gain, does so to sell them again for money, and in
the expectation of receiving more money than he laid out : to
get money, therefore, seems even to the person himself the ulti-
mate end of the whole. It often happens that he is not paid
in money, but in something else ; having bought goods to a
value equivalent, which are set ofT against those he sold. But
he accepted these at a money valuation, and in the belief that
they would bring in more money eventually than the price at
which they were made over to him. A dealer doing a large
amount of business, and turning over his capital rapidly, has
but a small portion of it in ready money at any one time. But
he only feels it valuable to him as it is convertible into money :
he considers no transaction closed until the net result is either
paid or credited in money : when he retires from business it is
into money that he converts the whole, and not until then does
he deem himself to have realized his gains: just as if money
were the only wealth, and money's worth were only the means
of attaining it. If it be now asked for what end money is de-
sirable, unless to supply the wants or pleasures of one's self or
others, the champion of the system would not be at all embar-
rassed by the question. True, he would say, these are the uses
of wealth, and very laudable uses while confined to domestic
commodities, because in that case, by exactly the amount which
you expend, you enrich others of your countrymen. Spend
your wealth, if you please, in whatever indulgences you have a
taste for ; but your wealth is not the indulgences, it is the sum
of money, or the annual money income, with which you pur-
chase them.

While there were so many things to render the assumption
which is the basis of the mercantile system plausible, there is
also some small foundation in reason, though a very insufficient
one, for the distinction which that system so emphatically
draws between money and every other kind of valuable pos-

PRELIMINARY REMARKS 5

session. We really, and justly, look upon a person as pos-
sessing the advantages of wealth, not in proportion to the use-
ful and agreeable things of which he is in the actual enjoyment,
but to his command over the general fund of things useful and
agreeable ; the power he possesses of providing for any exi-
gency, or obtaining any object of desire. Now, money is itself
that power ; while all other things, in a civilized state, seem to
confer it only by their capacity of being exchanged for money.
To possess any other article of wealth, is to possess that par-
ticular thing, and nothing else : if you wish for another thing
instead of it, you have first to sell it, or to submit to the incon-
venience and delay (if not the impossibility) of finding some
one who has what you want, and is willing to barter it for what
you have. But with money you are at once able to buy what-
ever things are for sale : and one whose fortune is in money,
or in things rapidly convertible into it, seems both to himself
and others to possess not any one thing, but all the things
which the money places it at his option to purchase. The
greatest part of the utility of wealth, beyond a very moderate
quantity, is not the indulgences it procures, but the reserved
power which its possessor holds in his hands of attaining pur-
poses generally ; and this power no other kind of wealth confers
so immediately or so certainly as money. It is the only form
of wealth which is not merely applicable to some one use, but
can be turned at once to any use. And this distinction was the
more likely to make an impression upon governments, as it is
one of considerable importance to them. A civilized govern-
ment derives comparatively little advantage from taxes unless
it can collect them in money : and if it has large or sudden pay-
ments to make, especially payments in foreign countries for
wars or subsidies, either for the sake of conquering or of not
being conquered (the two chief objects of national policy until
a late period), scarcely any medium of payment except money
will serve the purpose. All these causes conspire to make both
individuals and governments, in estimating their means, attach
almost exclusive importance to money, either in esse or in posse,
and look upon all other things (when viewed as part of their
resources) scarcely otherwise than as the remote means of ob-
taining that which alone, when obtained, affords the indefinite,
and at the same time instantaneous, command over objects of
desire, which best answers to the idea of wealth.

6 POLITICAL ECONOMY

An absurdity, however, does not cease to be an absurdity
when we have discovered what were the appearances which
made it plausible ; and the Mercantile Theory could not fail to
be seen in its true character when men began, even in an im-
perfect manner, to explore into the foundations of things, and
seek their premises from elementary facts, and not from the
forms and phrases of common discourse. So soon as they
asked themselves what is really meant by money — what it is
in its essential characters, and the precise nature of the func-
tions it performs — they reflected that money, like other things,
is only a desirable possession on account of its uses ; and that
these, instead of being, as they delusively appear, indefinite,
are of a strictly defined and limited description, namely, to
facilitate the distribution of the produce of industry according
to the convenience of those among whom it is shared. Further
consideration showed that the uses of money are in no respect
promoted by increasing the quantity which exists and circu-
lates in a country ; the service which it performs being as well
rendered by a small as by a large aggregate amount. Two
million quarters of corn will not feed so many persons as four
miUions ; but two millions of pounds sterling will carry on as
much traf^c, will buy and sell as many commodities, as four
millions, though at lower nominal prices. Money, as money,
satisfies no want ; its worth to any one, consists in its being a
convenient shape in which to receive his incomings of all sorts,
which incomings he afterwards, at the times which suit him
best, converts into the forms in which they can be useful to him.
Great as the difference would be between a country with money,
and a country altogether without it, it would be only one of
convenience ; a saving of time and trouble, like grinding by
water power instead of by hand, or (to use Adam Smith's illus-
tration) like the benefit derived from roads; and to mistake
money for wealth, is the same sort of error as to mistake the
highway which may be the easiest way of getting to your house
or lands, for the house and lands themselves.

Money, being the instrument of an important public and
private purpose, is rightly regarded as wealth ; but everything
else which serves any human purpose, and which nature does
not afford gratuitously, is wealth also. To be wealthy is to
have a large stock of useful articles, or the means of purchasing
them. Everything forms therefore a part of wealth, which

PRELIMINARY REMARKS 7

has a power of purchasing ; for which anything useful or agree-
able would be given in exchange. Things for which nothing
could be obtained in exchange, however useful or necessary
they may be, are not wealth in the sense in which the term is
used in Political Economy. Air, for example, though the
most absolute of necessaries, bears no price in the market,
because it can be obtained gratuitously : to accumulate a stock
of it would yield no profit or advantage to anyone ; and the
laws of its production and distribution are the subject of a
very different study from Political Economy. But though air
is not wealth, mankind are much richer by obtaining it gratis,
since the time and labor which would otherwise be required
for supplying the most pressing of all wants, can be devoted to
other purposes. It is possible to imagine circumstances in
which air would be a part of wealth. If it became customary
to sojourn long in places where the air does not naturally pene-
trate, as in diving-bells sunk in the sea, a supply of air artificially
furnished would, like water conveyed into houses, bear a price :
and if from any revolution in nature the atmosphere became
too scanty for the consumption, or could be monopolized, air
might acquire a very high marketable value. In such a case,
the possession of it, beyond his own wants, would be, to its
owner, wealth ; and the general wealth of mankind might at
first sight appear to be increased, by what would be so great
a calamity to them. The error would lie in not considering,
that however rich the possessor of air might become at the 1
expense of the rest of the community, all persons else would '
be poorer by all that they were compelled to pay for what they
had before obtained without payment.

This leads to an important distinction in the meaning of the
word wealth, as applied to the possessions of an individual,
and to those of a nation, or of mankind. In the wealth of man-
kind, nothing is included which does not of itself answer some
purpose of utility or pleasure. [To an individual, anything is
wealth, which, though useless in itself, enables him to claim
from others a part of their stock of things useful or pleasan^
Take, for instance, a mortgage of a thousand pounds on a
landed estate. This is wealth to the person to whom it brings
in a revenue, and who could perhaps sell it in the market for
the full amount of the debt. But it is not wealth to the coun-
try; if the engagement were annulled, the country would be

8 POLITICAL ECONOMY

neither poorer nor richer. The mortgagee would have lost a
thousand pounds, and the owner of the land would have gained
it. Speaking nationally, the mortgage was not itself wealth,
but merely gave A a claim to a portion of the wealth of B. It
was wealth to A, and wealth which he could transfer to a third
person ; but what he so transferred was in fact a joint owner-
ship, to the extent of a thousand pounds, in the land of which
B was nominally the sole proprietor. The position of fund-
holders, or owners of the public debt of a country, is similar.
They are mortgagees on the general wealth of the country.
The cancelling of the debt would be no destruction of wealth,
but a transfer of it : a wrongful abstraction of wealth from cer-
tain members of the community, for the profit of the govern-
ment, or of the tax-payers. Funded property therefore cannot
be counted as part of the national wealth. This is not always
borne in mind by the dealers in statistical calculations. For
example, in estimates of the gross income of the country,
founded on the proceeds of the income tax, incomes derived
from the funds are not always excluded : though the tax-payers
are assessed on their whole nominal income, without being per-
mitted to deduct from it the portion levied from them in taxa-
tion to form the income of the fund-holder. In this calculation,
therefore, one portion of the general income of the country is
counted twice over, and the aggregate amount made to appear
greater than it is by almost thirty millions. A country, how-
ever, may include in its wealth all stock held by its citizens in
the funds of foreign countries, and other debts due to them
from abroad. But even this is only wealth to them by being a
part ownership in wealth held by others. It forms no part of
the collective wealth of the human race. It is an element in
the distribution, but not in the composition, of the general
wealth.

It has been proposed to define wealth as signifying " instru-
ments " : meaning not tools and machinery alone, but the whole
accumulation possessed by individuals or communities, of
means for the attainment of their ends. Thus, a field is an in-
strument, because it is a means to the attainment of corn. Corn
is an instrument, being a means to the attainment of flour.
Flour is an instrument, being a means to the attainment of
bread. Bread is an instrument, as a means to the satisfaction
of hunger and to the support of life. Here we at last arrive at

PRELIMINARY REMARKS 9

things which are not instruments, being desired on their own
account, and not as mere means to something beyond. This
view of the subject is philosophically correct; or rather, this
mode of expression may be usefully employed along with
others, not as conveying a dififerent view of the subject from
the common one, but as giving more distinctness and reality
to the common view. It departs, however, too widely from
the custom of language, to be likely to obtain general accept-
ance, or to be of use for any other purpose than that of occa-
sional illustration.

Another example of a possession which is wealth to the per-
son holding it, but not wealth to the nation, or to mankind, is
slaves. It is by a strange confusion of ideas that slave property
(as it is termed) is counted, at so much per head, in an estimate
of the wealth, or of the capital, of the country which tolerates
the existence of such property. If a human being, considered
as an object possessing productive powers, is part of the na-
tional wealth when his powers are owned by another man, he
cannot be less a part of it when they are owned by himself.
Whatever he is worth to his master is so much property ab-
stracted from himself, and its abstraction cannot augment the
possessions of the two together, or of the country to which they
both belong. In propriety of classification, however, the peo-
ple of a country are not to be counted in its wealth. They are
that for the sake of which its wealth exists. The term wealth
is wanted to denote the desirable objects which they possess,
not inclusive of, but in contradistinction to, their own persons.
They are not wealth to themselves, though they are means of
acquiring it.

Wealth, then, may be defined, all useful or agreeable things
which possess exchangeable value ; or, in other words, all use-
ful or agreeable things except those which can be obtained, in
the quantity desired, without labor or sacrifice. To this defi-
nition, the only objection seems to be, that it leaves in uncer-
tainty a question which has been much debated — whether what
are called immaterial products are to be considered as wealth :
whether, for example, the skill of a workman, or any other
natural or acquired power of body or mind, shall be called
wealth, or not: a question, not of very great importance, and
which, so far as requiring discussion, will be more conveniently
considered in another place.*

* Infra, book I. chap. iii.

10 POLITICAL ECONOMY

These things having been premised respecting wealth, we
shall next turn our attention to the extraordinary differences
in respect to it, which exist between nation and nation, and be-
tween different ages of the world ; differences both in the quan-
tity of wealth, and in the kind of it ; as well as in the manner
in which the wealth existing in the community is shared among
its members.

There is, perhaps, no people or community, now existing,
which subsists entirely on the spontaneous produce of vegeta-
tion. But many tribes still live exclusively, or almost exclu-
sively, on wild animals, the produce of hunting or fishing. Their
clothing is skins ; their habitations huts rudely formed of logs
or boughs of trees, and abandoned at an hour's notice. The
food they use being little susceptible of storing up, they have
no accumulation of it, and are often exposed to great privations.
The wealth of such a community consists solely of the skins
they wear ; a few ornaments, the taste for which exists among
most savages ; some rude utensils ; the weapons with which
they kill their game, or fight against hostile competitors for the
means of subsistence ; canoes for crossing rivers and lakes, or
fishing in the sea; and perhaps some furs or other productions
of the wilderness, collected to be exchanged with civilized peo-
ple for blankets, brandy, and tobacco ; of which foreign produce
also there may be some unconsumed portion in store. To this
scanty inventory of material wealth, ought to be added their
land ; an instrument of production of which they make slender
use, compared with more settled communities, but which is
still the source of their subsistence, and which has a marketable
value if there be any agricultural community in the neighbor-
hood requiring more land than it possesses. This is the state
of greatest poverty in which any entire community of human
beings is known to exist ; though there are much richer com-
munities in which portions of the inhabitants are in a condition,
as to subsistence and comfort, as little enviable as that of the
savage.

The first great advance beyond this state consists in the
domestication of the more useful animals ; giving rise to the
pastoral or nomad state, in which mankind do not live on
the produce of hunting, but on milk and its products, and on
the annual increase of fllocks and herds. This condition is
not only more desirable in itself, but more conducive to further

PRELIMINARY REMARKS ii

progress ; and a much more considerable amount of wealth is
accumulated under it. So long as the vast natural pastures of
the earth are not yet so fully occupied as to be consumed more
rapidly than they are spontaneously reproduced, a large and
constantly increasing stock of subsistence may be collected and
preserved, with little other labor than that of guarding the
cattle from the attacks of wild beasts, and from the force or
wiles of predatory men. Large flocks and herds, therefore,
are in time possessed, by active and thrifty individuals through
their own exertions, and by the heads of families and tribes
through the exertions of those who are connected with them
by allegiance. There thus arises, in the shepherd state, in-
equality of possessions ; a thing which scarcely exists in the
savage state, where no one has much more than absolute neces-
saries, and in case of deficiency must share even those with his
tribe. In the nomad state, some have an abundance of cattle,
sufificient for the food of a nmltitude, while others have not con-
trived to appropriate and retain any superfluity, or perhaps any
cattle at all. But subsistence has ceased to be precarious, since
the more successful have no other use which they can make of
their surplus than to feed the less fortunate, while every in-
crease in the number of persons connected with them is an in-
crease both of security and of power : and thus they are enabled
to divest themselves of all labor except that of government
and superintendence, and acquire dependents to fight for them
in war and to serve them in peace. One of the features of this
state of society is, that a part of the community, and in some
degree even the whole of it, possess leisure. Only a portion
of time is required for procuring food, and the remainder is not
engrossed by anxious thought for the morrow, or necessary
repose from muscular activity. Such a life is highly favorable
to the growth of new wants, and opens a possibility of their
gratification. A desire arises for better clothing, utensils, and
implements, than the savage state contents itself with ; and the
surplus food renders it practicable to devote to these purposes
the exertions of a part of the tribe. In all or most nomad com-
munities we find domestic manufactures of a coarse, and in
some, of a fine kind. There is ample evidence that while those
parts of the world which have been the cradle of modern civili-
zation were still generally in the nomad state, considerable skill
had been attained in spinning, weaving, and dyeing woollen

12 POLITICAL ECONOMY

garments, in the preparation of leather, and in what appears a
still more difficult invention, that of working in metals. Even
speculative science took its first beginnings from the leisure
characteristic of this stage of social progress. The earliest as-
tronomical observations are attributed, by a tradition which
has much appearance of truth, to the shepherds of Chaldaea.

From this state of society to the agricultural the transition
is not indeed easy (for no great change in the habits of mankind
is otherwise than difficult, and in general either painful or very
slow), but it lies in what may be called the spontaneous course
of events. fThe growth of the population of men and cattle
began in time to press upon the earth's capabilities of yielding
natural pasture : and this cause doubtless produced the first
tilling of the ground, just as at a later period the same cause
made the superfluous hordes of the nations which had remained
nomad precipitate themselves upon those which had already
become agricultural ; until, these having become sufficiently
powerful to repel such inroads, the invading nations, deprived
of this outlet, were obliged also to become agricultural com-
munities.

But after this great step had been completed, the subsequent
progress of mankind seems by no means to have been so rapid
(certain rare combinations of circumstances excepted) as might
perhaps have been anticipated. The quantity of human food
which the earth is capable of returning even to the most
wretched system of agriculture, so much exceeds what could
be obtained in the purely pastoral state, that a great increase
of population is invariably the result. But this additional food
is only obtained by a great additional amount of labor ; so that
not only an agricultural has much less leisure than a pastoral
population, but, with the imperfect tools and unskilful proc-
esses which are for a long time employed (and which over the
greater part of the earth have not even yet been abandoned),
agriculturists do not, unless in unusually advantageous cir-
cumstances of climate and soil, produce so great a surplus of
food beyond their necessary consumption, as to support any
large class of laborers engaged in other departments of in-
dustry. The surplus, too, whether small or great, is usually
torn from the producers, either by the government to which
they are subject, or by individuals, who by superior force, or
by availing themselves of religious or traditional feelings of

PRELIMINARY REMARKS

13

subordination, have established themselves as lords of the
soil.

The first of these modes of appropriation, by the govern-
ment, is characteristic of the extensive monarchies which from
a time beyond historical record have occupied the plains of
Asia. The government, in those countries, though varying
in its qualities according to the accidents of personal character,
seldom leaves much to the cultivators beyond mere necessaries,
and often strips them so bare even of these, that it finds itself
obliged, after taking all they have, to lend part of it back to
those from whom it has been taken, in order to provide them
with seed, and enable them to support life until another harvest.
Under the regime in question, though the bulk of the popula-
tion are ill provided for, the government, by collecting small
contributions from great numbers, is enabled, with any toler-
able management, to make a show of riches quite out of pro-
portion to the general condition of the society ; and hence the
inveterate impression, of which Europeans have only at a late
period been disabused, concerning the great opulence of Orien-
tal nations. In this wealth, without reckoning the large por-
tion which adheres to the hands employed in collecting it, many
persons of course participate, besides the immediate household
of the sovereign. A large part is distributed among the various
functionaries of government, and among the objects of the sov-
ereign's favor or caprice. A part is occasionally employed in
works of public utility. The tanks, wells, and canals for irri-
gation, without which in many tropical climates cultivation
could hardly be carried on ; the embankments which confine
the rivers, the bazars for dealers, and the scraees for travellers,
none of which could have been made by the scanty means in
the possession of those using them, owe their existence to the
liberality and enlightened self-interest of the better order of
princes, or to the benevolence or ostentation of here and there
a rich individual, whose fortune, if traced to its source, is al-
ways found to have been drawn immediately or remotely from
the public revenue, most frequently by a direct grant of a por-
tion of it from the sovereign.

The ruler of a society of this description, after providing
largely for his own support, and that of all persons in whom he
feels an interest, and after maintaining as manv soldiers as he
thinks needful for his security or his state, has a disposable resi-

14 POLITICAL ECONOMY

due, which he is glad to exchange for articles of luxury suitable
to his disposition : as have also the class of persons who have
been enriched by his favor, or by handling the public revenues.
A demand thus arises for elaborate and costly manufactured
articles, adapted to a narrow but a wealthy market. This de-
mand is often supplied almost exclusively by the merchants of
more advanced communities, but often also raises up in the
country itself a class of artificers, by whom certain fabrics are
carried to as high excellence as can be given by patience,
quickness of perception and observation, and manual dex-
terity, without any considerable knowledge of the properties
of objects : such as some of the cotton fabrics of India. These
artificers are fed by the surplus food which has been taken by
the government and its agents as their share of the produce.
So literally is this the case, that in some countries the workman,
instead of taking the work home, and being paid for it after it is
finished, proceeds with his tools to his customer's house, and
is there subsisted until the work is complete. The insecurity,
however, of all possessions in this state of society, induces even
the richest purchasers to give a preference to such articles as,
being of an imperishable nature, and containing great value
in small bulk, are adapted for being concealed or carried off.
Gold and jewels, therefore, constitute a large proportion of the
wealth of these nations, and many a rich Asiatic carries nearly
his whole fortune on his person, or on those of the women of
his harem. No one, except the monarch, thinks of investing
his wealth in a manner not susceptible of removal. He, in-
deed, if he feels safe on his throne, and reasonably secure of
transmitting it to his descendants, sometimes indulges a taste
for durable edifices, and produces the Pyramids, or the Taj
Mahal and the Mausoleum at Sekundra. The rude manu-
factures destined for the wants of the cultivators are worked
up by village artisans, who are remunerated by land given to
them rent-free to cultivate, or by fees paid to them in kind from
such share of the crop as is left to the villagers by the govern-
ment. This state of society, however, is not destitute of a mer-
cantile class ; composed of two divisions, grain dealers and
money dealers. The grain dealers do not usually buy grain
from the producers, but from the agents of government, who,
receiving the revenue in kind, are glad to devolve upon others
the business of conveying it to the places where the prince, his

PRELIMINARY REMARKS 15

chief civil and military officers, the bulk of his troops, and the
artisans who supply the wants of these various persons, are
assembled. The money dealers lend to the unfortunate culti-
vators, when ruined by bad seasons or fiscal exactions, the
means of supporting life and continuing their cultivation, and
are repaid with enormous interest at the next harvest : or,
on a large scale, they lend to the government, or to those to
whom it has granted a portion of the revenue, and are indem-
nified by assigriiments on the revenue collectors, or by having
certain districts put into their possession, that they may pay
themselves from the revenues ; to enable them to do which, a
great portion of the powers of government are usually made
over simultaneously, to be exercised by them until either the
districts are redeemed, or their receipts have liquidated the
debt. Thus, the commercial operations of both these classes
of dealers take place principally upon that part of the produce
of the country which forms the revenue of the government.
From that revenue their capital is periodically replaced with a
profit, and that is also the source from which their original
funds have almost always been derived. Such, in its general
features, is the economical condition of most of the countries
of Asia, as it has been from beyond the commencement of au-
thentic history, and is still, wherever not disturbed by foreign
influences.

In the agricultural communities of ancient Europe whose
early condition is best known to us, the course of things was
diliferent. These, at their origin, were mostly small town-
communities, at the first plantation of which, in an unoccupied
country, or in one from which the former inhabitants had been
expelled, the land which was taken possession of was regu-
larly divided, in equal or in graduated allotments, among the
families composing the community. In some cases, instead of
a town there was a confederation of towns, occupied by people
of the same reputed race, and who were supposed to have set-
tled in the country about the same time. Each family pro-
duced its own food and the materials of its clothing, which were
worked up within itself, usually by the women of the family,
into the coarse fabrics with which the age was contented.
Taxes there were none, as there were either no paid officers of
government or if there were, their payment had been provided
for by a reserved portion of land, cultivated by slaves on ac-

i6 POLITICAL ECONOMY

count of the state; and the army consisted of the body of citi-
zens. The whole produce of the soil, therefore, belonged,
without deduction, to the family which cultivated it. So long
as the progress of events permitted this disposition of property
to last, the state of society was, for the majority of the free cul-
tivators, probably not an undesirable one ; and under it, in
some cases, the advance of mankind in intellectual culture was
extraordinarily rapid and brilliant. This more especially hap-
pened where, along with advantageous circumstances of race
and climate, and no doubt with many favorable accidents of
which all trace is now lost, was combined the advantage of a
position on the shores of a great inland sea, the other coasts of
which were already occupied by settled communities. The
knowledge which in such a position was acquired of foreign
productions, and the easy access of foreign ideas and inven-
tions, made the chain of routine, usually so strong in a rude
people, hang loosely on these communities. To speak only of
their industrial development ; they early acquired variety of
wants and desires, which stimulated them to extract from their
own soil the utmost which they knew how to make it yield ;
and when their soil was sterile, or after they had reached the
limit of its capacity, they often became traders, and bought up
the productions of foreign countries, to sell them in other coun-
tries with a profit.

The duration, however, of this state of things was from the
first precarious. These little communities lived in a state of
almost perpetual war. For this there were many causes. In
the ruder and purely agricultural communities a frequent cause
was the mere pressure of their increasing population upon their
limited land, aggravated as that pressure so often was by defi-
cient harvests in the rude state of their agriculture, and depend-
ing as they did for food upon a very small extent of country.
On these occasions, the community often emigrated in a body,
or sent forth a swarm of its youth, to seek, sword in hand, for
some less warlike people, who could be expelled from their
land, or detained to cultivate it as slaves for the benefit of their
despoilers. What the less advanced tribes did from necessity,
the more prosperous did from ambition and the military spirit :
and after a time the whole of these city-communities were
either conquerors or conquered. In some cases, the conquer-
ing state contented itself with imposing a tribute on the van-

PRELIMINARY REMARKS 17

quished : who being, in consideration of that burden, freed
from the expense and trouble of their own miUtary and naval
protection, might enjoy under it a considerable share of eco-
nomical prosperity, while the ascendant community obtained
a surplus of wealth, available for purposes of collective luxury
or magnificence. From such a surplus the Parthenon and the
Propylsea were built, the sculptures of Phidias paid for, and
the festivals celebrated, for which yEschylus, Sophocles, Eu-
ripides, and Aristophanes composed their dramas. But this
state of political relations, most useful, while it lasted, to the
progress and ultimate interest of mankind, had not the ele-
ments of durability. A small conquering community which
does not incorporate its conquests, always ends by being con-
quered. Universal dominion, therefore, at last rested with the
people who practised this art — with the Romans ; who, what-
ever were their other devices, always either began or ended by
taking a great part of the land to enrich their own leading
citizens, and by adopting into the governing body the prin-
cipal possessors of the remainder. It is unnecessary to dwell
on the melancholy economical history of the Roman Empire.
When inequality of wealth once commences, in a community
not constantly engaged in repairing by industry the injuries
of fortune, its advances are gigantic ; the great masses of
wealth swallow up the smaller. The Roman Empire ultimately
became covered with the vast landed possessions of a compara-
tively few families, for whose luxury, and still more for whose
ostentation, the most costly products were raised, while the
cultivators of the soil were slaves, or small tenants in a nearly
servile condition. From this time the wealth of the empire
progressively declined. In the beginning, the public revenues,
and the resources of rich individuals, sufficed at least to cover
Italy with splendid edifices, public and private: but at length
so dwindled under the enervating influences of misgovern-
ment, that what remained was not even sufficient to keep those
edifices from decay. The strength and riches of the civilized
world became inadequate to make head against the nomad
population wliich skirted its northern frontier: they overran
the empire, and a different order of things succeeded.

In the new frame in which European society was now cast,
the population of each country may be considered as com-
posed, in unc(|ual proportions, of two distinct nations or races,
Vol. I.— 2

i8 POLITICAL ECONOMY

the conquerors and the conquered: the first the proprietors
of the land, the latter the tillers of it. These tillers were allowed
to occupy the land on conditions which, being the product of
force, were always onerous, but seldom to the extent of ab-
solute slavery. Already, in the later times of the Roman em-
pire, predial slavery had extensively transformed itself into a
kind of serfdom : the coloni of the Romans were rather villeins
than actual slaves ; and the incapacity and distaste of the bar-
barian conquerors for personally superintending industrial oc-
cupations, left no alternative but to allow to the cultivators,
as an incentive to exertion^ some real interest in the soil. If,
for example, they were compelled to labor, three days in the
week, for their superior, the produce of the remaining days
was their own. If they were required to supply the provisions
of various sorts, ordinarily needed for the consumption of the
castle, and were often subject to requisitions in excess, yet after
supplying these demands they were suffered to dispose at their
will of whatever additional produce they could raise. Under
this system during the Middle Ages it was not impossible, no
more than in modern Russia (where, up to the recent measure
of emancipation, the same system still essentially prevailed)
for serfs to acquire property ; and in fact, their accumulations
are the primitive source of the wealth of modern Europe,

In that age of violence and disorder, the first use made by a
serf of any small provision which he had been able to accumu-
late, was to buy his freedom and withdraw himself to some
town or fortified village, which had remained undestroyed
from the time of the Roman dominion ; or, without buying his
freedom, to abscond thither. In that place of refuge, sur-
rounded by others of his own class, he attempted to live, se-
cured in some measure from the outrages and exactions of the
warrior caste, by his own prowess and that of his fellows. These
emancipated serfs mostly became artificers ; and lived by ex-
changing the produce of their industry for the surplus food
and materials which the soil yielded to its feudal proprietors.
This gave rise to a sort of European counterpart of the eco-
nomical condition of Asiatic countries ; except that, in lieu of a
single monarch and a fluctuating body of favorites and em-
ployes, there was a numerous and in a considerable degree fixed
class of great landholders ; exhibiting far less splendor, be-
cause individually disposing of a much smaller surplus pro-

PRELIMINARY REMARKS 19

duce, and for a long time expending the chief part of it in
maintaining the body of retainers whom the warhke habits of
society, and the httle protection afforded by government, ren-
dered indispensable to their safety. The greater stability, the
fixity of personal position, which this state of society afiforded,
in comparison with the Asiatic polity to which it economically
corresponded, was one main reason why it was also found more
favorable to improvement. From this time the economical
advancement of society has not been further interrupted. Se-
curity of person and property grew slowly, but steadily ; the
arts of life made constant progress ; plunder ceased to be the
principal source of accumulation ; and feudal Europe ripened
into commercial and manufacturing Europe. In the latter part
of the Middle Ages, the towns of Italy and Flanders, the free
cities of Germany, and some towns of France and England,
contained a large and energetic population of artisans, and
and many rich burghers, whose wealth had been acquired by
manufacturing industry, or by trading in the produce of such
industry. The Commons of England, the Tiers-Etat of
France, the bourgeoisie of the Continent generally, are the de-
scendants of this class. As these were a saving class, while the
posterity of the feudal aristocracy were a squandering class,
the former by degrees substituted themselves for the latter as
the owners of a great proportion of the land. This natural ten-
dency was in some cases retarded by laws contrived for the
purpose of detaining the land in the families of its existing pos-
sessors, in other cases accelerated by political revolutions.
Gradually, though more slowly, the immediate cultivators of
the soil, in all the more civilized countries, ceased to be in a
servile or semi-servile state : though the legal position, as well
as the economical condition attained by them, vary extremely
in the different nations of Europe, and in the great communi-
ties which have been founded beyond the Atlantic by the de-
scendants of Europeans.

The world now contains several extensive regions, provided
with the various ingredients of wealth in a degree of abundance
of which former ages had not even the idea. Without com-
pulsory labor, an enormous mass of food is annually extracted
from the soil, and maintains, besides the actual producers, an
equal, sometimes a greater number of laborers, occupied in
producing conveniences and luxuries of innumerable kinds, or

20 POLITICAL ECONOMY

in transporting them from place to place ; also a multitude of
persons employed in directing and superintending these vari-
ous labors ; and over and above all these, a class more numer-
ous than in the most luxurious ancient societies, of persons
whose occupations are of a kind not directly productive, and of
persons who have no occupation at all. The food thus raised,
supports a far larger population than had ever existed (at least
in the same regions) on an equal space of ground ; and sup-
ports them with certainty, exempt from those periodically re-
curring famines so abundant in the early history of Europe,
and in Oriental countries even now not unfrequent. Besides
this great increase in the quantity of food, it has greatly im-
proved in quality and variety ; while conveniences and lux-
uries, other than food, are no longer limited to a small and
opulent class, but descend, in great abundance, through many
widening strata in society. The collection resources of one of
these communities, when it chooses to put them forth for any
unexpected purpose ; its ability to maintain fleets and armies,
to execute public works, either useful or ornamental, to per-
form national acts of beneficence like the ransom of the West
India slaves ; to found colonies, to have its people taught, to
do anything in short which requires expense, and to do it with
no sacrifice of the necessaries or even the substantial comforts
of its inhabitants, are such as the world never saw before.

But in all these particulars, characteristic of the modern in-
dustrial communities, those communities differ widely from
one another. Though abounding in wealth as compared with
former ages, they do so in very different degrees. Even of the
countries which are justly accounted the richest, some have
made a more complete use of their productive resources, and
have obtained, relatively to their territorial extent, a much
larger produce, than others ; nor do they differ only in amount
of wealth, but also in the rapidity of its increase. The diversi-
ties in the distribution of wealth are still greater than in the
production. There are great differences in the condition of
the poorest class in different countries ; and in the proportional
numbers and opulence of the classes which are above the poor-
est. The very nature and designation of the classes who
originally share among them the produce of the soil, vary not
a little in different places. In some, the landowners are a class
in themselves, almost entirely separate from the classes en-

PRELIMINARY REMARKS 21

gag-ed in industry : in others, the proprietor of the land is al-
most universally its cultivator, owning the plough, and often
himself holding it. Where the proprietor himself does not cul-
tivate, there is sometimes, between him and the laborer, an in-
termediate agency, that of the farmer, who advances the sub-
sistence of the laborers, supplies the instruments of production,
and receives, after paying a rent to the landowner, all the pro-
duce : in other cases, the landlord, his paid agents, and the
laborers, are the only sharers. Manufactures, again, are some-
times carried on by scattered individuals, who own or hire the
tools or machinery they require, and employ little labor be-
sides that of their own family ; in other cases, by large num-
bers working together in one building, with expensive and
complex machinery owned by rich manufacturers. The same
difiference exists in the operations of trade. The wholesale
operations indeed are everywhere carried on by large capitals,
where such exist ; but the retail dealings, which collectively
occupy a very great amount of capital, are sometimes con-
ducted in small shops, chiefly by the personal exertions of the
dealers themselves, with their families, and perhaps an appren-
tice or two ; and sometimes in large establishments, of which
the funds are supplied by a wealthy individual or association,
and the agency is that of numerous salaried shopmen or shop-
women. Besides these differences in the economical phenom-
ena presented by different parts of what is usually called the
civilized world, all those earlier states which we previously
passed in review, have continued in some part or other of the
world, down to our own time. Hunting communities still exist
in America, nomadic in Arabia and the steppes of Northern
Asia ; Oriental society is in essentials what it has always been ;
the great empire of Russia is even now, in many respects, the
scarcely modified image of feudal Europe. Every one of the
great types of human society, down to that of the Esquimaux
or Patagonians, is still extant.

These remarkable differences in the state of different por-
tions of the human race, with regard to the production and
distribution of wealth, must, like all other phenomena, depend
on causes. And it is not a sufificient explanation to ascribe
them exclusively to the degrees of knowledge, possessed at dif-
ferent times and places, of the laws of nature and the physical
arts of life. Many other causes co-operate ; and that very

22 POLITICAL ECONOMY

progress and unequal distribution of physical knowledge, are
partly the effects, as well as partly the causes, of the state of the
production and distribution of wealth.

In so far as the economical condition of nations turns upon
the state of physical knowledge, it is a subject for the physical
sciences, and the arts founded on them. But in so far as the
causes are moral or psychological, dependent on institutions
and social relations, or on the principles of human nature, their
investigation belongs not to physical, but to moral and social
science, and is the object of what is called Political Economy.
j The production of wealth ; the extraction of the instruments
of human subsistence and enjoyment from the materials of the
globe, is evidently not an arbitrary thing. It has its necessary
conditions. Of these, some are physical, depending on the
properties of matter, and on the amount of knowledge of those
properties possessed at the particular place and time. These
Political Economy does not investigate, but assumes ; refer-
ring for the grounds, to physical science or common experience.
Combining with these facts of outward nature other truths
relating to human nature, it attempts to trace the secondary
or derivative laws, by which the production of wealth is deter-
mined ; in which must lie the explanation of the diversities of
riches and poverty in the present and past, and the ground of
whatever increase in wealth is reserved for the future.

Unlike the laws of Production, those of Distribution are
partly of human institution : since the manner in which wealth
is distributed in any given society, depends on the statutes or
usages therein obtaining. But though governments or na-
tions have the power of deciding what institutions shall exist,
they cannot arbitrarily determine how those institutions shall
work. The conditions on which the power they possess over
the distribution of wealth is dependent, and the manner in
which the distribution is affected by the various modes of con-
duct which society may think fit to adopt, are as much a subject
for scientific inquiry as any of the physical laws of nature.

The laws of Production and Distribution, and some of the
practical consequences deducible from them, are the subject
of the following treatise.

BOOK I

PRODUCTION

Chapter I. — Of the Requisites of Production

THE requisites of production are two: labor, and ap-
propriate natural objects.

Labor is either bodily or mental ; or, to express the
distinction more comprehensively, either muscular or nervous ;
and it is necessary to include in the idea, not solely the exer-
tion itself, but all feelings of a disagreeable kind, all bodily
inconvenience or mental annoyance, connected with the em-
ployment of one's thoughts, or muscles, or both, in a particular
occupation. Of the other requisite — appropriate natural ob-
jects— it is to be remarked, that some objects exist or grow up
spontaneously, of a kind suited to the supply of human wants.
There are caves and hollow trees capable of affording shelter;
fruit, roots, wild honey, and other natural products, on which
human life can be supported ; but even here a considerable
quantity of labor is generally required, not for the purpose
of creating, but of finding and appropriating them. In all
but these few and (except in the very commencement of human
society) unimportant cases, the objects supplied by nature are
only instrumental to human wants, after having undergone
some degree of transformation by human exertion. Even the
wild animals of the forest and of the sea, from which the hunt-
ing and fishing tribes derive their sustenance — though the
labor of which they are the subject is chiefly that required for
appropriating them — must yet, before they are used as food, be
killed, divided into fragments, and subjected in almost all cases
to some culinary process, which are operations requiring a
certain degree of human labor. The amount of transformation
which natural substances undergo before being brought into
the shape in which they are directly applied to human use,
varies from this or a still less degree of alteration in the nature

23

24 POLITICAL ECONOMY

and appearance of the object, to a change so total that no trace
is perceptible of the original shape and structure. There is
little resemblance between a piece of a mineral substance found
in the earth, and a plough, an axe, or a saw. There is less
resemblance between porcelain and the decomposing granite
of which it is made, or between sand mixed with sea-weed,
and glass. The difference is greater still between the fleece of a
sheep, or a handful of cotton seeds, and a web of muslin or
broadcloth ; and the sheep and seeds themselves are not spon-
taneous growths, but results of previous labor and care. In
these several cases the ultimate product is so extremely dis-
similar to the substance supplied by nature, that in the custom
of language nature is represented as only furnishing materials.

Nature, however, docs more than supply materials ; she
also supplies powers. The matter of the globe is not an inert
recipient of forms and properties impressed by human hands ;
it has active energies by which it co-operates with, and may
even be used as a substitute for, labor. In the early ages peo-
ple converted their corn into flour by pounding it between
two stones ; they next hit on a contrivance which enabled them,
by turning a handle, to make one of the stones revolve upon the
other ; and this process, a little improved, is still the common
practice of the East. The muscular exertion, however, which
it required, was very severe and exhausting, insomuch that it
was often selected as a punishment for slaves who had offended
their masters. When the time came at which the labor and
sufferings of slaves were thought worth economizing, the
greater part of this bodily exertion was rendered unnecessary,
by contriving that the upper stone should be made to revolve
upon the lower, not by human strength, but by the force of
the wind or of falling water. In this case, natural agents, the
wind or the gravitation of the water, are made to do a portion
of the work previously done by labor.

§ 2. Cases like this, in which a certain amount of labor has
been dispensed with, its work being devolved upon some nat-
ural agent, are apt to suggest an erroneous notion of the com-
parative functions of labor and natural powers ; as if the co-
operation of those powers with human industry were limited
to the cases in which they are made to perform what would
otherwise be done by labor ; as if, in the case of things made
(as the phrase is) by hand, nature only furnished passive mate-

REQUISITES OF PRODUCTION 25

rials. This is an illusion. The powers of nature are so actively
operative in the one case as in the other. A workman takes
a stalk of the flax or hemp plant, splits it into separate fibres,
twines together several of these fibres with his fingers, aided
by a simple instrument called a spindle ; having thus formed
a thread, he lays many such threads side by side, and places
other similar threads directly across them, so that each passes
alternately over and under those which are at right angles to
it ; this part of the process being facilitated by an instrument
called a shuttle. He has now produced a web of cloth, either
linen or sack-cloth, according to the material. He is said to
have done this by hand, no natural force being supposed to
have acted in concert with him. But by what force is each step
of this operation rendered possible, and the web, when pro-
duced, held together? By the tenacity, or force of cohesion, of
the fibres: which is one of the forces in nature, and which we
can measure exactly against other mechanical forces, and ascer-
tain how nmch of any of them it suffices to neutralize or coun-
terbalance.

If we examine any other case of what is called the action
of man upon nature, we shall find in like manner that the
powers of nature, or in other words the properties of matter,
do all the work, when once objects are put into the right posi-
tion. This one operation, of putting things into fit places for
being acted upon by their own internal forces, and by those
residing in other natural objects, is all that man does, or can
do, with matter. He only moves one thing to or from another.
He moves a seed into the ground ; and the natural forces of
vegetation produce in succession a root, a stem, leaves, flowers,
and fruit. He moves an axe through a tree, and it falls by the
natural force of gravitation ; he moves a saw through it, in
a particular manner, and the physical properties by which a
softer substance gives way before a harder, make it separate
into planks, which he arranges in certain positions, with nails
driven through them, or adhesive matter between them, and
produces a table, or a house. He moves a spark to fuel, and
it ignites, and by the force generated in combustion it cooks the
food, melts or softens the iron, converts into beer or sugar the
malt or cane-juice, which he has previously moved to the spot.
He has no other means of acting on matter than by moving
it. Motion, and resistance to motion, are the only things which

26 POLITICAL ECONOMY

his muscles are constructed for. By muscular contraction he
can create a pressure on an outward object, which, if sufficiently
powerful, will set it in motion, or if it be already moving, will
check or modify or altogether arrest its motion, and he can
do no more. But this is enough to have given all the command
which mankind have acquired over natural forces immeasur-
ably more powerful than themselves ; a command which, great
as it is already, is without doubt destined to become indefinitely
greater. He exerts this power either by availing himself of
natural forces in existence, or by arranging objects in those
mixtures and combinations by which natural forces are gen-
erated ; as when by putting a lighted match to fuel, and water
into a boiler over it, he generates the expansive force of steam,
a power which has been made so largely available for the at-
tainment of human purposes.*

Labor, then, in the physical worRl, is always and solely em-
ployed in putting objects in motion ; the properties of matter,
the laws of nature, do the rest. The skill and ingenuity of hu-
man beings are chiefly exercised in discovering movements,
practicable by their powers, and capable of bringing about the
effects which they desire. But, while movement is the only ef-
fect which man can immediately and directly produce by his
muscles, it is not necessary that he should produce directly by
them all the movements which he requires. The first and most
obvious substitute is the muscular action of cattle : by degrees
the powers of inanimate nature are made to aid in this, too, as
by making the wind, or water, things already in motion, com-
municate a part of their motion to the wheels, which before that
invention were made to revolve by muscular force. This ser-
vice is extorted from the powers of wind and water by a set
of actions, consisting like the former in moving certain objects
into certain positions in which they constitute what is termed
a machine ; but the muscular action necessary for this is not
constantly renewed, but performed once for all, and there is on
the whole a great economy of labor.

§ 3. Some writers have raised the question, whether nature
gives more assistance to labor in one kind of industry or in
another ; and have said that in some occupations labor does
most, in others nature most. In this, however, there seems

* This essential and primary law of a fundamental principle of Political
man's power over nature was, I believe, Economy, in the first chapter of Mr.
first illustrated and made prominent as Mill's " Elements,"

REQUISITES OF PRODUCTION fj

much confusion of ideas. The part which nature has in any
work of man, is indefinite and incommensurable. It is im-
possible to decide that in any one thing nature does more than
in any other. One cannot even say that labor does less. Less
labor may be required ; but if that which is required is abso-
lutely indispensable, the result is just as much the product of
labor, as of nature. When two conditions are equally neces-
sary for producing the effect at all, it is unmeaning to say that
so much of it is produced by one and so much by the other;
it is like attempting to decide which half of a pair of scissors
has most to do in the act of cutting; or which of the factors,
five and six, contributes most to the production of thirty. The
form which this conceit usually assumes, is that of supposing
that nature lends more assistance to human endeavors in agri-
culture, than in manufactures. This notion, held by the French
Economistcs, and from which Adam Smith was not free, arose
from a misconception of the nature of rent. The rent of land
being a price paid for a natural agency, and no such price being
paid in manufactures, these writers imagined that since a price
was paid, it was because there was a greater amount of service
to be paid for: whereas a better consideration of the subject
would have shown that the reason why the use of land bears a
price is simply the limitation of its quantity, and that if air, heat,
electricity, chemical agencies, and the other powers of nature
employed by manufacturers, were sparingly supplied, and
could, like land, be engrossed and appropriated, a rent could be
_exSLCted for them also.

§ 4. This leads to a distinction which we shall find to be of
primary importance. Of natural powers, some are unlimited,
others limited in quantity. By an unlimited quantity is, of
course, not meant literally, but practically unlimited : a quan-
tity beyond the use which can in any, or at least in present cir-
cumstances, be made of it. Land is, in some newly settled
countries, practically unlimited in quantity : there is more than
can be used by the existing population of the country, or by
any accession likely to be made to it for generations to come.
But even there, land favorably situated with regard to markets
or means of carriage, is generally limited in quantity : there is
not so much of it as persons would gladly occupy and cultivate,
or otherwise turn to use. In all old countries, land capable of
cultivation, land at least of any tolerable fertility, must be

28 POLITICAL ECONOMY

ranked among agents limited in quantity. Water, for ordi-
nary purposes, on the banks of rivers or lakes, may be regarded
as of unlimited abundance ; but if required for irrigation, it
may even there be insufficient to supply all wants, while in
places which depend for their consumption on cisterns or tanks,
or on wells which are not copious, or are liable to fail, water
takes its place among things the quantity of which is most
strictly limited. Where water itself is plentiful, yet water-
power, i.e. a fall of water applicable by its mechanical force to
the service of industry, may be exceedingly limited, compared
with the use which would be made of it if it were more abun-
dant. Coal, metallic ores, and other useful substances found
in the earth, are still more limited than land. They are not
only strictly local, but exhaustible ; though, at a given place
and time, they may exist in much greater abundance than
would be applied to present use even if they could be obtained
gratis. Fisheries, in the sea, are in most cases a gift of nature
practically unlimited in amount ; but the Arctic whale fisheries
have long been insufficient for the demand which exists even
at the very considerable price necessary to defray the cost of
appropriation : and the immense extension which the South-
ern fisheries have in consequence assumed, is tending to ex-
haust them likewise. River fisheries are a natural resource of
a very limited character, and would be rapidly exhausted, if
allowed to be used by every one without restraint. Air, even
that state of it which we term wind, may, in most situations, be
obtained in a quantity sufficient for every possible use ; and so
likewise, on the sea-coast or on large rivers, may water car-
riage : though the wharfage or harbor-room applicable to the
service of that mode of transport is in many situations far short
of what would be used if easily attainable.

It will be seen hereafter how much of the economy of so-
ciety depends on the limited quantity in which some of the
most important natural agents exist, and more particularly,
land. For the present I shall only remark that so long as the
quantity of a natural agent is practically unlimited, it cannot,
unless susceptible of artificial monopoly, bear any value in the
market, since no one will give anything for what can be ob-
tained gratis. But as soon as a limitation becomes practically
operative ; as soon as there is not so much of the thing to be
had, as would be appropriated and used if it could be obtained

LABOR AS AN AGENT OF PRODUCTION

29

for asking ; the ownership or use of the natural agent acquires
an exchangeable value. When more water-power is wanted
in a particular district, than there are falls of water to supply
it, persons will give an equivalent for the use of a fall of water.
When there is more land wanted for cultivation than a place
possesses, or than it possesses of a certain quality and certain
advantages of situation, land of that quality and situation may
be sold for a price, or let for an annual rent. This subject will
hereafter be discussed at length ; but it is often useful to an-
ticipate, by a brief suggestion, principles arid deductions which
we have not yet reached the place for exhibiting and illustrat-
ing fully.

Chapter II. — Of Labor as an Agent of Production

§ I. The labor which terminates in the production of an
article fitted for some human use, is either employed directly
about the thing, or in previous operations destined to facilitate,
perhaps essentiaT'to the possibility of, the subsequent ones. In
making bread, for example, the labor employed about the thing
itself is that of the baker; but the labor of the miller, though
employed directly in the production not of bread but of flour,
is equally part of the aggregate sum of labor by which the bread
is produced ; as is also the labor of the sower, and of the reaper.
Some may think that all these persons ought to be considered
as employing their labor directly about the thing ; the corn, the
flour, and the bread being one substance in three different
states. Without disputing about this question of mere lan-
guage, there is still the ploughman who prepared the ground
for the seed, and whose labor never came in contact with the
substance in any of its states ; and the plough-maker, whose
share in the result was still more remote. All these persons ul-
timately derive the remuneration of their labor from the bread,
or its price: the plough-maker as much as the rest; for since
ploughs are of no use except for tilling the soil, no one would
make or use ploughs for any other reason than because the in-
creased returns, thereby obtained from the ground, afforded a
source from which an adequate equivalent could be assigned
for the labor of the plough-maker. If the produce is to be used
or consumed in the form of bread, it is from the bread that this
equivalent must come. The bread must suffice to remunerate

30 POLITICAL ECONOMY

all these laborers, and several others ; such as the carpenters
and bricklayers who erected the farm buildings; the hedgers
and ditchers who made the fences necessary for the protection
of the crop ; the miners and smelters who extracted or pre-
pared the iron of which the plough and other implements were
made. These, however, and the plough-maker, do not depend
for their remuneration upon the bread made from the produce
of a single harvest, but upon that made from the produce of
all the harvests which are successively gathered until the
plough, or the buildings and fences, are worn out. We must
add yet another kind of labor ; that of transporting the produce
from the place of its production to the place of its destined use :
the labor of carrying the corn to market, and from market to
the miller's, the flour from the miller's to the baker's, and the
bread from the baker's to the place of its final consumption.
This labor is sometimes very considerable : fiour is transported
to England from beyond the Atlantic, corn from the heart of
Russia ; and in addition to the laborers immediately employed,
the wagoners and sailors, there are also costly instruments,
such as ships, in the construction of which much labor has been
expended : that labor, however, not depending for its whole
remuneration upon the bread, but for a part only ; ships being
usually, during the course of their existence, employed in the
transport of many different kinds of commodities.

To estimate, therefore, the labor of which any given com-
modity is the result, is far from a simple operation. The items
in the calculation are very numerous — as it may seem to some
persons, infinitely so ; for if, as a part of the labor employed in
making bread, we count the labor of the blacksmith who made
the plough, why not also (it may be asked) the labor of making
the tools used by the blacksmith, and the tools used in making
those tools, and so back to the origin of things? But after
mounting one or two steps in this ascending scale, we come
into a region of fractions too minute for calculation. Suppose,
for instance, that the same plough will last, before being worn
out, a dozen years. Only one-twelfth of the labor of making
the plough must be placed to the account of each year's harvest.
A twelfth part of the labor of making a plough is an appre-
ciable quantity. But the same set of tools, perhaps, sufifice to
the plough-maker for forging a hundred ploughs, which serve
during the twelve years of their existence to prepare the soil of

LABOR AS AN AGENT OF PRODUCTION 31

as many different farms. A twelve-hundredth part of the labor
of making his tools, is as much, therefore, as has been ex-
pended in procuring one year's harvest of a single farm : and
when this fraction comes to be further apportioned among the
various sacks of corn and loaves of bread, it is seen at once that
such quantities are not worth taking into the account for any
practical purpose connected with the commodity. It is true
that if the tool-maker had not labored, the corn and bread
never would have been produced ; but they will not be sold a
tenth part of a farthing dearer in consideration of his labor.

§ 2. Another of the modes in which labor is indirectly or
remotely instrumental to the production of a thing, requires
particular notice: namely, when it is employed in producing
subsistence, to maintain the laborers while they are engaged
in the production. This previous employment of labor is an
"mHispensable condition to every productive operation, on any
other than the very smallest scale. Except the labor of the
hunter and fisher, there is scarcely any kind of labor to which
the returns are immediate. Productive operations require to
be continued a certain time, before their fruits are obtained.
Unless the laborer, before commencing his work, possesses a
store of food, or can obtain access to the stores of some one
else, in sufificient quantity to maintain him until the produc-
tion is completed, he can undertake no labor but such as can
be carried on at odd intervals, concurrently with the pursuit of
his subsistence. He cannot obtain food itself in any abun-
dance ; for every mode of so obtaining it, requires that there be
already food in store. Agriculture only brings forth food after
the lapse of months ; and though the labors of the agriculturist
are not necessarily continuous during the whole period, they
must occupy a considerable part of it. Not only is agriculture
impossible without food produced in advance, but there must
be a very great quantity in advance to enable any considerable
community to support itself wholly by agriculture. A country
like England or France is only able to carry on the agriculture
of the present year, because that of past years has provided,
in those countries or somewhere else, sufificient food to sup-
port their agricultural population until the next harvest. They
are only enabled to produce so many other things besides food,
because the food which was in store at the close of the last har-
vest suffices to maintain not only the agricultural laborers, but
a large industrious population besides.

32

POLITICAL ECONOMY

The labor employed in producing this stock of subsistence,
forms a great and important part of the past labor which has
been necessary to enable present labor to be carried on. But
there is a dilTerence, requiring particular notice, between this
and the other kinds of previous or preparatory labor. The
miller, the reaper, the ploughman, the plough-maker, the wag-
oner and wagon-maker, even the sailor and shipbuilder when
employed, derive their remuneration from the ultimate product
— the bread made from the corn on which they have severally
operated, or supplied the instruments for operating. The
labor that produced the food which fed all these laborers, is as
necessary to the ultimate result, the bread of the present har-
vest, as any of those other portions of labor ; but is not, like
them, remunerated from it. That previous labor has received
its remuneration from the previous food. In order to raise
any product, there are needed labor, tools, and materials, and
food to feed the laborers. But the tools and materials are of
no use except for obtaining the product, or at least are to be
applied to no other use, and the labor of their construction can
be remunerated only from the product when obtained. The
food, on the contrary, is intrinsically useful, and is applied to
the direct use of feeding human beings. The labor expended
in producing the food, and recompensed by it, needs not be
remunerated over again from the produce of the subsequent
labor which it has fed. If we suppose that the same body of
laborers carried on a manufacture, and grew food to sustain
themselves while doing it, they have had for their trouble the
food and the manufactured article ; but if they also grew the
material and made the tools, they have had nothing for that
trouble but the manufactured article alone.

The claim to remuneration founded on the possession of
food, available for the maintenance of laborers, is of another
kind ; remuneration for abstinence, not for labor. If a person
has a store of food, he has it in his power to consume it him-
self in idleness, or in feeding others to attend on him, or to
fight for him, or to sing or dance for him. If, instead of these
things, he gives it to productive laborers to support them dur-
ing their work, he can, and naturally will, claim a remunera-
tion from the produce. He will not be content with simple re-
payment ; if he receives merely that, he is only in the same
situation as at first, and has derived no advantage from delay-

LABOR AS AN AGENT OF PRODUCTION 33

ing to apply his savings to his own benefit or pleasure. He will
look for some equivalent for this forbearance : he will expect
his advance of food to come back to him with an increase, called
in the language of business, a profit ; and the hope of this profit
will generally have been a part of the inducement which made
him accumulate a stock, by economizing in his own consump-
tion ; or, at any rate, which made him forego the application
of it, when accumulated, to his personal ease or satisfaction.
The food also which maintained other workmen while produc-
ing the tools or materials, must have been provided in advance
by some one, and he, too, must have his profit from the ulti-
mate product ; but there is this difference, that here the ulti-
mate product has to supply not only the profit, but also the
remuneration of the labor. The tool-maker (say, for instance,
the plough-maker) does not indeed usually wait for his pay-
ment until the harvest is reaped ; the farmer advances it to him,
and steps into his place by becoming the owner of the plough.
Nevertheless, it is from the harvest that the payment is to
come, since the farmer would not undertake this outlay unless
he expected that the harvest would repay him, and with a profit
too on this fresh advance ; that is, unless the harvest would
yield, besides the remuneration of the farm laborers (and a
profit for advancing it), a sufificient residue to remunerate the
plough-maker's laborers, give the plough-maker a profit, and
a profit to the farmer on both.

§ 3. From these considerations it appears, that in an enu-
meration and classification of the kinds of industry which are
intended for the indirect or remote furtherance of other pro-
ductive labor, we need not include the labor of producing sub-
sistence or other necessaries of life to be consumed by produc-
tive laborers ; for the main end and purpose of this labor is
the subsistence itself; and though the possession of a store
of it enables other work to be done, this is but an incidental
consequence. The remaining modes in which labor is indi-
rectly instrumental to production, may be arranged under five
heads.

First : Labor employed in producing materials, on which
industry is to be afterwards employed. This is, in many cases,
a labor of mere appropriation ; extractive industry, as it has
been aptly named by M. Dunoyer. The labor of the miner, for
example, consists of operations for digging out of the earth
Vol. I.— 3

34 POLITICAL ECONOMY

substances convertible by industry into various articles fitted
for human use. Extractive industry, however, is not confined
to the extraction of materials. Coal, for instance, is employed,
not only in the processes of industry, but in directly warming
human beings. When so used, it is not a material of produc-
tion, but is itself the ultimate product. So, also, in the case
of a mine of precious stones. These are to some small extent
employed in the productive arts, as diamonds by the glass-cut-
ter, emery and corundum for polishing, but their principal
destination, that of ornament, is a direct use ; though they
commonly require, before being so used, some process of man-
ufacture, which may perhaps warrant our regarding them as
materials. Metallic ores of all sorts are materials merely.

Under the head, production of materials, we must include
the industry of the wood-cutter, when employed in cutting and
preparing timber for building, or wood for the purpose of the
carpenter's or any other art. In the forests of America, Nor-
way, Germany, the Pyrenees, and Alps, this sort of labor is
largely employed on trees of spontaneous growth. In other
cases, we must add to the labor of the wood-cutter that of the
planter and cultivator.

Under the same head are also comprised the labors of the
agriculturists in growing flax, hemp, cotton, feeding silk-
worms, raising food for cattle, producing bark, dye-stufifs, some
oleaginous plants, and many other things only useful because
required in other departments of industry. So, too, the labor
of the hunter, as far as his object is furs or feathers ; of the
shepherd and the cattle-breeder, in respect of wool, hides, horn,
bristles, horse-hair, and the like. The things used as materials
in some process or other of manufacture are of a most miscel-
laneous character, drawn from almost every quarter of the
animal, vegetable, and mineral kingdoms. And besides this,
the finished products of many branches of industry are the ma-
terials of others. The thread produced by the spinner is applied
to hardly any use except as material for the weaver. Even the
product of the loom is chiefly used as material for the fabrica-
tors of articles of dress or furniture, or of further instruments
of productive industry, as in the case of the sail-maker. The
currier and tanner find their whole occupation in converting
raw material into what may be termed prepared material. In
strictness of speech, almost all food, as it comes from the hands

LABOR AS AN AGENT OF PRODUCTION 35

of the agriculturist, is nothing more than material for the occu-
pation of the baker or the cook.

§ 4. '^!Jie_seca»d -kind, oi indirect labor is- that employed in
making toojs. OX implements for the assistance of labor. I use
"fHese terms in their most comprehensive sense, embracing all
permanent instruments or helps to production, from a flint and
steel for striking a light, to a steamship, or the most complex
apparatus of manufacturing machinery. There may be some
hesitation where to draw the line between implements and ma-
terials ; and some things used in production (such as fuel)
would scarcely in common language be called by either name,
popular phraseology being shaped out by a different class of
necessities from those of scientific exposition. To avoid a
multiplication of classes and denominations answering to dis-
tinctions of no scientific importance, political economists gen-
erally include all things which are used as immediate means
of production (the means which are not immediate will be con-
sidered presently) either in the class of implements or in that
of materials. Perhaps the line is most usually and most con-
veniently drawn, by considering as a material every instrument
of production which can only be used once, being destroyed
(at least as an instrument for the purpose in hand) by a single
employment. Thus fuel, once burnt, cannot be again used as
fuel ; what can be so used is only any portion which has re-
mained unburnt the first time. And not only it cannot be used
without being consumed, but it is only useful by being con-
sumed ; for if no part of the fuel were destroyed, no heat would
be generated. A fleece, again, is destroyed as a fleece by being
spun into thread ; and the thread cannot be used as thread
when woven into cloth. But an axe is not destroyed as an axe
by cutting down a tree : it may be used afterwards to cut down
a hundred or a thousand more ; and though deteriorated in
some small degree by each use, it does not do its work by being
deteriorated, as the coal and the fleece do theirs by being de-
stroyed ; on the contrary, it is the better instrument the better
it resists deterioration. There are some things, rightly classed
as materials, which may be used as such a second and a third
time, but not while the product to which they at first contrib-
uted remains in existence. The iron which formed a tank or
a set of pipes may be melted to form a plough or a steam en-
gine ; the stones with which a house was built may be used after

36

POLITICAL ECONOMY

it is pulled down, to build another. But this cannot be done
while the original product subsists ; their function as materials
is suspended, until the exhaustion of the first use. Not so with
the things classed as implements ; they may be used repeatedly
for fresh work, until the time, sometimes very distant, at which
they are worn out, vv'hile the work already done by them may
subsist unimpaired, and when it perishes, does so by its own
laws, or by casualties of its own.*

The only practical difference of much importance arising
from the distinction between materials and implements, is one
which has attracted our attention in another case. Since ma-
terials are destroyed as such by being once used, the whole of
the labor required for their production, as well as the absti-
nence of the person who supplied the means of carrying it on,
must be remunerated from the fruits of that single use. Imple-
ments, on the contrary, being susceptible of repeated employ-
ment, the whole of the products which they are instrumental
in bringing into existence are a fund which can be drawn upon
to remunerate the labor of their construction, and the absti-
nence of those by whose accumulations that labor was sup-
ported. It is enough if each product contributes a fraction,
commonly an insignificant one, towards the remuneration of
that labor and abstinence, or towards indemnifying the imme-
diate producer for advancing that remuneration to the person
who produced the tools.

§ 5. Thirdly : Besides materials for industry to employ itself
on, and implements to aid it, provision must be made to pre-
vent its. operations from being disturbed and its products in-^_^
^r«-jured, either by the destroying agencies of nature, or by the
violence or rapacity of men. This gives rise to another mode
in which labor not employed directly about the product itself,
is instrumental to its production ; namely, when employed
for the protection of industry. Such is the object of all build-
ings for industrial purposes ; all manufactories, warehouses.

* The able and friendly reviewer of
this treatise in the Edinburgh" Review "
(October, 1848) conceives the distinction
between materials and implements
rather differently: proposing to con-
sider as materials " all the things which,
after having undergone the change im-
plied in production, are themselves mat-
ter of exchange," and as implements (or
instruments) " the things which are em-
ployed in producing that change, but do

not themselves become part of the ex-
changeable result." According to these
definitions, the fuel consumed in a man-
ufactory would be considered, not as a
material, but as an instrument. This
use of the terms accords better than that
proposed in the text, with the primitive
physical meaning of the word " mate-
rial "; but the distinction on which it is
grounded is one almost irrelevant to
political economy.

LABOR AS AN AGENT OF PRODUCTION 37

docks, granaries, barns, farm buildings devoted to cattle, or

to the operations of agricultural labor. I exclude those in

hich the laborers live, or which are destined for their personal

' ccommodation : these, like their food, supply actual wants,
and must be counted in the remuneration of their labor. There
are many modes in which labor is still more directly applied to
the protection of productive operations. The herdsman has
little other occupation than to protect the cattle from harm:
the positive agencies concerned in the realization of the prod-
uct, go on nearly of themselves. I have already mentioned
the labor of the hedger and ditcher, of the builder of walls or
dikes. To these must be added that of the soldier, the police-
man, and the judge. These functionaries are not indeed em-
ployed exclusively in the protection of industry, nor does their
payment constitute, to the individual producer, a part of the ex-
penses of production. But they are paid from the taxes, which
are derived from the produce of industry ; and in any tolerably
governed country they render to its operations a service far
more than equivalent to the cost. To society at large they are,
therefore, part of the expenses of production : and if the re-
turns to production were not sufficient to maintain these labor-
ers in addition to all the others required, production, at least
in that form and manner, could not take place. Besides, if the
protection which the government affords to the operations of
industry were not afforded, the producers would be under a
necessity of either withdrawing a large share of their time and
labor from production, to employ it in defence, or of engaging
armed men to defend them ; all which labor, in that case, must
be directly remunerated from the produce ; and things which
could not pay for this additional labor, would not be produced.
Under the present arrangements, the product pays its quota
towards the same protection, and, notwithstanding the waste
and prodigality incident to government expenditure, obtains
it of better quality at a much smaller cost.

§ 6. Fourthly: There is a very great amount of labor em-
ployed, not in bringing the product into existence, bii^yijxn-

^jdering;. it, when in existence, accessible to those for whose usT
it is intended. Many important classes of laborers find their
sole employment in some function of this kind. There is first
the whole class of carriers, by land or water: muleteers, wag-
oners, bargemen, sailors, wharfmen, coal-heavers, porters,

38 POLITICAL ECONOMY

railway establishments, and the like. Next, there are the con-
structors of all the implements of transport ; ships, barges,
carts, locomotives, etc., to which must be added roads, canals,
and railways. Roads are sometimes made by the government,
and opened gratuitously to the public ; but the labor of making
them is not the less paid for from the produce. Each producer,
in paying his quota of the taxes levied generally for the con-
struction of roads, pays for the use of those which conduce to
his convenience; and if made with any tolerable judgment,
they increase the returns to his industry by far more than an
equivalent amount.

Another numerous class of laborers employed in rendering
the things produced accessible to their intended consumers, is
the class of dealers and traders, or, as they may be termed, dis-
tributors. There would be a great waste of time and trouble,
and an inconvenience often amounting to impracticability, if
consumers could only obtain the articles they want by treating
directly with the producers. Both producers and consumers
are too much scattered, and the latter often at too great a dis-
tance from the former. To diminish this loss of time and
labor, the contrivance of fairs and markets was early had re-
course to, where consumers and producers might periodically
meet, without any intermediate agency ; and this plan answers
tolerably well for many articles, especially agricultural produce,
agriculturists having at some seasons a certain quantity of
spare time on their hands. But even in this case, attendance is
often very troublesome and inconvenient to buyers who have
other occupations, and do not live in the immediate vicinity ;
while, for all articles the production of which requires contin-
uous attention from the producers, these periodical markets
must be held at such considerable intervals, and the wants of
the consumers must either be provided for so long beforehand,
or must remain so long unsupplied, that even before the re-
sources of society admitted of the establishment of shops, the
supply of these wants fell universally into the hands of itinerant
dealers ; the pedler, who might appear once a month, being
preferred to the fair, which only returned once or twice a year.
In country districts, remote from towns or large villages, the
industry of the pedler is not yet wholly superseded. But a
dealer who has a fixed abode and fixed customers is so much
more to be depended on, that consumers prefer resorting to

LABOR AS AN AGENT OF PRODUCTION 39

him if he is conveniently accessible ; and dealers, therefore,
find their advantage in establishing themselves in every local-
ity where there are sufficient consumers near at hand to afford
them a remuneration.

In many cases the producers and dealers are the same per-
sons, at least as to the ownership of the funds and the control
of the operations. The tailor, the shoemaker, the baker, and
many other tradesmen, are the producers of the articles they
deal in, so far as regards the last stage in the production. This
union, however, of the functions of manufacturer and retailer,
is only expedient when the article can advantageously be made
at or near the place convenient for retailing it, and is, besides,
manufactured and sold in small parcels. When things have
to be brought from a distance, the same person cannot effectu-
ally superintend both the making and the retailing of them :
when they are best and most cheaply made on a large scale, a
single manufactory requires so many local channels to carry
off its supply, that the retailing is most conveniently delegated
to other agency : and even shoes and coats, when they are to
be furnished in large quantities at once, as for the supply of a
regiment or of a workhouse, are usually obtained not directly
from the producers, but from intermediate dealers, who make
it their business to ascertain from what producers they can be
obtained best and cheapest. Even when things are destined
to be at last sold by retail, convenience soon creates a class of
wholesale dealers. When products and transactions have mul-
tiplied beyond a certain point ; when one manufactory sup-
plies many shops, and one shop has often to obtain goods from
many different manufactories, the loss of time and trouble both
to the manufacturers and to the retailers by treating directly
with one another, makes it more convenient to them to treat
with a smaller number of great dealers or merchants, who only
buy to sell again, collecting goods from the various producers,
and distributing them to the retailers, to be by them further
distributed among the consumers. Of these various elements
is composed the Distributing Class, whose agency is supple-
mentary to that of the Producing Class : and the produce so
distributed, or its price, is the source from which the distrib-
utors are remunerated for their exertions, and for the ab-
stinence which enabled them to advance the funds needful for
the business of distribution.

40 POLITICAL ECONOMY

§ 7. We have now completed the enumeration of the modes
in which laboi employed on external nature is subservient to
production. But there is yet another mode of employing labor
which conduces equally, though still more remotely, to that ^
end : this is, labor of which the subject is human beings. Every '^
human being has been brought up from infancy at the expense \
of much labor to some person or persons, and if this labor or , ^
part of it had not been bestowed, the child would never have \
attained the age and strength which enable him to become a '
laborer in his turn. To the community at large, the labor and
expense of rearing its infant population form a part of the out-
lay which is a condition of production, and which is to be re-
placed with increase from the future produce of their labor.
By the individuals, this labor and expense are usually incurred
from other motives than to obtain such ultimate return, and,
for most purposes of political economy, need not be taken into
account as expenses of production. But the technical or in-
dustrial education of the community ; the labor employed in
learning and in teaching the arts of production, in acquiring
and communicating skill in those arts ; this labor is really,
and in general solely, undergone for the sake of the greater or
more valuable produce thereby attained, and in order that a
remuneration, equivalent or more than equivalent, may be
reaped by the learner, besides an adequate remuneration for
the labor of the teacher, when a teacher has been employed.

As the labor which confers productive powers, whether of
hand or of head, may be looked upon as part of the labor by
which society accomplishes its productive operations, or in
other words, as part of what the produce costs to society, so,
too, may the labor employed in keeping up productive powers ;
in preventing them from being destroyed or weakened by acci-
dent or disease. The labor of a physician or surgeon, when
made use of by persons engaged in industry, must be regarded
in the economy of society as a sacrifice incurred, to preserve
from perishing by death or infirmity that portion of the produc-
tive resources of society which is fixed in the lives and bodily or
mental powers of its productive members. To the individuals,
indeed, this forms but a part, sometimes an imperceptible part,
of the motives that induce them to submit to medical treatment :
it is not principally from economical motives that persons have
a limb amputated, or endeavor to be cured of a fever, though

LABOR AS AN AGENT OF PRODUCTION 41

when they do so there is generally sufficient inducement for
it even on that score alone. This is, therefore, one of the cases
of labor and outlay which, though conducive to production,
yet not being incurred for that end, or for the sake of the re-
turns arising from it, are out of the sphere of most of the gen-
eral propositions which political economy has occasion to as-
sert respecting productive labor: though, when society and
not the individuals are considered, this labor and outlay must
be regarded as part of the advance by which society effects its
productive operations, and for which it is indemnified by the
produce.

§ 8. Another kind of labor, usually classed as mental, but
conducing to the ultimate product as directly, though not so
immediately, as manual labor itself, is the labor of the inveritors
of industrial processes. I say, visually classed as mental, be-
cause in reality it is not exclusively so. All human exertion is
compounded of some mental and some bodily elements. The
stupidest hodman, who repeats from day to day the mechanical
act of climbing a ladder, performs a function partly intellectual ;
so much so, indeed, that the most intelligent dog or elephant
could not, probably, be taught to do it. The dullest human be-
ing, instructed beforehand, is capable of turning a mill ; but a
horse cannot turn it without somebody to drive and watch
him. On the other hand, there is some bodily ingredient in the
labor most purely mental, when it generates any external result.
Newton could not have produced the " Principia " without
the bodily exertion either of penmanship or of dictation ; and
he must have drawn many diagrams, and written out many
calculations and demonstrations, while he was preparing it in
his mind. Inventors, besides the labor of their brains, generally
go through much labor with their hands, in the models which
they construct and the experiments they have to make before
their idea can realize itself successfully in act. Whether men-
tal, however, or bodily, their labor is a part of that by which the
production is brought about. The labor of Watt in contriving
the steam-engine was as essential a part of production as that
of the mechanics who build or the engineers who work the
instrument ; and was undergone, no less than theirs, in the
prospect of a remuneration from the produce. The labor of
invention is often estimated and paid on the very same plan
as that of execution. Many manufacturers of ornamental

42 POLITICAL ECONOMY

goods have inventors in their employment, who receive wages
or salaries for designing patterns, exactly as others do for
copying them. All this is strictly part of the labor of produc-
tion ; as the labor of the author of a book is equally a part of
its production with that of the printer and binder.

In a national, or universal point of view, the labor of the
savant, or speculative thinker, is as much a part of production
in the very narrowest sense, as that of the inventor of a practical
art ; many such inventions having been the direct consequences
of theoretic discoveries, and every extension of knowledge of
the powers of nature being fruitful of applications to the pur-
poses of outward life. The electro-magnetic telegraph was the
wonderful and most unexpected consequence of the experi-
ments of Qirsted and the mathematical investigations of Am-
pere : and the modern art of navigation is an unforeseen emana-
tion from the purely speculative and apparently merely curious
inquiry, by the mathematicians of Alexandria, into the prop-
erties of three curves formed by the intersection of a plane
surface and a cone. No limit can be set to the importance, even
in a purely productive and material point of view, of mere
thought. Inasmuch, however, as these material fruits, though
the results are seldom the direct purpose of the pursuits of
savants, nor is their remuneration in general derived from the
increased production which may be caused incidentally, and
mostly after a long interval, by their discoveries ; this ulti-
mate influence does not, for most of the purposes of political
economy, require to be taken into consideration ; and specula-
tive thinkers are generally classed as the producers only of the
books, or other usable or salable articles, which directly ema-
nate from them. But when (as in political economy one should
always be prepared to do) we shift our point of view, and con-
sider not individual acts, and the motives by which they are
determined, but national and universal results, intellectual
speculation must be looked upon as a most influential part of
the productive labor of society, and the portion of its resources
employed in carrying on and in remunerating such labor, as a
highly productive part of its expenditure.

§ 9. In the foregoing survey of the modes of employing
labor in furtherance of production, I have made little use of the
popular distinction of industry into agricultural, manufactur-
ing, and commercial. For, in truth, this division fulfils very

LABOR AS AN AGENT OF PRODUCTION 43

badly the purposes of a classification. Many great branches of
productive industry find no place in it, or not without much
straining ; for example (not to speak of hunters or fishers) the
miner, the road-maker, and the sailor. The limit, too, between
agricultural and manufacturing industry cannot be precisely
drawn. The miller, for instance, and the baker — are they to be
reckoned among agriculturists, or among manufacturers?
Their occupation is in its nature manufacturing ; the food has
finally parted company with the soil before it is handed over
to them : this, however, might be said with equal truth of the
thresher, the winnower, the makers of butter and cheese ;
operations always counted as agricultural, probably because it
is the custom for them to be performed by persons resident on
the farm, and under the same superintendence as tillage. For
many purposes, all these persons, the miller and baker inclu-
sive, must be placed in the same class with ploughmen and
reapers. They are all concerned in producing food, and depend
for their remuneration on the food produced : when the one
class abounds and flourishes, the others do so too ; they form
collectively the '" agricultural interest " ; they render but one
service to the community by their united labors, and are paid
from one common source. Even the tillers of the soil, again,
when the produce is not food, but the materials of what are
commonly termed manufactures, belong in many respects to
the same division in the economy of society as manufacturers.
The cotton-planter of Carolina, and the wool-grower of Aus-
tralia, have more interests in common with the spinner and
weaver than with the corn-grower. But, on the other hand,
the industry which operates immediately upon the soil has, as
we shall see hereafter, some properties on which many impor-
tant consequences depend, and which distinguish it from all the
subsequent stages of production, whether carried on by the
same person or not ; from the industry of the thresher and
winnower, as much as from that of the cotton-spinner. When
I speak, therefore, of agricultural labor, I shall generally mean
this, and this exclusively, unless the contrary is either stated
or implied in the context. The term manufacturing is too
vague to be of much use when precision is required, and when
I employ it, I wish to be understood as intending to speak
popularly rather than scientifically.

44 POLITICAL ECONOMY

Chapter III. — Of Unproductive Labor.

§ I. Labor is indispensable to production, but has not always
production for its effect. There is much labor, and of a high
order of usefulness, of which production is not the object.
Labor has accordingly been distinguished into Productive and
Unproductive. There has been not a little controversy among
political economists on the question, what kinds of labor should
be reputed to be unproductive ; and they have not always per-
ceived that there was in reality no matter of fact in dispute be-
tween them.

Many writers have been unwilling to class any labor as pro-
ductive, unless its result is palpable in some material object,
capable of being transferred from one person to another. There
are others (among whom are Mr. M'Culloch and M. Say) who
looking upon the word unproductive as a term of disparage-
ment, remonstrate against imposing it upon any labor which
is regarded as useful — which produces a benefit or a pleasure
worth the cost. The labor of officers of government, of the
army and navy, of physicians, lawyers, teachers, musicians,
dancers, actors, domestic servants, etc., when they really ac-
complish what they are paid for, and are not more numerous
than is required for its performance, ought not, say these writ-
ers, to be " stigmatized " as unproductive, an expression which
they appear to regard as synonymous with wasteful or worth-
less. But this seems to be a misunderstanding of the matter
in dispute. Production not being the sole end of human exist-
ence, the term unproductive does not necessarily imply any
stigma ; nor was ever intended to do so in the present case.
The question is one of mere language and classification. Dif-
ferences of language, however, are by no means unimportant,
even when not grounded on differences of opinion ; for, though
either of two expressions may be consistent with the whole
truth, they generally tend to fix attention upon different parts
of it. We must therefore enter a little into the consideration
of the various meanings which may attach to the words pro-
ductive and unproductive when applied to labor.

In the first place, even in what is called the production of
material objects, it must be remembered that what is produced
is not the matter composing them. All the labor of all the
human beings in the world could not produce one particle of

UNPRODUCTIVE LABOR 45

matter. To weave broadcloth is but to rearrange, in a peculiar
manner, the particles of wool; to grow corn is only to put a
portion of matter called a seed, into a situation where it can
draw together particles of matter from the earth and air, to
form the new combination called a plant. Though we cannot
create matter, we can cause it to assume properties, by which,
from having been useless to us, it becomes useful. What we
produce, or desire to produce, is always, as M. Say rightly
terms it, a utility. Labor is not creative of objects, but of
utilities. Neither, again, do we consume and destroy the ob-
jects themselves; the matter of which they were composed re-
mains, more or less altered in form : what has really been con-
sumed is only the qualities by which they were fitted for the
purpose they have been applied to. It is, therefore, pertinently
asked by M. Say and others — since, when we are said to pro-
duce objects, we only produce utility, why should not all labor
which produces utility be accounted productive? Why refuse
that title to the surgeon who sets a limb, the judge or legislator
who confers security, and give it to the lapidary who cuts and
polishes a diamond ? Why deny it to the teacher from whom
I learn an art by which I can gain my bread, and accord it to
the confectioner who makes bonbons for the momentary pleas-
ure of a sense of taste?

It is quite true that all these kinds of labor are productive
of utility ; and the question which now occupies us could not
have been a question at all, if the production of utility were
enough to satisfy the notion which mankind have usually
formed of productive labor. Production, and productive, are,
of course, elliptical expressions, involving the idea of a some-
thing produced ; but this something, in common apprehension,
I conceive to be, not utility, but Wealth. Productive labor
means labor productive of wealth. We are recalled, therefore,
to the question touched upon in our first chapter, what Wealth
is, and whether only material products, or all useful products,
are to be included in it.

§ 2. Now, the utilities produced by labor are of three kinds.
They are.

First, utilities fixed and embodied in outward objects ; by
labor employed in investing external material things with
properties which render them serviceable to human beings.
This is the common case, and requires no illustration.

46 POLITICAL ECONOMY

Secondly, utilities fixed and embodied in human beings ; the
labor being in this case employed in conferring on human
beings qualities which render them serviceable to themselves
and others. To this class belongs the labor of all concerned in
education ; not only schoolmasters, tutors, and professors, but
governments, so far as they aim successfully at the improve-
ment of the people ; moralists, and clergymen, as far as pro-
ductive of benefit ; the labor of physicians, as far as instru-
mental in preserving life and physical or mental efficiency ;
of the teachers of bodily exercises, and of the various trades,
sciences, and arts, together with the labor of the learners in
acquiring them ; and all labor bestowed by any persons, through-
out life, in improving the knowledge or cultivating the bodily
or mental faculties of themselves or others.

Thirdly and lastly, utilities not fixed or embodied in any
object, but consisting in a mere service rendered ; a pleasure
given, an inconvenience or a pain averted, during a longer or
a shorter time, but without leaving a permanent acquisition in
the improved qualities of any person or thing; the labor being
employed in producing a utility directly, not (as in the two
former cases) in fitting some other thing to afford a utility.
Such, for example, is the labor of the musical performer, the
actor, the public declaimer or reciter, and the showman. Some
good may no doubt be produced, and much more might be pro-
duced, beyond the moment, upon the feelings and disposition,
or general state of enjoyment of the spectators; or instead
of good there may be harm ; but neither the one nor the other
is the effect intended, is the result for which the exhibitor works
and the spectator pays ; nothing but the immediate pleasure.
Such, again, is the labor of the army and navy; they, at the
best, prevent a country from being conquered, or from being
injured or insulted, which is a service, but in all other respects
leave the country neither improved nor deteriorated. Such,
too, is the labor of the legislator, the judge, the officer of justice,
and all other agents of government, in their ordinary functions,
apart from any influence they may exert on the improvement
of the national mind. The service which they render is to
maintain peace and security ; these compose the utility which
they produce. It may appear to some that carriers and mer-
chants or dealers should be placed in this same class, since
their labor does not add any properties to objects: but I reply

UNPRODUCTIVE LABOR

47

that it does ; it adds the property of being in the place where
they are wanted, instead of being in some other place : which
is a very useful property, and the utility it confers is embodied
in the things themselves, which now actually are in the place
where they are required for use, and in consequence of that
increased utility could be sold at an increased price, proportioned
to the labor expended in conferring it. This labor, therefore,
does not belong to the third class, but to the first.

§ 3. We have now to consider which of these three classes
of labor should be accounted productive of wealth, since that
is what the term productive, when used by itself, must be un-
derstood to import. Utilities of the third class, consisting in
pleasures which only exist while being enjoyed, and services
which only exist while being performed, cannot be spoken of
as wealth, except by an acknowledged metaphor. It is essen-
tial to the idea of wealth to be susceptible of accumulation:
things which cannot, after being produced, be kept for some
time before being used, are never, I think, regarded as wealth,
since, however much of them may be produced and enjoyed,
the person benefited by them is no richer, is nowise improved
in circumstances. But there is not so distinct and positive a
violation of usage in considering as wealth any product which
is both useful and susceptible of accumulation. The skill, and
the energy and perseverance, of the artisans of a country, are
reckoned part of its wealth, no less than their tools and ma-
chinery.* According to this definition, we should regard all
labor as productive which is employed in creating permanent
utilities, whether embodied in human beings, or in any other
animate or inanimate objects. This nomenclature I have, in

* Some authorities look upon it as an
essential element in the idea of wealth,
that it should be capable not solely of
being accumulated, but of being trans-
ferred; and inasmuch as the valuable
qualities, and even the productive cajiac-
ities, of a human being cannot be de-
tached from him and passed to some one
else, they deny to these the appellation
of wealth, and to the labor expended in
acquiring them the name of productive
labor. It seems to me, however, that
the skill of an artisan (for instance)
being both a desirable possession and
one of a certain durability (not to say
productive even of material wealth),
there is no better reason for refusing
to it the title of wealth because it is
attached to a man, than to a coalpit or

a manufactory because they are attached
to a place. Besides, if the skill itself
cannot be parted with to a purchaser,
the use of it may; if it cannot be sold
it can be hired; and it may be, and is,
sold outright in all countries whose
laws permit that the man himself should
be sold along with it. Its defect of
transferability does not result from a
natural, but from a legal and moral
obstacle.

The human being himself (as formerly
observed) I do not class as wealth. He
is the purpose for which wealth exists.
But his acquired capacities, which exist
only as means, and have been called
into existence by labor, fall riglitly. as
it seems to me, within that designation.

48 POLITICAL ECONOMY

a former publication,* recommended as the most conducive to
the ends of classification ; and I am still of that opinion.

But in applying the term wealth to the industrial capacities
of human beings, there seems always, in popular apprehension,
to be a tacit reference to material products. The skill of an
artisan is accounted wealth, only as being the means of acquir-
ing wealth in a material sense ; and any qualities not tending
visibly to that object are scarcely so regarded at all. A country
would hardly be said to be richer, except by a metaphor, how-
ever precious a possession it might have in the genius, the
virtues, or the accomplishments of its inhabitants ; unless in-
deed these were looked upon as marketable articles, by which
it could attract the material wealth of other countries, as the
Greeks of old, and several modern nations have done. While,
therefore, I should prefer, were I constructing a new technical
language, to make the distinction turn upon the permanence
rather than upon the materiality of the product, yet when em-
ploying terms which common usage has taken complete pos-
session of, it seems advisable so to employ them as to do the
least possible violence to usage ; since any improvement in ter-
minology obtained by straining the received meaning of a pop-
ular phrase, is generally purchased beyond its value, by the
obscurity arising from the conflict between new and old asso-
ciations.

I shall, therefore, in this treatise, when speaking of wealth,
understand by it only what is called material wealth, and by
productive labor only those kinds of exertion which produce
utilities embodied in material objects. But in limiting myself
to this sense of the word, I mean to avail myself of the full
extent of that restricted acceptation, and I shall not refuse the
appellation productive, to labor which yields no material prod-
uct as its direct result, provided that an increase of material
products is its ultimate consequence. Thus, labor expended in
the acquisition of manufacturing skill I class as productive,
not in virtue of the skill itself, but of the manufactured products
created by the skill, and to the creation of which the labor of
learning the trade is essentially conducive. The labor of ofificers
of government, in affording the protection which, afiforded in
some manner or other, is indispensable to the prosperity of in-

• Essays on some Unsettled Questions the words Productive and Unproduc-
oi " Political Economy." Essay III. On tive.

UNPRODUCTIVE LABOR 49

dustry, must be classed as productive even of material wealth,
because without it, material wealth, in anything like its present
abundance, could not exist. Such labor may be said to be pro-
ductive indirectly or mediately, in opposition to the labor of the
ploughman and the cotton-spinner, which are productive imme-
diately. They are all alike in this, that they leave the commu-
nity richer in material products than they found it; they in-
crease, or tend to increase, material wealth.

§ 4. By Unproductive Labor, on the contrary, will be under-
stood labor which does not terminate in the creation of material
wealth ; which, however largely or successfully practised, does
not render the community and the world at large richer in mate-
rial products, but poorer by all that is consumed by the laborers
while so employed.

All labor is, in the language of political economy, unproduc-
tive, which ends in immediate enjoyment, without any increase
of the accumulated stock of permanent means of enjoyment.
And all labor, according to our present definition, must be
classed as unproductive, which terminates in a permanent bene-
fit, however important, provided that an increase of material
products forms no part of that benefit. The labor of saving
a friend's life is not productive, unless the friend is a productive
laborer and produces more than he consumes. To a religious
person the saving of a soul must appear a far more important
service than the saving of a life ; but he will not therefore call
a missionary or a clergyman productive laborers, unless they
teach, as the South Sea Missionaries have in some cases done,
the arts of civilization in addition to the doctrines of their re-
ligion. It is, on the contrary, evident that the greater number
of missionaries or clergymen a nation maintains, the less it has
to expend on other things ; while the more it expends judi-
ciously in keeping agriculturists and manufacturers at work,
the more it will have for every other purpose. By the former
it diminishes, ceteris paribus, its stock of material products ; by
the latter, it increases them.

Unproductive may be as useful as productive labor; it may
be more useful, even in point of permanent advantage ; or its
use may consist only in pleasurable sensation, which, when gone,
leaves no trace ; or it may not afford even this, but may be
absolute waste. In any case society or mankind grow no richer
by it, but poorer. All material products consumed by anyone
Vol. I.— 4

50 POLITICAL ECONOMY

while he produces nothing are so much subtracted, for the time,
from the material products which society would otherwise have
possessed. But, though society grows no richer by unproduc-
tive labor, the individual may. An unproductive laborer may
receive for his labor, from those who derive pleasure or benefit
from it, a remuneration which may be to him a considerable
source of wealth ; but his gain is balanced by their loss ; they
may have received a full equivalent for their expenditure, but
they are so much poorer by it. When a tailor makes a coat
and sells it there is a transfer of the price from the customer
to the tailor, and a coat besides which did not previously exist ;
but what is gained by an actor is a mere transfer from the spec-
tator's funds to his, leaving no article of wealth for the spec-
tator's indemnification. Thus the community collectively gains
nothing by the actor's labor ; and it loses, of his receipts, all
that portion which he consumes, retaining only that which he
lays by. A community, however, may add to its wealth by
unproductive labor, at the expense of other communities, as an
individual may at the expense of other individuals. The gains
of Italian opera singers, German governesses, French ballet
dancers, etc., are a source of wealth, as far as they go, to their
respective countries, if they return thither. The petty states
of Greece, especially the ruder and more backward of those
states, were nurseries of soldiers, who hired themselves to the
princes and satraps of the East to carry on useless and destruc-
tive wars, and returned with their savings to pass their declining
years in their own country : these were unproductive laborers,
and the pay they received, together with the plunder they took,
was an outlay without return to the countries which furnished
it ; but, though no gain to the world, it was a gain to Greece.
At a later period the same country and its colonies supplied
the Roman empire with another class of adventurers, who,
under the name of philosophers or of rhetoricians, taught to
the youth of the higher classes what were esteemed the most
valuable accomplishments : these were mainly unproductive
laborers, but their ample recompense was a source of wealth
to their own country. In none of these cases was there any
accession of wealth to the world. The services of the laborers,
if useful, were obtained at a sacrifice to the world of a portion
of material wealth ; if useless, all that these laborers consumed
was, to the world, waste.

UNPRODUCTIVE LABOR 51

To be wasted, however, is a liability not confined to unpro-
ductive labor. Productive labor may equally be wasted if more
of it is expended than really conduces to production. If defect
of skill in laborers, or of judgment in those who direct them,
causes a misapplication of productive industry; if a farmer
persists in ploughing with three horses and two men, when ex-
perience has shown that two horses and one man are sufficient,
the surplus labor, though employed for purposes of production,
is wasted. If a new process is adopted which proves no better,
or not so good as those before in use, the labor expended in
perfecting the invention and in carrying it into practice, though
employed for a productive purpose, is wasted. Productive labor
may render a nation poorer, if the wealth it produces — that is,
the increase it makes in the stock of useful or agreeable things —
be of a kind not immediately wanted : as when a commodity
is unsalable, because produced in a quantity beyond the present
demand ; or when speculators build docks and warehouses be-
fore there is any trade. The bankrupt states of North America,
with their premature railways and canals, have made this kind
of mistake; and it was for some time doubtful whether Eng-
land, in the disproportionate development of railway enterprise,
had not, in some degree, followed the example. Labor sunk in
expectation of a distant return, when the great exigencies or
limited resources of the community require that the return be
rapid, may leave the country not only poorer in the meanwhile,
by all which those laborers consume, but less rich even ulti-
mately than if immediate returns had been sought in the first
instance, and enterprises for distant profit postponed.

§ 5. The distinction of Productive and Unproductive is ap-
plicable to consumption as well as to labor. All the members
of the community are not laborers, but all are consumers, and
consume either unproductively or productively. Whoever con-
tributes nothing directly or indirectly to production, is an un-
productive consumer. The only productive consumers are pro-
ductive laborers, the labor of direction being of course included,
as well as that of execution. But the consumption even of pro-
ductive laborers is not all of it productive consumption. There
is unproductive consumption by productive consumers. What
they consume in keeping up or improving their health, strength,
and capacities of work, or in rearing other productive laborers to
succeed them, is productive consumption. But consumption on

52 POLITICAL ECONOMY

pleasures or luxuries, whether by the idle or by the industrious,
since production is neither its object nor is in any way advanced
by it, must be reckoned unproductive : with a reservation, per-
haps, of a certain quantum of enjoyment which may be classed
among necessaries, since anything short of it would not be
consistent with the greatest efficiency of labor. That alone is
productive consumption which goes to maintain and increase
the productive powers of the community ; either those residing
in its soil, in its materials, in the number and efficiency of its
instruments of production, or in its people.

There are numerous products which may be said not to
admit of being consumed otherwise than unproductively. The
annual consumption of gold lace, pineapples, or champagne
must be reckoned unproductive, since these things give no as-
sistance to production, nor any support to life or strength, but
what would equally be given by things much less costly. Hence
it might be supposed that the labor employed in producing them
ought not to be regarded as productive in the sense in which
the term is understood by political economists. I grant that
no labor tends to the permanent enrichment of society which is
employed in producing things for the use of unproductive con-
sumers. The tailor who makes a coat for a man who produces
nothing is a productive laborer ; but in a few weeks or months
the coat is worn out, while the wearer has not produced any-
thing to replace it, and the community is then no richer by the
labor of the tailor than if the same sum had been paid for a
stall at the opera. Nevertheless, society has been richer by
the labor while the coat lasted — that is, until society, through
one of its unproductive members, chose to consume the produce
of the labor unproductively. The case of the gold lace or the
pineapple is no further different than that they are still further
removed than the coat from the character of necessaries. These
things also are wealth until they have been consumed.

§ 6. We see, however, by this that there is a distinction, more
important to the wealth of a community than even that between
productive and unproductive labor — the distinction, namely, be-
tween labor for the supply of productive, and for the supply of
unproductive consumption ; between labor employed in keeping
up or in adding to the productive resources of the country, and
that which is employed otherwise. Of the produce of the coun-
try, a part only is destined to be consumed productively; the

UNPRODUCTIVE LABOR 53

remainder supplies the unproductive consumption of producers
and the entire consumption of the unproductive classes. Sup-
pose that the proportion of the annual produce applied to the
first purpose amounts to half; then one-half the productive
laborers of the country are all that are employed in the opera-
tions on which the permanent wealth of the country depends.
The other half are occupied from year to year, and from gen-
eration to generation, in producing things which are consumed
and disappear without return ; and whatever this half consume
is as completely lost, as to any permanent effect on the national
resources, as if it were consumed unproductively. Suppose that
this second half of the laboring population ceased to work, and
that the government or their parishes maintained them in idle-
ness for a whole year : the first half would suffice to produce,
as they had done before, their own necessaries and the neces-
saries of the second half, and to keep the stock of materials and
implements undiminished; the unproductive classes, indeed,
would be either starved or obliged to produce their own sub-
sistence, and the whole community would be reduced during
a year to bare necessaries ; but the sources of production would
be unimpaired, and the next year there would not necessarily
be a smaller produce than if no such interval of inactivity had
occurred ; while, if the case had been reversed, if the first half
of the laborers had suspended their accustomed occupations,
and the second half had continued theirs, the country at the
end of the twelvemonth would have been entirely impoverished.
It would be a great error to regret the large proportion of
the annual produce which, in an opulent country, goes to sup-
ply unproductive consumption. It would be to lament that the
community has so much to spare from its necessities for its
pleasures and for all higher uses. This portion of the produce
is the fund from which all the wants of the community, other
than that of mere living, are provided for — the measure of its
means of enjoyment and of its power of accomplishing all pur-
poses not productive. That so great a surplus should be avail-
able for such purposes, and that it should be applied to them,
can only be a subject of congratulation. The things to be re-
gretted, and which are not incapable of being remedied, are
the prodigious inequality with which this surplus is distrib-
uted, the little worth of the objects to which the greater part
of it is devoted, and the large share which falls to the lot of
persons who render no equivalent service in return.

54

POLITICAL ECONOMY

Chapter IV Of Capital

§ I. It has been seen in the preceding chapters that, besides
the primary and universal requisites of production, labor and
natural agents, there is another requisite without which no
productive operations beyond the rude and scanty beginnings
of primitive industry are possible, namely, a stock, previously
accumulated, of the products of former labor. This accumu-
lated stock of the produce of labor is termed Capital. The
function of Capital in production it is of the utmost importance
thoroughly to understand, since a number of the erroneous
notions with which our subject is infested originate in an im-
perfect and confused apprehension of this point.

Capital, by persons wholly unused to reflect on the subject, is
supposed to be synonymous with money. To expose this mis-
apprehension would be to repeat what has been said in the
introductory chapter. Money is no more synonymous with cap-
ital than it is with wealth. Money cannot itself perform any
part of the office of capital, since it can afford no assistance to
production. To do this it must be exchanged for other things ;
and anything which is susceptible of being exchanged for other
things is capable of contributing to production in the same de-
gree. What capital does for production, is to afford the shelter,
protection, tools, and materials which the work requires, and
to feed and otherwise maintain the laborers during the process.
These are the services which present labor requires from past,
and from the produce of past, labor. Whatever things are
destined for this use — destined to supply productive labor with
these various prerequisites — are Capital.

To familiarize ourselves with the conception, let us consider
what is done with the capital invested in any of the branches
of business which compose the productive industry of a country.
A manufacturer, for example, has one part of his capital in
the form of buildings fitted and destined for carrying on his
branch of manufacture. Another part he has in the form of
machinery. A third consists, if he be a spinner, of raw cotton,
flax, or wool ; if a weaver, of flaxen, woollen, silk, or cotton
thread ; and the like, according to the nature of the manufact-
ure. Food and clothing for his operatives it is not the custom
of the present age that he should directly provide; and few
capitalists, except the producers of food or clothing, have any

CAPITAL

55

portion worth mentioning of their capital in that shape. In-
stead of this, each capitahst has money, which he pays to his
work-people, and so enables them to supply themselves : he has
also finished goods in his warehouses, by the sale of which he
obtains more money, to employ in the same manner, as well
as to replenish his stock of materials, to keep his buildings and
machinery in repair, and to replace them when worn out. His
money and finished goods, however, are not wholly capital, for
he does not wholly devote them to these purposes : he employs
a part of the one, and of the proceeds of the other, in supplying
his personal consumption and that of his family, or in hiring
grooms and valets, or maintaining hunters and hounds, or in
educating his children, or in paying taxes, or in charity. What
then is his capital ? Precisely that part of his possessions, what-
ever it be, which is to constitute his fund for carrying on fresh
production. It is of no consequence that a part, or even the
whole of it, is in a form in which it cannot directly supply the
wants of laborers.

Suppose, for instance, that the capitalist is a hardware man-
ufacturer, and that his stock in trade, over and above his ma-
chinery, consists at present wholly in iron goods. Iron goods
cannot feed laborers. Nevertheless, by a mere change of the
destination of these iron goods, he can cause laborers to be fed.
Suppose that with a portion of the proceeds he intended to
maintain a pack of hounds, or an establishment of servants;
and that he changes his intention, and employs it in his busi-
ness, paying it in wages to additional work-people. These
work-people are enabled to buy and consume the food which
would otherwise have been consumed by the hounds or by the
servants ; and thus without the employer's having seen or
touched one particle of the food, his conduct has determined
that so much more of the food existing in the country has been
devoted to the use of productive laborers, and so much less
consumed in a manner wholly unproductive. Now vary the
hypothesis, and suppose that what is thus paid in wages would
otherwise have been laid out not in feeding servants or hounds,
but in buying plate and jewels, and in order to render the effect
perceptible, let us suppose that the change takes place on a
considerable scale, and that a large sum is diverted from buying
plate and jewels to employing productive laborers, whom we
shall suppose to have been previously, like the Irish peasantry,

56 POLITICAL ECONOMY

only half employed and half fed. The laborers, on receiving
their increased wages, will not lay them out in plate and jewels,
but in food. There is not, however, additional food in the
country ; nor any unproductive laborers or animals, as in the
former case, whose food is set free for productive purposes.
Food will therefore be imported if possible; if not possible,
the laborers will remain for a season on their short allowance :
but the consequence of this change in the demand for com-
modities, occasioned by the change in the expenditure of the
capitalists from unproductive to productive, is that next year
more food will be produced, and less plate and jewelry. So
that again, without having had anything to do with the food
of the laborers directly, the conversion by individuals of a por-
tion of their property, no matter of what sort, from an unpro-
ductive destination to a productive, has had the effect of causing
more food to be appropriated to the consumption of productive
laborers. The distinction, then, between Capital and Not-capi-
tal, does not lie in the kind of commodities, but in the mind
of the capitalist — in his will to employ them for one purpose
rather than another ; and all property, however ill adapted in
itself for the use of laborers, is a part of capital, so soon as it,
or the value to be received from it, is set apart for productive
reinvestment. The sum of all the values so destined by their
respective possessors, composes the capital of the country.
Whether all those values are in a shape directly applicable to
productive uses, makes no difference. Their shape, whatever
it may be, is a temporary accident ; but, once destined for pro-
duction, they do not fail to find a way of transforming them-
selves into things capable of being applied to it.

§ 2. As whatever of the produce of the country is devoted
to production is capital, so, conversely, the whole of the capital
of the country is devoted to production. This second proposi-
tion, however, must be taken with some limitations and explana-
tions. A fund may be seeking for productive employment, and
find none, adapted to the inclinations of its possessor : it then is
capital still, but unemployed capital. Or the stock may consist
of unsold goods, not susceptible of direct application to produc-
tive uses, and not, at the moment, marketable : these, until sold,
are in the condition of unemployed capital. Again, artificial or
accidental circumstances may render it necessary to possess a
larger stock in advance, that is, a larger capital before entering

CAPITAL 57

on production, than is required by the nature of things. Sup-
post that the government lays a tax on the production in one
of its earher stages, as for instance by taxing the material. The
manufacturer has to advance the tax, before commencing the
manufacture, and is therefore under a necessity of having a
larger accumulated fund than is required for, or is actually em-
ployed in, the production which he carries on. He must have
a larger capital, to maintain the same quantity of productive
labor; or (what is equivalent) with a given capital he main-
tains less labor. This mode of levying taxes, therefore, limits
unnecessarily the industry of the country : a portion of the fund
destined by its owners for production being diverted from its
purpose, and kept in a constant state of advance to the govern-
ment.

For another example : a farmer may enter on his farm at such
a time of the year, that he may be required to pay one, two,
or even three quarters' rent before obtaining any return from
the produce. This, therefore, must be paid out of his capital.
Now rent, when paid for the land itself, and not for improve-
ments made in it by labor, is not a productive expenditure.
It is not an outlay for the support of labor, or for the provision
of implements or materials the produce of labor. It is the price
paid for the use of an appropriated natural agent. This natural
agent is indeed as indispensable (and even more so) as any
implement : but the having to pay a price for it, is not. In the
case of the implement (a thing produced by labor) a price of
some sort is the necessary condition of its existence: but the
land exists by nature. The payment for it, therefore, is not
one of the expenses of production ; and the necessity of making
the payment out of capital, makes it requisite that there should
be a greater capital, a greater antecedent accumulation of the
produce of past labor, than is naturally necessary, or than is
needed where land is occupied on a different system. This
extra capital, though intended by its owners for production,
is in reality employed unproductively, and annually replaced,
not from any produce of its own, but from the produce of the
labor supported by the remainder of the farmer's capital.

Finally, that large portion of the productive capital of a coun-
try which is employed in paying the wages and salaries of labor-
ers, evidently is not, all of it, strictly and indispensably necessary
for production. As much of it as exceeds the actual necessaries

58 POLITICAL ECONOMY

of life and health (an excess which in the case of skilled la-
borers is usually considerable) is not expended in supporting
labor, but in remunerating it, and the laborers could wait for
this part of their remuneration until the production is com-
pleted : it needs not necessarily pre-exist as capital : and if
they unfortunately had to forego it altogether, the same amount
of production might take place. In order that the whole re-
muneration of the laborers should be advanced to them in daily
or weekly payments, there must exist in advance, and be appro-
priated to productive use, a greater stock, or capital, than would
suffice to carry on the existing extent of production : greater, by
whatever amount of remuneration the laborers receive, beyond
what the self-interest of a prudent slave-master would assign
to his slaves. In truth, it is only after an abundant capital had
already been accumulated, that the practice of paying in ad-
vance any remuneration of labor beyond a bare subsistence,
could possibly have arisen : since whatever is so paid, is not
really applied to production, but to the unproductive consump-
tion of productive laborers, indicating a fund for production
sufficiently ample to admit of habitually diverting a part of it
to a mere convenience.

It will be observed that I have assumed, that the laborers are
always subsisted from capital : and this is obviously the fact,
though the capital needs not necessarily be furnished by a
person called a capitalist. When the laborer maintains himself
by funds of his own, as when a peasant-farmer or proprietor
lives on the produce of his land, or an artisan works on his
own account, they are still supported by capital, that is, by funds
provided in advance. The peasant does not subsist this year
on the produce of this year's harvest, but on that of the last.
The artisan is not living on the proceeds of the work he has
in hand, but on those of work previously executed and dis-
posed of. Each is supported by a small capital of his own,
which he periodically replaces from the produce of his labor.
The large capitalist is, in like manner, maintained from funds
provided in advance. If he personally conducts his operations,
as much of his personal or household expenditure as does
not exceed a fair remuneration of his labor at the market price,
must be considered a part of his capital, expended, like any
other capital, for production : and his personal consumption,
so far as it consists of necessaries, is productive consumption.

CAPITAL 59

§ 3. At the risk of being tedious, I must add a few more
illustrations, to bring out into a still clearer and stronger light
the idea of Capital. As M, Say truly remarks, it is on the very
elements of our subject that illustration is most usefully be-
stowed, since the greatest errors which prevail in it may be
traced to the want of a thorough mastery over the elementary
ideas. Nor is this surprising: a branch may be diseased and
all the rest healthy, but unsoundness at the root diffuses un-
healthiness through the whole tree.

Let us therefore consider whether, and in what cases, the
property of those who live on the interest of what they possess,
without being personally engaged in production, can be re-
garded as capital. It is so called in common language, and,
with reference to the individual, not improperly. All funds
from which the possessor derives an income, which income he
can use without sinking and dissipating the fund itself, are to
him equivalent to capital. But to transfer hastily and incon-
siderately to the general point of view, propositions which
are true of the individual, has been a source of innumerable
errors in political economy. In the present instance, that which
is virtually capital to the individual, is or is not capital to the
nation, according as the fund which by the supposition he has
not dissipated, has or has not been dissipated by somebody else.

For example, let property of the value of ten thousand
pounds belonging to A, be lent to B, a farmer or manufacturer,
and employed profitably in B's occupation. It is as much cap-
ital as if it belonged to B. A is really a farmer or manufacturer,
not personally, but in respect of his property. Capital worth
ten thousand pounds is employed in production — in maintaining
laborers and providing tools and materials ; which capital be-
longs to A, while B takes the trouble of employing it, and re-
ceives for his remuneration the difference between the profit
which it yields and the interest he pays to A. This is the
simplest case.

Suppose next that A's ten thousand pounds, instead of being
lent to B, are lent on mortgage to C, a landed proprietor, by
whom they are employed in improving the productive powers
of his estate, by fencing, draining, road-making, or permanent
manures. This is productive employment. The ten thousand
pounds arc sunk, but not dissipated. They yield a permanent
return; the land now afford^ an increase of produce, sufficient,

6o POLITICAL ECONOMY

in a few years, if the outlay has been judicious, to replace the
amount, and in time to multiply it manifold. Here, then, is
a value of ten thousand pounds, employed in increasing the
produce of the country. This constitutes a capital, for which
C, if he lets his land, receives the returns in the nominal form
of increased rent ; and the mortgage entitles A to receive from
these returns, in the shape of interest, such annual sum as has
been agreed on. We will now vary the circumstances, and
suppose that C does not employ the loan in improving his land,
but in paying off a former mortgage, or in making a provision
for children. Whether the ten thousand pounds thus employed
are capital or not, will depend on what is done with the amount
by the ultimate receiver. If the children invest their fortunes
in a productive employment, or the mortgagee on being paid
off lends the amount to another landholder to improve his land,
or to a manufacturer to extend his business, it is still capital,
because productively employed.

Suppose, however, that C, the borrowing landlord, is a spend-
thrift, who burdens his land not to increase his fortune but
to squander it, expending the amount in equipages and enter-
tainments. In a year or two it is dissipated, and without return.
A is as rich as before ; he has no longer his ten thousand pounds,
but he has a lien on the land, which he could still sell for that
amount. C, however, is ten thousand pounds poorer than former-
ly ; and nobody is richer. It may be said that those are richer who
have made profit out of the money while it was being spent. No
doubt if C lost it by gaming, or was cheated of it by his ser-
vants, that is a mere transfer, not a destruction, and those who
have gained the amount may employ it productively. But if C
has received the fair value for his expenditure in articles of
subsistence or luxury, which he has consumed on himself, or
by means of his servants or guests, these articles have ceased
to exist, and nothing has been produced to replace them : while
if the same sum had been employed in farming or manufactur-
ing, the consumption which would have taken place would
have been more than balanced at the end of the year by new
products, created by the labor of those who would in that case
have been the consumers. By C's prodigality, that which would
have been consumed with a return, is consumed without return.
C's tradesmen may have made a profit during the process ; but
if the capital had been expended productively, an equivalent

CAPITAL 6 1

profit would have been made by builders, fencers, toolmakers,
and the tradespeople who supply the consumption of the labor-
ing classes ; while at the expiration of the time (to say nothing
of any increase), C would have had the ten thousand pounds
or its value replaced to him, which now he has not. There is,
therefore, on the general result, a difference to the disadvantage
of the community, of at least ten thousand pounds, being the
amount of C's unproductive expenditure. To A, the difference
is not material, since his income is secured to him, and while
the security is good, and the market rate of interest the same,
he can always sell the mortgage at its original value. To
A, therefore, the lien of ten thousand pounds on C's estate,
is virtually a capital of that amount ; but is it so in reference
to the community ? It is not. A had a capital of ten thousand
pounds, but this has been extinguished — dissipated and de-
stroyed by C's prodigality. A now receives his income, not
from the produce of his capital, but from some other source of
income belonging to C, probably from the rent of his land,
that is, from payments made to him by farmers out of the
produce of tJicir capital. The national capital is diminished by
ten thousand pounds, and the national income by all which
those ten thousand pounds, employed as capital, would have
produced. The loss does not fall on the owner of the destroyed'
capital, since the destroyer has agreed to indemnify him for it.
But his loss is only a small portion of that sustained by the
community, since what was devoted to the use and consump-
tion of the proprietor was only the interest ; the capital itself
was, or would have been, employed in the perpetual mainten-
ance of an equivalent number of laborers, regularly reproduc-
ing what they consumed : and of this maintenance they are
deprived without compensation.

Let us now vary the hypothesis still further, and suppose
that the money is borrowed, not by a landlord, but by the State.
A lends his capital to Government to carry on a war : he buys
from the State what are called government securities ; that is,
obligations on the government to pay a certain annual income.
If the government employed the money in making a railroad,
this might be a productive employment, and A's property would
still be used as capital ; but since it is employed in war, that is,
in the pay of officers and soldiers who produce nothing, and in
destroying a quantity of gunpowder and bullets without return,

62 POLITICAL ECONOMY

the government is in the situation of C, the spendthrift land-
lord, and A's ten thousand pounds are so much national capital
which once existed, but exists no longer : virtually thrown into
the sea, as far as wealth or production is concerned ; though
for other reasons the employment of it may have been justi-
fiable. A's subsequent income is derived, not from the produce
of his own capital, but from taxes drawn from the produce of
the remaining capital of the community ; to whom his capital
is not yielding any return, to indemnify them for the payment ;
it is lost and gone, and what he now possesses is a claim on the
returns to other people's capital and industry. This claim he
can sell, and get back the equivalent of his capital, which he
may afterward employ productively. True ; but he does not
get back his own capital, or anything which it has produced ;
that, and all its possible returns, are extinguished : what he
gets is the capital of some other person, which that person is
willing to exchange for his lien on the taxes. Another capitalist
substitutes himself for A as a mortgagee of the public, and A
substitutes himself for the other capitalist as the possessor of
a fund employed in production, or available for it. By this
exchange the productive powers of the community are neither
increased nor diminished. The breach in the capital of the
country was made when the government spent A's money:
whereby a value of ten thousand pounds was withdrawn or
withheld from productive employment, placed in the fund for
unproductive consumption, and destroyed without equivalent.

Chapter V. — Fundamental Propositions Respecting Capital

§ I. If the preceding explanations have answered their pur-
pose, they have given not only a sufficiently complete possession
of the idea of Capital according to its definition, but a sufficient
familiarity with it in the concrete, and amidst the obscurity with
which the complication of individual circumstances surrounds
it, to have prepared even the unpractised reader for certain ele-
mentary propositions or theorems respecting capital, the full
comprehension of which is already a considerable step out of
darkness into light.

The first of these propositions is, That industry is limited by
capital. This is so obvious as to be taken for granted in many
common forms of speech; but to see a truth occasionally is one

FUNDAMENTAL PROPOSITIONS ON CAPITAL 63

thing, to recognize it habitually, and admit no propositions in-
consistent with it, is another. The axiom was until lately almost
universally disregarded by legislators and political writers ; and
doctrines irreconcilable with it are still very commonly professed
and inculcated.

The following are common expressions, implying its truth.
The act of directing industry to a particular employment is de-
scribed by the phrase "applying capital " to the employment.
To employ industry on the land is to apply capital to the land.
To employ labor in a manufacture is to invest capital in the
manufacture. This implies that industry cannot be employed to
any greater extent than there is capital to invest. The proposi-
tion, indeed, must be assented to as soon as it is distinctly ap-
prehended. The expression " applying capital " is of course
metaphorical: what is really applied is labor; capital being an
indispensable condition. Again, we often speak of the " produc-
tive powers of capital." This expression is not literally correct.
The only productive powers are those of labor and natural
agents; or if any portion of capital can by a stretch of language
be said to have a productive power of its own, it is only
tools and machinery, which, like wind or water, may be said to
co-operate with labor. The food of laborers and the materials
of production have no productive power; but labor cannot exert
it productive power unless provided with them. There can be
no more industry than is supplied with materials to work up and
food to eat. Self-evident as the thing is, it is often forgotten that
the people of a country are maintained and have their wants sup-
plied, not by the produce of present labor, but of past. They
consume what has been produced, not what is about to be pro-
duced. Now, of what has been produced, a part only is allotted
to the support of productive labor; and there will not and
cannot be more of that labor than the portion so allotted (which
is the capital of the country) can feed, and provide with the ma-
terials and instruments of production.

Yet, in disregard of a fact so evident, it long continued to be
believed that laws and governments, without creating capital,
could create industry. Not by making the people more labo-
rious, or increasing the efficiency of their labor; these are ob-
jects to which the government can, in some degree, indirectlv
contribute. But without any increase in the skill or energy of
the laborers, and without causing any persons to labor who had

64

POLITICAL ECONOMY

previously been maintained in idleness, it was still thought that
the government, without providing additional funds, could cre-
ate additional employment. A government would, by prohibi-
tory laws, put a stop to the importation of some commodity;
and when by this it had caused the commodity to be produced
at home, it would plume itself upon having enriched the country
with a new branch of industry, would parade in statistical tables
the amount of produce yielded and labor employed in the pro-
duction, and take credit for the whole of this as a gain to the
country, obtained through the prohibitory law. Although this
sort of political arithmetic has fallen a little into discredit in
England, it still flourishes in the nations of Continental Europe.
Had legislators been aware that industry is limited by capital,
they would have seen that, the aggregate capital of the country
not having been increased, any portion of it which they by their
laws had caused to be embarked in the newly-acquired branch
of industry must have been withdrawn or withheld from some
other; in which it gave, or would have given, employment to
probably about the same quantity of labor which it employs in its
new occupation.*

§ 2. Because industry is limited by capital, we are not how-
ever to infer that it always reaches that limit. Capital may be
temporarily unemployed, as in the case of unsold goods, or funds
that have not yet found an investment; during this interval it
does not set in motion any industry. Or there may not be as
many laborers obtainable, as the capital would maintain and em-
ploy. This has been known to occur in new colonies, where
capital has sometimes perished uselessly for want of labor: the
Swan River settlement (now called Western Australia), in the
first years after its foundation, was an instance. There are many

* An exception must be admitted when
the industry created or upheld by the
restrictive law belongs to the class of
what are called domestic manufactures.
These being carried on by_ persons al-
ready fed — by laboring families, in the
intervals of other employment — no trans-
fer of capital to the occupation is neces-
sary to its being undertaken, beyond
the value of the materials and tools,
which is often inconsiderable. If, there-
fore, a protecting duty causes this occu-
pation to be carried on, when it other-
wise would not, there is in this case a
real increase of the production of the
country.

In order to render our theoretical
proposition invulnerable, this peculiar
case must be allowed for: but it does

not touch the practical doctrine of free
trade. Domestic manufactures cannot,
from the very nature of things, require
protection, since the subsistence of the
laborers being provided from other
sources, the price of the product, how-
ever much it may be reduced, is nearly
all clear gain. If, therefore, the do-
mestic producers retire from the com-
petition, it is never from necessity, but
because the product is not worth the
labor it costs, in the opinion of the best
judges, those who enjoy the one and un-
dergo the other. They prefer the sac-
rifice of buying their clothing to the
labor of making it. They will not con-
tinue their labor unless society will
give them more for it, than in their own
opinion its product is worth.

FUNDAMENTAL PROPOSITIONS ON CAPITAL 65

persons maintained from existing capital, who produce nothing,
or who might produce much more than they do. If the laborers
were reduced to lower wages, or induced to work more hours
for the same wages, or if their families, who are already main-
tained from capital, were employed to a greater extent than they
now are in adding to the produce, a given capital would afford
employment to more industry. The unproductive consumption
of productive laborers, the whole of which is now supplied by
capital, might cease, or be postponed until the produce came in;
and additional productive laborers might be maintained with the
amount. By such means society might obtain from its existing
resources a greater quantity of produce: and to such means it
has been driven, when the sudden destruction of some large
portion of its capital rendered the employment of the remainder
with the greatest possible effect, a matter of paramount consider-
ation for the time.

Where industry has not come up to the limit imposed by capi-
tal, governments may, in various ways, for example, by import-
ing additional laborers, bring it nearer to that limit: as by the
importation of Coolies and free Negroes into the West Indies.
There is another way in which governments can create additional
industry. They can create capital. They may lay on taxes, and
employ the amount productively. They may do what is nearly
equivalent; they may lay taxes on income or expenditure, and
apply the proceeds towards paying off the public debts. The
fundholder, when paid off, would still desire to draw an income
from his property, most of which therefore would find its way
into productive employment, while a great part of it would have
been drawn from the fund for unproductive expenditure, since
people do not wholly pay their taxes from what they would have
saved, but partly, if not chiefly, from what they would have spent.
It may be added, that any increase in the productive power of
capital (or, more properly speaking, of labor) by improvements
in the arts of life, or otherwise, tends to increase the employment
for labor; since, when there is a greater produce altogether, it is
always probable that some portion of the increase will be saved
and converted into capital; especially when the increased re-
turns to productive industry hold out an additional temptation
to the conversion of funds from an unproductive destination to a
productive.

§ 3. While, on the one hand, industry is limited by capital, so
Vol. L— 5

66 POLITICAL ECONOMY

on the other, every increase of capital gives, or is capable of giv-
ing, additional employment to industry; and this without as-
signable limit. I do not mean to deny that the capital, or part of
it, may be so employed as not to support laborers, being fixed in
machinery, buildings, improvement of land, and the like. In
any large increase of capital a considerable portion will gen-
erally be thus employed, and will only co-operate with laborers,
not maintain them. What I do intend to assert is, that the por-
tion which is destined to their maintenance, may (supposing no
alteration in anything else) be indefinitely increased, without cre-
ating an impossibility of finding them employment: in other
words, that if there are human beings capable of work, and food
to feed them, they may always be employed in producing some-
thing. This proposition requires to be somewhat dwelt upon,
being one of those which it is exceedingly easy to assent to when
presented in general terms, but somewhat difficult to keep fast
hold of, in the crowd and confusion of the actual facts of society.
It is also very much opposed to common doctrines. There is
not an opinion more general among mankind than this, that the
unproductive expenditure of the rich is necessary to the employ-
ment of the poor. Before Adam Smith, the doctrine had hardly
been questioned; and even since his time, authors of the highest
name and of great merit * have contended, that if consumers
were to save and convert into capital more than a limited por-
tion of their income, and were not to devote to unproductive
consumption an amount of means bearing a certain ratio to the
capital of the country, the extra accumulation would be merely
so much waste, since there would be no market for the commodi-
ties which the capital so created would produce. I conceive this
to be one of the many errors arising in political economy, from
the practice of not beginning with the examination of simple
cases, but rushing at once into the complexity of concrete phe-
nomena.

Everyone can see that if a benevolent government possessed
all the food, and all the implements and materials, of the com-
munity, it could exact productive labor from all capable of it,
to whom it allowed a share in the food, and could be in no danger
of wanting a field for the employment of this productive labor,
since as long as there was a single want unsaturated (which ma-
terial objects could supply), of any one individual, the labor of

* For example, Mr. Malthus, Dr. Chalmers, M. de Sismondi.

FUNDAMENTAL PROPOSITIONS ON CAPITAL 67

the community could be turned to the production of something
capable of satisfying that want. Now, the individual possessors
of capital, when they add to it by fresh accumulations, are doing
precisely the same thing which we suppose to be done by a
benevolent government. As it is allowable to put any case by
way of hypothesis, let us imagine the most extreme case con-
ceivable. Suppose that every capitalist came to be of opinion
that not being more meritorious than a well-conducted laborer,
he ought not to fare better; and accordingly laid by, from con-
scientious motives, the surplus of his profits; or suppose this
abstinence not spontaneous, but imposed by law or opinion upon
all capitalists, and upon landowners likewise. Unproductive
expenditure is now reduced to its lowest limit: and it is asked,
how is the increased capital to find employment? Who is to buy
the goods which it will produce? There are no longer customers
even for those which were produced before. The goods, there-
fore, (it is said) will remain unsold ; they will perish in the ware-
houses; until capital is brought down to what it was originally,
or rather to as much less, as- the demand of the consumers has
lessened. But this is seeing only one-half of the matter. In the
case supposed, there would no longer be any demand for luxu-
ries, on the part of capitalists and landowners. But when these
classes turn their income into capital, they do not thereby anni-
hilate their power of consumption ; they do but transfer it from
themselves to the laborers to whom they give employment.
Now, there are two possible suppositions in regard to the labor-
ers; either there is, or there is not, an increase of their numbers,
proportional to the increase of capital. If there is. the case offers
no difficulty. The production of necessaries for the new popula-
tion, takes the place of the production of luxuries for a portion
of the old, and supplies exactly the amount of employment which
has been lost. But suppose that there is no increase of popula-
tion. The whole of what was previously expended in luxuries,
by capitalists and landlords, is distributed among the existing
laborers, in the form of additional wages. We will assume them
to be already sufficiently supplied with necessaries. What fol-
lows? That the laborers become consumers of luxuries; and
the capital previously employed in the production of luxuries, is
still able to employ itself in the same manner: the difference be-
ing, that the luxuries are shared among the community generally,
instead of being confined to a few. The increased accunuilation

68 POLITICAL ECONOMY

and increased production might, rigorously speaking, continue,
until every laborer had every indulgence of wealth, consistent
with continuing to work; supposing that the power of their
labor were physically sufficient to produce all this amount of in-
dulgences for their whole number. Thus the limit of wealth is
never deficiency of consumers, but of producers and productive
power. Every addition to capital gives to labor either additional
employment, or additional remuneration; enriches either the
country, or the laboring class. If it finds additional hands to set
to work, it increases the aggregate produce: if only the same
hands, it gives them a larger share of it; and perhaps even in this
case, by stimulating them to greater exertion, augments the
produce itself.

§ 4. A second fundamental theorem respecting Capital, re-
lates to the source from which it is derived. It is the result of
saving. The evidence of this lies abundantly in what has been
already said on the subject. But the proposition needs some
further illustration.

If all persons were to expend in personal indulgences all that
they produce, and all the income they receive from what is pro-
duced by others, capital could not increase. All capital, with a
trifling exception, was originally the re-sult of saving. I say, with
a trifling exception; because a person who labors on his own
account, may spend on his own account all he produces, with-
out becoming destitute; and the provision of necessaries on
which he subsists until he has reaped his harvest, or sold his
commodity, though a real capital, cannot be said to have been
saved, since it is all used for the supply of his own wants, and
perhaps as speedily as if it had been consumed in idleness. We
may imagine a number of individuals or families settled on as
many separate pieces of land, each living on what their own
labor produces, and consuming the whole produce. But even
these must save (that is, spare from their personal consumption)
as much as is necessary for seed. Some saving, therefore, there
must have been, even in this simplest of all states of economical
relations; people must have produced more than they used, or
used less than they produced. Still more must they do so before
they can employ other laborers, or increase their production be-
yond what can be accomplished by the work of their own hands.
All that anyone employs in supporting and carrying on any other
labor than his own, must have been originally brought together

• FUNDAMENTAL PROPOSITIONS ON CAPITAL 69

by saving; somebody must have produced it and forborne to
consume it. We may say, therefore, without material inaccuracy,
that all capital, and especially all addition to capital, are the re-
sult of saving.

In a rude and violent state of society it continually happens
that the person who has capital is not the very person who has
saved it, but some one who, being stronger, or belonging to a
more powerful community, has possessed himself of it by
plunder. And even in a state of things in which property was
protected, tlie increase of capital has usually been, for a long
time, mainly derived from privations which, though essentially
the same with saving, are not generally called by that name, be-
cause not voluntary. The actual producers have been slaves,
compelled to produce as much as force could extort from them,
and to consume as little as the self-interest or the usually very
slender humanity of their taskmasters would permit. This kind
of compulsory saving, however, would not have caused any in-
crease of capital, unless a part of the amount had been saved
over again, voluntarily, by the master. If all that he made his
slaves produce and forbear to consume, had been consumed by
him on personal indulgences, he would not have increased his
capital, nor been enabled to maintain an increasing number of
slaves. To maintain any slaves at all, implied a previous saving ;
a stock, at least of food, provided in advance. This saving may
not, however, have been made by any self-imposed privation of
the master; but more probably by that of the slaves themselves
while free; the rapine or war, which deprived them of their per-
sonal liberty, having transferred also their accumulations to the
conqueror.

There are other cases in which the term saving, with the asso-
ciations usually belonging to it, does not exactly fit the opera-
tion by which capital is increased. If it were said, for instance,
that the only way to accelerate the increase of capital is by in-
crease of saving, the idea would probably be suggested of greater
abstinence, and increased privation. But it is obvious that what-
ever increases the productive power of labor, creates an addition-
al fund to make savings from, and enables capital to be enlarged
not only without additional privation, but concurrently with an
increase of personal consumption. Nevertheless, there is here
an increase of saving, in the scientific sense. Though there is
more consumed, there is also more spared. There is a greater

70 POLITICAL ECONOMY

excess of production over consumption. It is consistent with
correctness to call this a greater saving. Though the term is not
unobjectionable, there is no other which is not liable to as great
objections. To consume less than is produced, is saving; and
that is the process by which capital is increased; not necessarily
by consuming less, absolutely. We must not allow ourselves to
be so much the slaves of words, as to be unable to use the word
saving in this sense, without being in danger of forgetting that
to increase capital there is another way besides consuming less,
namely, to produce more.

§ 5. A third fundamental theorem respecting Capital, closely
connected with the one last discussed is, that although saved,
and the result of saving, it is nevertheless consumed. The
word saving does not imply that what is saved is not consumed,
nor even necessarily that its consumption is deferred; but only
that, if consumed immediately, it is not consumed by the person
who saves it. If merely laid by for future use, it is said to be
hoarded; and while hoarded, is not consumed at all. But if em-
ployed as capital, it is all consumed; though not by the capitalist.
Part is exchanged for tools or machinery, which are worn out by
use: part for seed or materials, which are destroyed as such by
being sown or wrought up, and destroyed altogether by the con-
sumption of the ultimate product. The remainder is paid in
wages to productive laborers, who consume it for their daily
wants ; or if they in their turn save any part, this also is not, gen-
erally speaking, hoarded, but (through savings banks, benefit
clubs, or some other channel) re-employed as capital, and con-
sumed.

The principle now stated is a strong example of the necessity
of attention to the most elementary truths of our subject: for it
is one of the most elementary of them all, and yet no one who
has not bestowed some thought on the matter is habitually aware
of it, and most are not even willing to admit it when first stated.
To the vulgar, it is not at all apparent that what is saved is con-
sumed. To them, everyone who saves, appears in the light of a
person who hoards; they may think such conduct permissible,
or even laudable, when it is to provide for a family, and the like;
but they have no conception of it as doing good to other people:
saving is to them another word for keeping a thing to one's self;
while spending appears to them to be distributing it among
others. The person who expends his fortune in unproductive

FUNDAMENTAL PROPOSITIONS ON CAPITAL 71

consumption, is looked upon as diffusing benefits all around;
and is an object of so much favor, that some portion of the same
popularity attaches even to him who spends what does not belong
to him; who not only destroys his own capital, if he ever had
any, but, under pretence of borrowing, and on promise of repay-
ment, possesses himself of capital belonging to others, and de-
stroys that likewise.

This popular error comes from attending to a small portion
only of the consequences that flow from the saving or the
spending; all the effects of either which are out of sight, be-
ing out of mind. The eye follows what is saved, into an imag-
inary strong box, and there loses sight of it; what is spent,
it follows into the hands of tradespeople and dependents; but
without reaching the ultimate destination in either case.
Saving (for productive investment), and spending, coincide
very closely in the first stage of their operations. The effects
of both begin with consumption; with the destruction of a
certain portion of wealth; only the things consumed, and
the persons consuming, are different. There is, in the one
case, a wearing out of tools, a destruction of material, and a
quantity of food and clothing supplied to laborers, which
they destroy by use; in the other case, there is a consumption,
that is to say, a destruction, of wines, equipages, and furniture.
Thus far, the consequence to the national wealth has been much
the same; an equivalent quantity of it has been destroyed in
both cases. But in the spending, this first stage is also the final
stage; that particular amount of the produce of labor has dis-
appeared, and there is nothing left; while, on the contrary, the
saving person, during the whole time that the destruction was
going on, has had laborers at work repairing it; who are ulti-
mately found to have replaced, with an increase, the equivalent
of what has been consumed. And as this operation admits of
being repeated indefinitely without any fresh act of saving, a sav-
ing once made becomes a fund to maintain a corresponding
number of laborers in perpetuity, reproducing annually their
own maintenance with a profit.

It is the intervention of money which obscures, to an unprac-
tised apprehension, the true character of these phenomena. Al-
most all expenditure being carried on by means of money, the
money comes to be looked upon as the main feature in the trans-
action; and since that does not perish, but only changes hands,

72 POLITICAL ECONOMY

people overlook the destruction which takes place in the case of
unproductive expenditure. The money being merely transferred,
they think the wealth also has only been handed over from the
spendthrift to other people. But this is simply confounding
money with wealth. The wealth which has been destroyed was
not the money, but the wines, equipages, and furniture which
the money purchased; and these having been destroyed without
return, society collectively is poorer by the amount. It may be
said, perhaps, that wines, equipages, and furniture, are not sub-
sistence, tools, and materials, and could not in any case have
been applied to the support of labor; that they are adapted for
no other than unproductive consumption, and that the detriment
to the wealth of the community was when they were produced,
not when they were consumed. I am willing to allow this, as
far as is necessary for the argument, and the remark would be
very pertinent if these expensive luxuries were drawn from an
existing stock, never to be replenished. But since, on the con-
trary, they continue to be produced as long as there are con-
sumers for them, and are produced in increased quantity to meet
an increased demand ; the choice made by a consumer to expend
five thousand a year in luxuries, keeps a corresponding number
of laborers employed from year to year in producing things
which can be of no use to production ; their services being lost
so far as regards the increase of the national wealth, and the tools,
materials, and food which they annually consume being so much
subtracted from the general stock of the community applicable
to productive purposes. In proportion as any class is improvi-
dent or luxurious, the industry of the country takes the direction
of producing luxuries for their use ; while not only the employ-
ment for productive laborers is diminished, but the subsistence
and instruments which are the means of such employment do
actually exist in smaller quantity.

Saving, in short, enriches, and spending impoverishes, the
community along with the individual; which is but saying in
other words, that society at large is richer by what it expends
in maintaining and aiding productive labor, but poorer by what
it consumes in its enjoyments.*

* It is worth while to direct attention a consequence of the detriment itself,

to several circumstances which to a cer- One of these is that spendthrifts do not

tain extent diminish the detriment usually succeed in consuming ali they

caused to the peneral wealth by the spend. Their habitual carelessness as

prodigality of individuals, or raise up a to expenditure causes them to be

compensation, more or less a/nple, as cheated and robbed on all quarters,

FUNDAMENTAL PROPOSITIONS ON CAPITAL 73

§6. To return to our fundamental theorem. Everything
which is produced is consumed; both what is saved and what is
said to be spent ; and the former quite as rapidly as the latter.
All the ordinary forms of language tend to disguise this. When
people talk of the ancient wealth of a country, of riches inherited
from ancestors, and similar expressions, the idea suggested is,
that the riches so transmitted were produced long ago, at the
time when they are said to have been first acquired, and that no
portion of the capital of the country was produced this year,
except as much as may have been this year added to the total
amount. The fact is far otherwise. The greater part, in value,
of the wealth now existing in England has been produced by
human hands within the last twelve months. A very small pro-
portion indeed of that large aggregate was in existence ten years
ago; — of the present productive capital of the country scarcely
any part, except farm-houses and manufactories, and a few ships
and machines ; and even these would not in most cases have sur-
vived so long, if fresh labor had not been employed within that
period in putting them into repair. The land subsists, and the
land is almost the only thing that subsists. Everything which is
produced perishes, and most things very quickly. Most kinds

often by persons of frugal habits. Large
accumulations are continually made by
the agents, stewards, and even domestic
servants, of improvident persons of for-
tune; and they pay much higher prices
for all purchases than people of careful
habits, which accounts for their being
popular as customers. They are, there-
fore, actually not able to get into their
possession and destroy a quantity of
wealth by any means equivalent to the
fortune which they dissipate. Much of
it is merely transferred to others, by
whom a part may be saved. Another
thing to be observed is, that the prodi-
gality of some may reduce others to a
forced economy. Suppose a sudden de-
mand for some article of luxury, caused
by the caprice of a prodigal, which not
having been calculated on beforehand,
there has been no increase of the usual
supply. The price will rise; and may
rise beyond the means or the inclina-
tions of some of the habitual consumers,
who may in consequence forego their
accustomed indulgence, and save the
amount. If they do not, but continue
to spend as great a value ns before on
the commodity, the dealers in it obtain,
for only the same quantity of the article,
a return increased by the whole of what
the spendthrift has paid; and thus the
amount which he loses is transferred
bodily to them, and may be added to
their capital: his increased personal
consumption being made up by the

privations of the other purchasers, who
have obtained less than usual of their
accustomed gratification for the same
equivalent. On the other hand, a coun-
ter-process must be going on some-
where, since the prodigal must have
diminished his purchases in some other
quarter to balance the augmentation in
this; he has perhaps called in funds
employed in sustaining productive la-
bor, and the dealers in subsistence and
in the instruments of production have
had commodities left on their hands, or
have received, for the usual amount of
commodities, a less than usual return.
But such losses of income or capital, by
industrious persons, except when of ex-
traordinary amount, are generally made
up by increased pinching and privation;
so that the capital of the c<immunity may
not be, on the whole, impaired, and the
prodigal may have had his self-indi:l-
gence at the expense not of the perma-
nent resources, but of the temporary
pleasures and comforts of others. For
in every case the community are poorer
by what any one spends, unless others
are in consequence led to curtail their
spending. There are yet other .ind more
recondite ways in wliich the jirofusion
of some may bring about its compensa-
tion in the extra savings of others; but
these can only be considered in that part
of the Fourth Book, which treats of the
limiting ])rincii)le to the accumulation
of capital.

74 POLITICAL ECONOMY

of capital are not fitted by their nature to be long preserved.
There are a few, and but a few productions, capable of a very
prolonged existence. Westminster Abbey has lasted many cen-
turies, with occasional repairs; some Grecian sculptures have
existed above two thousand years; the Pyramids perhaps double
or treble that time. But these were objects devoted to unproduc-
tive use. If we except bridges and aqueducts (to which may in
some countries be added tanks and embankments), there are
few instances of any edifice applied to industrial purposes which
has been of great duration; such buildings do not hold out
against wear and tear, nor is it good economy to construct them
of the solidity necessary for permanency. Capital is kept in ex-
istence from age to age not by preservation, but by perpetual
reproduction: every part of it is used and destroyed, generally
very soon after it is produced, but those who consume it are em-
ployed meanwhile in producing more. The growth of capital is
similar to the growth of population. Every individual who is
born, dies, but in each year the number born exceeds the number
who die: the population, therefore, always increases, though not
one person of those composing it was alive until a very recent
date.

§ 7. This perpetual consumption and reproduction of capital
afiford the explanation of what has so often excited wonder, the
great rapidity with which countries recover from a state of devas-
tation; the disappearance, in a short time, of all traces of the
mischiefs done by earthquakes, floods, hurricanes, and the rav-
ages of war. An enemy lays waste a country by fire and sword,
and destroys or carries away nearly all the movable wealth ex-
isting in it: all the inhabitants are ruined, and yet in a few years
after, everything is much as it was before. This ids medicatrix
naturcc has been a subject of sterile astonishment, or has been
cited to exemplify the wonderful strength of the principle of
saving, which can repair such enormous losses in so brief an in-
terval. There is nothing at all wonderful in the matter. What
the enemy have destroyed, would have been destroyed in a little
time by the inhabitants themselves: the wealth which they so
rapidly reproduce, would have needed to be reproduced and
would have been reproduced in any case, and probably in as
short a time. Nothing is changed, except that during the re-
production they have not now the advantage of consuming what
had been produced previously. The possibility of a rapid repair

FUNDAMENTAL PROPOSITIONS ON CAPITAL

75

of their disasters, mainly depends on whether the country has
been depopulated. If its effective population have not been ex-
tirpated at the time, and are not starved afterwards; then, with
the same skill and knowledge which they had before, with their
land and its permanent improvements undestroyed, and the more
durable buildings probably unimpaired, or only partially in-
jured, they have nearly all the requisites for their former amount
of production. If there is as much of food left to them, or of
valuables to buy food, as enables them by any amount of priva-
tion to remain alive and in working condition, they will in a
short time have raised as great a produce, and acquired col-
lectively as great wealth and as great a capital, as before; by
the mere continuance of that ordinary amount of exertion which
they are accustomed to employ in their occupations. Nor does
this evince any strength in the principle of saving, in the popular
sense of the term, since what takes place is not intentional ab-
stinence, but involuntary privation.

Yet so fatal is the habit of thinking through the medium of
only one set of technical phrases, and so little reason have studi-
ous men to value themselves on being exempt from the very
same mental infirmities which beset the vulgar, that this simple
explanation was never given (so far as I am aware) by any po-
litical economist before Dr. Chalmers; a writer many of whose
opinions I think erroneous, but who has always the merit of
studying phenomena at first hand, and expressing them in a lan-
guage of his own, which often uncovers aspects of the truth that
the received phraseologies only tend to hide.

§ 8. The same author carries out this train of thought to some
important conclusions on another closely connected subject, that
of government loans for war purposes or other unproductive ex-
penditure. These loans, being drawn from capital (in lieu of
taxes, which would generally have been paid from income, and
made up in part or altogether by increased economy) must, ac-
cording to the principles we have laid down, tend to impoverish
the country: yet the years in which expenditure of this sort has
been on the greatest scale, have often been years of great ap-
parent prosperity : the wealth and resources of the country, in-
stead of diminishing, have given every sign of rapid increase
during the process, and of greatly expanded dimensions after its
close. This was confessedly the case with Great Britain during
the last long Continental war; and it would take some space to

y6 POLITICAL ECONOMY

enumerate all the unfounded theories in political economy, to
which that fact gave rise, and to which it secured temporary cre-
dence; almost all tending to exalt unproductive expenditure, at
the expense of productive. Without entering into all the causes
which operated, and which commonly do operate, to prevent
these extraordinary drafts on the productive resources of a coun-
try from being so much felt as it might seem reasonable to ex-
pect, we will suppose the most unfavorable case possible: that
the whole amount borrowed and destroyed by the government,
was abstracted by the lender from a productive employment in
which it had actually been invested. The capital, therefore, of
the country, is this year diminished by so much. But unless the
amount abstracted is something enormous, there is no reason in
the nature of the case why next year the national capital should
not be as great as ever. The loan cannot have been taken from
that portion of the capital of the country which consists of tools,
machinery, and buildings. It must have been wholly drawn
from the portion employed in paying laborers : and the laborers
will suffer accordingly. But if none of them are starved ; if their
wages can bear such an amount of reduction, or if charity inter-
poses between them and absolute destitution, there is no reason
that their labor should produce less in the next year than in the
year before. If they produce as much as usual, having been paid
less by so many millions sterling, these millions are gained by
their employers. The breach made in the capital of the country
is thus instantly repaired, but repaired by the privations and
often the real misery of the laboring class. Here is ample rea-
son why such periods, even in the most unfavorable circum-
stances, may easily be times of great gain to those whose pros-
perity usually passes, in the estimation of society, for national
prosperity.*

* On the other hand, it must be re- war expenditure. Accordingly, Dr. Chal-
membered that war abstracts from pro- mers's doctrine, though true of this
ductive employment not only capital, but country, is wholly inapplicable to coun-
likewise laborers, that the funds with- tries differently circumstanced; to
drawn from the remuneration of produc- France, for example, during the Napo-
tive laborers are partly employed in pay- leon wars. At that period the draft
ing the same or other individuals for un- on the laboring population of France,
productive labor; and that by this por- for a long series of years, was enormous,
tion of its effects, war expenditure acts while the funds which supported the
in precisely the opposite manner to that war were mostly supplied by contribu-
which Dr. Chalmers points out, and, so tions levied on the countries overrun by
far as it goes, directly counteracts the tlie French arms, a very small propor-
effects described in the text. So far as tion alone consisting of French capital,
laborers are taken from production to In France, accordingly, the wages of
man the army and navy, the laboring labor did not fall, but rose; the em-
classes are not damaged, the capitalists ployers of labor were not benefited, but
are not benefited, and the general injured; while the wealth of the country
produce of the country is diminished by was impaired by the suspension or total

FUNDAMENTAL PROPOSITIONS ON CAPITAL 77

This leads to the vexed question to which Dr. Chalmers has
very particularly adverted; whether the funds required by a
government for extraordinary unproductive expenditure, are
best raised by loans, the interest only being provided by
taxes, or whether taxes should be at once laid onto the
whole amount; which is called in the financial vocabulary,
raising the whole of the supplies within the year. Dr.
Chalmers is strongly for the latter method. He says, the
common notion is that in calling for the whole amount in one
year, you require what is either impossible, or very inconvenient;
that the people cannot, without great hardship, pay the whole at
once out of their yearly income; and that it is much better to
require of them a small payment every year in the shape of in-
terest, than so great a sacrifice once for all. To which his answer
is, that the sacrifice is made equally in either case. Whatever
is spent, cannot but be drawn from yearly income. The whole
and every part of the wealth produced in the country, forms, or
helps to form, the yearly income of somebody. The privation
which it is supposed must result from taking the amount in the
shape of taxes, is not avoided by taking it in a loan. The suffer-
ing is not averted, but only thrown upon the laboring classes,
the least able, and who least ought to bear it: while all the in-
conveniences, physical, moral, and political, produced by main-
taining taxes for the perpetual payment of the interest, are in-
curred in pure loss. Whenever capital is withdrawn from pro-
duction, or from the fund destined for production, to be lent to
the State and expended unproductively, that whole sum is with-
held from the laboring classes: the loan, therefore, is in truth
paid off the same year; the whole of the sacrifice necessary for
paying it off is actually made: only it is paid to the wrong per-
sons, and therefore does not extinguish the claim ; and paid by
the very worst of taxes, a tax exclusively on the laboring class.
And after having, in this most painful and unjust way, gone
through the whole effort necessary for extinguishing the debt,
the country remains charged with it, and with the payment of its
interest in perpetuity.

These views appear to me strictly just, in so far as the value

loss of so vast an amount of its produc- war and support armies for her Conti-

tive labor. In England all this was re- nental allies. Consequently, as shown

versed. England employed compara- in the text, her laborers suffered, her

lively few additional soldiers and sailors capitalists prospered, and her perma-

of her own, while she diverted hundreds ncnt productive resources did not fall

of millions of capital from productive off.
employment, to supply munitions of

78 POLITICAL ECONOMY

absorbed in loans would otherwise have been employed in pro-
ductive industry within the country. The practical state of the
case, however, seldom exactly corresponds with this supposition.
The loans of the less wealthy countries are made chiefly with
foreign capital, which would not, perhaps, have been brought
in to be invested on any less security than that of the govern-
ment: while those of rich and prosperous countries are generally
made, not with funds withdrawn from productive employment,
but with the new accumulations constantly making from income,
and often with a part of them which, if not so taken, would have
migrated to colonies, or sought other investments abroad. In
these cases (which will be more particularly examined here-
after*), the sum wanted may be obtained by loan without detri-
ment to the laborers, or derangement of the national industry,
and even perhaps with advantage to both, in comparison with
raising the amount by taxation; since taxes, especially when
heavy, are almost always partly paid at the expense of what
would otherwise have been saved and added to capital. Besides,
in a country which makes so great yearly additions to its wealth
that a part can be taken and expended unproductively without
diminishing capital, or even preventing a considerable increase,
it is evident that even if the whole of what is so taken would have
become capital, and obtained employment in the country, the
efifect on the laboring classes is far less prejudicial, and the case
against the loan system much less strong, than in the case first
supposed. This brief anticipation of a discussion which will find
its proper place elsewhere, appeared necessary to prevent false
inferences from the premises previously laid down.

§ 9. We now pass to a fourth fundamental theorem respect-
ing Capital, which is, perhaps, oftener overlooked or miscon-
ceived than even any of the foregoing. What supports and em-
ploys productive labor, is the capital expended in setting it to
work, and not the demand of purchasers for the produce of the
labor when completed. Demand for commodities is not demand
for labor. The demand for commodities determines in what par-
ticular branch of production the labor and capital shall be em-
ployed ; it determines the direction of the labor ; but not the
more or less of the labor itself, or of the maintenance or payment
of the labor. These depend on the amount of the capital, or
other funds directly devoted to the sustenance and remuneration
of labor,

* Infra, book iv. chaps. ',v. v.

FUNDAMENTAL PROPOSITIONS ON CAPITAL 79

Suppose, for instance, that there is a demand for velvet; a
fund ready to be laid out in buying velvet, but no capital to es-
tablish the manufacture. It is of no consequence how great the
demand may be; unless capital is attracted into the occupation,
there will be no velvet made, and consequently none bought;
unless, indeed, the desire of the intending purchaser for it is so
strong, that he employs part of the price he would have paid for
it, in making advances to work-people, that they may employ
themselves in making velvet; that is, unless he converts part of
his income into capital, and invests that capital in the manufact-
ure. Let us now reverse the hypothesis, and suppose that there
is plenty of capital ready for making velvet, but no demand.
Velvet will not be made; but there is no particular preference
on the part of capital for making velvet. Manufacturers and
their laborers do not produce for the pleasure of their customers,
but for the supply of their own wants, and having still the capital
and the labor which are the essentials of production, they can
either produce something else which is in demand, or if there be
no other demand, they themselves have one, and can produce the
things which they want for their own consumption. So that the
employment afforded to labor does not depend on the purchasers,
but on the capital. I am, of course, not taking into consideration
the effects of a sudden change. If the demand ceases unex-
pectedly, after the commodity to supply it is already produced,
this introduces a different element into the question : the capital
has actually been consumed in producing something which no-
body wants or uses, and it has therefore perished, and the em-
ployment which it gave to labor is at an end, not because there
is no longer a demand, but because there is no longer a capital.
This case therefore does not test the principle. The proper test
is, to suppose that the change is gradual and foreseen, and is at-
tended with no waste of capital, the manufacture being discon-
tinued by merely not replacing the machinery as it wears out,
and not reinvesting the money as it comes in from the sale of
the produce. The capital is thus ready for a new employment,
in which it will maintain as much labor as before. The manu-
facturer and his work-people lose the benefit of the skill and
knowledge which they had acquired in the particular business,
and which can only be partially of use to them in any other; and
that is the amount of loss to the community by the change. But
the laborers can still work, and the capital which previously em-

8o POLITICAL ECONOMY

ployed them will, either in the same hands, or by being lent to
others, employ either those laborers or an equivalent number in
some other occupation.

This theorem, that to purchase produce is not to employ
labor; that the demand for labor is constituted by the wages
which precede the production, and not by the demand which
may exist for the commodities resulting from the production ; is
a proposition which greatly needs all the illustration it can re-
ceive. It is, to common apprehension, a paradox; and even
among political economists of reputation, I can hardly point to
any, except Mr. Ricardo and M. Say, who have kept it con-
stantly and steadily in view. Almost all others occasionally ex-
press themselves as if a person who buys commodities, the prod-
uce of labor, was an employer of labor, and created a demand for
it as really, and in the same sense, as if he bought the labor it-
self directly, by the payment of wages. It is no wonder that po-
litical economy advances slowly, when such a question as this
still remains open at its very threshold. I apprehend, that if by
demand for labor be meant the demand by which wages are
raised, or the number of laborers in employment increased,
demand for commodities does not constitute demand for labor.
I conceive that a person who buys commodities and consumes
them himself, does no good to the laboring classes, and that it is
only by what he abstains from consuming, and expends in di-
rect payments to laborers in exchange for labor, that he benefits
the laboring classes, or adds anything to the amount of their
employment.

For the better illustration of the principle, let us put the fol-
lowing case. A consumer may expend his income either in buy-
ing services or commodities. He may employ part of it in hir-
ing journeymen bricklayers to build a house, or excavators to
dig artificial lakes, or laborers to make plantations and lay out
pleasure-grounds; or, instead of this, he may expend the same
value in buying velvet and lace. The question is, whether the
difference between these two modes of expending his income
affects the interest of the laboring classes. It is plain that in the
first of the two cases he employs laborers, who will be out of em-
ployment, or at least out of that employment, in the opposite
case. But those from whom I differ say that this is of no conse-
quence, because in buying velvet and lace he equally employs
laborers, namely, those who make the velvet and lace. I con-

FUNDAMENTAL PROPOSITIONS ON CAPITAL 8i

tend, however, that in this last case he does not employ laborers;
but merely decides in what Ivind of work some other person shall
employ them. The consumer does not with his own funds pay
to the weavers and lacemakers their day's wages. He buys the
finished commodity, which has been produced by labor and capi-
tal, the laborer not being paid nor the capital furnished by him,
but by the manufacturer. Suppose that he had been in the habit
of expending this portion of his income in hiring journeymen
bricklayers, who laid out the amount of their wages in food and
clothing, which were also produced by labor and capital. He,
however, determines to prefer velvet, for which he thus creates
an extra demand. This demand cannot be satisfied without an
extra supply, nor can the supply be produced without an extra
capital; where, then, is the capital to come from? There is noth-
ing in the consumer's change of purpose which makes the capital
of the country greater than it otherwise was. It appears, then,
that the increased demand for velvet could not for the present be
supplied, were it not that the very circumstance which gave rise
to it has set at liberty a capital of the exact amount required. The
very sum which the consumer now employs in buying velvet,
formerly passed into the hands of journeymen bricklayers, who
expended it in food and necessaries, which they now either go
without, or squeeze, by their competition, from the shares
of other laborers. The labor and capital, therefore, which
formerly produced necessaries for the use of these brick-
layers, are deprived of their market, and must look out
for other employment; and they find it in making velvet for
the new demand. I do not mean that the very same labor and
capital which produced the necessaries turn themselves to pro-
ducing the velvet; but, in some one or other of a hundred modes,
they take the place of that which does. There was capital in ex-
istence to do one of two things — to make the velvet, or to pro-
duce necessaries for the journeyman bricklayers; but not to do
both. It was at the option of the consumer which of the two
should happen ; and if he chooses the velvet, they go without the
necessaries.

For further illustration, let us suppose the same case reversed.
The consumer has been accustomed to buy velvet, but resolves
to discontinue that expense, and to employ the same annual sum
in hiring bricklayers. If the common opinion be correct, this
change in the mode of his expenditure gives no additional em-
VoL. I.— 6

82 POLITICAL ECONOMY

ployment to labor, but only transfers employment from velvet-
makers to bricklayers. On closer inspection, however, it will be
seen that there is an increase of the total sum applied to the re-
muneration of labor. The velvet manufacturer, supposing him
aware of the diminished demand for his commodity, diminishes
the production, and sets at liberty a corresponding portion of
the capital employed in the manufacture. This capital, thus with-
drawn from the maintenance of velvet-makers, is not the same
fund with that which the customer employs in maintaining brick-
layers; it is a second fund. There are therefore two funds to be
employed in the maintenance and remuneration of labor, where
before there was only one. There is not a transfer of employ-
ment from velvet-makers to bricklayers ; there is a new employ-
ment created for bricklayers, and a transfer of employment from
velvet-makers to some other laborers, most probably those who
produce the food and other things which the bricklayers con-
sume.

In answer to this it is said, that though money laid out in buy-
ing velvet is not capital, it replaces a capital; that though it does
not create a new demand for labor, it is the necessary means of
enabling the existing demand to be kept up. The funds (it may
be said) of the manufacturer, while locked up in velvet, cannot
be directly applied to the maintenance of labor; they do not
begin to constitute a demand for labor until the velvet is sold,
and the capital which made it replaced from the outlay of the
purchaser; and thus, it may be said, the velvet-maker and the
velvet-buyer have not two capitals, but only one capital between
them, which by the act of purchase the buyer transfers to the
manufacturer: and if instead of buying velvet he buys labor, he
simply transfers this capital elsewhere, extinguishing as much
demand for labor in one quarter as he creates in another.

The premises of this argument are not denied. To set free a
capital which would otherwise be locked up in a form useless for
the support of labor, is, no doubt, the same thing to the interests
of laborers as the creation of a new capital. It is perfectly true
that if I expend £i,ooo in buying velvet, I enable the manufact-
urer to employ £i,ooo in the maintenance of labor, which could
not have been so employed while the velvet remained unsold:
and if it would have remained unsold forever unless I bought it,
then by changing my purpose and hiring bricklayers instead, I
undoubtedly create no new demand for labor: for while I em-

FUNDAMENTAL PROPOSITIONS ON CAPITAL 83

ploy ii,ooo in hiring labor on the one hand, I annihilate forever
£1,000 of the velvet-maker's capital on the other. But this
is confounding the effects arising from the mere suddenness of a
change with the effects of the change itself. If when the buyer
ceased to purchase, the capital employed in making velvet for his
use necessarily perished, then his expending the same amount
in hiring bricklayers would be no creation, but merely a transfer,
of employment. The increased employment which I contend is
given to labor, would not be given unless the capital of the
velvet-maker could be liberated, and would not be given
until it zvas liberated. But everyone knows that the capital
invested in an employment can be withdrawn from it, if sufficient
time be allowed. If the velvet-maker had previous notice, by not
receiving the usual order, he will have produced i 1,000 less vel-
vet, and an equivalent portion of his capital will have been al-
ready set free. If he had no previous notice, and the article con-
sequently remains on his hands, the increase of his stock will
induce him next year to suspend or diminish his production until
the surplus is carried ofif. When this process is complete, the
manufacturer will find himself as rich as before, with undimin-
ished power of employing labor in general, though a portion of
his capital will now be employed in maintaining some other kind
of it. Until this adjustment has taken place, the demand for
labor will be merely changed, not increased: but as soon
as it has taken place, the demand for labor is increased.
Where there was formerly only one capital employed in
maintaining weavers to make ii,ooo worth of velvet, there
is now that same capital employed in making something
else, and £1,000 distributed among bricklayers besides. There
are now two capitals employed in remunerating two sets of
laborers; while before, one of those capitals, that of the cus-
tomer, only served as a wheel in the machinery by which the
other capital, that of the manufacturer, carried on its employ-
ment of labor from year to year.

The proposition for which I am contending is in reality equiva-
lent to the following, which to some minds will appear a truism,
though to others it is a paradox: that a person does good to
laborers, not by what he consumes on himself, but solely by
what he does not so consume. If instead of laying out £100 in
wine or silk, I expend it iti wages, the demand for commodities
is precisely equal in both cases: in the one, it is a demand for

84 POLITICAL ECONOMY

£ioo worth of wine or silk, in the other, for the same value of
bread, beer, laborers' clothing, fuel, and indulgences; but the la-
borers of the community have in the latter case the value of £ioo
more of the produce of the community distributed among them.
I have consumed that much less, and made over my consuming
power to them. If it were not so, my having consumed less
would not leave more to be consumed by others; which is a
manifest contradiction. When less is not produced, what one
person forbears to consume is necessarily added to the share of
those to whom he transfers his power of purchase. In the case
supposed I do not necessarily consume less ultimately, since the
laborers whom I pay may build a house for me, or make some-
thing else for my future consumption. But I have at all events
postponed my consumption, and have turned over part of my
share of the present produce of the community to the laborers.
If after an interval I am indemnified, it is not from the existing
produce, but from a subsequent addition made to it. I have
therefore left more of the existing produce to be consumed by
others; and have put into the possession of laborers the power
to consume it.

There cannot be a better reductio ad abstirdum of the oppo-
site doctrine than that afforded by the Poor Law. If it be equally
for the benefit of the laboring classes whether I consume my
means in the form of things purchased for my own use, or set
aside a portion in the shape of wages or alms for their direct con-
sumption, on what ground can the policy be justified of taking
my money from me to support paupers? since my unproductive
expenditure would have equally benefited them, while I should
have enjoyed it too. If society can both eat its cake and have it,
why should it not be allowed the double indulgence? But com-
mon sense tells everyone in his own case (though he does not see
it on the larger scale) that the poor-rate which he pays is really
subtracted from his own consumption; and that no shifting of
payment backwards and forwards will enable two persons to eat
the same food. If he had not been required to pay the rate, and
had consequently laid out the amount on himself, the poor would
have had as much less for their share of the total produce of the
country, as he himself would have consumed more.*

• The following case, which presents Suppose that a rich individual. A, ex-

the argument in a somewhat different pends a certain amount daily in wages

shape, may serve for still further illus- or alms, which, as soon as received, is

tration: expended and consumed, in the form of

FUNDAMENTAL PROPOSITIONS ON CAPITAL

85

It appears, then, that a demand delayed until the work is com-
pleted, and furnishing no advances, but only reimbursing ad-
vances made by others, contributes nothing to the demand for
labor; and that what is so expended, is, in all its effects, so far
as regards the employment of the laboring class, a mere nullity;
it does not and cannot create any employment except at the ex-
pense of other employment which existed before.

coarse food, by the receivers. A dies,
leaving his property to B, who discon-
tinues this item of expenditure, and ex-
pends in lieu of it the same sum each
day in delicacies for his own table. I
have chosen this supposition, in order
that the two cases may be similar in all
their circumstances, except that which
is the subject of comparison. In order
not to obscure the essential facts of the
case by exhibiting them through the
hazy medium of a money transaction,
let us further suppose that A, and B af-
ter him, are landlords of the estate on
which both the food consumed by the
recipients of A's disbursements, and the
articles of luxury supplied for B's table,
are produced; and that their rent is paid
to them in kind, they giving previous
notice what description of produce they
shall require. The question is, whether
B's expenditure gives as much employ-
ment or as much food to his poorer
neighbors as A's gave.

From the case as stated, it seems to
follow that while A lived, that portion
of his income which he expended in
wages or alms, would be drawn by him
from the farm in the shape of food for
laborers, and would be used as such;
while B, who came after him, would re-
quire, instead of this, an equivalent
value in expensive articles of food, to
be consumed in his own household: that
the farmer, therefore, would, under B's
regime, produce that much less of or-
dinary food, and more of expensive deli-
cacies, for each day of the year, than
was produced in A's time, and that there
would be that amount less of food
shared, throughout the year, among the
laboring and poorer classes. This is
what would be conformable to the prin-
ciples laid down in the text. Those who
think differently, must, on the other
hand, suppose that the luxuries required
by H would be produced, not instead of,
but in addition to, the food previously
supplied to A's laborers, and that the
aggregate produce of the country would
be increased in amount. But when it
is asked, how this double production
would be effected — how the farmer,
whose capital and labor were already
fully employed, would be enabled to sup-
ply the new wants of B, without pro-
ducing less of other things; the only
mode which presents itself is, that he
should first produce the food, and then,
jriving that food to the laborers whom
A formerly fed, should by means of their
labor, produce the luxuries wanted by
B. This, accordingly, when the ob-
jectors are hard pressed, appears to be

really their meaning. But it is an ob-
vious answer, that on this supposition,
B must wait for his luxuries till the sec-
ond year, and they are wanted this year.
By the original hypothesis, he consumes
his lu.xurious dinner day by day, /'art
fiassu with the rations of bread and
potatoes formerly served out by A to
his laborers. There is not time to feed
the laborers first, and supply B after-
wards: he and they cannot both have
their wants ministered to: he can only
satisfy his own demand for commodi-
ties, by leaving as much of theirs, as was
formerly supplied from that fund, un-
satisfied.

It may, indeed, be rejoined by an
objector, that, since on the present show-
ing, time is the only thing wanting to
render the expenditure of B consistent
with as large an employment to labor as
was given by A, why may we not sup-
pose that B postpones his increased con-
sumption of personal luxuries until they
can be furnished to him by the labor of
the persons whom A employed? In that
case, it may be said, he would employ
and feed as much labor as his predeces-
sors. Undoubtedly he would; but why?
Because his income would be expended
in exactly the same manner as his pred-
ecessor's; it would be expended in
wages. A reserved from his personal
consumption a fund which he paid away
directly to laborers; B does the same,
only instead of paying it to them him-
self, he leaves it in the hands of the
farmer, who pays it to them for him.
On this supposition B, in the first year,
neither expending the amount, as far
as he is personally concerned, in A's
manner nor in his own, really saves that
portion of his income, and lends it to
the farmer. And if, in subsequent years,
confining himself within the year's in-
come, he leaves the farmer in arrears to
that amount, it becomes an additional
capital, with which the farmer may per-
manently emjiloy and feed A's laborers.
Nobody pretends that such a change as
this, a chan.-^e from spending an in-
come in wages of labor, to savmg it for
investment, deprives any laborers of em-
ployment. What is affirmed to have
that effect is, the change from hiring la-
borers to buying commodities for per-
sonal use; as represented by our origmal
hypothesis.

In our illustration we have supposed
no buying and selling, or use of money.
But the case as we have put it, corre-
sponds with actual fact in everything
except the details of the mechanism.
The whole of any country is virtually a

86 POLITICAL ECONOMY

But though a demand for velvet does nothing more in regard
to the employment for labor and capital, than to determine so
much of the employment which already existed, into that par-
ticular channel instead of any other; still, to the producers al-
ready engaged in the velvet manufacture, and not intending to
quit it, this is of the utmost importance. To them, a falling ofif
in the demand is a real loss, and one which, even if none of their
goods finally perish unsold, may mount to any height, up "to that
which would make them choose, as the smaller evil, to retire
from the business. On the contrary, an increased demand en-
ables them to extend their transactions — to make a profit on a
larger capital, if they have it, or can borrow it; and, turning over
their capital more rapidly, they will employ their laborers more
constantly, or employ a greater number than before. So that
an increased demand for a commodity does really, in the par-
ticular department, often cause a greater employment to be given
to labor by the same capital. The mistake lies in not perceiv-
ing that in the cases supposed, this advantage is given to labor
and capital in one department, only by being withdrawn from
another; and that when the change has produced its natural ef-
fect of attracting into the employment additional capital propor-
tional to the increased demand, the advantage itself ceases.

The grounds of a proposition, when well understood, usually
give a tolerable indication of the limitations of it. The general
principle, now stated is, that demand for commodities deter-
mines merely the direction of labor, and the kind of wealth pro-
duced, but not the quantity or efficiency of the labor, or the ag-
gregate of wealth. But to this there are two exceptions. First;
when labor is supported, but not fully occupied, a new demand
for something which it can produce, may stimulate the labor
thus supported to increased exertions, of which the result may
be an increase of wealth, to the advantage of the laborers them-

single farm and manufactory, from
which every member of the community
draws his appointed share of the prod-
uce, having a certain number of coun-
ters, called pounds sterling, put into
his hands, which, at his convenience,
he brings back and exchanges for such
goods as he prefers, up to the limit
of the amount. He does not, as in our
imaginary case, give notice beforehand
what things he shall require; but the
dealers and producers are quite capable
of finding it out by observation, and
any change in the demand is promptly
followed by an adaptation of the supply

to it. If a consumer changes from pay-
ing away a part of his income in wages,
to spending it that same day (not some
subsequent and distant day) in things
for his own consumption, and perseveres
in this altered practice until production
has had time to adapt itself to the alter-
ation of demand, there will from that
time be less food and other articles for
the vise of laborers, produced in the
country, by exactly the value of the
extra luxuries now demanded; and the
laborers, as a class, will be worse off by
the precise amount.

FUNDAMENTAL PROPOSITIONS ON CAPITAL 87

selves and of others. Work which can be done in the spare
hours of persons subsisted from some other source, can (as be-
fore remarked) be undertaken without withdrawing capital from
other occupations, beyond the amount (often very small) re-
quired to cover the expense of tools and materials; and even
this will often be provided by savings made expressly for the pur-
pose. The reason of our theorem thus failing, the theorem it-
self fails, and employment of this kind may, by the springing up
of a demand for the commodity, be called into existence without
depriving labor of an equivalent amount of employment in any
other quarter. The demand does not, even in this case, operate
on labor any other wise than through the medium of an existing
capital; but it affords an inducement which causes that capital
to set in motion a greater amount of labor than it did before.

The second exception, of which I shall speak at length in a
subsequent chapter, consists in the known effect of an extension
of the market for a commodity, in rendering possible an in-
creased development of the division of labor, and hence a more
effective distribution of the productive forces of society. This,
like the former, is more an exception in appearance, than it is
in reality. It is not the money paid by the purchaser which re-
munerates the labor; it is the capital of the producer: the de-
mand only determines in what manner that capital shall be em-
ployed, and what kind of labor it shall remunerate ; but if it de-
termines that the commodity shall be produced on a large scale,
it enables the same capital to produce more of the commodity,
and may, by an indirect effect in causing an increase of capital,
produce an eventual increase of the remuneration of the laborer.

The demand for commodities is a consideration of importance
rather in the theory of exchange, than in that of production.
Looking at things in the aggregate, and permanently, the re-
muneration of the producer is derived from the productive
power of his own capital. The sale of the produce for money,
and the subsequent expenditure of the money in buying other
commodities, are a mere exchange of equivalent values, for
mutual accommodation. It is true that, the division of employ-
ments being one of the principal means of increasing the pro-
ductive power of labor, the power of exchanging gives rise to
a great increase of the produce ; but even then it is production,
not exchange, which remunerates labor and capital. We cannot
too strictly represent to ourselves the operation of exchange,

88 POLITICAL ECONOMY

whether conducted by barter or through the medium of money,
as the mere mechanism by which each person transforms the
remuneration of his labor or of his capital into the particular
shape in which it is most convenient to him to possess it ; but
in no wise the source of the remuneration itself.

§ lo. The preceding principles demonstrate the fallacy of
many popular arguments and doctrines, which are continually
reproducing themselves in new forms. For example, it has been
contended, and by some from whom better things might have
been expected, that the argument for the income tax, grounded
on its falling on the higher and middle classes only, and sparing
the poor, is an error ; some have gone so far as to say, an im-
posture ; because in taking from the rich what they would have
expended among the poor, the tax injures the poor as much as
if it had been directly levied from them. Of this doctrine we
now know what to think. So far, indeed, as what is taken from
the rich in taxes, would, if not so taken, have been saved and
converted into capital, or even expended in the maintenance
and wages of servants or of any class of unproductive laborers,
to that extent the demand for labor is no doubt diminished, and
the poor injuriously affected, by the tax on the rich; and as
these effects are almost always produced in a greater or less
degree, it is impossible so to tax the rich as that no portion
whatever of the tax can fall on the poor. But even here the
question arises, whether the government, after receiving the
amount, will not lay out as great a portion of it in the direct
purchase of labor, as the taxpayers would have done. In regard
to all that portion of the tax, which, if not paid to the govern-
ment, would have been consumed in the form of commodities
(or even expended in services if the payment has been advanced
by a capitalist), this, according to the principles we have inves-
tigated, falls definitively on the rich, and not at all on the poor.
There is exactly the same demand for labor, so far as this por-
tion is concerned, after the tax, as before it. The capital which
hitherto employed the laborers of the country, remains, and is
still capable of employing the same number. There is the same
amount of produce paid in wages, or allotted to defray the feed-
ing and clothing of laborers.

If those against whom I am now contending were in the right,
it would be impossible to tax anybody except the poor. If it
is taxing the laborers, to tax what is laid out in the produce

FUNDAMENTAL PROPOSITIONS ON CAPITAL 89

of labor, the laboring classes pay all the taxes. The same argu-
ment, however, equally proves, that it is impossible to tax the
laborers at all ; since the tax, being laid out either in labor or
in commodities, comes all back to them ; so that taxation has
the singular property of falling on nobody. On the same show-
ing, it would do the laborers no harm to take from them all
they have, and distribute it among the other members of the
community. It would all be " spent among them," which on
this theory comes to the same thing. The error is produced by
not looking directly at the realities of the phenomena, but at-
tending only to the outward mechanism of paying and spend-
ing. If we look at the effects produced not on the money, which
merely changes hands, but on the commodities which are used
and consumed, we see that, m consequence of the income tax,
the classes who pay it do really diminish their consumption.
Exactly so far as they do this, they are the persons on whom
the tax falls. It is defrayed out of what they would otherwise
have used and enjoyed. So far, on the other hand, as the
burden falls, not on what they would have consumed, but on
what they would have saved to maintain production, or spent
in maintaining or paying unproductive laborers, to that extent
the tax forms a deduction from what would have been used
and enjoyed by the laboring classes. But if the government,
as is probably the fact, expends fully as much of the amount
as the taxpayers would have done in the direct employment of
labor, as in hiring sailors, soldiers, and policemen, or in paying
off debt, by which last operation it even increases capital : the
laboring classes not only do not lose any employment by the
tax, but may possibly gain some, and the whole of the tax falls
exclusively where it was intended.

All that portion of the produce of the country which anyone,
not a laborer, actually and literally consumes for his own use,
does not contribute in the smallest degree to the maintenance
of labor. No one is benefited by mere consumption, except the
person who consumes. And a person cannot both consume his
income himself, and make it over to be consumed by others.
Taking away a certain portion by taxation cannot deprive both
him and them of it, but only him or them. To know which is
the sufiferer, we must understand whose consumption will have
to be retrenched in consequence : this, whoever it be, is the
person on whom the tax really falls.

90 POLITICAL ECONOMY

Chapter VI. — On Circulating and Fixed Capital

§ I. To complete our explanations on the subject of capital,
it is necessary to say something of the two species into which
it is usually divided. The distinction is very obvious, and
though not named, has been often adverted to, in the two
preceding chapters : but it is now proper to define it accurately,
and to point out a few of its consequences.

Of the capital engaged in the production of any commodity,
there is a part which, after being once used, exists no longer
as capital ; is no longer capable of rendering service to pro-
duction, or at least not the same service, nor to the same sort
of production. Such, for example, is the portion of capital
which consists of materials. The tallow and alkali of which
soap is made, once used in the manufacture, are destroyed as
alkali and tallow ; and cannot be employed any further in the
soap manufacture, though in their altered condition, as soap,
they are capable of being used as a material or an instrument
in other branches of manufacture. In the same division must
be placed the portion of capital which is paid as the wages,
or consumed as the subsistence of laborers. That part of the
capital of a cotton-spinner which he pays away to his work-
people, once so paid, exists no longer as his capital, or as a
cotton-spinner's capital : such portion of it as the workmen
consume, no longer exists as capital at all : even if they save
any part, it may now be more properly regarded as a fresh
capital, the result of a second act of accumulation. Capital
which in this manner fulfils the wdiole of its office in the pro-
duction in which it is engaged, by a single use, is called Circu-
lating Capital. The term, which is not very appropriate, is
derived from the circumstance, that this portion of capital re-
quires to be constantly renewed by the sale of the finished
product, and when renewed is perpetually parted with in buy-
ing materials and paying wages ; so that it does its work, not
by being kept, but by changing hands.

Another large portion of capital, however, consists in instru-
ments of production, of a more or less permanent character:
which produce their effect not by being parted with, but by
being kept ; and the efficacy of which is not exhausted by a
single use. To this class belong buildings, machinery, and ^11

CIRCULATING AND FIXED CAPITAL 91

or most things known by the name of implements or tools.
The durability of some of these is considerable, and their func-
tion as productive instruments is prolonged through many repe-
titions of the productive operation. In this class must likewise
be included capital sunk (as the expression is) in permanent
improvements of land. So also the capital expended once for
all, in the commencement of an undertaking, to prepare the
way for subsequent operations : the expense of opening a mine,
for example : of cutting canals, of making roads or docks.
Other examples might be added, but these are sufficient. Capi-
tal which exists in any of these durable shapes, and the return
to which is spread over a period of corresponding duration,
is called Fixed Capital.

Of fixed capitals, some kinds require to be occasionally or
periodically renewed. Such are all implements and buildings :
they require, at intervals, partial renewal by means of repairs,
and are at last entirely worn out, and cannot be of any further
service as buildings and implements, but fall back into the class
of materials. In other cases, the capital does not, unless as a
consequence of some unusual accident, require entire renewal :
but there is always some outlay needed, either regularly or at
least occasionally, to keep it up. A dock or a canal, once made,
does not require, like a machine, to be made again, unless pur-
posely destroyed, or unless an earthquake or some similar
catastrophe has filled it up : but regular and frequent outlays
are necessary to keep it in repair. The cost of opening a mine
needs not be incurred a second time ; but unless someone goes
to the expense of keeping the mine clear of water, it is soon
rendered useless. The most permanent of all kinds of fixed
capital is that employed in giving increased productiveness to
a natural agent, such as land. The draining of marshy or inun-
dated tracts like the Bedford Level, the reclaiming of land
from the sea, or its protection by embankments, are improve-
ments calculated for perpetuity ; but drains and dikes require
frequent repair. Tlic same character of perpetuity belongs to
the improvement of land by subsoil draining, which adds so
much to the productiveness of the clay soils ; or by permanent
manures, that is, by the addition to the soil, not of the sub-
stances which enter into the composition of vegetables, and
which are therefore consumed by vegetation, but of those which
merely alter the relation of the soil to air and water; as sand

92 POLITICAL ECONOMY

and lime on the heavy soils, clay and marl on the light. Even
such works, however, require some, though it may be very
little, occasional outlay to maintain their full effect.

These improvements, however, by the very fact of their de-
serving that title, produce an increase of return, which, after
defraying all expenditure necessary for keeping them up, still
leaves a surplus. This surplus forms the return to the capital
sunk in the first instance, and that return does not, as in the
case of machinery, terminate by the wearing out of the ma-
chine, but continues forever. The land thus increased in pro-
ductiveness, bears a value in the market, proportional to the
increase: and hence it is usual to consider the capital which
was invested, or sunk, in making the improvement, as still exist-
ing in the increased value of the land. There must be no
mistake, however. The capital, like all other capital, has been
consumed. It was consumed in maintaining the laborers who
executed the improvement, and in the wear and tear of the
tools by which they were assisted. But it was consumed pro-
ductively, and has left a permanent result in the improved
productiveness of an appropriated natural agent, the land. We
may call the increased produce the joint result of the land and
of a capital fixed in the land. But as the capital, having in
reality been consumed, cannot be withdrawn, its productiveness
is thenceforth indissolubly blended with that arising from the
original qualities of the soil ; and the remuneration for the use
of it thenceforth depends, not upon the laws which govern the
returns to labor and capital, but upon those which govern the
recompense for natural agents. What these are, we shall see
hereafter.*

§ 2. There is a great difiference between the efifects of circu-
lating and those of fixed capital, on the amount of the gross
produce of the country. Circulating capital being destroyed
as such, or at any rate finally lost to the owner, by a single use ;
and the product resulting from that one use being the only
source from which the owner can replace the capital, or obtain
any remuneration for its productive employment ; the product
must of course be sufficient for those purposes, or in other
words, the result of a single use must be a reproduction equal
to the whole amount of the circulating capital used, and a profit
besides. This, however, is by no means necessary in the case

* Infra, book ii. chap. xvi. On Rent.

CIRCULATING AND FIXED CAPITAL 93

of fixed capital. Since machinery, for example, is not wholly
consumed by one use, it is not necessary that it should be wholly
replaced from the product of that use. The machine answers
the purpose of its owner, if it brings in, during each interval
of time, enough to cover the expense of repairs, and the de-
terioration in value which the machine has sustained during
the same time, with a surplus sufficient to yield the ordinary
profit on the entire value of the machine.

From this it follows that all increase of fi.xed capital, when
taking place at the expense of circulating, must be, at least
temporarily, prejudicial to the interests of the laborers. This
is true, not of machinery alone, but of all improvements by
which capital is sunk ; that is, rendered permanently incapable
of being applied to the maintenance and remuneration of labor.
Suppose that a person farms his own land, with a capital of two
thousand quarters of corn, employed in maintaining laborers
during one year (for simplicity we omit the consideration of
seed and tools), whose labor produces him annually two thou-
sand four bundled quarters, being a profit of twenty per cent.
This profit we shall suppose that he annually consumes, carry-
ing on his operations from year to year on the original capital
of two thousand quarters. Let us now suppose that by the
expenditure of half his capital he effects a permanent improve-
ment of his land, which is executed by half his laborers, and
occupies them for a year, after which he will only require, for
the effectual cultivation of his land, half as many laborers as
before. The remainder of his capital he employs as usual. In
the first year there is no difference in the condition of the la-
borers, except that part of them have received the same pay
for an operation on the land, which they previously obtained
for ploughing, sowing, and reaping. At the end of the year,
however, the improver has not, as before, a capital of two thou-
sand quarters of corn. Only one thousand quarters of his capi-
tal have been reproduced in the usual way: he has now only
those thousand quarters and his improvements. He will em-
ploy, in the next and in each following year, only half the num-
ber of laborers, and will divide among them only half the former
quantity of subsistence. The loss will soon be made up to them
if the improved land, with the diminished quantity of labor,
produces two thousand four hundred quarters as before, be-
cause so enormous an accession of gain will probably induce

94

POLITICAL ECONOMY

the improver to save a part, add it to his capital, and become
a larger employer of labor. But it is conceivable that this may
not be the case; for (supposing, as we may do, that the im-
provement will last indefinitely, without any outlay worth men-
tioning to keep it up) the improver will have gained largely
by his improvement if the land now yields, not two thousand
four hundred, but one thousand five hundred quarters ; since
this will replace the one thousand quarters forming his present
circulating capital, with a profit of twenty-five per cent, (instead
of twenty as before) on the whole capital, fixed and circulating
together. The improvement, therefore, may be a very profit-
able one to him, and yet very injurious to the laborers.

The supposition, in the terms in which it has been stated, is
purely ideal ; or at most applicable only to such a case as that
of the conversion of arable land into pasture, which, though
formerly a frequent practice, is regarded by modern agricult-
urists as the reverse of an improvement. The clearing away
of the small farmers in the north of Scotland, within the present
century, was however a case of it ; and Ireland, since the potato
famine and the repeal of the corn-laws, is another. The re-
markable decrease which has lately attracted notice in the gross
produce of Irish agriculture, is, to all appearance, partly attrib-
utable to the diversion of land from maintaining human laborers
to feeding cattle : and it could not have taken place without the
removal of a large part of the Irish population by emigration
or death. We have thus two recent instances in which what
was regarded as an agricultural improvement, has diminished
the power of the country to support its population. The effect,
however, of all the improvements due to modern science is to
increase, or at all events, not to diminish the gross produce.
But this does not affect the substance of the argument. Sup-
pose that the improvement does not operate in the manner sup-
posed— does not enable a part of the labor previously employed
on the land to be dispensed with — but only enables the same
labor to raise a greater produce. Suppose, too, that the greater
produce, which by means of the improvement can be raised from
the soil with the same labor, is all wanted, and will find purchas-
ers. The improver will in that case require the same number of
laborers as before, at the same wages. But where will he find
the means of paying them? He has no longer his original cap-
ital of two thousand quarters disposable for the purpose. One

CIRCULATING AND FIXED CAPITAL 95

thousand of them are lost and gone — consumed in making the
improvement. If he is to employ as many laborers as before,
and pay them as highly, he must borrow, or obtain from some
other source, a thousand quarters to supply the deficit. But
these thousand quarters already maintained, or were destined
to maintain, an equivalent quantity of labor. They are not a
fresh creation ; their destination is only changed from one
productive employment to another ; and though the agricultur-
ist has made up the deficiency in his own circulating capital,
the breach in the circulating capital of the community remains
unrepaired.

The argument relied on by most of those who contend that
machinery can never be injurious to the laboring class, is,
that by cheapening production it creates such an increased de-
mand for the commodity, as enables, ere long, a greater number
of persons than ever to find employment in producing it. This
argument does not seem to me to have the weight commonly
ascribed to it. The fact, though too broadly stated, is, no doubt,
often true. The copyists who were thrown out of employment
by the invention of printing, were doubtless soon outnumbered
by the compositors and pressmen who took their place : and
the number of laboring persons now occupied in the cotton man-
ufacture is many times greater than were so occupied previously
to the inventions of Hargreaves and Arkwright, which shows
that besides the enormous fixed capital now embarked in the
manufacture, it also employs a far larger circulating capital
than at any former time. But if this capital was drawn from
other employments ; if the funds which took the place of the
capital sunk in costly machinery, were supplied not by any
additional saving consequent on the improvements, but by drafts
on the general capital of the community ; what better are the
laboring classes for the mere transfer? In what manner is
the loss they sustained by the conversion of circulating into
fixed capital, made up to them by a mere shifting of part of
the remainder of the circulating capital from its old employ-
ments to a new one?

All attempts to make out that the laboring classes as a collec-
tive body cannot suffer temporarily by the introduction of ma-
chinery, or by the sinking of capital in permanent improve-
ments, are, I conceive, necessarily fallacious. That they would
suflfer in the particular department of industry to which the

96 POLITICAL ECONOMY

change applies, is generally admitted, and obvious to common
sense ; but it is often said, that though employment is with-
drawn from labor in one department, an exactly equivalent
employment is opened for it in others, because what the con-
sumers save in the increased cheapness of one particular article
enables them to augment their consumption of others, thereby
increasing the demand for other kinds of labor. This is plau-
sible, but, as was shown in the last chapter, involves a fallacy ;
demand for commodities being a totally different thing from
demand for labor. It is true, the consumers have now addi-
tional means of buying other things ; but this will not create
the other things, unless there is capital to produce them, and
the improvement has not set at liberty any capital, if even it has
not absorbed some from other employments. The supposed
increase of production and of employment for labor in other
departments therefore will not take place ; and the increased
demand for commodities by some consumers, will be balanced
by a cessation of demand on the part of others, namely, the la-
borers who were superseded by the improvement, and who will
now be maintained, if at all, by sharing, either in the way of
competition, or of charity, in what was previously consumed by
other people.

§ 3. Nevertheless, I do not believe that as things are actually
transacted, improvements in production are often, if ever, in-
jurious, even temporarily, to the laboring classes in the aggre-
gate. They would be so if they took place suddenly to a great
amount, because much of the capital sunk must necessarily in
that case be provided from funds already employed as circulat-
ing capital. But improvements are always introduced very
gradually, and are seldom or never made by withdrawing cir-
culating capital from actual production, but are made by the
employment of the annual increase. There are few, if any, ex-
amples of a great increase of fixed capital, at a time and place
where circulating capital was not rapidly increasing likewise.
It is not in poor or backward countries that great and costly
improvements in production are made. To sink capital in land
for a permanent return — to introduce expensive machinery —
are acts involving immediate sacrifice for distant objects ; and
indicate, in the first place, tolerably complete security of prop-
erty; in the second, considerable activity of industrial enter-
prise ; and in the third, a high standard of what has been called

CIRCULATING AND FIXED CAPITAL 97

the " effective desire of accumulation " : which three things
are the elements of a society rapidly progressive in its amount
of capital. Although, therefore, the laboring classes must suf-
fer, not only if the increase of fixed capital takes place at the
expense of circulating, but even if it is so large and rapid as
to retard that ordinary increase to which the growth of popula-
tion has habitually adapted itself; yet, in point of fact, this is
very unlikely to happen, since there is probably no country
whose fixed capital increases in a ratio more than proportional
to its circulating. If the whole of the railways which, during
the speculative madness of 1845, obtained the sanction of Par-
liament, had been constructed in the times fixed for the com-
pletion of each, this improbable contingency would, most likely,
have been realized ; but this very case has afforded a striking
example of the difficulties which oppose the diversion into new
channels of any considerable portion of the capital that supplies
the old : difficulties generally much more than sufficient to pre-
vent enterprises that involve the sinking of capital, from ex-
tending themselves with such rapidity as to impair the sources
of the existing employment for labor.

To these considerations must be added, that even if improve-
ments did for a time decrease the aggregate produce and the
circulating capital of the community, they would not the less
tend in the long run to augment both. They increase the return
to capital ; and of this increase the benefit must necessarily
accrue either to the capitalist in greater profits, or to the cus-
tomer in diminished prices ; affording, in either case, an aug-
mented fund from which accumulation may be made, while
enlarged profits also hold out an increased inducement to ac-
cumulation. In the case we before selected, in which the im-
mediate result of the improvement was to diminish the gross
produce from two thousand four hundred quarters to one thou-
sand five hundred, yet the profit of the capitalist being now five
hundred quarters instead of four hundred, the extra one hun-
dred quarters, if regularly saved, would in a few years replace
the one thousand quarters sulitractcd from his circulating capi-
tal. Now the extension of business which almost certainly fol-
lows in any department in which an improvement has been
made, affords a strong inducement to those engaged in it to
add to their capital ; and hence, at the slow pace at which
improvements are usually introduced, a great part of the capital
Vol. I.— 7

98 POLITICAL ECONOMY

which the improvement ultimately absorbs, is drawn from the
increased protits and increased savings which it has itself called
forth.

This tendency of improvements in production to cause in-
creased accumulation, and thereby ultimately to increase the
gross produce, even if temporarily diminishing it, will assume
a still more decided character if it should appear that there are
assignable limits both to the accumulation of capital, and to
the increase of production from the land, which limits once
attained, all further increase of produce must stop ; but that
improvements in production, whatever may be their other ef-
fects, tend to throw one or both of these limits farther off.
Now, these are truths which will appear in the clearest light
in a subsequent stage of our investigation. It will be seen, that
the quantity of capital which will, or even which can, be accu-
mulated in any country, and the amount of gross produce which
will, or even which can, be raised, bear a proportion to the state
of the arts of production there existing; and that every im-
provement, even if for the time it diminish the circulating capi-
tal and the gross produce, ultimately makes room for a larger
amount of both, than could possibly have existed otherwise. It
is this which is the conclusive answer to the objections against
machinery ; and the proof thence arising of the ultimate benefit
to laborers of mechanical inventions even in the existing state
of society, will hereafter be seen to be conclusive.* But this
does not discharge governments from the obligation of alleviat-
ing, and if possible preventing, the evils of which this source of
ultimate benefit is or may be productive to an existing genera-
tion. If the sinking or fixing of capital in machinery or useful
works, were ever to proceed at such a pace as to impair mate-
rially the funds for the maintenance of labor, it would be in-
cumbent on legislators to take measures for moderating its
rapidity: and since improvements which do not diminish em-
ployment on the whole, almost always throw some particular
class of laborers out of it, there cannot be a more legitimate
object of the legislator's care than the interests of those who
are thus sacrificed to the gains of their fellow-citizens and of
posterity.

To return to the theoretical distinction between fixed and
circulating capital. Since all wealth which is destined to be

* Infra, book iv. chap. v.

CHOICE EXAMPLES OF CLASSIC SCULPTURE.

HERMES,

From the original bronze statue in the Museo Borhonico at Naples.

Hermes, called Mercunis by the Romans, was a son of Zeus (Jupiter) and
Maia, the daughter of Atlas. In Mythology he is the god of trade and the mes-
senger of Olympus. He is frequently represented with a winged cap, wings on
both feet, and a short staff, winged and entwined with serpents.

CIRCULATING AND FIXED CAPITAL 99

employed for reproduction comes within the designation of cap-
ital, there are parts of capital which do not agree with the defi-
nition of either species of it ; for instance, the stock of finished
goods which a manufacturer or dealer at any times possesses
unsold in his warehouses. But this, though capital as to its
destination, is not yet capital in actual exercise: it is not en-
gaged in production, but has first to be sold or exchanged, that
is, converted into an equivalent value of some other commod-
ities ; and therefore is not yet either fixed or circulating capital ;
but will become either one or the other, or be eventually divided
between them. With the proceeds of his finished goods, a manu-
facturer will partly pay his work-people, partly replenish his
stock of the materials of his manufacture, and partly provide
new buildings and machinery, or repair the old ; but how much
will be devoted to one purpose, and how' much to another, de-
pends on the nature of the manufacture, and the requirements
of the particular moment.

It should be observed further, that the portion of capital con-
sumed in the form of seed or material, though, unlike fixed
capital, it requires to be at once replaced from the gross produce,
stands yet in the same relation to the employment of labor as
fixed capital does. What is expended in materials is as much
withdrawn from the maintenance and remuneration of laborers,
as what is fixed in machinery ; and if capital now expended in
wages were diverted to the providing of materials, the effect
on the laborers would be as prejudicial as if it were converted
into fixed capital. This, however, is a kind of change wdiich
never takes place. The tendency of improvements in production
is always to economize, never to increase, the expenditure of
seed or material for a given produce ; and the interest of the
laborers has no detriment to apprehend from this source.

Chapter VII. — On what Depends the Degree of Productiveness

of Productive Agents

§ I. We have concluded our general survey of the requisites
of production. We have found that they may be reduced to
three : labor, capital, and the materials and motive forces af-
forded by nature. Of these, labor and the raw material of the
globe are primary and indispensable. Natural motive powers
may be called in to the assistance of labor, and are a help, but

loo POLITICAL ECONOMY

not an essential, of production. The remaining requisite, capi-
tal, is itself the product of labor : its instrumentality in produc-
tion is therefore, in reality, that of labor in an indirect shape.
It does not the less require to be specified separately. A pre-
vious application of labor to produce the capital required for
consumption during the work, is no less essential than the ap-
plication of labor to the work itself. Of capital, again, one,
and by far the largest, portion, conduces to production only by
sustaining in existence the labor which produces : the remain-
der, namely the instruments and materials, contribute to it di-
rectly, in the same manner with natural agents, and the mate-
rials supplied by nature.

We now advance to the second great question in political
economy ; on what the degree of productiveness of these agents
depends. For it is evident that their productive efficacy varies
greatly at various times and places. With the same population
and extent of territory, some countries have a much larger
amount of production than others, and the same country at
one time a greater amount than itself at another. Compare
England either with a similar extent of territory in Russia, or
with an equal population of Russians. Compare England now
with England in the Middle Ages ; Sicily, Northern Africa, or
Syria at present, with the same countries at the time of their
greatest prosperity, before the Roman conquest. Some of the
causes which contribute to this difference of productiveness are
obvious ; others not so much so. We proceed to specify several
of them.

§ 2. The most evident cause of superior productiveness is
what are called natural advantages. These are various. Fer-
tility of soil is one of the principal. In this there are great
varieties, from the deserts of Arabia to the alluvial plains of
the Ganges, the Niger, and the Mississippi. A favorable cli-
mate is even more important than a rich soil. There are coun-
tries capable of being inhabited, but too cold to be compatible
with agriculture. Their inhabitants cannot pass beyond the
nomadic state ; they must live, like the Laplanders, by the do-
mestication of the reindeer, if not by hunting or fishing, like
the miserable Esquimaux. There are countries where oats
will ripen, but not wheat, such as the North of Scotland ; others
where wheat can be grown, but from excess of moisture and
want of sunshine, affords but a precarious crop; as in parts

DEGREES OF PRODUCTIVENESS loi

of Ireland. With each advance toward the south, or, in the
European temperate region, toward the east, some new branch
of agricuhure becomes first possible, then advantageous ; the
vine, maize, figs, olives, silk, rice, dates, successively present
themselves, until we come to the sugar, coffee, cotton, spices,
etc., of climates which also afford, of the more common agri-
cultural products, and with only a slight degree of cultivation,
two or even three harvests in a year. Nor is it in agriculture
alone that differences of climate are important. Their influence
is felt in many other branches of production : in the durability
of all work which is exposed to the air; of buildings, for ex-
ample. If the temples of Karnac and Luxor had not been in-
jured by men, they might have subsisted in their original perfec-
tion almost forever, for the inscriptions on some of them,
though anterior to all authentic history, are fresher than is in
our climate an inscription fifty years old : while at St. Peters-
burg, the most massive works, solidly executed in granite hardly
a generation ago, are already, as travellers tell us, almost in a
state to require reconstruction, from alternate exposure to sum-
mer heat and intense frost. The superiority of the woven
fabrics of Southern Europe over those of England in the rich-
ness and clearness of many of their colors, is ascribed to the
superior quality of the atmosphere, for which neither the knowl-
edge of chemists nor the skill of dyers has been able to provide,
in our hazy and damp climate, a complete equivalent.

Another part of the influence of climate consists in lessening
the physical requirements of the producers. In hot regions,
mankind can exist in comfort with less perfect housing, less
clothing; fuel, that absolute necessary of life in cold climates,
they can almost dispense with, except for industrial uses. They
also require less aliment ; as experience has proved, long before
theory had accounted for it by ascertaining that most of what
we consume as food is not required for the actual nutrition of
the organs, but for keeping up the animal heat, and for supply-
ing the necessary stimulus to the vital functions, which in hot
climates is almost sufficiently supplied by air and sunshine.
Much, therefore, of the labor elsewhere expended to procure
the mere necessaries of life, not being required, more remains
disposable for its higher uses and enjoyments ; if the character
of the inhabitants does not rather induce them to use up these
advantages in over-population, or in the indulgence of repose.

I02 POLITICAL ECONOMY

Among natural advantages, besides soil and climate, must
be mentioned abundance of mineral productions, in convenient
situations, and capable of being worked witb moderate labor.
Such are the coal-fields of Great Britain which do so much to
compensate its inhabitants for the disadvantages of climate ;
and the scarcely inferior resource possessed by this country and
the United States, in a copious supply of an easily reduced iron
ore, at no great depth below the earth's surface, and in close
proximity to coal deposits available for working it. In moun-
tain and hill districts, the abundance of natural water-power
makes considerable amends for the usually inferior fertility of
those regions. But perhaps a greater advantage than all these
is a maritime situation, especially when accompanied with good
natural harbors ; and, next to it, great navigable rivers. These
advantages consist indeed wholly in saving the cost of carriage.
But few who have not considered the subject, have any adequate
notion how great an extent of economical advantage this com-
prises; nor, without having considered the influence exercised
on production by exchanges, and by what is called the division
of labor, can it be fully estimated. So important is it, that it
often does more than counterbalance sterility of soil, and almost
every other natural inferiority ; especially in that early stage
of industry in which labor and science have not yet provided
artificial means of communication capable of rivalling the nat-
ural. In the ancient world, and in the Middle Ages, the most
prosperous communities were not those which had the largest
territory, or the most fertile soil, but rather those which had
been forced by natural sterility to make the utmost use of a
convenient maritime situation ; as Athens, Tyre, Marseilles,
Venice, the free cities on the Baltic, and the like.

§ 3. So much for natural advantages ; the value of which,
ccrtcris paribus, is too obvious to be ever underrated. But ex-
perience testifies that natural advantages scarcely ever do for
a community, no more than fortune and station do for an in-
dividual, anything like what it lies in their nature, or in their
capacity, to do. Neither now nor in former ages have the
nations possessing the best climate and soil been either the rich-
est or the most powerful; but (in so far as regards the mass
of the people) generally among the poorest, though, in the midst
of poverty, probably on the whole the most enjoying. Human
life in those countries can be supported on so little, that the poor

DEGREES OF PRODUCTIVENESS 103

seldom sufifer from anxiety, and in climates in which mere
existence is a pleasure, the luxury which they prefer is that of
repose. Energy, at the call of passion, they possess in abun-
dance, but not that which is manifested in sustained and per-
severing labor : and as they seldom concern themselves enough
about remote objects to establish good political institutions, the
incentives to industry are further weakened by imperfect pro-
tection of its fruits. Successful production, like most other
kinds of success, depends more on the qualities of the human
agents, than on the circumstances in which they work: and
it is difficulties, not facilities, that nourish bodily and mental
energy. Accordingly the tribes of mankind who have overrun
and conquered others, and compelled them to labor for their
benefit, have been mostly reared amidst hardship. They have
either been bred in the forests of northern climates, or the defi-
ciency of natural hardships has been supplied, as among the
Greeks and Romans, by the artificial ones of a rigid military
discipline. From the time when the circumstances of modern
society permitted the discontinuance of that discipline, the
South has no longer produced conquering nations; military
vigor, as well as speculative thought and industrial energy,
have all had their principal seats in the less favored North.

As the second, therefore, of the causes of superior produc-
tiveness, we may rank the greater energy of labor. By this is
not to be understood occasional, but regular and habitual energy.
No one undergoes, without murmuring, a greater amount of
occasional fatigue and hardship, or has his bodily powers, and
such faculties of mind as he possesses, kept longer at their ut-
most stretch, than the North American Indian ; yet his indo-
lence is proverbial, whenever he has a brief respite from the
pressure of present wants. Individuals, or nations, do not differ
so much in the efforts they are able and willing to make under
strong immediate incentives, as in their capacity of present
exertion for a distant object, and in the thoroughness of their
application to work on ordinary occasions. Some amount of
these qualities is a necessary condition of any great improve-
ment among mankind. To civilize a savage, he must be in-
spired with new wants and desires, even if not of a very ele-
vated kind, provided that their gratification can be a motive
to steady and regular bodily and mental exertion. If the ne-
groes of Jamaica and Dcmerara, after their emancipation, had

I04 POLITICAL ECONOMY

contented themselves, as it was predicted they would do, with
the necessaries of life, and abandoned all labor beyond the little
which in a tropical climate, with a thin population and abun-
dance of the richest land, is sufficient to support existence, they
would have sunk into a condition more barbarous, though less
unhappy, than their previous state of slavery. The motive which
was most relied on for inducing them to work was their love
of fine clothes and personal ornaments. No one will stand up
for this taste as worthy of being cultivated, and in most so-
cieties its indulgence tends to impoverish rather than to enrich ;
but in the state of mind of the negroes it might have been the
only incentive that could make them voluntarily undergo sys-
tematic labor, and so acquire or maintain habits of voluntary
industry which may be converted to more valuable ends. In
England, it is not the desire of wealth that needs to be taught,
but the use of wealth, and appreciation of the objects of desire
which wealth cannot purchase, or for attaining which it is not
required. Every real improvement in the character of the
English, whether it consist in giving them higher aspirations,
or only a juster estimate of the value of their present objects
of desire, must necessarily moderate the ardor of their devotion
to the pursuit of wealth. There is no need, however, that it
should diminish the strenuous and business-like application to
the matter in hand, which is found in the best English work-
men, and is their most valuable quality.

The desirable medium is one which mankind have not often
known how to hit : when they labor, to do it with all their might,
and especially with all their mind ; but to devote to labor, for
mere pecuniary gain, fewer hours in the day, fewer days in the
year, and fewer years of life.

§ 4. The third element which determines the productiveness
of the labor of a community, is the skill and knowledge therein
existing ; whether it be the skill and knowledge of the laborers
themselves, or of those who direct their labor. No illustration
is requisite to show how the efficacy of industry is promoted
by the manual dexterity of those who perform mere routine
processes ; by the intelligence of those engaged in operations
in which the mind has a considerable part ; and by the amount
of knowledge of natural powers and of the properties of objects,
which is turned to the purposes of industry. That the produc-
tiveness of the labor of a people is limited by their knowledge

DEGREES OF PRODUCTIVENESS

105

of the arts of life, is self-evident ; and that any progress in
those arts, any improved application of the objects or powers
of nature to industrial uses, enables the same quantity and in-
tensity of labor to raise a greater produce.

One principal department of these improvements consists in
the invention and use of tools and machinery. The manner in
which these serve to increase production and to economize labor,
needs not be specially detailed in a work like the present: it
will be found explained and exemplified, in a manner at once
scientific and popular, in Mr. Babbage's well-known " Economy
of Machinery and Manufactures." An entire chapter of Mr.
Babbage's book is composed of instances of the efficacy of
machinery in " exerting forces too great for human power,
and executing operations too delicate for human touch." But
to find examples of work which could not be performed at all
by unassisted labor, we need not go so far. Without pumps,
worked by steam engines or otherwise, the water which collects
in mines could not in many situations be got rid of at all, and
the mines, after being worked to a little depth, must be aban-
doned : without ships or boats the sea could never have been
crossed ; without tools of some sort, trees could not be cut
down, nor rocks excavated ; a plough, or at least a hoe, is
necessary to any tillage of the ground. Very simple and rude
instruments, however, are sufficient to render literally possible
most works hitherto executed by mankind ; and subsequent in-
ventions have chiefly served to enable the work to be performed
in greater perfection, and, above all, with a greatly diminished
quantity of labor : the labor thus saved becoming disposable
for other employment.

The use of machinery is far from being the only mode in
which the effects of knowledge in aiding production are exem-
plified. In agriculture and horticulture, machinery is only now
beginning to show that it can do anything of importance, be-
yond the invention and progressive improvement of the plough
and a few other simple instruments. The greatest agricultural
inventions have consisted in the direct application of more judi-
cious processes to the land itself, and to the plants growing on
it : such as rotation of crops, to avoid the necessity of leaving
the land uncultivated for one season in every two or three ;
improved manures, to renovate its fertility when exhausted by
cropping; ploughing and draining the subsoil as well as the

lo6 POLITICAL ECONOMY

surface ; conversion of bogs and marshes into cultivable land ;
such modes of pruning, and of training and propping up plants
and trees, as experience has shown to deserve the preference;
in the case of the more expensive cultures, planting the roots
or seeds farther apart, and more completely pulverizing the
soil in which they are placed, etc. In manufactures and com-
merce, some of the most important improvements consist in
economizing time ; in making the return follow more speedily
upon the labor and outlay. There are others of which the ad-
vantage consists in economy of material.

§ 5. But the effects of the increased knowledge of a commu-
nity in increasing its wealth, need the less illustration as they
have become familiar to the most uneducated, from such con-
spicuous instances as railways and steamships. A thing not
yet so well understood and recognized, is the economical value
of the general diffusion of intelligence among the people. The
number of persons fitted to direct and superintend any indus-
trial enterprise, or even to execute any process which cannot
be reduced almost to an affair of memory and routine, is always
far short of the demand ; as is evident from the enormous dif-
ference between the salaries paid to such persons, and the wages
of ordinary labor. The deficiency of practical good sense, which
renders the majority of the laboring class such bad calculators
— which makes, for instance, their domestic economy so im-
provident, lax, and irregular — must disqualify them for any
but a low grade of intelligent labor, and render their industry
far less productive than with equal energy it otherwise might
be. The importance, even in this limited aspect of popular edu-
cation, is well worthy of the attention of politicians, especially
in England ; since competent observers, accustomed to employ
laborers of various nations, testify that in the workmen of other
countries they often find great intelligence wholly apart from
instruction, but that if an English laborer is anything but a
hewer of wood and a drawer of water, he is indebted for it to
education, which in his case is almost always self-education.
Mr. Escher, of Zurich, (an engineer and cotton manufacturer
employing nearly two thousand workingmen of many different
nations), in his evidence annexed to the " Report of the Poor
Law Commissioners," in 1840, on the training of pauper chil-
dren, gives a character of English as contrasted with Conti-
nental workmen, which all persons of similar experience will,
I believe, confirm.

DEGREES OF PRODUCTIVENESS 107

" The Italians' quickness of perception is shown in rapidly
comprehending any new descriptions of labor put into their
hands, in a power of quickly comprehending the meaning of
their employer, of adapting themselves to new circumstances,
much beyond what any other classes have. The French work-
men have the like natural characteristics, only in a somewhat
lower degree. The English, Swiss, German, and Dutch work-
men, we find, have all much slower natural comprehension. As
workmen only, the preference is undoubtedly due to the Eng-
lish ; because, as we find them, they are all trained to special
branches, on which they have had comparatively superior train-
ing, and have concentrated all their thoughts. As men of busi-
ness or of general usefulness, and as men with whom an em-
ployer would best like to be surrounded, I should, however,
decidedly prefer the Saxons and the Swiss, but more especially
the Saxons, because they have had a very careful general educa-
tion, which has extended their capacities beyond any special
employment, and ren-dered them fit to take up, after a short
preparation, any employment to which they may be called. If
I have an English workman engaged in the erection of a steam-
engine, he will understand that, and nothing else ; and for other
circumstances or other branches of mechanics, however closely
allied, he will be comparatively helpless to adapt himself to all
the circumstances that may arise, to make arrangements for
them, and give sound advice or write clear statements and let-
ters on his work in the various related branches of mechanics."

On the connection between mental cultivation and moral
trustworthiness in the laboring class, the same witness says :
" The better educated workmen, we find, are distinguished by
superior moral habits in every respect. In the first place, they
are entirely sober ; they are discreet in their enjoyments, which
are of a more rational and refined kind ; they have a taste for
much better society, which they approach respectfully, and con-
sequently find much readier admittance to it ; they cultivate
music ; they read ; they enjoy the pleasures of scenery, and
make parties for excursions in the country ; they are economi-
cal, and their economy extends beyond their own purse to the
stock of their master ; they are, consequently, honest and trust-
worthy." And in answer to a question respecting the English
workmen : " Whilst in respect to the work to which they have
been specially trained they are the most skilful, they are in

io8 POLITICAL ECONOMY

conduct the most disorderly, debauched, and unruly, and least
respectable and trustworthy of any nation whatsoever whom
we have employed ; and in saying this, I express the experience
of every manufacturer on the Continent to whom i have spoken,
and especially of the English manufacturers, who make the
loudest complaints. These characteristics of depravity do not
apply to the English workmen who have received an education,
but attach to the others in the degree in which they are in want
of it. When the uneducated English workmen are released
from the bonds of iron discipline in which they have been re-
strained by their employers in England, and are treated with
the urbanity and friendly feeling which the more educated work-
men on the Continent expect and receive from their employers,
they, the English workmen, completely lose their balance : they
do not understand their position, and after a certain time be-
come totally unmanageable and useless." * This result of ob-
servation is borne out by experience in England itself. As soon
as any idea of equality enters the mind of an uneducated English
workingman, his head is turned by it. When he ceases to be
servile, he becomes insolent.

The moral qualities of the laborers are fully as important
to the efficiency and worth of their labor, as the intellectual.
Independently of the effects of intemperance upon their bodily
and mental faculties, and of flighty unsteady habits upon the
energy and continuity of their work (points so easily under-
stood as not to require being insisted upon), it is well worthy
of meditation, how much of the aggregate effect of their labor
depends on their trustworthiness. All the labor now expended
in watching that they fulfil their engagement, or in verifying
that they have fulfilled it, is so much withdrawn from the real
business of production, to be devoted to a subsidiary function
rendered needful not by the necessity of things, but by the dis-
honesty of men. Nor are the greatest outward precautions more
than very imperfectly efficacious, where, as is now almost in-
variably the case, with hired laborers, the slightest relaxation
of vigilance is an opportunity eagerly seized for eluding per-
formance of their contract. The advantage to mankind of
being able to trust one another, penetrates into every crevice
and cranny of human life : the economical is perhaps the small-

* The whole evidence of this intelH- much testimony on similar points by
gent and experienced employer of labor other witnesses, contained in the same
as deserving of attention; as well as volume.

DEGREES OF PRODUCTIVENESS 109

est part of it, yet even this is incalculable. To consider only
the most obvious part of the waste of wealth occasioned to
society by human improbity; there is in all rich communities
a predatory population, who live by pillaging or over-reaching
other people ; their numbers cannot be authentically ascertained,
but on the lowest estimate, in a country like England, it is very
large. The support of these persons is a direct burthen on the
national industry. The police, and the whole apparatus of
punishment, and of criminal and partly of civil justice, are
a second burthen rendered necessary by the first. The ex-
orbitantly paid profession of lawyers, so far as their work is
not created by defects in the law of their own contriving, are
required and supported principally by the dishonesty of man-
kind. As the standard of integrity in a community rises higher,
all these expenses become less. But this positive saving would
be far outweighed by the immense increase in the produce of all
kinds of labor, and saving of time and expenditure, which would
be obtained if the laborers honestly performed what they under-
take ; and by the increased spirit, the feeling of power and con-
fidence, with which works of all sorts would be planned and
carried on by those who felt that all whose aid was required
would do their part faithfully according to their contracts. Con-
joint action is possible just in proportion as human beings can
rely on each other. There are countries in Europe, of first-rate
industrial capabilities, where the most serious impediment to
conducting business concerns on a large scale, is the rarity of
persons who are supposed fit to be trusted with the receipt and
expenditure of large sums of money. There are nations whose
commodities are looked shyly upon by merchants, because they
cannot depend on finding the quality of the article conform-
able to that of the sample. Such short-sighted frauds are far
from unexampled in English exports. Everyone has heard of
" devil's dust " : and among other instances given by Mr. Bab-
bage, is one in which a branch of export trade was for a long
time actually sto])ped by the forgeries and frauds which had
occurred in it. On the other hand the substantial advantage
derived in business transactions from proved trustworthiness,
is not less remarkably exemplified in the same work. " At one
of our largest towns, sales and purchases on a very extensive
scale are made daily in the course of business without any of
the parties ever exchanging a written document." Spread over

no

POLITICAL ECONOMY

a year's transactions, how great a return, in saving of time,
trouble, and expense, is brought in to the producers and dealers
of such a town from their own integrity. " The influence of
established character in producing confidence operated in a
very remarkable manner at the time of the exclusion of British
manufactures from the Continent during the last war. One
of our largest establishments had been in the habit of doing
extensive business with a house in the centre of Germany : but
on the closing of the Continental ports against our manufact-
ures, heavy penalties were inflicted on all those who contravened
the Berlin and Milan decrees. The English manufacturer con-
tinued, nevertheless, to receive orders, with directions how to
consign them, and appointments for the time and mode of pay-
ment, in letters, the handwriting of which was known to him, but
which were never signed except by the Christian name of one
of the firm, and even in some instances they were without any
signature at all. These orders were executed, and in no instance
was there the least irregularity in the payments." *

• Some minor instances noticed by
Mr. Babbage may be cited in further
illustration of the waste occasioned to
society through the inability of its mem-
bers to trust one another.

" The cost to the purchaser is the
price he pays for any article, added to
the cost of verifying the fact of its hav-
ing that degree of goodness for which
he contracts. In some cases, the good-
ness of the article is evident on mere
inspection; and in those cases there is
not much difference of price at different
shops. The goodness of loaf sugar, for
instance, can be discerned almost at a
glance; and the consequence is, that
the price is so uniform, and the profit
upon it so small, that no grocer is at
all anxious to sell it; whilst on the other
hand, tea, of which it is exceedingly dif-
ficult to judge, and which can be adul-
terated by mixture so as to deceive the
skill even of a practised eye, has a great
variety of different prices, and is that
article which every grocer is most anx-
ious to sell to his customers. The diffi-
culty and expense of verification are in
some instances so great as to justify the
deviation from well-established princi-
ples. Thus it is a general maxim that
Government can purchase any article
at a cheaper rate than that at which
they can manufacture it themselves. But
it has, nevertheless, been considered
more economical to build extensive
flour-mills (such as those at Deptford),
and to grind their own corn, than to
verify each sack of purchased flour, and
to employ persons in devising methods
of delecting the new modes of adultera-
tion which might be continually resort-
ed to." A similar want of confidence

might deprive a nation, such as the
United States, of a large export trade
in flour.

Again: " Some years since, a inode
of preparing old clover and trefoil seeds
by a process called doctoring became so
prevalent as to excite the attention of
the House of Commons. It appeared in
evidence before a Committee, that the
old seed of the white clover was doc-
tored by first wetting it slightly, and
then drying it by the fumes of burning
sulphur; and that the red clover seed
had its color improved by shaking it in
a sack with a small quantity of indigo;
but this being detected after a time, the
doctors then used a preparation of log-
wood, fined by a little copperas, and
sometimes by verdigris; thus at once
improving the appearance of the old
seed, and diminishing, if not destroying,
its vegetative power, already enfeebled
by age. Supposing no injury had re-
sulted to good seed so prepared, it was
proved that, from the improved appear-
ance, the market price would be en-
hanced by this process from five to
twenty-five shillings a hundred-weight.
But the greatest evil arose from the cir-
cumstance of these processes rendering
old and worthless seed equal in appear-
ance to the best. One witness had tried
some doctored seed, and found that not
above one grain in a hundred grew, and
that those which did vegetate died away
afterwards; whilst about eighty or ninety
per cent, of good seed usually grows.
The seed so treated was sold to retail
dealers in the country, who of course
endeavored to purchase at the cheapest
r?.te, and from them it got into the
hands of the farmers, neitlier of these

DEGREES OF PRODUCTIVENESS

III

§ 6. Among the secondary causes which determine the pro-
ductiveness of productive agents, the most important is Se-
curity. By security I mean the completeness of the protection
which society affords to its members. This consists of pro-
tection by the government, and protection against the govern-
ment. The latter is the more important. Where a person
known to possess anything worth taking away, can expect
nothing but to have it torn from him, with every circumstance
of tyrannical violence, by the agents of a rapacious govern-
ment, it is not likely that many will exert themselves to produce
much more than necessaries. This is the acknowledged ex-
planation of the poverty of many fertile tracts of Asia, which
were once prosperous and populous. From this to the degree
of security enjoyed in the best governed parts of Europe, there
are numerous gradations. In many provinces of France, be-
fore the Revolution, a vicious system of taxation on the land,
and still more the absence of redress against the arbitrary ex-
actions which were made under color of the taxes, rendered
it the interest of every cultivator to appear poor, and therefore
to cultivate badly. The only insecurity which is altogether
paralyzing to the active energies of producers, is that arising
from the government, or from persons invested with its au-
thority. Against all other depredators there is a hope of de-
fending one's self. Greece and the Greek colonies in the ancient
world, Flanders and Italy in the Middle Ages, by no means
enjoyed what anyone with modern ideas would call security :

classes being capable of distinguishing
the fraudulent from the genuine seed.
Many cultivators in consequence dimin-
ished their consumption of the articles,
and others were obliged to pay a higher
price to those who had skill to distin-
guish the mixed seed, and who had in-
tegrity and character to prevent them
from dealing in it."

The same writer states that Irish flax,
though in natural quality inferior to
none, sells, or did lately sell, in the
market at a penny to twopence per
pound less than foreign or I'ritish flax;
part of the difference arising from neg-
ligence in its preparation, but part from
the cause mentioned in the evidence of
Mr. Cnrry, many years Secretary to the
Irish f.inen f'.oard : " The owners of
the flax, who are almost always people
in the lower classes of life, believe that
they can best advance their own inter-
ests by imposing on the buyers. Flax
being sold bv weight, various expedients
are used to increase it ; and evrrv expe-
dient is injurious, particularly the damp-

ing of it; a very common practice,
which makes the flax afterwards heat.
The inside of every bundle (and the
bundles all vary in bulk) is often full
of pebbles, or dirt of various kinds, to
increase tfie weight. In this state it is
purchased and exported to Great Brit-
ain."

It was given in evidence before a Com-
mittee of the House of Commons that
the lace trade at Nottingham had great-
ly fallen off, from the making of fraudu-
lent and bad articles: that "a kind of
lace called single-press was manufact-
ured." (I still quote Mr. Babbage)
" which, although good to the eye, be-
came nearly sjioiled in washing by the
sli[)ping of the threads; that not one
jurson in « thousand could distinguish
the difference between single-press and
dnuble-prcss lace; that even workmen
and manufacturers were obliged to em-
ploy a magnifying-glass foi that pur-
pose; and that in another similar arti-
cle, called warp-lace, such aid was es-
sential."

112 POLITICAL ECONOMY

the state of society was most unsettled and turbulent ; person
and property were exposed to a thousand dangers. But they
were free countries ; they were in general neither arbitrarily
oppressed, nor systematically plundered by their governments.
Against other enemies the individual energy which their insti-
tutions called forth, enabled them to make successful resist-
ance : their labor, therefore, was eminently productive, and
their riches, while they remained free, were constantly on the
increase. The Roman despotism, putting an end to wars and
internal conflicts throughout the empire, relieved the subject
population from much of the former insecurity : but because it
left them under the grinding yoke of its own rapacity, they
became enervated and impoverished, until they were an easy
prey to barbarous but free invaders. They would neither fight
nor labor, because they were no longer suffered to enjoy that
for which they fought and labored.

Much of the security of person and property in modern na-
tions is the effect of manners and opinion rather than of law.
There are, or lately were, countries in Europe where the mon-
arch was nominally absolute, but where, from the restraints
imposed by established usage, no subject felt practically in the
smallest danger of having his possessions arbitrarily seized or
a contribution levied on them by the government. There must,
however, be in such governments much petty plunder and
other tyranny by subordinate agents, for which redress is not
obtained, owing to the want of publicity which is the ordinary
character of absolute governments. In England the people
are tolerably well protected, both by institutions and manners,
against the agents of government ; but, for the security they
enjoy against other evildoers, they are very little indebted to
their institutions. The laws cannot be said to afford protection
to property, when they afford it only at such a cost as renders
submission to injury in general the better calculation. The
security of property in England is owing (except as regards
open violence) to opinion, and the fear of exposure, much more
than to the direct operation of the law and the courts of justice.

Independently of all imperfection in the bulwarks which so-
ciety purposely throws round what it recognizes as property,
there are various other modes in which defective institutions
impede the employment of the productive resources of a coun-
try to the best advantage. We shall have occasion for noticing

COMBINATION OF LABOR 113

many of these in the progress of our subject. It is sufficient
here to remark, that the efificiency of industry may be expected
to be great, in proportion as the fruits of industry are insured
to the person exerting it : and that all social arrangements are
conducive to useful exertion, according as they provide that
the reward of every one for his labor shall be proportioned as
much as possible to the benefit which it produces. All laws or
usages which favor one class or sort of persons to the disad-
vantage of others ; which chain up the efforts of any part of the
community in pursuit of their own good, or stand between
those efforts and their natural fruits — are (independently of all
other grounds of condemnation) violations of the fundamental
principles of economical policy ; tending to make the aggre-
gate productive powers of the community productive in a less
degree than they would otherwise be.

Chapter VIII. — Of Co-operation, or the Combination of Labor

§ I. In the enumeration of the circumstances which promote
the productiveness of labor, we have left one untouched, which,
because of its importance, and of the many topics of discussion
which it involves, requires to be treated apart. This is, co-
operation, or the combined action of numbers. Of this great
aid to production, a single department, known by the name of
Division of Labor, has engaged a large share of the attention
of political economists ; most deservedly indeed, but to the ex-
clusion of other cases and exemplifications of the same com-
prehensive law. Mr. Wakefield was, I believe, the first to point
out, that a part of the subject had, with injurious effect, been
mistaken for the whole ; that a more fundamental principle
lies beneath that of the division of labor, and comprehends it.

Co-operation, he observes,* is " of two distinct kinds: first,
such co-operation as takes place when several persons help
each other in the same employment ; secondly, such co-opera-
tion as takes place when several persons help each other in
different employments. These may be termed Simple Co-
operation and Complex Co-operation.

" The advantage of simple co-operation is illustrated by the
case of two greyhounds running together, which, it is said, will

• Note to Wakefield's edition of Adam Smith, vol. i. p. 36.

Vol. I.— 8

114 POLITICAL ECONOMY

kill more hares than four greyhounds running separately. In
a vast number of simple operations performed by human exer-
tion, it is quite obvious that two men working together will do
more than four, or four times four men, each of whom should
work alone. In the lifting of heavy weights, for example, in
the felling of trees, in the sawing of timber, in the gathering
of much hay or corn during a short period of fine weather, in
draining a large extent of land during the short season when
such a work may be properly conducted, in the pulling of ropes
on board ship, in the rowing of large boats, in some mining
operations, in the erection of a scafifolding for building, and in
the breaking of stones for the repair of a road, so that the whole
of the road shall always be kept in good order ; in all these sim-
ple operations, and thousands more, it is absolutely necessary
that many persons should work together, at the same time, in
the same place, and in the same way. The savages of New
Holland never help each other, even in the most simple opera-
tions ; and their condition is hardly superior, in some respects
it is inferior, to that of the wild animals which they now and
then catch. Let anyone imagine that the laborers of England
should suddenly desist from helping each other in simple em-
ployments, and he will see at once the prodigious advantages of
simple co-operation. In a countless number of employments,
the produce of labor is, up to a certain point, in proportion to
such mutual assistance amongst the workmen. This is the
first step in social improvement." The second is, when " one
body of men having combined their labor to raise more food
than they require, another body of men are induced to combine
their labor for the purpose of producing more clothes than they
require, and with those clothes buying the surplus food of the
other body of laborers ; while, if both bodies together have
produced more food and clothes than they both require, both
bodies obtain, by means of exchange, a proper capital for set-
ting more laborers to work in their respective occupations."
To simple co-operation is thus super-added what Mr. Wake-
field terms Complex Co-operation. The one is the combina-
tion of several laborers to help each other in the same set of
operations ; the other is the combination of several laborers
to help one another by a division of operations.

There is " an important distinction between simple and com-
plex co-operation. Of the former, one is always conscious at

COMBINATION OF LABOR

"5

the time of practising it : it is obvious to the most ignorant and
vulgar eye. Of the latter, but a very few of the vast numbers
who practise it are in any degree conscious. The cause of this
distinction is easily seen. When several men are employed in
lifting the same weight, or pulling the same rope, at the same
time, and in the same place, there can be no sort of doubt that
they co-operate with each other ; the fact is impressed on the
mind by the mere sense of sight ; but when several men, or
bodies of men, are employed at different times and places, and
in different pursuits, their co-operation with each other, though
. it may be quite as certain, is not so readily perceived as in the
other case : in order to perceive it, a complex operation of the
mind is required."

In the present state of society the breeding and feeding of
sheep is the occupation of one set of people, dressing the wool
to prepare it for the spinner is that of another, spinning it into
thread of a third, weaving the thread into broadcloth of a
fourth, dyeing the cloth of a fifth, making it into a coat of a
sixth, without counting the multitude of carriers, merchants,
factors, and retailers put in requisition at the successive stages
of this progress. All these persons, without knowledge of one
another or previous understanding, co-operate in the produc-
tion of the ultimate result, a coat. But these are far from
being all who co-operate in it ; for each of these persons re-
quires food, and many other articles of consumption, and
unless he could have relied that other people would produce
these for him, he could not have devoted his whole time to one
step in the succession of operations which produces one single
commodity, a coat. Every person who took part in producing
food or erecting houses for this series of producers, has, how-
ever unconsciously on his part, combined his labor with theirs.
It is by a real, though unexpressed, concert, " that the body
who raise more food than they want, can exchange with the
body who raise more clothes than they want ; and if the two
bodies were separated, either by distance or disinclination —
unless the two bodies should virtually form themselves into
one, for the common object of raising enough food and clothes
for the whole — they could not divide into two distinct parts
the whole operation of producing a sufficient quantity of food
and clothes."

§ 2. The influence exercised on production by the separation

ii6 POLITICAL ECONOMY

of employments, is more fundamental than, from the mode in
which the subject is usually treated, a reader might be induced
to suppose. It is not merely that when the production of dif-
ferent things becomes the sole or principal occupation of dif-
ferent persons, a much greater quantity of each kind of article
is produced. The truth is much beyond this. Without some
separation of employments, very few things would be produced
at ah.

Suppose a set of persons, or a number of families, all em-
ployed precisely in the same manner ; each family settled on a
piece of its own land, on which it grows by its labor the food
required for its own sustenance, and as there are no persons
to buy any surplus produce where all are producers, each fam-
ily has to produce within itself whatever other articles it con-
sumes. In such circumstances, if the soil was tolerably fertile,
and population did not tread too closely on the heels of sub-
sistence, there would be, no doubt, some kind of domestic
manufactures ; clothing for the family might perhaps be spun
and woven within it, by the labor probably of the women (a
first step in the separation of employments) ; and a dwelling
of some sort would be erected and kept in repair by their
united labor. But beyond simple food (precarious, too, from
the variations of the seasons), coarse clothing, and very im-
perfect lodging, it would be scarcely possible that the family
should produce anything more. They would, in general, re-
quire their utmost exertions to accomplish so much. Their
power even of extracting food from the soil would be kept with-
in narrow limits by the quality of their tools, which would
necessarily be of the most wretched description. To do almost
anything in the way of producing for themselves articles of
convenience or luxury, would require too much time, and, in
many cases, their presence in a dififerent place. Very few
kinds of industry, therefore, would exist ; and that which did
exist, namely the production of necessaries, would be extremely
inefficient, not solely from imperfect implements, but because,
when the ground and the domestic industry fed by it had been
made to supply the necessaries of a single family in tolerable
abundance, there would be little motive, while the numbers
of the family remained the same, to make either the land or the
labor produce more.

But suppose an event to occur, which would amount to a

COMBINATION OF LABOR 117

revolution in the circumstances of this little settlement. Sup-
pose that a company of artificers, provided with tools, and with
food sufficient to maintain them for a year, arrive in the coun-
try and establish -themselves in the midst of the population.
These new settlers occupy themselves in producing articles of
use or ornament adapted to the taste of a simple people ; and
before their food is exhausted they have produced these in
considerable quantity, and are ready to exchange them for
more food. The economical position of the landed population
is now most materially altered. They have an opportunity
given them of acquiring comforts and luxuries. Things which,
while they depended solely on their own labor, they never could
have obtained, because they could not have produced, are now
accessible to them if they can succeed in producing an addi-
tional quantity of food and necessaries. They are thus incited
to increase the productiveness of their industry. Among the
conveniences for the first time made accessible to them, better
tools are probably one ; and apart from this, they have a mo-
tive to labor more assiduously, and to adopt contrivances for
making their labor more effectual. By these means they will
generally succeed in compelling their land to produce, not
only food for themselves, but a surplus for the newcomers,
wherewith to buy from them the products of their industry.
The new settlers constitute what is called a market for surplus
agricultural produce : and their arrival has enriched the settle-
ment not only by the manufactured articles which they pro-
duce, but by the food which would not have been produced
unless they had been there to consume it.

There is no inconsistency between this doctrine, and the
proposition we before maintained, that a market for commodi-
ties does not constitute employment for labor.* The labor of
the agriculturists was already provided with employment ;
they are not indebted to the demand of the newcomers for
being able to maintain themselves. What that demand does
for them is, to call their labor into increased vigor and effi-
ciency ; to stimulate them, by new motives, to new exertions.
Neither do the newcomers owe their maintenance and employ-
ment to the demand of the agriculturists : with a year's sub-
sistence in store, they could have settled side by side with the
former inhabitants, and produced a similar scanty stock of

• Supra, pp. 79—85.

ii8 POLITICAL ECONOMY

food and necessaries. Nevertheless, we see of what supreme
importance to the productiveness of the labor of producers, is
the existence of other producers within reach, employed in a
dififerent kind of industry. The power of exchanging the
products of one kind of labor for those of another, is a condi-
tion, but for which, there would almost always be a smaller
quantity of labor altogether. When a new market is opened
for any product of industry, and a greater quantity of the ar-
ticle is consequently produced, the increased production is
not always obtained at the expense of some other product ; it
is often a new creation, the result of labor which would other-
wise have remained unexerted ; or of assistance rendered to
labor by improvements or by modes of co-operation to which
recourse would not have been had if an inducement had not
been ofifered for raising a larger produce.

§ 3. From these considerations it appears that a country
will seldom have a productive agriculture, unless it has a large
town population, or the only available substitute, a large ex-
port trade in agricultural produce to supply a population else-
where. I use the phrase town population for shortness, to
imply a population non-agricultural ; which will generally be
collected in towns or large villages, for the sake of combination
of labor. The application of this truth by Mr. Wakefield to the
theory of colonization, has excited much attention, and is
doubtless destined to excite much more. It is one of those
great practical discoveries, which, once made, appear so obvious
that the merit of making them seems less than it is. Mr. Wake-
field was the first to point out that the mode of planting new
settlements, then commonly practised — setting down a number
of families side by side, each on its piece of land, all employing
themselves in exactly the same manner, — though in favorable
circumstances it may assure to those families a rude abundance
of mere necessaries, can never be other than unfavorable to
great production or rapid growth : and his system consists of
arrangements for securing that every colony shall have from
the first a town population, bearing due proportion to its agri-
cultural, and that the cultivators of the soil shall not be so
widely scattered as to be deprived by distance, of the benefit of
that town population as a market for their produce. The prin-
ciple on which the scheme is founded, does not depend on any
theory respecting the superior productiveness of land held in

COMBINATION OF LABOR 119

large portions, and cultivated by hired labor. Supposing it
true that land yields the greatest produce when divided into
small properties and cultivated by peasant proprietors, a town
population would be just as necessary to induce those proprie-
tors to raise that larger produce : and if they were too far from
the nearest seat of non-agricultural industry to use it as a
market for disposing of their surplus, and thereby supplying
their other wants, neither that surplus nor any equivalent for
it would, generally speaking, be produced.

It is, above all, the deficiency of town population which
limits the productiveness of the industry of a country like
India. The agriculture of India is conducted entirely on the
system of small holdings. There is, however, a considerable
amount of combination of labor. The village institutions and
customs, which are the real framework of Indian society, make
provision for joint action in the cases in which it is seen to be
necessary ; or where they fail to do so, the government (when
tolerably well administered) steps in, and by an outlay from the
revenue, executes by combined labor the tanks, embankments,
and works of irrigation, which are indispensable. The imple-
ments and processes of agriculture are, however, so wretched,
that the produce of the soil, in spite of great natural fertility
and a climate highly favorable to vegetation, is miserably
small : and the land might be made to yield food in abundance
for many more than the present number of inhabitants, without
departing from the system of small holdings. But to this the
stimulus is wanting, which a large town population, connected
with the rural districts by easy and unexpensive means of com-
munication, would afford. That town population, again, does
not grow up, because the few wants and unaspiring spirit of
the cultivators (joined until lately with great insecurity of prop-
erty, from military and fiscal rapacity) prevent them from at-
tempting to become consumers of town produce. In these cir-
cumstances the best chance of an early development of the
productive resources of India, consists in the rapid growth of
its export of agricultural produce (cotton, indigo, sugar, cof-
fee, etc.) to the markets of Europe. The producers of these
articles are consumers of food supplied by their fellow-agri-
culturists in India ; and the market thus opened for surplus
food will, if accompanied by good government, raise up by
degrees more extended wants and desires, directed either

I20 POLITICAL ECONOMY

towards European commodities or towards things which will
require for their production in India a larger manufacturing
population.

§ 4. Thus far of the separation of employments, a form of
the combination of labor without which there cannot be the
first rudiments of industrial civilization. But when this separa-
tion is thoroughly established ; when it has become the general
practice for each producer to supply many others with one com-
modity, and to be supplied by others with most of the things
which he consumes ; reasons not less real, though less impera-
tive, invite to a further extension of the same principle. It is
found that the productive power of labor is increased by carry-
ing the separation further and further ; by breaking down more
and more every process of industry into parts, so that each
laborer shall confine himself to an ever smaller number of sim-
ple operations. And thus, in time, arise those remarkable cases
of what is called the division of labor, with which all readers on
subjects of this nature are familiar. Adam Smith's illustration
from pin-making, though so well known, is so much to the
point, that I will venture once more to transcribe it. " The
business of making a pin is divided into about eighteen dis-
tinct operations. One man draws out the wire, another
straights it, a third cuts it, a fourth points it, a fifth grinds it at
the top for receiving the head ; to make the head requires two
or three distinct operations ; to put it on, is a peculiar busi-
ness ; to whiten the pins is another ; it is even a trade by itself
to put them into the paper. ... I have seen a small manu-
factory where ten men only were employed, and where some
of them, consequently, performed two or three distinct opera-
tions. But though they were very poor, and therefore but in-
dififerently 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 up-
wards of four thousand pins of a middling size. Those ten per-
sons, 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 with-
out any of them having been educated to this peculiar business,
they certainly could not each of them have made twenty, per-
haps not one pin in a day."

COMBINATION OF LABOR 12T

M. Say furnishes a still stronger example of the effects of di-
vision of labor — from a not very important branch of industry
certainly, the manufacture of playing cards. " It is said by
those engaged in the business, that each card, that is, a piece
of pasteboard of the size of the hand, before being ready for
sale, does not undergo fewer than seventy operations, every
one of which might be the occupation of a distinct class of
workmen. And if there are not seventy classes of work-people
in each card manufactory, it is because the division of labor is
not carried so far as it might be ; because the same workman
is charged with two, three, or four distinct operations. The in-
fluence of this distribution of employments is immense. I have
seen a card manufactory where thirty workmen produced daily
fifteen thousand five hundred cards, being above five hundred
cards for each laborer; and it may be presumed that if each
of these workmen were obliged to perform all the operations
himself, even supposing him a practised hand, he would not
perhaps complete two cards in a day : and the thirty workmen,
instead of fifteen thousand five hundred cards, would make
only sixty." *

In watchmaking, as Mr. Babbage observes, " it was stated
in evidence before a Committee of the House of Commons, that
there are a hundred and two distinct branches of this art, to
each of which a boy may be put apprentice ; and that he only
learns his master's department, and is unable, after his appren-
ticeship has expired, without subsequent instruction, to work
at any other branch. The watch-finisher, whose business it is
to put together the scattered parts, is the only one, out of the
one hundred and two persons, who can work in any other de-
partment than his own." f

§ 5. The causes of the increased efficiency given to labor by
the division of employments are some of them too familiar to
require specification ; but it is worth while to attempt a com-
plete enumeration of them. By Adam Smith they are reduced
to three. " First, the increase of dexterity in every particular
workman ; secondly, the saving of the time which is commonly
lost in passing from one species of work to another ; and lastly,

• f^ay, " Cours d'Economie Politique the production of which is the result of

Pratique," vol. i. p. 340. such a multitude of manual operations.

It is a remarkable proof of the econ- can be sold for a trifling sum.
omy of labor occasioned by this minute t " Economy of Machinery and Man-
division of occupations, that an article, ufacturcs," 3d Edition, p. 201.

122

POLITICAL ECONOMY

the invention of a great number of machines which facihtate
and abridge labor, and enable one man to do the work of
many."

Of these, the increase of dexterity of the individual workman
is the most obvious and universal. It does not follow that be-
cause a thing has been done oftener it will be done better. That
depends on the intelligence of the workman, and on the degree
in which his mind works along with his hands. But it will be
done more easily. The organs themselves acquire gi eater
power: the muscles employed grow stronger by frequent ex-
ercise, the sinews more pliant, and the mental powers more
efficient, and less sensible of fatigue. What can be done easily
has at least a better chance of being done well, and is sure to
be done more expeditiously. What was at first done slowly
comes to be done quickly ; what was at first done slowly with
accuracy is at last done quickly with equal accuracy. This is
as true of mental operations as of bodily. Even a child, after
much practice, sums up a column of figures with a rapidity
which resembles intuition. The act of speaking any language,
of reading fluently, or playing music at sight, are cases as re-
markable as they are familiar. Among bodily acts, dancing,
gymnastic exercises, ease and brilliancy of execution on a mu-
sical instrument, are examples of the rapidity and facility ac-
quired by repetition. In simpler manual operations, the eflfect
is of course still sooner produced. " The rapidity," Adam
Smith observes, " with which some of the operations of certain
manufactures are performed, exceeds what the human hand
could, by those who have never seen them, be supposed capable
of acquiring." * This skill is, naturally, attained after shorter
practice, in proportion as the division of labor is more minute ;
and will not be attained in the same degree at all, if the work-
man has a greater variety of operations to execute than allows
of a sufficiently frequent repetition of each. The advantage is
not confined to the greater efficiency ultimately attained, but

* " In astronomical observations, the
senses of the operator are rendered so
acute by habit, that he can estimate dif-
ferences of time to the tenth of a second;
and adjust his measuring instrument to
graduations of which five thousand oc-
cupy only an inch. It is the same
throughout the commonest processes of
manufacture. A child who fastens on
the heads of pins will repeat an opera-
tion requiring several distinct motions

of the muscles one hundred times a
minute for several successive hours. In
a recent Manchester paper it was stated
that a peculiar sort of twist or ' gimp,'
which cost three shillings making when
first introduced, was now manufactured
for one penny; and this not, as usually,
by the invention of a new machine, but
solely through the increased dexterity
of the workman." — " Edinburgh Re-
view " for January, 1849, p. 81.

COMBINATION OF LABOR 123

includes also the diminished loss of time, and waste of material,
in learning the art. " A certain quantity of material," says Mr.
Babbage,f " will in all cases be consumed unprofitably, or
spoiled, by every person who learns an art ; and as he applies
himself to each new process, he will waste some of the raw ma-
terial, or of the partly manufactured commodity. But if each
man commits this waste in acquiring successively every proc-
ess, the quantity of waste will be much greater than if each per-
son confine his attention to one process." And in general each
will be much sooner qualified to execute his one process, if he
be not distracted while learning it, by the necessity of learning
others.

The second advantage enumerated by Adam Smith as aris-
ing from the division of labor, is one on which I cannot help
thinking that more stress is laid by him and others than it de-
serves. To do full justice to his opinion, I will quote his own
exposition of it. " The advantage which is gained by saving
the time commonly lost in passing from one sort of work to
another, is much greater than we should at first view be apt
to imagine it. It is impossible to pass very quickly from one
kind of work to another, that is carried on in a different place,
and with quite different tools. A country weaver, who culti-
vates a small farm, must lose a good deal of time in passing
from his loom to the field, and from the field to his loom. When
the two trades can be carried on in the same workhouse, the
loss of time is no doubt much less. It is even in this case,
however, very considerable. A man commonly saunters a lit-
tle in turning his hand from one sort of employment to another.
When he first begins the new work, he is seldom very keen and
hearty ; his mind, as they say, does not go to it, and for some
time he rather trifles than applies to good purpose. The habit
of sauntering and of indolent careless application, which is
naturally, or rather necessarily acquired by every country
workman who is obliged to change his work and his tools
every half hour, and to apply his hand in twenty different ways
almost every day of his life, renders him almost always sloth-
ful and lazy, and incapable of any vigorous application even
on the most pressing occasions." This is surely a most exag-
gerated description of the inefficiency of country labor, where
it has any adequate motive to exertion. Few workmen change

t Page 171.

124 POLITICAL ECONOMY

their work and their tools oftener than a gardener ; is he usually
incapable of vigorous application? Many of the higher de-
scription of artisans have to perform a great multiplicity of
operations with a variety of tools. They do not execute each
of these with the rapidity with which a factory workman per-
forms his single operation ; but they are, except in a merely
manual sense, more skilful laborers, and in all senses whatever
more energetic.

Mr. Babbage, following in the track of Adam Smith, says,
"When the human hand, or the human head, has been for some
time occupied in any kind of work, it cannot instantly change
its employment with full efifect. The muscles of the limbs em-
ployed have acquired a flexibility during their exertion, and
those not in action a stiffness during rest, which render every
change slow and unequal in the commencement. Long habit
also produces in the muscles exercised a capacity for enduring
fatigue to a much greater degree than they could support under
other circumstances. A similar result seems to take place in
any change of mental exertion ; the attention bestowed on the
new subject not being so perfect at first as it becomes after
some exercise. The employment of different tools in the suc-
cessive processes, is another cause of the loss of time in chang-
ing from one operation to another. If these tools are simple,
and the change is not frequent, the loss of time is not consider-
able ; but in many processes of the arts, the tools are of great
delicacy, requiring accurate adjustment every time they are
used ; and in many cases, the time employed in adjusting bears
a large proportion to that employed in using the tool. The
sliding-rest, the dividing and the drilling engine are of this
kind : and hence, in manufactories of sufificient extent, it is
found to be good economy to keep one machine constantly em-
ployed in one kind of work : one lathe, for example, having a
screw motion to its sliding-rest along the whole length of its
bed, is kept constantly making cylinders ; another, having a
motion for equalizing the velocity of the work at the point at
which it passes the tool, is kept for facing surfaces; whilst a
third is constantly employed in cutting wheels."

I am very far from implying that these diiTerent considera-
tions are of no weight ; but I think there are counter-consid-
erations which are overlooked. If one kind of muscular or
mental labor is different from another, for that very reason

COMBINATION OF LABOR 125

it is to some extent a rest from that other ; and if the greatest
vigor is not at once obtained in the second occupation, neither
could the first have been indefinitely prolonged without some
relaxation of energy. It is a matter of common experience
that a change of occupation will often afford relief where com-
plete repose would otherwise be necessary, and that a person
can work many more hours without fatigue at a succession of
occupations, than if confined during the whole time to one.
Different occupations employ different muscles, or different
energies of the mind, some of which rest and are refreshed
while others work. Bodily labor itself rests from mental, and
conversely. The variety itself has an invigorating effect on
what, for want of a more philosophical appellation, we must
term the animal spirits ; so important to the efficiency of all
work not mechanical, and not unimportant even to that. The
comparative weight due to these considerations is different
with different individuals ; some are more fitted than others for
persistency in one occupation, and less fit for change ; they
require longer to get the steam up (to use a metaphor now
common) ; the irksomeness of setting to work lasts longer,
and it requires more time to bring their faculties into full play,
and therefore when this is once done, they do not like to leave
off, but go on long without intermission, even to the injury
of their health. Temperament has something to do with these
differences. There are people whose faculties seem by nature
to come slowly into action, and to accomplish little until they
have been a long time employed. Others, again, get into ac-
tion rapidly, but cannot, without exhaustion, continue long.
In this, however, as in most other things, though natural dif-
ferences are something, habit is much more. The habit of
passing rapidly from one occupation to another may be ac-
quired, like other habits, by early cultivation ; and when it is
acquired, there is none of the sauntering which Adam Smith
speaks of, after each change ; no want of energy and interest,
but the workman comes to each part of his occupation with a
freshness and a spirit which he does not retain if he persists in
any one part (unless in case of unusual excitement) beyond the
length of time to which he is accustomed. Women are usually
(at least in their present social circumstances) of far greater
versatility than men ; and the present topic is an instance
among multitudes, how little the ideas and experience of worn-

126 POLITICAL ECONOMY

en have yet counted for, in forming the opinions of mankind.
There are few women who would not reject the idea that work
is made vigorous by being protracted, and is inefficient for
some time after changing to a new thing. Even in this case,
habit, I beHeve, much more than nature, is the cause of the
difference. The occupations of nine out of every ten men are
special, those of nine out of every ten women general, embrac-
ing a multitude of details, each of which requires very little
time. Women are in the constant practice of passing quickly
from one manual, and still more from one mental, operation to
another, which therefore rarely costs them either effort or loss
of time, while a man's occupation generally consists in work-
ing steadily for a long time at one thing, or one very limited
class of things. But the situations are sometimes reversed, and
with them the characters. Women are not found less efficient
than men for the uniformity of factory work, or they would
not so generally be employed for it ; and a man who has cul-
tivated the habit of turning his hand to many things, far from
being the slothful and lazy person described by Adam Smith,
is usually remarkably lively and active. It is true, however,
that change of occupation may be too frequent even for the
most versatile. Incessant variety is even more fatiguing than
perpetual sameness.

The third advantage attributed by Adam Smith to the divi-
sion of labor, is, to a certain extent, real. Inventions tending
to save labor in a particular operation, are more likely to occur
to any one in proportion as his thoughts are intensely directed
to that occupation, and continually employed upon it. A per-
son is not so likely to make practical improvements in one de-
partment of things, whose attention is very much diverted to
others. But, in this, much more depends on general intelli-
gence and habitual activity of mind, than on exclusiveness of
occupation ; and if that exclusiveness is carried to a degree
unfavorable to the cultivation of intelligence, there will be
more lost in this kind of advantage than gained. We may add,
that whatever may be the cause of making inventions, when
they are once made, the increased efficiency of labor is owing
to the invention itself, and not to the division of labor.

The greatest advantage (next to the dexterity of the work-
men) derived from the minute division of labor which takes
place in modern manufacturing industry, is one not mentioned

COMBINATION OF LABOR 127

by Adam Smith, but to which attention has been drawn by Mr.
Babbage ; the more economical distribution of labor, by class-
ing the work-people according to their capacity. Different
parts of the same series of operations require unequal degrees
of skill and bodily strength ; and those who have skill enough
for the most difficult, or strength enough for the hardest parts
of the labor, are made much more useful by being employed
solely in them ; the operations which everybody is capable of,
being left to those who are fit for no others. Production is
most efficient when the precise quantity of skill and strength,
which is required for each part of the process, is employed in
it, and no more. The operation of pin-making requires, it
seems, in its different parts, such different degrees of skill, that
the wages earned by the persons employed vary from four-
pence halfpenny a day to six shillings ; and if the workman
who is paid at that highest rate had to perform the whole
process, he would be v/orking a part of his time with a waste
per day equivalent to the difference between six shillings and
fourpence halfpenny. Without reference to the loss sustained
in quantity of work done, and supposing even that he could
make a pound of pins in the same time in which ten workmen
combining their labor can make ten pounds, Mr. Babbage com-
putes that they would cost, in making, three times and three-
quarters as much as they now do by means of the division of
labor. In needle-making, he adds, the difference would be still
greater, for in that, the scale of remuneration for different parts
of the process varies from sixpence to twenty shillings a day.

To the advantage which consists in extracting the greatest
possible amount of utility from skill, may be added the anal-
ogous one, of extracting the utmost possible utility from tools.
" If any man," says an able writer,* " had all the tools which
many different occupations require, at least three-fourths of
them would constantly be idle and useless. It were clearly then
better, were any society to exist where each man had all these
tools, and alternately carried on each of these occupations, that
the members of it should, if possible, divide them amongst
them, each restricting himself to some particular employment.
The advantages of the change to the whole community, and
therefore to every individual in it, are great. In the first place,

• " Statement of some New Principles on the Subject of Political Economy,"
by John Rae (Boston, U. S.), p. 164.

128 POLITICAL ECONOMY

the various implements, being in constant employment, yield
a better return for what has been laid out in procuring them.
In consequence their owners can afford to have them of better
quality and more complete construction. The result of both
events is, that a larger provision is made for the future wants
of the whole society."

§ 6. The division of labor, as all writers on the subject have
remarked, is limited by the extent of the market. If, by the
separation of pin-making into ten distinct employments, forty-
eight thousand pins can be made in a day, this separation will
only be advisable if the number of accessible consumers is such
as to require, every day, something like forty-eight thousand
pins. If there is only a demand for twenty-four thousand, the
division of labor can only be advantageously carried to the ex-
tent which will every day produce that smaller number. This,
therefore, is a further mode in which an accession of demand
for a commodity tends to increase the efficiency of the labor
employed in its production. The extent of the market may be
limited by several causes : too small a population ; the popula-
tion too scattered and distant to be easily accessible ; deficiency
of roads and water carriage ; or, finally, the population too
poor, that is, their collective labor too little effective, to admit
of their being large consumers. Indolence, want of skill, and
want of combination of labor, among those who would other-
wise be buyers of a commodity, limit, therefore, the practicable
amount of combination of labor among its producers. In an
early stage of civilization, when the demand of any particular
locality was necessarily small, industry only flourished among
those who by their command of the sea-coast or of a navigable
river, could have the whole world, or all that part of it which
lay on coasts or navigable rivers, as a market for their produc-
tions. The increase of the general riches of the world, when
accompanied with freedom of commercial intercourse, im-
provements in navigation, and inland communication by roads,
canals, or railways, tends to give increased productiveness to
the labor of every nation in particular, by enabling each locality
to supply with its special products so much larger a market,
that a great extension of the division of labor in their produc-
tion is an ordinary consequence.

The division of labor is also limited, in many cases, by the
nature of the employment. Agriculture, for example, is not

PRODUCTION ON A LARGE AND SMALL SCALE 129

susceptible of so great a division of occupation as many
branches of manufactures, because its different operations can-
not possibly be simultaneous. One man cannot be always
ploughing, another sowing, and another reaping. A work-
man who only practised one agricultural operation would be
idle eleven months of the year. The same person may per-
form them all in succession, and have, in most climates, a con-
siderable amount of unoccupied time. To execute a great
agricultural improvement, it is often necessary that many labor-
ers should work together ; but in general, except the few whose
business is superintendence, they all work in the same manner.
A canal or a railway embankment cannot be made without a
combination of many laborers ; but they are all excavators,
except the engineer and a few clerks.

Chapter IX. — Of Production on a Large, and Production on a

Small Scale

§ I. From the importance of combination of labor, it is an
obvious conclusion, that there are many cases in which produc-
tion is made much more effective by being conducted on a large
scale. Whenever it is essential to the greatest efficiency of
labor that many laborers should combine, even though only
in the way of Simple Co-operation, the scale of the enterprise
must be such as to bring many laborers together, and the cap-
ital must be large enough to maintain them. Still more need-
ful is this when the nature of the employment allows, and the
extent of the possible market encourages, a considerable divi-
sion of labor. The larger the enterprise, the further the divi-
sion of labor may be carried. This is one of the principal
causes of large manufactories. Even when no additional sub-
division of the work would follow an enlargement of the opera-
tions, there will be good economy in enlarging them to the
point at which every person to whom it is convenient to assign
a special occupation, will have full employment in that occupa-
tion. This point is well illustrated by Mr. Babbage : *

" If machines be kept working through the twenty-four
hours," (which is evidently the only economical mode of em-
ploying them) " it is necessary that some person shall attend
to admit the workmen at the time they relieve each other ; and

• Page 214 et seqq.

Vol. I.— 9

I30

POLITICAL ECONOMY

whether the porter or other servant so employed admit one
person or twenty, his rest will be equally disturbed. It will
also be necessary occasionally to adjust or repair the machine ;
and this can be done much better by a workman accustomed
to machine-making, than by the person who uses it. Now,
since the good performance and the duration of machines de-
pend, to a very great extent, upon correcting every shake or
imperfection in their parts as soon as it appears, the prompt
attention of a workman resident on the spot will considerably
reduce the expenditure arising from the wear and tear of the
machinery. But in the case of a single lace-frame, or a single
loom, this would be too expensive a plan. Here then arises an-
other circumstance which tends to enlarge the extent of a
factory. It ought to consist of such a number of machines as
shall occupy the whole time of one workman in keeping them
in order : if extended beyond that number, the same principle
of economy would point out the necessity of doubling or trip-
ling the number of machines, in order to employ the whole time
of two or three skilful workmen.

" When one portion of the workman's labor consists in the
exertion of mere physical force, as in weaving, and in many
similar arts, it will soon occur to the manufacturer, that if that
part were executed by a steam-engine, the same man might,
in the case of weaving, attend to two or more looms at once :
and, since we already suppose that one or more operative en-
gineers have been employed, the number of looms may be
so arranged that their time shall be fully occupied in keeping"
the steam engine and the looms in order.

" Pursuing the same principles, the manufactory becomes
gradually so enlarged, that the expense of lighting during the
night amounts to a considerable sum : and as there are already
attached to the establishment persons who are up all iiight, and
can therefore constantly attend to it, and also engineers to
make and keep in repair any machinery, the addition of an
apparatus for making gas to light the factory leads to a new
extension, at the same time that it contributes, by diminish-
ing the expense of lighting, and the risk of accidents from fire,
to reduce the cost of manufacturing.

" Long before a factory has reached this extent, it will have
been found necessary to establish an accountant's department,
with clerks to pay the workmen, and to see that they arrive

PRODUCTION ON A LARGE AND SMALL SCALE 131

at their stated times ; and this department must be in commu-
nication with the agents who purchase the raw produce, and
with those who seU the manufactured article." It will cost
these clerks and accountants little more time and trouble to
pay a large number of workmen than a small number : to check
the accounts of large transactions, than of small. If the busi-
ness doubled itself, it would probably be necessary to increase,
but certainly not to double, the number either of accountants,
or of buying and selling agents. Every increase of business
would enable the whole to be carried on with a proportionally
smaller amount of labor.

As a general rule, the expenses of a business do not increase
by any means proportionally to the quantity of business. Let
us take as an example, a set of operations which we are accus-
tomed to see carried on by one great establishment, that of the
Post Office. Suppose that the business, let us say only of the
London letter-post, instead of being centralized in a single con-
cern, were divided among five or six competing companies.
Each of these would be obliged to maintain almost as large an
establishment as is now sufficient for the whole. Since each
must arrange for receiving and delivering letters in all parts of
the town, each must send letter-carriers into every street, and
almost every alley, and this too as many times in the day as is
now done by the Post Office, if the service is to be as well per-
formed. Each must have an office for receiving letters in every
neighborhood, with all subsidiary arrangements for collecting
the letters from the different offices and redistributing them.
To this must be added the much greater number of superior
officers who would be required to check and control the sub-
ordinates, implying not only a greater cost in salaries for such
responsible officers, but the necessity, perhaps, of being satis-
fied in many instances with an inferior standard of qualification,
and so failing in the object.

Whether or not the advantages obtained by operating on a
large scale preponderate in any particular case over the more
watchful attention, and greater regard to minor gains and
losses, usually found in small establishments, can be ascer-
tained, in a state of free competition. l)y an unfailing test.
Wherever there are large and small establishments in the same
business, that one of the two which in existing circumstances
carries on the production at greatest advantage, will be able to

132 POLITICAL ECONOMY

undersell the other. The power of permanently underselling
can only, generally speaking, be derived from increased effec-
tiveness of labor ; and this, when obtained by a more extended
division of employment, or by a classification tending to a better
economy of skill, always implies a greater produce from the
same labor, and not merely the same produce from less labor:
it increases not the surplus only, but the gross produce of in-
dustry. If an increased quantity of the particular article is not
required, and part of the laborers in consequence lose their em-
ployment, the capital which maintained and employed them is
also set at liberty ; and the general produce of the country is
increased, by some other application of their labor.

Another of the causes of large manufactories, however, is
the introduction of processes requiring expensive machinery.
Expensive machinery supposes a large capital ; and is not re-
sorted to except with the intention of producing, and the hope
of selling, as much of the article as comes up to the full powers
of the machine. For both these reasons, wherever costly ma-
chinery is used, the large system of production is inevitable.
But the power of underselling is not in this case so unerring
a test as in the former, of the beneficial effect on the total pro-
duction of the community. The power of underselling does not
depend on the absolute increase of produce, but on its bearing
an increased proportion to the expenses : which, as was shown
in a former chapter,* it may do, consistently with even a
diminution of the gross annual produce. By the adoption of
machinery, a circulating capital, which was perpetually con-
sumed and reproduced, has been converted into a fixed capital,
requiring only a small annual expense to keep it up : and a
much smaller produce will suffice for merely covering that ex-
pense, and replacing the remaining circulating capital of the
producer. The machinery therefore might answer perfectly
well to the manufacturer, and enable him to undersell his com-
petitors, though the effect on the production of the country
might be not an increase but a diminution. It is true, the ar-
ticle will be sold cheaper, and therefore, of that single article,
there will probably be not a smaller, but a greater quantity
sold ; since the loss to the community collectively has fallen
upon the work-people, and they are not the principal custom-
ers, if customers at all, of most branches of manufacture. But

* Supra, chap. vi. p. 93, 94.

PRODUCTION ON A LARGE AND SMALL SCALE

133

though that particular branch of industry may extend itself, it
will be by replenishing its diminished circulating capital from
that of the community generally ; and if the laborers employed
in that department escape loss of employment, it is because the
loss will spread itself over the laboring people at large. If any
of them are reduced to the condition of unproductive laborers,
supported by voluntary or legal charity, the gross produce of
the country is to that extent permanently diminished, until
the ordinary progress of accumulation makes it up : but if the
condition of the laboring classes enables them to bear a tempo-
rary reduction of wages, and the superseded laborers become
absorbed in other employments, their labor is still productive,
and the breach in the gross produce of the community is re-
paired, though not the detriment to the laborers. I have re-
stated this exposition, which has already been made in a former
place, to impress more strongly the truth, that a mode of pro-
duction does not of necessity increase the productive efifect of
the collective labor of a community, because it enables a partic-
ular commodity to be sold cheaper. The one consequence
generally accompanies the other, but not necessarily. I will
not here repeat the reasons I formerly gave, nor anticipate
those which will be given more fully hereafter, for deeming the
exception to be rather a case abstractedly possible, than one
which is frequently realized in fact.

A considerable part of the saving of labor effected by sub-
stituting the large system of production for the small, is the
saving in the labor of the capitalists themselves. If a hundred
producers with small capitals carry on separately the same
business, the superintendence of each concern will probably
require the whole attention of the person conducting it, suffi-
ciently at least to hinder his time or thoughts from being dis-
posable for anything else: while a single manufacturer pos-
sessing a capital equal to the sum of theirs, with ten or a dozen
clerks, could conduct the whole of their amount of business,
and have leisure too for other occupations. The small capital-
ist, it is true, generally combines with the business of direction
some portion of the details, which the other leaves to his sub-
ordinates : the small farmer follows his own plough, the small
tradesman serves in his own shop, the small weaver plies his
own loom. lUit \n this very union of functions there is, in a
great proportion of cases, a want of economy. The principal

134 POLITICAL ECONOMY

in the concern is either wasting, in the routine of a business,
qualities suitable for the direction of it, or he is only fit for the
former, and then the latter will be ill done. I must observe
however that I do not attach, to this saving of labor, the im-
portance often ascribed to it. There is undoubtedly much more
labor expended in the superintendence of many small capitals
than in that of one large capital. For this labor however the
small producers have generally a full compensation, in the feel-
ing of being their own masters, and not servants of an em-
ployer. It may be said, that if they value this independence
they will submit to pay a price for it, and to sell at the reduced
rates occasioned by the competition of the great dealer or man-
ufacturer. But they cannot always do this and continue to gain
a living. They thus gradually disappear from society. After
having consumed their little capital in prolonging the vmsuc-
cessful struggle, they either sink into the condition of hired
laborers, or become dependent on others for support.

§ 2. Production on a large scale is greatly promoted by the
practice of forming a large capital by the combination of many
small contributions ; or, in other words, by the formation of
joint stock companies. The advantages of the joint stock prin-
ciple are numerous and important.

In the first place, many undertakings require an amount of
capital beyond the means of the richest individual or private
partnership. No individual could have made a railway from
London to Liverpool ; it is doubtful if any individual could
even work the traffic on it, now when it is made. The govern-
ment indeed could have done both ; and in countries where
the practice of co-operation is only in the earlier stages of its
growth, the government can alone be looked to for any of the
works for which a great combination of means is requisite;
because it can obtain those means by compulsory taxation,
and is already accustomed to the conduct of large operations.
For reasons, however, which are tolerably well known, and of
which we shall treat fully hereafter, government agency for the
conduct of industrial operations is generally one of the least
eligible resources, when any other is available.

Next, there are undertakings which individuals are not ab-
solutely incapable of performing, but which they cannot per-
form on the scale and with the continuity which are ever more
and more required by the exigencies of a society in an advanc-

PRODUCTION ON A LARGE AND SMALL SCALE 135

ing state. Individuals are quite capable of despatching ships
from England to any or every part of the world, to carry pas-
sengers and letters; the thing was done before joint stock
companies for the purpose were heard of. But when, from the
increase of population and transactions, as well as of means of
payment, the public will no longer content themselves with
occasional opportunities, but require the certainty that packets
shall start regularly, for some places once or even twice a day,
for others once a week, for others that a steamship of great
size and expensive construction shall depart on fixed days twice
in each month, it is evident that to afford an assurance of keep-
ing up with punctuality such a circle of costly operations, re-
quires a much larger capital and a much larger staff of qualified
subordinates than can be commanded by an individual capitalist.
There are other cases, again, in which though the business
might be perfectly well transacted with small or moderate capi-
tals, the guarantee of a great subscribed stock is necessary or
desirable as a security to the public for the fulfilment of pecun-
iary engagements. This is especially the case when the nature
of the business requires that numbers of persons should be
Vk^illing to trust the concern with their money : as in the busi-
ness of banking, and that of insurance : to both of which the
joint stock principle is eminently adapted. It is an instance
of the folly and jobbery of the rulers of mankind, that until
a late period the joint stock principle, as a general resort, was
in this country interdicted by law to these two modes of busi-
ness ; to banking altogether, and to insurance in the depart-
ment of sea risks ; in order to bestow a lucrative monopoly on
particular establishments which the government was pleased
exceptionally to license, namely the Bank of England, and two
insurance companies, the London and the Royal Exchange.

Another advantage of joint stock, or associated management,
is its incident of publicity. This is not an invariable, but it
is a natural, consequence of the joint stock principle, and might
be, as in some important cases it already is, compulsory. In
banking, insurance, and other businesses which depend wholly
on confidence, publicity is a still more important element of
success than a large subscribed capital. A heavy loss occurring
in a private bank may be kept secret ; even though it were of
such magnitude as to cause the ruin of the concern, the banker
may still carry it'on for years, trying to retrieve its position,

136 POLITICAL ECONOMY

only to fall in the end with a greater crash : but this cannot
so easily happen in the case of a joint stock company whose
accounts are published periodically. The accounts, even if
cooked, still exercise some check ; and the suspicions of share-
holders, breaking out at the general meetings, put the public on
their guard.

These are some of the advantages of joint stock over individ-
ual management. But if we look to the other side of the ques-
tion, we shall find that individual management has also very
great advantages over joint stock. The chief of these is the
much keener interest of the managers in the success of the
undertaking.

The administration of a joint stock association is, in the
main, administration by hired servants. Even the committee,
or board of directors, who are supposed to superintend the
management, and who do really appoint and remove the man-
agers, have no pecuniary interest in the good working of the
concern beyond the shares they individually hold, wliich are
always a very small part of the capital of the association, and
in general but a small part of the fortunes of the directors them-
selves ; and the part they take in the management usually di-
vides their time with many other occupations, of as great or
greater importance to their own interest ; the business being
the principal concern of no one except those who are hired to
carry it on. But experience shows, and proverbs, the ex-
pression of popular experience, attest, how inferior is the qual-
ity of hired servants, compared with the ministration of those
personally interested in the work, and how indispensable, when
hired service must be employed, is " the master's eye " to watch
over it.

The successful conduct of an industrial enterprise requires
two quite distinct qualifications : fidelity, and zeal. The fidelity
of the hired managers of a concern it is possible to secure.
When their work admits of being reduced to a definite set of
rules, the violation of these is a matter on which conscience
cannot easily blind itself, and on which responsibility may be
enforced by the loss of employment. But to carry on a great
business successfully, requires a hundred things which, as they
cannot be defined beforehand, it is impossible to convert into
distinct and positive obligations. First and principally, it re-
quires that the directing mind should be incessantly occupied

PRODUCTION ON A LARGE AND SMALL SCALE

137

with the subject; should be continually laying schemes by
which greater profit may be obtained, or expense saved. This
intensity of interest in the subject it is seldom to be expected
that anyone should feel, who is conducting a business as the
hired servant and for the profit of another. There are experi-
ments in human affairs which are conclusive on the point. Look
at the whole class of rulers, and ministers of state. The work
they are intrusted with, is among the most interesting and
exciting of all occupations ; the personal share which they them-
selves reap of the national benefits or misfortunes which befall
the state under their rule, is far from trifling, and the rewards
and punishments which they may expect from public estima-
tion are of the plain and palpable kind which are most keenly
felt and most widely appreciated. Yet how rare a thing is it
to find a statesman in whom mental indolence is not stronger
than all these inducements. How infinitesimal is the proportion
who trouble themselves to form, or even to attend to, plans of
public improvement, unless when it is made still more trouble-
some to them to remain inactive ; or who have any other real
desire than that of rubbing on, so as to escape general blame.
On a smaller scale, all who have ever employed hired labor have
had ample experience of the efforts made to give as little labor
in exchange for the wages, as is compatible with not being
turned off. The universal neglect by domestic servants of
their employer's interests, wherever these are not protected by
some fixed rule, is matter of common remark ; unless where
long continuance in the same service, and reciprocal good of-
fices, have produced either personal attachment, or some feeling
of a common interest.

Another of the disadvantages of joint stock concerns, which
is in some degree common to all concerns on a large scale, is
disregard of small gains and small savings. In the manage-
ment of a great capital and great transactions, especially when
the managers have not much interest in it of their own, small
sums arc apt to be counted for next to nothing; they never
seem worth the care and trouble which it costs to attend to
them, and the credit of liberality and open-handedness is cheaply
bought by a disregard of such trifling considerations. But small
profits and small expenses, often repeated, amount to great
gains and losses: and of this a large capitalist is often a suffi-
ciently good calculator to be practically aware ; and to arrange

138 POLITICAL ECONOMY

his business on a system, which if enforced by a sufficiently
vigilant superintendence, precludes the possibility of the habit-
ual waste, otherwise incident to a great business. But the man-
agers of a joint stock concern seldom devote themselves suffi-
ciently to the work, to enforce unremittingly, even if introduced,
through every detail of the business, a really economical system.

From considerations of this nature, Adam Smith was led to
enunciate as a principle, that joint stock companies could never
be expected to maintain themselves without an exclusive privi-
lege, except in branches of business which like banking, insur-
ance, and some others, admit of being, in a considerable degree,
reduced to fixed rules. This however is one of those overstate-
ments of a true principle, often met with in Adam Smith. In
his days there were few instances of joint stock companies
which had been permanently successful without a monopoly,
except the class of cases which he referred to ; but since his
time there have been many ; and the regular increase both of
the spirit of combination and of the ability to combine, will
doubtless produce many more. Adam Smith fixed his observa-
tion too exclusively on the superior energy and more unremit-
ting attention brought to a business in which the whole stake
and the whole gain belong to the persons conducting it ; and
he overlooked various countervailing considerations which go
a great way toward neutralizing even that great point of supe-
riority.

Of these one of the most important is that which relates to
the intellectual and active qualifications of the directing head.
The stimulus of individual interest is some security for exer-
tion, but exertion is of little avail if the intelligence exerted
is of an inferior order, which it must necessarily be in the
majority of concerns carried on by the persons chiefly interested
in them. Where the concern is large, and can afiford a re-
muneration sufficient to attract a class of candidates superior
to the common average, it is possible to select for the general
management, and for all the skilled employments of a subordi-
nate kind, persons of a degree of acquirement and cultivated
intelligence which more than compensates for their inferior
interest in the result. Their greater perspicacity enables them,
with even a part of their minds, to see probabilities of advantage
which never occur to the ordinary run of men by the continued
exertion of the whole of theirs ; and their superior knowledge,

PRODUCTION ON A LARGE AND SMALL SCALE 139

and habitual rectitude of perception and of judgment, guard
them against blunders, the fear of which would prevent the
others from hazarding their interests in any attempt out of the
ordinary routine.

It must be further remarked, that it is not a necessary .conse-
quence of joint stock management, that the persons employed,
whether in superior or in subordinate offices, should be paid
wholly by fixed salaries. There are modes of connecting more
or less intimately the interest of the employes with the pecun-
iary success of the concern. There is a long series of inter-
mediate positions, between working wholly on one's own ac-
count, and working by the day, week, or year for an invariable
payment. Even in the case of ordinary unskilled labor, there
is such a thing as task- work, or working by the piece : and the
superior efficiency of this is so well known, that judicious em-
ployers always resort to it when the work admits of being put
out in definite portions, without the necessity of too troublesome
a surveillance to guard against inferiority in the execution.
In the case of the managers of joint stock companies, and of
the superintending and controlling officers in many private
establishments, it is a common enough practice to connect their
pecuniary interest with the interest of their employers, by giv-
ing them part of their remuneration in the form of a percentage
on the profits. The personal interest thus given to hired ser-
vants is not comparable in intensity to that of the owner of
the capital ; but it is sufficient to be a very material stimulus
to zeal and carefulness, and, when added to the advantage of
superior intelligence, often raises the quality of the service much
above that which the generality of masters are capable of ren-
dering to themselves. The ulterior extensions of which this
principle of remuneration is susceptible, being of great social
as well as economical importance, will be more particularly ad-
verted to in a subsequent stage of the present inquiry.

As I have already remarked of large establishments generally,
when compared with small ones, whenever competition is free
its results will show whether individual or joint stock agency
is best adapted to the particular case, since that which is most
efficient and most economical will always in the end succeed in
underselling the other.

§ 3. The possibility of substituting the large system of pro-
duction for the small, depends, of course, in the first place, on

140 POLITICAL ECONOMY

the extent of the market. The large system can only be advan-
tageous when a large amount of business is to be done : it
implies, therefore, either a populous and flourishing community,
or a great opening for exportation. Again, this as well as every
other change in the system of production is greatly favored by
a progressive condition of capital. It is chiefly when the capital
of a country is receiving a great annual increase, that there is
a large amount of capital seeking for investment : and a new
enterprise is much sooner and more easily entered upon by
new capital, than by withdrawing capital from existing employ-
ments. The change is also much facilitated by the existence of
large capitals in few hands. It is true that the same amount
of capital can be raised by bringing together many small sums.
But this (besides that it is not equally well suited to all branches
of industry), supposes a much greater degree of commercial
confidence and enterprise diffused through the community, and
belongs altogether to a more advanced stage of industrial
progress.

In the countries in which there are the largest markets, the
widest diffusion of commercial confidence and enterprise, the
greatest annual increase of capital, and the greatest number of
large capitals owned by individuals, there is a tendency to sub-
stitute more and more, in one branch of industry after another,
large establishments for small ones. In England, the chief type
of all these characteristics, there is a perpetual growth not only
of large manufacturing establishments, but also, wherever a
sufficient number of purchasers are assembled, of shops and
warehouses for conducting retail business on a large scale.
These are almost always able to undersell the smaller trades-
men, partly, it is understood, by means of division of labor, and
the economy occasioned by limiting the employment of skilled
agency to cases where skill is required ; and partly, no doubt,
by the saving of labor arising from the great scale of the trans-
actions : as it costs no more time, and not much more exertion
of mind, to make a large purchase, for example, than a small
one, and very much less than to make a number of small ones.

With a view merely to production, and to the greatest effi-
ciency of labor, this change is wholly beneficial. In some cases
it is attended with drawbacks, rather social than economical,
the nature of which has been already hinted at. But whatever
disadvantages may be supposed to attend on the change from

PRODUCTION ON A LARGE AND SMALL SCALE 141

a small to a large system of production, they are not applicable
to the change from a large to a still larger. When, in any
employment, the regime of independent small producers has
either never been possible, or has been superseded, and the sys-
tem of many work-people under one management has become
fully established, from that time any further enlargement in the
scale of production is generally an unqualified benefit. It is
obvious, for example, how great an economy of labor would
be obtained if London were supplied by a single gas or water
company instead of the existing plurality. While there are even
as many as two, this implies double establishments of all sorts,
when one only, with a small increase, could probably perform
the whole operation equally well ; double sets of machinery and
works, when the whole of the gas or water required could gen-
erally be produced by one set only ; even double sets of pipes,
if the companies did not prevent this needless expense by agree-
ing upon a division of the territory. Were there only one es-
tablishment, it could make lower charges, consistently with
obtaining the rate of profit now realized. But would it do so?
Even if it did not, the community in the aggregate would still
be a gainer, since the shareholders are a part of the community,
and they would obtain higher profits while the consumers paid
only the same. It is, however, an error to suppose that the
prices are ever permanently kept down by the competition of
these companies. Where competitors are so few, they always
end by agreeing not to compete. They may run a race of cheap-
ness to ruin a new candidate, but as soon as he has established
his footing they come to terms with him. When, therefore, a
business of real public importance can only be carried on ad-
vantageously upon so large a scale as to render the liberty of
competition almost illusory, it is an unthrifty dispensation of
the public resources that several costly sets of arrangements
should be kept up for the purpose of rendering to the commu-
nity this one service. It is much better to treat it at once as
a public function ; and if it be not such as the government itself
could beneficially undertake, it should be made ov-er entire to
the company or association which will perform it on the best
terms for the public. In the case of railways, for example, no
one can desire to see the enormous waste of capital and land
(not to speak of increased nuisance) involved in the construc-
tion of a second railway to connect the same places already

142 POLITICAL ECONOMY

united by an existing one; while the two would not do the
work better than it could be done by one, and after a short
time would probably be amalgamated. Only one such line
ought to be permitted, but the control over that line never ought
to be parted with by the State, unless on a temporary concession,
as in France ; and the vested right which Parliament has al-
lowed to be acquired by the existing companies, like all other
proprietary rights which are opposed to public utility, is mor-
ally valid only as a claim to compensation.

§ 4. The question between the large and the small systems
of production as applied to agriculture — between large and
small farming, the grande and the petite culture — stands, in
many respects, on different grounds from the general question
between great and small industrial establishments. In its social
aspects, and as an element in the Distribution of Wealth, this
question will occupy us hereafter: but even as a question of
production, the superiority of the large system in agriculture
is by no means so clearly established as in man«ufactures.

I have already remarked, that the operations of agriculture
are little susceptible of benefit from the division of labor. There
is but little separation of employments even on the largest farms.
The same persons may not in general attend to the live stock,
to the marketing, and to the cultivation of the soil ; but much
beyond that primary and simple classification the subdivision
is not carried. The combination of labor of which agriculture
is susceptible, is chiefly that which Mr. Wakefield terms Simple
Co-operation ; several persons helping one another in the same
work, at the same time and place. But I confess it seems to
me that this able writer attributes more importance to that kind
of co-operation, in reference to agriculture properly so called,
than it deserves. None of the common farming operations re-
quire much of it. There is no particular advantage in setting
a great number of people to work together in ploughing or dig-
ging or sowing the same field, or even in mowing or reaping
it unless time presses. A single family can generally supply
all the combination of labor necessary for these purposes. And
in the works in which a union of many efforts is really needed,
there is seldom found any impracticability in obtaining it where
farms are small.

The waste of productive power by subdivision of the land
often amounts to a great evil, but this applies chiefly to a sub-

PRODUCTION ON A LARGE AND SMALL SCALE 143

division so minute, that the cultivators have not enough land
to occupy their time. Up to that point the same principles
which recommend large manufactories are applicable to agri-
culture. For the greatest productive efficiency, it is generally
desirable (though even this proposition must be received with
qualifications) that no family who have any land, should have
less than they could cultivate, or than will fully employ their
cattle and tools. These, however, are not the dimensions of
large farms, but of what are reckoned in England very small
ones. The large farmer has some advantage in the article of
buildings. It does not cost so much to house a great number
of cattle in one building, as to lodge them equally well in several
buildings. There is also some advantage in implements. A
small farmer is not so likely to possess expensive instruments.
But the principal agricultUEal implements, even when of the
best construction, are not expensive. It may not answer to a
small farmer to own a threshing machine, for the small quan-
tity of corn he has to thres^h ; but there is no reason why such
a machine should not in every neighborhood be owned in com-
mon, or provided by some person to whom the others pay a
consideration for its use ; especially as, when worked by steam,
they are so constructed as to be movable.* The large farmer
can make some saving in cost of carriage. There is nearly as
much trouble in carrying a small portion of produce to market,
as a much greater produce ; in bringing home a small, as a
much larger quantity of manures, and articles of daily consump-
tion. There is also the greater cheapness of buying things in
large quantities. These various advantages must count for
something, but it does not seem that they ought to count for
very much. In England for some generations, there has been
little experience of small farms ; but in Ireland the experience
has been ample, not merely under the worst but under the best
management : and the highest Irish authorities may be cited
in opposition to the opinion which on this subject commonly
prevails in England. Mr. Blacker, for example, one of the
most experienced agriculturists aixl successful improvers in
the North of Ireland, whose experience was chiefly in the best

* The observations in the text may and small farms, will not depend on the

hereafter require some degree of modi- efficiency of the instruments, but on

ideation from inventions such as the their costliness. T see no reason to ex-

stcam plough and the reaiiing machine. pcct that this will be such as to make

The effect, however, of tliese improve- them inaccessible to small farmers, or

ments on tlie relative advantages of large combinations of small farmers.

144 POLITICAL ECONOMY

cultivated, which are also the most minutely divided, parts of
the country, was of opinion, that tenants holding farms not
exceeding from five to eight or ten acres, could live comfort-
ably, and pay as high a rent as any large farmer whatever.
" I am firmly persuaded " (he says,*) " that the small farmer
who holds his own plough and digs his own ground, if he fol-
lows a proper rotation of crops, and feeds his cattle in the house,
can undersell the large farmer, or in other words can pay a
rent which the other cannot afiford ; and in this I am confirmed
by the opinion of many practical men who have well considered
the subject. . . . The English farmer of 700 to 800 acres
is a kind of man approaching to what is known by the name of
a gentleman farmer. He must have his horse to ride, and his
gig, and perhaps an overseer to attend to his laborers ; he cer-
tainly cannot superintend himself the labor going on in a farm
of 800 acres." After a few other remarks, he adds : " Besides
all these drawbacks, which the small farmer knows little about,
there is the great expense of carting out the manure from the
homestead to such a great distance, and again carting home
the crop. A single horse will consume the produce of more
land than would feed a small farmer and his wife and two chil-
dren. And what is more than all, the large farmer says to his
laborers, go to your work ; but when the small farmer has
occasion to hire them, he says, come; the intelligent reader will,
I dare say, understand the difference."

One of the objections most urged against small farms is, that
they do not and cannot maintain, proportionally to their extent,
so great a number of cattle as large farms, and that this occa-
sions such a deficiency of manure, that a soil much subdivided
must always be impoverished. It will be found, however, that
subdivision only produces this effect when it throws the land
into the hands of cultivators so poor as not to possess the amount
of live stock suitable to the size of their farms. A small farm
and a badly stocked farm are not synonymous. To make the
comparison fairly, we must suppose the same amount of capital
which is possessed by the large farmers to be disseminated
among the small ones. When this condition, or even any ap-
proach to it, exists, and when stall feeding is practised (and
stall feeding now begins to be considered good economy even

* " Prize Essay on the Management of Landed Property in Ireland," by Will-
iam Blacker, Esq. (1837), p. 23.

PRODUCTION ON A LARGE AND SMALL SCALE 145

on large farms), experience, far from bearing out the assertion
that small farming is unfavorable to the multiplication of cattle,
conclusively establishes the very reverse. The abundance of
cattle, and copious use of manure, on the small farms of Flan-
ders, are the most striking features in that Flemish agriculture
which is the admiration of all competent judges, whether in
England or on the Continent.*

* " The number of beasts fed on a
farm of which the whole is arable land,"
(says the elaborate and intelligent treat-
ise on Flemish Husbandry, from per-
sonal observation and the best sources,
published in the Library of the Society
for the Diiifusion of Useful Knowledge)
*' is surprising to those who are not ac-
quainted with the mode in which the
food is prepared for the cattle. A beast
for every three acres of land is a com-
mon proportion, and in very small oc-
cupations where much spade husbandry
is used, the proportion is still greater.
After comparing the accounts given in
a variety of places and situations of the
average quantity of milk v/hich a cow
gives when fed in the stall, the result
is, that it greatly exceeds that of our
best dairy farms, and the quantity of
butter made from a given quantity of
milk is also greater. It appears aston-
ishing that the occupier of only ten or
twelve acres of light arable land should
be able to maintain four or five cows,
but the fact is notorious in the Waes
country." (Pp. 59, 60.)

This subject is treated very intelli-
gently in the work of M. Passy, " On
Systems of Cultivation and their Influ-
ence on Social Economy," one of the
most impartial discussions, as between
the two systems, which has yet appeared
in France.

" Without doubt it is England that,
on an equal surface, feeds the greatest
number of animals; Holland and some
parts of Lombardy can alone vie with
her in this respect: but is this a conse-
quence of the mode of cultivation, and
have not climate and local situation a
share in producing it? Of this I think
there can be no doubt. In fact, what-
ever may have been said, wherever large
and small cultivation meet in the same
place, the latter, though it cannot sup-
port as many sheep, possesses, all things
considered, the greatest quantity of ma-
nure-producing animals.

" In Belgium, for example, the two
provinces of smallest farms are Antwerp
and East Flanders, and they possess on
an average for every 100 hectares (250
acres) of cultivated land, 74 horned cat-
tle and 14 sheep. The two provinces
where we find the large farms are Na-
mur and Hainaut, and they average, for
every 100 hectares of cultivated ground,
only 30 horned cattle and 45 sheep.
Reckoning, as is the custom, ten sheep
as equal to one head of horned cattle.
we find in the first case, the equivalent
of 76 beasts to maintain the fecundity
of the soil; in the latter case less than

Vol. I. — lo

35, a difference which must be called
enormous. (See the statistical docu-
ments published by the Minister of the
Interior.) The abundance of animals,
in the parts of Belgium which are most
subdivided, is nearly as great as in
England. Calculating the number in
England in proportion only to the culti-
vated ground, there are for each 100
hectares, 65 horned cattle and nearly 260
sheep, together equal to gi of the former,
being only an excess of 15. It should
besides be remembered, that in Belgium
stall feeding being continued nearly the
whole year, hardly any of the manure is
lost, while in England, grazing in the
open fields diminishes considerably the
quantity which can be completely util-
ized.

" Again, in the Department of the
Nord, the arrondissements which have
the smallest farms support the greatest
quantity of animals. While the arron-
dissements of Lille and Hazebrouck,
besides a greater number of horses,
maintain the equivalent of 52 and 46
head of horned cattle, those of Dunkirk
and Avesnes, where the farms are larger,
produce the equivalent of only 44 and 40
head. (See the statistics of France pub-
lished by the Minister of Commerce.)

" A similar e.xamination extended to
other portions of France would yield
similar results. In the immediate neigh-
borhood of towns, no doubt, the small
farmers, having no difficulty in purchas-
ing manure, do not maintain animals:
but, as a general rule, the kind of culti-
vation which takes most out of the
ground must be that which is obliged
to be most active in renewing its fer-
tility. Assuredly the small farms can-
not have numerous flocks of sheep, and
this is an inconvenience; but they sup-
port more horned cattle than the large
farms. To do so is a necessity they
cannot escape from, in any country
where the demands of consumers re-
quire their existence: if they could not
fulfil this condition, they must perish.

" The following are particulars, the
exactness of which is fully attested by
the excellence of the work from which
I extract them, the statistics of the
commune of Vensat (department of Puy
de Dome), lately published by Dr.
Jusseraud, mayor of the commune.
They are the more valuable, as they
throw full light on the nature of the
changes which the extension of small
farming has, in that district, produced
in the number and kind of animals by
whose manure the productiveness of
the soil is kept up and increased. The

146

POLITICAL ECONOMY

The disadvantage, when disadvantage there is, of small, or
rather of peasant farming, as compared with capitalist farming,
must chiefly consist in inferiority of skill and knowledge; but
it is not true, as a general fact, that such inferiority exists.
Countries of small farms and peasant farming, Flanders and
Italy, had a good agriculture many generations before England,
and theirs is still, as a whole, probably the best agriculture in
the world. The empirical skill, which is the effect of daily and
close observation, peasant farmers often possess in an eminent
degree. The traditional knowledge, for example, of the culture
of the vine, possessed by the peasantry of the countries where
the best wines are produced, is extraordinary. There is no
doubt an absence of science, or at least of theory ; and to some
extent a deficiency of the spirit of improvement, so far as relates
to the introduction of new processes. There is also a want of
means to make experiments, which can seldom be made with
advantage except by rich proprietors or capitalists. As for
those systematic improvements which operate on a large tract
of country at once (such as great works of draining or irriga-
tion) or which for any other reason do really require large
numbers of workmen combining their labor, these are not in
general to be expected from small farmers, or even small pro-
prietors ; though combination among them for such purposes
is by no means unexampled, and will become more common as
their intelligence is more developed.

Against these disadvantages is to be placed, where the tenure
of land is of the requisite kind, an ardor of industry absolutely
unexampled in any other condition of agriculture. This is a
subject on which the testimony of competent witnesses is unani-

commune consists of 1612 hectares, di-
vided into 4600 parccUcs, owned by 591
proprietors, and of this extent 1466 hec-
tares are under cultivation. In 1790,
seventeen farms occupied two-thirds of
the whole, and twenty others the re-
mainder. Since then the land has been
much divided, and the subdivision is
now extreme. What has been the effect
on the quantity of cattle? A consider-
able increase. In 1790 there were only
about 300 horned cattle, and from 1800
to 2000 sheep; there are now 676 of the
former and only 533 of the latter. Thus
1300 sheep have been replaced by 376
oxen and cows, and fall things taken
into account) the quantity of manure
has increased in the ratio of 490 to 729,
or more than 48 per cent., not to men-
tion that the animals being now stronger
and better fed, yield a much greater

contribution than formerly to the fertili-
zation of the ground.

" Such is the testimony of facts on
the point. It is not. true, then, that
small farming feeds fewer animals than
large; on the contrary, local circum-
stances being the same, it feeds a
greater number: and this is only what
might have been presumed; for, requir-
ing more from the soil, it is obliged to
take greater pains for keeping up its
productiveness. All the other reproaches
cast upon small farming, when collated
one by one with facts justly appreciated,
will be seen to be no better founded, and
to have been made only because the
countries compared with one another
were differently situated in respect to
the general causes of agricultural pros-
perity." (Pp. 116 — 120.)

PRODUCTION ON A LARGE AND SMALL SCALE 147

mous. The working of the petite culture cannot be fairly judged
where the small cultivator is merely a tenant, and not even a
tenant on fixed conditions, but (as until lately in Ireland) at
a nominal rent greater than can be paid, and therefore practi-
cally at a varying rent always amounting to the utmost that can
be paid. To understand the subject, it must be studied where
the cultivator is the proprietor, or at least a metayer with a
permanent tenure ; where the labor he exerts to increase the
produce and value of the land avails wholly, or at least partly,
to his own benefit and that of his descendants. In another di-
vision of our subject, we shall discuss at some length the im-
portant subject of tenures of land, and I defer till then any
citation of evidence on the marvellous industry of peasant pro-
prietors. It may suffice here to appeal to the immense amount
of gross produce which, even without a permanent tenure, Eng-
lish laborers generally obtain from their little allotments; a
produce beyond comparison greater than a large farmer ex-
tracts, or would find it his interest to extract, from the same
piece of land.

And this I take to be the true reason why large cultivation
is generally most advantageous as a mere investment for profit.
Land occupied by a large farmer is not, in one sense of the
word, farmed so highly. There is not nearly so much labor
expended on it. This is not on account of any economy arising
frorh combination of labor, but because, by employing less,
a greater return is obtained in proportion to the outlay. It does
not answer to anyone to pay others for exerting all the labor
which the peasant, or even the allotment holder, gladly under-
goes when the fruits are to be wholly reaped by himself. This
labor, however, is not unproductive ; it all adds to the gross
produce. With anything like equality of skill and knowledge,
the large farmer does not obtain nearly so much from the soil
as the small proprietor, or the small farmer with adequate mo-
tives to exertion : but though his returns are less, the labor is
less in a still greater degree, and as whatever labor he employs
must be paid for, it does not suit his purpose to employ more.

But although the gross produce of the land is greatest, other
things being the same, under small cultivation, and although,
therefore, a country is al)le on that system to support a larger
aggregate population, it is generally assumed by English writers
that what is termed the net produce, that is, the surplus after

148 POLITICAL ECONOMY

feeding the cultivators, must be smaller; that therefore, the
population disposable for all other purposes, for manufactures,
for commerce and navigation, for national defence, for the pro-
motion of knowledge, for the liberal professions, for the
various functions of government, for the arts and litera-
ture, all of which are dependent on this surplus for their
existence as occupations, must be less numerous ; and that
the nation, therefore (waiving all question as to the con-
dition of the actual cultivators), must be inferior in the princi-
pal elements of national power, and in many of those of general
well-being. This, however, has been taken for granted much
too readily. Undoubtedly, the non-agricultural population will
bear a less ratio to the agricultural, under small than under
large cultivation. But that it will be less numerous absolutely,
is by no means a consequence. If the total population, agri-
cultural and non-agricultural, is greater, the non-agricultural
portion may be more numerous in itself, and may yet be a
smaller proportion of the whole. If the gross produce is larger,
the net produce may be larger, and yet bear a smaller ratio to
the gross produce. Yet even Mr. Wakefield sometimes appears
to confound these distinct ideas. In France it is computed that
two-thirds of the whole population are agricultural. In Eng-
land, at most, one-third. Hence Mr. Wakefield infers, that " as
in France only three people are supported by the labor of two
cultivators, while in England the labor of two cultivators sup-
ports six people, English agriculture is twice as productive as
French agriculture," owing to the superior efficiency of large
farming through combination of labor. But in the first place
the facts themselves are overstated. The labor of two persons
in England does not quite support six people, for there is not a
little food imported from foreign countries, and from Ireland.
In France, too, the labor of two cultivators does much more
than supply the food of three persons. It provides the three
persons, and occasionally foreigners, with flax, hemp, and to
a certain extent with silk, oils, tobacco, and latterly sugar,
which in England are wholly obtained from abroad ; nearly
all the timber used in France is of home growth, nearly all
which is used in England is imported ; the principal fuel of
France is procured and brought to market by persons reckoned
among agriculturists, in England by persons not so reckoned.
I do not take into calculation hides and wool, these products

PRODUCTION ON A LARGE AND SMALL SCALE 149

being common to both countries, nor wine or brandy produced
for home consumption, since England has a corresponding pro-
duction of beer and spirits ; but England has no material export
of either article, and a great importation of the last, while France
supplies wines and spirits to the whole world. I say nothing
of fruit, eggs, and such minor articles of agricultural produce,
in which the export trade of France is enormous. But, not to
lay undue stress on these abatements, we will take the statement
as it stands. Suppose that two persons, in England, do bond
fide produce the food of six, while in France, for the same
purpose, the labor of four is requisite. Does it follow that
England must have a larger surplus for the support of a non-
agricultural population? No; but merely that she can devote
two-thirds of her whole produce to the purpose, instead of one-
third. Suppose the produce to be twice as great, and the one-
third will amount to as much as the two-thirds. The fact
might be, that owing to the greater quantity of labor employed
on the French system, the same land would produce food for
twelve persons which on the English system would only produce
it for six : and if this were so, which would be quite consistent
with the conditions of the hypothesis, then although the food
for twelve was produced by the labor of eight, while the six
were fed by the labor of only two, there would be the same
number of hands disposable for other employment in the one
country as in the other. I am not contending that the fact is
so. I know that the gross produce per acre in France as a
whole (though not in its most improved districts) averages
much less than in England, and that, in proportion to the ex-
tent and fertility of the two countries, England has, in the sense
we are now speaking of, much the largest disposable popula-
tion. But the disproportion certainly is not to be measured
by Mr. Wakefield's simple criterion. As well might it be said
that agricultural labor in the United States, where, by a late
census, four families in every five appeared to be engaged in
agriculture, must be still more inefficient than in France.

The inferiority of French cultivation (which, taking the
country as a whole, must be allowed to be real, though much
exaggerated), is probably more owing to the lower general
average of industrial skill and energy in that country, than to
any special cause: and even if partly the effect of minute sub-
division, it does not prove that small farming is disadvanta-

I50 POLITICAL ECONOMY

geous, but only (what is undoubtedly the fact) that farms in
France are very frequently too small, and, what is worse, bro-ken
up into an almost incredible number of patches or parcelles,
most inconveniently dispersed and parted from one another.

As a question, not of gross, but of net produce, the compara-
tive merits of the grande and the petite culture, especially when
the small farmer is also the proprietor, cannot be looked upon
as decided. It is a question on which good judges at present
differ. The current of English opinion is in favor of large
farms: on the Continent, the weight of authority seems to be
on the other side. Professor Rau, of Heidelberg, the author of
one of the most comprehensive and elaborate of extant treatises
on political economy, and who has that large acquaintance with
facts and authorities on his own subject, which generally char-
acterizes his countrymen, lays it down as a settled truth, that
small or moderate-sized farms yield not only a larger gross but
a larger net produce: though, he adds, it is desirable there
should be some great proprietors, to lead the way in new im-
provements.* The most apparently impartial and discriminat-
ing judgment that I have met with is that of M. Passy, who
(always speaking with reference to net produce) gives his
verdict in favor of large farms for grain and forage : but, for
the kinds of culture which require much labor and attention,
places the advantage wholly on the side of small cultivation;
including in this description, not only the vine and the olive,
where a considerable amount of care and labor must be bestowed
on each individual plant, but also roots, leguminous plants, and
those which furnish the materials of manufactures. The small
size, and consequent multiplication, of farms, according to all
authorities, are extremely favorable to the abundance of many
minor products of agriculture, f

It is evident that every laborer who extracts from the land
more than his own food, and that of any family he may have,
increases the means of supporting a non-agricultural popula-
tion. Even if his surplus is no more than enough to buy
clothes, the laborers who make the clothes are a non-agricul-
tural population, enabled to exist by food which he produces.

* See pp. 352 and 353 of a French produce, poultry, and eggs, a value of

translation published at Brussels in 1839, sometimes 1000 francs (£40) a year:

by M. Fred, de Kemmeter, of Ghent. which, deducting expenses, is an ad-

t " In the department of the Nord," dition to the net produce of 15 to 20

says M. Passy, " a farm of 20 hectares francs per hectare." — " On Systems of

(50 acres) produces in calves, dairy Cultivation," p. 114.

PRODUCTION ON A LARGE AND SMALL SCALE 151

Every agricultural family, therefore, which produces its own
necessaries, adds to the net produce of agricuhure ; and so does
every person born on the land, who by employing himself on it,
adds more to its gross produce than the mere food which he
eats. It is qviestionable whether, even in the most subdivided
districts of Europe which are cultivated by the proprietors, the
multiplication of hands on the soil has approached, or tends to
approach, within a great distance of this limit. In France,
though the subdivision is confessedly too great, there is proof
positive that it is far from having reached the point at which
it would begin to diminish the power of supporting a non-
agricultural population. This is demonstrated by the great in-
crease of the towns ; which have of late increased in a much
greater ratio than the population generally,* showing (unless
the condition of the town laborers is becoming rapidly deterio-
rated, which there is no reason to believe) that even by the un-
fair and inapplicable test of proportions, the productiveness of
agriculture must be on the increase. This, too, concurrently
with the amplest evidence that in the more improved districts
of France, and in some which, until lately, were among the un-
improved, there is a considerably increased consumption of
country produce by the country population itself.

Impressed with the conviction that, of all faults which can
be committed by a scientific writer on political and social sub-
jects, exaggeration, and assertions beyond the evidence, most
require to be guarded against, I limited myself in the early edi-
tions of this work to the foregoing very moderate statements.
I little knew how much stronger my language might have been
without exceeding the truth, and how much the actual progress
of French agriculture surpassed anything which I had at that
time sufificient grounds to affirm. The investigations of that
eminent authority on agricultural statistics, M. Leonce de
Lavergne, undertaken by desire of the Academy of Moral and
Political Sciences of the Institute of France, have led to the
conclusion that since the Revolution of 1789, the total produce
of French agriculture has doubled ; profits and wages having
both increased in about the same, and rent in a still greater
ratio. M. de Lavergne, whose impartiality is one of his great-

• During the interval lietween the cen- ccedcd tlie apprepfnte increase of all
sus of iS.si antl that of iSs6, the increase France: while nearly all the other large
of the population of Paris alone, ex- towns likewise showed an increase.

152 POLITICAL ECONOMY

est merits, is, moreover, so far in this instance from the sus-
picion of having a case to make out, that he is laboring to show,
not how much French agriculture has accomplished, but how
much still remains for it to do. " We have required " (he says)
" no less than seventy years to bring into cultivation two mill-
ion hectares " (five million English acres) " of waste land, to
suppress half our fallows, double our agricultural products, in-
crease our population by 30 per cent., our wages by 100 per
cent., our rent by 150 per cent. At this rate we shall require
three-quarters of a century more to arrive at the point which
England has already attained." *

After this evidence, we have surely now heard the last of
the incompatibility of small properties and small farms with
agricultural improvement. The only question which remains
open is one of degree : the comparative rapidity of agricultural
improvement under the two systems ; and it is the general
opinion of those who are equally well acquainted with both,
that improvement is greatest under a due admixture between
them.

In the present chapter, I do not enter on the question be-
tween great and small cultivation in any other respect than as
a question of production, and of the efificiency of labor. We
shall return to it hereafter as affecting the distribution of the
produce, and the physical and social well-being of the culti-
vators themselves ; in which aspects it deserves, and requires,
a still more particular examination.

Chapter X. — Of the Law of the Increase of Labor

§1. We have now successively considered each of the agents
or conditions of production, and of the means by which the
efificacy of these various agents is promoted. In order to come
to an end of the questions which relate exclusively to produc-
tion, one more, of primary importance, remains.

Production is not a fixed, but an increasing thing. When
not kept back by bad institutions, or a low state of the arts of
life, the produce of industry has usually tended to increase;
stimulated not only by the desire of the producers to augment

• "Economic Rurale de la France Societe Centrale d'Agriculture de
depuis 17S9." Par M. Leonce de La- France. 2me ed. p. 59.
vergne, Membre de I'lnstitut et de la

LAW OF THE INCREASE OF LABOR 153

their means of consumption, but by the increasing number of
the consumers. Nothing in poHtical economy can be of more
importance than to ascertain the law of this increase of produc-
tion ; the conditions to which it is subject ; whether it has prac-
tically any limits, and what these are. There is also no subject
in political economy which is popularly less understood, or on
which the errors committed are of a character to produce, and
do produce, greater mischief.

We have seen that the essential requisites of production are
three — labor, capital, and natural agents ; the term capital in-
cluding all external and physical requisites which are products
of labor, the term natural agents all those which are not. But
among natural agents we need not take into account those
which, existing in unlimited quantity, being incapable of ap-
propriation, and never altering in their qualities, are always
ready to lend an equal degree of assistance to production, what-
ever may be its extent ; as air, and the light of the sun. Being
now about to consider the impediments to production, not the
facilities for it, we need advert to no other natural agents than
those which are liable to be deficient, either in quantity or in
productive power. These may be all represented by the term
land. Land, in the narrowest acceptation, as the source of ag-
ricultural produce, is the chief of them ; and if we extend the
term to mines and fisheries — to what is found in the earth
itself, or in the waters which partly cover it, as well as to what
is grown or fed on its surface, it embraces everything with
which we need at present concern ourselves.

We may say, then, without a greater stretch of language than
under the necessary explanations is permissible, that the requi-
sites of production are Labor, Capital, and Land. The in-
crease of production, therefore, depends on the properties of
these elements. It is a result of the increase either of the ele-
ments themselves, or of their productiveness. The law of the
increase of production must be a consequence of the laws of
these elements ; the limits to the increase of production must
be the limits, whatever they are, set by those laws. We pro-
ceed to consider the three elements successively, with refer-
ence to this efifect ; or in other words, the law of the increase
of production, viewed in respect of its dependence, first on La-
bor, secondly on Capital, and lastly on Land.

§ 2. The increase of labor is the increase of mankind ; of

154

POLITICAL ECONOMY

population. On this subject the discussions excited by the Es-
say of Mr. Malthus have made the truth, though by no means
universally admitted, yet so fully known, that a briefer ex-
amination of the question than would otherwise have been
necessary will probably on the present occasion suffice.

The power of multiplication inherent in all organic life may
be regarded as infinite. There is no one species of vegetable
or animal, which, if the earth were entirely abandoned to it, and
to the things on which it feeds, would not in a small number
of years overspread every region of the globe, of which the cli-
mate was compatible with its existence. The degree of possible
rapidity is different in different orders of beings ; but in all it
is sulBcient, for the earth to be very speedily filled up. There
are many species of vegetables of which a single plant will
produce in one year the germs of a thousand ; if only two
come to maturity, in fourteen years the two will have multiplied
to sixteen thousand and more. It is but a moderate case of fe-
cundity in animals to be capable of quadrupling their numbers
in a single year ; if they only do as much in half a century, ten
thousand will have swelled within two centuries to upwards of
two millions and a half. The capacity of increase is necessarily
in a geometrical progression : the numerical ratio alone is
different.

To this property of organized beings, the human species
forms no exception. Its power of increase is indefinite, and
the actual multiplication would be extraordinarily rapid, if the
power were exercised to the utmost. It never is exercised to
the utmost, and yet, in the most favorable circumstances known
to exist, which are those of a fertile region colonized from an
industrious and civilized community, population has con-
tinued, for several generations, independently of fresh immigra-
tion, to double itself in not much more than twenty years.*
That the capacity of multiplication in the human species ex-
ceeds even this, is evident if we consider how great is the ordi-
nary number of children to a family, where the cHmate is good
and early marriages usual ; and how small a proportion of them
die before the age of maturity, in the present state of hygienic
knowledge, where the locality is healthy, and the family ade-

* This has been disputed; but the dependently of immigrants and of their

highest estimate I have seen of the progeny— that of Mr. Carey— does not

term which population requires for exceed thirty years,
doubling itself in the United States, in-

LAW OF THE INCREASE OF LABOR

155

quately provided with the means of hving. It is a very low
estimate of the capacity of increase, if we only assume, that in
a good sanitary condition of the people, each generation may
be double the number of the generation which preceded it.

Twenty or thirty years ago, these propositions might still
have required considerable enforcement and illustration ; but
the evidence of them is so ample and incontestable, that they
have made their way against all kinds of opposition, and may
now be regarded as axiomatic : though the extreme reluctance
felt to admitting them, every now and then gives birth to some
ephemeral theory, speedily forgotten, of a different law of in-
crease in different circumstances, through a providential adap-
tation of the fecundity of the human species to the exigencies
of society.* The obstacle to a just understanding of the sub-
ject does not arise from these theories, but from too confused
a notion of the causes which, at most times and places, keep
the actual increase of mankind so far behind the capacity.

§ 3. Those causes, nevertheless, are in no way mysterious.
What prevents the population of hares and rabbits from over-
stocking the earth? Not want of fecundity, but causes very
different : many enemies, and insufficient subsistence ; not
enough to eat, and liability to being eaten. In the human race,
which is not generally subject to the latter inconvenience, the
equivalents for it are war and disease. If the multiplication of

* One of these theories, that of Mr.
Doubleday, may be thought to require
a passing notice, because it has of late
obtained some followers, and because
it derives a semblance of support from
tlie general analogies of organic life.
This theory maintains that the fecundity
of the human animal, and of all other
living beings, is in inverse proportion
to the quantity of nutriment: that an
underfed population multiplies rapidly,
but that all classes in comfortable cir-
cumstances are, by a physiological law,
so unprolific, as seldom to keep up their
numbers without being recruited from
a poorer class. There is no doubt that
a positive excess of nutriment, in ani-
mals as well as in fruit trees, is unfa-
vorable to reproduction; and it is quite
possible, though by no means proved,
that the physiological conditions of fe-
cundity may exist in the greatest de-
gree when the supply of food is some-
what stinted. But any one who might
be inclined to draw from this, even if
admitted, conclusions at variance with
the principle of Mr. Malthus, needs only
be invited to look through a volume of
the Peerage, and observe the enormous
families almost universal in that class;
or call to mind the large families of the

English clergy, and generally of the
middle classes of England. It is, be-
sides, well remarked by Mr. Carey, that,
to be consistent with Mr. Doubleday's
theory, the increase of the population
of the United States, apart from immi-
gration, ought to be one of the slowest
on record.

Mr. Carey has a theory of his own,
also grounded on a physiological truth,
that the total sum of nutriment received
by an organized body directs itself, in
largest proportion, to the parts of the
system which are most used; from which
he anticipates a diminution in the fecun-
dity of human beings, not through more
abundant feeding, but through the
greater use of their brains incident to
an advanced civilization. There is con-
siderable plausibility in this speculation,
and experience may hereafter confirm
it. P>ut the change in the human con-
stitution which it supposes, if ever real-
ized, will conduce to the expected effect
rather by rendering physical self-re-
straint easier, than by dispensing with
its necessity : since the most rapid known
rate of multiplication is quite compati-
ble witli a very sparing employment of
the multiplying power.

156

POLITICAL ECONOMY

mankind proceeded only, like that of the other animals, from a
blind instinct, it would be limited in the same manner with
theirs ; the birds would be as numerous as the physical consti-
tution of the species admitted of, and the population would be
kept down by deaths.* But the conduct of human creatures is
more or less influenced by foresight of consequences, and by
impulses superior to mere animal instincts : and they do not,
therefore, propagate like swine, but are capable, though in very
unequal degrees, of being withheld by prudence, or by the
social affections, from giving existence to beings born only to
misery and premature death. In proportion as mankind rise
above the condition of the beasts, population is restrained by
the fear of want, rather than by want itself. Even where there
is no question of starvation, many are similarly acted upon by
the apprehension of losing what have come to be regarded as
the decencies of their situation in life. Hitherto no other mo-
tives than these two have been found strong enough, m the
generality of mankind, to counteract the tendency to increase.
It has been the practice of a great majority of the middle and
the poorer classes, whenever free from external control, to
marry as early, and in most countries to have as many children,
as was consistent with maintaining themselves in the condition
of life which they were born to, or were accustomed to con-
sider as theirs. Among the middle classes, in many individual
instances, there is an additional restraint exercised from the
desire of doing more than maintaining their circumstances —
of improving them ; but such a desire is rarely found, or rarely
has that effect, in the laboring classes. If they can bring up a
family as they were themselves brought up, even the prudent
among them are usually satisfied. Too often they do not think
even of that, but rely on fortune, or on the resources to be found
in legal or voluntary charity.

* Mr. Carey expatiates on the absurd-
ity of supposing that matter tends to as-
sume the highest form of organization,
the human, at a more rapid rate than it
assumes the lower forms which compose
human food; that human beings mul-
tiply faster than turnips and cabbages.
But the limit to the increase of man-
kind, according to the doctrine of Mr.
Malthus, does not depend on the power
of increase of turnips and cabbages, but
on the limited quantity of the land on
which they can be grown. So long as
the quantity of land is practically un-
limited, which it is in the United States,

and food, consequently, can be increased
at the highest rate which is natural to
it, mankind also may, without aug-
mented difficulty in obtaining subsist-
ence, increase at their highest rate.
When Mr. Carey can show, not that tur-
nips and cabbages but that the soil it-
self, or the nutritive elements contained
in it, tend naturally to multiply, and
that, too, at a rate exceeding the most
rapid possible increase of mankind, he
will have said something to the purpose.
Till then, this part, at least, of his argu-
ment may be considered as non-existent.

LAW OF THE INCREASE OF LABOR

157

In a very backward state of society, like that of Europe in
the Middle Ages, and many parts of Asia at present, popula-
tion is kept down by actual starvation. The starvation does
not take place in ordinary years, but in seasons of scarcity,
which in those states of society are much more frequent and
more extreme than Europe is now accustomed to. In these
seasons actual want, or the maladies consequent on it, carry off
numbers of the population, which in a succession of favorable
years again expands, to be again cruelly decimated. In a more
improved state, few, even among the poorest of the people,
are limited to actual necessaries, and to a bare sufificiency of
those: and the increase is kept within bounds, not by excess
of deaths, but by limitation of births. The limitation is brought
about in various ways. In some countries, it is the result of
prudent or conscientious self-restraint. There is a condition
to which the laboring people are habituated ; they perceive that
by having too numerous families, they must sink below that
condition, or fail to transmit it to their children ; and this they
do not choose to submit to. The countries in which, so far as is
known, a great degree of voluntary prudence has been longest
practised on this subject, are Norway and parts of Switzerland.
Concerning both, there happens to be unusually authentic in-
formation ; many facts were carefully brought together by Mr.
Malthus, and much additional evidence has been obtained
since his time. In both these countries the increase of popula-
tion is very slow ; and what checks it, is not multitude of
deaths, but fewness of births. Both the births and the deaths
are remarkably few in proportion to the population ; the aver-
age duration of life is the longest in Europe ; the population
contains fewer children, and a greater proportional number
of persons in the vigor of life, than is known to be the case in
any other part of the world. The paucity of births tends di-
rectly to prolong life, by keeping the people in comfortable
circumstances ; and the same prudence is doubtless exercised
in avoiding causes of disease, as in keeping clear of the prin-
cipal cause of poverty. It is worthy of remark that the two
countries thus honorably distinguished, are countries of small
landed proprietors.

There are other cases in which the prudence and forethought,
which perhaps might not be exercised by the people them-
selves, are exercised by the state for their benefit; marriage

IS8 POLITICAL ECONOMY

not being permitted until the contracting parties can show that
they have the prospect of a comfortable support. Under these
laws, of which I shall speak more fully hereafter, the condition
of the people is reported to be good, and the illegitimate births
not so numerous as might be expected. There are places,
again, in which the restraining cause seems to be not so much
individual prudence, as some general and perhaps even acci-
dental habit of the country. In the rural districts of England,
during the last century, the growth of population was very
effectually repressed by the difficulty of obtaining a cottage to
live in. It was the custom for unmarried laborers to lodge
and board with their employers ; it was the custom for mar-
ried laborers to have a cottage : and the rule of the English
poor laws by which a parish was charged with the support of
its unemployed poor, rendered landowners averse to promote
marriage. About the end of the century, the great demand
for men in war and manufactures, made it be thought a patri-
otic thing to encourage population : and about the same time
the growing inclination of farmers to live like rich people,
favored as it was by a long period of high prices, made them
desirous of keeping inferiors at a greater distance, and pe-
cuniary motives arising from abuses of the poor laws being
superadded, they gradually drove their laborers into cottages,
which the landlords now no longer refused permission to build.
In some countries an old standing custom that a girl should
not marry until she had spun and woven for herself an ample
trousseau (destined for the supply of her whole subsequent
life), is said to have acted as a substantial check to population.
In England, at present, the influence of prudence in keeping
down multiplication is seen by the diminished number of mar-
riages in the manufacturing districts in years when trade is bad.
But whatever be the causes by which the population is any-
where limited to a comparatively slow rate of increase, an
acceleration of the rate very speedily follows any diminution of
the motives to restraint. It is but rarely that improvements in
the condition of the laboring classes do anything more than
give a temporary margin, speedily filled up by an increase of
their numbers. The use they commonly choose to make of
any advantageous change in their circumstances, is to take it
out in the form which, by augmenting the population, deprives
the succeeding generation of the benefit. Unless, either by

LAW OF THE INCREASE OF LABOR 159

their general improvement in intellectual and moral culture, or
at least by raising their habitual standard of comfortable liv-
ing, they can be taught to make a better use of favorable cir-
cumstances, nothing permanent can be done for them ; the
most promising schemes end only in having a more numerous,
but not a happier people. By their habitual standard, I mean
that (when any such there is) down to which they will multiply,
but not lower. Every advance they make in education, civiliza-
tion, and social improvement, tends to raise this standard ; and
there is no doubt that it is gradually, though slowly, rising in
the more advanced countries of Western Europe. Subsistence
and employment in England have never increased more rapidly
than in the last forty years, but every census since 1821 showed
a smaller proportional increase of population than that of the
period preceding ; and the produce of French agriculture and
industry is increasing in a progressive ratio, while the popula-
tion exhibits, in every quinquennial census, a smaller propor-
tion of births to the population.

The subject, however, of population, in its connection with
the condition of the laboring classes, will be considered in an-
other place : in the present, we have to do with it solely as one
of the elements of Production : and in that character we could
not dispense with pointing out the unlimi^d extent of its
natural powers of increase, and the causes owing to which so
small a portion of that unlimited power is for the most part
actually exercised. After this brief indication, we shall proceed
to the other elements.

Chapter XI. — Of the Law of the Increase of Capital

§ I. The requisites of production being labor, capital, and
land, it has been seen from the preceding chapter that the im-
pediments to the increase of production do not arise from the
first of these elements. On the side of labor there is no ob-
stacle to an increase of production, indefinite in extent and of
unslackcning rapidity. Population has the power of increasing
in a uniform and rapid geometrical ratio. If the only essential
condition of production were labor, the produce might, and
naturally would, increase in the same ratio; and there would
be no limit, until the numbers of mankind were brought to a
stand from actual want of space.

i6o POLITICAL ECONOMY

But production has other requisites, and of these, the one
which we shall next consider is Capital. There cannot be more
people in any country, or in the world, than can be supported
from the produce of past labor until that of present labor comes
in. There will be no greater number of productive laborers in
any country, or in the world, than can be supported from that
portion of the produce of past labor, which is spared from the
enjoyments of its possessor for purposes of reproduction, and
is termed Capital. We have next, therefore, to inquire into the
conditions of the increase of capital ; the causes by which the
rapidity of its increase is determined, and the necessary limita-
tions of that increase.

Since all capital is the product of saving, that is, of abstinence
from present consumption for the sake of a future good, the
increase of capital must depend upon two things — the amount
of the fund from which saving can be made, and the strength
of the dispositions which prompt to it.

The fund from which saving can be made, is the surplus of
the produce of labor, after supplying the necessaries of life to
all concerned in the production (including those employed in
replacing the materials, and keeping the fixed capital in re-
pair). More than this surplus cannot be saved under any cir-
cumstances. As much as this, though it never is saved, always
might be. This surplus is the fund from which the enjoyments,
as distinguished from the necessaries of the producers, are
provided ; it is the fund from which all are subsisted, who are
not themselves engaged in production ; and from which all
additions are made to capital. It is the real net produce of the
country. The phrase, net produce, is often taken in a more
limited sense, to denote only the profits of the capitalist and the
rent of the landlord, under the idea that nothing can be included
in the net produce of capital, but what is returned to the owner
of the capital after replacing his expenses. But this is too nar-
row an acceptation of the term. The capital of the employer
forms the revenue of the laborers, and if this exceeds the neces-
saries of life, it gives them a surplus which they may either
expend in enjoyments or save. For every purpose for which
there can be occasion to speak of the net produce of industry,
this surplus ought to be included in it. When this is included,
and not otherwise, the net produce of the country is the meas-
ure of its effective power ; of what it can spare for any pur-

LAW OF THE INCREASE OF CAPITAL i6i

poses of public utility, or private indulgence ; the portion of
its produce of which it can dispose at pleasure ; which can be
drawn upon to attain any ends, or gratify any wishes, either
of the government or of individuals ; which it can either spend
for its satisfaction, or save for future advantage.

The amount of this fund, this net produce, this excess of pro-
duction above the physical necessaries of the producers, is one
of the elements that determine the amount of saving. The
greater the produce of labor after supporting the laborers, the
more there is which can be saved. The same thing also partly
contributes to determine how much will be saved. A part of
the motive to saving consists in the prospect of deriving an
income from savings ; in the fact that capital, employed in
production, is capable of not only reproducing itself but yield-
ing an increase. The greater the profit that can be made from
capital, the stronger is the motive to its accumulation. That
indeed which forms the inducement to save, is not the whole
of the fund which supplies the means of saving, not the whole
net produce of the land, capital, and labor of the country, but
only a part of it, the part which forms the remuneration of the
capitalist, and is called profit of stock. It will, however, be
readily enough understood, even previously to the explanations
which will be given hereafter, that when the general produc-
tiveness of labor and capital is great, the returns to the capitalist
are likely to be large, and that some proportion, though not a
uniform one, will commonly obtain between the two.

§ 2. But the disposition to save does not wholly depend on the
external inducement to it ; on the amount of profit to be made
from savings. With the same pecuniary inducement, the in-
clination is very different, in different persons, and in different
communities. The eifective desire of accumulation is of un-
equal strength, not only according to the varieties of indi-
vidual character, but to the general state of society and civili-
zation. Like all other moral attributes, it is one in which the
human race exhibits great differences, conformably to the
diversity of its circumstances and the stage of its progress.

On topics which if they were to be fully investigated would
exceed the bounds that can be allotted to them in this treatise,
it is satisfactory to be able to refer to other works in which the
necessary developments have been presented more at length.
On the subject of Population this valuable service has been
Vol. I.— II

l62

POLITICAL ECONOMY

rendered by the celebrated Essay of Mr. Malthus ; and on the
point which now occupies us I can refer with equal confidence
to another, though a less known work, " New Principles of
Political Economy," by Dr. Rae.* In no other book known to
me is so much light thrown, both from principle and history,
on the causes which determine the accumulation of capital.

All accumulation involves the sacrifice of a present, for the
sake of a future good. But the expediency of such a sacrifice
varies very much in different states of circumstances ; and the
willingness to make it, varies still more.

In weighing the future against the present, the uncertainty
of all things future is a leading element ; and that uncertainty
is of very different degrees. " All circumstances," therefore,
" increasing the probability of the provision we make for fu-
turity being enjoyed by ourselves or others, tend " justly and
reasonably " to give strength to the effective desire of accumu-
lation. Thus a healthy climate or occupation, by increasing
the probability of life, has a tendency to add to this desire.
When engaged in safe occupations, and living in healthy coun-
tries, men are much more apt to be frugal than in unhealthy
or hazardous occupations, and in climates pernicious to human
life. Sailors and soldiers are prodigals. In the West Indies,
New Orleans, the East Indies, the expenditure of the inhabi-
tants is profuse. The same people, coming to reside in the
healthy parts of Europe, and not getting into the vortex of ex-
travagant fashion, live economically. War and pestilence have
always waste and luxury among the other evils that follow in
their train. For similar reasons, whatever gives security to the
affairs of the community is favorable to the strength of this
principle. In this respect the general prevalence of law and
order, and the prospect of the continuance of peace and tran-

* This treatise is an example, such as
not unfrequently presents itself, how
much more depends on accident, than
on the qualities of a book, in determin-
ing its reception. Had it appeared at a
suitable time, and been favored by cir-
cumstances, it would have had every
requisite for great success. The author,
a Scotchman settled in the United
States, unites much knowledge, an orig-
inal vein of thought, a considerable
turn for philosophic generalities, and a
manner of exposition and illustration
calculated to make ideas tell not only
for what they are worth, but for more
than they are worth, and which some-
times, I think, has that effect in the
writer's own mind. The principal fault

of the book is the position of antagonism
in which, with the controversial spirit
apt to be found in those who have new
thoughts on old subjects, he has placed
himself towards Adam Smith. I call
this a fault (though I think many of the
criticisms just, and some of them far-
seeing), because there is much less real
difference of opinion than might be sup-
posed from Dr. Rae's animadversions;
and because what he has found vulner-
able in his great predecessor is chiefly
the " human too-much " in his prem-
ises; the portion of them that is over
and above what was either required or
is actually used for the establishment of
his conclusions.

LAW OF THE INCREASE OF CAPITAL 163

quilHty, have considerable influence." * The more perfect the
security, the greater will be the effective strength of the desire
of accumulation. Where property is less safe, or the vicissi-
tudes ruinous to fortunes are more frequent and severe, fewer
persons will save at all, and of those who do, many will require
the inducement of a higher rate of profit on capital, to make
them prefer a doubtful future to the temptation of present en-
joyment.

These are considerations which afifect the expediency, in the
eye of reason, of consulting future interests at the expense of
present. But the inclination to make this sacrifice does not
solely depend upon its expediency. The disposition to save is
often far short of what reason would dictate : and at other
times is liable to be in excess of it.

Deficient strength of the desire of accumulation may arise
from improvidence, or from want of interest in others. Im-
providence may be connected with intellectual as well as moral
causes. Individuals and communities of a very low state of
intelligence are always improvident. A certain measure of
intellectual development seems necessary to enable, absent
things, and especially things future, to act with any force on
the imagination and will. The effect of want of interest in
others in diminishing accumulation, will be admitted, if
we consider how much saving at present takes place, which
has for its object the interest of others rather, than of our-
selves ; the education of children, their advancement in life,
the future interests of other personal connections, the power
of promoting by the bestowal of money or time, objects of
public or private usefulness. If mankind were generally in
the state of mind to which some approach was seen in the
declining period of the Roman empire — caring nothing for
their heirs, as well as nothing for friends, the public, or any
object which survived them — they would seldom deny them-
selves any indulgence for the sake of saving, beyond what was
necessary for their own future years ; which they would place
in life annuities, or in some other form which would make its
existence and their lives terminate together.

§ 3. From these various causes, intellectual and moral, there
is, in different portions of the human race, a greater diversity
than is usually adverted to, in the strength of the effective de-

• Rae, p. 123.

i64 POLITICAL ECONOMY

sire of accumulation. A backward state of general civilization
is often more the effect of deficiency in this particular than
in many others which attract more attention. In the circum-
stances, for example, of a hunting tribe, " man may be said to
be necessarily improvident, and regardless of futurity, because,
in this state, the future presents nothing which can be with
certainty either foreseen or governed. . . . Besides a want
of the motives exciting to provide for the needs of futurity
through means of the abilities of the present, there is a want
of the habits of perception and action, leading to a constant
connection in the mind of those distant points, and of the series
of events serving to unite them. Even, therefore, if motives be
awakened capable of producing the exertion necessary to ef-
fect this connection, there remains the task of training the mind
to think and act so as to establish it."

For instance : " Upon the banks of the St. Lawrence there
are several little Indian villages. They are surrounded, in gen-
eral, by a good deal of land, from which the wood seems to
have been long extirpated, and have, besides, attached to them,
extensive tracts of forest. The cleared land is rarely, I may
almost say never, cultivated, nor are any inroads made in the
forest for such a purpose. The soil is, nevertheless, fertile, and
were it not, manure lies in heaps by their houses. Were every
family to inclose half an acre of ground, till it, and plant it in
potatoes and maize, it would yield a sufificiency to support them
one-half the year. They suffer, too, every now and then, ex-
treme want, insomuch that, joined to occasional intemperance,
it is rapidly reducing their numbers. This, to us, so strange
apathy proceeds not, in any great degree, from repugnance to
labor ; on the contrary, they apply very diligently to it when its
reward is immediate. Thus, besides their peculiar occupations
of hunting and fishing, in which they are ever ready to engage,
they are much employed in the navigation of the St. Lawrence,
and may be seen laboring at the oar, or setting with the pole,
in the large boats used for the purpose, and always furnish the
greater part of the additional hands necessary to conduct rafts
through some of the rapids. Nor is the obstacle aversion to
agricultural labor. This is no doubt a prejudice of theirs ; but
mere prejudices always yield, principles of action cannot be
created. When the returns from agricultural labor are speedy
and great, they are also agriculturists. Thus, some of the little

LAW OF THE INCREASE OF CAPITAL 165

islands on Lake St. Francis, near the Indian village of St.
Regis, are favorable to the growth of maize, a plant yielding a
return of a hundredfold, and forming, even when half ripe, a
pleasant and substantial repast. Patches of the best land on
these islands are, therefore, every year cultivated by them for
this purpose. As their situation renders them inaccessible to
cattle, no fence is required ; were this additional outlay neces-
sary, I suspect they would be neglected^ like the commons ad-
joining their village. These had apparently at one time, been
under crop. The cattle of the neighboring settlers would now,
however, destroy any crop not securely fenced, and this addi-
tional necessary outlay consequently bars their culture. It
removes them to an order of instruments of slower return than
that which corresponds to the strength of the effective desire
of accumulation in this little society,

" It is here deserving of notice, that what instruments of this
kind they do form, are completely formed. The small spots of
corn they cultivate are thoroughly weeded and hoed. A little
neglect in this part would indeed reduce the crop very much ;
of this experience has made them perfectly aware, and they act
accordingly. It is evidently not the necessary labor that is the
obstacle to more extended culture, but the distant return from
that labor. I am assured, indeed, that among some of the more
remote tribes, the labor thus expended much exceeds that
given by the whites. The same portions of ground being
cropped without remission, and manure not being used, they
would scarcely yield any return, were not the soil most carefully
broken and pulverized, both with the hoe and the hand. In
such a situation a white man would clear a fresh piece of
ground. It would perhaps scarce repay his labor the first year,
and he would have to look for his reward in succeeding years.
On the Indian, succeeding years are too distant to make suffi-
cient impression ; though, to obtain what labor may bring
about in the course of a few months, he toils even more assid-
uously than the white man." *

This view of things is confirmed by the experience of the
Jesuits, in their interesting efforts to civilize the Indians of
Paraguay. They gained the confidence of these savages in a
most extraordinary degree. They acquired influence over
them sufficient to make them change their whole manner of life.

• Rae, p. 136.

i66 POLITICAL ECONOMY

They obtained their absolute submission and obedience. They
established peace. They taught them all the operations of
European agriculture, and many of the more difficult arts.
There were everywhere to be seen, according to Charlevoix,
" workshops of gilders, painters, sculptors, goldsmiths, watch-
makers, carpenters, joiners, dyers," etc. These occupations
were not practised for the personal gain of the artificers : the
produce was at the absolute disposal of the missionaries, who
ruled the people by a voluntary despotism. The obstacles
arising from aversion to labor were therefore very completely
overcome. The real difficulty was the improvidence of the peo-
ple ; their inability to think for the future ; and the necessity
accordingly of the most unremitting and minute superinten-
dence on the part of their instructors. " Thus at first, if these
gave up to them the care of the oxen with which they ploughed,
their indolent thoughtlessness would probably leave them at
evening still yoked to the implement. Worse than this, in-
stances occurred where they cut them up for supper, thinking,
when reprehended, that they sufficiently excused themselves
by saying they were hungry. . . . These fathers, says Ulloa,
have to visit the houses, to examine what is really wanted:
for, without this care, the Indians would never look after any-
thing. They must be present, too, when animals are slaugh-
tered, not only that the meat may be equally divided, but that
nothing may be lost." " But notwithstanding all this care and
superintendence," says Charlevoix, " and all the precautions
which are taken to prevent any want of the necessaries of life,
the missionaries are sometimes much embarrassed. It often
happens that they " (the Indians) " do not reserve to themselves
a sufficiency of grain, even for seed. As for their other provi-
sions, were they not well looked after, they would soon be with-
out wherewithal to support life." *

As an example intermediate, in the strength of the eflfective
desire of accumulation, between the state of things thus de-
picted and that of modern Europe, the case of the Chinese de-
serves attention. From various circumstances in their per-
sonal habits and social condition, it might be anticipated that
they would possess a degree of prudence and self-control
greater than other Asiatics, but inferior to most European na-
tions ; and the following evidence is adduced of the fact :

* Rae, p. 140.

LAW OF THE INCREASE OF CAPITAL 167

" Durability is one of the chief qualities, marking a high de-
gree of the effective desire of accumulation. The testimony
of travellers ascribes to the instruments formed by the Chinese
a very inferior durability to similar instruments constructed
by Europeans. The houses, we are told, unless of the higher
ranks, are in general of unburnt bricks, of clay, or of hurdles
plastered with earth ; the roofs, of reeds fastened to laths. We
can scarcely conceive more unsubstantial or temporary fabrics.
Their partitions are of paper, requiring to be renewed every
year. A similar observation may be made concerning their
implements of husbandry, and other utensils. They are almost
entirely of wood, the metals entering but very sparingly mto
their construction ; consequently they soon wear out, and re-
quire frequent renewals. A greater degree of strength in the
effective desire of accumulation, would cause them to be con-
structed of materials requiring a greater present expenditure,
but being far more durable. From the same cause, much land,
that in other countries would be cultivated, lies waste. All
travellers take notice of large tracts of lands, chiefly swamps,
which continue in a state of nature. To bring a swamp into
tillage is generally a process, to complete which, requires sev-
eral years. It must be previously drained, the surface long
exposed to the sun, and many operations performed, before it
can be made capable of bearing a crop. Though yielding,
probably, a very considerable return for the labor bestowed on
it, that return it not made until a long time has elapsed. The
cultivation of such land implies a greater strength of the effec-
tive desire of accumulation than exists in the empire.

" The produce of the harvest is, as we have remarked, always
an instrument of some order or another ; it is a provision for
future want, and regulated by the same laws as those to which
other means of attaining a similar end conform. It is there
chiefly rice, of which there are two harvests, the one in June,
the other in October. The period then of eight months be-
tween October and June, is that for which provision is made
each year, and the different estimate they make of to-day and
this day eight months will appear in the self-denial they prac-
tise now, in order to guard against want then. The amount of
this self-denial would seem to be small. The father Parennin,
indeed, (who seems to have been one of the most intelligent of
the Jesuits, and spent a long life among the Chinese of all

i68 POLITICAL ECONOMY

classes,) asserts, that it is their great deficiency in forethought
and frugality in this respect, which is the cause of the scarcities
and famines that frequently occur."

That it is defect of providence, not defect of industry, that
limits production among the Chinese, is still more obvious than
in the case of the semi-agriculturalized Indians. " Where the
returns are quick, where the instruments formed require but
little time to bring the events for which they were formed to
an issue," it is well known that " the great progress which has
been made in the knowledge of the arts suited to the nature of
the country and the wants of its inhabitants " makes industry
energetic and effective. " The warmth of the climate, the natu-
ral fertility of the country, the knowledge which the inhabi-
tants have acquired of the arts of agriculture, and the discovery
and gradual adaptation to every soil of the most useful vege-
table productions, enable them very speedily to draw from al-
most any part of the surface, what is there esteemed an equiva-
lent to much more than the labor bestowed in tilling and
cropping it. They have commonly double, sometimes treble har-
vests. These, when they consist of a grain so productive as
rice, the usual crop, can scarce fail to yield to their skill, from
almost any portion of soil that can be at once brought into
culture, very ample returns. Accordingly there is no spot that
labor can immediately bring under cultivation that is not made
to yield to it. Hills, even mountains are ascended and formed
into terraces ; and water, in that country the great productive
agent, is led to every part by drains, or carried up to it by
the ingenious and simple hydraulic machines which have been
in use from time immemorial among this singular people.
They efifect this the more easily, from the soil, even in these
situations, being very deep and covered with much vegetable
mould. But what yet more than this marks the readiness with
which labor is forced to form the most difficult materials into
instruments, where these instruments soon bring to an issue
the events for which they are formed, is the frequent occurrence
on many of their lakes and rivers, of structures resembling the
floating gardens of the Peruvians, rafts covered with vegetable
soil and cultivated. Labor in this way draws from the materials
on which it acts very speedy returns. Nothing can exceed the
luxuriance of vegetation when the quickening powers of a
genial sun are ministered to by a rich soil and abundant mois-

LAW OF THE INCREASE OF CAPITAL 169

ture. It is otherwise, as we have seen, in cases where the re-
turn, though copious, is distant. European travellers are sur-
prised at meeting these httle floating farms by the side of
swamps which only require draining to render them tillable.
It seems to them strange that labor should not rather be be-
stowed on the solid earth, where its fruits might endure, than
on structures that must decay and perish in a few years. The
people they are among think not so much of future years, as
of the present time. The effective desire of accumulation is of
very dififerent strength in the one, from what it is in the other.
The views of the European extend to a distant futurity, and he
is surprised at the Chinese, condemned, through improvidence,
and want of sufficient prospective care, to incessant toil, and as
he thinks, insufiferable wretchedness. The views of the Chinese
are confined to narrower bounds ; he is content to live from
day to day, and has learnt to conceive even a life of toil a
blessing." *

When a country has carried production as far as in the ex-
isting state of knowledge it can be carried with an amount of
return corresponding to the average strength of the effective
desire of accumulation in that country, it has reached what is
called the stationary state ; the state in which no further addi-
tion will be made to capital unless there takes place either some
improvement in the arts of production, or an increase in the
strength of the desire to accumulate. In the stationary state,
though capital does not on the whole increase, some persons
grow richer and others poorer. Those whose degree of provi-
dence is below the usual standard, become impoverished, their
capital perishes, and makes room for the savings of those
whose effective desire of accumulation exceeds the average.
These become the natural purchasers of the land, manufac-
tories, and other instruments of production owned by their
less provident countrymen.

What the causes are which make the return to capital greater
in one country than in another, and which, in certain circum-
stances, make it impossible for any additional capital to find
investment unless at diminished returns, will appear clearly
hereafter. In China, if that country has really attained, as it
is supposed to have done, the stationary state, accumulation has
stopped when the returns to capital are still as high as is indi-

* Rae, pp. 151—5.

I70 POLITICAL ECONOMY

cated by a rate of interest legally twelve per cent., and practi-
cally varying (it is said) between eighteen and thirty-six. It
is to be presumed therefore that no greater amount of capital
than the country already possesses, can find employment at this
high rate of profit, and that any lower rate does not hold out
to a Chinese sufficient temptation to induce him to abstain from
present enjoyment. What a contrast with Holland, where,
during the most flourishing period of its history, the govern-
ment was able habitually to borrow at two per cent., and private
individuals, on good security, at three. Since China is not a
country like Burmah, or the native states of India, where an
enormous interest is but an indispensable compensation for the
risk incurred from the bad faith or poverty of the state, and
of almost all private borrowers ; the fact, if fact it be, that the
increase of capital has come to a stand while the returns to it are
still so large, denotes a much less degree of the effective de-
sire of accumulation, in other words a much lower estimate
of the future relatively to the present, than that of most Euro-
pean nations.

§ 4. We have hitherto spoken of countries in which the aver-
age strength of the desire to accumulate is short of that which,
in circumstances of any tolerable security, reason and sober
calculation would approve. We have now to speak of others
in which it decidedly surpasses that standard. In the more
prosperous countries of Europe, there are to be found abun-
dance of prodigals; in some of them (and in none more than
England) the ordinary degree of economy and providence
among those who live by manual labor cannot be considered
high ; still, in a very numerous portion of the community, the
professional, manufacturing, and trading classes, being those
who, generally speaking, unite more of the means with more
of the motives for saving than any other class, the spirit of
accumulation is so strong, that the signs of rapidly increasing
wealth meet every eye : and the great amount of capital seeking
investment excites astonishment, whenever peculiar circum-
stances turning much of it into some one channel, such as rail-
way construction or foreign speculative adventure, bring the
largeness of the total amount into evidence.

There are many circumstances, which, in England, give a
peculiar force to the accumulating propensity. The long ex-
emption of the country from the ravages of war, and the far

LAW OF THE INCREASE OF CAPITAL

171

earlier period than elsewhere at which property was secure from
military violence or arbitrary spoliation, have produced a long-
standing and hereditary confidence in the safety of funds when
trusted out of the owner's hands, which in most other countries
is of much more recent origin, and less firmly established. The
geographical causes which have made industry rather than war
the natural source of power and importance to Great Britain,
have turned an unusual proportion of the most enterprising
and energetic characters into the direction of manufactures and
commerce ; into supplying their wants and gratifying their
ambition by producing and saving, rather than by appropriating
what has been produced and saved. Much also depended on
the better political institutions of this country, which by the
scope they have allowed to individual freedom of action, have
encouraged personal activity and self-reliance, while by the lib-
erty they confer of association and combination, they facilitate
industrial enterprise on a large scale. The same institutions
in another of their aspects, give a most direct and potent stim-
ulus to the desire of acquiring wealth. The earlier decline of
feudalism having removed or much weakened invidious dis-
tinctions between the originally trading classes and those who
had been accustomed to despise them; and a polity having
grown up which made wealth the real source of political influ-
ence ; its acquisition was invested with a factitious value, inde-
pendent of its intrinsic utility. It became synonymous with
power; and since power with the common herd of mankind
gives power, wealth became the chief source of personal con-
sideration, and the measure and stamp of success in life. To
get out of one rank in society into the next above it, is the great
aim of English middle-class life, and the acquisition of wealth
the means. And inasmuch as to be rich without industry, has
always hitherto constituted a step in the social scale above those
who are rich by means of industry, it becomes the object of
ambition to save not merely as much as will afford a large in-
come while in business, but enough to retire from business and
live in affluence on realized gains. These causes have in Eng-
land been greatly aided by that extreme incapacity of the people
for personal enjoyment, which is a characteristic of countries
over which Puritanism has passed. But if accumulation is, on
one hand, rendered easier by the a1)scnce of a taste for pleasure,
it is, on the other, made more difficult by the presence of a

172 POLITICAL ECONOMY

very real taste for expense. So strong is the association be-
tween personal consequence and the signs of wealth, that the
silly desire for the appearance of a large expenditure has the
force of a passion, among large classes of a nation which derive
less pleasure than perhaps any other in the world from what
it spends. Owing to this circumstance, the effective desire of
accumulation has never reached so high a pitch in England as
it did in Holland, where, there being no rich idle class to set
the example of a reckless expenditure, and the mercantile
classes, who possessed the substantial power on which social
influence always waits, being left to establish their own scale
of living and standard of propriety, their habits remained frugal
and unostentatious.

In England and Holland, then, for a long time past, and now
in most other countries in Europe (which are rapidly following
England in the same race), the desire of accumulation does not
require, to make it effective, the copious returns which it re-
quires in Asia, but is sufficiently called into action by a rate of
profit so low, that instead of slackening, accumulation seems
now to proceed more rapidly than ever ; and the second requisite
of increased production, increase of capital, shows no tendency
to become deficient. So far as that element is concerned, pro-
duction is susceptible of an increase without any assignable
bounds.

The progress of accumulation would no doubt be considerably
checked, if the returns to capital were to be reduced still lower
than at present. But why should any possible increase of capital
have that effect? This question carries the mind forward to
the remaining one of the three requisites of production. The
limitation to production, not consisting in any necessary limit
to the increase of the other two elements, labor and capital,
must turn upon the properties of the only element which is in-
herently, and in itself, limited in quantity. It must depend on
the properties of land.

CHOICE EXAMPLES OF EARLY PRINTING AND

ENGRAVING.

Fac-similes from Rare and Curious Books.

TITLE-PAGE BY HO LEE FN.

This is a fac-simile ol' a title-page that was designed for an edition of the New
Testament printed by Adam Petri in 1523 ; and though it does not bear either name
or initials, its authorship is unmistakable.

LAW OF INCREASE OF PRODUCTION FROM LAND

173

Chapter XII. — Of the Law of the Increase of Production from

Land

§ I. Land differs from the other elements of production, labor
and capital, in not being susceptible of indefinite increase. Its
extent is limited, and the extent of the more productive kinds
of it more limited still. It is also evident that the quantity of
produce capable of being raised on any given piece of land is
not indefinite. This limited quantity of land, and limited pro-
ductiveness of it, are the real limits to the increase of production.

That they are the ultimate limits, must always have been
clearly seen. But since the final barrier has never in any in-
stance been reached ; since there is no country in which all the
land, capable of yielding food, is so highly cultivated that a
larger produce could not (even without supposing any fresh
advance in agricultural knowledge) be obtained from it, and
since a large portion of the earth's surface still remains entirely
uncultivated ; it is commonly thought, and is very natural at
first to suppose, that for the present all limitation of production
or population from this source is at an indefinite distance, and
that ages must elapse before any practical necessity arises for
taking the limiting principle into serious consideration.

I apprehend this to be not only an error, but the most serious
one, to be found in the whole field of political economy. The
question is more important and fundamental than any other;
it involves the whole subject of the causes of poverty, in a rich
and industrious community ; and unless this one matter be
thoroughly understood, it is to no purpose proceeding any fur-
ther in our inquiry.

§ 2. The limitation to production from the properties of the
soil, is not like the obstacle opposed by a wall, which stands
immovable in one particular spot, and offers no hindrance to
motion short of stopping it entirely. We may rather compare
it to a highly clastic and extensible band, which is hardly ever
so violently stretched that it could not possibly be stretched any
more, yet the pressure of which is felt long before the final limit
is reached, and felt more severely the nearer that limit is ap-
proached.

After a certain, and not very advanced, stage in the progress
of agriculture, it is the law of production from the land, that
in any given state of agricultural skill and knowledge, by in-

174 POLITICAL ECONOMY

creasing the labor, the produce is not increased in an equal
degree ; doubling the labor does not double the produce ; or,
to express the same thing in other words, every increase of
produce is obtained by a more than proportional increase in the
application of labor to the land.

This general law of agricultural industry is the most impor-
tant proposition in political economy. Were the law different,
nearly all the phenomena of the production and distribution of
wealth would be other than they are. The most fundamental
errors which still prevail on our subject, result from not per-
ceiving this law at work underneath the more superficial agen-
cies on which attention fixes itself ; but mistaking these agencies
for the ultimate causes of efifects of which they may influence
the form and mode, but of which it alone determines the essence.

When, for the purpose of raising an increase of produce, re-
course is had to inferior land, it is evident that, so far, the
produce does not increase in the same proportion with the labor.
The very meaning of inferior land, is land which with equal
labor returns a smaller amount of produce. Land may be
inferior either in fertility or in situation. The one requires
a greater proportional amount of labor for growing the pro-
duce, the other for carrying it to market. If the land A yields
a thousand quarters of wheat, to a given outlay in wages,
manure, etc., and in order to raise another thousand recourse
must be had to the land B, which is either less fertile or more
distant from the market, the two thousand quarters will cost
more than twice as much labor as the original thousand, and
the produce of agriculture will be increased in a less ratio than
the labor employed in procuring it.

Instead of cultivating the land B, it would be possible, by
higher cultivation, to make the land A produce more. It might
be ploughed or harrowed twice instead of once, or three times
instead of twice ; it might be dug instead of being ploughed ;
after ploughing, it might be gone over with a hoe instead of
a harrow, and the soil more completely pulverized ; it might be
oftener or more thoroughly weeded ; the implements used might
be of higher finish, or more elaborate construction ; a greater
quantity or more expensive kinds of manure might be applied,
or when applied, they might be more carefully mixed and incor-
porated with the soil. These are some of the modes by which
the same land may be made to yield a greater produce; and

LAW OF INCREASE OF PRODUCTION FROM LAND 175

when a greater produce must be had, some of these are among
the means usually employed for obtaining it. But, that it is
obtained at a more than proportional increase of expense, is evi-
dent from the fact that inferior lands are cultivated. Inferior
lands, or lands at a greater distance from the market, of course
yield an inferior return, and an increasing demand cannot be
supplied from them unless at an augmentation of cost, and there-
fore of price. If the additional demand could continue to be
supplied from the superior lands, by applying additional labor
and capital, at no greater proportional cost than that at which
they yield the quantity first demanded of them, the owners or
farmers of those lands could undersell all others, and engross
the whole market. Lands of a lower degree of fertility or in
a more remote situation, might indeed be cultivated by their
proprietors, for the sake of subsistence or independence ; but it
never could be the interest of anyone to farm them for profit.
That a profit can be made from them, sufficient to attract capital
to such an investment, is a proof that cultivation on the more
eligible lands has reached a point, beyond which any greater
application of labor and capital would yield, at the best, no
greater return than can be obtained at the same expense from
less fertile or less favorably situated lands.

The careful cultivation of a well-farmed district of England
or Scotland is a symptom and an effect of the more unfavorable
terms which the land has begun to exact for any increase of its
fruits. Such elaborate cultivation costs much more in propor-
tion, and requires a higher price to render it profitable, than
farming on a more superficial system ; and would not be
adopted if access could be had to land of equal fertility, pre-
viously unoccupied. Where there is the choice of raising the
increasing supply which society requires, from fresh land of
as good quality as that already cultivated, no attempt is made
to extract from land anything approaching to what it will yield
on what are esteemed the best European modes of cultivating.
The land is tasked up to the point at which the greatest return
is obtained in proportion to the labor employed, but no further :
any additional labor is carried elsewhere. " It is long," says an
intelligent traveller in the United States,* " before an English
eye becomes reconciled to the lightness of the crops and the

•"Letters from America." by Jolin " T. yell's Travels in America," vol. ii.
Robert Godley, vol. i. p. 42. See also p. 83.

176 POLITICAL ECONOMY

careless farming (as we should call it) which is apparent. One
forgets that where land is so plentiful and labor so dear as it
is here, a totally different principle must be pursued to that
which prevails in populous countries, and that the consequences
will of course be a want of tidiness, as it were, and finish, about
everything which requires labor." Of the two causes mentioned,
the plentifulness of land seems to me the true explanation, rather
than the dearness of labor; for, however dear labor may be,
when food is wanted, labor will always be applied to producing
it in preference to anything else. But this labor is more effec-
tive for its end by being applied to fresh soil, than if it were
employed in bringing the soil already occupied into higher cul-
tivation. Only when no soils remain to be broken up but such
as either from distance or inferior quality require a consider-
able rise of price to render their cultivation profitable, can it
become advantageous to apply the high farming of Europe to
any American lands ; except, perhaps, in the immediate vicinity
of towns, where saving in cost of carriage may compensate for
great inferiority in the return from the soil itself. As American
farming is to English, so is the ordinary English to that of
Flanders, Tuscany, or the Terra di Lavoro ; where by the
application of a far greater quantity of labor there is obtained
a considerably larger gross produce, but on such terms as would
never be advantageous to a mere speculator for profit, unless
made so by much higher prices of agricultural produce.

The principle which has now been stated must be received,
no doubt, with certain explanations and limitations. Even after
the land is so highly cultivated that the mere application of
additional labor, or of an additional amount of ordinary dress-
ing, would yield no return proportioned to the expense, it may
still happen that the application of a much greater additional
labor and capital to improving the soil itself, by draining or
permanent manures, would be as liberally remunerated by the
produce, as any portion of the labor and capital already em-
ployed. It would sometimes be much more amply remunerated.
This could not be, if capital always sought and found the most
advantageous employment; but if the most advantageous em-
ployment has to wait longest for its remuneration, it is only
in a rather advanced stage of industrial development that the
preference will be given to it ; and even in that advanced stage,
the laws or usages connected with property in land and the

LAW OF INCREASE OF PRODUCTION FROM LAND 177

tenure of farms, are often such as to prevent the disposable
capital of the country from flowing freely into the channel of
agricultural improvement : and hence the increased supply, re-
quired by increasing population, is sometimes raised at an aug-
menting cost by higher cultivation, when the means of produc-
ing it without increase of cost are known and accessible. There
can be no doubt, that if capital were forthcoming to execute,
within the next year, all known and recognized improvements
in the land of the United Kingdom which would pay at the
existing prices, that is, which would increase the produce in
as great or a greater ratio than the expense ; the result would
be such (especially if we include Ireland in the supposition)
that inferior land would not for a long time require to be
brought under tillage : probably a considerable part of the less
productive lands now cultivated, which are not particularly
favored by situation, would go out of culture; or (as the im-
provements in question are not so much applicable to good
land, but operate rather by converting bad land into good) the
contraction of cultivation might principally take place by a less
high dressing and less elaborate tilling of land generally; a
falling back to something nearer the character of American
farming; such only of the poor lands being altogether aban-
doned as were not found susceptible of improvement. And
thus the aggregate produce of the whole cultivated land would
bear a larger proportion than before to the labor expended
on it ; and the general law of diminishing return from land
would have undergone, to that extent, a temporary superses-
sion. No one, however, can suppose that even in these circum-
stances, the whole produce required for the country could be
raised exclusively from the best lands, together with those pos-
sessing advantages of situation to place them on a par with the
best. Much would undoubtedly continue to be produced under
less advantageous conditions, and with a smaller proportional
return, than that obtained from the best soils and situations.
And in proportion as the further increase of population re-
quired a still greater addition to the supply, the general law
would resume its course, and the further augmentation would
be obtained at a more than proportionate expense of labor and
capital.

§ 3. That the produce of land increases, cccteris paribus, in
a diminishing ratio to the increase in the labor employed, is a
Vol. I. — 12

178 POLITICAL ECONOMY

truth more often ignored or disregarded than actually denied.
It has, however, met with a direct impugner in the well-known
American political economist, Mr. H. C. Carey, who maintains,
that the real law of agricultural industry is the very reverse;
the produce increasing in a greater ratio than the labor, or in
other words, affording to labor a perpetually increasing return.
To substantiate this assertion, he argues, that cultivation does
not begin with the better soils, and extend from them, as the
demand increases, to the poorer, but begins with the poorer,
and does not, till long after, extend itself to the more fertile.
Settlers in a new country invariably commence on the high and
thin lands ; the rich but swampy soils of the river bottoms
cannot at first be brought into cultivation, by reason of their
unhealthiness, and of the great and prolonged labor required
for clearing and draining them. As population and wealth
increase, cultivation travels down the hillsides, clearing them
as it goes, and the most fertile soils, those of the low grounds,
are generally (he even says universally) the latest cultivated.
These propositions, with the inferences which Mr. Carey draws
from them, are set forth at much length in his latest and most
elaborate treatise, " Principles of Social Science " ; and he
considers them as subverting the very foundation of what he
calls the English political economy, with all its practical con-
sequences, especially the doctrine of free trade.

As far as words go, Mr. Carey has a good case against several
of the highest authorities in political economy, who certainly
did enunciate in too universal a manner the law which they
laid down, not remarking that it is not true of the first cultiva-
tion in a newly settled country. Where population is thin and
capital scanty, land which requires a large outlay to render it
fit for tillage must remain untilled ; though such lands, when
their time has come, often yield a greater produce than those
earlier cultivated, not only absolutely, but proportionally to
the labor employed, even if we include that which had been
expended in originally fitting them for culture. But it is not
pretended that the law of diminishing return was operative
from the very beginning of society ; and though some political
economists may have believed it to come into operation earlier
than it does, it begins quite early enough to support the con-
clusions they founded on it. Mr. Carey will hardly assert that
in any old country — in England and France, for example —

LAW OF INCREASE OF PRODUCTION FROM LAND 179

the lands left waste are, or have for centuries been, more nat-
urally fertile than those under tillage. Judging even by his
own imperfect test, that of local situation — how imperfect, I
need not stop to point out — is it true that in England or France
at the present day, the uncultivated part of the soil consists
of the plains and valleys, and the cultivated of the hills ? Every-
one knows, on the contrary, that it is the high lands and thin
soils which are left to nature; and when the progress of pop-
ulation demands an increase of cultivation, the extension is from
the plains to the hills. Once in a century, perhaps, a Bedford
Level may be drained, or a Lake of Harlem pumped out ; but
these are slight and transient exceptions to the normal progress
of things ; and in old countries which are at all advanced in
civilization, little of this sort remains to be done.*

Mr. Carey himself unconsciously bears the strongest testi-
mony to the reality of the law he contends against ; for one
of the propositions most strenuously maintained by him is,
that the raw products of the soil, in an advancing community,
steadily tend to rise in price. Now, the most elementary truths
of political economy show that this could not happen, unless
the cost of production, measured in labor, of those products,
tended to rise. If the application of additional labor to the land
was, as a general rule, attended with an increase in the propor-
tional return, the price of produce, instead of rising, must
necessarily fall as society advances, unless the cost of production
of gold and silver fell still more : a case so rare, that there are
only two periods in all history when it is known to have taken
place : the one, that which followed the opening of the Mexican
and Peruvian mines; the other, that in which we now live.
At all known periods except these two, the cost of production
of the precious metals has been either stationary or rising. If,
therefore, it be true that the tendency of agricultural produce
is to rise in money price as wealth and population increase,
there needs no other evidence that the labor required for raising
it from the soil tends to augment when a greater quantity is
demanded.

I do not go so far as Mr. Carey: I do not assert that the

* Ireland may be alleged as an excej?- ward one. Neither is it at all certain

tion. a large fraction nf the entire soil that the bogs of Ireland, if drained and

of that country being still incnpable of brought under tillage, would take their

cultivation for want of drainage. Hut, place along with Mr. Carey's fertile river

though Ireland is an old country, tin- bottoms, or among any but the poorer

fortunate social and political circum- soils,
stances have kept it a poor and back-

i8o POLITICAL ECONOMY

cost of production and consequently the price, of agricultural
produce, always and necessarily rises as population increases.
It tends to do so, but the tendency may be, and sometimes is,
even during long periods, held in check. The effect does not
depend on a single principle, but on two antagonizing prin-
ciples. There is another agency, in habitual antagonism to the
law of diminishing return from land ; and to the consideration
of this we shall now proceed. It is no other than the progress
of civilization. I use this general and somewhat vague ex-
pression, because the things to be included are so various, that
hardly any term of a more restricted signification would com-
prehend them all.

Of these, the most obvious is the progress of agricultural
knowledge, skill, and invention. Improved processes of agri-
culture are of two kinds : some enable the land to yield a greater
absolute produce, without an equivalent increase of labor ; oth-
ers have not the power of increasing the produce, but have that
of diminishing the labor and expense by which it is obtained.
Among the first are to be reckoned the disuse of fallows, by
means of the rotation of crops ; and the introduction of new
articles of cultivation capable of entering advantageously into
the rotation. The change made in British agriculture toward
the close of the last century, by the introduction of turnip hus-
bandry, is spoken of as amounting to a revolution. These im-
provements operate not only by enabling the land to produce
a crop every year instead of remaining idle one year in every
two or three to renovate its powers, but also by direct increase
of its productiveness ; since the great addition made to the num-
ber of cattle by the increase of their food, affords more abun-
dant manure to fertilize the corn lands. Next in order comes
the introduction of new articles of food containing a greater
amount of sustenance, like the potato, or more productive spe-
cies or varieties of the same plant, such as the Swedish turnip.
In the same class of improvements must be placed a better
knowledge of the properties of manures, and of the most effec-
tual modes of applying them ; the introduction of new and
more powerful fertilizing agents, such as guano, and the con-
version to the same purpose, of substances previously wasted;
inventions like subsoil-ploughing or tile-draining; improve-
ments in the breed or feeding of laboring cattle ; augmented
stock of the animals which consume and convert into human

LAW OF INCREASE OF PRODUCTION FROM LAND i8i

food what would otherwise be wasted ; and the like. The other
sort of improvements, those which diminish labor, but without
increasing the capacity of the land to produce, are such as the
improved construction of tools; the introduction of new in-
struments which spare manual labor, as the winnowing and
threshing machines ; a more skilful and economical application
of muscular exertion, such as the introduction, so slowl)^ ac-
complished in England, of Scotch ploughing, with two horses
abreast and one man, instead of three or four horses in a team
and two men, etc. These improvements do not add to the pro-
ductiveness of the land, but they are equally calculated with
the former to counteract the tendency in the cost of production
of agricultural produce, to rise with the progress of population
and demand.

Analogous in effect to this second class of agricultural im-
provements, are improved means of communication. Good
roads are equivalent to good tools. It is of no consequence
whether the economy of labor takes place in extracting the pro-
duce from the soil, or in conveying it to the place where it is
to be consumed. Not to say in addition, that the labor of cul-
tivation itself is diminished by whatever lessens the cost of
bringing manure from a distance, or facilitates the many opera-
tions of transport from place to place which occur within the
bounds of the farm. Railways and canals are virtually a dimi-
nution of the cost of production of all things sent to market by
them ; and literally so of all those, the appliances and aids for
producing which, they serve to transmit. By their means land
can be cultivated, which would not otherwise have remuner-
ated the cultivators without a rise of price. Improvements in
navigation have, with respect to food or materials brought from
beyond sea, a corresponding effect.

From similar considerations, it appears that many purely
mechanical improvements, which have, apparently at least, no
peculiar connection with agriculture, nevertheless enable a given
amount of food to be obtained with a smaller expenditure of
labor. A great improvement in the process of melting iron,
would tend to cheapen agricultural implements, diminish the
cost of railroads, of wagons and carts, ships, and perhaps build-
ings, and many other things to which iron is no<: at present
applied, because it is too costly ; and would thence diminish
the cost of production of food. The same effect would follow

i82 POLITICAL ECONOMY

from an improvement in those processes of what may be termed
manufacture, to which the material of food is subjected after
it is separated from the ground. The first appHcation of wind
or water power to grind corn, tended to cheapen bread as much
as a very important discovery in agricuhure would have done ;
and any great improvement in the construction of corn-mills,
would have, in proportion, a similar influence. The effects of
cheapening locomotion have been already considered. There are
also engineering inventions which facilitate all great operations
on the earth's surface. An improvement in the art of taking
levels is of importance to draining, not to mention canal and
railway making. The fens of Holland, and of some parts of
England, are drained by pumps worked by the wind or by steam.
Where canals of irrigation, or where tanks or embankments are
necessary, mechanical skill is a great resource for cheapening
production.

Those manufacturing improvements which cannot be made
instrumental to facilitate, in any of its stages, the actual pro-
duction of food, and therefore do not help to counteract or
retard the diminution of the proportional return to labor from
the soil, have, however, another effect, which is practically
equivalent. What they do not prevent, they yet, in some degree,
compensate for.

The materials of manufactures being all drawn from the land,
and many of them from agriculture, which supplies in particu-
lar the entire material of clothing ; the general law of produc-
tion from the land, the law of diminishing return, must in the
last resort be applicable to manufacturing as well as to agri-
cultural industry. As population increases, and the power of
the land to yield increased produce is strained harder and
harder, any additional supply of material, as well as of food,
must be obtained by a more than proportionally increasing ex-
penditure of labor. But the cost of the material forming gen-
erally a very small portion of the entire cost of the manufacture,
the agricultural labor concerned in the production of manu-
factured goods is but a small fraction of the whole labor worked
up in the commodity. All the rest of the labor tends con-
stantly and strongly toward diminution, as the amount of pro-
duction increases. Manufactures are vastly more susceptible
than agriculture, of mechanical improvements, and contrivances
for saving labor ; and it has already been seen how greatly the

LAW OF INCREASE OF PRODUCTION FROM LAND 183

division of labor, and its skilful and economical distribution,
depend on the extent of the market, and on the possibility of
production in large masses. In manufactures, accordingly, the
causes tending to increase the productiveness of industry, pre-
ponderate greatly over the one cause which tends to diminish it :
and the increase of production, called forth by the progress of
society, takes place, not at an increasing, but at a continually
diminishing proportional cost. This fact has manifested itself
in the progressive fall of the prices and values of almost every
kind of manufactured goods during two centuries past ; a fall
accelerated by the mechanical inventions of the last seventy or
eighty years, and susceptible of being prolonged and extended
beyond any limit which it would be safe to specify.

Now it is quite conceivable that the efficiency of agricultural
labor might be undergoing, with the increase of produce, a
gradual diminution; that the price of food, in consequence,
might be progressively rising, and an ever growing proportion
of the population might be needed to raise food for the whole ;
while yet the productive power of labor in all other branches
of industry might be so rapidly augmented, that the required
amount of labor could be spared from manufactures, and never-
theless a greater produce be obtained, and the aggregate wants
of the community be on the whole better supplied, than before.
The benefit might even extend to the poorest class. The in-
creased cheapness of clothing and lodging might make up to
them for the augmented cost of their food.

There is, thus, no possible improvement in the arts of pro-
duction which does not in one or another mode exercise an
antagonistic influence to the law of diminishing return to agri-
cultural labor. Nor is it only industrial improvements which
have this efifect. Improvements in government, and almost
every kind of moral and social advancement, operate in the
same manner. Suppose a country in the condition of France
before the Revolution: taxation imposed almost exclusively
on the industrious classes, and on such a principle as to be an
actual penalty on production ; and no redress obtainable for
any injury to property or person, when inflicted by people of
rank or court influence. Was not the hurricane which swept
away this system of things, even if we look no further than to
its efifcct in augmenting the productiveness of labor, equivalent
to manv industrial inventions ? The removal of a fiscal burthen

i84 POLITICAL ECONOMY

on agriculture, such as tithe, has the same effect as if the labor
necessary for obtaining the existing produce were suddenly
reduced one-tenth. The abolition of corn laws, or of any other
restrictions which prevent commodities from being produced
where the cost of their production is lowest, amounts to a vast
improvement in production. When fertile land, previously re-
served as hunting ground, or for any other purpose of amuse-
ment, is set free for culture, the aggregate productiveness of
agricultural industry is increased. It is well known what has
been the effect in England of badly administered poor laws,
and the still worse effect in Ireland of a bad system of tenancy,
in rendering agricultural labor slack and ineffective. No im-
provements operate more directly upon the productiveness of
labor than those in the tenure of farms, and in the laws relating
to landed property. The breaking up of entails, the cheapening
of the transfer of property, and whatever else promotes the
natural tendency of land in a system of freedom, to pass out of
hands which can make little of it into those which can make
more ; the substitution of long leases for tenancy at will, and
of any tolerable system of tenancy whatever for the wretched
cottier system ; above all, the acquisition of a permanent in-
terest in the soil by the cultivators of it ; all these things are
as real, and some of them as great, improvements in production,
as the invention of the spinning jenny or the steam engine.

We may say the same of improvement in education. The
intelligence of the workman is a most important element in
the productiveness of labor. So low, in some of the most
civilized countries, is the present standard of intelligence, that
there is hardly any source from which a more indefinite amount
of improvement may be looked for in productive power,
than by endowing with brains those who now have only
hands. The carefulness, economy, and general trustworthi-
ness of laborers are as important as their intelligence. Friend-
ly relations, and a community of interest and feeling be-
tween laborers and employers, are eminently so: I should
rather say, would be ; for I know not where any such sen-
timent of friendly alliance now exists. Nor is it only in the
laboring class that improvement of mind and character operates
with beneficial effect even on industry. In the rich and idle
classes, increased mental energy, more solid instruction, and
stronger feelings of conscience, public spirit, or philanthropy,

LAW OF INCREASE OF PRODUCTION FROM LAND 185

would qualify them to originate and promote the most valuable
improvements, both in the economical resources of their coun-
try, and in its institutions and customs. To look no further
than the most obvious phenomena ; the backwardness of French
agriculture in the precise points in which benefit might be ex-
pected from the influence of an educated class, is partly ac-
counted for by the exclusive devotion of the richer landed pro-
prietors to town interests and town pleasures. There is scarcely
any possible amelioration of human affairs which would not,
among its other benefits, have a favorable operation, direct or
indirect, upon the productiveness of industry. The intensity
of devotion to industrial occupations would indeed in many
cases be moderated by a more liberal and genial mental culture,
but the labor actually bestowed on those occupations would
almost always be rendered more effective.

Before pointing out the principal inferences to be drawn from
the nature of the two antagonistic forces by which the produc-
tiveness of agricultural industry is determined, we must observe
that what we have said of agriculture is true, with little varia-
tion, of the other occupations which it represents ; of all the
arts which extract materials from the globe. Mining industry,
for example, usually yields an increase of produce at a more
than proportional increase of expense. It does worse, for even
its customary annual produce requires to be extracted by a
greater and greater expenditure of labor and capital. As a
mine does not reproduce the coal or ore taken from it, not only
are all mines at last exhausted, but even when they as yet show
no signs of exhaustion, they must be worked at a continually
increasing cost ; shafts must be sunk deeper, galleries driven
farther, greater power applied to keep them clear of water ; the
produce must be lifted from a greater depth, or conveyed a
greater distance. The law of diminishing return applies there-
fore to mining, in a still more unqualified sense than to agri-
culture : but the antagonizing agency, that of improvements in
production, also applies in a still greater degree. Mining opera-
tions are more susceptible of mechanical improvements than
agricultural : the first great application of the steam engine
was to mining; and there are unlimited possibilities of improve-
ment in the chemical processes by which the metals are ex-
tracted. There is another contingency, of no unfrcquent oc-
currence, which avails to counterbalance the progress of all ex-

i86 POLITICAL ECONOMY

isting mines toward exhaustion : this is, the discovery of new
ones, equal or superior in richness.

To resume ; all natural agents which are limited in quantity,
are not only limited in their ultimate productive power, but,
long before that power is stretched to the utmost, they yield
to any additional demands on progressively harder terms. This
law may however be suspended, or temporarily controlled, by
whatever adds to the general power of mankind over nature ;
and especially by any extension of their knowledge, and their
consequent command, of the properties and powers of natural
agents.

Chapter XIII. — Consequences of the Foregoing Laws

§ I. From the preceding exposition it appears that the limit
to the increase of production is twofold; from deficiency of
capital, or of land. Production comes to a pause, either because
the effective desire of accumulation is not sufficient to give
rise to any further increase of capital, or because, however dis-
posed the possessors of surplus income may be to save a por-
tion of it, the limited land at the disposal of the community
does not permit additional capital to be employed with such
a return, as would be an equivalent to them for their absti-
nence.

In countries where the principle of accumulation is as weak
as it is in the various nations of Asia; where people will neither
save, nor work to obtain the means of saving, unless under
the inducement of enormously high profits, nor even then if it
is necessary to wait a considerable time for them; where either
productions remain scanty, or drudgery great, because there is
neither capital forthcoming nor forethought sufficient for the
adoption of the contrivances by which natural agents are made
to do the work of human labor; the desideratum for such a
country, economically considered, is an increase of industry, and
of the effective desire of accumulation. The means are, first,
a better government; more complete security of property; mod-
erate taxes, and freedom from arbitrary exaction under the
name of taxes; a more permanent and more advantageous ten-
ure of land, securing to the cultivator as far as possible the
undivided benefits of the industry, skill, and economy he may
exert. Secondly, improvement of the public intelligence; the

CONSEQUENCES OF THE FOREGOING LAWS 1S7

decay of usages or superstitions which interfere with the ef-
fective employment of industry; and the growth of mental ac-
tivity, making the people alive to new objects of desire. Thirdly,
the introduction of foreign arts, which raise the returns deriv-
able from additional capital, to a rate corresponding to the low
strength of the desire of accumulation; and the importation of
foreign capital, which renders the increase of production no
longer exclusively dependent on the thrift or providence of the
inhabitants themselves, while it places before them a stimulat-
ing example, and by instilling new ideas and breaking the chains
of habit, if not by improving the actual condition of the popula-
ton, tends to create in them new wants, increased ambition, and-
greater thought for the future. These considerations apply
more or less to all the Asiatic populations, and to the less civil-
ized and industrious part of Europe, as Russia, Turkey, Spain,
and Ireland.

§ 2. But there are other countries, and England is at the head
of them, in which neither the spirit of industry nor the effective
desire of accumulation need any encouragement; where the
people will toil hard for a small remuneration, and save much
for a small profit; where, though the general thriftiness of the
laboring class is much below what is desirable, the spirit of ac-
cumulation in the more prosperous part of the community re-
quires abatement rather than increase. In these countries there
would never be any deficiency of capital, if its increase were
never checked or brought to a stand by too great a diminution
of its returns. It is the tendency of the returns to a progressive
diminution, which causes the increase of production to be often
attended with a deterioration in the condition of the producers;
and this tendency, which would in time put an end to increase
of production altogether, is a result of the necessary and inherent
conditions of production from the land.

In all countries which have passed beyond a rather early stage
in the progress of agriculture, every increase in the demand for
food, occasioned by increased population, will always, unless
there is a simultaneous improvement in production, diminish
the share which on a fair division would fall to each individual.
An increased production, in default of unoccupied tracts of fer-
tile land, or of fresh improvements tending to cheapen com-
modities, can never be obtained but by increasing the labor in
more tlian tlie same proportion. The population must either

i88 POLITICAL ECONOMY

work harder, or eat less, or obtain their usual food by sacrific-
ing a part of their other customary comforts. Whenever this
necessity is postponed, notwithstanding an increase of popula-
tion, it is because the improvements which facilitate production
continue progressive; because the contrivances of mankind for
making their labor more efifective, keep up an equal struggle
with nature, and extort fresh resources from her reluctant
powers as fast as human necessities occupy and engross the old.

From this, results the important corollary, that the necessity
of restraining population is not, as many persons believe, pecu-
liar to a condition of great inequality of property. A greater
number of people cannot, in any given state of civilization, be
collectively so well provided for as a smaller. The niggardli-
ness of nature, not the injustice of society, is the cause of the
penalty attached to over-population. An unjust distribution of
wealth does not even aggravate the evil, but, at most, causes it
to be somewhat earlier felt. It is in vain to say, that all mouths
which the increase of mankind calls into existence, bring with
them hands. The new mouths require as much food as the old
ones, and the hands do not produce as much. If all instruments
of production were held in joint property by the whole people,
and the produce divided with perfect equality among them, and
if in a society thus constituted, industry were as energetic and
the produce as ample as at present, there would be enough to
make all the existing population extremely comfortable; but
when that population had doubled itself, as, with the existing
habits of the people, under such an encouragement, it undoubt-
edly would in little more than twenty years, what would then
be their condition? Unless the arts of production were in the
same time improved in an almost unexampled degree, the in-
ferior soils which must be resorted to, and the more laborious
and scantily remunerative cultivation which must be employed
on the superior soils, to procure food for so much larger a popu-
lation, would, by an insuperable necessity, render every individ-
ual in the community poorer than before. If the population
continued to increase at the same rate, a time would soon arrive
when no one would have more than mere necessaries, and, soon
after, a time when no one would have a sufficiency of those, and
the further increase of population would be arrested by death.

Whether, at the present or any other time, the produce of in-
dustry, proportionally to the labor employed, is increasing or

CONSEQUENCES OF THE FOREGOING LAWS 189

diminishing, and the average condition of the people improving
or deteriorating, depends upon v^^hether population is advancing
faster than improvement, or improvement than population.
After a degree of density has been attained, sufficient to allow
the principal benefits of combination of labor, all further in-
crease tends in itself to mischief, so far as regards the average
condition of the people ; but the progress of improvement has a
counteracting operation, and allows of increased numbers with-
out any deterioration, and even consistently with a higher aver-
age of comfort. Improvement must here be understood in a
wide sense, including not only new industrial inventions, or an
extended use of those already known, but improvements in in-
stitutions, education, opinions, and human affairs generally, pro-
vided they tend, as almost all improvements do, to give new
motives or new facilities to production. If the productive powers
of the country increase as rapidly as advancing numbers call
for an augmentation of produce, it is not necessary to obtain
that augmentation by the cultivation of soils more sterile than
the worst already under culture, or by applying additional la-
bor to the old soils at a diminished advantage; or at all events
this loss of power is compensated by the increased efficiency
with which, in the progress of improvement, labor is employed
in manufactures. In one way or the other, the increased popu-
lation is provided for, and all are as well off as before. But if
the growth of human power over nature is suspended or slack-
ened, and population does not slacken its increase; if, with only
the existing command over natural agencies, those agencies are
called upon for an increased produce; this greater produce will
not be afforded to the increased population, without either de-
manding on the average a greater effort from each, or on the
average reducing each to a smaller ration out of the aggregate
produce.

As a matter of fact, at some periods the progress of popula-
tion has been the more rapid of the two, at others that of im-
provement. In England during a long interval preceding the
French Revolution, population increased slowly; but the prog-
ress of improvement, at least in agriculture, would seem to have
been still slower, since though nothing occurred to lower the
value of the precious metals, the price of corn rose considerably,
and England, from an exporting, became an importing country.
This evidence, however, is short of conclusive, inasmuch as the

190

POLITICAL ECONOMY

extraordinary number of abundant seasons during the first half
of the century, not continuing during the last, was a cause of in-
creased price in the later period, extrinsic to the ordinary prog-
ress of society. Whether during the same period improvements
in manufactures, or diminished cost of imported commodities,
made amends for the diminished productiveness of labor on the
land, is uncertain. But ever since the great mechanical inven-
tions of Watt, Arkwright, and their cotemporaries, the return to
labor has probably increased as fast as the population; and
would have outstripped it, if that very augmentation of return
had not called forth an additional portion of the inherent power
of multiplication in the human species. During the twenty or
thirty years last elapsed, so rapid has been the extension of im-
proved processes of agriculture, that even the land yields a
greater produce in proportion to the labor employed; the aver-
age price of corn had become decidedly lower, even before the
repeal of the corn laws had so materially lightened, for the time
being, the pressure of population upon production. But though
improvement may during a certain space of time keep up with,
or even surpass, the actual increase of population, it assuredly
never comes up to the rate of increase of which population is
capable : and nothing could have prevented a general deteriora-
tion in the condition of the human race, were it not that popula-
tion has in fact been restrained. Had it been restrained still
more, and the same improvements taken place, there would have
been a larger dividend than there now is, for the nation or the
species at large. The new ground wrung from nature by the
improvements would not have been all used up in the support
of mere numbers. Though the gross produce would not have
been so great, there would have been a greater produce per
head of the population.

§ 3. When the growth of numbers outstrips the progress of
improvement, and a country is driven to obtain the means of
subsistence on terms more and more unfavorable, by the inabil-
ity of its land to meet additional demands except on more
onerous conditions; there are two expedients by which it may
hope to mitigate that disagreeable necessity, even though no
change should take place in the habits of the people with re-
spect to their rate of increase. One of these expedients is the
importation of food from abroad. The other is emigration.

The admission of cheaper food from a foreign country, is

CONSEQUENCES OF THE FOREGOING LAWS 191

equivalent to an agricultural invention by which food could be
raised at a similarly diminished cost at home. It equally in-
creases the productive power of labor. The return was, before,
so much food for so much labor employed in the growth of food :
the return is now, a greater quantity of food, for the same labor
employed in producing cottons or hardware, or some other com-
modity to be given in exchange for food. The one improve-
ment, like the other, throws back the decline of the productive
power of labor by a certain distance : but in the one case as in
the other, it immediately resumes its course; the tide which has
receded, instantly begins to re-advance. It might seem, indeed,
that when a country draws its supply of food from so wide a sur-
face as the whole habitable globe, so little impression can be
Pj"oduced on that great expanse by any increase of mouths in
one small corner of it, that the inhabitants of the country may
double and treble their numbers, without feeling the effect in
any increased tension of the springs of production, or any en-
hancement of the price of food throughout the world. But in
this calculation several things are overlooked.

In the first place, the foreign regions from which corn can
be imported do not comprise the whole globe, but those parts of
it almost alone, which are in the immediate neighborhood of
coasts or navigable rivers. The coast is the part of most coun-
tries which is earliest and most thickly peopled, and has seldom
any food to spare. The chief source of supply, therefore, is the
strip of country along the banks of some navigable river, as the
Nile, the Vistula, or the Mississippi; and of such there is not, in
the productive regions of the earth, so great a multitude, as to
suffice during an indefinite time for a rapidly growing demand,
without an increasing strain on the productive powers of the
soil. To obtain auxiliary supplies of corn from the interior in
any abundance, would, in the existing state of the communica-
tions, be hopeless. By improved roads, and eventually by canals
and railways, the obstacle will be so reduced as not to be in-
superable: but this is a slow progress; in all the food-exporting
countries except America, a very slow progress; and one which
cannot keep pace with population, unless the increase of the last
is very efifectually restrained.

In the next place, even if the supply were drawn from the
whole instead of a small part of the surface of the exporting
countries, the quantity of food would still be limited, which

192

POLITICAL ECONOMY

could be obtained from them without an increase of the propor-
tional cost. The countries which export food may be divided
into two classes; those in which the effective desire of accumu-
lation is strong, and those in which it is weak. In Australia
and the United States of America, the effective desire of accu-
mulation is strong; capital increases fast, and the production of
food might be very rapidly extended. But in such countries
population also increases with extraordinary rapidity. Their
agriculture has to provide for their own expanding numbers,
as well as for those of the importing countries. They must,
therefore, from the nature of the case, be rapidly driven, if not
to less fertile, at least what is equivalent, to remoter and less ac-
cessible lands, and to modes of cultivation like those of old coun-
tries, less productive in proportion to the labor and expense.

But the countries which have at the same time cheap food
and great industrial prosperity are few, being only those in which
the arts of civilized life have been transferred full grown to a
rich and uncultivated soil. Among old countries, those which
are able to export food, are able only because their industry is
in a very backward state; because capital, and hence population,
have never increased sufficiently to make food rise to a higher
price. Such countries are Russia, Poland, and the plains of the
Danube. In those regions the effective desire of accumulation
is weak, the arts of production most imperfect, capital scanty,
and its increase, especially from domestic sources, slow. When
an increased demand arose for food to be exported to other
countries, it would only be very gradually that food could be
produced to meet it. The capital needed could not be obtained
by transfer from other employments, for such do not exist. The
cottons or hardware which would be received from England in
exchange for corn, the Russians and Poles do not now produce
in the country: they go without them. Something might in
time be expected from the increased exertions to which producers
would be stimulated by the market opened for their produce;
but to such increase of exertion, the habits of countries whose
agricultural population consists of serfs, or of peasants who have
but just emerged from a servile condition, are the reverse of
favorable, and even in this age of movement these habits do not
rapidly change. If a greater outlay of capital is relied on as the
source from which the produce is to be increased, the means
must either be obtained by the slow process of saving, under

CONSEQUENCES OF THE FOREGOING LAWS 193

the impulse given by new commodities and more extended inter-
course (and in that case the population would most likely in-
crease as fast), or must be brought in from foreign countries.
If England is to obtain a rapidly increasing supply of corn from
Russia or Poland, English capital must go there to produce it.
This, however, is attended with so many difficulties, as are equiv-
alent to great positive disadvantages. It is opposed by differ-
ences of language, differences of manners, and a thousand ob-
stacles arising from the institutions and social relations of the
country: and after all it would inevitably so stimulate popula-
tion on the spot, that nearly all the increase of food produced by
its means, would probably be consumed without leaving the
country: so that if it were not the almost only mode of intro-
ducing foreign arts and ideas, and giving an effectual spur to
the backward civilization of those countries, little reliance could
be placed on it for increasing the exports, and supplying other
countries with a progressive and indefinite increase of food.
But to improve the civilization of a country is a slow process,
and gives time for so great an increase of population both in the
country itself, and in those supplied from it, that its effect in
keeping down the price of food against the increase of demand,
is not likely to be more decisive on the scale of all Europe, than
on the smaller one of a particular nation.

The law, therefore, of diminishing return to industry, when-
ever population makes a more rapid progress than improve-
ment, is not solely applicable to countries which are fed from
their own soil, but in substance applies quite as much to those
which are willing to draw their tood from any accessible quarter
that can afford it cheapest. A sudden and great cheapening of
food, indeed, in whatever manner produced, would, like any
other sudden improvement in the arts of life, throw the natural
tendency of affairs a stage or two further back, though without
altering its course. There is one contingency connected with
freedom of im.portation, which may yet produce temporary ef-
fects greater than were ever contemplated either by the bitterest
enemies or the most ardent adherents of free-trade in food.
Maize, or Indian corn, is a product capable of being supphed in
quantity sufficient to feed the whole country, at a cost, allowing
for difference of nutritive quality, cheaper even than the potato.
If maize should ever substitute itself for wheat as the staple food
of the poor, the productive power of labor in obtaining food
Vol. I.— 13

194 POLITICAL ECONOMY

would be so enormously increased, and the expense of main-
taining a family so diminished, that it would require perhaps
some generations for population, even if it started forward at
an American pace, to overtake this great accession to the facili-
ties of its support.

§ 4. Besides the importation of corn, there is another resource
which can be invoked by a nation whose increasing numbers
press hard, not against their capital, but against the productive
capacity of their land: I mean Emigration, especially in the
form of Colonization. Of this remedy the efficacy as far as it
goes is real, since it consists in seeking elsewhere those unoccu-
pied tracts of fertile land, which if they existed at home would
enable the demand of an increasing population to be met with-
out any falling off in the productiveness of labor. Accordingly,
when the region to be colonized is near at hand, and the habits
and tastes of the people sufficiently migratory, this remedy is
completely effectual. The migration from the older parts of the
American Confederation to the new territories, which is to all
intents and purposes colonization, is what enables population
to go on unchecked throughout the Union without hav-
ing yet diminished the return to industry, or increased the
difficulty of earning a subsistence. If Australia or the interior
of Canada were as near to Great Britain as Wisconsin and
Iowa to New York; if the superfluous people could remove
to it without crossing the sea, and were of as adventurous and
restless a character, and as little addicted to staying at home, as
their kinsfolk of New England, those unpeopled continents would
render the same service to the United Kingdom which the old
states of America derive from the new. But these things being
as they are — though a judiciously conducted emigration is a
most important resource for suddenly lightening the pressure
of population by a single efifort — and though in such an extra-
ordinary case as that of Ireland under the threefold operation
of the potato failure, the poor law, and the general turning out
of tenantry throughout the country, spontaneous emigration
may at a particular crisis remove greater multitudes than it was
ever proposed to remove at once by any national scheme; it still
remains to be shown by experience whether a permanent stream
of emigration can be kept up, sufficient to take ofif, as in America,
all that portion of the annual increase (when proceeding at its
greatest rapidity) which being in excess of the progress made

CONSEQUENCES OF THE FOREGOING LAWS 195

during the same short period in the arts of Ufe, tends to render
living more difficult for every averagely-situated individual in
the community. And unless this can be done, emigration can-
not, even in an economical point of view, dispense with the ne-
cessity of checks to population. Further than this we have not
to speak of it in this place. The general subject of colonization
as a practical question, its importance to old countries, and the
principles on which it should be conducted, will be discussed at
some length in a subsequent portion of this Treatise.

BOOK II

DISTRIBUTION
Chapter I. — Of Property

THE principles which have been set forth in the first part
of this Treatise, are, in certain respects, strongly dis-
tinguished from those, on the consideration of which
we are now about to enter. The laws and conditions of th6~
production of wealth, partake of the character of physical truths.
There is nothing optional, or arbitrary in them. "Wliatever
mankind produce, must be produced in the modes, and under
the conditions, imposed by the constitution of external things,
and by the inherent properties of their own bodily and mental
structure. Whether they like it or not, their productions will
be limited by the amount of their previous accumulation, and,--'
that being given, it will be proportional to their energy, their
skill, the perfection of their machinery, and their judicious use
of the advantages of combined labor. Whether they like it or
not, a double quantity of labor will not raise, on the same land,
a double quantity of food, unless some improvement takes place
in the processes of cultivation. Whether they like it or not,
the unproductive expenditure of individuals will pro tanto tend
to impoverish the community, and only their productive expen-
diture will enrich it. The opinions, or the wishes, which may
exist on these different matters, do not control the things them-
selves. We cannot, indeed, foresee to what extent the modes
of production may be altered, or the productiveness of labor
increased, by future extensions of our knowledge of the laws
of nature, suggesting new processes of industry of which we
have at present no conception. But howsoever we may succeed
in making for ourselves more space within the limits set by
the constitution of things, we know that there must be limits.
We cannot alter the ultimate properties either of matter or
mind, but can only employ those properties more or less suc-
cessfully, to bring about the events in which we are interested.

196

PROPERTY 197

It is not so with the Distribution of Weahh. That is a matter
of human institution solely. The things once there, mankind,
individually or collectively, can do with them as they like. They
can place them at the disposal of whomsoever they please, and
on whatever terms. Further, in the social state, in every state
except total solitude, any disposal whatever of them can only
take place by the consent of society, or rather of those who dis-
pose of its active force. Even what a person has produced by
his individual toil, unaided by anyone, he cannot keep, unless
by the permission of society. Not only can society take it from
him, but individuals could and would take it from him, if society
only remained passive ; if it did not either interfere en masse,
or employ and pay people for the purpose of preventing him
from being disturbed in the possession. The distribution of
wealth, therefore, depends on the laws and customs of society.
The rules by which it is determined, are what the opinions and
feelings of the ruling portion of the community make them, and
are very different in different ages and countries ; and might
be still more different, if mankind so chose.

The opinions and feelings of mankind, doubtless, are not a
matter of chance. They are consequences of the fundamental
laws of human nature, combined with the existing state of
knowledge and experience, and the existing condition of social
institutions and intellectual and moral culture. But the laws
of the generation of human opinions are not within our present
subject. They are part of the general theory of human prog-
ress, a far larger and more difficult subject of inquiry than
political economy. We have here to consider, not the causes,
but the consequences of the rules according to which wealth
may be distributed. Those, at least, are as little arbitrary, and
have as much the character of physical laws, as the laws of
production. Human beings can control their own acts, but
not the consequences of their acts either to themselves or to
others. Society can subject the distribution of wealth to what-
ever rules it thinks best ; but what practical results will flow
from the operation of those rules, must be discovered, like any
other physical or mental truths, by observation and reasoning.

We proceed, then, to the consideration of the different modes
of distributing the produce of land and labor, which have been
adopted in practice, or may be conceived in theory. Among
these, our attention is first claimed by that primary and funda-

198 POLITICAL ECONOMY

mental institution, on which, unless in some exceptional and
very limited cases, the economical arrangements of society have
always rested, though in its secondary features it has varied,
and is liable to vary. I mean, of course, the institution of in-
dividual property. ^
"^ § 2. Private property, as an institution, did not owe its origin
to any of those considerations of utility, which plead for the
maintenance of it when established. Enough is known of rude
ages, both from history and from analogous states of society in
our own time, to show, that tribunals (which always precede
laws) were originally established, not to determine rights, but
to repress violence and terminate quarrels. With this object
chiefly in view, they naturally enough gave legal efifect to first
occupancy, by treating as the aggressor the person who first
commenced violence, by turning, or attempting to turn, another
out of possession. The preservation of the peace, which was
the original object of civil government, was thus attained;
while by confirming, to those who already possessed it, even
what was not the fruit of personal exertion, a guarantee was
incidentally given to them and others that they would be pro-
tected in what was so.

In considering the institution of property as a question in
social philosophy, we must leave out of consideration its actual
origin in any of the existing nations of Europe. We may
suppose a community unhampered by any previous possession ;
a body of colonists, occupying for the first time an uninhabited
country ; bringing nothing with them but what belonged to
them in common, and having a clear field for the adoption of
the institutions and polity which they judged most expedient;
required, therefore, to choose whether they would conduct the
work of production on the principle of individual property, or
on some system of common ownership and collective agency.

If private property were adopted, we must presume that it
would be accompanied by none of the initial inequalities and
injustices which obstruct the beneficial operation of the prin-
ciple in old societies. Every full-grown man or woman, we
must suppose, would be secured in the unfettered use and dis-
posal of his or her bodily and mental faculties ; and the instru-
ments of production, the land and tools, would be divided fairly
among them, so that all might start, in respect to outward ap-
pliances, on equal terms. It is possible also to conceive that in

PROPERTY 199

this original apportionment, compensation might be made for
the injuries of nature, and the balance redressed by assigning
to the less robust members of the community advantages in the
distribution, sufficient to put them on a par with the rest. But
the division, once made, would not again be interfered with;
individuals would be left to their own exertions and to the
ordinary chances, for making an advantageous use of what was
assigned to them. If individual property, on the contrary, were
excluded, the plan which must be adopted would be to hold the
land and all instruments of production as the joint property of
the community, and to carry on the operations of industry on
the common account. The direction of the labor of the com-
munity would devolve upon a magistrate or magistrates, whom
we may suppose elected by the suffrages of the community, and
whom we must assume to be voluntarily obeyed by them. The
division of the produce would in like manner be a public act.
The principle might either be that of complete equality, or of
apportionment to the necessities or deserts of individuals, in
whatever manner might be conformable to the ideas of justice
or policy prevailing in the community.

Examples of such associations, on a small scale, are the mo-
nastic orders, the Moravians, the followers of Rapp, and others :
and from the hopes which they hold out of relief from the mis-
eries and iniquities of a state of much inequality of wealth,
schemes for a larger application of the same idea have reap-
peared and become popular at all periods of active speculation
on the first principles of society. In an age like the present,
when a general reconsideratiQn,.J3iIall first prrneiples is "Ifelt
to be incvitabk', and when more than at any former period of
history tlic .suffering portions of the community have a voice
in the discussion, it was impossible but that ideas of this nature
should spread far and wide. The late revolutions in Europe
have thrown up a great amount of spe'culation of this character,
and an unusual share of attention has consequently been drawn
to the various forms which these ideas have assumed : nor is
this attention likely to diminish, but on the contrary, to increase
more and more.

The assailants of the principle of individual property may be
(Jivided into two classes : those whose scheme implies absolute
equality in the distribution of the physical means of life and
enjoyment, and those who admit inequaHty, but grounded on

200 POLITICAL ECONOMY

some principle, or supposed principle, of justice or general ex-
pediency, and not, like so many of the existing social inecjual-
ities, dependent on accident alone. At the head of the first class,
as the earliest of those belonging to the present generation, must
be placed Mr. Owen and his followers. M. Louis Blanc and
M. Cabet have more recently become conspicuous as apostles
of similar doctrines (though the former advocates equality of
distribution only as a transition to a still higher standard of
justice, that all should work according to their capacity, and
receive according to their wants). The characteristic name for
this economical system is Communism, a word of continental
origin, only of late introduced into this country. The word
Socialism, which originated among the English Communists,
and was assumed by them as a name to designate their own
doctrine, is now, on the Continent, employed in a larger sense ;
not necessarily implying Communism, or the entire abolition
of private property, but applied to any system which requires
that the land and the instruments of production should be the
property, not of individuals, but of communities or associations,
or of the government. Among such systems, the two of highest
intellectual pretension are those which, from the names of their
real or reputed authors, have been called St. Simonism and
Fourierism ; the former, defunct as a system, but which during
the few years of its public promulgation, sowed the seeds of
nearly all the Socialist tendencies which have since spread so
widely in France : the second, still flourishing in the number,
talent, and zeal of its adherents.

§ 3. Whatever may be the merits or defects of these various
schemes, they cannot be truly said to be impracticable. No
reasonable person can doubt that a village community, com-
posed of a few thousand inhabitants cultivating in joint owner-
ship the same extent of land which at present feeds that number
of people, and producing by combined labor and the most im-
proved processes the manufactured articles which they re-
quired, could raise an amount of productions sufficient to main-
tain them in comfort ; and would find the means of obtaining,
and if need be, exacting, the quantity of labor necessary for
this purpose, from every member of the association who was
capable of work.

The objection ordinarily made to a system of community of
property and equal distribution of the produce, that each per-

PROPERTY 20I

son would be incessantly occupied in evading his fair share of
the work, points, undoubtedly, to a real difficulty. But those
who urge this objection, forget to how great an extent the
same difficulty exists under the system on which nine-tenths
of the business of society is now conducted. The objection sup-
poses, that honest and efficient labor is only to be had from
those who are themselves individually to reap the benefit of
their own exertions. But how small a part of all the labor per-
formed in England, from the lowest paid to the highest, is done
by persons working for their own benefit. From the Irish reaper
or hodman to the chief justice or the minister of state, nearly
all the work of society is remunerated by day wages or fixed
salaries. A factory operative has less personal interest in his
work than a member of a Communist association, since he is
not, like him, working for a partnership of which he is himself
a member. It will no doubt be said, that though the laborers
themselves have not, in most cases, a personal interest in their
work, they are watched and superintended, and their labor di-
rected, and the mental part of the labor performed, by persons
who have. Even this, however, is far from being universally
the fact. In all public, and many of the largest and most suc-
cessful private undertakings, not only the labors of detail, but
the control and superintendence are intrusted to salaried offi-
cers. And though the " master's eye," when the master is vigi-
lant and intelligent, is of proverbial value, it must be remem-
bered that in a Socialist farm or manufactory, each laborer
would be under the eye not of one master, but of the whole
community. In the extreme case of obstinate perseverance in
not performing the due share of work, the community would
have the same resources which society now has for compelling
conformity to the necessary conditions of the association. Dis-
missal, the only remedy at present, is no remedy when any other
laborer who may be engaged does no better than his prede-
cessor: the power of dismissal only enables an employer to
obtain from his workmen the customary amount of labor, but
that customary labor may be of any degree of inefficiency. Even
the laborer who loses his employment by idleness or negligence,
has nothing worse to suffer, in the most unfavorable case, than
the discipline of a workhouse, and if the desire to avoid this
be a sufficient motive in the one system, it would be sufficient
in the other. I am not undervaluing the strength of the incite-

202 POLITICAL ECONOMY

ment given to labor when the whole or a large share of the
benefit of extra exertion belongs to the laborer. But under the
present system of industry this incitement, in the great majority
of cases, does not exist. If Communistic labor might be less
vigorous than that of a peasant proprietor, or a workman labor-
ing on his own account, it would probably be more energetic
than that of a laborer for hire, who has no personal interest in
tlTe"lnaFter~af "all". 'The neglect by the uneducated classes of
laborers for hire, of the duties which they engage to perform,
is in the present state of society most flagrant. Now it is an ad-
mitted condition of the Communist scheme that all shall be
educated : and this being supposed, the duties of the members
of the association would doubtless be as diligently performed
as those of the generality of salaried officers in the middle or
higher classes ; who are not supposed to be necessarily unfaith-
ful to their trust, because so long as they are not dismissed, their
pay is the same in however lax a manner their duty is fulfilled.
Undoubtedly, as a general rule, remuneration by fixed salaries
does not in any class of functionaries produce the maximum
of zeaV: and this is as much as can be reasonably alleged against
Communistic labor.

That even this inferiority would necessarily exist, is by no
means so certain as is assumed by those who are little used
to carry their minds beyond the state of things with which
they are familiar. Mankind are capable of a far greater amount
of public spirit than the present age is accustomed to suppose
possible. History bears witness to the success with which large
bodies of human beings may be trained to feel the public in-
terest their own. And no soil could be more favorable to the
growth of such a feeling, than a Communist association, since
all the ambition, and the bodily and mental activity, which are
now exerted in the pursuit of separate and self-regarding in-
! terests, would require another sphere of employment, and would
naturally find it in the pursuit of the general benefit of the com-
munity. The same cause, so often assigned in explanation of
the devotion of the Catholic priest or monk to the interest of
his order — that he has no interest apart from it — would, under
Communism, attach the citizen to the community. And inde-
pendently of the public motive, every member of the association
would be amenable to the most universal, and one of the strong-
est of personal motives, that of public opinion. The force of

PROPERTY 203

this motive in deterring from any act or omission positively-
reproved by the community, no one is likely to deny ; but the
power also of emulation, in exciting to the most strenuous
exertions for the sake of the approbation and admiration of
others, is borne witness to by experience in every situation in
which human beings publicly compete with one another, even
if it be in things frivolous, or from which the public derive no
benefit. A contest, who can do most for the common good, is
not the kind of competition which Socialists repudiate. To
what extent, therefore, the energy of labor would be diminished
by Communism, or whether in the long run it would be dimin-
ished at all, must be considered for the present an undecided
question.

Aopther of the objections to Communism is similar to that, 1
so often urged against poor-laws : that if every member of the
community were assured of subsistence for himself and any
number of children, on the sole condition of willingness to
work, prudential restraint on the multiplication of mankind
would be at an end, and population would start forward at a
rate which would reduce the community through successive
stages of increasing discomfort to actual starvation. There
would certainly be much ground for this apprehension if Com-
munism provided no motives to restraint, equivalent to those
which it would take away. But Communism is precisely the )
state of things in which opinion might be expected to declare /
itself with greatest intensity against this kind of selfish intem- ,
perance. Any augmentation of numbers which diminished the
comfort or increased the toil of the mass, would then cause
(which now it does not) immediate and unmistakable incon-
venience to every individual in the association ; inconvenience
which could not then be imputed to the avarice of employers, or
the unjust privileges of the rich. In such altered circumstances
opinion could not fail to reprobate, and if reprobation did not
suffice, to repress by penalties of some description, this or any
other culpable self-indulgence at the expense of the community.
The Communistic scheme, instead of being peculiarly open to
the objection drawn from danger of over-population, has the
recommendation of tending in an especial degree to the pre-
vention of that evil.

A more real difficulty is that of fairly apportioning the labor
of the community among its members. There arc many kinds

204 POLITICAL ECONOMY

of work, and by what standard are they to be measured one
against another? Who is to judge how much cotton spinning,
or distributing goods from the stores, or bricklaying, or chim-
ney sweeping, is equivalent to so much ploughing? The diffi-
culty of making the adjustment between different qualities of
. labor is so strongly felt by Communist writers, that they have
I usually thought it necessary to provide that all should work
j| by turns at every description of useful labor : an arrangement
which by putting an end to the division of employments, would
sacrifice so much of the advantage of co-operative production
as greatly to diminish the productiveness of labor. Besides,
even in the same kind of work, nominal equality of labor would
be so great a real inequality, that the feeling of justice would
revolt against its being enforced. All persons are not equally
fit for all labor; and the same quantity of labor is an unequal
burden on the weak and the strong, the hardy and the delicate,
the quick and the slow, the dull and the intelligent.

But these difficulties, though real, are not necessarily insuper-
able. The apportionment of work to the strength and capacities
of individuals, the mitigation of a general rule to provide for
cases in which it would operate harshly, are not problems to
which human intelligence, guided by a sense of justice, would
be inadequate. And the worst and most unjust arrangement
which could be made of these points, under a system aiming
at equality, would be so far short of the inequality and injustice
with which labor (not to speak of remuneration) is now appor-
tioned, as to be scarcely worth counting in the cornparison. We
must remember too that Communism, as a system of society,
exists only in idea ; that its difficulties, at present, are much
better understood than its resources ; and that the intellect of
mankind is only beginning to contrive the means of organizing
it in detail, so as to overcome the one and derive the greatest
advantage from the other.

If, therefore, the choice were to be made between Communism
with all its chances, and the present state of society with all its
sufferings and injustices; if the institution of private property
necessarily carried with it as a consequence, that the produce
of labor should be apportioned as we now see it, almost in an
inverse ratio to the labor — the largest portions to those who
have never worked at all, the next largest to those whose work
is almost nominal, and so in a descending scale, the remunera-

PROPERTY

205

tion dwindling as the work grows harder and more disagreeable,
until the most fatiguing and exhausting bodily labor cannot
count with certainty on being able to earn even the necessaries
of life; if this, or Communism, were the alternative, all the
difficulties, great or small, of Communism would be but as dust
in the balance. But to make the comparison applicable, we
must compare Communism at its best, with the regime oi in-
dividual property, not as it is, but as it might be made. The
principle of private property has never yet had a fair trialin
any country ; and less so, perhaps, in this country than in some
others. The social arrangements of modern Europe commenced
from a distribution of property which was the result, not of
just partition, or acquisition by industry, but of conquest and
violence : and notwithstanding what industry has been doing
for many centuries to modify the work of force, the system
still retains many and large traces of its origin. ' The laws
of property have never yet conformed to the principles on
which the justification of private property rests. 'They have
made property of things which never ought to be property, and
absolute property where only a qualified property ought to
exist. They have not held the balance fairly between human
beings, but have heaped impediments upon some, to give ad-
vantage to others ; they have purposely fostered inequalities,
and prevented all from starting fair in the race. That all should
indeed start on perfectly equal terms, is inconsistent with any
law of private property : but if as much pains as has been taken
to aggravate the inequality of chances arising from the natural
working of the principle, had been taken to temper that ine-
quality by every means not subversive of the principle itself;
if the tendency of legislation had been to favor the diffusion, in-
stead ofthe concentration of wealth — to encourage the subdi-
vision of the large masses, instead of striving to keep them
together ; the principle of individual property would have been
found to have no necessary connection with the physical and
social evils which almost all Socialist writers assume to be
inseparable from it.

Private property, in every defence made of it, is supposed
to mean, the guarantee to individuals, of the fruits of their
own labor and abstinence. The guarantee to them of the fruits
of the labor and abstinence of others, transmitted to them v/ith-
out any merit or exertion af llieir^own, is not of the essence

2o6 POLITICAL ECONOMY

of the institution, but a mere incidental consequence, which
when it reaches a certain height, does not promote, but conflicts
with the ends which render private property legitimate. To
judge of the final destination of the institution of property, we
must suppose everything rectified, which causes the institution
to work in a manner opposed to that equitable principle, of pro-
portion between remuneration and exertion, on which in every
vindication of it that will bear the light, it is assumed to be
grounded. We must also suppose two conditions realized, with-
out which neither Communism nor any other laws or institutions
could make the condition of the mass of mankind other than
degraded and miserable. One of these conditions is, universal
education; the other, a due limitation of the numbers of the
community. With these, there could be no poverty even under
the present social institutions: and these being supposed, the
question of Socialism is not, as generally stated by Socialists,
a question of fiying to the sole refuge against the evils which
now bear down humanity ; but a mere question of comparative
advantages, which futurity must determine. We are too ig-
norant either of what individual agency in its best form, or
Socialism in its best form, can accomplish, to be qualified to
decide which of the two will be the ultimate form of human
society.

If a conjecture may be hazarded, the decision will probably
depend mainly on one consideration, viz., which of the two sys-
I tems is consistent with the greatest amount of human liberty
and spontaneity. After the means of subsistence are assured,
the next in strength of the personal wants of human beings is
liberty; and (unlike the physical wants, which as civilization
advances become more moderate and more amenable to control)
it increases instead of diminishing in intensity, as the intelli-
gence and the moral faculties are more developed. The perfec-
tion both of social arrangements and of practical morality would
be, to secure to all persons complete independence and freedom
of action, subject to no restriction but that of not doing injury
to others : and the education which taught or the social insti-
tutions which required them to exchange the control of their
own actions for any amount of comfort or affluence, or to
renounce liberty for the sake of equality, would deprive them
of one of the most elevated characteristics of human nature.
{ It remains to be discovered how far the preservation of this

PROPERTY 207

characteristic would be found compatible with the communistic /
organization of society. No doubt, this, like all the other ob-
jections to the Socialist schemes, is vastly exaggerated. The
members of the association need not be required to live together
more than they do now, nor need they be controlled in the
disposal of their individual share of the produce, and of the
probably large amount of leisure which, if they limited their
production to things really worth producing, they would pos-
sess. Individuals need not be chained to an occupation, or
to a particular locality. The restraints of Communism would
be freedom in comparison with the present condition of the
majority of the human race. The generality of laborers in
this and most other countries, have as little choice of occupa-
*> tion or freedom of locomotion, are practically as dependent
on fixed rules and on the will of others, as they could be on
any system short of actual slavery ; to say nothing of the entire
domestic subjection of one-half the species, to which it is the
signal honor of 'Owenism and most other forms of Socialism *^^
that they assign equal rights, in all respects, with those of the
hitherto dominant sex. But it is not by comparison with the
present bad state of society that the claims of Communism can
be estimated ; nor is it sufficient that it should promise greater
personal and mental freedom than is now enjoyed by those who
have not enough of either to deserve the name. The question
is whether there would be any asylum left for individuality
of character ; whether public opinion would not be a tyrannical
yoke ; whether the absolute dependence of each on all, and
surveillance of each by all, would not grind all down into a
tame uniformity of thoughts, feelings, and actioils. This is
already one of the glaring evils of the existing state of society,
notwithstanding a much greater diversity of education and
pursuits, and a much less absolute dependence of the individual
on the mass, than would exist in the Communistic regime. No f.
society in which eccentricity is a matter of reproach, can be in l)
a Vk^holcsome state. It is yet to be ascertained whether the Com- \
munistic scheme would be consistent with that multiform de-
velopment of human nature, those manifold unlikenesses, that
diversity of tastes and talents, and variety of intellectual points
of view, which not only form a great part of the interest of
human life, but by bringing intellects into a stimulating colli-
sion, and by presenting to each innumerable notions that he

2o8 POLITICAL ECONOMY

would not have conceived of himself, are the mainspring of
mental and moral progression.

§ 4. I have thus far confined my observations to the Com-
munistic doctrine, which forms the extreme limit of Socialism ;
according to which not only the instruments of production, the
land and capital, are the joint property of the community, but
the produce is divided and the labor apportioned, as far as
possible, equally. The objections, whether well or ill grounded,
to which Socialism is liable, apply to this form of it in their
greatest force. The other varieties of Socialism mainly differ
from Communism, in not relying solely on what M. Louis Blanc
calls the point of honor of industry, but retaining more or less
of the incentives to labor derived from private pecuniary in-
terest. Thus it is already a modification of the strict theory of
Communism, when the principle is professed of proportioning
remuneration to labor. The attempts which have been made
in France to carry Socialism into practical effect, by associations
of workmen manufacturing on their own account, mostly began
by sharing the remuneration equally, without regard to the
quantity of work done by the individual : but in almost every
case this plan was after a short time abandoned, and recourse
was had to working by the piece. The original principle ap-
peals to a higher standard of justice, and is adapted to a much
higher moral condition of human nature. The proportioning
of remuneration to work done, is really just, only in so far as
the more or less of the work is a matter of choice: when it
depends on natural difference of strength or capacity, this
principle of remuneration is in itself an injustice: It is giving
to those who have ; assigning most to those who are already
most favored by nature. Considered, however, as a compro-
mise with the selfish type of character formed by the present
standard of morality, and fostered by the existing social insti-
tutions, it is highly expedient ; and until education shall have
been entirely regenerated, is far more likely to prove immedi-
ately successful, than an attempt at a higher ideal.

The two elaborate forms of non-communistic Socialism
known as St. Simonism and Fourierism, are totally free from the
objections usually urged against Communism ; and though they
are open to others of their own, yet by the great intellectual
power which in many respects distinguishes them, and by their
large and philosophic treatment of some of the fundamental

PROPERTY, 209

problems of society and morality, they may justly be counted
among the most remarkable productions of the past and present
age.

The St. Simonian scheme does not contemplate an equal,
but an unequal division of the produce ; it does not propose
that all should be occupied ahke, but differently, according to
their vocation or capacity ; the function of each being assigned,
like grades in a regiment, by the choice of the directing author-
ity, and the remuneration being by salary, proportioned to the'^
importance, in the eyes of that authority, of the function itself,
and the merits of the person who fulfils it. For the constitu-
tion of the ruling body, different plans might be adopted,
consistently with the essentials of the system. It might be ap-
pointed by popular suft'rage. In the idea of the original au-
thors, the rulers were supposed to be persons of genius and
virtue, who obtained the voluntary adhesion of the rest by the
force of mental superiority. That the scheme might in some
peculiar states of society work with advantage, is not improb-
able. There is indeed a successful experiment, of a somewhat
similar kind, on record, to which I have once alluded ; that of
the Jesuits in Paraguay. A race of savages, belonging to a
portion of mankind more averse to consecutive exertion for a
distant object than any other authentically known to us, was
brought under the mental dominion of civilized and instructed
men who were united among themselves by a system of com-
munity of goods. To the absolute authorty of these men they
reverentially submitted themselves, and were induced by them
to learn the arts of civilized life, and to practice labors for the
community, which no inducement that could have been offered
would have prevailed on them to practise for themselves. This
social system was of short duration, being prematurely de-
stroyed by diplomatic arrangements and foreign force. That
it could be brought into action at all was probably owing to the
immense distance in point of knowledge and intellect which
separated the few rulers from the whole body of the ruled, with-
out any intermediate orders, either social or intellectual. In any
other circumstances it would probably have been a complete
failure. It supposes an absolute despotism in the heads of the
association; which would probal)ly not be much improved if
the depositaries of the despotism (contrary to the views of the
authors of the system) were varied from time to time according
Vol. I. — 14

2IO POLITICAL ECONOMY

to the result of a popular canvass. But to suppose that one
or a few human beings, howsoever selected, could, by whatever
machinery of subordinate agency, be qualified to adapt each
person's work to his capacity, and proportion each person's
remuneration to his merits — to be, in fact, the dispensers of
distributive justice to every member of a community; or that
any use which they could make of this power would give general
satisfaction, or would be submitted to without the aid of force
— is a supposition almost too chimerical to be reasoned against.
A fixed rule, like that of equality, might be acquiesced in, and
so might chance, or an external necessity ; but that a handful
of human beings should weigh everybody in the balance, and
give more to one and less to another at their sole pleasure and
judgment, would not be borne, unless from persons believed
to be more than men, and backed by supernatural terrors.

The most skilfully combined, and with the greatest foresight
of objections, of all the forms of Socialism, is that commonly
known as Fourierism. This system does not contemplate the
abolition o? private property, nor even of inheritance : on the
contrary, it avowedly takes into consideration, as an element
in the distribution of the produce, capital as well as labor. It
proposes that the operations of industry should be carried on
by associations of about two thousand members, combining
their labor on a district of about a square league in extent, under
the guidance of chiefs selected by themselves. In the distri-
bution, a certain minimum is first assigned for the subsistence
of every member of the community, whether capable or not
of labor. The remainder of the produce is shared in certain
proportions, to be determined beforehand, among the three
elements. Labor, Capital, and Talent. The capital of the com-
munity may be owned in unequal shares by different members,
who would in that case receive, as in any other joint-stock
company, proportional dividends. The claim of each person
on the share of the produce apportioned to talent is estimated
by the grade or rank which the individual occupies in the sev-
eral groups of laborers to which he or she belongs ; these grades
being in all cases conferred by the choice of his or her compan-
ions. The remuneration, when received, would not of necessity
be expended or enjoyed in common ; there would be separate
menagcs for all who preferred them, and no other community
of living is contemplated, than that all the members of the

PROPERTY 211

association should reside in the same pile of buildings ; for
saving of labor and expense, not only in building, but in every
branch of domestic economy ; and in order that, the whole of
the buying and selling operations of the community being per-
formed by a single agent, the enormous portion of the produce
of industry now carried off by the profits of mere distributors
might be reduced to the smallest amount possible.

This system, unlike Communism, does not, in theory at least,
withdraw any of the motives to exertion which exist in the
present state of society. On the contrary, if the arrangement
worked according to the intentions of its contrivers, it would
even strengthen those motives ; since each person would have
much more certainty of reaping individually the fruits of in-
creased skill or energy, bodily or mental, than under the present
social arrangements can be felt by any but those who are in
the most advantageous positions, or to whom the chapter of
accidents is more than ordinarily favorable. The Fourierists,
however, have still another resource. They believe that they
have solved the great and fundamental problem of rendering
labor attractive. That this is not impracticable, they contend by
very strong arguments ; in particular by one which they have
in common with the Owenites, viz., that scarcely any labor,
however severe, undergone by human beings for the sake of
subsistence, exceeds in intensity that which other human beings,
whose subsistence is already provided for, are found ready and
even eager to undergo for pleasure. This certainly is a most
significant fact, and one from which the student in social phi-
losophy may draw important instruction. But the argument
founded on it may easily be stretched too far. If occupations
full of discomfort and fatigue are freely pursued by many per-
sons as amusements, who does not see that they are amuse-
ments exactly because they are pursued freely, and may be
discontinued at pleasure? The liberty of quitting a position
often makes the whole difference between its being painful and
pleasurable. Many a person remains in the same town, street,
or house from January to December, without a wish or a
thought tending toward removal, who, if confined to that same
place by the mandate of authority, would find the imprisonment
absolutely intolerable.

According to the Fourierists, scarcely any kind of useful labor
is naturally and necessarily disagreeable, unless it is either re-

212 POLITICAL ECONOMY

garded as dishonorable, or is immoderate in degree, or destitute
of the stimulus of sympathy and emulation. Excessive toil
needs not, they contend, be undergone by anyone, in a society
in which there would be no idle class, and no labor wasted,
as so enormous an amount of labor is now wasted, in useless
things ; and where full advantage would be taken of the power
of association, both in increasing the efficiency of production,
and in economizing consumption. The other requisites for ren-
dering labor attractive would, they think, be found in the exe-
cution of all labor by social groups, to any number of which the
same individual might simultaneously belong, at his or her own
choice ; their grade in each being determined by the degree of
service which they were found capable of rendering, as appre-
ciated by the suffrages of their comrades. It is inferred from
the diversity of tastes and talents, that every member of the
community would be attached to several groups, employing
themselves in various kinds of occupation, some bodily, others
mental, and would be capable of occupying a high place in
some one or more; so that a real equality, or something more
nearly approaching to it than might at first be supposed, would
practically result : not from the compression, but, on the con-
trary, from the largest possible development, of the various
natural superiorities residing in each individual.

Even from so brief an outline, it must be evident that this
system does no violence to any of the general laws by which
human action, even in the present imperfect state of moral and
intellectual cultivation, is influenced ; and that it would be
extremely rash to pronounce it incapable of success, or unfitted
to realize a great part of the hopes founded on it by its partisans.
With regard to this, as to all other varieties of Socialism, the
thing to be desired, and to which they have a just claim, is
opportunity of trial. They are all capable of being tried on
a moderate scale, and at no risk, either personal or pecuniary,
to any except those who try them. It is for experience to de-
termine how far or how soon any one or more of the possible
systems of community of property will be fitted to substitute
itself for the " organization of industry " based on private own-
ership of land and capital. In the meantime we may, without
attempting to limit the ultimate capabilities of human nature,
affirm, that the political economist, for a considerable time to
come, will be chiefly concerned with the conditions of existence

PROPERTY 213

and progress belonging to a society founded on private property
and individual competition ; and that the object to be principally
aimed at in the present stage of human improvement, is not the
subversion of the system of individual property, but the im-
provement of it, and the full participation of every member
of the community in its benefits.

Chapter II. — The Same Subject Continued

§ I. It is next to be considered, what is included in the jdea
of private property, and by what considerations the application
of the principle should be bounded^

The institution of property, when limited to its essential ele-
ments, consists in the recognition, in each person, of a right to
the exclusive disposal of what he or she have producelTby^their
own exertions, or received either by gift or by fair agreement,
"without force or fraud, from those who produced it. The foun-
dation of the whole is, the right of producers to what they
themselves have produced. It may be objected, therefore, to
the institution as it now exists, that it recognizes rights of prop-
erty in individuals over things which they have not produced.
For example (it may be said) the operatives in a manufactory
create, by their labor and skill, the whole produce ; yet, instead
of its belonging to them, the law gives them only their stipu-
lated hire, and transfers the produce to some one who has
merely supplied the funds, without perhaps contributing any-
thing to the work itself, even in the form of superintendence.
The answer to this is, that the labor of manufacture is only one
of the conditions which must combine for the production of
the commodity. The labor cannot be carried on without ma-
terials and machinery, nor without a stock of necessaries pro-
vided in advance, to maintain the laborers during the produc-
tion. All these things are the fruits of previous labor. If the
laborers were possessed of them, they would not need to divide
the produce with any one ; but while they have them not, an
equivalent must be given to those who have, both for the
antecedent labor, and for the abstinence by which the produce
of that labor, instead of being expended on indulgences, has
been reserved for this use. The capital may not have been, and
in most cases was not, created by the labor and abstinence of
the present possessor ; but it was created by the labor and ab-

214 POLITICAL ECONOMY

stinence of some former person, who may indeed have been
wrongfully dispossessed of it, but who, in the present age of
the world, much more probably transferred his claims to the
present capitalist by gift or voluntary contract : and the ab-
stinence at least must have been continued by each successive
owner, down to the present. If it be said, as it may with truth,
that those who have inherited the savings of others have an
advantage which they may have in no way deserved, over the
industrious whose predecessors have not left them anything;
I not only admit, but strenuously contend, that this unearned
advantage should be curtailed, as much as is consistent with
justice to those who thought fit to dispose of their savings by
giving them to their descendants. But while it is true that the
laborers are at a disadvantage compared with those whose pred-
ecessors have saved, it is also true that the laborers are far
better ofif than if those predecessors had not saved. They
share in the advantage, though not to an equal extent with the
inheritors. The terms of co-operation between present labor
and the fruits of past labor and saving, are subject for adjust-
ment between the two parties. Each is necesssary to the other.
The capitalists can do nothing without laborers, nor the la-
borers without capital. If the laborers compete for employ-
ment, the capitalists on their part compete for labor, to the full
extent of the circulating capital of the country. Competition
is often spoken of as if it were necessarily a cause of misery
and degradation to the laboring class ; as if high wages were
not precisely as much a product of competition as low wages.
The remuneration of labor is as much the result of the law of
competition in the United States, as it is in Ireland, and much
more completely so than in England.

The right of property includes, then, the freedom of acquir-
ing by contract. The right of each to what he has produced,
implies a right to what has been produced by others, if ob-
tained by their free consent ; since the producers must either
have given it from good will, or exchanged it for what they es-
teemed an equivalent, and to prevent them from doing so would
be to infringe their right of property in the product of their
own industry.

§ 2. Before proceeding to consider the things which the
principle of individual property does not include, we must
specify one more thing which it does include ; and this is, that

PROPERTY 215

a title, after a certain period, should be given by prescription.
According to the fundamental idea of property, indeed, noth-
ing ought to be treated as such, which has been acquired by
force or fraud, or appropriated in ignorance of a prior title
vested in some other person ; but it is necessary to the security
of rightful possessors, that they should not be molested by
charges of wrongful acquisition, when by the lapse of time
witnesses must have perished or been lost sight of, and the real
character of the transaction can no longer be cleared up. Pos-
session which has not been legally questioned within a moder-
ate number of years, ought to be, as by the laws of all nations
it is, a complete title. Even when the acquisition was wrong-
ful, the dispossession, after a generation has elapsed, of the
probably bond fide possessors, by the revival of a claim which
had been long dormant, would generally be a greater injustice,
and almost always a greater private and public mischief, than
leaving the original wrong without atonement. It may seem
hard, that a claim, originally just, should be defeated by mere
lapse of time ; but there is a time after which, (even looking at
the individual case, and without regard to the general effect on
the security of possessors,) the balance of hardship turns the
other way. With the injustices of men, as with the convulsions
and disasters of nature, the longer they remain unrepaired, the
greater become the obstacles to repairing them, arising from
the aftergrowths which would have to be torn up or broken
through. In no human transactions, not even in the simplest
and clearest, does it follow that a thing is fit to be done now,
because it was fit to be done sixty years ago. It is scarcely
needful to remark, that these reasons for not disturbing acts of
injustice of old date, cannot apply to unjust systems or insti-
tutions ; since a bad law or usage is not one bad act, in the re-
mote past, but a perpetual repetition of bad acts, as long as
the law or usage lasts.

Such, then, being the essentials of private property, it is now
to be considered, to what extent the forms in which the insti-
tution has existed in different states of society, or still exists,
are necessary consequences of its principle, or are recom-
mended by the reasons on which it is grounded.

§ 3. Nothing is implied in property but the right of each to
his (or her) own faculties, to what he can produce by them, and
to whatever he can get for them in a fair market : together with

2i6 POLITICAL ECONOMY

his right to give this to any other person if he chooses, and the
right of that other to receive and enjoy it.

It follows, therefore, that although the right of bequest, or
gift after death, forms part of the idea of private property, the
right of inheritance, as distinguished from bequest, does not.
That the property of persons who have made no disposition of
it during their lifetime, should pass first to their children, and
failing them, to the nearest relations, may be a proper ar-
rangement or not, but is no consequence of the principle of
private property. Although there belong to the decision of
such questions many considerations besides those of political
economy, it is not foreign to the plan of this work to suggest,
for the judgment of thinkers^ the view of them which most
recommends itself to the writer's mind.

No presumption in favor of existing ideas on this subject is
to be derived from their antiquity. In early ages, the property
of a deceased person passed to his children and nearest rela-
tives by so natural and obvious an arrangement, that no other
was likely to be even thought of in competition with it. In
the first place, they were usually present on the spot : they were
in possession, and if they had no other title, had that, so im-
portant in an early state of society, of first occupancy. Second-
ly, they were already, in a manner, joint owners of his property
during his life. If the property was in land, it had generally
been conferred by the State on a family rather than on an in-
dividual : if it consisted of cattle or movable goods, it had
probably been acquired, and was certainly protected and de-
fended, by the united efforts of all members of the family who
were of an age to work or fight. Exclusive individual prop-
erty, in the modern sense, scarcely entered into the ideas of
the time ; and when the first magistrate of the association died,
he really left nothing vacant but his own share in the division,
which devolved on the member of the family who succeeded to
his authority. To have disposed of the property otherwise,
would have been to break up a little commonwealth, united by
ideas, interest, and habits, and to cast them adrift on the world.
These considerations, though rather felt than reasoned about,
had so great an influence on the minds of mankind, as to create
the idea of an inherent right in the children to the possessions
of their ancestor ; a right which it was not competent to himself
to defeat. Bequest, in a primitive state of society, was seldom

PROPERTY 217

recognized ; a clear proof, were there no other, that property
was conceived in a manner totally different from the conception
of it in the present time.*

But the feudal family, the last historical form of patriarchal
life, has long perished, and the unit of society is not now the
family or clan, composed of all the reputed descendants of a
common ancestor, but the individual ; or at most a pair of in-
dividuals, with their unemancipated children. Property is now
inherent in individuals, not in families : the children when
grown up do not follow the occupations or fortunes of the
parent : if they participate in the parent's pecuniary means it
is at his or her pleasure, and not by a voice in the ownership
and government of the whole, but generally by the exclusive
enjoyment of a part : and in this country at least (except as far
as entails or settlements are an obstacle) it is in the power of
parents to disinherit even their children, and leave their
fortune to strangers. More distant relatives are in general
almost as completely detached from the family and its inter-
ests as if they were in no way connected with it. The only
claim they are supposed to have on their richer relations, is to
a preference, ceteris paribus, in good offices, and some aid in
case of actual necessity.

So great a change in the constitution of society must make
a considerable difiference in the grounds on which the disposal
of property by inheritance should rest. The reasons usually
assigned by modern writers for giving the property of a per-
son who dies intestate, to the children, or nearest relatives,
are first, the supposition that in so disposing of it, the law is
more likely than in any other mode to do what the proprietor
would have done, if he had done anything ; and secondly, the
hardship, to those who lived with their parents and partook
in their opulence, of being cast down from the enjoyments of
wealth into poverty and privation.

There is some force in both these arguments. The law
ought, no doubt, to do for the children or dependents of an
intestate, whatever it was the duty of the parent or protector
1o have done, so far as this can be known by anyone besides
himself. Since, however, the law cannot decide on individual
claims, but must proceed by general rules, it is next to be con-
sidered what these rules should be.

• See, for admirable illustrations of Maine's profound work on " Ancient
this and many kindred points, Mr. Law and its relation to Modern Ideas."

2i8 POLITICAL ECONOMY

We may first remark, that in regard to collateral relatives,
it is not, unless on grounds personal to the particular indi-
vidual, the duty of any one to make a pecuniary provision for
them. No one now expects it, unless there happens to be no
direct heirs ; nor would it be expected even then, if the expec-
tation were not created by the provisions of the law in case of
intestacy. I see, therefore, no reason why collateral inheritance
should exist at all. Mr. Bentham long ago proposed, and
other high authorities have agreed in the opinion, that if there
are no heirs either in the descending or in the ascending line,
the property, in case of intestacy, should escheat to the State.
With respect to the more remote degrees of collateral relation-
ship, the point is not very likely to be disputed. Few will main-
tain that there is any good reason why the accumulations of
some childless miser should on his death (as every now and
then happens) go to enrich a distant relative who never saw
him, who perhaps never knew himself to be related to him
until there was something to be gained by it, and who had no
moral claim upon him of any kind, more than the most entire
stranger. But the reason of the case applies alike to all col-
laterals, even in the nearest degree. Collaterals have no real
claims, but such as may be equally strong in the case of non-
relatives ; and in the one case as in the other, where valid
claims exist, the proper mode of paying regard to them is by
bequest.

The claims of children are of a different nature : they are
real, and indefeasible. But even of these, I venture to think
that the measure usually taken is an erroneous one : what is
due to children is in some respects underrated, in others, as it
appears to me, exaggerated. One of the most binding of all
obligations, that of not bringing children into the world unless
they can be maintained in comfort during childhood, and
brought up with a likelihood of supporting themselves when of
full age, is both disregarded in practice and made light of in
theory in a manner disgraceful to human intelligence. On the
other hand, when the parent possesses property, the claims of
the children upon it seem to me to be the subject of an opposite
error. Whatever fortune a parent may have inherited, or still
more, may have acquired, I cannot admit that he owes to his
children, merely because they are his children, to leave them
rich, without the necessity of any exertion. I could not ad-

PROPERTY 219

mit it, even if to be so left were always, and certainly, for the
good of the children themselves. But this is in the highest
degree uncertain. It depends on individual character. With-
out supposing extreme cases, it may be affirmed that in a ma-
jority of instances the good not only of society but of the indi-
viduals would be better consulted by bequeathing to them a
moderate than a large provision. This, which is a common-
place of moralists ancient and modern, is felt to be true by
many intelligent parents, and would be acted upon much more
frequently, if they did not allow themselves to consider less
what really is, than what will be thought by others to be, ad-
vantageous to the children.

The duties of parents to their children are those which are
indissolubly attached to the fact of causing the existence of a
human being. The parent owes to society to endeavor to
make the child a good and valuable member of it, and owes to
the children to provide, so far as depends on him, such edu-
cation, and such appliances and means, as will enable them to
start with a fair chance of achieving by their own exertions
a successful life. To this every child has a claim ; and I can-
not admit, that as a child he has a claim to more. There is a
case in which these obligations present themselve's in their
true light, without any extrinsic circumstances to disguise or
confuse them : it is that of an illegitimate child. To such a
child it is generally felt that there is due from the parent, the
amount of provision for his welfare which will enable him to
make his life on the whole a desirable one. I hold that to no
child, merely as such, anything more is due, than what is ad-
mitted to be due to an illegitimate child : and that no child
for whom thus much has been done, has, unless on the score of
previously raised expectations, any grievance, if the remainder
of the parent's fortune is devoted to public uses, or to the bene-
fit of individuals on whom in the parent's opinion it is better
bestowed.

In order to give the children that fair chance of a desirable
existence, to which they arc entitled, it is generally necessary
that they should not be brought up from childhood in habits
of luxury which they will not have the means of indulging in
after life. This, again, is a duty often flagrantly violated by
possessors of terminable incomes, who have little property to
leave. When the children of rich parents have lived, as it is

220 POLITICAL ECONOMY

natural they should do, in habits corresponding to the scale of
expenditure in which the parents indulge, it is generally the
duty of the parents to make a greater provision for them, than
would suffice for children otherwise brought up. I say gen-
erally, because even here there is another side to the question.
It is a proposition quite capable of being maintained, that to a
strong nature which has to make its way against narrow cir-
cumstances, to have known early some of the feelings and
experiences of wealth, is an advantage both in the formation
of character and in the happiness of life. But allowing that
children have a just ground of complaint, who have been
brought up to require luxuries which they are not afterwards
likely to obtain, and that their claim, therefore, is good to a
provision bearing some relation to the mode of their bringing
up ; this, too, is a claim which is particularly liable to be
stretched further than its reasons warrant. The case is ex-
actly that of the younger children of the nobility and landed
gentry, the bulk of whose fortune passes to the eldest son.
The other sons, who are usually numerous, are brought up in
the same habits of luxury as the future heir, and they receive, as
a younger brother's portion, generally what the reason of the
case dictates, namely, enough to support, in the habits of life
to which they are accustomed, themselves, but not a wife or
children. It really is no grievance to any man, that for the
means of marrying and of supporting a family, he has to de-
pend on his own exertions.

A provision, then, such as is admitted to be reasonable in
the case of illegitimate children, of younger children, wherever
in short the justice of the case, and the real interests of the in-
dividuals and of society, are the only things considered, is, I
conceive, all that parents owe to their children, and all, there-
fore, which the state owes to the children of those who die in-
testate. The surplus, if any, I hold that it may rightfully ap-
propriate to the general purposes of the community. I would
not, however, be supposed to recommend that parents should
never do more for their children than what, merely as children,
they have a moral right to. In some cases it is imperative, in
many laudable, and in all allowable, to do much more. For
this, however, the means are afforded by the liberty of bequest.
It is due, not to the children but to the parents, that they should
have the power of showing marks of affection, of requiting

PROPERTY 22 1

services and sacrifices, and of bestowing their wealth according
to their own preferences, or their own judgment of fitness.

§ 4. Whether the power of bequest should itself be subject
to limitation, is an ulterior question of great importance. Un-
like inheritance ab intcstato, bequest is one of the attributes of
property: the ownership of a thing^cannotjbe looked upon as
complete without the power of bestowing it, at death or dur-
ing life, at the owner's pleasure : and all the reasons, which
recommend that private property should exist, recommend pro
tanto this extension of it. But property is only a means to an
e^nd^ not itself the end. Eike aTT other proprietary rights, and
even in a greater degree than most, the power of bequest may
be so exercised as to conflict with the permanent interests of
Jhe human race. It does so, when, not content with bequeath-
ing an estate to A, the testator prescribes that on A's death it
shall pass to his eldest son, and to that son's son, and so on
forever. No doubt, persons have occasionally exerted them-
selves more strenuously to acquire a fortune from the hope of
founding a family in perpetuity; but the mischiefs to society
of such perpetuities outweigh the value of this incentive to ex-
ertion, and the incentives in the case of those who have the
opportunity of making large fortunes are strong enough with-
out it. A similar abuse of the power of bequest is committed
when a person who does the meritorious act of leaving property
for public uses, attempts to prescribe the details of its applica-
tion in perpetuity ; when in founding a place of education,
(for instance) he dictates, forever, what doctrines shall be
taught. It being impossible that any one should know what
doctrines will be fit to be taught after he has been dead for
centuries, the law ought not to give effect to such dispositions
of property, unless subject to the perpetual revision (after a
certain interval has elapsed) of a fitting authority.

These are obvious limitations. But even the simplest exer-
cise of the right of bequest, that of determining the person to
whom property shall pass immediately on the death of the
testator, has always been reckoned among the privileges which
might be limited or varied, according to views of expediency.
The limitations, hitherto, have been almost solely in favor of
children. In England the right is in principle unlimited, al-
most the only impediment being that arising from a settlement
by a former proprietor, in which case the holder for the time

222 POLITICAL ECONOMY

being cannot indeed bequeath his possessions, but only be-
cause there is nothing to bequeath, he having merely a life
interest. By the Roman law on which the civil legislation of
the Continent of Europe is principally founded, bequest origi-
nally was not permitted at all, and even after it was introduced,
a Icgitima portio was compulsorily reserved for each child ; and
such is still the law in some of the Continental nations. By the
French law since the Revolution, the parent can only dispose
by will, of a portion equal to the share of one child, each of
the children taking an equal portion. This entail, as it may be
called, of the bulk of every one's property upon the children
collectively, seems to me as little defensible in principle as an
entail in favor of one child, though it does not shock so di-
rectly the idea of justice. I cannot admit that parents should
be compelled to leave to their children even that provision
which, as children, I have contended that they have a moral
claim to. Children may forfeit that claim by general unworthi-
ness, or particular ill-conduct to the parents : they may have
other resources or prospects : what has been previously done
for them, in the way of education and advancement in life, may
fully satisfy their moral claim ; or others may have claims
superior to theirs.

The extreme .restriction of the power of bequest in French
law was adopted as a democratic expedient, to break down the_
custom of primogeniture, and counteract the tendency of in-
herited property to collect in large masses. I agree in thinking
these objects eminently desirable ; bu_t the means used are not,
I think, the most judicious. Were I framing a code of laws
according to what seems to me best in itself, without regard
to existing opinions and sentiments, I should prefer to restrict,
not what any one might bequeath, but what any one should be
permitted to acquire, by bequest or inheritance. Each person
should have power to dispose by will of his or her whole prop-
erty ; but not to lavish it in enriching some one individual,
beyond a certain maximum, which should be^xed sufficiently
high to afTord the means of comfortable independence. The
inequalities of property which arise from unequal industry, fru-
gality, perseverance, talents, and to a certain extent even op-
portunities, are inseparable from the principle of private prop-
erty, and if we accept the principle, we must bear with these
consequences of it : but I see nothing objectionable in fixing

PROPERTY

223

a limit to what any one may acquire by the mere favor of others,
without any exercise of his facuhies, and in requiring that if
he desires any further accession of fortune, he shall work for
it.* I do not conceive that the degree of limitation which this
would impose on the right of bequest, would be felt as a bur-
densome restraint by any testator who estimated a large fortune
at its true value, that of the pleasures and advantages that can
be purchased with it : on even the most extravagant estimate
of which, it must be apparent to every one, that the difference
to the happiness of the possessor between a moderate inde-
pendence and five times as much, is insignificant when weighed
against the enjoyment that might be given, and the perma-
nent benefits diffused, by some other disposal of the four-fifths.
So long indeed as the opinion practically prevails, that the best
thing which can be done for objecis of affection is to heap on
them to satiety those intrinsically worthless things on which
large fortunes are mostly expended, there might be little use
in enacting such a law, even if it were possible to get it passed,
since if there were the inclination, there would generally be
the power of evading it. The law would be unavailing unless
the popular sentiment went energetically along with it ; which
(judging from the tenacious adherence of public opinion in
France to the law of compulsory division) it would in some
states of society and government be very likely to do, how-
ever much the contrary may be the fact in England and at
the present time. If the restriction could be made practically
effectual, the benefit would be great. Wealth which could no
longer be employed in over-enriching a Jew, would citlier^ be
devoted to objects of public usefulness, or if bestowed on indi-
viduals, would be distributed among a larger number. While
those enormous fortunes which no one needs for any personal
purpose but ostentation or improper power, would become
much less numerous, there would be a great multiplication of
persons in easy circumstances, with the advantages of leisure.

* In the case of capital employed in
the hands of the owner himself, in car-
rying on any of the operations of in-
dustry, there are strong grounds for
leaving to him the power of bequeathing
to one person the whole of the funds
actually engaged in a single enterprise.
It is well that he should be en.ibled to
leave the enterprise under the control of
whichever of his heirs lie regards as best
fitted to conduct it virtuously and effi-
ciently; and the necessity (very frequent

and inconvenient imder the French law)
would be obviated, of breaking up a
manufacturing or commercial establish-
ment at the death of its chief. In like
manner it should be allowed to a pro-
prietor who leaves to one of his suc-
cessors the moral burden of keeping
up an ancestral mansion and park or
pleasure-ground, to bestow along with
them as much other property as is re-
quired for their sufiicient maintenance.

224

POLITICAL ECONOMY

and all the real enjoyments which wealth can give, except those
of vanity ; a class by whom the services which a nation having
leisured classes is entitled to expect from them, either by their
direct exertions or by the tone they give to the feelings and
tastes of the public, would be rendered in a much more bene-
ficial manner than at present. A large portion also of the ac-
cumulations of successful industry would probably be devoted
to public uses, either by direct bequests to the State, or by the
endowment of institutions ; as is already done very largely in
the United States, where the ideas and practice in the matter
of inheritance seem to be usually rational and beneficial.*

§ 5. The next point to be considered is, whether the reasons
on which the institution of property rests, are applicable to all
things in which a right of exclusive ownership is at present
recognized ; and if not, on what other grounds the recognition
is defensible.

" The essential principle of property being to assure to all per-
sons what they have produced by their labor and accumulated
by their abstinence, this principle cannot apply to what is not
the produce of labor, the raw material of the earth. If the land
derived its productive power wholly from nature, and not at all
from industry, or if there were any means of discriminating
what is derived from each source, it not only would not be
necessary, but it would be the height of injustice, to let the gift
of nature be engrossed by individuals. The use of the land in
agriculture must indeed, for the time being, be of necessity
exclusive ; the same person who has ploughed and sown must
be permitted to reap : but the land might be occupied for one
season only, as among the ancient Germans ; or might be
periodically redivided as population increased : or the State

* " Munificent bequests and donations
for public purposes, whether charitable
or educational, form a striking feature
in the modern history of the United
States, and especially of New England.
Not only is it common for rich capital-
ists to leave by will a portion of their
fortune towards the endowment of na-
tional institutions, but individuals dur-
ing their lifetime make magnificent
grants of money for the same objects.
There is here no compulsory law for the
equal partition of property among chil-
dren, as in France, and on the other
hand, no custom of entail or primogeni-
ture, as in England, so that the affluent
feel themselves at liberty to share their
wealth between their kindred and the
public; it being impossible to found a
family, and parents having frequently

the happiness of seeing all their chil-
dren well provided for and independent
long before their death. I have seen a
list of bequests and donations made dur-
ing the last thirty years for the benefit
of religious, charitable, and literary in-
stitutions in the State of Massachusetts
alone, and they amounted to no less a
sum than six millions of dollars, or more
than a million sterling." — Lyell's " Trav-
els in America," vol. i. p. 263.

In England, whoever leaves anything,
beyond trifling legacies, for public or
beneficent objects, when he has any near
relatives living, does so at the risk of
being declared insane by a jury after
his death, or at the least, of having the
property wasted in a Chancery suit to
set aside the will.

PROPERTY

225

might be the universal landlordj and the cultivators tenants
under it, either on lease or at will.

"^"Biit though land is not the produce of industry, most of its
valuable qualities are so. Labor is not only requisite for using,
but almost equally so for fashioning the instrument. Consid-
erable labor is often required at the commencement, to clear
the land for cultivation. In many cases, even when cleared, its
productiveness is wholly the effect of labor and art. The Bed-
ford Level produced little or nothing until artifically drained.
The bogs of Ireland, until the same thing is done to them, can
produce little besides fuel. One of the barrenest soils in the
world, composed of the material of the Goodwin Sands, the
Pays de Waes in Flanders, has been so fertilized by industry,
as to have become one of the most productive in Europe. Cul-
tivation also requires buildings and fences, which are wholly
the produce of labor. The fruits of this industry cannot be
reaped in a short period. The labor and outlay are immediate,
the benefit is spread over many years, perhaps over all future
time. ''A holder will not incur this labor and outlay when
strangers and not himself will be benefited by it. "If he under-
takes such improvements, he must have a sufficient period be-
fore him in which to profit by them ; and he is in no way so
sure of having always a sufficient period as when his tenure is
perpetual.*^''

§ 6. These are the reasons which form the justification, in
an economical point of view, of property in land. It is seen that

* " What endowed man with intelli-
gence and perseverance in labor, what
made him direct all his efforts towards
an end useful to his race, was the senti-
ment of perpetuity. The lands which
the streams have deposited along their
course are always the most fertile, hut
are also those which they menace with
their inundations or corrupt by marshes.
Under the guarantee of perpetuity men
undertook long and painful labors to
give the marshes an outlet, to erect em-
bankments against inundations, to dis-
tribute by irrigation-channels fertilizing
waters over the same fields which the
same waters had condemned to sterility.
Under the same guarantee, man, no
longer contenting himself with the an-
nual products of the earth, distin-
guished among the wild vegetation the
perennial plants, shrubs, and trees
which would be useful to him, improved
them by culture, changed, it may al-
most be said, their very nature, and
multiplied their amount. There are
fruits which it required centuries of
cultivation to bring to their present per-

VOL. I.— 15

//

fection, and others which have been in-
troduced from the most remote regions.
Men have opened the earth to a great
depth to renew the soil, and fertilize
it by the mixture of its parts and by
contact with the air; they have fixed
on the hillsides the soil which would
have slid off, and have covered the face
of the country with a vegetation every-
where abundant, and everywhere useful
to the human race. Among their labors
there are some of which the fruits can
only be reaped at the end of ten or of
twenty years; there are others by which
their posterity will still benefit after sev-
eral centuries. All have concurred in
augmenting the productive force of na-
ture, in giving to mankind a revenue
infinitely more abundant, a revenue of
which a considerable part is consumed
by those who have no share in the own-
ership of the land, but who would not
have found a maintenance but for that
appropriation of the soil by which they
seem, at first sight, to have been disin-
herited."— Sismondi, " Studies in Po-
litical Economy," Third Essay, on Ter-
ritorial W'L'alth.

226 POLITICAL ECONOMY

they are only valid, in so far as the proprietor of land is its
improver.'^ Whenever, in any country, the proprietor, generally
speaking, ceases to be the improver, political economy has
nothing to say in defence of landed property, as there estab-
lished. In no sound theory of private property was it ever con-
templated that the proprietor of land should be merely a sine-
curist quartered on it.

In Great Britain, the landed proprietor is not unfrequently
an improver. But it cannot be said that he is generally so.
And in the majority of cases he grants the liberty of cultivation
on such terms, as to prevent improvements from being made
by any one else. In the southern parts of the island, as there
are usually no leases, permanent improvements can scarcely be
made except by the landlord's capital ; accordingly the South,
compared with the North of England, and with the Lowlands
of Scotland, is still extremely backward in agricultural im-
provement. The truth is, that any very general improvement
of land by the landlords, is hardly compatible with a law or
custom of primogeniture. When the land goes wholly to the
heir, it generally goes to him severed from the pecuniary re-
sources which would enable him to improve it, the personal
property being absorbed by the provision for younger chil-
dren, and the land itself often heavily burdened for the same
purpose. There is, therefore, but a small proportion of land-
lords who have the means of making expensive improvements,
unless they do it with borrowed money, and by adding to the
mortgages with which in most cases the land was already
burdened when they received it. But the position of the owner
of a deeply mortgaged estate is so precarious ; economy is
so unwelcome to one whose apparent fortune greatly exceeds
his real means, and the vicissitudes of rent and price which
only trench upon the margin of his income, are so formidable
to one who can call little more than the margin his own ; that
it is no wonder if few landlords find themselves in a condition
to make immediate sacrifices for the sake of future profit.
Were they ever so much inclined, those alone can prudently
do it, who have seriously studied the principles of scientific
agriculture : and great landlords have seldom seriously studied
anything. They might at least hold out inducements to the
farmers to do what they will not or cannot do themselves ; but
even in granting leases, it is in England a general complaint

PROPERTY

227

that they tie up their tenants by covenants grounded on the
practices of an obsolete and exploded agriculture : while most
of them, by withholding leases altogether, and giving the
farmer no guarantee of possession beyond a single harvest,
keep the land on a footing little more favorable to improve-
ment than in the time of our barbarous ancestors,

" immetata quibus jugera liberas

Fruges et Cererem ferunt.

Nee cultura placet longior annua."

Landed property in England is thus very far from completely
fulfilling the conditions which render its existence economi-
cally justifiable. But if insufficiently realized even in England,
in Ireland those conditions are not complied with at all. With
individual exceptions (some of them very honorable ones), the
owners of Irish estates do nothing for the land but drain it
of its produce. What has been epigrammatically said in the
discussions on " peculiar burdens " is literally true when ap-
phed to them ; that the greatest " burden on land " is the land-
lords. Returning nothing to the soil, they consume its whole
produce, minus the potatoes strictly necessary to keep the in-
habitants from dying of famine : and when they have any pur-
pose of improvement, the preparatory step usually consists in
not leaving even this pittance, but turning out the people to
beggary if not to starvation.* When landed property has
placed itself upon this footing it ceases to be defensible, and
the time has come for making some new arrangement of the
matter.

When the '" sacredness of property " is talked of, it should
always be remembered, that any such sacredness does not be-
long in the same degree to landed property. No man made the
land. It is the original inheritaiice of the whole_species. Its
appropriation is wholly a question of general expediency.
When private property in lands is not expedientTTTTs unjust.
It is no hardship to any one, to be excluded from what others
have produced : they were not bound to produce it for his use,
and he loses nothing by not sharing in what otherwise would
not have existed at all. But it is some hardship to be born
into the world and to find all nature's gifts previously en-

* I must beg the reafler to bear in nomical, taking place in our age, that,

mind that this paragraph was written without perjictually rewriting a work

eighteen years ago (iX^R). So wonrlerful like tlie present, it is impossible to keep

are the changes, both moral and ceo- up with them.

228 POLITICAL ECONOMY

grossed, and no place left for the new-comer. To reconcile
people to this, after they have once admitted into their minds
the idea that any moral rights belong to them as human be-
ings, it will always be necessary to convince them that the ex-
clusive appropriation is good for mankind on the whole, them-
selves included. But this is what no sane human being could
be persuaded of, if the relation between the landowner and the
cultivator were the same everywhere as it has been in Ireland.
Landed property is felt even by those most tenacious of its
rights, to be a different thing from other property ; and where
the bulk of the community have been disinherited of their share
of it, and it has become the exclusive attribute of a small minor-
ity, men have generally tried to reconcile it, at least in theory,
to their sense of justice, by endeavoring to attach duties to it,
and erecting it into a sort of magistracy, either moral or legal.
But if the state is at liberty to treat the possessors of land as
public functionaries, it is only going one step further to say,
that it is at liberty to discard them. The claim of the land-
owners to the land is altogether subordinate to the general pol-
icy of the state. The principle of property gives them no right
to the land, but only a right to compensation for whatever por-
tion of their interest in the land it may be the policy of the state
to deprive them of. To that, their claim is indefeasible. It is
due to landowners, and to owners of any property whatever,
recognized as such by the state, that they should not be dis-
possessed of it without receiving its pecuniary value, or an an-
nual income equal to what they derived from it. This is due
on the general principles on which property rests. If the land
was bought with the produce of the labor and abstinence of
themselves or their ancestors, compensation is due to them on
that ground ; even if otherwise, it is still due on the ground
of prescription. Nor can it ever be necessary for accomplish-
ing an object by which the community altogether will gain,
that a particular portion of the community should be immo-
lated. When the property is of a kind to which peculiar af-
fections attach themselves, the compensation ought to exceed
a bare pecuniary equivalent. But, subject to this proviso, the
state is at liberty to deal with landed property as the general
interests of the community may require, even to the extent, if
it so happen, of doing with the whole, what is done with a part
whenever a bill is passed for a railroad or a new street. The

PROPERTY 229

community has too much at stake in the proper cultivation of
the land, and in the conditions annexed to the occupancy of it,
to leave these things to the discretion of a class of persons
called landlords, when they have shown themselves unfit for
the trust. The legislature, which if it pleased might convert
the whole body of landlords into fund-holders or pensioners,
might, a fortiori, commute the average receipts of Irish land-
owners into a fixed rent charge, and raise the tenants into pro-
prietors ; supposing always that the full market value of the
land was tendered to the landlords, in case they preferred that
to accepting the conditions proposed.

There will be another place for discussing the various modes
of landed property and tenure, and the advantages and incon-
veniences of each ; in this chapter our concern is with the right
itself, the grounds which justify it, and (as a corollary from
these) the conditions by which it should be limited. To me
it_seems almost an axiom that property in land should be inter-
preted strictly, and that the balance in all cases of doubt should
incline against the proprietor. The reverse is the case with
property in movables, and in all things the product of labor ;
over these, the owner's power both of use and of exclusion
should be absolute, except where positive evil to others would
result from it ; but injhe case of land, no exclusive right should
be permitted in any individual, which cannot be shown to be
productive of positive good. To be allowed any exclusive right
at all, over a portion of the common inheritance, while there are
others who have no portion, is already a privilege. No quan-
tity of movable goods which a person can acquire by his labor,
prevents others from acquiring the like by the same means ;
but from the very nature of the case, whoever owns land, keeps
others out of the enjoyment of it. The privilege, or monopoly,
is only defensible as a necessary evil ; it becomes an injustice
when carried to any point to which the compensating good
does not follow it.

For instance, the exclusive right to the land for purposes
of cultivation does not imply an exclusive right to it for pur-
poses of access ; and no such right ought to be recognized,
except to the extent necessary to protect the produce against
damage, and the owner's privacy against invasion. The pre-
tension of two Dukes to shut up a part of the Highlands, and
exclude the rest of mankind from many square miles of moun-

23© POLITICAL ECONOMY

tain scenery to prevent disturbance to wild animals, is an abuse ;
it exceeds the legitimate bounds of the right of landed property.
When land is not intended to becultiyated, no good reason
can in general be given for its being private property at all ;
and if any one is permitted to call it his, he ought to know that
he holds it by sufferance of the community, and on an implied
condition that his ownership, since it cannot possibly do them
any good, at least shall not deprive them of any, which they
could have derived from the land if it had been unappropriated.
Even in the case of cultivated land, a man whom, though only
one among millions, the law permits to hold thousands of acres
as his single share, is not entitled to think that all this is given
to him to use and abuse, and deal with as if it concerned no-
body but himself. The rents or profits which he can obtain
from it are at his sole disposal ; but with regard to the land,
in everything which he does with it, and in everything which
he abstains from doing, he is morally bound, and should when-
ever the case admits be legally compelled, to make his interest
and pleasure consistent with the public good. The species at
large still retains, of its original claim to the soil of the planet
which it inhabits, as much as is compatible with the purposes
for which it has parted with the remainder.

§ 7. Besides property in the produce of labor, and property
in land, there are other things which are or have been subjects
of property, in which jip proprietary rights ought to exist at
an. But as the civilized world has in general made up its mind
on most of these, there is no necessity for dwelling on them in
this place. At the head of them, is property in human beings.
It is almost superfluous to observe, that this institution can
have no place in any society even pretending to be founded on
justice, or on fellowship between human creatures. But, in-
iquitous as it is, yet when the state has expressly legalized it,
and human beings, for generations, have been bought, sold,
and inherited under sanction of law, it is another wrong, in
abolishing the property, not to make full compensation. This
wrong was avoided by the great measure of justice in 1833,
one of the most virtuous acts, as well as the most practically
beneficent, ever done collectively by a nation. Other exam-
ples of property which ought not to have been created, are
properties in public trusts : such as judicial ofifices under the
old French regime, and the heritable jurisdictions which, in

CLASSES WHO DIVIDE THE PRODUCE 231

countries not wholly emerged from feudality, pass with the
land. Our own country affords, as cases in point, that of a
commission in the army, and of an advowson, or right of nomi-
nation to an ecclesiastical benefice. A property is also some-
times created in a right of taxing the public ; in a monopoly,
for instance, or other exclusive privilege. These abuses pre-
vail most in semi-barbarous countries ; but are not without
example in the most civilized. In France there are several im-
portant trades and professions, including notaries, attorneys,
brokers, appraisers, printers, and (until lately) bakers and
butchers, of which the numbers are limited by law. The brevet
or privilege of one of the permitted number consequently
brings a high price in the market. When this is the case,
compensation probably could not with justice be refused, on
the abolition of the privilege. There are other cases in which
this would be more doubtful. The question would turn upon
what, in the peculiar circumstances, was sufficient to consti-
tute prescription ; and whether the legal recognition which
the abuse had obtained, was sufficient to constitute it an insti-
tution, or amounted only to an occasional license. It would
be absurd to claim compensation for losses caused by changes
in a tariff, a thing confessedly variable from year to year ; or
for monopolies like those granted to individuals by the Tudors,
favors of a despotic authority, which the power that gave was
competent at any time to recall.

So much on the institution of property, a subject of which,
for the purposes of political economy, it was indispensable to
treat, but on which we could not usefully confine ourselves to
economical considerations. We have now to inquire on what
principles and with what results the distribution of the produce
of land and labor is effected, under the relations which this
institution creates among the different members of the com-
munity.

Chapter III. — Of the Classes among Whom the Produce is

Distributed

§ I. Private property being assumed as a fact, we have next
to enumerate the different classes of persons to whom it gives
rise ; whose concurrence, or at least whose permission, is neces-
sary to production, and who arc therefore able to stipulate for
a share of the produce. We have to inquire, according to what

232

POLITICAL ECONOMY

0

laws the produce distributes itself among these classes, by the
spontaneous action of the interests of those concerned : after
which, a further question will be, what effects are or might be
produced by laws, institutions, and measures of government,
in superseding or modifying that spontaneous distribution.

The three requisites of production, as has been so often re-
peated, are labor, capital, and land : understanding by capital,
the means and appliances which are the accumulated results

_ of previous labor, and by land, the materials and instruments
supplied by nature, whether contained in the interior of the
earth or constituting its surface. Since each of these elements
of production may be separately appropriated, the Jndustrial
community may be considered as divided into landowners,
capitalists, and productive laborers. Each of these classes, as
such, obtains a share of the produce : no other person or class
obtains anything, except by concession from them. The re-
mainder of the community is, in fact, supported at their ex-
pense, giving, if any equivalent, one consisting of unproduc-
tive services. These three classes, therefore, are considered
in political economy as making up the whole community.

§ 2. But although these three sometimes exist as separate
classes, dividing the produce among them, they do not neces-
sarily or always so exist. The fact is so much otherwise, that
there are only one or two communities in which the complete
separation of these classes is the general rule. England and
Scotland, with parts of Belgium and Holland, are almost the
only countries in the world where the land, capital, and labor
employed in agriculture, are generally the property of separate
owners. The ordinary case is, that the same person owns either

.twQ_of. these requisites, or all three.

The case in which the same person owns all three, embraces
the two extremes of existing society, in respect to the inde-
pendence and dignity of the laboring class. First, when the
laborer himself is the proprietor. This is the commonest case
in the Northern States of the American Union ; one of the com-
monest in France, Switzerland, the three Scandinavian king-
doms, and parts of Germany ; * and a common case in parts

* " The Norwegian return " (say the sus in 1825, out of a population of 1,051,-

Commissioners of Poor Law Inquiry, 318 persons, there were 59,464 freeholders.

to whom information was furnished from As by 59,464 freeholders must be meant

nearly every country in Europe and 59,464 heads of families, or about 300,000

America by the ambassadors and con- individuals; the freeholders must form

suls there) " states that at the last cen- more than one-fourth of the whole popu-

CLASSES WHO DIVIDE THE PRODUCE

233

of Italy and in Belgium. In all these countries there are, no
doubt, large landed properties, and a still greater number
which, without being large, require the occasional or constant
aid of hired laborers. Much, however, of the land is owned in
portions too small to require any other labor than that of the
peasant and his family, or fully to occupy even that. The
capital employed is not always that of the peasant proprietor,
many of these small properties being n:iortgaged to obtain the
means of cultivating; but the capital is invested at the peasant's
risk, and though he pays interest for it, it gives to no one any
right of interference, except perhaps eventually to take posses-
sion of the land, if the interest ceases to be paid.

The other case in which the land, labor, and capital, belong
to the same person, is the case of slave countries, in which the ^
laborers themselves are owned by the landowner. Our West
India colonies before emancipation, and the sugar colonies of
the nations by whom a similar act of justice is still unperformed,
are examples of large establishments for agricultural and man-
ufacturing labor (the production of sugar and rum is a com-
bination of both) in which the land, the factories (if they may
be so called), the machinery, and the degraded laborers, are
all the property of a capitalist. In this case, as well as in its
extreme opposite, the case of the peasant proprietor, .there is
jiQ.division of the produce.

§ 3. When the three requisites are not all ownedby the same
person, it often happens that two of them are so. Sometimes
the same person owns the capital and the land, but not the ■
labor. The landlord makes his engagement directly with the
laborer, and supplies the whole or part of the stock necessary
for cultivation. This system is the usual one in those parts of
Continental Europe, in which the laborers are neither serfs on
the one hand, nor proprietors on the other. It was very com-

lation. Mr. Macgregor states that in
Denmark (by which Zealand and the
adjoining islands are iirobahly meant)
out of a population of 926,110, the num-
ber of landed proprietors and farmers is
415,110, or nearly one-half. In .Sleswick-
Holstein, out of a population of 604,085,
it is 196,017, or about one-third. The
proportion of proprietors and farmers
to the whole population is not given in
Sweden: but the .Stockholm return esti-
mates the average quantity of land an-
nexed to a laborer's habitation at from
one to five acres; and though the (lot-
tenburg return gives a lower estimate,
it adds, that the peasants possess much

of the land. In Wurtemburg we are
told that more than two-thirds of the la-
boring population are the proprietors
of their own habitations, and that al-
most all own at least a garden of from
thrce-riuarters of an acre to an acre and
a half." In some of these statements,
proprietors and farmers are not discrimi-
nated; but "all the returns concur in
stating the number of day-laborers to be
very small."— (" Preface to Foreign
Communications," p. xxxviii.) As the
general st.Ttus of the laboring people,
the condition of a workman for hire is
almost peculiar to Great Britain.

234 POLITICAL ECONOMY

mon in France before the Revolution, and is still much prac-
tised in some parts of that country, when the land is not the
property of the cultivator. It prevails generally in the level
districts of Italy, except those principally pastoral, such as the
Maremma of Tuscany and the Campagna of Rome. On this
system the division of the produce is between two classes, the
landowner and the laborer.

In other cases again the laborer does not own the land, but
owns the little stock employed on it, the landlord not being in
the habit of supplying any. This system generally prevails in
Ireland. It is nearly universal in India, and in most countries
of the East ; whether the government retains, as it generally
does, the ownership of the soil, or allows portions to become,
either absolutely or in a qualified sense, the property of indi-
viduals. In India, however, things are so far better than in
Ireland, that the owner of land is in the habit of making ad-
vances to the cultivators, if they cannot cultivate without them.
For these advances the native landed proprietor usually de-
mands high interest ; but the principal landowner, the govern-
ment, makes them gratuitously, recovering the advance after
the harvest, together with the rent. The produce is here di-
vided,_ as before between the same two classes, the landowner
and the laborer.

These are the principal variations in the classification of

those among whom the produce of agricultural labor is dis-
tributed.,.. In the case of manufacturing industry there never

are more than two classes, the laborers and the capitalists.
The original artisans in all countries were either slaves, or the
women of the family. In the manufacturing establishments of
the ancients, whether on a large or on a small scale, the la-
borers were usually the property of the capitalist. In general,
if any manual labor was thought compatible with the dignity
of a freeman, it was only agricultural labor. The converse sys-
tem, in which the capital was owned by the laborer, was coeval
with free labor, and under it the first great advances of manu-
facturing industry were achieved. The artisan owned the loom
or the few tools he used, and worked on his own account ; or at
least ended by doing so, though he usually worked for an-
other, first as apprentice and next as journeyman, for a certain
number of years before he could be admitted a master. But
the status of a permanent jouriieymanj, all his life a hired laborer

COMPETITION AND CUSTOM 235

and nothing more, had no place in the crafts and guilds of the
MfddleTAgesT In country villages, where a carpenter or a
blacksmith cannot live and support hired laborers on the re-
turns of his business, he is even now his own workman ; and
shopkeepers in similar circumstances are their own shopmen,
or shopwomen. But wherever the extent of the market admits
of_k, the distinction is now fully established_between the class
of capitalists, or employers of labor, and tlie_class of laborers ;.
the capitalists, in general, contributing no other labor than that
of direction and superintendence.

Chapter IV. — Of Competition and Custom

§1. Under the rule of individual property, the division of the
produce is the result of two determining agencies: Competition,
and Custom. It is important to ascertain the amount of influ-
ence which belongs to each of these causes, and in what manner
the operation of one is modified by the other.

Political economists generally, and English political econo-
mists above others, have been accustomed to lay almost ex-
clusive stress upon the first of these agencies; to exaggerate
the effect of competition, and to take into little account the
other and conflicting principle. They are apt to express them-
selves as if they thought that competition actually does, in all
cases, whatever it can be shown to be the tendency of competi-
tion to do. This is partly intelligible, if we consider that only
through the principle of competition has political economy any
pretension to the character of a science. So far as rents, profits,
wages, prices, are determined by competition, laws may be as-
signed for them. Assume competition to be their exclusive
regulator, and principles of broad generality and scientific pre-
cision may be laid down, according to which they will be regu-
lated. The political economist justly deems this his proper
business: and, as an alistract or hypothetical science, political
economy cannot be required to do, and indeed cannot do, any-
thing more. But it would be a great misconception of the actual
course of human affairs, to suppose that competition exercises
in fact this unlimited sway. I am not speaking of monopolies,
either natural or artificial, or of any interferences of authority
with the liberty of production or exchange. Such disturbing

236 POLITICAL ECONOMY

causes have always been allowed for by political economists. I
speak of cases in which there is nothing to restrain competition:
no hindrance to it either in the nature of the case or in artificial
obstacles; yet in which the result is not determined by competi-
tion, but by custom or usage; competition either not taking
place at all, or producing its effect in quite a different manner
from that which is ordinarily assumed to be natural to it.

§ 2. Competition, in fact, has only become in any considerable
degree the governing principle of contracts, at a comparatively
modern period. The further we look back into history, the more
we see all transactions and engagements under the influence of
fixed customs. The reason is evident. Custom is the most
powerful protector of the weak against the strong; their sole
protector where there are no laws or government adequate to
the purpose. Custom is a barrier which, even in the most op-
pressed condition of mankind, tyranny is forced in some degree
to respect. To the industrious population in a turbulent military
community, freedom of competition is a vain phrase; they are
never in a condition to make terms for themselves by it : there is
always a master who throws his sword into the scale, and the
terms are such as he imposes. But though the law of the strong-
est decides, it is not the interest nor in general the practice of
the strongest to strain that law to the utmost, and every relaxa-
tion of it has a tendency to become a custom, and every custom
to become a right. Rights thus originating, and not competi-
tion in any shape, determine, in a rude state of society, the
share of the produce enjoyed by those who produce it. The re-
lations, more especially, between the landowner and the culti-
vator, and the payments made by the latter to the former, are,
in all states of society but the most modern, determined by the
usage of the country. Never until late times have the conditions
of the occupancy of land been (as a general rule) an affair of
competition. The occupier for the time has very commonly
been considered to have a right to retain his holding, while he
fulfils the customary requirements; and has thus become, in a
certain sense, a co-proprietor of the soil. Even where the holder
has not acquired this fixity of tenure, the terms of occupation
have often been fixed and invariable.

In India, for example, and other Asiatic communities simi-
larly constituted, the ryots, or peasant-farmers, are not regarded
as tenants at will, nor even as tenants by virtue of a lease. In

COMPETITION AND CUSTOM 237

most villages there are indeed some ryots on this precarious
footing, consisting of those, or the descendants of those, who
have settled in the place at a known and comparatively recent
period: but all who are looked upon as descendants or repre-
sentatives of the original inhabitants, and even many mere ten-
ants of ancient date, are thought entitled to retain their land,
as long as they pay the customary rents. What these customary
rents are, or ought to be, has indeed, in most cases, become a
matter of obscurity; usurpation, tyranny, and foreign conquest
having to a great degree obliterated the evidences of them. But
when an old and purely Hindoo principality falls under the do-
minion of the British Government, or the management of its
officers, and when the details of the revenue system come to be
inquired into, it is usually found that though the demands of
the great landholder, the State, have been swelled by fiscal ra-
pacity until all limit is practically lost sight of, it has yet been
thought necessary to have a distinct name and a separate pretext
for each increase of exaction; so that the demand has sometimes
come to consist of thirty or forty different items, in addition to
the nominal rent. This circuitous mode of increasing the pay-
ments assuredly would not have been resorted to, if there had
been an acknowledged right in the landlord to increase the rent.
Its adoption is a proof that there was once an effective limita-
tion, a real customary rent ; and that the understood right of the
ryot to the land, so long as he paid rent according to custom, was
at some time or other more than nominal.* The British Govern-
ment of India always simplifies the tenure by consolidating the
various assessments into one, thus making the rent nominally as
well as really an arbitrary thing, or at least a matter of specific
agreement : but it scrupulously respects the right of the ryot to
the land, though until the reforms of the present generation (re-
forms even now only partially carried into effect) it seldom left
him much more than a bare subsistence.

In modern Europe the cultivators have gradually emerged
from a state of personal slavery. The barbarian conquerors of
the Western empire found that the easiest mode of managing
their conquests would be to leave the occupation of the land in
the hands in which they found it, and to save themselves a labor

• The ancient law books of flie TTin- that the rules laid down in those books

doos mention in some cases one-sixth, were, at any period of history, really

in others one-fourth of the produce, as acted upon.
a proper rent; but there is no evidence

238 POLITICAL ECONOMY

so uncongenial as the superintendence of troops of slaves, by
allowing the slaves to retain in a certain degree the control of
their own actions, under an obligation to furnish the lord with
provisions and labor. A common expedient was to assign
to the serf, for his exclusive use, as much land as was thought
sufficient for his support, and to make him work on the other
lands of his lord whenever required. By degrees these indefinite
obligations were transformed into a definite one, of supplying
a fixed quantity of provisions or a fixed quantity of labor: and
as the lords, in time, became inclined to employ their income in
the purchase of luxuries rather than in the maintenance of re-
tainers, the payments in kind were commuted for payments in
money. Each concession, at first voluntary and revocable at
pleasure, gradually acquired the force of custom, and was at
last recognized and enforced by the tribunals. In this manner
the serfs progressively rose into a free tenantry, who held their
land in perpetuity on fixed conditions. The conditions v/ere
sometimes very onerous, and the people very miserable. But
their obligations were determined by the usage or law of the
country, and not by competition.

Where the cultivators had never been, strictly speaking, in
personal bondage, or after they had ceased to be so, the exigen-
cies of a poor and little advanced society gave rise to another
arrangement, which in some parts of Europe, even highly im-
proved parts, has been found suf^ficiently advantageous to be
continued to the present day. I speak of the metayer system.
Under this, the land is divided in small farms, among single
families, the landlord generally supplying the stock which the
agricultural system of the country is considered to require, and
receiving, in lieu of rent and profit, a fixed proportion of the
produce. This proportion, which is generally paid in kind,
is usually (as is implied in the words metayer, mesaaiuolo, and
medictarius) , one-half. There are places, however, such as the
rich volcanic soil of the province of Naples, where the landlord
takes two-thirds, and yet the cultivator by means of an excellent
agriculture contrives to live. But whether the proportion is two-
thirds or one-half, it is a fixed proportion; not variable from
farm to farm, or from tenant to tenant. The custom of the
country is the universal rule; nobody thinks of raising or lower-
ing rents, or of letting land on other than the customary condi-
tions. Competition, as a regulator of rent, has no existence.

COMPETITION AND CUSTOM 239

§ 3. Prices, whenever there was no monopoly, came earHer
under the influence of competition, and are much more univer-
sally subject to it, than rents: but that influence is by no means,
even in the present activity of mercantile competition, so abso-
lute as is sometimes assumed. There is no proposition which
meets us in the field of political economy oftener than this — that
there cannot be two prices in the same market. Such undoubt-
edly is the natural effect of unimpeded competition; yet every-
one knows that there are, almost always, two prices in the same
market. Not only are there in every large town, and in almost
every trade, cheap shops and dear shops, but the same shop
often sells the same article at different prices to different cus-
tomers: and, as a general rule, each retailer adapts his scale
of prices to the class of customers whom he expects. The whole-
sale trade, in the great articles of commerce, is really under the
dominion of competition. There, the buyers as well as sellers
are traders or manufacturers, and their purchases are not influ-
enced by indolence or vulgar finery, nor depend on the smaller
motives of personal convenience, but are business transactions.
In the wholesale markets therefore it is true as a general propo-
sition, that there are not two prices at one time for the same
thing: there is at each time and place a market price, which
can be quoted in a price-current. But retail price, the price
paid by the actual consumer, seems to feel very slowly and im-
perfectly the effect of competition; and when competition does
exist, it often, instead of lowering prices, merely divides the
gains of the high price among a greater number of dealers.
Hence it is that, of the price paid- by the consumer, so large a
proportion is absorbed by the gains of retailers; and anyone
who inquires into the amount which reaches the hands of those
who made the things he buys, will often be astonished at its small-
ness. When indeed the market, being that of a great city,
holds out a sufiflcient inducement to large capitalists to engage
in retail operations, it is generally found a better speculation to
attract a large business by underselling others, than merely to di-
vide the field of employment with them. This influence of com-
petition is making itself felt more and more through the princi-
pal branches of retail trade in the large towns; and the rapidity
and cheapness of transport, by making consumers less depen-
dent on the dealers in their immediate neighborhood, are tend-
ing to assimilate more and more the whole country to a large

240 POLITICAL ECONOMY

town; but hitherto it is only in the great centres of business that
retail transactions have been chiefly, or even much, determined
by competition. Elsewhere it rather acts, when it acts at all, as
an occasional disturbing influence; the habitual regulator is cus-
tom, modified from time to time by notions existing in the
minds of purchasers and sellers, of some kind of equity or justice.

In many trades the terms on which business is done are a
matter of positive arrangement among the trade, who use the
means they always possess of making the situation of any mem-
ber of the body who departs from its fixed customs, inconvenient
or disagreeable. It is well known that the bookselling trade was,
until lately, one of these, and that notwithstanding the active
spirit of rivalry in the trade, competition did not produce its
natural effect in breaking down the trade rules. All professional
remuneration is regulated by custom. The fees of physicians,
surgeons, and barristers, the charges of attorneys, are nearly in-
variable. Not certainly for want of abundant competition in
those professions, but because the competition operates by di-
minishing each competitor's chance of fees, not by lowering the
fees themselves.

Since custom stands its ground against competition to so con-
siderable an extent, even where, from the multitude of competi-
tors and the general energy in the pursuit of gain, the spirit of
competition is strongest, we may be sure that this is much more
the case where people are content with smaller gains, and esti-
mate their pecuniary interest at a lower rate when balanced
against their ease or their pleasure. I believe it will often be
found, in Continental Europe, that prices and charges, of some
or of all sorts, are much higher in some places than in others not
far distant, without its being possible to assign any other cause
than that it has always been so : the customers are used to it, and
acquiesce in it. An enterprising competitor, with suf^cient capi-
tal, might force down the charges, and make his fortune during
the process; but there are no enterprising competitors; those
who have capital prefer to leave it where it is, or to make less
profit by it in a more quiet way.

These observations must be received as a general correction,
to be applied whenever relevant, whether expressly mentioned
or not, to the conclusions contained in the subsequent portions
of this Treatise. Our reasonings must, in general, proceed as if
the known and natural effects of competition were actually pro-

SLAVERY 241

duced by it, in all cases in which it is not restrained by some posi-
tive obstacle. Where competition, though free to exist, does not
exist, or where it exists, but has its natural consequences over-
ruled by any other agency, the conclusions will fail more or less
of being applicable. To escape error, we ought, in applying the
conclusions of political economy to the actual affairs of life, to
consider not only what will happen supposing the maximum of
competition, but how far the result will be affected if competition
falls short of the maximum.

The states of economical relation which stand first in order,
to be discussed and appreciated, are those in which competition
has no part, the arbiter of transactions being either brute force
or established usage. These will be the subject of the next four
chapters.

Chapter V Of Slavery

§ I. Among the forms which society assumes under the in-
fluence of the institution of property, there are, as I have already
remarked, two, otherwise of a widely dissimilar character, but
resembling in this, that the ownership of the land, the labor, and
the capital, is in the same hands. One of these cases is that of
slavery, the other is that of peasant proprietors. In the one, the
landowner owns the labor, in the other the laborer owns the
land. We begin with the first.

In this system all the produce belongs to the landlord. The
food and other necessaries of his laborers are part of his ex-
penses. The laborers possess nothing but what he thinks fit to
give them, and until he thinks fit to take it back: and they
work as hard as he chooses, or is able, to compel them. Their
wretchedness is only limited by his humanity, or his pecuniary
interest. With the first consideration, we have on the present
occasion nothing to do. What the second in so detestable a con-
stitution of society may dictate, depends on the facilities for im-
porting fresh slaves. If full-grown able-bodied slaves can be
procured in sufficient numbers, and imported at a moderate ex-
pense, self-interest will recommend working the slaves to death,
and replacing them by importation, in preference to the slow and
expensive process of breeding them. Nor are the slave-owners
generally backward in learning this lesson. It is notorious that
such was the practice in our slave colonies, while the slave trade
was legal ; and it is said to be so still in Cuba.
Vol. I.— 16

242

POLITICAL ECONOMY

When, as among the ancients, the slave-market could only be
supplied by captives either taken in war, or kidnapped from
thinly scattered tribes on the remote confines of the known
world, it was generally more profitable to keep up the number
by breeding, which necessitates a far better treatment of them;
and for this reason, joined with several others, the condition of
slaves, notwithstanding occasional enormities, was probably
much less bad in the ancient world than in the colonies of mod-
ern nations. The Helots are usually cited as the type of the most
hideous form of personal slavery, but with how little truth, ap-
pears from the fact that they were regularly armed (though not
with the panoply of the hoplite) and formed an integral part of
the military strength of the State. They were doubtless an in-
ferior and degraded caste, but their slavery seems to have been
one of the least onerous varieties of serfdom. Slavery appears
in far more frightful colors among the Romans, during the period
in which the Roman aristocracy was gorging itself with the
plunder of a newly conquered world. The Romans were a cruel
people, and the worthless nobles sported with the lives of their
myriads of slaves with the same reckless prodigality with which
they squandered any other part of their ill-acquired possessions.
Yet, slavery is divested of one of its worst features when it is
compatible with hope : enfranchisement was easy and common :
enfranchised slaves obtained at once the full right of citizens,
and instances were frequent of their acquiring not only riches,
but latterly even honors. By the progress of milder legislation
under the Emperors, much of the protection of law was thrown
round the slave, he became capable of possessing property, and
the evil altogether assumed a considerably gentler aspect. Until,
however, slavery assumes the mitigated form of villanage, in
which not only the slaves have property and legal rights, but
their obligations are more or less limited by usage, and they
partly labor for their own benefit; their condition is seldom such
as to produce a rapid growth either of population or of produc-
tion.

§ 2. So long as slave countries are underpeopled in proportion
to their cultivable land, the labor of the slaves, under any toler-
able management, produces much more than is suf^cient for
their support ; especially as the great amount of superintendence
which their labor requires, preventing the dispersion of the pop-
ulation, insures some of the advantages of combined labor.

SLAVERY 243

Hence, in a good soil and climate, and with reasonable care of
his own interests, the owner of many slaves has the means of
being rich. The influence, however, of such a state of society
on production, is perfectly well understood. It is a truism to
assert, that labor extorted by fear of punishment is inefficient
and unproductive. It is true that in some circumstances, human
beings can be driven by the lash to attempt, and even to accom-
plish, things which they would not have undertaken for any
payment which it could have been worth while to an employer
to offer them. And it is likely that productive operations which
require much combination of labor, the production of sugar for
example, would not have taken place so soon in the American
colonies, if slavery had not existed to keep masses of labor to-
gether. There are also savage tribes so averse from regular in-
dustry, that industrial life is scarcely able to introduce itself
among them until they are either conquered and made slaves of,
or become conquerors and make others so. But after allowing
the full value of these considerations, it remains certain that
slavery is incompatible with any high state of the arts of life, and
any great efficiency of labor. For all products which require
much skill, slave countries are usually dependent on foreigners.
Hopeless slavery effectually brutifies the intellect; and intelli-
gence in the slaves, though often encouraged in the ancient
world and in the East, is in a more advanced state of society a
source of so much danger and an object of so much dread to the
masters, that in some of the States of America it is a highly penal
ofifence to teach a slave to read. All processes carried on by
slave labor are conducted in the rudest and most unimproved
manner. And even the animal strength of the slave is, on an
average, not half exerted. The unproductiveness and wasteful-
ness of the industrial system in the Slave States are instructively
displayed in the valuable writings of Mr. Olmsted. The mildest
form of slavery is certainly the condition of the serf, who is at-
tached to the soil, supports himself from his allotment, and works
a certain number of days in the week for his lord. Yet there is
but one opinion on the extreme inefficiency of serf labor. The
following passage is from Professor Jones,* whose " Essay on
the Distribution of Wealth " (or rather on Rent), is a copious
repertory of valuable facts on the landed tenures of different
countries:

* " Essay on the Distribution of Wealth and on the Sources of Taxation." By
the Rev. Richard Jones. Page 50.

244 POLITICAL ECONOMY

" The Russians, or rather those German writers who have
observed the manners and habits of Russia, state some strong
facts on this point. Two Middlesex mowers, they say, will mow
in a day as much grass as six Russian serfs, and in spite of the
dearness of provisions in England and their cheapness in Rus-
sia, the mowing a quantity of hay which would cost an English
farmer half a copeck, will cost a Russian proprietor three or four
copecks.* The Prussian counsellor of state, Jacob, is considered
to have proved, that in Russia, where everything is cheap, the
labor of a serf is doubly as expensive as that of a laborer in Eng-
land. M. Schmalz gives a startling account of the unproductive-
ness of serf labor in Prussia, from his own knowledge and ob-
servation.! In Austria, it is distinctly stated, that the labor of a
serf is equal to only one-third of that of a free hired laborer. This
calculation, made in an able work on agriculture (with some ex-
tracts from which I have been favored), is applied to the practi-
cal purpose of deciding on the number of laborers necessary to
cultivate an estate of a given magnitude. So palpable, indeed,
are the ill effects of labor rents on the industry of the agricultural
population, that in Austria itself, where proposals of changes of
any kind do not readily make their way, schemes and plans for
the commutation of labor rents are as popular as in the more
stirring German provinces of the North." |

What is wanting in the quality of the labor itself, is not made
up by any excellence in the direction and superintendence. As
the same writer § remarks, the landed proprietors " are neces-
sarily, in their character of cultivators of their own domains, the
only guides and directors of the industry of the agricultural pop-
ulation," since there can be no intermediate class of capitalist
farmers where the laborers are the property of the lord. Great
landowners are everywhere an idle class, or if they labor at all,
addict themselves only to the more exciting kinds of exertion;
that lion's share which superiors always reserve for themselves.
" It would," as Mr. Jones observes, " be hopeless and irrational
to expect, that a race of noble proprietors, fenced round with
privileges and dignity, and attracted to military and political

* Schmalz, ''Economic Politique," not dared to take away: it freed th»

French translation, vol. i. p. 66. peasantry from what remained of the

t Vol. ii. p. 107. bondage of serfdom, the labor rents;

t The Hungarian revolutionary gov- decreeing compensation to the land-

ernment, during its brief existence, be- lords at the expense of the state, and

stowed on that country one of the great- not at that of the liberated peasants.
est benefits it could receive, and one § Jones, pp. 53, 54.

which the tyranny that succeeded has

SLAVERY 245

pursuits by the advantages and habits of their stations should
ever become attentive cultivators as a body." Even in England,
if the cultivation of every estate depended upon its proprietor,
any one can judge what would be the result. There would be
a few cases of great science and energy, and numerous individ-
ual instances of moderate success, but the general state of agri-
culture would be contemptible.

§ 3. Whether the proprietors themselves would lose by the
emancipation of their slaves, is a different question from the
comparative effectiveness of free and slave labor to the com-
munity. There has been much discussion of this question as an
abstract thesis; as if it could possibly admit of any universal so-
lution. Whether slavery or free labor is most profitable to the
employer, depends on the wages of the free laborer. These,
again, depend on the numbers of the laboring population, com-
pared with the capital and the land. Hired labor is generally
so much more efficient than slave labor, that the employer can
pay a considerably greater value in wages, than the maintenance
of his slaves cost him before, and yet be a gainer by the change:
but he cannot do this without limit. The decline of serfdom in
Europe, and its extinction in the Western nations, were doubt-
less hastened by the changes which the growth of population
must have made in the pecuniary interests of the master. As
population pressed harder upon the land, without any improve-
ment in agriculture, the maintenance of the serfs necessarily be-
came more costly, and their labor less valuable. With the rate
of wages such as it is in Ireland, or in England (where, in pro-
portion to its efficiency, labor is quite as cheap as in Ireland), no
one can for a moment imagine that slavery could be profitable.
If the Irish peasantry were slaves, their masters would be as
willing, as their landlords now are, to pay large sums merely to
get rid of them. In the rich and underpeopled soil of the West
India islands, there is just as little doubt that the balance of
profits between free and slave labor was greatly on the side of
slavery, and that the compensation granted to the slave owners
for its abolition was not more, perhaps even less, than an equiva-
lent for their loss.

More needs not be said here on a cause so completely judged
and decided as that of slavery. Its demerits are no longer a
question requiring argument; though the temper of mind
manifested by the larger part of the influential classes in Great

246 POLITICAL ECONOMY

Britain respecting the struggle now taking place in America,
shows how grievously the feelings of the present generation of
Englishmen, on this subject, have fallen behind the positive acts
of the generation which preceded them. That the sons of the
deliverers of the West Indian Negroes should see with com-
placency, and encourage by their sympathies, the foundation of
a great and powerful military commonwealth, pledged by its
principles and driven by its strongest interests to be the armed
propagator of slavery through every region of the earth into
which its power can penetrate, discloses a mental state in the
leading portion of our higher and middle classes, which it is
melancholy to see, and will be a lasting blot in English history.
Fortunately they have stopped short of actually aiding, other-
wise than by words, the nefarious enterprise to which they have
not been ashamed of wishing success; and it is now probable that
at the expense of the best blood of the Free States, but to their
immeasurable elevation in mental and moral worth, the curse
of slavery will be cast out from the great American republic, to
find its last temporary refuge in Brazil and Cuba. No European
country, except Spain alone, any longer participates in the enor-
mity. Even serfage has now ceased to have a legal existence in
Europe: Denmark has the honor of being the first Continental
nation which imitated England in liberating its colonial slaves;
and the abolition of slavery was one of the earliest acts of the
heroic and calumniated Provisional Government of France. The
Dutch Government was not long behind, and its colonies and
dependencies are now, I believe, without exception, free from
actual slavery: though forced labor for the public authorities is
still a recognized institution in Java, soon, we may hope, to be
exchanged for complete personal freedom.

Chapter VI. — Of Peasant Proprietors

§ I. In the regime of peasant properties, as in that of slavery,
the whole produce belongs to a single owner, and the distinction
of rent, profits, and wages, does not exist. In all other respects,
the two states of society are the extreme opposites of each other.
The one is the state of greatest oppression and degradation to
the laboring class. The other is that in which they are the most
uncontrolled arbiters of their own lot.

PEASANT PROPRIETORS 247

The advantage, however, of small properties in land, is one
of the most disputed questions in the range of political economy.
On the Continent, though there are some dissentients from the
prevailing opinion, the benefit of having a numerous proprietary-
population exists in the minds of most people in the form of an
axiom. But English authorities are either unaware of the judg-
ment of Continental agriculturists, or are content to put it aside,
on the plea of their having no experience of large properties in
favorable circumstances : the advantage of large properties be-
ing only felt where there are also large farms ; and as this, in
arable districts, implies a greater accumulation of capital than
usually exists on the Continent, the great Continental estates,
except in the case of grazing farms, are mostly let out for culti-
vation in small portions. There is some truth in this ; but the
argument admits of being retorted ; for if the Continent knows
little, by experience, of cultivation on a large scale and by large
capital, the generality of English writers are no better ac-
quainted practically with peasant proprietors, and have almost
always the most erroneous ideas of their social condition and
mode of life. Yet the old traditions even of England are on
the same side with the general opinion of the Continent. The
" yeomanry " who were vaunted as the glory of England while
they existed, and have been so much mourned over since they
disappeared, were either small proprietors or small farmers,
and if they were mostly the last, the character they bore for
sturdy independence is the more noticeable. There is a part of
England, unfortunately a very small part, where peasant pro-
prietors are still common ; for such are the " statesmen " of
Cumberland and Westmoreland, though they pay, I believe,
generally if not universally, certain customary dues, which,
being fixed, no more affect their character of proprietors than
the land-tax does. There is but one voice, among those ac-
quainted with the country, on the admirable effects of this
tenure of land in those counties. No other agricultural popu-
lation in England could have furnished the originals of Words-
worth's peasantry.*

• In Mr. Wordsworth's little descrip- family, or to the occasional accommoda-
tive work on the scenery of the Lakes, tion of his nciKhlmr. Two or three cows
he speaks of the upper part of the dales furnished each family with milk and
as having been for centuries " a perfect cheese. The cha|iel was the only edifice
republic of shepVicrds and agriculturists, that presided over these dwellings, the
proprietors, for the most part, of the supreme head of this pure common-
lands which they occupied and culti- wealth; the members of which existed
vated. The ploucrh of each man was in the midst of a powerful emiiire, like
confined to the maintenance of his own an ideal society, or an organized com-

248

POLITICAL ECONOMY

The general system, however, of EngHsh cultivation, afford-
ing no experience to render the nature and operation of peasant
properties famihar, and EngHshmen being in general pro-
foundly ignorant of the agricultural economy of other countries,
the very idea of peasant proprietors is strange to the English
mind, and does not easily find access to it. Even the forms
of language stand in the way : the familiar designation for
owners of land being " landlords," a term to which " tenants "
is always understood as a correlative. When, at the time of
the famine, the suggestion of peasant properties as a means
of Irish improvement found its way into parliamentary and
newspaper discussions, there were writers of pretension to
whom the word " proprietor " was so far from conveying any
distinct idea, that they mistook the small holdings of Irish
cottier tenants for peasant properties. The subject being so
little understood, I think it important, before entering into the
theory of it, to do something toward showing how the case
stands as a matter of fact ; by exhibiting, at greater length
than would otherwise be admissible, some of the testimony
which exists respecting the state of cultivation, and the com-
fort and happiness of the cultivators, in those countries and
parts of countries, in which the greater part of the land has
neither landlord nor farmer, other than the laborer who tills
the soil.

§ 2. I lay no stress on the condition of North America, where,
as is well known, the land, wherever free from the curse of
slavery, is almost universally owned by the same person who
holds the plough. A country combining the natural fertility of
America with the knowledge and arts of modern Europe, is so
peculiarly circumstanced, that scarcely anything, except inse-
curity of property or a tyrannical government, could materially
impair the prosperity of the industrious classes. I might, with

munity, whose constitution had been
imposed and regtrtated by the moun-
tains which protected it. Neither high-
born nobleman, knight, nor esquire was
here; but many of these humble sons of
the hills had a consciousness that the
land which they walked over and tilled
had for more than five hundred years
been possessed by men of their name
and blood. . . . Corn was grown
in these vales sufficient upon each estate
to furnish bread for each family, no
more. The storms and moisture of the
climate induced them to sprinkle their
upland property with outhouses of na-
tive stone, as places of shelter for their

sheep, where in tempestuous weather,
food was distributed to them. Every
family spun from its own flock the wool
with which it was clothed; a weaver was
here and there found among thern, and
the rest of their wants was supplied by
the produce of the yarn, which they
carded and spun in their own houses,
and carried to market either under their
arms, or more frequently on packhorses,
a small train taking their way weekly
down the valley, or over the mountains,
to the most commodious town."—" A
Description of the Scenery of the Lakes
in the North of England," 3d edit. pp.
50 to S3 and 63 to 65.

PEASANT PROPRIETORS

249

Sismondi, insist more strongly on the case of ancient Italy,
especially Latium, that Campagjia which then swarmed with
inhabitants in the very regions which under a contrary regime
have become uninhabitable from malaria. But I prefer taking
the evidence of the same writer on things known to him by
personal observation.

" It is especially Switzerland," says M. de Sismondi, " which
should be traversed and studied to judge of the happiness of
peasant proprietors. It is from Switzerland we learn that agri-
culture practised by the very persons who enjoy its fruits, suf-
fices to procure great comfort for a very numerous population ;
a great independence of character, arising from independence
of position ; a great commerce of consumption, the result of the
easy circumstances of all the inhabitants, even in a country
whose climate is rude, whose soil is but moderately fertile, and
where late frosts and inconstancy of seasons often blight the
hopes of the cultivator. It is impossible to see without admira-
tion those timber houses of the poorest peasant, so vast, so well
closed in, so covered with carvings. In the interior, spacious
corridors separate the different chambers of the numerous fam-
ily; each chamber has but one bed, which is abundantly fur-
nished with curtains, bedclothes, and the whitest linen ; care-
fully kept furniture surrounds it ; the wardrobes are filled with
linen ; the dairy is vast, well aired, and of exquisite cleanness ;
under the same roof is a great provision of corn, salt meat,
cheese and wood ; in the cow-houses are the finest and most
carefully tended cattle in Europe ; the garden is planted with
flowers, both men and women are cleanly and warmly clad,
the women preserve with pride their ancient costume ; all carry
in their faces the impress of health and strength. Let other
nations boast of their opulence, Switzerland may always point
with pride to her peasants." *

The same eminent writer thus expresses his opinions on peas-
ant proprietorship in general :

" Wherever we find peasant proprietors, w^e also find the
comfort, security, confidence in the future, and independence,
which assure at once happiness and virtue. The peasant who
with his children does all the work of his little inheritance, who
pays no rent to anyone above him, nor wages to anyone below,
who regulates his production by his consumption, who eats his

" " Studies in Political Economy." Essay III.

250

POLITICAL ECONOMY

own corn, drinks his own wine, is clothed in his own hemp and
wool, cares little for the prices of the market ; for he has little
to sell and little to buy, and is never ruined by revulsions of
trade. Instead of fearing for the future, he sees it in the
colors of hope ; for he employs every moment not required by
the labors of the year, on something profitable to his children
and to future generations. A few minutes' work suffices him
to plant the seed which in a hundred years will be a large tree,
to dig the channel which will conduct to him a spring of fresh
water, to improve by cares often repeated, but stolen from odd
times, all the species of animals and vegetables which surround
him. His little patrimony is a true savings bank, always ready
to receive all his little gains and utilize all his moments of leisure.
The ever-acting power of nature returns them a hundredfold.
The peasant has a lively sense of the happiness attached to the
condition of a proprietor. Accordingly he is always eager to
buy land at any price. He pays more for it than its value, more
perhaps than it will bring him in ; but is he not right in esti-
mating highly the advantage of having always an advantageous
investment for his labor, without underbidding in the wages
market — of being always able to find bread, without the neces-
sity of buying it at a scarcity price ?

" The peasant proprietor is of all cultivators the one who
gets most from the soil, for he is the one who thinks most of
the future, and who has been most instructed by experience.
He is also the one who employs the human powers to most
advantage, because dividing his occupations among all the
members of his family, he reserves some for every day of the
year, so that nobody is ever out of work. Of all cultivators
he is the happiest, and at the same time the land nowhere oc-
cupies, and feeds amply without becoming exhausted, so many
inhabitants as where they are proprietors. Finally, of all culti-
vators the peasant proprietor is the one who gives most encour-
agement to commerce and manufactures, because he is the
richest." *

* And in another work (" New Princi- are clear indications of the former. It

pies of Political Economy," book iii. is true an oppressive government may

chap. 3) he says: " When we traverse destroy the comfort and brutify the in-

nearly the whole of Switzerland, and telligence which should be the result of

several provinces of France, Italy, and property; taxation may abstract the best

Germany, we need never ask, in looking produce of the fields, the insolence of

at any piece of land, if it belongs to a government officers may disturb the

peasant proprietor or to a farmer. The security of the peasant, the impossi-

intelligent care, the enjoyments provided bility of obtaining justice against a pow-

for the laborer, the adornment which erfu! neighbor may sow discouragement

the country has received from his hands, in his mind, and in the fine country

PEASANT PROPRIETORS 251

This picture of unwearied assiduity, and what may be called
affectionate interest in the land, is borne out in regard to the
more intelligent Cantons of Switzerland by English observers.
" In walking anywhere in the neighborhood of Zurich," says
Mr. Inglis, " in looking to the right or to the left, one is struck
with the extraordinary industry of the inhabitants ; and if we
learn that a proprietor here has a return of ten per cent., we
are inclined to say, ' he deserves it.' I speak at present of coun-
try labor, though I believe that in every kind of trade also, the
people of Zurich are remarkable for their assiduity ; but in the
industry they show in the cultivation of their land I may safely
say they are unrivalled. When I used to open my casement
between four and five in the morning to look out upon the lake
and the distant Alps, I saw the laborer in the fields ; and when
I returned from an evening walk, long after sunset, as late,
perhaps, as half-past eight, there was the laborer, mowing his
grass, or tying up his vines. . . . It is impossible to look at
a field, a garden, a hedging, scarcely even a tree, a flower, or
a vegetable, without perceiving proofs of the extreme care and
industry that are bestowed upon the cultivation of the soil.
If, for example, a path leads through or by the side of a field
of grain, the corn is not, as in England, permitted to hang over
the path, exposed to be pulled or trodden down by every passer-
by ; it is everywhere bounded by a fence, stakes are placed at
intervals of about a yard, and, about two or three feet from
the ground, boughs of trees are passed longitudinally along. If
you look into a field toward evening, where there are large beds
of cauliflower or cabbage, you will find that every single plant
has been watered. In the gardens, which around Zurich are
extremely large, the most punctilious care is evinced in every
production that grows. The vegetables are planted with seem-
ingly mathematical accuracy ; not a single weed is to be seen,
not a single stone. Plants arc not earthed up as with us, but
are planted in a small hollow, into each of which a little manure
is put, and each plant is watered daily. Where seeds are sown,
the earth directly above is broken into the finest powder ; every
shrub, every flower is tied to a stake, and where there is wall-

which has been Riven back to the ad- cordinp to authentic accounts, extremely
ministration of the King of Sardinia, the miserable. But, as M. de Sismondi con-
proprietor, cf|ually with tlic day-lnborer, tinues. " it is in vain to observe only
wears the livery of indigence." He was one of the rules of political economy; it
here speaking of Savoy, where the peas- cannot by itself suffice to produce good;
ants were generally proprietors, and, ac- but at least it diminishes evil."

252 POLITICAL ECONOMY

fruit, a trellis is erected against the wall, to which the boughs
are fastened, and there is not a single thing that has not its
appropriate resting-place." *

Of one of the remote valleys of the High Alps the same writer
thus expresses himself: f

" In the whole of the Engadine the land belongs to the peas-
antry, who, like the inhabitants of every other place where this
state of things exist, vary greatly in the extent of their posses-
sions. . . . Generally speaking, an Engadine peasant lives
entirely upon the produce of his land, with the exception of
the few articles of foreign growth required in his family, such
as coffee, sugar, and wine. Flax is grown, prepared, spun, and
woven, without ever leaving his house. He has also his own
wool, which is converted into a blue coat without passing
through the hands of either the dyer or the tailor. The country
is incapable of greater cultivation than it has received. All has
been done for it that industry and an extreme love of gain can
devise. There is not a foot of waste land in the Engadine, the
lowest part of which is not much lower than the top of Snow-
don. Wherever grass will grow, there it is ; wherever a rock
will bear a blade, verdure is seen upon it ; wherever an ear
of rye will ripen, there it is to be found. Barley and oats have
also their appropriate spots ; and wherever it is possible to ripen
a little patch of wheat, the cultivation of it is attempted. In no
country in Europe will be found so few poor as in the Engadine.
In the village of Suss, which contains about six hundred inhabi-
tants, there is not a single individual who has not wherewithal
to live comfortably, not a single individual who is indebted to
others for one morsel that he eats."

Notwithstanding the general prosperity of the Swiss peas-
antry, this total absence of pauperism, and (it may almost be
said) of poverty, cannot be predicated of the whole country;
the largest and richest canton, that of Berne, being an example
of the contrary; for although, in the parts of it which are
occupied by peasant proprietors, their industry is as remark-
able and their ease and comfort as conspicuous as elsewhere,
the canton is burdened with a numerous pauper population,
through the operation of the worst regulated system of poor-
law administration in Europe, except that of England before

• " Switzerland, the South of France, and the Pyrenees in 1830." By H. D.
Inglis. Vol. i. chap. 2. t Ibid, chaps. 8 and 10.

PEASANT PROPRIETORS

253

the new Poor Law.* Nor is Switzerland in some other re-
spects a favorable example of all that peasant properties might
effect. There exists a series of statistical accounts of the Swiss
cantons, drawn up mostly with great care and intelligence, con-
taining detailed information, of tolerably recent date, respecting
the condition of the land and of the people. From these, the
subdivision appears to be often so minute, that it can hardly
be supposed not to be excessive: and the indebtedness of the
proprietors in the flourishing canton of Zurich " borders," as
the writer expresses it, " on the incredible " ; so that " only
the intensest industry, frugality, temperance, and complete
freedom of commerce enable them to stand their ground." f
Yet the general conclusion deducible from these books is that
since the beginning of the century, and concurrently with the
subdivision of many great estates which belonged to nobles
or to the cantonal governments, there has been a striking and
rapid improvement in almost every department of agriculture,
as well as in the houses, the habits, and the food of the people.
The writer of the account of Thiirgau goes so far as to say,
that since the subdivision of the feudal estates into peasant
properties, it is not uncommon for a third or a fourth part of an
estate to produce as much grain, and support as many head of
cattle, as the whole estate did before.^

§ 3. One of the countries in which peasant proprietors are
of oldest date, and most numerous in proportion to the popula-
tion, is Norway. Of the social and economical condition of
that country an interesting account has been given by Mr.
Laing. His testimony in favor of small landed properties both
there and elsewhere, is given with great decision. I shall quote
a few passages.

" If small proprietors are not good farmers, it is not from
the same cause here which we are told makes them so in Scot-

• There have been considerable changes
in the Poor Law administration and leg-
islation of the Canton of Heme since
the sentence in the text was written.
But 1 am not sufficiently acquainted
with the nature and operation of these
changes, to speak more particularly of
them here.

t " Historical, Geographical, and .Sta-
tistical Picture of Switzerland." I'art
I. Canton of Zurich. By Gerold Meyer
Von Knonau, 1R34, pp. 80, 81. There are
villages in Zurich, he adds, in which
there is not a single property unmort-
gaged. It does not, however, follow

that each individual proprietor is deeply
involved because the aggregate mass of
incumbrances is large. In the Canton
of Schaffhausen, for instance, it is stated
that the landed properties are almost all
mortgaged, hut rarely for more than
one-half their registered value. (Part
XII. Canton of Schaffhausen, by Ed-
ward Im-Thurn, 1840, p. 52), and the
mortgages are often for the improve-
ment and enlargement of the estate.
(Part XVII. Canton of Thiirgau, by
J. A. Pupikofcr, 1837, p. 209.)
t " Thiirgau," p. 72.

254

POLITICAL ECONOMY

land — indolence and want of exertion. The extent to which
irrigation is carried on in these glens and valleys shows a spirit
of exertion and co-operation." (I request particular attention
to this point), " to which the latter can show nothing similar.
Hay being the principal winter support of live stock, and both
it and corn, as well as potatoes, liable, from the shallow soil
and powerful reflection of sunshine from the rocks, to be burnt
and withered up, the greatest exertions are made to bring water
from the head of each glen, along such a level as will give the
command of it to each farmer at the head of his fields. This
is done by leading it in wooden troughs (the half of a tree
roughly scooped) from the highest perennial stream among the
hills, through woods, across ravines, along the rocky, often per-
pendicular, sides of the glens, and from this main trough giving
a lateral one to each farmer in passing the head of his farm.
He distributes this supply by movable troughs among his fields ;
and at this season waters each rig successively with scoops like
those used by bleachers in watering cloth, laying his trough
between every two rigs. One would not believe, without seeing
if, how very large an extent of land is traversed expeditiously
by these artificial showers. The extent of the main troughs is
very great. In one glen I walked ten miles, and found it
troughed on both sides : on one, the chain is continued down
the main valley for forty miles.* Those may be bad farmers
who do such things ; but they are not indolent, nor ignorant
of the principle of working in concert, and keeping up estab-
lishments for common benefit. They are undoubtedly, in these
respects, far in advance of any community of cottars in our
Highland glens. They feel as proprietors, who receive the
advantage of their own exertions. The excellent state of the
roads and bridges is another proof that the country is inhabited
by people who have a common interest to keep them under
repair. There are no tolls." f

* Rcichensperger (" The Land Ques-
tion ") quoted by Mr. Kay (" Social
Condition and Education of the People
in England and Evirope "), observes,
" that the parts of Europe where the
most extensive and costly plans for
watering the meadows and lands have
been carried out in the greatest perfec-
tion, are those where the lands are very
much subdivided, and are in the hands
of small proprietors. He instances the
plain round Valencia, several of the
southern departments of France, par-
ticularly those of Vaucluse and Bouches
du Rhone, Lombardy, Tuscany, the dis-

tricts of Sienna, Lucca, and Bergamo,
Piedmont, many parts of Germany, etc.,
in all which parts of Europe the land is
very much subdivided among small pro-
prietors. In all these parts great and
expensive systems and plans of general
irrigation have been carried out, and are
now being supported, by the small pro-
prietors themselves; thus showing how
they are able to accomplish, by means
of combination, work requiring the ex-
penditure of great quantities of capital."
— Kay, i. 126.

t I-aing, " Journal of a Residence in
Norway," pp. 36, 37.

PEASANT PROPRIETORS

255

On the effects of peasant proprietorship on the Continent
generally, the same writer expresses himself as follows : *

" If we listen to the large farmer, the scientific agricultur-
ist, the " [English] " political economist, good farming must
perish with large farms ; the very idea that good farming can
exist, unless on large farms cultivated with great capital, they
hold to be absurd. Draining, manuring, economical arrange-
ment, cleaning the land, regular rotations, valuable stock and
implements, all belong exclusively to large farms, worked by
large capital, and by hired labor. This reads very well ; but
if we raise our eyes from their books to their fields, and coolly
compare what we seen in the best districts farmed in large
farms, with what we see in the best districts farmed in small
farms, we see, and there is no blinking the fact, better crops
on the ground in Flanders, East Friesland, Holstein, in short,
on the whole line of the arable land of equal quality on the
Continent, from the Sound to Calais, than we see on the line
of British coast opposite to this line, and in the same latitudes,
from the Frith of Forth all round to Dover. Minute labor on
small portions of arable ground gives evidently, in equal soils
and climate, a superior productiveness, where these small por-
tions belong in property, as in Flanders, Holland, Friesland,
and Ditmarsch in Holstein, to the farmer. It is not pretended
by our agricultural writers, that our large farmers, even in
Berwickshire, Roxburghshire, or the Lothians, approach to
the garden-like cultivation, attention to manures, drainage, and
clean state of the land, or in productiveness from a small space
of soil not originally rich, which distinguish the small farmers
of Flanders, or their system. In the best farmed parish in Scot-
land or England, more land is wasted in the corners and bor-
ders of the fields of large farms, in the roads through them,
unnecessarily wide because they are bad, and bad because they
are wide, in neglected commons, waste spots, useless belts and
clumps of sorry trees, and such unproductive areas, than would
maintain the poor of the parish, if they were all laid together
and cultivated. But large capital applied to farming is of course
only applied to the very best of the soils of a country. It cannot
touch the small unproductive spots which require more time
and labor to fertilize them than is consistent with a quick return
of capital. But although hired time and labor cannot be applied

Notes of a Traveller," pp. 299 et seqq.

« ((

256

POLITICAL ECONOMY

beneficially to such cultivation, the owner's own time and labor
may. He is working for no higher terms at first from his land
than a bare living. But in the course of generations fertility
and value are produced ; a better living, and even very im-
proved processes of husbandry, are attained. Furrow draining,
stall feeding all summer, liquid manures, are universal in the
husbandry of the small farms of Flanders, Lombardy, Switzer-
land. Our most improving districts under large farms are but
beginning to adopt them. Dairy husbandry even, and the
manufacture of the largest cheeses by the co-operation of many
small farmers,* the mutual assurance of property against fire
and hail-storms, by the co-operation of small farmers — the most
scientific and expensive of all agricultural operations in modern
times, the manufacture of beet-root sugar — the supply of the
European markets with flax and hemp, by the husbandry of
small farmers — the abundance of legumes, fruits, poultry, in
the usual diet even of the lowest classes abroad, and the total
want of such variety at the tables even of our middle classes,
and this variety and abundance essentially connected with the
husbandry of small farmers — all these are features in the occu-
pation of a country by small proprietor-farmers, which must
make the inquirer pause before he admits the dogma of our
land doctors at home, that large farms worked by hired labor
and great capital can alone bring out the greatest productive-
ness of the soil and furnish the greatest supply of the necessaries
and conveniences of life to the inhabitants of a country."

§ 4. Among the many flourishing regions of Germany in
which peasant properties prevail, I select the Palatinate, for the
advantage of quoting, from an English source, the results of
recent personal observation of its agriculture and its people.

* The manner in which the Swiss
peasants combine to carry on cheese-
making by their united capital deserves
to be noted: " Each parish in Switzer-
land hires a man, generally from the
district of Gruyere in the canton of
Freyburg, to take care of the herd, and
make the cheese. One cheeseman, one
pressman or assistant, and one cowherd,
are considered necessary for every forty
cows. The owners of the cows get
credit each of them, in a book daily, for
the quantity of milk given by each cow.
The cheeseman and his assistants milk
the cows, put the milk all together, and
make cheese of it, and at the end of ths
season each owner receives the weight
of cheese proportionable to the quantity
of milk his cows have delivered. By
this co-operative plan, instead of the

small-sized unmarketable cheeses only,
which each could produce out of his
three or four cows milk, he has the
same weight in large marketable cheese
superior in quality, because made by
people who attend to no other business.
The cheeseman and his assistants are
paid so much per head of the cows, in
money or in cheese, or sometimes they
hire the cows, and pay the owners in
money or cheese." — Notes of a Trav-
eller," p. 351. A similar system exist?
in the French Jura. See, for full details,
Lavergne, " Rural Economy of France."
2d ed., pp. 139 et seqq. One of the
most remarkable points in this interest-
ing case of combination of labor, is the
confidence which it supposes, and which
experience must justify in the integrity
of the persons employed.

PEASANT PROPRIETORS 257

Mr. Howitt, a writer whose habit it is to see all English objects
and English socialities on their brightest side, and who, in treat-
ing of the Rhenish peasantry, certainly does not underrate the
rudeness of their implements, and the inferiority of their plough-
ing, nevertheless shows that under the invigorating influence
of the feelings of proprietorship, they make up for the imper-
fections of their apparatus by the intensity of their application.
" The peasant harrows and clears his land till it is in the nicest
order, and it is admirable to see the crops which he obtains." *
" The peasants f are the great and ever-present objects of coun-
try life. They are the great population of the country, because
they themselves are the possessors. This country is, in fact,
for the most part, in the hands of the people. It is parcelled
out among the multitude. . . . The peasants are not, as
with us, for the most part, totally cut oft" from property in the
soil they cultivate, totally dependent on the labor afforded by
others — they are themselves the proprietors. It is, perhaps,
from this cause that they are probably the most industrious
peasantry in the world. They labor busily, early and late, be-
cause they feel that they are laboring for themselves. . . .
The German peasants work hard, but they have no actual want.
Every man has his house, his orchard, his roadside trees, com-
monly so heavy with fruit, that he is obliged to prop and secure
them all ways, or they would be torn to pieces. He has his
corn-plot, his plot for mangel-wurzel, for hemp, and so on. He
is his own master ; and he, and every member of his family,
have the strongest motives to labor. You see the effect of this
in that unremitting diligence which is beyond that of the whole
world besides, and his economy, which is still greater. The
Germans, indeed, are not so active and lively as the English.
You never see them in a bustle, or as though they meant to
knock off a vast deal in a little time. . . . They are, on the
contrary, slow, but forever doing. They plod on from day to
day, and year to year — the most patient, untirable, and perse-
vering of animals. The English peasant is so cut off from
the idea of property, that he comes habitually to look upon it
as a thing from which he is warned by the laws of the large
proprietors, and l)ccomes, in consequence, spiritless, purpose-
less. . . . The German haucr, on the contrary, looks on the
country as made for him and his fellow-men. He feels himself

• " Rural and Domestic Life of Germany," p. 27. t Ibid. p. 40.

Vol. I.— 17

258 POLITICAL ECONOMY

a man ; he has a stake in the country, as good as that of the
bulk of his neighbors; no man can threaten him with ejection,
or the workhouse, so long as he is active and economical. He
walks, therefore, with a bold step ; he looks you in the face with
the air of a free man, but of a respectful one."

Of their industry, the same writer thus further speaks:
" There is not an hour of the year in which they do not find
unceasing occupation. In the depth of winter, when the weather
permits them by any means to get out of doors, they are always
finding something to do. They carry out their manure to their
lands while the frost is in them. If there is not frost, they are
busy cleaning ditches and felling old fruit-trees, or such as do
not bear well. Such of them as are too poor to lay in a sufficient
stock of wood, find plenty of work in ascending into the moun-
tainous woods, and bringing thence fuel. It would astonish
the English common people to see the intense labor with which
the Germans earn their firewood. In the depth of frost and
snow, go into any of their hills and woods, and there you find
them hacking up stumps, cutting off branches, and gathering,
by all means which the official wood-police will allow, boughs,
stakes, and pieces of wood, which they convey home with the
most incredible toil and patience." * After a description of
their careful and laborious vineyard culture, he continues : f
" In England, with its great quantity of grass lands, and its
large farms, so soon as the grain is in, and the fields are shut
up for hay grass, the country seems in a comparative state
of rest and quiet. But here they are everywhere, and forever,
hoeing and mowing, planting and cutting, weeding and gather-
ing. They have a succession of crops like a market-gardener.
They have their carrots, poppies, hemp, flax, saintfoin, lucerne,
rape, colewort, cabbage, rutabaga, black turnips, Swedish and
white turnips, teazles, Jerusalem artichokes, mangel-wurzel,
parsnips, kidney beans, field beans and peas, vetches, Indian
corn, buckwheat, madder for the manufacturer, potatoes, their
great crop of tobacco, millet — all, for the greater part, under
the family management, in their own family allotments. They
have had these things first to sow, many of them to transplant,
to hoe, to weed, to clear off insects, to top ; many of them to
mow and gather in successive crops. They have their water-
meadows, of which kind almost all their meadows are, to flood,

• " Rural and Domestic Life of Germany," p. 44. t Ibid. p. 50.

PEASANT PROPRIETORS

259

to mow, and reflood ; watercourses to reopen and to make anew ;
their early fruits to gather, to bring to market with their green
crops of vegetables ; their cattle, sheep, calves, foals, most of
them prisoners, and poultry to look after ; their vines, as they
shoot rampantly in the summer heat, to prune, and thin out the
leaves when they are too thick : and anyone may imagine what
a scene of incessant labor it is."

This interesting sketch, to the general truth of which any
observant traveller in that highly cultivated and populous re-
gion can bear witness, accords with the more elaborate delinea-
tion by a distinguished inhabitant. Professor Rau, in his little
treatise " On the Agriculture of the Palatinate." * Dr. Rau
bears testimony not only to the industry, but to the skill and
intelligence of the peasantry; their judicious employment of
manures, and excellent rotation of crops ; the progressive im-
provement of their agriculture for generations past, and the
spirit of further improvement which is still active. " The inde-
fatigableness of the country people, who may be seen in activity
all the day and all the year, and are never idle, because they make
a good distribution of their labors, and find for every interval
of time a suitable occupation, is as well known as their zeal
is praiseworthy in turning to use every circumstance which
presents itself, in seizing upon every useful novelty which of-
fers, and even in searching out new and advantageous methods.
One easily perceives that the peasant of this district has reflected
much on his occupation : he can give reasons for his modes of
proceeding, even if those reasons are not always tenable ; he
is as exact an observer of proportions as it is possible to be from
memory, without the aid of figures : he attends to such general
signs of the times as appear to augur him either benefit or
harm." f

The experience of all other parts of Germany is similar. " In
Saxony," says Mr. Kay, " it is a notorious fact, that during
the last thirty years, and since the peasants became the proprie-
tors of the land, there has been a rapid and continual improve-
ment in the condition of the houses, in the manner of living,
in the dress of the peasants, and particularly in the culture of
the land. I have twice walked through that part of Saxony
called Saxon Switzerland, in company with a German guide,

•"On the ARriculture of the Palati- HcidtlhcrK." Ry Dr. Karl Heinrich
nate, and particularly in the territory of Kan. Heidclbcrp, 1830.

t Kau, pp. IS, 16.

26o POLITICAL ECONOMY

and on purpose to see the state of the villages and of the farm-
ing, and I can safely challenge contradiction when I affirm
that there is no farming in all Europe superior to the laboriously
careful cultivation of the valleys of that part of Saxony. There,
as in the cantons of Berne, Vaud, and Zurich, and in the Rhine
provinces, the farms are singularly flourishing. They are kept
in beautiful condition, and are always neat and well managed.
The ground is cleared as if it were a garden. No hedges or
brushwood encumber it. Scarcely a rush or thistle or a bit
of rank grass is to be seen. The meadows are well watered
every spring with liquid manure, saved from the drainings of
the farmyards. The grass is so free from weeds that the Saxon
meadows reminded me more of English lawns than of anything
else I had seen. The peasants endeavor to outstrip one another
in the quantity and quality of the produce, in the preparation
of the ground, and in the general cultivation of their respective
portions. All the little proprietors are eager to find out how
to farm so as to produce the greatest results ; they diligently
seek after improvements ; they send their children to the agri-
cultural schools in order to fit them to assist their fathers ; and
each proprietor soon adopts a new improvement introduced by
any of his neighbors." * If this be not overstated, it denotes
a state of intelligence very different not only from that of Eng-
lish laborers but of English farmers.

Mr. Kay's book, published in 1850, contains a mass of evi-
dence gathered from observation and inquiries in many dififerent
parts of Europe, together with attestations from many distin-
guished writers, to the beneficial effects of peasant properties.
Among the testimonies which he cites respecting their effect on
agriculture, I select the following:

" Reichensperger, himself an inhabitant of that part of Prus-
sia where the land is the most subdivided, has published a long
and very elaborate work to show the admirable consequences
of a system of freeholds in land. He expresses a very decided
opinion that not only are the gross products of any given num-
ber of acres held and cultivated by small or peasant proprietors,
greater than the gross products of an equal number of acres
held by a few great proprietors, and cultivated by tenant farm-

* " The Social Condition and Educa- By Joseph Kay, Esq., M.A., Barrister-

tion of the People in England and Eu- at-Law, and late Travelling Bachelor of

rope; showing the Results of the Pri- the University of Cambridge. Vol. i.

mary Schools, and of the Division of pp. 138 — 40.
Landed Property in Foreign Countries."

PEASANT PROPRIETORS 261

ers, but that the net products of the former, after deducting all
the expenses of cultivation, are also greater than the net prod-
ucts of the latter. ... He mentions one fact which seems
to prove that the fertility of the land in countries where the
properties are small, must be rapidly increasing. He says that
the price of the land which is divided into small properties in
the Prussian Rhine provinces, is much higher, and has been
rising much more rapidly, than the price, of land on the great
estates. He and Professor Rau both say that this rise in the
price of the small estates would have ruined the more recent
purchasers, unless the productiveness of the small estates had
increased in at least an equal proportion ; and as the small pro-
prietors have been gradually becoming more and more pros-
perous notwithstanding the increasing prices they have paid
for their land, he argues, with apparent justness, that this
would seem to show that not only the gross profits of the small
estates, but the net profits also, have been gradually increasing,
and that the net profits per acre, of land, when farmed by small
proprietors, are greater than the net profits per acre of land
farmed by a great proprietor. He says, with seeming truth,
that the increasing price of land in the small estates cannot be
the mere effect of competition, or it would have diminished
the profits and the prosperity of the small proprietors, and that
this result has not followed the rise.

" Albrecht Thaer, another celebrated German writer on the
different systems of agriculture, in one of his later works
('Principles of Rational Agriculture') expresses his decided
conviction, that the net produce of land is greater when farmed
by small proprietors than when farmed by great proprietors
or their tenants. . . . This opinion of Thaer is all the more
remarkable, as, during the early part of his life, he was very
strongly in favor of the English system of great estates and
great farms."

Mr. Kay adds, from his own observation, " The peasant
farming of Prussia, Saxony, Holland, and Switzerland is the
most perfect and economical farming I have ever witnessed in
any country." *

§ 5. P>ut the most decisive example in opposition to the Eng-
lish prejudice against cultivation by peasant proprietors, is the
case of Belgium. The soil is originally one of the worst in

• Kay, i. 116— 18.

262 POLITICAL ECONOMY

Europe. " The provinces," says Mr. M'Culloch,* " of West
and East Flanders, and Hainault, form a far-stretching plain,
of which the luxuriant vegetation indicates the indefatigable
care and labor bestowed upon its cultivation ; for the natural
soil consists almost wholly of barren sand, and its great fertility
is entirely the result of very skilful management and judicious
application of various manures." There exists a carefully pre-
pared and comprehensive treatise on Flemish Husbandry, in the
Farmer's Series of the Society for the Dififusion of Useful
Knowledge. The writer observes,! that the Flemish agricult-
urists " seem to want nothing but a space to work upon : what-
ever be the quality or texture of the soil, in time they will make
it produce something. The sand in the Campine can be com-
pared to nothing but the sands on the seashore, which they
probably were originally. It is highly interesting to follow
step by step the progress of improvement. Here you see a
cottage and rude cow-shed erected on a spot of the most un-
promising aspect. The loose white sand blown into irregular
mounds is only kept together by the roots of the heath : a small
spot only is levelled and surrounded by a ditch : part of this is
covered with young broom, part is planted with potatoes, and
perhaps a small patch of diminutive clover may show itself: "
but manures, both solid and liquid, are collecting, " and this is
the nucleus from which, in a few years, a little farm will spread
around. ... If there is no manure at hand, the only thing
that can be sown, on pure sand, at first, is broom : this grows
in the most barren soils ; in three years it is fit to cut, and pro-
duces some return in fagots for the bakers and brickmakers.
The leaves which have fallen have somewhat enriched the soil,
and the fibres of the roots have given a certain degree of com-
pactness. It may now be ploughed and sown with buckwheat,
or even with rye without manure. By the time this is reaped,
some manure may have been collected, and a regular course
of cropping may begin. As soon as clover and potatoes enable
the farmer to keep cows and make manure, the improvement
goes on rapidly ; in a few years the soil undergoes a complete
change : it becomes mellow and retentive of moisture, and en-
riched by the vegetable matter afiforded by the decomposition
of the roots of clover and other plants. . . . After the land
has been gradually brought into a good state, and is cultivated

* " Geographical Dictionary," art. " Belgium." t Pp- 11—14-

PEASANT PROPRIETORS 263

in a regular manner, there appears much less difference be-
tween the soils which have been originally good, and those
which have been made so by labor and industry. At least the
crops in both appear more nearly alike at harvest, than is the
case in soils of different qualities in other countries. This is
a great proof of the excellency of the Flemish system ; for it
shows that the land is in a constant state of improvement, and
that the deficiency of the soil is compensated by greater atten-
tion to tillage and manuring, especially the latter."

The people who labor thus intensely, because laboring for
themselves, have practised for centuries those principles of ro-
tation of crops and economy of manures, which in England
are counted among modern discoveries : and even now the
superiority of their agriculture, as a whole, to that of England,
is admitted by competent judges. " The cultivation of a poor
light soil, or a moderate soil," says the writer last quoted,*
" is generally superior in Flanders to that of the most improved
farms of the same kind in Britain. We surpass the Flemish
farmer greatly in capital, in varied implements of tillage, in
the choice and breeding of cattle and sheep " (though, accord-
ing to the same authority,! they are much " before us in the
feeding of their cows "), " and the British farmer is in general a
man of superior education to the Flemish peasant. But in the
minute attention to the qualities of the soil, in the management
and application of manures of different kinds, in the judicious
succession of crops, and especially in the economy of land, so
that every part of it shall be in a constant state of production,
we have still something to learn from the Flemings," and not
from an instructed and enterprising Fleming here and there, but
from the general practice.

Much of the most highly cultivated part of the country con-
sists of peasant properties, managed by the proprietors, always
either wholly or partly by spade industry.;}: " When the land
is cultivated entirely by the spade, and no horses are kept, a
cow is kept for every three acres of land, and entirely fed on
artificial grasses and roots. This mode of cultivation is princi-
pally adopted in the Waes district, where properties are verv
small. All the labor is done by the different members of the
family ; " children soon beginning " to assist in various minute
operations, according to their age and strength, such as weed-

• "Flemish Husbandry," p. 3. t Ibid., p. 13. J Ibid., pp. 73 et seq.

264 POLITICAL ECONOMY

ing, hoeing, feeding the cows. If they can raise rye and wheat
enough to make their bread, and potatoes, turnips, carrots, and
clover, for the cows, they do well ; and the produce of the sale
of their rape-seed, their flax, their hemp, and their butter, after
deducting the expense of manure purchased, which is always
considerable, gives them a very good profit. Suppose the whole
extent of the land to be six acres, which is not an uncommon
occupation, and which one man can manage;" then (after
describing the cultivation), " if a man with his wife and three
young children are considered as equal to three and a half
grown-up men, the family will require thirty-nine bushels of
grain, forty-nine bushels of potatoes, a fat hog, and the butter
and milk of one cow : an acre and a half of land will produce
the grain and potatoes, and allow some corn to finish the fatten-
ing of the hog, which has the extra buttermilk : another acre
in clover, carrots, and potatoes, together with the stubble tur-
nips, will more than feed the cow ; consequently two and a half
acres of land is sufficient to feed this family, and the produce
of the other three and a half may be sold to pay the rent or
the interest of purchase-money, wear and tear of implements,
extra manure, and clothes for the family. But these acres are
the most profitable on the farm, for the hemp, flax, and colza
are included ; and by having another acre in clover and roots,
a second cow can be kept, and its produce sold. We have,
therefore, a solution of the problem, how a family can live and
thrive on six acres of moderate land." After showing by calcu-
lation, that this extent of land can be cultivated in the most
perfect manner by the family without any aid from hired labor,
the writer continues : " In a farm of ten acres entirely culti-
vated by the spade, the addition of a man and a woman to the
members of the family will render all the operations more easy ;
and with a horse and cart to carry out the manure, and bring
home the produce, and occasionally draw the harrows, fifteen
acres may be very well cultivated. . . . Thus it will be seen "
(this is the result of some pages of details and calculations *),
" that by spade husbandry, an industrious man with a small
capital, occupying only fifteen acres of good light land, may
not only live and bring up a family, paying a good rent, but
may accumulate a considerable sum in the course of his life."
But the indefatigable industry by which he accomplishes this,

• " Flemish Husbandry," p. 8i.

PEASANT PROPRIETORS 265

and of which so large a portion is expended not in the mere
cultivation, but in the improvement, for a distant return, of
the soil itself — has that industry no connection with not paying
rent ? Could it exist, without presupposing, at least, a virtually
permanent tenure?

As to their mode of living, " the Flemish farmers and laborers
live much more economically than the same class in England:
they seldom eat meat, except on Sundays and in harvest : but-
termilk and potatoes with brown bread is their daily food." It
is on this kind of evidence that English travellers, as they hurry
through Europe, pronounce the peasantry of every Continental
country poor and miserable, its agricultural and social system
a failure, and the English the only regime under which laborers
are well off. It is, truly enough, the only regime under which
laborers, whether well off or not, never attempt to be better. So
little are English laborers accustomed to consider it possible
that a laborer should not spend all he earns, that they habit-
ually mistake the signs of economy for those of poverty. Ob-
serve the true interpretation of the phenomena :

" Accordingly they are gradually acquiring capital, and their
great ambition is to have land of their own. They eagerly seize
every opportunity of purchasing a small farm, and the price is
so raised by competition, that land pays little more than two
per cent, interest for the purchase money. Large properties
gradually disappear, and are divided into small portions, which
sell at a high rate. But the wealth and industry of the popu-
lation are continually increasing, being rather diffused through
the masses than accumulated in individuals."

With facts like these, known and accessible, it is not a little
surprising to find the case of Flanders referred to not in recom-
mendation of peasant properties, but as a warning against them ;
on no better ground than a presumptive excess of population,
inferred from the distress which existed among the peasantry
of Brabant and East Flanders in the disastrous year 1846-47.
The evidence which I have cited from a writer conversant with
the subject, and having no economical theory to support, shows
that the distress, whatever may have been its severity, arose
from no insufficiency in these little properties to supply abun-
dantly, in any ordinary circumstances, the wants of all whom
they have to maintain. It arose from the essential condition
to which those are subject who employ land of their own in

266

POLITICAL ECONOMY

growing their own food, namely, that the vicissitudes of the
seasons must be borne by themselves, and cannot, as in the
case of large farmers, be shifted from them to the consumer.
When we remember the season of 1846, a partial failure of all
kinds of grain, and an almost total one of the potato, it is no
wonder that in so unusual a calamity the produce of six acres,
half of them sown with flax, hemp, or oil-seeds, should fall
short of a year's provision for a family. But we are not to
contrast the distressed Flemish peasant with an English capi-
talist who farms several hundred acres of land. If the peasant
were an Englishman, he would not be that capitalist, but a
day laborer under a capitalist. And is there no distress, in times
of dearth, among day laborers? Was there none, that year,
in countries where small proprietors and small farmers are
unknown? I am aware of no reason for believing that the
distress was greater in Belgium, than corresponds to the pro-
portional extent of the failure of crops compared with other
countries.*

§ 6. The evidence of the beneficial operation of peasant prop-
erties in the Channel Islands is of so decisive a character, that I
cannot help adding to the numerous citations already made,
part of a description of the economical condition of those islands,
by a writer who combines personal observation with an attentive
study of the information afforded by others. Mr. William
Thornton, in his " Plea for Peasant Proprietors," a book which
by the excellence both of its materials and of its execution, de-
serves to be regarded as the standard work on that side of the
question, speaks of the island of Guernsey in the following terms:
" Not even in England is nearly so large a quantity of produce
sent to market from a tract of such limited extent. This of itself
might prove that the cultivators must be far removed above
poverty, for being absolute owners of all the produce raised by
them, they of course sell only what they do not themselves re-
quire. But the satisfactoriness of their condition is apparent

• As much of the distress lately com-
plained of in Belgium, as partakes in
any degree of a permanent character,
appears to be almost confined to the
portion of the population who carry on
manufacturing labor, either by itself or
in conjunction with agricultural; and to
be occasioned by a diminished demand
for Belgic manufactures.

To the preceding testimonies respect-
ing Germany, Switzerland, and Belgium,

may be added the following from
Niebuhr, respecting the Roman Cam-
pagna. In a letter from Tivoli, he says:
" Wherever you find hereditary farmers,
or small proprietors, there you also find
industry and honesty. I believe that a
man who would employ a large fortune
in establishing small freeholds might
put an end to robbery in the mountain
districts."—" Life and Letters of Nie-
buhr," vol. ii. p. I49'

PEASANT PROPRIETORS 267

to every observer. ' The happiest community,' says Mr. Hill,
' which it has ever been my lot to fall in with, is to be found in
this little island of Guernsey,' ' No matter,' says Sir George
Head, ' to what point the traveller may choose to bend his way,
comfort everywhere prevails.' What most surprises the English
visitor in his first walk or drive beyond the bounds of St, Peter's
Port, is the appearance of the habitations with which the land-
scape is thickly studded. Many of them are such as in his own
country would belong to persons of middle rank ; but he is puz-
zled to guess what sort of people live in the others, which, though
in general not large enough for farmers, are almost invariably
much too good in every respect for day laborers. . . . Lit-
erally, in the whole island, with the exception of a few fisher-
men's huts, there is not one so mean as to be likened to the ordi-
nary habitation of an English farm laborer. . . . ' Look,'
says a late Bailifif of Guernsey, Mr. De L'Isle Brock, ' at the
hovels of the English, and compare them with the cottages of our
peasantry.' . . . Beggars are utterly unknown. . . , Pau-
perism, able-bodied pauperism at least, is nearly as rare as
mendicancy. The Savings Banks accounts also bear witness to
the general abundance enjoyed by the laboring classes of Guern-
sey. In the year 1841, there were in England, out of a popula-
tion of nearly fifteen millions, less than 700,000 depositors, or
one in every twenty persons, and the average amount of the de-
posits was £30. In Guernsey, in the same year, out of a popula-
tion of 26,000 the number of depositors was 1920, and the aver-
age amount of the deposits £40," * The evidence as to Jersey
and Alderney is of a similar character.

Of the efficiency and productiveness of agriculture on the
small properties of the Channel Islands, Mr. Thornton produces
ample evidence, the result of which he sums up as follows: " Thus
it appears that in the two principal Channel Islands, the agricul-
tural population is, in the one twice, and in the other, three
times, as dense as in Britain, there being in the latter country
only one cultivator to twenty-two acres of cultivated land, while
in Jersey there is one to eleven, and in Guernsey one to seven
acres. Yet the agriculture of these islands maintains, besides
cultivators, non-agricultural populations, respectively four and
five times as dense as that of Britain. This difference does not
arise from any superiority of soil or climate possessed by the

•"A Plea for Peasant Proprietors." By William Thomas Thornton, pp. 99—104.

268 POLITICAL ECONOMY

Channel Islands, for the former is naturally rather poor, and
the latter is not better than in the southern counties of England.
It is owing entirely to the assiduous care of the farmers, and to
the abundant use of manure." * " In the year 1837," he says
in another place, f " the average yield of wheat in the large
farms of England was only twenty-one bushels, and the highest
average for any one county was no more than twenty-six
bushels. The highest average since claimed for the whole of
England, is thirty bushels. In Jersey, where the average size of
farms is only sixteen acres, the average produce of wheat per
acre was stated by Inglis in 1834 to be thirty-six bushels; but
it is proved by official tables to have been forty bushels in the
five years ending with 1833. In Guernsey, where farms are still
smaller, four quarters per acre, according to Inglis, is consid-
ered a good, but still a very common crop." " Thirty shillings ;j;
an acre would be thought in England a very fair rent for mid-
dling land; but in the Channel Islands, it is only very inferior land
that would not let for at least £4."

§ 7. It is from France, that impressions unfavorable to peas-
ant properties are generally drawn; it is in France that the sys-
tem is so often asserted to have brought forth its fruit in the
most wretched possible agriculture, and to be rapidly reducing,
if not to have already reduced, the peasantry, by subdivision of
land, to the verge of starvation. It is difficult to account for the
general prevalence of impressions so much the reverse of truth.
The agriculture of France was wretched, and the peasantry in
great indigence, before the Revolution. At that time they were
not, so universally as at present, landed proprietors. There were,
however, considerable districts of France where the land, even
then, was to a great extent the property of the peasantry, and
among these were many of the most conspicuous exceptions to
the general bad agriculture and to the general poverty. An au-
thority, on this point, not to be disputed, is Arthur Young, the
inveterate enemy of small farms, the coryphaeus of the modern
English school of agriculturists ; who yet, travelling over nearly
the whole of France in 1787, 1788, and 1789. when he finds
remarkable excellence of cultivation, never hesitates to ascribe
it to peasant property. " Leaving Sauve," says he,§ " I was much

• William Thomas Thornton's " A Plea J Tbid., p. 32.

for Peasant Proprietors," p. 38. § Arthur Young's "Travels in France,"

t Ibid., p. 9. vol. i. p. 50.

PEASANT PROPRIETORS 269

struck with a large tract of land, seemingly nothing but huge
rocks; yet most of it enclosed and planted with the most indus-
trious attention. Every man has an olive, a mulberry, an al-
mond, or a peach tree, and vines scattered among them; so that
the whole ground is covered with the oddest mixture of these
plants and bulging rocks, that can be conceived. The inhabi-
tants of this village deserve encouragement for their industry;
and if I were a French minister they should have it. They would
soon turn all the deserts around them into gardens. Such a
knot of active husbandmen, who turn their rocks into scenes of
fertility, because I suppose their &w)i, would do the same by the
wastes, if animated by the same omnipotent principle." Again :*
" Walk to Rossendal," (near Dunkirk) " where M. le Brun has
an improvement on the Dunes, which he very obligingly showed
me. Between the town and that place is a great number of neat
little houses, built each with its garden, and one or two fields en-
closed, of most wretched blowing dune sand, naturally as white
as snow, but improved by industry. The magic of property
turns sand to gold." And again: f " Going out of Gange, I was
surprised to find by far the greatest exertion in irrigation which
I had yet seen in France ; and then passed by some steep moun-
tains, highly cultivated in terraces. Much watering at St. Law-
rence. The scenery very interesting to a farmer. From Gange,
to the mountain of rough ground which I crossed, the ride has
been the most interesting which I have taken in France; the
efforts of industry the most vigorous; the animation the most
lively. An activity has been here, that has swept away all diffi-
culties before it, and has clothed the very rocks with verdure.
It would be a disgrace to common sense to ask the cause; the
enjoyment of property must have done it. Give a man the se-
cure possession of a bleak rock, and he will turn it into a garden ;
give him a nine years' lease of a garden, and he will convert it
into a desert."

In his description of the country at the foot of the Western
Pyrenees, he speaks no longer from surmise, but from knowl-
edge. " Take X the road to Moneng, and come presently to a
scene which was so new to me in France, that I could hardly
believe my own eyes. A succession of many well-built, tight,
and comfortable farming cottages built of stone and covered

• Arthur Young's "Travels in France," t Tbid., p. 51.

vol. i. p. 88. X Ibid. vol. i.

270 POLITICAL ECONOMY

with tiles; each having its Httle garden, enclosed by dipt thorn-
hedges, with plenty of peach and other fruit-trees, some fine
oaks scattered in the hedges, and young trees nursed up with
so much care, that nothing but the fostering attention of the
owner could effect anything like it. To every house belongs a
farm, perfectly well enclosed, with grass borders mown and
neatly kept around the corn-fields, with gates to pass from one
enclosure to another. There are some parts of England (where
small yeomen still remain) that resemble this country of Beam;
but we have very little that is equal to what I have seen in this
ride of twelve miles from Pau to Moneng. It is all in the hands
of little proprietors, without the farms being so small as to oc-
casion a vicious and miserable population. An air of neatness,
warmth, and comfort breathes over the whole. It is visible in
their new-built houses and stables; in their little gardens; in
their hedges; in the courts before their doors; even in the coops
for their poultry, and the sties for their hogs. A peasant does
not think of rendering his pig comfortable, if his own happiness
hang by the thread of a nine years' lease. We are now in Beam,
within a few miles of the cradle of Henry IV. Do they inherit
these blessings from that good prince? The benignant genius
of that good monarch seems to reign still over the country; each
peasant has the fowl in the pot." He frequently notices the ex-
cellence of the agriculture of French Flanders, where the farms
" are all small, and much in the hands of little proprietors." *
In the Pays de Caux, also a country of small properties, the agri-
culture was miserable; of which his explanation was, that it " is
a manufacturing country, and farming is but a secondary pur-
suit to the cotton fabric, which spreads over the whole of it." f
The same district is still a seat of manufactures, and a country of
small proprietors, and is now, whether we judge from the ap-
pearance of the crops or from the official returns, one of the
best cultivated in France. In " Flanders, Alsace, and part of
Artois, as well as on the banks of the Garonne, France possesses
a husbandry equal to our own." X Those countries, and a con-
siderable part of Ouercy, " are cultivated more like gardens than
farms. Perhaps they are too much like gardens, from the small-
ness of properties." § In those districts the admirable rotation
of crops, so long practised in Italy, but at that time generally

* Young, pp. 322 — 4. t Ibid. vol. i. p. 357.

t Ibid. p. 325. § Ibid. p. 364.

PEASANT PROPRIETORS 271

neglected in France, was already universal. " The rapid suc-
cession of crops, the harvest of one being but the signal of sowing
immediately for a second," (the same fact which strikes all ob-
servers in the valley of the Rhine,) '* can scarcely be carried
to greater perfection: and this is a point, perhaps, of all others
the most essential to good husbandry, when such crops are so
justly distributed as we generally find them in these provinces;
cleaning and ameliorating ones being made the preparation for
such as foul and exhaust."

It must not, however, be supposed that Arthur Young's testi-
mony on the subject of peasant properties is uniformly favorable.
In Lorraine, Champagne, and elsewhere, he finds the agriculture
bad, and the small proprietors very miserable, in consequence,
as he says, of the extreme subdivision of the land. His opinion
is thus summed up : * — " Before I travelled, I conceived that
small farms, in property, were very susceptible of good cultiva-
tion; and that the occupier of such, having no rent to pay,
might be sufficiently at his ease to work improvements, and
carry on a vigorous husbandry ; but what I have seen in France,
has greatly lessened my good opinion of them. In Flanders, I
saw excellent husbandry on properties of 30 to 100 acres; but
we seldom find here such small patches of property as are com-
mon in other provinces. In Alsace, and on the Garonne, that is,
on soils of such exuberant fertility as to demand no exertions,
some small properties also are well cultivated. In Beam, I
passed through a region of little farmers, whose appearance,
neatness, ease, and happiness charmed me; it was what property
alone could, on a small scale, effect; but these were by no
means contemptibly small; they are, as I judged by the distance
from house to house, from 40 to 80 acres. Except these, and a
very few other instances, I saw nothing respectable on small
properties, except a most unremitting industry. Indeed, it is
necessary to impress on the reader's mind, that though the
husbandry I met with, in a great variety of instances on little
properties, was as bad as can be well conceived, yet the industry
of the possessors was so conspicuous, and so meritorious, that
no conmiendations would be too great for it. It was sufficient
to prove that property in land is, of all others, the most active
instigator to severe and incessant labor. And this truth is of
such force and extent, that I know no way so sure of carrying

• Young, p. 412.

272 POLITICAL ECONOMY

tillage to a mountain top, as by permitting the adjoining villagers
to acquire it in property; in fact, we see that in the mountains
of Languedoc, etc., they have conveyed earth in baskets, on their
backs, to form a soil where nature had denied it."

The experience, therefore, of this celebrated agriculturist, and
apostle of the grande culture, may be said to be that the effect
of small properties, cultivated by peasant proprietors, is admir-
able when they are not too small: so small, namely, as not fully
to occupy the time and attention of the family, for he often com-
plains, with great apparent reason, of the quantity of idle time
which the peasantry had on their hands when the land was in
very small portions, notwithstanding the ardor with which they
toiled to improve their little patrimony, in every way which their
knowledge or ingenuity could suggest. He recommends, ac-
cordingly, that a limit of subdivision should be fixed by law ; and
this is by no means an indefensible proposition in countries, if
such there are, where division, having already gone further than
the state of capital and the nature of the staple articles of cul-
tivation render advisable, still continues progressive. That each
peasant should have a patch of land, even in full property, if it
is not suf^cient to support him in comfort, is a system with all
the disadvantages, and scarcely any of the benefits, of small
properties; since he must either live in indigence on the produce
of his land, or depend as habitually as if he had no landed pos-
sessions, on the wages of hired labor: which, besides, if all the
holdings surrounding him are of similar dimensions, he has little
prospect of finding. The benefits of peasant properties are con-
ditional on their not being too much subdivided; that is, on
their not being required to maintain too many persons, in pro-
portion to the produce that can be raised from them by those per-
sons. The question resolves itself, like most questions respect-
ing the condition of the laboring classes, into one of population.
Are small properties a stimulus to undue multiplication, or a
check to it?

Chapter VII. — Continuation of the Same Subject

§1. Before examining the influence of peasant properties on
the ultimate economical interests of the laboring class, as de-
termined by the increase of population, let us note the points re-
specting the moral and social influence of that territorial arrange-
ment, which may be looked upon as established, either by the

PEASANT PROPRIETORS

273

reason of the case, or by the facts and authorities cited in the
preceding chapter.

The reader new to the subject must have been struck with the
powerful impression made upon all the witnesses to whom I
have referred, by what a Swiss statistical writer calls the " al-
most superhuman industry " of peasant proprietors.* On this
point, at least, authorities are unanimous. Those who have seen
only one country of peasant properties, always think the inhabi-
tants of that country the most industrious in the world. There
is as little doubt among observers, with what feature in the con-
dition of the peasantry this pre-eminent industry is connected.
It is " the magic of property," which, in the words of Arthur
Young, " turns sand into gold." The idea of property does not,
however, necessarily imply that there should be no rent, and
more than that there should be no taxes. It merely implies
that the rent should be a fixed charge, not liable to be raised
against the possessor by his own improvements, or by the will
of a landlord. A tenant at a quit-rent is, to all intents and pur-
poses, a proprietor; a copyholder is not less so than a freeholder.
What is wanted is permanent possession on fixed terms. " Give
a man the secure possession of a bleak rock, and he will turn it
into a garden; give him a nine years' lease of a garden, and he
will convert it into a desert."

The details which have been cited, and those, still more min-
ute, to be found in the same authorities, concerning the habitu-
ally elaborate system of cultivation, and the thousand devices of
the peasant proprietor for making every superfluous hour and
odd moment instrumental to some increase in the future produce
and value of the land, will explain what has been said in a previ-
ous chapter f respecting the far larger gross produce which,
with anything like parity of agricultural knowledge, is obtained,
from the same quality of soil, on small farms, at least when they
are the property of the cultivator. The treatise on " Flemish
Husbandry " is especially instructive respecting the means by
which untiring industry does more than outweigh inferiority of
resources, imperfection of implements, and ignorance of scien-
tific theories. The peasant cultivation of Flanders and Italy is
affirmed to produce heavier crops, in equal circumstances of soil,
than the best cultivated districts of Scotland and England. It

» »«

TVip Canton Schaffhausen " (be- t Supra, Book i. chap. ix. § 4.

fore quoted), p. 53.

Vol. I.— 18

274

POLITICAL ECONOMY

produces them, no doubt, with an amount of labor which, if paid
for by the employer, would make the cost to him more than
equivalent to the benefit; but to the peasant it is not cost, it is
the devotion of time which he can spare, to a favorite pursuit,
if we should not rather say a ruling passion.*

We have seen, too, that it is not solely by superior exertion
that the Flemish cultivators succeed in obtaining these brilliant
results. The same motive which gives such intensity to their in-
dustry, placed them earlier in possession of an amount of agri-
cultural knowledge not attained until much later in countries
where agriculture was carried on solely by hired labor. An
equally high testimony is borne by M. de Lavergne f to the agri-
cultural skill of the small proprietors, in those parts of France to
which the petite culture is really suitable. " In the rich plains of
Flanders, on the banks of the Rhine, the Garonne, the Charente,
the Rhone, all the practices which lertilize the land and increase
the productiveness of labor are known to the very smallest cul-
tivators, and practised by them, however considerable may be
the advances which they require. In their hands, abundant man-
ures; collected at great cost, repair and incessantly increase the
fertility of the soil, in spite of the activity of cultivation. The
races of cattle are superior, the crops magnificent. Tobacco,
flax, colza, madder, beetroot, in some places; in others, the vine,
the olive, the plum, the mulberry, only yield their abundant
treasures to a population of industrious laborers. Is it not also
to the petite culture that we are indebted for most of the garden
produce obtained by dint of great outlay in the neighboorhood
of Paris?"

* Read the graphic description by the
historian Michelet, of the feelings of a
peasant proprietor towards his land.

" If we would know the inmost
thought, the passion, of the French
peasant, it is very easy. Let us walk
out on Sunday into the country and fol-
low him. Behold him yonder, walking
in front of us. It is two o'clock; his
wife is at vespers: he has on his Sunday
clothes; I perceive that he is going to
visit his mistress.

" What mistress? His land.

" I do not say he goes straight to it.
No, he is free to-day, and may either
go or not. Does he not go every day in
the week? Accordingly, he turns aside,
he goes another way, he has business
elsewhere. And yet — he goes.

" It is true, he was passing close by;
it was an opportunity. He looks, but
apparently he will not go in; what for?
And yet — he enters.

" At least it is probable that he will
not work; he is in his Sunday dress: he
has a clean shirt and blouse. Still, there
is no harm in plucking up this weed
and throwing out that stone. There is
a stump, too, which is in the way; but
he has not his tools with him, he will
do it to-morrow.

" Then he folds his arms and gazes,
serious and careful. He gives a long, a
very long look, and seems lost in
thought. At last, if he thinks himself
observed, if he sees a passerby, he
moves slowly away. Thirty paces off
he stops, turns round, and casts on his
land a last look, sombre and profound,
but to those who can see it, the look is
full of passion, of heart, of devotion." —
" The People," by J. Michelet, Part i.
chap. I.

t Essay on the Rural Economy of
England, Scotland, and Ireland," 3d ed.
p. 127.

PEASANT PROPRIETORS

275

§ 2. Another aspect of peasant properties, in which it is es-
sential that they should be considered, is that of an instrument of
popular education. Books and schooHng are absolutely neces-
sary to education; but not all-sufficient. The mental faculties
will be most developed where they are most exercised; and what
gives more exercise to them than the having a multitude of in-
terests, none of which can be neglected, and which can be pro-
vided for only by varied efforts of will and intelligence? Some
of the disparagers of small properties lay great stress on the
cares and anxieties which beset the peasant proprietor of the
Rhineland or Flanders. It is precisely those cares and anxieties
which tend to make him a superior being to an English day-
laborer. It is, to be sure, rather abusing the privileges of fair
argument to represent the condition of a day-laborer as not an
anxious one. I can conceive no circumstances in which he is
free from anxiety, where there is a possibility of being out of
employment; unless he has access to a profuse dispensation of
parish pay, and no shame or reluctance in demanding it. The
day-laborer has, in the existing state of society and population,
many of the anxieties which have not an invigorating effect on
the mind, and none of those which have. The position of the
peasant proprietor of Flanders is the reverse. From the anxiety
which chills and paralyses — the uncertainty of having food to
eat — few persons are more exempt: it requires as rare a concur-
rence of circumstances as the potato failure combined with an
universal bad harvest, to bring him within reach of that danger.
His anxieties are the ordinary vicissitudes of more and less; his
cares are that he takes his fair share of the business of life ; that
he is a free human being, and not perpetually a child, which
seems to be the approved condition of the laboring classes
according to the prevailing philanthropy. He is no longer
a being of a different order from the middle classes; he
has pursuits and objects like those which occupy them,
and give to their intellects the greater part of such culti-
vation as they receive. If there is a first principle in in-
tellectual education, it is this — that the discipline which does
good to the mind is that in which the mind is active, not that in
which it is passive. The secret for developing the faculties is to
give them much to do, and much inducement to do it. This
detracts nothing from the importance, and even necessity, of
other kinds of mental cultivation. The possession of property

276 POLITICAL ECONOMY

will not prevent the peasant from being coarse, selfish, and nar-
row-minded. These things depend on other influences, and other
kinds of instruction. But this great stimulus to one kind of
mental activity, in no way impedes any other means of intellect-
ual development. On the contrary, by cultivating the habit of
turning to practical use every fragment of knowledge acquired,
it helps to render that schooling and reading fruitful, which
without some such auxiliary influence are in too many cases like
seed thrown on a rock.

§ 3. It is not on the intelligence alone that the situation of a
peasant proprietor exercises an improving influence. It is no
less propitious to the moral virtues of prudence, temperance,
and self-control. Day-laborers, where the laboring class mainly
consists of them, are usually improvident; they spend carelessly
to the full extent of their means and let the future shift for itself.
This is so notorious, that many persons strongly interested in
the welfare of the laboring classes, hold it as a fixed opinion that
an increase of wages would do them little good, unless accom-
panied by at least a corresponding improvement in their tastes
and habits. The tendency of peasant proprietors, and of those
who hope to become proprietors, is to the contrary extreme; to
take even too much thought for the morrow. They are oftener
accused of penuriousness than of prodigality. They deny them-
selves reasonable indulgences, and live wretchedly in order to
economize. In Switzerland almost everybody saves, who has
any means of saving; the case of the Flemish farmers has been
already noticed: among the French, though a pleasure-loving
and reputed to be a self-indulgent people, the spirit of thrift is
diffused through the rural population in a manner most grati-
fying as a whole, and which in individual instances errs rather
on the side of excess than defect. Among those who, from the
hovels in which thev live, and the herbs and roots which con-
stitute their diet, are mistaken by travellers for proofs and speci-
mens of general indigence, there are numbers who have hoards
in leathern bags, consisting of sums in five-franc pieces, which
they keep by them perhaps for a whole generation, unless
brought out to be expended in their most cherished gratification
— the purchase of land. If there is a moral inconvenience attached
to a state of society in which the peasantry have land, it is the
danger of their being too careful of their pecuniary concerns;
of its making them crafty, and " calculating " in the objection'

PEASANT PROPRIETORS

277

able sense. The French peasant is no simple countryman, no
downright " peasant of the Danube: " * both in fact and in fic-
tion he is now " the crafty peasant." That is the stage which
he has reached in the progressive development which the consti-
tution of things has imposed on human intelligence and human
emancipation. But some excess in this direction is a small and
a passing evil compared with recklessness and improvidence in
the laboring classes, and a cheap price to pay for the inestimable
worth of the virtue of self-dependence, as the general character-
istic of a people: a virtue which is one of the first conditions of
excellence in a human character — the stock On which if the other
virtues are not grafted, they have seldom any firm root; a quality
indispensable in the case of a laboring class, even to any tolerable
degree of physical comfort; and by which the peasantry of
France, and of most European countries of peasant proprietors,
are distinguished beyond any other laboring population.

§ 4. Is it likely, that a state of economical relations so condu-
cive to frugality and prudence in every other respect, should be
prejudicial to it in the cardinal point of increase of population?
That it is so is the opinion expressed by most of those English
political economists who have written anything about the mat-
ter. Mr. M'Culloch's opinion is well known. Mr. Jones af-
firms,! that a " peasant population, raising their own wages
from the soil, and consuming them in kind, are universally acted
upon very feebly by internal checks, or by motives disposing
them to restraint. The consequence is, that unless some external
cause, quite independent of their will, forces such peasant culti-
vators to slacken their rate of increase, they will, in a limited
territory, very rapidly approach a state of want and penury, and
will be stopped at last only by the physical impossibility of pro-
curing subsistence." He elsewhere J speaks of such a peasantry
as " exactly in the condition in which the animal disposition to
increase their numbers is checked by the fewest of those balanc-
ing motives and desires which regulate the increase of superior
ranks or more civilized people." The " causes of this pecu-
liarity " Mr. Jones promised to point out in a subsequent work,
which never made its appearance. I am totally unable to con-
jecture from what theory of human nature, and of the motives
which influence human conduct, he would have derived them.

• See the celebrated fable of La Fon- t " Essay on the Distribution of

taine. Wealth," p. 146. i Ibid. p. 68.

278 POLITICAL ECONOMY

Arthur Young assumes the same " peculiarity " as a fact; but,
though not much in the habit of quahfying his opinions, he
does not push his doctrine to so violent an extreme as Mr. Jones;
having, as we have seen, himself testified to various instances in
which peasant populations, such as Mr. Jones speaks of, were
not tending to " a state of want and penury," and were in no
danger whatever of coming in contact with " physical impossi-
bility of procuring subsistence."

That there should be discrepancy of experience on this matter,
is easily to be accounted for. Whether the laboring people live
by land or by wages, they have always hitherto multiplied
up to the limit set by their habitual standard of com-
fort. When that standard was low, not exceeding a scanty
subsistence, the size of properties, as well as the rate of
wages, has been kept down to what would barely support life.
Extremely low ideas of what is necessary for subsistence, are
perfectly compatible with peasant properties; and if a people
have always been used to poverty, and habit has reconciled them
to it, there will be over-population, and excessive subdivision of
land. But this is not to the purpose. The true question is, sup-
posing a peasantry to possess land not insufficient but sufficient
for their comfortable support, are they more, or less, likely to
fall from this state of comfort through improvident multiplica-
tion, than if they were living in an equally comfortable manner
as hired laborers? All a priori considerations are in favor of
their being less likely. The dependence of wages on population
is a matter of speculation and discussion. That wages would
fall if population were much increased is often a matter of real
doubt, and always a thing which requires some exercise of the
thinking faculty for its intelligent recognition. But every peas-
ant can satisfy himself from evidence which he can fully appre-
ciate, whether his piece of land can be made to support several
families in the same comfort in which it supports one. Few
people like to leave to their children a worse lot in life than their
own. The parent who has land to leave, is perfectly able to
judge whether the children can live upon it or not: but people
who are supported by wages, see no reason why their sons
should be unable to support themselves in the same way, and
trust accordingly to chance. " In even the most useful and
necessary arts and manufactures," says Mr. Laing,* " the de-

• " Notes of a Traveller," p. 46.

PEASANT PROPRIETORS 279

mand for laborers is not a seen, known, steady, and appreciable
demand: but it is so in husbandry," under small properties.
" The labor to be done, the subsistence that labor will produce
out of his portion of land, are seen and known elements in a
man's calculation upon his means of subsistence. Can his square
of land, or can it not, subsist a family? Can he marry or not?
are questions which every man can answer without delay, doubt,
or speculation. It is the depending on chance, where judgment
has nothing clearly set before it, that causes reckless, improvi-
dent marriages in the lower, as in the higher classes, and pro-
duces among us the evils of over-population; and chance neces-
sarily enters into every man's calculations, when certainty is
removed altogether ; as it is, where certain subsistence is, by
our distribution of property, the lot of but a small portion in-
stead of about two-thirds of the people."

There never has been a writer more keenly sensible of the evils
brought upon the laboring classes by excess of population, than
Sismondi, and this is one of the grounds of his earnest advocacy
of peasant properties. He had ample opportunity, in more coun-
tries than one, for judging of their elTect on population. Let us
see his testimony. " In the countries in which cultivation by
small proprietors still continues, population increases regularly
and rapidly until it has attained its natural limits; that is to say,
inheritances continue to be divided and subdivided among sev-
eral sons, as long as, by an increase of labor, each family can
extract an equal income from a smaller portion of land. A
father who possessed a vast extent of natural pasture, divides
it among his sons, and they turn it into fields and meadows; his
sons divide it among their sons, who abolish fallows: each im-
provement in agricultural knowledge admits of another step in
the subdivision of property. But there is no danger lest the
proprietor should bring up his children to make beggars of them.
He knows exactly what inheritance he has to leave them; he
knows that the law will divide it equally among them; he sees
the limit beyond which this division would make them descend
from the rank which he has himself filled, and a just family
pride, common to the peasant and to the nobleman, makes him
abstain from summoning into life, children for whom he cannot
properly provide. If more are born, at least they do not marry,
or they agree among themselves, which of several brothers shall
perpetuate the family. It is not found that in the Swiss Cantons,

28o POLITICAL ECONOMY

the patrimonies of the peasants are ever so divided as to reduce
chem below an honorable competence; though the habit of for-
eign service, by opening to the children a career indefinite and
uncalculable, sometimes calls forth a superabundant popula-
tion." *

There is similar testimony respecting Norway. Though there
is no law or custom of primogeniture, and no manufactures to
take ofif a surplus population, the subdivision of property is not
carried to an injurious extent. " The division of the land among
children," says Mr. Laing,f " appears not, during the thousand
years it has been in operation, to have had the effect of reducing
the landed properties to the minimum size that will barely sup-
port human existence. I have counted from five-and-twenty to
forty cows upon farms, and that in a country in which the far-
mer must, for at least seven months in the year, have winter
provender and houses provided for all the cattle. It is evident
that some cause or other, operating on aggregation of landed
property, counteracts the dividing effects of partition among chil-
dren. That cause can be no other than what I have long con-
jectured would be effective in such a social arrangement; viz.
that in a country where land is held, not in tenancy merely, as
in Ireland, but in full ownership, its aggregation by the deaths
of co-heirs, and by the marriages of the female heirs among the
body of landholders, will balance its subdivision by the equal
succession of children. The whole mass of property will, I con-
ceive, be found in such a state of society to consist of as many
estates of the class of ii,ooo, as many of iioo, as many of
£io, a year, at one period as at another." That this should hap-
pen, supposes diffused through society a very efficacious pru-
dential check to population : and it is reasonable to give part of
the credit of this prudential restraint to the peculiar adaptation of
the peasant-proprietary system for fostering it.

" In some parts of Switzerland," says Mr. Kay,J " as in the
canton of Argovie for istance, a peasant never marries before he
attains the age of twenty-five years, and generally much later in
life; and in that canton the women very seldom marry before
they have attained the age of thirty. . . . Nor do the divi-
sion of land and the cheapness of the mode of conveying it from
one man to another, encourage the providence of the laborers

* " Nouveaux Principes," book iii. t " Residence in Norway," p. i8.

chap. 3. + Kay, vol. i., pp. 67 — 9.

PEASANT PROPRIETORS

281

of the rural districts only. They act in the same manner, though
perhaps in a less degree, upon the laborers of the smaller towns.
In the smaller provincial towns it is customary for a laborer to
own a small plot of ground outside the town. This plot he cul-
tivates in the evening as his kitchen garden. He raises in it
vegetables and fruits for the use of his family during the winter.
After his day's work is over, he and his family repair to the gar-
den for a short time, which they spend in planting, sowing, weed-
ing, or preparing for sowing, a harvest, according to the season.
The desire to become possessed of one of these gardens operates
very strongly in strengthening prudential habits and in restrain-
ing improvident marriages. Some of the manufacturers in the
canton of Argovie told me that a townsman was seldom con-
tented until he had bought a garden, or a garden and house, and
that the town laborers generally deferred their marriages for
some years, in order to save enough to purchase either one or
both of these luxuries."

The same writer shows by statistical evidence * that in Prussia
the average age of marriage is not only much later than in Eng-
land, but "is gradually becoming later than it was formerly," while
at the same time " fewer illegitimate children are born in Prussia
than in any other of the European countries." " Wherever I
travelled," says Mr. Kay,t " in North Germany and Switzer-
land, I was assured by all that the desire to obtain land, which
was felt by all the peasants, was acting as the strongest possible
check upon undue increase of population." |

In Flanders, according to Mr. Fauche, the British Consul at
Ostend,§ " farmer's sons and those who have the means to be-
come farmers will delay their marriage until they get possession
of a farm." Once a farmer, the next object is to become a pro-
prietor. " The first thing a Dane does with his savings," says
Mr. Browne, the Consul at Copenhagen,! | " is to purchase a

• Kay, vol. i., pp. 75-79. t Tbid. p. go.

t The Prussian minister of statistics,
in a work (" Condition of the People in
Prussia ") which I am obliged to quote
at second-hand from Mr. Kay. after
proving by figures the great and pro-
gressive increase of the consumption of
food and clothing per head of the popu-
lation, from which he justly infers a
corresponding increase of the produc-
tiveness of agriculture, continues: "The
division of estates has, since 1R31, pro-
ceeded more and more throughout the

country. There are now many more
small independent proprietors than for-
merly. Yet, however many complaints
of pauperism are heard among the de-
pendent laborers, we never hear it com-
plained that pauperism is increasing
among the peasant proprietors." — Kay,
i. 262—6.

§ In a communication to the Commis-
sioners of Poor I,aw Enquiry, p. 640 of
their Foreign Communications, Appen-
dix F to their First Report.

II Ibid. p. 268.

282 POLITICAL ECONOMY

clock, then a horse and cow, which he hires out, and which pays
a good interest. Then his ambition is to become a petty proprie-
tor, and this class of persons is better off than any in Denmark.
Indeed, I know of no people in any country who have more
easily within their reach all that is really necessary for life than
this class, which is very large in comparison with that of la-
borers."

But the experience which most decidedly contradicts the assert-
ed tendency of peasant proprietorship to produce excess of popu-
lation, is the case of France. In that country the experiment is
not tried in the most favorable circumstances, a large proportion
of the properties being too small. The number of landed pro-
prietors in France is not exactly ascertained, but on no estimate
does it fall much short of five millions; which, on the lowest
calculation of the number of persons of a family (and for France
it ought to be a low calculation), shows much more than half the
population as either possessing, or entitled to inherit, landed
property. A majority of the properties are so small as not to
afford a subsistence to the proprietors, of whom, according to
some computations, as many as three millions are obliged to eke
out their means of support either by working for hire, or by
taking additional land, generally on metayer tenure. When the
property possessed is not sufftcient to relieve the possessor from
dependence on wages, the condition of a proprietor loses much
of its characteristic efficacy as a check to over-population: and
if the prediction so often made in England had been realized,
and France had become a " pauper warren," the experiment
would have proved nothing against the tendencies of the same
system of agricultural economy in other circumstances. But
what is the fact? That the rate of increase of the French popula-
tion is the slowest in Europe. During the generation which the
Revolution raised from the extreme of hopeless wretchedness to
sudden abundance, a great increase of population took place.
But a generation has grown up, which, having been born in im-
proved circumstances, has not learnt to be miserable; and upon
them the spirit of thrift operates most conspicuously, in keep-
ing the increase of population within the increase of national
wealth. In a table, drawn up by Professor Rau, of the rate of
annual increase of the populations of various countries, that of
France, from 1817 to 1827, is stated at 0.63 per cent., that of
England during a similar decennial period being 1.6 annually.

PEASANT PROPRIETORS

283

and that of the United States nearly 3.* According to the official
returns as analyzed by M. Legoyt,f the increase of the popula-
tion, which from 1801 to 1806 was at the rate of 1.28 per cent,
annually, averaged only 0.47 per cent, from 1806 to 183 1 ; from
1831 to 1836 it averaged 0.60 per cent.; from 1836 to 1841, 0.41
per cent., and from 1841 to 1846, 0.68 per cent.^ At the census
of 185 1 the rate of annual increase shown was only 1.08 per
cent, in the five years, or 0.21 annually; and at the census of
1856 only 0.71 per cent, in five years, or 0.14 annually; so, that,
in the words of M. de Lavergne, " population has almost ceased
to increase in France." § Even this slow increase is wholly the
effect of a diminution of deaths; the number of births not in-
creasing at all, while the proportion of the births to the popula-

• The following is the table (see p. i68
of the Belgian translation of Mr. Rau's
large work) :

Per cent.

United States 1820-30 2.92

Hungary (according to Rohrer) 2.40

England 1811-21.... 1.78

" 1821-31 1.60

Austria (Rohrer) 1.30

Prussia 1816-27 1.54

" 1820-30 1.30

" 1821-31 1.27

Netherlands 1821-28 1.28

Scotland 1821-31.... 1.30

Saxony 1815-30 1.15

Baden 1820-30 (Heunisch) 1.13

Bavaria 1814-28 1.08

Naples 1814-24 0.83

France 1817-27 (Mathieu) 0.63

and more recently (Moreau de

Jonnes 0.55

But the number given by Moreau de
Jonnes, he adds, is not entitled to im-
plicit confidence.

The following table given by M. Que-
telet (" (Jn Man and the Development
of his Faculties," vol. i. chap. 7), also on
the authority of Rau, contains addi-
tional matter, and differs in some items
from the preceding, probably from the
author's having taken, in those cases,
an average of different years:

Per cent.

Ireland 2.45

Hungary 2.40

Spain 1.66

England 1.65

Rhenish Prussia 1.33

Austria 1.30

Bavaria 1.08

Netherlands 0.94

Naples 0.83

France 0.63

Sweden 0.58

Lombardy 0.45

A very carefully prepared statement,
by M. Legoyt, in the " Journal des
Economistes for May, 1847, which

brings up the results for France to the
census of the preceding year, 1846, is
summed up in the following table:

Countries

Sweden

Norway

Denmark

Russia

Austria

Prussia

Saxony

Hanover

Bavaria

Wurtemberg

Holland

Belgium

Sardinia

Great Britain (exclu-
sive of Ireland) . . .

France

United States

for

the
and
1846

the

t " Journal des Economistes "
March and May, 1847.

t M. Legoyt is of opinion that
population was understated in 1841,
the increase between that time and
consequently overstated, and that
real increase during the whole period
was something intermediate between the
last two averages, or not much more
than one in two hundred.

§ " Journal des Economistes " for
February, 1847. In the " Journal " for
January, 1865, M. Legoyt gives some of
the numbers slightly altered, and, I
presume, corrected. The series of per-
centages is 1.28, 0.31, 0.69, 0.60, 0.41, 0.68,
0.22, and 0.20. The last census, that of
1861, shows a slight reaction, the per-
centage, independently of the newly ac-
quired departments, being 0.32.

284

POLITICAL ECONOMY

tion is constantly diminishing.* This slow growth of the num-
bers of the people, while capital increases much more rapidly,
has caused a noticeable improvement in the condition of the la-
boring class. The circumstances of that portion of the class
who are landed proprietors are not easily ascertained with preci-
sion, being of course extremely variable: but the mere laborers,
who derived no direct benefit from the changes in landed prop-
erty which took place at the Revolution, have unquestionably
much improved in condition since that period, f Dr. Rau testi-

* The following are the numbers given by M. Legoyt:

From 1824 to 1828 annual number of births 981,914, being i in 32.30 of the population.
" 1829 to 1833 " " 965,444, " I in 34.00 " "

" 1834 to 1838 " " 972,993. " I in 34-39

" 1839 to 1843 " " 970,617, " I in 35.27 " "

" 1844 & 1S45 " " 983,573. " 1 in 35-58

In the last two years the births, ac-
cording to M. Legoyt, were swelled by
the effects of a considerable immigra-
tion. " This diminution of births," he
observes, " while there is a constant,
though not a rapid increase both of pop-
ulation and of marriages, can only be
attributed to the progress of prudence
and forethought in families. It was a
foreseen consequence of our civil and
social institutions, which, producing a
daily increasing subdivision of fortunes,
both landed and movable, call forth in
our people the instincts of conservation
and of comfort."

In four departments, among which are
two of the most thriving in Normandy,
the deaths even then exceeded the births.
The census of 1856 -exhibits the remark-
able fact of a positive diminution in the
population of 54 out of the 86 depart-
ments. A significant comment on the
" pauper-warren " theory. See M. de La-
vergne's analysis of the returns.

t " The classes of our population
which have only wages, and are there-
fore the most exposed to indigence,
are now (1846) much better provided
with the necessaries of food, lodging,
and clothing, than they were at the be-
ginning of the century. This may be
proved by the testimony of all persons
who can remember the earlier of the
two periods compared. Were there any
doubts on the subject, they might easily
be dissipated by consulting old culti-
vators and workmen, as I have myself
done in various localities, without meet-
ing with a single contrary testimony;
we may also appeal to the facts collected
by an accurate observer, M. Villerme,
in his ' Picture of the Moral and Physi-
cal Condition of the Working Classes,'
book ii. chap, i." (" Researches on the
Causes of Indigence," by A. Clement,
pp. 84, 85.) The same writer speaks (p.
118) of " the considerable rise which has
taken place since 1789 in the wages of
agricultural day-laborers "; and adds the
following evidence of a higher standard
of habitual requirements, even in that
portion of the town population, the state
of which is usually represented as most

deplorable: " In the last fifteen or
twenty years a considerable change has
taken place in the habits of the opera-
tives in our manufacturing towns: they
now expend much more than formerly
on clothing and ornament. . . . Cer-
tain classes of workpeople, such as the
canuts of Lyons " (according to all rep-
resentations, like their counterpart, our
handloom weavers, the very worst paid
class of artisans), " no longer show
themselves, as they did formerly, cov-
ered with filthy rags." (Page 164.)

The preceding statements were given
in former editions of this work, being
the best to which I had at the time ac-
cess; but evidence, both of a more re-
cent, and of a more minute and precise
character, will now be found in the im-
portant work of M. Leonce de Lavergne.
" Rural Economy of France since 1789."
According to that painstaking, well-in-
formed, atid most impartial inquirer, the
average daily wages of a French la-
borer have risen, since the commence-
ment of the Revolution, in the ratio of
19 to 30, while, owing to the more con-
stant employment, the total earnings
have increased in a still greater ratio,
not short of double. The following are
the statements of M. de Lavergne (2d
ed.^ p. 57) :

" Arthur Young estimates at 19 sous
(9%d.) the average of a day's wages,
which must now be about i franc 50
centimes (is. 3d.), and this increase only
represents a part of the improvement.
Though the rural population has re-
mained about the same in numbers, the
addition made to the population since
1789 having centred in the towns, the
number of actual working days has in-
creased, first because, the duration of
life having augmented, the number of
able-bodied men is greater, and next,
because labor is better organized, partly
through the suppression of several festi-
val-holidays, partly by the mere effect
of a more active demand. When we take
into account the increased number of
his working days, the annual receipts
of the rural workman must have
doubled. This augmentation of wages

PEASANT PROPRIETORS

285

fies to a similar fact in the case of another country in which the
subdivision of the land is probably excessive, the Palatinate.*

I am not aware of a single authentic instance which supports
the assertion that rapid multiplication is promoted by peasant
properties. Instances may undoubtedly be cited of its not be-
ing prevented by them, and one of the principal of these is
Belgium; the prospects of which, in respect to population, are at
present a matter of considerable uncertainty. Belgium has the
most rapidly increasing population on the Continent; and when
the circumstances of the country require, as they must soon do.
that this rapidity should be checked, there w'ill be a considerable
strength of existing habit to be broken through. One of the
unfavorable circumstances is the great power possessed over the
minds of the people by the Catholic priesthood, whose influence
is everywhere strongly exerted against restraining population.
As yet, however, it must be remembered that the indefatigable
industry and great agricultural skill of the people have rendered
the existing rapidity of increase practically innocuous; the great
number of large estates still undivided affording by their gradual
dismemberment, a resource for the necessary augmentation ot
the gross produce; and there are, besides, many large manu-
facturing towns, and mining and coal districts, which attract
and employ a considerable portion of the annual increase of
population.

§ 5. But even where peasant properties are accompanied by
an excess of numbers, this evil is not necessarily attended with
the additional economical disadvantage of too great a subdivi-
sion of the land. It does not follow because landed property

answers to at least an equal augmenta-
tion of comforts, since the prices of the
chief necessaries of life have changed
but little, and those of manufactured,
for example of woven, articles, have ma-
terially diminished. The lodging of the
laborers has also improved, if not in all,
at least in most of our provinces."

M. de Lavergne's estimate of the av-
erage amount of a day's wages is
grounded on a careful comparison, in
this and all other economical points of
view, of all the different provinces of
France.

• In his little book on the Agriculture
of the Palatinate, already cited. He says
that the daily wages of labor, which dur-
ing the last years of the war were un-
usually high, and so continued until 1817,
afterwards sank to a lower money-rate,
but that the prices of many commodities
having fallen in a still greater propor-
tion, the condition of the people was un-

equivocally improved. The food given
to farm laborers by their employers has
also greatly improved in quantity and
quality. " It is now considerably better
than about forty years ago, when the
poorer class obtained less flesh-meat and
puddings, and no cheese, butter, and the
like." (P. 20.) " Such an increase of
wages " (adds the Professor) " which
must be estimated not in money, but in
the quantity of necessaries and con-
veniences which the laborer is enabled
to procure, is, by universal admission, a
proof that the mass of capital must have
increased." It proves not only this, but
also that the laboring population has not
increased in an equal degree; and that,
in this instance as well as in France, the
division of the land, even when exces-
sive, has been compatible with a
strengthening of the prudential checks
to population.

286 POLITICAL ECONOMY

is minutely divided, that farms will be so. As large properties
are perfectly compatible with small farms, so are small prop-
perties with farms of an adequate size; and a subdivision
of occupancy is not an inevitable consequence of even un-
due multiplication among peasant proprietors. As might be
expected from their admirable intelligence in things relat-
ing to their occupation, the Flemish peasantry have long
learnt this lesson. " The habit of not dividing properties," says
Dr. Rau,* " and the opinion that this is advantageous, have
been so completely preserved in Flanders, that even now, when
a peasant dies leaving several children, they do not think of di-
viding his patrimony, though it be neither entailed nor settled
in trust; they prefer selling it entire, and sharing the proceeds,
considering it as a jewel which loses its value when it is divided."
That the same feeling must prevail widely even in France, is
shown by the great frequency of sales of land, amounting in
ten years to a fourth part of the whole soil of the country ; and
M. Passy, in his tract " On the Changes in the Agricultural Con-
dition of the Department of the Eure since the year 1800," f
states other facts tending to the same conclusion. " The ex-
ample," says he, " of this department attests that there does not
exist, as some writers have imagined, between the distribution of
property and that of cultivation, a connection which tends in-
vincibly to assimilate them. In no portion of it have changes
of ownership had a perceptible influence on the size of holdings.
While, in districts of small farming, lands belonging to the same
owner are ordinarily distributed among many tenants, so neither
is it uncommon, in places where the grande culture prevails,
for the same farmer to rent the lands of several proprietors. In
the plains of Vexin, in particular, many active and rich culti-
vators do not content themselves with a single farm; others add
to the lands of their principal holding, all those in the neighbor-
hood which they are able to hire, and in this manner make up a
total extent which in some cases reaches or exceeds two hundred
hectares " (five hundred England acres). " The more the es-
tates are dismembered, the more frequent do this sort of ar-
rangements become; and as they conduce to the interest of
all concerned, it is probable that time will confirm them."

* Page 334 of the Brussels translation. cipal political economists of France,

He cites as an authority, Schwerz, " Pa- and doing great and increasing honor

pers on Agriculture," i. 185. to their knowledge and ability. M.

t One of the many important papers Passy's essay has been reprinted sep-

which have appeared in the " Journal arately as a pamphlet,
des Economistes," the organ of the prin-

PEASANT PROPRIETORS

287

" In some places," says M. de Lavergne,* " in the neighbor-
hood of Faris, for example, where the advantages of the grande
culture become evident, the size of farms tends to increase, sev-
eral farms are thrown together into one, and farmers enlarge
their holdings by renting parccUcs from a number of different
proprietors. Elsewhere farms as well as properties of too great
extent, tend to division. Cultivation spontaneously finds out the
organization which suits it best." It is a striking fact, stated by
the same eminent writer, f that the departments which have the
greatest number of small separate accounts with the tax-col-
lector, are the Nord, the Somme, the Pas de Calais, the Seine
Inferieure, the Aisne, and the Oise; all of them among the rich-
est and best cultivated, and the first-mentioned of them the very
richest and best cultivated, in France.

Undue subdivision, and excessive smallness of holdings, are
undoubtedly a prevalent evil in some countries of peasant pro-
prietors, and particularly in parts of Germany and France. The
governments of Bavaria and Nassau have thought it necessary
to impose a legal limit to subdivision, and the Prussian Govern-
ment unsuccessfully proposed the same measure to the Estates
of its Rhenish Provinces. But I do not think it will anywhere
be found that the petite culture is the system of the peasants,
and the grande culture that of the great landlords : on the
contrary, wherever the small properties are divided among too
many proprietors, I believe it to be true that the large proper-
ties also are parcelled out among too many farmers, and that
the cause is the same in both cases, a backward state of capital,
skill, and agricultural enterprise. There is reason to believe that
the subdivision in France is not more excessive than is ac-
counted for by this cause; that it is diminishing, not increasing;
and that the terror expressed in some quarters at the progress
of the morcellcment, is one of the most groundless of real or
pretended panics. J

* " Rural Economy of France," p. 455.

t Page 117. See, for facts of a similar
tendency, pp. 141, 250, and other pas-
sages of the same important treatise;
which, on the other hand, equally
abounds with evidence of the mischiev-
ous eflfect of subdivision when too
minute, or when the nature of the soil
and of its products is not suitable to it.

% Mr. I.aing, in his latest publication,
" Observations on the Social and Po-
litical i^tate of the European People in
1848 and 1849," a book devoted to the
glorification of England, and the dis-

paragement of everything elsewhere
which others, or even he himself in
former works, had thought worthy of
praise, argues that " although the land
itself is not divided and subdivided "
on the death of the proprietor, " the
value of the land is, and with effects al-
most as prejudicial to social progress.
The value of each share becomes a
debt or burden upon the land." Con-
sequently the condition of the agricul-
tural population is retrograde: ''each
generation is worse off than the pre-
ceding one, although the land is neither

288

POLITICAL ECONOMY

If peasant properties have any effect in promoting subdivision
beyond the degree which corresponds to the agricultural prac-
tices of the country, and which is customary on its large estates,
the cause must lie in one of the salutary influences of the system;
the eminent degree in which it promotes providence on the part
of these who, not being yet peasant proprietors, hope to become
so. In England, where the agricultural laborer has no invest-
ment for his savings but the savings bank, and no position to
which he can rise by any exercise of economy, except perhaps
that of a petty shopkeeper, with its chances of bankruptcy, there
is nothing at all resembling the intense spirit of thrift which
takes possession of one who, from being a day laborer, can raise
himself by saving to the condition of a landed proprietor. Ac-
cording to almost all authorities, the real cause of the mor-
cellcmcnt is the higher price which can be obtained for land by
selling it to the peasantry, as an investment for their small ac-
cumulations, than by disposing of it entire to some rich pur-
chaser who has no object but to live on its income without im-
proving it. The hope of obtaining such an investment is the most
powerful of inducements, to those who are without land, to prac-
tice the industry, frugality, and self-restraint, on which their
success in this object of ambition is dependent.

As the result of this inquiry into the direct operation and in-
direct influences of peasant properties, I conceive it to be es-
tablished, that there is no necessary connection between this
form of landed property and an imperfect state of the arts of
production; that it is favorable in quite as many respects as it is
unfavorable, to the most effective use of the powers of the soil;
that no other existing state of agricultural economy has so
beneficial an effect on the industry, the intelligence, the frugality,
and prudence of the population, nor tends on the whole so much

less nor more divided, nor worse culti-
vated." And this he gives as the ex-
planation of the great indebtedness of
the small landed proprietors in France
(PP- 97—9)- If these statements were cor-
rect, they would invalidate all which Mr.
Laing affirmed so positively in other
writings, and repeats in this, respecting
the peculiar efficacy of the possession of
land in preventing over-population. But
he is entirely mistaken as to the matter
of fact. In the only counti-y of which
he speaks from actual residence, Nor-
way, he does not pretend that the con-
dition of the peasant proprietors is de-
teriorating. The facts already cited
prove that in respect to Belgium, Ger-

many, and Switzerland, the assertion is
equally wide of the mark; and what has
been shown respecting the slow increase
of population in France, demonstrates
that if the condition of the French peas-
antry was deteriorating, it could not be
from the cause supposed by Mr. Laing.
The truth I believe to be that in every
country without exception, in which
peasant properties prevail, the condition
of the people is improving, the produce
of the land and even its fertility increas-
ing, and from the larger surplus which
remains after feeding the agricultural
classes, the towns are augmenting both
in population and in the well-being of
their inhabitants.

METAYERS

289

to discourage an improvident increase of their numbers; and
that no existing state, therefore, is on the whole so favorable,
both to their moral and their physical welfare. Compared with
the English system of cultivation by hired labor, it must be re-
garded as eminently beneficial to the laboring class.* We are
not on the present occasion called upon to compare it with the
joint ownership of the land by associations of laborers.

Chapter VIII. —Of Metayers

§ I. From the case in which the produce of land and labor
belongs undividedly to the laborer, we proceed to the cases in
which it is divided, but between two classes only, the laborers
and the landowners; the character of capitalists merging in
the one or the other, as the case may be. It is possible indeed
to conceive that there might be only two classes of persons to
share the produce, and that a class of capitalists might be one
of them ; the character of laborer and that of landowner being
united to form the other. This might occur in two ways. The
laborers, though owning the land, might let it to a tenant, and
work under him as hired servants. But this arrangement,
even in the very rare cases which could give rise to it, would
not require any particular discussion, since it would not differ

* French history strikingly confirms
these conclusions. Three times during
the course of ages the peasantry have
been purchasers of land; and these times
immediately preceded the three princi-
pal eras of French agricultural pros-
perity.

" In the worst times," says the his-
torian Michelet (" The People," Part i.
chap, j), " the times of universal pov-
erty, when even the rich are poor and
obliged to sell, the poor are enabled to
buy: no other purchaser presenting him-
self, the peasant in rags arrives with his
piece of gold, and acquires a little bit of
land. These moments of disaster in
which the peasant was able to buy land
at a low price, have always been fol-
lowed by a sudden gush of prosperity
which people could not account for.
Towards 1500, for example, when France,
exhausted by Louis XI, seemed to be
completing its ruin in Italy, the noblesse
who went to the wars were obliged to
sell: the land, passing into new hands,
suddenly began to flourish; men began
to labor and to build. This happy mo-
ment, in the style of courtly historians,
was called the good Louis Xll.

" Unhappily it did not last long.
Scarcely had the land recovered itself
when the tax-collector fell upon it; the

Vol. I.— iq

wars of religion followed, and seemed
to raze everything to the ground; with
horrible miseries, dreadful famines, in
which mothers devoured their children.
Who would believe that the country re-
covered from this? Scarcely is the war
ended, when from the devastated fields,
and the cottages still black with the
flames, comes forth the hoard of the
peasant. He buys; in ten years, France
wears a new face; in twenty or thirty,
all possessions have doubled and
trebled in value. This moment, again
baptized by a royal name, is called the
good Henry IV and the great Riche-
fieu."

Of the third era it is needless again
to speak; it was that of the Revolution.

Whoever would study the reverse of
the picture, may compare these historic
periods, characterized by the dismem-
berment of large and the construction
of small properties, with the wide-spread
national suffering which accompanied,
and the permanent deterioration of the
condition of the laboring classes which
followed, the " clearing " away of small
yeomen to make room for large grazing
farms, which was the grand economical
event of I'.nglish history during the six-
teenth century.

290

POLITICAL ECONOMY

in any material respect from the threefold system of laborers,
capitalists, and landlords. The other case is the not uncom-
mon one, in which a peasant proprietor owns and cultivates
the land, but raises the little capital required, by a mortgage
upon it. Neither does this case present any important peculiar-
ity. There is but one person, the peasant himself, who has any
right or power of interference in the management. He pays a
fixed annuity as interest to a capitalist, as he pays another
fixed sum in taxes to the government. Without dwelling
further on these cases, we pass to those which present marked
features of peculiarity.

When the two parties sharing in the produce are the laborer
or laborers and the landowner, it is not a very material circum-
stance in the case, which of the two furnishes the stock, or
whether, as sometimes happens, they furnish it, in a determinate
proportion, between them. The essential difference does not
lie in this, but in another circumstance, namely, whether the
division of the produce between the two is regulated by cus-
tom or by competition. We will begin with the former case ;
of which the metayer culture is the principal, and in Europe
almost the sole, example.

The principle of the metayer system is that the laborer, or
peasant, makes his engagement directly with the landowner,
and pays, not a fixed rent, either in money or in kind, but a cer-
tain proportion of the produce, or rather of what remains of the
produce after deducting what is considered necessary to keep
up the stock. The proportion is usually, as the name imports,
one-half ; but in several districts in Italy it is two-thirds. Re-
specting the supply of stock, the custom varies from place to
place ; in some places the landlord furnishes the whole, in
others half, in others some particular part, as for instance the
cattle and seed, the laborer providing the implements.* " This

* In France, before the Revolution,
according to Arthur Young (I. 403) there
was great local diversity in this respect.
In Champagne, " the landlord common-
ly finds half the cattle and half the seed,
and the mclaycr, labor, implements, and
taxes; but in some districts the landlord
bears a share of these. In Roussillon,
the landlord pays ha'f the taxes; and in
Guienne, from Auch to Fleuran, many
landlords pay all. Near Aguillon, on
the Garonne, the metayers furnish half
the cattle. At Nangis, in the Isle of
France, 1 met with an agreement for the
landlord to furnish live stock, imple-
ments, harness, and taxes; the metayer
found labor and his own capitation tax:

the landlord repaired the house and
gates; the ir.ctayer the windows: the
landlord provided seed the first year,
the metayer the last; in the intervening
years they supply half and half. In the
Bourbonnois the landlord finds all sorts
of live stock, yet the metayer sells,
changes, and buys at his will; the stew-
ard keeping an account of these muta-
tions, for the landlord has half the
product of sales, and pays half the pur-
chases." In Piedmont, he says, " the
landlord commonly pays the taxes and
repairs the buildings, and the tenant
provides cattle, implements, and seed."
(II. iSi.)

METAYERS

291

connection," says Sismondi, speaking chiefly of Tuscany,* " is
often the subject of a contract, to define certain services and
certain occasional payments to which the metayer binds him-
self ; nevertheless the differences in the obligations of one such
contract and another are inconsiderable ; usage governs alike
all these engagements, and supplies the stipulations whicli have
not been expressed : and the landlord who attempted to de-
part from usage, who exacted more than his neighbor, who
took for the basis of the agreement anything but the equal divi-
sion of the crops, would render himself so odious, he would be
so sure of not obtaining a metayer who was an honest man,
that the contract of all the metayers may be considered as iden-
tical, at least in each province, and never gives rise to any com-
petition among peasants in search of employment, or any offer
to cultivate the soil on cheaper terms than one another." To
the same effect Chateauvieux,f speaking of the metayers of
Piedmont. " They consider it " (the farm) " as a patrimony,
and never think of renewing the lease, but go on from genera-
tion to generation, on the same terms, without writings or
registries." %

§ 2. When the partition of the produce is a matter of fixed
usage, not of varying convention, political economy has no
laws of distribution to investigate. It has only to consider,
as in the case of peasant proprietors, the effects of the system,
first, on the condition of the peasantry, morally and physically,
and secondly, on the efficiency of the labor. In both these par-
ticulars the metayer system has the characteristic advantages
of peasant properties, but has them in a less degree. The me-
tayer has less motive to exertion than the peasant proprietor,
since only half the fruits of his industry, instead of the whole,
are his own. But he has a much stronger motive than a day
laborer, who has no other interest in the result than not to be
dismissed. If the metayer cannot be turned out except for

* " Studies in Political Economy,"
Essay VI. On the Condition of the
Cultivators in Tuscany.

t " Letters from Italy." I quote from
Dr. Rigby's translation. (P. 22.)

t This virtual fixity of tenure is not.
however, universal, even in Italy; and
it is to its absence that Sismondi attrib-
utes the irfferior condition of the metay-
ers in some provinces of Naples, in
Lucca, and in the Riviera of Genoa;
where the landlords obtain a larger
(though still a fixed) share of the

produce. In those countries the culti-
vation is splendid, but tlie people wretch-
edly poor. " The same misfortune would
probably have befallen the people of
Tuscany if public opinion did not pro-
tect the cultivator; but a proprietor
would not dare to impose conditions un-
usual in the country, and even in chang-
ing one metayer for another, he alters
nothing in the terms of the engage-
ment."— " New Principles of Political
Economy," book iii. chap. 5.

292

POLITICAL ECONOMY

some violation of his contract, he has a stronger motive to ex-
ertion than any tenant-farmer who has not a lease. The me-
tavcr is at least his landlord's partner, and a half-sharer in their
joint gains. Where, too, the permanence of his tenure is guar-
anteed by custom, he acquires local attachments, and much of
the feelings of a proprietor. I am supposing that this half
produce is sufficient to yield him a comfortable support.
Whether it is so, depends (in any given state of agriculture)
on the degree of subdivision of the land ; which depends on the
operation of the population principle. A multiplication of
people, beyond the number that can be properly supported on
the land or taken off by manufactures, is incident even to a
peasant proprietary, and of course not less but rather more in-
cident to a metayer population. The tendency, however, which
we noticed in the proprietary system, to promote prudence on
this point, is in no small degree common to it with the metayer
system. There, also, it is a matter of easy and exact calculation
whether a family can be supported or not. If it is easy to see
whether the owner of the whole produce can increase the pro-
duction so as to maintain a greater number of persons equally
well, it is a not less simple problem whether the owner of half
the produce can do so.* There is one check which this system
seems to offer, over and above those held out even by the pro-
prietary system ; there is a landlord, who may exert a con-
trolling power, by refusing his consent to a subdivision. I do
not, however, attach great importance to this check, because
the farm may be loaded with superfluous hands without being
subdivided ; and because, so long as the increase of hands in-
creases the gross produce, which is almost always the case, the
landlord, who receives half the produce, is an immediate gainer,
the inconvenience falling only on the laborers. The landlord
is no doubt liable in the end to suffer from their poverty, by

* M. Bastiat affirms that even in
France, incontestably the least favor-
able example of the metayer system, its
effect in repressing population is con-
spicuous. " It is a well-ascertained fact
that the tendency to excessive multipli-
cation is chiefly manifested in the class
who live on wages. Over these the fore-
thought which retards marriages has lit-
tle operation, because the evils which
flow from excessive competition appear
to them only very confusedly, and at a
considerable distance. It is, therefore,
the most advantageous condition of a
people to be so organized as to contain
no regular class of laborers for hire. In
metayer countries, marriages are prin-

cipally determined by the demands of
cultivation; they increase when, from
whatever cause, the metairics offer va-
cancies injurious to production; they di-
minish when the places are filled up. A
fact easily ascertained, the proportion
between the size of the farm and the
number of hands, operates like fore-
thought, and with greater effect. We
find, accordingly, that when nothing
occurs to make an opening for a su-
perfluous population,_ numbers remain
stationary: as is seen in our southern de-
partments."— " Considerations on Metay-
age." in the " Journal des Economistes "
for February, 1846.

METAYERS 293

being forced to make advances to them, especially in bad sea-
sons ; and a foresight of this ultimate inconvenience may
operate beneficially on such landlords as prefer future security
to present profit.

The characteristic disadvantage of the metayer system is
very fairly stated by Adam Smith, After pointing out that
metayers " have a plain interest that the whole produce should
be as great as possible, in order that their own proportion may
be so," he continues,* " it could never, however, be the interest
of this species of cultivators to lay out, in the further improve-
ment of the land, any part of the little stock which they might
save from their own share of the produce, because the lord, who
laid out nothing, was to get one-half of whatever it produced.
The tithe, which is but a tenth of the produce, is found to be a
very great hindrance to improvement. A tax, therefore, which
amounted to one-half, must have been an effectual bar to it.
It might be the interest of a metayer to make the land produce
as much as could be brought out of it by means of the stock
furnished by the proprietor ; but it could never be his interest
to mix any part of his own with it. In France, where five parts
out of six of the whole kingdom are said to be still occupied
by this species of cultivators, the proprietors complain that
their metayers take every opportunity of employing the mas-
ter's cattle rather in carriage than in cultivation ; because in the
one case they get the whole profits to themselves, in the other
they share them with their landlord."

It is indeed implied in the very nature of the tenure, that all
improvements which require expenditure of capital, must be
made with the capital of the landlord. This, however, is es-
sentially the case even in England, whenever the farmers are
tenants-at-will : or (if Arthur Young is right) even on a " nine
years' lease." If the landlord is wilhng to provide capital for
improvements, the metayer has the strongest interest in pro-
moting them, since half the benefit of them will accrue to him-
self. As however the perpetuity of tenure which, in the case
we are discussing, he enjoys by custom, renders his consent a
necessary condition ; the spirit of routine, and dislike of inno-
vation, characteristic of an agricultural people when not cor-
rected by education, are no doubt, as the advocates of the sys-
tem seem to admit, a serious hindrance to improvement.

• " Wealth of Nations," book iii., chap. 2.

294

POLITICAL ECONOMY

§ 3. The metayer system has met with no mercy from Eng-
lish authorities. " There is not one word to be said in favor
of the practice," says Arthur Young,* " and a thousand argu-
ments that might be used against it. The hard plea of necessity
can alone be urged in its favor ; the poverty of the farmers
being so great, that the landlord must stock the farm, or it
could not be stocked at all : this is a most cruel burden to a
proprietor, who is thus obliged to run much of the hazard of
farming in the most dangerous of all methods, that of trusting
his property absolutely in the hands of people who are generally
ignorant, many careless, and some undoubtedly wicked. . . .
In this most miserable of all the modes of letting land, the de-
frauded landlord receives a contemptible rent ; the farmer is in
the lowest state of poverty ; the land is miserably cultivated ;
and the nation suffers as severely as the parties themselves.
. . . Wherever f this system prevails, it may be taken for
granted that a useless and miserable population is found. . . .
Wherever the country (that I saw) is poor and unwatered, in
the Milanese, it is in the hands of metayers: " they are almost
always in debt to their landlord for seed or food, and " their
condition is more wretched than that of a day laborer. . . .
There % are but few districts " (in Italy) " where lands are let
to the ocupying tenant at a money-rent ; but wherever it is
found, their crops are greater ; a clear proof of the imbecility
of the metaying system." " Wherever it " (the metayer sys-
tem) " has been adopted," says Mr. M'Culloch,§ " it has put a
stop to all improvement, and has reduced the cultivators to
the most abject poverty." Mr. Jones || shares the common
opinion, and quotes Turgot and Destutt-Tracy in support of
it. The impression, however, of all these writers (notwith-
standing Arthur Young's occasional references to Italy) seems
to be chiefly derived from France, and France before the Revo-
lution.^ Now the situation of French metayers under the old

* " Travels," vol. i., pp. 404— S.

t Ibid. vol. ii., 151 — 3.

j Ibid. ii. 217.

§ " Principles of Political Economy,"
3d ed. p. 471.

II " Essay on the Distribution of
Wealth," pp. 102^.

H M. de Tracy is partially an excep-
tion, inasmuch as his experience reaches
lower down than the revolutionary
period: but he admits (as Mr. Jones has
himself stated in another place) that he
is acquainted only with a limited dis-

trict, of great subdivision and unfertile
soil.

M. Passy is of opinion, that a French
peasantry must be in indigence and the
country badly cultivated on the metayer
system, because the proportion of the
produce claimable by the landlord is too
high; it being only in more favorable
climates that any land, not of the most
exuberant fertility, can pay half its gross
produce in rent, and leave enough to
peasant farmers to enable them to grow
successfully the more expensive and val-

METAYERS

295

regime by no means represents the typical form of the con-
tract. It is essential to that form, that the proprietor pays all
the taxes. But in France the exemption of the noblesse from
direct taxation had led the Government to throw the whole
burden of their ever-increasing fiscal exactions upon the oc-
cupiers : and it is to these exactions that Turgot ascribed the
extreme wretchedness of the metayers : a wretchedness in some
cases so excessive, that in Limousin and Angoumois (the
provinces which he administered) they had seldom more, ac-
cording to him, after deducting all burdens, than from twenty-
live to thirty livres (20 to 24 shillings) per head for their whole
annual consumption : " I do not mean in money, but including
all that they consume in kind from their own crops." * When
we add that they had not the virtual fixity of tenure of the me-
tayers of Italy, ("in Limousin," says Arthur Young,f "the
metayers are considered as little better than menial servants,
removable at pleasure, and obliged to conform in all things to
the will of the landlords,") it is evident that their case affords no
argument against the metayer system in its better form. A
population who could call nothing their own — who, like the
Irish cottiers, could not in any contingency be worse off — had
nothing to restrain them from multiplying, and subdividing
the land, until stopped by actual starvation.

We shall find a very different picture, by the most accurate
authorities, of the metayer cultivation of Italy. In the first
place, as to subdivision. In Lombardy, according to Chateau-
vieux,J there are few farms which exceed sixty acres, and few
which have less than ten. These farms are all occupied by
metayers at half profit. They invariably display " an extent §
and a richness in buildings rarely known in any other country
in Europe." Their plan " affords the greatest room with the
least extent of building ; is best adapted to arrange and secure
the crop ; and is, at the same time, the most economical, and

uable products of agriculture. (" On
Systems of Culture," p. 35.) This is an
objection only to a particular numerical
proportion, which is indeed the com-
* mon one, but is not essential to the sys-
tem.

* See the " Memoir on the .Surcharge
of Taxes sufTcred by the Generality of
Limoges, addressed to the Council of
State in 1786," pp. 260-304 of the fourth
volume of Turgot's Works. The occa-
sional engagements of landlords (as
mentioned by Arthur Young) to pay a

part of the taxes, were, according to
Turcot, of recent origin, under the com-
pulsion of actual necessity. " The pro-
prietor only consents to it when he can
find no mi'taycr on other terms; conse-
quently, even in that case, the metayer
is always reduced to what is barely suffi-
cient to prevent him from dying of hun-
ger." (P. 275.)

t Vol. i., p. 404.

t " Letters from Italy," translated by
Rigby, p. 16.

§ Ibid., pp. 19, 20.

296 POLITICAL ECONOMY

the least exposed to accidents by fire." The court-yard " ex-
hibits a whole so regular and commodious, and a system of
such care and good order, that our dirty and ill-arranged farms
can convey no adequate idea of." The same description applies
to Piedmont. The rotation of crops is excellent. " I should
think * no country can bring so large a portion of its produce
to market as Piedmont." Though the soil is not naturally very
fertile, " the number of cities is prodigiously great." The agri-
culture must, therefore, be eminently favorable to the net as
well as to the gross produce of the land. " Each plough works
thirty-two acres in the season. . . . Nothing can be more
perfect or neater than the hoeing and moulding up the maize,
when in full growth, by a single plough, with a pair of oxen,
without injury to a single plant, while all the weeds are effectu-
ally destroyed." So much for agricultural skill. " Nothing
can be so excellent as the crop which precedes and that which
follows it." The wheat " is thrashed by a cylinder, drawn by
a horse, and guided by a boy, while the laborers turn over the
straw with forks. This process lasts nearly a fortnight: it is
quick and economical, and completely gets out the grain. . . ,
In no part of the world are the economy and the management
of the land better understood than in Piedmont, and this ex-
plains the phenomenon of its great population and immense
export of provisions." All this under metayer cultivation.

Of the valley of the Arno, in its whole extent, both above
and below Florence, the same writer thus speaks ; f — " Forests
of olive-trees covered the lower parts of the mountains, and by
their foliage concealed an infinite number of small farms, which
peopled these parts of the mountains : chestnut-trees raised
their heads on the higher slopes, their healthy verdure con-
trasting with the pale tint of the olive-trees, and spreading a
brightness over this amphitheatre. The road was bordered on
each side with village-houses, not more than a hundred paces
from each other. . . . They are placed at a little distance
from the road, and separated from it by a wall, and a terrace
of some feet in extent. On the wall are commonly placed many
vases of antique forms, in which flowers, aloes, and young
orange-trees are growing. The house itself it completely cov-
ered with vines. . . . Before these houses we saw groups of
peasant females dressed in white linen, silk corsets, and straw

• " Letters from Italy," pp. 24—31. t Pp- 7&— 9-

METAYERS 297

hats ornamented with flowers. . . . These houses being so
near each other, it is evident that the land annexed to them
must be small, and that property, in these valleys, must be very
much divided ; the extent of these domains being from three
to ten acres. The land lies round the houses, and is divided
into fields by small canals, or rows of trees, some of which are
mulberry-trees, but the greatest number poplars, the leaves of
which are eaten by the cattle. Each tree supports a vine. . . .
These divisions, arrayed in oblong squares, are large enough
to be cultivated by a plough without wheels, and a pair of oxen.
There is a pair of oxen between ten or twelve of the farmers ;
they employ them successively in the cultivation of all the
farms. . . . Almost every farm maintains a well-looking
horse, which goes in a small two-wheeled cart, neatly made,
and painted red ; they serve for all the purposes of draught
for the farm, and also to convey the farmer's daughters to mass
and to balls. Thus, on holidays, hundreds of these little carts
are seen flying in all directions, carrying the young women,
decorated with flowers and ribbons."

This is not a picture of poverty ; and so far as agriculture is
concerned, it efifectually redeems metayer cultivation, as exist-
ing in these countries, from the reproaches of English writers ;
but with respect to the condition of the cultivators, Chateau-
vieux's testimony is, in some points, not so favorable. " It
is * neither the natural fertility of the soil, nor the abundance
which strikes the eye of the traveller, which constitute the well-
being of its inhabitants. It is the number of individuals among
whom the total produce is divided, which fixes the portion that
each is enabled to enjoy. Here it is very small. I have thus
far, indeed, exhibited a delightful country, well watered, fertile,
and covered with a perpetual vegetation ; I have shown it di-
vided into countless inclosures, which, like so many beds in a
garden, display a thousand varying productions ; I have
shown, that to all these inclosures are attached well-built
houses, clothed with vines, and decorated with flowers ; but,
on entering them, we find a total want of all the conveniences
of life, a table more than frugal, and a general appearance of
privation." Is not Chateauvieux here unconsciously contrast-
ing the condition of the metayers with that of the farmers of
other countries, when the proper standard with which to com-
pare it is that of the agricultural day-laborers?

• Pp. 73-6.

298 POLITICAL ECONOMY

Arthur Young says,* " I was assured that these metayers
are (especially near Florence) much at their ease ; that on holi-
days they are dressed remarkably well, and not without ob-
jects of luxury, as silver, gold, and silk : and live well, on plenty
of bread, wine, and legumes. In some instances this may pos-
sibly be the case, but the general fact is contrary. It is absurd
to think that metayers, upon such a farm as is cultivated by a
pair of oxen, can live at their ease ; and a clear proof of their
poverty is this, that the landlord, who provides half the live
stock, is often obliged to lend the peasant money to procure
his half. . . . The metayers, not in the vicinity of the city,
are so poor, that landlords even lend them corn to eat : their
food is black bread, made of a mixture with vetches ; and their
drink is very little wine, mixed with water, and called aquaroUe;
meat on Sundays only ; their dress very ordinary." Mr. Jones
admits the superior comfort of the metayers near Florence, and
attributes it partly to straw-plaiting, by which the women of
the peasantry can earn, according to Chateauvieux,f from fif-
teen to twenty pence a day. But even this fact tells in favor of
the metayer system ; for in those parts of England in which
either straw-plaiting or lace-making is carried on by the wom-
en and children of the laboring class, as in Bedfordshire and
Buckinghamshire, the condition of the class is not better, but
rather worse than elsewhere, the wages of agricultural labor
being depressed by a full equivalent.

In spite of Chateauvieux's statement respecting the poverty
of the metayers, his opinion, in respect to Italy at least, is given
in favor of the system. " It occupies X and constantly interests
the proprietors, which is never the case with great proprietors
who lease their estates at fixed rents. It establishes a com-
munity of interests, and relations of kindness between the pro-
prietors and the metayers ; a kindness which I have often wit-
nessed, and from which result great advantages in the moral
condition of society. The proprietor, under this system, al-
ways interested in the success of the crop, never refuses to
make an advance upon it, which the land promises to repay
with interest. It is by these advances, and by the hope thus in-
spired, that the rich proprietors of land have gradually per-
fected the whole rural economy of Italy. It is to them that it
owes the numerous systems of irrigation which water its soil,

* " Travels." vol. ii. p. 156. t " Letters from Italy," p. 75. J Ibid. pp. 295—6.

METAYERS 299

as also the establishment of the terrace culture on the hills:
gradual but permanent improvements, which common peas-
ants, for want of means, could never have effected, and which
could never have been accomplished by the farmers, nor by
the great proprietors who let their estates at fixed rents, be-
cause they are not sufficiently interested. Thus the interested
system forms of itself that alliance between the rich proprietor,
whose means provide for the improvement of the culture, and
the metayer, whose care and labors are directed, by a common
interest, to make the most of these advances."

But the testimony most favorable to the system is that of Sis-
mondi, which has the advantage of being specific, and from
accurate knowledge ; his information being not that of a
traveller, but that of a resident proprietor, intimately acquainted
with rural life. His statements apply to Tuscany generally,
and more particularly to the Val di Nievole, in which his own
property lay, and which is not within the supposed privileged
circle immediately round Florence. It is one of the districts in
which the size of farms appears to be the smallest. The fol-
lowing is his description of the dwellings and mode of life of the
metayers of that district.*

" The house, built of good walls with lime and mortar, has
always at least one story, sometimes two, above the ground
floor. On the ground fioor are generally the kitchen, a cow-
house for two-horned cattle, and the storehouse, which takes
its name, tinaia, from the large vats (tini) in which the wine is
put to ferment, without any pressing: it is there also that the
metayer locks up his casks, his oil, and his grain. Almost al-
ways there is also a shed supported against the house, where he
can work under cover to mend his tools, or chop forage for his
cattle. On the first and second stories are two, three, and often
four bedrooms. The largest and most airy of these is generally
destined by the metayer, in the months of May and June, to the
bringing up of silkworms. Great chests to contain clothes and
linen, and some wooden chairs, are the chief furniture of the
chambers ; but a newly-married wife always brings with her
a wardrobe of walnut wood. The beds are uncurtained and
unroofed, but on each of them, besides a good paillasse filled
with the elastic straw of the maize plant, there are one or two
mattresses of wool, or, among the poorest, of tow, a good

•From his Sixth Essay, formerly referred to.

300 POLITICAL ECONOMY

blanket, sheets of strong hempen cloth, and on the best bed of
the family a coverlet of silk padding, which is spread on festival
days. The only fireplace is in the kitchen ; and there also is
the great wooden table where the family dines, and the benches ;
the great chest which serves at once for keeping the bread and
other provisions, and for kneading; a tolerably complete
though cheap assortment of pans, dishes, and earthenware
plates : one or two metal lamps, a steelyard, and at least two
copper pitchers for drawing and holding water. The linen and
the working clothes of the family have all been spun by the
women of the house. The clothes, both of men and of women,
are of the stuff called nicsza lana when thick, mola when thin,
and made of a coarse thread of hemp or tow, filled up with cot-
ton or wool ; it is dried by the same women by whom it was
spun. It would hardly be believed what a quantity of cloth and
of mes:^a lana the peasant women are able to accumulate by
assiduous industry ; how many sheets there are in the store ;
what a number of shirts, jackets, trousers, petticoats, and gowns
are possessed by every member of the family. By way of
example I add in a note the inventory of the peasant family
best known to me : it is neither one of the richest nor of the
poorest, and lives happily by its industry on half the produce of
less than ten arpcnts of land.* The young women had a mar-
riage portion of fifty crowns, twenty paid down, and the rest by
instalments of two every year. The Tuscan crown is worth
six francs {4s. I0(/]. The commonest marriage portion of a
peasant girl in the other parts of Tuscany, where the metairies
are larger, is 100 crowns, 600 francs."

Is this poverty, or consistent with poverty? When a com-
mon, M. de Sismondi even says the common, marriage por-
tion of a metayer's daughter is £24 English money, equivalent
to at least 50/. in Italy and in that rank of life ; when one whose
dowry is only half that amount, has the wardrobe described,
which is represented by Sismondi as a fair average ; the class

* Inventory of the trousseau of Jane, aprons {mola), 4 white, 8 colored, and

daughter of Valente Papini, on her mar- 3 silk, handkerchiefs, 2 embroidered veils

riage with Giovacchino Landi, the 2Qth and one of tulle, 3 towels, 14 pairs of

of April, 183s, at Porto Vecchia, near stockings, 2 hats (one of felt, the other

Pescia: of fine straw); 2 cameos set in gold, 2

" 28 shifts, 7 best dresses (of particu- golden earrings, i chaplet with two

lar fabrics of silk), 7 dresses of printed Roman silver crowns, i coral necklace

cotton, 2 winter working dresses {mcssa with its cross of gold. . . . All the

lana), 3 summer working dresses and richer married women of the class have,

petticoats (mola), 3 white petticoats, 5 besides, the z'este di seta, the great holi-

aprons of printed linen, i of black silk, day dress, which they only wear four or

1 of black merinos, 9 colored working five times in their lives."

METAYERS 301

must be fully comparable, in general condition, to a large pro-
portion even of capitalist farmers in other countries ; and in-
comparably above the day-laborers of any country, except a
new colony, or the United States. Very little can be inferred,
against such evidence, from a traveller's impression of the
poor quality of their food. Its inexpensive character may be
rather the effect of economy than of necessity. Costly feeding
is not the favorite luxury of a southern people ; their diet in
all classes is principally vegetable, and no peasantry on the
Continent has the superstition of the English laborer respect-
ing white bread. But the nourishment of the Tuscan peasants,
according to Sismondi, " is wholesome and various : its basis
is an excellent wheaten bread, brown, but pure from bran and
from all mixture." In the bad season, they take but two meals
a day : at ten in the morning they eat their pollenta, at the
beginning of the night their soup, and after it bread with a
relish of some sort (companatico). In summer they have three
meals, at eight, at one, and in the evening; but the fare is
lighted only once a day, for dinner, which consists of soup,
and a dish of salt meat or dried fish, or haricots, or greens,
which are eaten with bread. Salt meat enters in a very small
quantity into this diet, for it is reckoned that forty pounds of
salt pork per head suffice amply for a year's provision ; twice
a week a small piece of it is put into the soup. On Sundays they
have always on the table a dish of fresh meat, but a piece which
weighs only a pound or a pound and a half suf^ces for the
whole family, however numerous it may be. It must not be for-
gotten that the Tuscan peasants generally produce olive oil
for their own consumption : they use it not only for lamps, but
as seasoning to all the vegetables prepared for the table, which
it renders both more savory and more nutritive. At breakfast
their food is bread, and sometimes cheese and fruit ; at supper,
bread and salad. Their drink is composed of the inferior wine
of the country, the vincUa or piqiiette made by fermenting in
water the pressed skins of the grapes. They always, however,
reserve a little of their best wine for the day when they thresh
their corn, and for some festivals which are kept m families.
About fifty bottles of vinella per annum, and five sacks of
wheat (about 1,000 pounds of bread) are considered as the
supply necessary for a full grown man."

The remarks of Sismondi on the moral influences of this state

302

POLITICAL ECONOMY

of society are not less worthy of attention. The rights and ob-
Hgations of the metayer being fixed by usage, and all taxes and
rates being paid by the proprietor, " the metayer has the advan-
tages of landed property without the burden of defending it. It
is the landlord to whom, wdth the land, belong all its disputes :
the tenant lives in peace with all his neighbors ; between him
and them there is no motive for rivalry or distrust, he preserves
a good understanding with them, as well as with his landlord,
with the tax collector, and with the church : he sells little, and
buys little ; he touches little money, but he seldom has any to
pay. The gentle and kindly character of the Tuscans is often
spoken of, but without sufficiently remarking the cause which
has contributed most to keep up that gentleness ; the tenure,
by which the entire class of farmers, more than three-fourths
of the population, are kept free from almost every occasion for
quarrel." The fixity of tenure which the metayer, so long as
he fulfils his own obligations, possesses by usage, though not
by law, gives him the local attachments, and almost the strong
sense of personal interest, characteristic of a proprietor. " The
metayer lives on his metairie as on his inheritance, loving it
with affection, laboring incessantly to improve it, confiding in
the future, and making sure that his land will be tilled after him
by his children and his children's children. In fact, the ma-
jority of metayers live from generation to generation on the
same farm ; they know it in its details with a minuteness which
the feeling of property can alone give. The plots terraced up,
one above the other, are often not above four feet wide ; but
there is not one of them, the qualities of which the metayer
has not studied. This one is dry, that other is cold and damp :
here the soil is deep, there it is a mere crust which hardly covers
the rock ; wheat thrives best on one, rye on another : here it
would be labor wasted to sow Indian corn, elsewhere the soil
is unfit for beans and lupins, further ofif flax will grow ad-
mirably, the edge of this brook will be suited for hemp. In this
way one learns with surprise from the metayer, that in a space
of ten arpents, the soil, the aspect, and the inclination of the
ground present greater variety than a rich farmer is generally
able to distinguish in a farm of five hundred acres. For the lat-
ter knows that he is only a temporary occupant ; and more-
over, that he must conduct his operations by general rules,
and neglect details. But the experienced metayer has had his

METAYERS

303

intelligence so awakened by interest and affection, as to be the
best of observers ; and with the whole future before him, he
thinks not of himself alone, but of his children and grand-
children. Therefore, when he plants an olive, a tree which lasts
for centuries, and excavates at the bottom of the hollow in
which he plants it, a channel to let out the water by which it
would be injured, he studies all the strata of the earth which he
has to dig out." *

§ 4. I do not offer these quotations as evidence of the intrin-
sic excellence of the metayer system ; but they surely suffice
to prove that neither " land miserably cultivated " nor a peo-
ple in " the most abject poverty," have any necessary con-
nection with it, and that the unmeasured vituperation lavished
upon the system by English writers, is grounded on an ex-
tremely narrow view of the subject. I look upon the real econ-
omy of Italy as simply so much additional evidence in favor of
small occupations with permanent tenure. It is an example of
what can be accomplished by those two elements, even under
the disadvantage of the peculiar nature of the metayer con-
tract, in which the motives to exertion on the part of the tenant
are only half as strong as if he farmed the land on the same
footing of perpetuity at a money-rent, either fixed, or varying
according to some rule which would leave to the tenant the
whole benefit of his own exertions. The metayer tenure is
not one which we should be anxious to introduce where the
exigencies of society had not naturally given birth to it ; but
neither ought we to be eager to abolish it on a mere a priori
view of its disadvantages. If the system in Tuscany works as
well in practice as it is represented to do, with every appearance
of minute knowledge, by so competent an authority as Sis-
mondi ; if the mode of living of the people, and the size of

* Of the intelligence of this interest-
ing people, M. de Sismondi speaks in
the most favorable terms. Few of them
can read; but there is often one member
of the family destined for the priesthood,
who reads to them on winter evenings.
Their language differs little from the
purest Italian. The taste for improvisa-
tion in verse is general. " The peasants
of the Vale of Nievolo freqtient the thea-
tre in summer on festival days, from
nine to eleven at night: their admission
costs them little more than five French
sous (sV^d). Their favorite author is
Alfieri; the whole history of the .'\trida:
is familiar to these people who cannot
read, and who seek from that austere

poet a relaxation from their rude la-
bors." Unlike most rustics, they find
pleasure in the beauty of their country.
In the hills of the vale of Nievole
there is in front of every house a thresh-
ing-ground, seldom of more than 25 or
[o square fathoms; it is often the only
evel space in the whole farm : it is at
the same time a terrace which commands
the plains and the valley, and looks out
upon a delightful country. Scarcely ever
have I stood still to admire it. without
the mclaycr's coming out to enjoy my
admiration, and point out with his finger
the beauties which he thought might
have escaped my notice."

i

304 POLITICAL ECONOMY

farms, have for ages maintained and still maintain themselves *
such as they are said to be by him, it were to be regretted that
a state of rural well-being so much beyond what is realized
in most European countries, should be put to hazard by an
attempt to introduce, under the guise of agricultural improve-
ment, a system of money-rents and capitalist farmers. Even
where the metayers are poor, and the subdivision great, it is
not to be assumed as of course, that the change would be for
the better. The enlargement of farms, and the introduction
of what are called agricultural improvements, usually dimin-
ish the number of laborers employed on the land ; and unless
the growth of capital in trade and manufactures affords an
opening for the displaced population, or unless there are re-
claimable wastes on which they can be located, competition
will so reduce wages, that they will probably be worse off as
day-laborers than they were as metayers.

Mr. Jones very properly objects against the French econo-
mists of the last century, that in pursuing their favorite object
of introducing money-rents, they turned their minds solely
to putting farmers in the place of metayers, instead of trans-
forming the existing metayers into farmers ; which, as he justly
remarks, can scarcely be effected, unless, to enable the me-
tayers to save and become owners of stock, the proprietors
submit for a considerable time to a diminution of income, in-
stead of expecting an increase of it, which has generally been
their immediate motive for making the attempt. If this trans-
formation were effected, and no other change made in the me-
tayer's condition ; if, preserving all the other rights which
usage insures to him, he merely got rid of the landlord's claim
to half the produce, paying in lieu of it a moderate fixed rent ;
he would be so far in a better position than at present, as the
whole, instead of only half the fruits of any improvement he
made, would now belong to himself ; but even so, the benefit
would not be without alloy ; for a metayer, though not him-
self a capitalist, has a capitalist for his partner, and has the
use, in Italy at least, of a considerable capital, as is proved by

•" We never," says Sismondi, " find a families: only one marries and under-
family of metayers proposing to their takes the charge of the household: none
landlord to divide the mctairie, unless of the others marry unless the first is
the work is really more than they can cViildless, or unless some one of them
do, and they feel assured of retaining has the offer of a new metairic." " New
the same enjoyments on a smaller piece Principles of Political Economy," book
of ground. We never find several sons iii. chap. S-
all marrying, and forming as many new

COTTIERS 305

the excellence of the farm buildings : and it is not probable
that the landowners would any longer consent to peril their
movable property on the hazards of agricultural enterprise,
when assured of a fixed money income without it. Thus would
the question stand, even if the change left undisturbed the me-
tayer's virtual fixity of tenure, and converted him, in fact, into
a peasant proprietor at a quit rent. But if we suppose him
converted into a mere tenant, displaceable at the landlord's
will, and liable to have his rent raised by competition to any
amount which any unfortunate being in search of subsistence
can be found to offer or promise for it, he would lose all the
features in his condition which preserve it from being de-
teriorated : he would be cast down from his present position
of a kind of half proprietor of the land, and would sink into
a cottier tenant.

Chapter IX.— Of Cottiers

§ I. By the general appellation of cottier tenure, I shall desig-
nate all cases without exception, in which the laborer makes
his contract for land without the intervention of a capitalist
farmer, and in which the conditions of the contract, especially
the amount of rent, are determined not by custom but by com-
petition. The principal European example of this tenure is
Ireland, and it is from that country that the term cottier is
derived.* By far the greater part of the agricultural popula-
tion of Ireland might until very lately have been said to be
cottier-tenants ; except so far as the Ulster tenant-right con-
stituted an exception. There was, indeed, a numerous class
of laborers who (we may presume through the refusal either
of proprietors or of tenants in possession to permit any further
subdivision) had been unable to obtain even the smallest patch
of land as permanent tenants. But, from the deficiency of cap-
ital, the custom of paying wages in land was so universal, that
even those who worked as casual laborers for the cottiers or for
such larger farmers as were found in the country, were usually
paid not in money, but by permission to cultivate for the season
a piece of ground, which was generally delivered to them by

• In its original acceptation, the word stretched the term to include those

" cottier " desipnated a class of sub- small farmers themselves, and generally

tenants, who rent a cottafje and an acre all peasant farmers whose rents are de-

or two of land from the small farmers. termined by competition.
But the usage of writers has long since

Vol. I. — 20

3o6 POLITICAL ECONOMY

the farmer ready manured, and was known by the name of
conacre. F"or this they agreed to pay a money rent, often of
several pounds an acre, but no money actually passed, the debt
being worked out in labor, at a money valuation.

The produce, on the cottier system, being divided into two
portions, rent, and the remuneration of the laborer; the one
is evidently determined by the other. The laborer has whatever
the landlord does not take: the condition of the laborer de-
pends on the amount of rent. But rent, being regulated by
competition, depends upon the relation between the demand for
land, and the supply of it. The demand for land depends
on the number of competitors, and the competitors are the
whole rural population. The effect, therefore, of this tenure,
is to bring the principle of population to act directly on the
land, and not, as in England, on capital. Rent, in this state of
things, depends on the proportion between population and land.
As the land is a fixed quantity, while population has an un-
limited power of increase, unless something checks that in-
crease, the competition for land soon forces up rent to the
highest point consistent with keeping the population alive. The
effects, therefore, of cottier tenure depend on the extent to
which the capacity of population to increase is controlled, either
by custom, by individual prudence, or by starvation and disease.

It would be an exaggeration to afifirm, that cottier tenancy is
absolutely incompatible with a prosperous condition of the la-
boring class. If we could suppose it to exist among a people
to whom a high standard of comfort was habitual ; whose re-
quirements were such, that they would not offer a higher rent
for land than would leave them an ample subsistence, and whose
moderate increase of numbers left no unemployed population
to force up rents by competition, save when the increasing prod-
uce of the land from increase of skill would enable a higher
rent to be paid without inconvenience ; the cultivating class
might be as well remunerated, might have as large a share of
the necessaries and comforts of life, on this system of tenure
as on any other. They would not, however, while their rents
were arbitrary, enjoy any "of the peculiar advantages which
metayers on the Tuscan system derive from their connection
with the land. They would neither have the use of a capital
belonging to their landlords, nor would the want of this be
made up by the intense motives to bodily and mental exertion,

COTTIERS

307

which act upon the peasant who has a permanent tenure. On
the contrary, any increased value given to the land by the ex-
ertions of the tenant, would have no effect but to raise the rent
against himself, either the next year, or at farthest when his
lease expired. The landlords might have justice or good sense
enough not to avail themselves of the advantage which compe-
tition would give them ; and different landlords would do so
in different degrees. But it is never safe to expect that a class
or body of men will act in opposition to their immediate pecun-
iary interest ; and even a doubt on the subject would be almost
as fatal as a certainty, for when a person is considering whether
or not to undergo a present exertion or sacrifice for a compara-
tively remote future, the scale is turned by a very small proba-
bility that the fruits of the exertion or of the sacrifice would be
taken from him. The only safeguard against these uncertain-
ties would be the growth of a custom, insuring a permanence
of tenure in the same occupant, without liability to any other
increase of rent than might happen to be sanctioned by the
general sentiments of the community. The Ulster tenant-right
is such a custom. The very considerable sums which outgoing
tenants obtain from their successors, for the good-will of their
farms,* in the first place actually limit the competition for land
to persons who have such sums to offer: while the same fact
also proves that full advantage is not taken by the landlord
of even that more limited competition, since the landlord's rent
does not amount to the whole of what the incoming tenant not
only offers but actually pays. He does so in the full confidence
that the rent will not be raised ; and for this he has the guar-
antee of a custom, not recognized by law, but deriving its bind-
ing force from another sanction, perfectly well understood in
Ireland. f Without one or other of these supports, a custom
limiting the rent of land is not likely to grow up in any progres-

* " It is not uncommon for a tenant
without a lease to sell the bare privilege
of occupancy or possession of his farm,
without any visible sign of improve-
ment having been made by h-m, at from
ten to sixteen, up to twenty and even
forty years' purchase of the rent." —
(" Digest of Evidence Taken by Lord
I5evon's Commission," Introductory
Chapter.) The compiler adds, " the
comparative tranquillity of that district "
(Ulster) " may perhaps be mainly at-
tributable to this fact.

t " It is in the great majority of cases
not a reimbursement for outlay incurred.

or improvements eflfected on the land,
but a mere life insurance or purchase of
immunity from outrage." — ( Digest, ut
supra.") " The present tenant-right of
Ulster " (the writer judiciouslv remarks)
" is an embryo copyhold." " Even there,
if the tenant-right be disregarded, and
a tenant be ejected without having re-
ceived the price of his good-will, out-
rages are generally the consecuicnce." —
(Chapter viii.) " The disorganized state
of Tipperary, and the agrarian combina-
tion throughout Ireland, are but a
methodized war to obtain the Ulster
tenant-right."

3o8 POLITICAL ECONOMY

sive community. If wealth and population were stationary,
rent also would generally be stationary, and after remaining
a long time unaltered, would probably come to be considered
unalterable. But all progress in wealth and population tends
to a rise of rents. Under a metayer system there is an estab-
lished mode in which the owner of land is sure of participating
in the increased produce drawn from it. But on the cottier
system he can only do so by a readjustment of the contract,
while that readjustment, in a progressive community, would
almost always be to his advantage. His interest, therefore,
is decidedly opposed to the growth of any custom commuting
rent into a fixed demand.

§ 2. Where the amount of rent is not limited, either by law
or custom, a cottier system has the disadvantages of the worst
metayer system, with scarcely any of the advantages by which,
in the best forms of that tenure, they are compensated. It is
scarcely possible that cottier agriculture should be other than
miserable. There is not the same necessity that the condition
of the cultivators should be so. Since by a sufficient restraint
on population competition for land could be kept down, and
extreme poverty prevented ; habits of prudence and a high
standard of comfort, once established, would have a fair chance
of maintaining themselves : though even in these favorable
circumstances the motives to prudence would be considerably
weaker than in the case of metayers, protected by custom (like
those of Tuscany) from being deprived of their farms: since
a metayer family, thus protected, could not be impoverished by
any other improvident multiplication than their own, but a
cottier family, however prudent and self-restraining, may have
the rent raised against it by the consequences of the multiplica-
tion of other families. Any protection to the cottiers against
this evil could only be derived from a salutary sentiment of
duty or dignity, pervading the class. From this source, how-
ever, they might derive considerable protection. If the habitual
standard of requirement among the class were high, a young
man might not choose to offer a rent which would leave him
in a worse condition than the preceding tenant ; or it might
be the general custom, as it actually is in some countries, not
to marry until a farm is vacant.

But it is not where a high standard of comfort has rooted
itself in the habits of the laboring classes, that we are ever

COTTIERS 309

called upon to consider the effects of a cottier system. That
system is found only where the habitual requirements of the
rural laborers are the lowest possible; where, as long as they
are not actually starving, they will multiply: and population
is only checked by the diseases, and the shortness of life, con-
sequent on insufficiency of merely physical necessaries. This
was the state of the largest portion of the Irish peasantry.
When a people have sunk into this state, and still more when
they have been in it from time immemorial, the cottier system
is an almost insuperable obstacle to their emerging from it.
When the habits of the people are such that their increase is
never checked but by the impossibility of obtaining a bare sup-
port, and when this support can only be obtained from land, all
stipulations and agreements respecting amount of rent are
merely nominal ; the competition for land makes the tenants
undertake to pay more than it is possible they should pay, and
when they have paid all they can, more almost always remains
due.

" As it may fairly be said of the Irish peasantry," said Mr.
Revans, the Secretary to the Irish Poor Law Inquiry Commis-
sion,* " that every family which has not sufficient land to yield
its food has one or more of its members supported by begging,
it will easily be conceived that every endeavor is made by the
peasantry to obtain small holdings, and that they are not influ-
enced in their biddings by the fertility of the land, or by their
ability to pay the rent, but solely by the offer which is most
likely to gain them possession. The rents which they promise,
they are almost invariably incapable of paying; and conse-
quently they become indebted to those under whom they hold,
almost as soon as they take possession. They give up, in the
shape of rent, the whole produce of the land with the exception
of a sufficiency of potatoes for a subsistence; but as this is
rarely equal to the promised rent, they constantly have against
them an increasing balance. In some cases, the largest quan-
tity of produce which their holdings ever yielded or which,
under their system of tillage, they could in the most favorable
seasons be made to yield, would not he equal to the rent bid ;
consequently, if the peasant fulfilled his engagement with his

• " Evils of the State of Ireland, their tion of evidence from the mass collected

Causes and their Remedy." Page 10. by the Commission presided over by

A pamphlet, containing, amonR other Archbishop Whatcly.
things, an excellent digest and selec-

3IO

POLITICAL ECONOMY

landlord, which he is rarely able to accomplish, he would till
the ground for nothing, and give his landlord a premium for
being allowed to till it. On the seacoast, fishermen, and in the
northern counties those who have looms, frequently pay more
in rent than the market value of the whole produce of the land
they hold. It might be supposed that they would be better with-
out land under such circumstances. But fishing might fail dur-
ing a week or two, and so might the demand for the produce
of the loom, when, did they not possess the land upon which
their food is grown, they might starve. The full amount of the
rent bid, however, is rarely paid. The peasant rem.ains con-
stantly in debt to his landlord ; his miserable possessions —
the wretched clothing of himself and of his family, the two
or three stools, and the few pieces of crockery, which his
wretched hovel contains, would not, if sold, liquidate the stand-
ing and generally accumulating debt. The peasantry are mostly
a year in arrear, and their excuse for not paying more is desti-
tution. Should the produce of the holding, in any year, be
more than usually abundant, or should the peasant by any acci-
dent become possessed of any property, his comforts cannot be
increased ; he cannot indulge in better food, nor in a greater
quantity of it. His furniture cannot be increased, neither can
liis wife or children be better clothed. The acquisition must
go to the person under whom he holds. The accidental addi-
tion will enable him to reduce his arrear of rent, and thus to
"defer ejectment. But this must be the bound of his expec-
tation."

As an extreme instance of the intensity of competition for
land, and of the monstrous height to which it occasionally forced
up the nominal rent, we may cite from the evidence taken
by Lord Devon's Commission,* a fact attested by Air. Hurly,
Clerk of the Crown for Kerry : " I have known a tenant bid
for a farm that I was perfectly well acquainted with, worth
£50 a year: I saw the competition get up to such an extent,
that he was declared the tenant at £450."

§ 3. In such a condition, what can a tenant gain by any
amount of industry or prudence, and what lose by any reck-
lessness? If the landlord at any time exerted his full legal
rights, the cottier would not be able even to live. If by extra
exertion he doublod the produce of his bit of land, or if he

* " Evidence," p. 851.

COTTIERS 311

prudently abstained from producing mouths to eat it up, his
only gain would be to have more left to pay to his landlord ;
while, if he had twenty children, they would still be fed first,
and the landlord could only take what was left. Almost alone
among mankind the cottier is in this condition, that he can
scarcely be either better or worse off by any act of his own.
If he were industrious or prudent, nobody but his landlord
would gain ; if he is lazy or intemperate, it is at his landlord's
expense. A situation more devoid of motives to either labor
or self-command, imagination itself cannot conceive. The in-
ducements of free human beings are taken away, and those of
a slave not substituted. He has nothing to hope, and nothing
to fear, except being dispossessed of his holding, and against
this he protects himself by the ultima ratio of a defensive civil
war. Rockism and Whiteboyism were the determination of
a people who had nothing that could be called theirs but a daily
meal of the lowest description of food, not to submit to being
deprived of that for other people's convenience.

Is it not, then, a bitter satire on the mode in which opinions
are formed on the most important problems of human nature
and life, to find public instructors of the greatest pretension,
imputing the backwardness of Irish industry, and the want
of energy of the Irish people in improving their condition, to
a peculiar indolence and recklessness in the Celtic race? Of
all vulgar modes of escaping from the consideration of the
effect of social and moral influences on the human mind, the
most vulgar is that of attributing the diversities of conduct
and character to inherent natural differences. What race would
not be indolent and insouciant when things are so arranged, that
they derive no advantage from forethought or exertion? If
such are the arrangements in the midst of which they live and
work, what wonder if the listlessness and indifference so en-
gendered are not shaken off the first moment an opportunity
offers when exertion would really be of use ? It is very natural
that a pleasure-loving and sensitively organized people like the
Irish, should be less addicted to steady routine labor than the
English, because life has more excitements for them independ-
ent of it ; but they are not less fitted for it than their Celtic
brethren the French, nor less so than the Tuscans, or the an-
cient Greeks. An excitable organization is precisely that in
which, by adequate inducements, it is easiest to kindle a spirit

312

POLITICAL ECONOMY

of animated exertion. It speaks nothing against the capacities
of industry in human beings, that they will not exert themselves
without motive. No laborers work harder, in England or
America, than the Irish ; but not under a cottier system.

§ 4. The multitudes who till the soil of India, are in a con-
dition sufficiently analogous to the cottier system, and at the
same time sufficiently different from it, to render the compari-
son of the two a source of some instruction. In most parts
of India there are, and perhaps have always been, only two
contracting parties, the landlord and the peasant : the landlord
being generally the sovereign, except where he has, by a special
instrument, conceded his rights to an individual, who becomes
his representative. The payments, however, of the peasants,
or ryots, as they are termed, have seldom if ever been regulated,
as in Ireland, by competition. Though the customs locally
obtaining were infinitely various, and though practically no
custom could be maintained against the sovereign's will, there
was always a rule of some sort common to a neighborhood:
the collector did not make his separate bargain with the peas-
ant, but assessed each according to the rule adopted for the rest.
The idea was thus kept up of a right of property in the tenant,
or at all events, of a right to permanent possession ; and the
anomaly arose of a fixity of tenure in the peasant-farmer, co-
existing with an arbitrary power of increasing the rent.

When the Mogul government substituted itself throughout
the greater part of India for the Hindoo rulers, it proceeded
on a different principle. A minute survey was made of the land,
and upon that survey an assessment was founded, fixing the
specific payment due to the government from each field. If
this assessment had never been exceeded, the ryots would have
been in the comparatively advantageous position of peasant-
proprietors, subject to a heavy, but a fixed quit-rent. The ab-
sence, however, of any real protection against illegal extortions,
rendered this improvement in their condition rather nominal
than real ; and, except during the occasional accident of a
humane and vigorous local administrator, the exactions had no
practical limit but the inability of the ryot to pay more.

It was to this state of things that the English rulers of India
succeeded ; and they were, at an early period, struck with the
importance of putting an end to this arbitrary character of
the land-revenue, and imposing a fixed limit to the government

COTTIERS 313

demand. They did not attempt to go back to the Mogul valua-
tion. It has been in general the very rational practice of the
English Government in India, to pay little regard to what was
laid down as the theory of the native institutions, but to inquire
into the rights which existed and were respected in practice, and
to protect and enlarge those. For a long time, however, it blun-
dered grievously about matters of fact, and grossly misunder-
stood the usages and rights which it found existing. Its mis-
takes arose from the inability of ordinary minds to imagine a
state of social relations fundamentally different from those with
which they are practically familiar. England being accustomed
to great estates and great landlords, the English rulers took it
for granted that India must possess the like ; and looking round
for some set of people who might be taken for the objects of
their search, they pitched upon a sort of tax-gatherers called
zemindars. " The zemindar," says the philosophical historian
of India,* " had some of the attributes which belong to a land-
owner ; he collected the rents of a particular district, he gov-
erned the cultivators of that district, lived in comparative splen-
dor, and his son succeeded him when he died. The zemindars,
therefore, it was inferred without delay, were the proprietors
of the soil, the landed nobility and gentry of India. It was not
considered that the zemindars, though they collected the rents,
did not keep them ; but paid them all away, with a small de-
duction, to the government. It was not considered that if they
governed the ryots, and in many respects exercised over them
despotic power, they did not govern them as tenants of theirs,
holding their lands either at will or by contract under them.
The possession of the ryot was an hereditary possession ; from
which it was unlawful for the zemindar to displace him: for
every farthing which the zemindar drew from the ryot, he was
bound to account ; and it was only by fraud, if, out of all that
he collected, he retained an ana more than the small proportion
which, as pay for the collection, he was permitted to receive."

" There was an opportunity in India," continues the histo-
rian, " to which the history of the world presents not a parallel.
Next after the sovereign, the immediate cultivators had, by
far, the greatest portion of interest in the soil. For the rights
(such as they were) of the zemindars, a complete compensation
might have easily been made. The generous resolution was

• " Mill's History of British India," book vi. chap. 8.

SM

POLITICAL ECONOMY

adopted, of sacrificing to the improvement of the country, the
proprietary rights of the sovereign. The motives to improve-
ment which property gives, and of which the power was so
justly appreciated, might have been bestowed upon those upon
whom they would have operated with a force incomparably
greater than that with which they could operate upon any other
class of men : they might have been bestowed upon those from
whom alone, in every country, the principal improvements in
agriculture must be derived, the immediate cultivators of the
soil. And a measure worthy to be ranked among the noblest
that ever were taken for the improvement of any country, might
have helped to compensate the people of India for the miseries
of that misgovernment which they had so long endured. But
the legislators were English aristocrats ; and aristocratical prej-
udices prevailed."

The measure proved a total failure, as to the main effects
which its well-meaning promoters expected from it. Unac-
customed to estimate the mode in which the operation of any
given institution is modified even by such variety of circum-
stances as exists within a single kingdom, they flattered them-
selves that they had created, throughout the Bengal provinces,
English landlords, and it proved that they had only created
Irish ones. The new landed aristocracy disappointed every
expectation built upon them. They did nothing for the im-
provement of their estates, but everything for their own ruin.
The same pains not being taken, as had been taken in Ireland,
to enable the landlords to defy the consequences of their im-
providence, nearly the whole land of Bengal had to be seques-
trated and sold, for debts or arrears of revenue, and in one
generation most of the ancient zemindars had ceased to exist.
Other families, mostly the descendants of Calcutta money deal-
ers, or of native officials who had enriched themselves under
the British government, now occupy their place ; and live as
useless drones on the soil which has been given up to them.
Whatever the government has sacrificed of its pecuniary claims,
for the creation of such a class, has at the best been wasted.

In the parts of India into which the British rule has been
more recently introduced, the blunder has been avoided of en-
dowing a useless body of great landlords with gifts from the
public revenue. In most parts of the Madras and in part of
the Bombay Presidency, the rent is paid directly to the govern-

MEANS OF ABOLISHING COTTIER TENANCY 315

ment by the immediate cultivator. In the Northwestern Prov-
inces, the government makes its engagement with the village
community collectively, determining the share to be paid by
each individual, but holding them jointly responsible for each
other's default. But in the greater part of India, the immediate
cultivators have not obtained a perpetuity of tenure at a fixed
rent. The government manages the land on the principle on
which a good Irish landlord manages his estate: not putting
it up to competition, not asking the cultivators what they will
promise to pay, but determining for itself what they can afford
to pay, and defining its demand accordingly. In many districts
a portion of the cultivators are considered as tenants of the
rest, the government making its demand from those only (often
a numerous body) who are looked upon as the successors of
the original settlers or conquerors of the village. Sometimes
the rent is fixed only for one year, sometimes for three or five ;
but the uniform tendency of present policy is toward long leases,
extending, in the northern provinces of India, to a term of thirty
years. This arrangement has not existed for a sufficient time to
have shown by experience, how far the motives to improvement
which the long lease creates in the minds of the cultivators, fall
short of the influence of a perpetual settlement.* But the two
plans, of annual settlements and of short leases, are irrevocably
condemned. They can only be said to have succeeded, in com-
parison with the unlimited oppression which existed before.
They are approved by nobody, and were never looked upon in
any other light than as temporary arrangements, to be aban-
doned when a more complete knowledge of the capabilities of
the country should afford data for something more permanent.

Chapter X Means of Abolishing Cottier Tenancy

§ I. When the first edition of this work was written and
published, the question, what is to be done with a cottier popu-
lation, was to the English Government the most urgent of prac-
tical questions. The majority of a population of eight millions,
having long grovelled in helpless inertness and abject poverty
under the cottier system, reduced by its operation to mere food
of the cheapest description, and to an incapacity of either doing

* Since this was written, the resolu- leases of the Northern Provinces into
tion has been adopted by the Indian perpetual tenures at fixed rents.
GoverijjDient of conyefjing the long

3i6 POLITICAL ECONOMY

or willing anything for the improvement of their lot, had at
last, by the failure of that lowest quality of food, been plunged
into a state in which the alternative seemed to be either death,
or to be permanently supported by other people, or a radical
change in the economical arrangements under which it had
hitherto been their misfortune to live. Such an emergency
had compelled attention to the subject from the legislature and
from the nation, but it could hardly be said with much result;
for, the evil having originated in a system of land tenancy which
withdrew from the people every motive to industry or thrift
except the fear of starvation, the remedy provided by Parlia-
ment was to take away even that, by conferring on them a legal
claim to eleemosynary support : while, toward correcting the
cause of the mischief, nothing was done, beyond vain com-
plaints, though at the price to the national treasury of ten mill-
ions sterling for the delay.

" It is needless " (I observed) " to expend any argument in
proving that the very foundation of the economical evils of
Ireland is the cottier system ; that while peasant rents fixed
by competition are the practice of the country, to expect in-
dustry, useful activity, any restraint on population but death,
or any the smallest diminution of poverty, is to look for figs
on thistles and grapes on thorns. If our practical statesmen
are not ripe for the recognition of this fact ; or if while they
acknowledge it in theory, they have not a sufficient feeling of
its reality, to be capable of founding upon it any course of con-
duct ; there is still another, and a purely physical consideration,
from which they will find it impossible to escape. If the one
crop on which the people have hitherto supported themselves
continues to be precarious, either some new and great impulse
must be given to agricultural skill and industry, or the soil of
Ireland can no longer feed anything like its present population.
The whole produce of the western half of the island, leaving
nothing for rent, will not now keep permanently in existence
the whole of its people : and they will necessarily remain an
annual charge on the taxation of the empire, until they are
reduced either by emigration or by starvation to a number
corresponding with the low state of their industry, or unless
the means are found of making that industry much more pro-
ductive."

Since these words were written, events unforeseen by anyone

MEANS OF ABOLISHING COTTIER TENANCY 317

have saved the EngHsh rulers of Ireland from the embarrass-
ments which would have been the just penalty of their indiffer-
ence and want of foresight. Ireland, under cottier agriculture,
could no longer supply food to its population : Parliament, by
way of remedy, applied a stimulus to population, but none
at all to production ; the help, however, which had not been
provided for the people of Ireland by political wisdom, came
from an unexpected source. Self-supporting emigration — the
Wakefield system, brought into effect on the voluntary principle
and on a gigantic scale (the expenses of those who followed
being paid from the earnings of those who went before) has,
for the present, reduced the population down to the number
for which the existing agricultural system can find employment
and support. The census of 1851, compared with that of 1841,
showed in round numbers a diminution of population of a mill-
ion and a half. The subsequent census (of 1861) shows a
further diminution of about half a million. The Irish having
thus found the way to that flourishing continent which for gen-
erations will be capable of supporting in undiminished com-
fort the increase of the population of the whole world ; the
peasantry of Ireland having learnt to fix their eyes on a terres-
trial paradise beyond the ocean, as a sure refuge both from the
oppression of the Saxon and from the tyranny of nature ; there
can be little doubt that however much the employment for agri-
cultural labor may hereafter be diminished by the general intro-
duction throughout Ireland of English farming, or even if like
the county of Sutherland all Ireland should be turned into a
grazing farm, the superseded people would migrate to America
with the same rapidity, and as free of cost to the nation, as the
million of Irish who went thither during the three years pre-
vious to 1 85 1, Those who think that the land of a country
exists for the sake of a few thousand landowners, and that as
long as rents are paid, society and government have fulfilled
their function, may see in this consummation a happy end to
Irish difficulties.

But this is not a time, nor is the human mind now in a con-
dition, in which such insolent pretensions can be maintained.
The land of Ireland, the land of every country, belongs to the
people of that country. The individuals called landowners have
no right, in morality and justice, to anything but the rent, or
compensation for its salable value. With regard to the land

3i8 POLITICAL ECONOMY

itself, the paramount consideration is, by what mode of ap-
propriation and of cultivation it can be made most useful to
the collective body of its inhabitants. To the owners of the
rent it may be very convenient that the bulk of the inhabitants,
despairing of justice in the country where they and their ances-
tors have lived and suffered, should seek on another continent
that property in land which is denied to them at home. But
the legislature of the empire ought to regard with other eyes
the forced expatriation of millions of people. When the in-
habitants of a country quit the country en masse because its
Government will not make it a place fit for them to live in, the
Government is judged and condemned. There is no necessity
for depriving the landlords of one farthing of the pecuniary
value of their legal rights; but justice requires that the actual
cultivators should be enabled to become in Ireland what they
will become in America — proprietors of the soil which they
cultivate.

Good policy requires it no less. Those who, knowing neither
Ireland nor any foreign country, take as their sole standard
of social and economical excellence English practice, propose
as the single remedy for Irish wretchedness, the transformation
of the cottiers into hired laborers. But this is rather a scheme
for the improvement of Irish agriculture, than of the condition
of the Irish people. The status of a day laborer has no charm
for infusing forethought, frugality, or self-restraint, into a
people devoid of them. If the Irish peasantry could be uni-
versally changed into receivers of wages, the old habits and
mental characteristics of the people remaining, we should merely
see four or five millions of people living as day laborers in the
same wretched manner in which as cottiers they lived before;
equally passive in the absence of every comfort, equally reckless
in multiplication, and even, perhaps, equally listless at their
work; since they could not be dismissed in a body, and if they
could, dismissal would now be simply remanding them to the
poor-rate. Far other would be the effect of making them peas-
ant proprietors. A people who in industry and providence have
everything to learn — who are confessedly among the most back-
ward of European populations in the industrial virtues — re-
quire for their regeneration the most powerful incitements by
which those virtues can be stimulated : and there is no stimulus
as yet comparable to property in land. A permanent interest

MEANS OF ABOLISHING COTTIER TENANCY

319

in the soil to those who till it, is almost a guarantee for the
most unwearied laboriousness : against overpopulation, though
not infallible, it is the best preservative yet known, and where
it failed, any other plan would probably fail much more egre-
giously ; the evil would be beyond the reach of merely economic
remedies.

The case of Ireland is similar in its requirements to that of
India. In India, though great errors have from time to time
been committed, no one ever proposed, under the name of agri-
cultural improvement, to eject the ryots or peasant farmers
from their possession ; the improvement that has been looked
for, has been through making their tenure more secure to them,
and the sole difference of opinion is between those who contend
for perpetuity, and those who think that long leases will suffice.
The same question exists as to Ireland ; and it would be idle
to deny that long leases, under such landlords as are sometimes
to be found, do effect wonders, even in Ireland. But then, they
must be leases at a low rent. Long leases are in no way to be
relied on for getting rid of cottierism. During the existence of
cottier tenancy, leases have always been long ; iwenty-one years
and three lives concurrent, was a usual term. But the rent
being fixed by competition, at a higher amount than could be
paid, so that the tenant neither had, nor could, by any exertion
acquire, a beneficial interest in the land, the advantage of a
lease was merely nominal. In India, the government, where
it has not imprudently made over its proprietary rights to the
zemindars, is able to prevent this evil, because, being itself the
landlord, it can fix the rent according to its own judgment;
but under individual landlords, while rents are fixed by compe-
tition, and the competitors are a peasantry struggling for sub-
sistence, nominal rents are inevitable, unless the population is
so thin, that the competition itself is only nominal. The ma-
jority of landlords will grasp at immediate money and imme-
diate power ; and so long as they find cottiers eager to offer
them everything, it is useless to rely on them for tempering
the vicious practice by a considerate self-denial.

A perpetuity is a stronger stimulus to improvement than a
long lease : not only because the longest lease, before coming
to an end, passes through all the varieties of short leases down
to no lease at all ; but for more fundamental reasons. It is
very shallow, even in pure economics, to take no account of the

320

POLITICAL ECONOMY

influence of imagination: there is a virtue in " forever " beyond
the longest term of years ; even if the term is long enough
to include children, and all whom a person individually cares
for, yet until he has reached that high degree of mental cultiva-
tion at which the public good (which also includes perpetuity)
acquires a paramount ascendancy over his feelings and desires,
he will not exert himself with the same ardor to increase the
value of an estate, his interest in which diminishes in value
every year. Besides, while perpetual tenure is the general rule
of landed property, as it is in all the countries of Europe, a
tenure for a limited period, however long, is sure to be regarded
as something of inferior consideration and dignity, and inspires
less of ardor to obtain it, and of attachment to it when obtained.
But where a country is under cottier tenure, the question of
perpetuity is quite secondary to the more important point, a
limitation of the rent. Rent paid by a capitalist who farms for
profit, and not for bread, may safely be abandoned to competi-
tion; rent paid by laborers cannot, unless the laborers were
in a state of civilization and improvement which laborers have
nowhere yet reached, and cannot easily reach under such a ten-
ure. Peasant rents ought never to be arbitrary, never at the
discretion of the landlord : either by custom or law, it is im-
peratively necessary that they should be fixed ; and where no
mutually advantageous custom, such as the metayer system of
Tuscany, has established itself, reason and experience recom-
mend that they should be fixed by authority: thus changing
the rent into a quit-rent, and the farmer into a peasant pro-
prietor.

For carrying this change into efifect on a sufficiently large
scale to accomplish the complete abolition of cottier tenancy, the
mode which most obviously suggests itself is the direct one, of
doing the thing outright by Act of Parliament ; making the
whole land of Ireland the property of the tenants, subject to
the rents now really paid (not the nominal rents), as a fixed
rent charge. This, under the name of " fixity of tenure," was
one of the demands of the Repeal Association during the most
successful period of their agitation ; and was better expressed
by Mr. Conner, its earliest, most enthusiastic, and most inde-
fatigable apostle,* by the words, " a valuation and a perpetuity."

* Author of numerous pamphlets, en- sion of Ireland," and others. Mr. Con-
titled " True Political Economy of Ire- ner has been an agitator on the subject
land," " Letter to the Earl of Devon," since 1832.
" Two Letters on the Rackrent Oppres-

MEANS OF ABOLISHING COTTIER TENANCY 321

In such a measure there would not have been any injustice,
provided the landloids were compensated for the present value
of the chances of increase which they were prospectively re-
quired to forego. The rupture of existing social relations would
hardly have been more violent than that effected by the min-
isters Stein and Hardenberg, when, by a series of edicts, in the
early part of the present century, they revolutionized the state
of landed property in the Prussian monarchy, and left their
names to posterity among the greatest benefactors of their
country. To enlightened foreigners writing on Ireland, Von
Raumer and Gustave de Beaumont, a remedy of this sort
seemed so exactly and obviously what the disease required,
that they had some difficulty in comprehending how it was that
the thing was not yet done.

This, however, would have been, in the first place, a complete
expropriation of the higher classes of Ireland : which, if there
is any truth in the principles we have laid down, would be per-
fectly warrantable, but only if it were the sole means of effect-
ing a great public good. In the second place, that there should
be none but peasant proprietors, is in itself far from desirable.
Large farms, cultivated by large capital, and owned by persons
of the best education which the country can give, persons quali-
fied by instruction to appreciate scientific discoveries, and able
to bear the delay and risk of costly experiments, are an im-
portant part of a good agricultural system. Many such land-
lords there are even in Ireland ; and it would be a public mis-
fortune to drive them from their posts. A large proportion
also of the present holdings are probably still too small to try
the proprietary system under the greatest advantages : nor are
the tenants always the persons one would desire to select as the
first occupants of peasant properties. There are numbers of
them on whom it would have a more beneficial effect to give
them the hope of acquiring a landed property by industry and
frugality, than the property itself in immediate possession.

There are, however, much milder measures, not open to sim-
ilar objections, and which, if pushed to the utmost extent of
which they are susceptible, would realize in no inconsiderable
degree the object sought. One of them would be, to enact that
whoever reclaims waste land becomes the owner of it, at a
fixed quit-rent equal to a moderate interest on its mere value
as waste. It would of course be a necessary part of this meas-
VOL. I. — 21

322

POLITICAL ECONOMY

ure, to make compulsory on landlords the surrender of waste
lands (not of an ornamental character) whenever required for
reclamation. Another expedient, and one in which individuals
could co-operate, would be to buy as much as possible of the
land offered for sale, and sell it again in small portions as peas-
ant properties. A Society for this purpose was at one time
projected (though the attempt to establish it proved unsuccess-
ful) on the principles, so far as applicable, of the Freehold
Land Societies which have been so successfully established in
England, not primarily for agricultural, but for electoral pur-
poses.

This is a mode in which private capital may be employed in
renovating the social and agricultural economy of Ireland, not
only without sacrifice, but with considerable profit to its owners.
The remarkable success of the Waste Land Improvement So-
ciety, which proceeded on a plan far less advantageous to the
tenant, is an instance of what an Irish peasantry can be stimu-
lated to do, by a sufficient assurance that what they do will be
for their own advantage. It is not even indispensable to adopt
perpetuity as the rule ; long leases at moderate rents, like those
of the Waste Land Society, would suffice, if a prospect were
held out to the farmers of being allowed to purchase their farms
with the capital which they might acquire, as the Society's ten-
ants were so rapidly acquiring under the influence of its benefi-
cent system.* When the lands were sold, the funds of the asso-
ciation would be liberated, and it might recommence operations
in some other quarter.

* Though this society, during the
years succeeding the famine, was forced
to wind up its affairs, the memory of
what it accomplished ought to be pre-
served. The following is an extract in
the Proceedings of Lord Devon's Com-
mission (page 84), from the report made
to the society in 1845, by their intelli-
gent manager, Colonel Robinr^on:

" Two hundred and forty-five tenants,
many of whom were a few years since
in a state bordering on pauperism, the
occupiers of small holdings of from ten
to twenty plantation acres each, have,
hy their own free labor, with the so-
ciety's aid, improved their farms to the
value of £4,396; £605 having been added
during the last year, being at the rate of
£17 i8s. per tenant for the whole term,
and £2 gs. for the past year; the benefit
of which improvements each tenant will
enjoy during the unexpired term of a
thirty-one years' lease.

" These 245 tenants and their families
have, by spade industry, reclaimed and
brought into cultivation 1,032 plantation

acres of land, previously unproductive
mountain waste, upon which they grew,
last year, crops valued by competent
practical persons at £3,896, being in the
proportion of £15 i8s. each tenant; and
their live stock, consisting of cattle,
horses, sheep, and pigs, now actually
upon the estates, is valued, according
to the present prices of the neighboring
markets, at £4,162, of which £1,304 has
been added since February, 1844, being
at the rate of £16 19s. for the whole
period, and £5 6s. for the last year;
during which time their stock has thus
increased in value a sum equal to their
present annual rent; and by the statisti-
cal tables and returns referred to in
previous reports, it is proved that the
tenants, in general, improve their little
farms, and increase their cultivation and
crops, in nearly direct proportion to the
number of available working persons of
both sexes, of which their families con-
sist."

There cannot be a stronger testimony
to the superior amount of gross, and

MEANS OF ABOLISHING COTTIER TENANCY 323

§ 2. Thus far I had written in 1856. Since that time the
great crisis of Irish industry has made further progress, and
it is necessary to consider how its present state affects the opin-
ions, on prospects or on practical measures, expressed in the
previous part of this chapter.

The principal change in the situation consists in the great
diminution, holding out a hope of the entire extinction, of
cottier tenure. The enormous decrease in the number of small
holdings and increase in those of a medium size, attested by the
statistical returns, sufficiently prove the general fact, and all
testimonies show that the tendency still continues.* It is prob-
able that the repeal of the corn laws, necessitating a change in
the exports of Ireland from the products of tillage to those of
pasturage, would of itself have sufficed to bring about this

even of net produce, raised by small
farming under any tolerable system of
landed tenure; and it is worthy of at-
tention that the industry and zeal were
greatest among the smaller holders;
Colonel Robinson noticing, as excep-
tions to the remarkable and rapid
progress of improvement, some tenants
who were " occupants of larger farms
than twenty acres, a class too often
deficient in the enduring industry indis-
pensable for the successful prosecution
of mountain improvements."

* There is, however, a partial counter-
current, of which I have not seen any
public notice. " A class of men, not
very numerous, but sufficiently so to do
much mischief, have, through the
Landed Estates Court, got into posses-
sion of land in Ireland, who, of all
classes, are least likely to recognize the
duties of a landlord's position. These
are small traders in towns, who by dint
of sheer parsimony, frequently com-
bined with money-lending at usurious
rates, have succeeded, in the course of
a long life, in scraping together as much
money as will enable them to buy fifty
or a hundred acres of land. These peo-
ple never think of turning farmers, but,
proud of their position as landlords, pro-
ceed to turn it to tlic utmost account.
An instance of this kind came under my
notice lately. The tenants on the prop-
erty were, at the time of the purchase,
some twelve years ago, in a tolerably
comfortable state. VVithin that period
their rent has been raised three several
times; and it is now. as T am informed
by the i)riest of the district, nearly
double its amount at the commence-
ment of the present proprietor's reign.
The result is that tlic people, who were
formerly in tolerable comfort, are now
rcduceci to poverty: two of fhem have
left the property and sfjuattcd near an
adjacent turf bog, where they exist trust-
ing for sui)port to occasional jobs. If
this man is not shot, he will injure
himself through the deterioration of his

property, but meantime he has been
getting eight or ten per cent, on his
purchase-money. This is by no means
a rare case. The scandal which such
occurrences cause, casts its reflection
on transactions of a wholly different and
perfectly legitimate kind, where the re-
moval of the tenants is simply an act of
mercy for all parties.

" The anxiety of landlords to get rid
of cottiers is also to some extent neu-
tralized by the anxiety of middlemen to
get them. About one-fourth of the
whole land of Ireland is held under
long leases; the rent received when the
lease is of long standing, being generally
greatly under the real value of the land.
It rarely happens that land thus held
is cultivated by the owner of the lease;
instead of this, he sublets it at a rack
rent to small men, and lives on the ex-
cess of the rent which he receives over
that which he pays. Some of these
leases are always running out; and as
they draw towards their close, the mid-
dleman has no other interest in the land
than, at any cost of permanent deterio-
ration, to get the utmost out of it during
the unexpired period of the term. For
this purpose the small cottier tenants
precisely answer his turn. Middlemen
in this position are as anxious to obtain
cottiers as tenants, as the landlords are
to be rid of them; and the result is a
transfer of this sort of tenant from one
class of estates to tlic other. The move-
ment is of limited dimensions, but it
does exist, and so far as it exists, neu-
tralizes the general tendency. Perhaps
it may be thought that this system will
reproduce itself; that the same motives
which led to the existence of middle-
men will perpetuate the class; but there
is no danger of this. Landowners are
now perfectly alive to the ruinous con-
sequences of this system, however con-
venient for a time; and a clause against
sub-letting is now becoming a matter of
course in every lease." — (Private Com-
munication from Professor Cairnes.)

324 POLITICAL ECONOMY

revolution in tenure. A grazing farm can only be managed by
a capitalist farmer, or by the landlord. But a change involving
so great a displacement of the population, has been immensely
facilitated and made more rapid by the vast emigration, as well
as by that greatest boon ever conferred on Ireland by any Gov-
ernment, the Encumbered Estates Act ; the best provisions of
which have since, through the Landed Estates Court, been
permanently incorporated into the social system of the coun-
try. The greatest part of the soil of Ireland, there is reason to
believe, is now farmed either by the landlords, or by small cap-
italist farmers. That these farmers are improving in circum-
stances, and accumulating capital, there is considerable evi-
dence, in particular the great increase of deposits in the banks
of which they are the principal customers. So far as that class
is concerned, the chief thing still wanted is security of tenure,
or assurance of compensation for improvements. The means
of supplying these wants are now engaging the attention of the
most competent minds ; Judge Longfield's address, in the
autumn of 1864, and the sensation created by it, are an era in
the subject, and a point has now been reached when we may
confidently expect that within a very few years something ef-
fectual will be done.

But what, meanwhile, is the condition of the displaced cot-
tiers, so far as they have not emigrated ; and of the whole class
who subsist by agricultural labor, without the occupation of
any land? As yet, their state is one of great poverty, with but
slight prospect of improvement. Money wages, indeed, have
risen much above the wretched level of a generation ago : but
the cost of subsistence has also risen so much above the old
potato standard, that the real improvement is not equal to the
nominal ; and according to the best information to which I
have access, there is little appearance of an improved standar.d
of living among the class. The population, in fact, reduced
though it be, is still far beyond what the country can support as
a mere grazing district of England. It may not, perhaps, be
strictly true that, if the present number of inhabitants are
to be maintained at home, it can only be either on the old
vicious system of cottierism, or as small proprietors growing
their own food. The lands which will remain under tillage
would, no doubt, if sufficient security for outlay were given,
admit of a more extensive employment of laborers by the small

MEANS OF ABOLISHING COTTIER TENANCY 325

capitalist farmers ; and this, in the opinion of some competent
judges, might enable the country to support the present num-
ber of its population in actual existence. But no one will pre-
tend that this resource is sufficient to maintain them in any con-
dition in which it is fit that the great body of the peasantry of a
country should exist. Accordingly the emigration, which for
a time had fallen off, has, under the additional stimulus of bad
seasons, revived in all its strength. It is calculated that within
the year 1864 not less than 100,000 emigrants left the Irish
shores. As far as regards the emigrants themselves and their
posterity, or the general interests of the human race, it would
be folly to regret this result. The children of the immigrant
Irish receive the education of Americans, and enter, more
rapidly and completely than would have been possible in the
country of their descent, into the benefits of a higher state of
civilization. In twenty or thirty years they are not mentally
distinguishable from other Americans. The loss, and the dis-
grace, are England's : and it is the English people and govern-
ment whom it chiefly concerns to ask themselves, how far it
will be to their honor and advantage to retain the mere soil
of Ireland, but to lose its inhabitants. With the present feel-
ings of the Irish people, and the direction which their hope
of improving their condition seems to be permanently taking,
England, it is probable, has only the choice between the de-
population of Ireland, and the conversion of a part of the labor-
ing population into peasant proprietors. The truly insular
ignorance of her public men respecting a form of agricultural
economy which predominates in nearly every other civilized
country, makes it only too probable that she will choose the
worse side of the alternative. Yet there are germs of a ten-
dency to the formation of peasant proprietors on Irish soil,
which require only the aid of a friendly legislator to foster
them ; as is shown in the following extract from a private com-
munication by my eminent and valued friend. Professor
Cairnes : —

" On the sale, some eight or ten years ago, of the Thomond,
Portarlington, and Kingston estates, in the Encumbered Es-
tates Court, it was observed that a considerable number of oc-
cupying tenants purchased the fee of their farms. I have not
been able to detain any information as to what followed that
proceeding — whether the purchasers continued to farm their

326

POLITICAL ECONOMY

small properties, or under the mania of landlordism tried to es-
cape from their former mode of life. But there are other facts
which have a bearing on this question. In those parts of the
country where tenant-right prevails, the prices given for the
good will of a farm are enormous. The following figures, taken
from the schedule of an estate in the neighborhood of Newry,
now passing through the Landed Estates Court, will give an
idea, but a very inadequate one, of the prices which this mere
customary right generally fetches.

" Statement showing the prices at which the tenant-right of
certain farms near Newry was sold : —

Lot

Acres

Rent

Purchase-money
of tenant-right

I

23
24

13
14

lO

5

8

II

2

i:74

77
39
34
33
13

26

33
5

;^33
240
IIO

2 ,

'X ,

A

85
172

75

130

130

5

e

6 .

7

8

Q

Total

IIO

;^344

^980

" The prices here represent on the whole about three years'
purchase of the rental : but this, as I have said, gives but an
inadequate idea of that which is frequently, indeed of that which
is ordinarily, paid. The right, being purely customary, will
vary in value with the confidence generally reposed in the
good faith of the landlord. In the present instance, circum-
stances have come to light in the course of the proceedings con-
nected with the sale of the estate, which give reason to believe
that the confidence in this case was not high ; consequently,
the rates above given may be taken as considerably under those
which ordinarily prevail. Cases, as I am informed on the
highest authority, have in other parts of the country come to
light, also in the Landed Estates Court, in which the price given
for the tenant-right was equal to that of the whole fee of the
land. It is a remarkable fact that people should be found to
give, say twenty or twenty-five years' purchase, for land which
is still subject to a good round rent. Why, it will be asked, do

MEANS OF ABOLISHING COTTIER TENANCY 327

they not purchase land out and out for the same, or a sHghtly
larger, sum ? The answer to this question, I believe, is to be
found in the state of our land laws. The cost of transferring
land in small portions is, relatively to the purchase money, very
considerable, even in the Landed Estates Court ; while the
good will of a farm may be transferred without any cost at all.
The cheapest conveyance that could be drawn in that Court,
where the utmost economy, consistent with the present mode
of remunerating legal services, is strictly enforced, would, irre-
spective of stamp duties, cost iio — a very sensible addition to
the purchase of a small peasant estate : a conveyance to trans-
fer a thousand acres might not cost more, and would probably
not cost much more. But in truth, the mere cost of conveyance
represents but the least part of the obstacles which exist to ob-
taining land in small portions. A far more serious impediment
is the complicated state of the ownership of land, which renders
it frequently impracticable to subdivide a property into such
portions as would bring the land within the reach of small bid-
ders. The remedy for this state of things, however, lies in
measures of a m.ore radical sort than I fear it is at all probable
that any House of Commons we are soon likely to see would
even with patience consider. A registry of titles may succeed
in reducing this complex condition of ownership to its simplest
expression ; but where real complication exists, the difficulty
is not to be got rid of by mere simplicity of form ; and a regis-
try of titles — while the powers of disposition at present enjoyed
by landowners remain undiminished, while every settler and
testator has an almost unbounded license to multiply interests
in land, as pride, the passion for dictation, or mere whim may
suggest — will, in my opinion, fail to reach the root of the evil.
The effect of these circumstances is to place an immense pre-
mium upon large dealings in land — indeed in most cases prac-
tically to preclude all other than large dealings ; and while this
is the state of the law, the experiment of peasant proprietor-
ship, it is plain, cannot be fairly tried. The facts, however,
which I have stated show, I think, conclusively, that there is no
obstacle in the disposition of the people to the introduction of
this system."

I have concluded a discussion, which has occupied a space
almost disproportioned to the dimensions of this work ; and
I here close the examination of those simpler forms of social

328 POLITICAL ECONOMY

economy in which the produce of the land either belongs un-
dividedly to one class, or is shared only between two classes.
We now proceed to the hypothesis of a threefold division of
the produce, among laborers, landlords, and capitalists ; and
in order to connect the coming discussion as closely as pos-
sible with those which have now for some time occupied us, I
shall commence with the subject of Wages.

Chapter XI Of Wages

§ I. Under the head of Wages are to be considered, first,
the c^^^es which determine or influence the wag:es of labor
generally, and secondly, the dififerences that existbetween the
wages of different emplovments. It is convenient to keep these
two classes of consideration separate ; and in discussing the
law of wages, to proceed in the first instance as if there were no
other kind of labor than common unskilled labor, of the aver-
age degree of hardness and disagreeableness.

Wages, like other things, may be regulated either by com-
petition or by custom. In this country there are few kinds of
labor of which the remuneration would not be lower than it
is, if the employer took the full advantage of competition. Com-
petition, however, must be regarded, in the present state of so-
ciety, as the principal regulator of wages, and custom or in-
dividual character only as a modifying circumstance, and that
in a comparatively slight degree.

Wages, then, depend mainly upon the demand and supply
of labor ; or as it is often expressed, on the proportion be-
tween population and capital. By population is here meant
the number only of the laboring class, or rather of those who
work for hire ; and by capital, only circulating capital, and
not even the whole of that, but the part which is expended in
the direct purchase of labor. To this, however, must be added
all funds which, without forming a part of capital, are paid in
exchange for labor, such as the wages of soldiers, domestic
servants, and all other unproductive laborers. There is un-
fortunately no mode of expressing by one familiar term, the
aggregate of what may be called the wages-fund of a country :
and as the wages of productive labor form nearly the whole of
that fund, it is usual to overlook the smaller and less important

WAGES 329

part, and to say that wages depend on population and capital.
It will be convenient to employ this expression, remembering,
however, to consider it as elliptical, and not as a literal state-
ment of the entire truth.

With these limitations of the terms, wages not only depend
upon the relative amount of capital and population, but cannot,
under the rule of competition, be affected by anything else.
Wages (meaning, of course, the general rate) cannot rise, but
by an increase of the aggregate funds employed in hiring la-
borers, or a diminution in the number of the competitors for
hire ; nor fall, except either by a diminution of the funds de-
voted to paying labor, or by an increase in the number of
laborers to be paid.

§ 2. There are, however, some facts in apparent contradic-
tion to tfiis doctrine, which it is incumbent on us to consider,
and explain. ^^

For instance, it is a common saying that wages are high
when trade is good. The demand for labor in any particular
employment is more pressing, and higher wages are paid, when
there is a brisk demand for the commodity produced ; and the
contrary when there is what is called a stagnation : then work-
people are dismissed, and those who are retained must sub-
mit to a reduction of wages : though in these cases there is
neither more nor less capital than before. This is true ; and
is one of those complications in the concrete phenomena, which
obscure and disguise the operation of general causes ; but it
is not really inconsistent with the principles laid down. Capi-
tal which the owner does not employ in purchasing labor, but
keeps idle in his hands, is the same thing to the laborers, for the
time being, as if it did not exist. All capital is, from the varia-
tions of trade, occasionally in this state. A manufacturer, find-
ing a slack demand for his commodity, forbears to employ la-
borers in increasing a stock which he finds it difficult to dispose
of ; or if he goes on until all his capital is locked up in unsold
goods, then at least he must of necessity pause until he can get
paid for some of them. But no one expects either of these
states to be permanent ; if he did, he would at the first oppor-
tunity remove his capital to some other occupation, in which
it would still continue to employ labor. The capital remains
unemployed for a time, during which the labor market is over-
stocked, and wages fall. Afterwards the demand revives, and

33°

POLITICAL ECONOMY

perhaps becomes unusually brisk, enabling the manufacturer
to sell his commodity even faster than he can produce it : his
whole capital is then brought into complete efficiency, and if
he is able, he borrows capital in addition, which would other-
wise have gone into some other employment. At such times
wages, in his particular occupation, rise. If we suppose, what
in strictness is not absolutely impossible, that one of these fits
of briskness or of stagnation should affect all occupations at
the same time, wages altogether might undergo a rise or a fall.
These, however, are but temporary fluctuations : the capital
now lying idle will next year be in active employment, that
which is this year unable to keep up with the demand will in its
turn be locked up in crowded warehouses ; and wages in these
several departments will ebb and flow accordingly : but noth-
ing can perjnanentbuslter .gejieral wa^es. except an in_crease or
J^aiminlrdx3n''oT^pitaJJ.tself (alwaysnieaning by the term, the
fund sofallsortsTaes tinea for the payment of labor) com-
pared with the quantity of labor offering itself to be hired.

Again, it is another common notion that high prices make
high wages ; because the producers and dealers, being better
off, can afford to pay more to their laborers. I have already
said that a brisk demand, which causes temporary high prices,
causes also temporary high wages. But higli prices, in them-
selves, can only raise wages if the dealers, receiving more, are
induced to save more, and make an addition to their capital,
or at least to their purchases of labor. This is indeed likely
enough to be the case ; and if the high prices came direct from
heaven, or even from abroad, the laboring class might be bene-
fited, not by the high prices themselves, but by the increase of
capital occasioned by them. The same effect, however, is often
attributed to a high price which is the result of restrictive laws,
or which is in some way or other to be paid by the remaining
members of the community ; they having no greater means
than before to pay it with. High prices of this sort, if they ben-
efit one class of laborers, can only do so at the expense of
others ; since if the dealers by receiving high prices are enabled
to make greater savings, or otherwise increase their purchases
of labor, all other people by paying those high prices, have
their means of saving, or of purchasing labor, reduced in an
equal degree ; and it is a matter of accident whether the one
alteration or the other will have the greatest effect on the labor

WAGES 331

market. Wages will probably be temporarily higher in the
employment in which prices have risen, and somewhat lower
in other employments : in which case, while the first half of
the phenomenon excites notice, the other is generally over-
looked, or if observed, is not ascribed to the cause which really
produced it. Nor will the partial rise of wages last long : for
though the dealers in that one employment gain more, it does
not follow that there is room to employ a greater amount of
savings in their own business: their increasing capital will
probably flow over into other employments, and there counter-
balance the diminution previously made in the demand for
labor by the diminished savings of other classes.

Another opinion often maintained is, that wages (meaning
of course money wages) vary with the price of food ; rising
when it rises, and falling when it falls. This opinion is, I con-
ceive, only partially true: and in so far as true, in no way
affects the dependence of wages on the proportion between
capital and labor : since the price of food, when it affects wages
at all, affects them through that law. Dear or cheap food
caused by variety of seasons does not affect wages (unless they
are artificially adjusted to it by law or charity) : or rather, it
has some tendency to afifect them in the contrary way to that
supposed ; since in times of scarcity people generally compete
more violently for employment, and lower the labor market
against themselves. But dearness or cheapness of food, when
of a permanent character, and capable of being calculated on
beforehand, may afifect wages. In the first place, if the laborers
have, as is often the case, no more than enough to keep them in
working condition, and enable them barely to support the ordi-
nary number of children, it follows that if food grows per-
manently dearer without a rise of wages, a greater number of
the children will prematurely die ; and thus wages will ulti-
mately be higher, but only because the number of people will
be smaller, than if food had remained cheap. But, secondly,
even though wages were high enough to admit of food's be-
coming more costly without depriving the laborers and their
families of necessaries ; though they could bear, physically
speaking, to be worse ofif, perhaps they would not consent to be
so. They might have habits of comfort which were to them as
necessaries, and sooner than forego which, they would put an
additional restraint on their power of multiplication ; so that

332 POLITICAL ECONOMY

wages would rise, not by increase of deaths but by diminution
of births. In these cases, then, wages do adapt themselves to
the price of food, though after an interval of almost a genera-
tion. Mr. Ricardo considers these two cases to comprehend
all cases. He assumes, that there is everywhere a minimum
rate of wages : either the lowest with which it is physically pos-
sible to keep up the population, or the lowest with which the
people will choose to do so. To this minimum he assumes tliat
the general rate of wages ahvavs tenj^s : that they can never
nbe lower, beyond the length of time required for a diminished
rate of increase to make itself felt, and can never long continue
higher. This assumption contains sufficient truth to render it
admissible for the purposes of abstract science ; and the con-
clusion which Mr. Ricardo draws from it, namely, that wages
in the long run rise and fall with the permanent rise of food, is,
like almost all his conclusions, true hypothetically, that is,
granting the suppositions from which he sets out. But in the
application to practice, it is necessary to consider that the min-
imum of which he speaks, especially when it is not a physical,
but what may be termed a moral minimum, is itself liable to
vary. If wages were previously so high that they could bear
reduction, to which the obstacle was a high standard of com-
fort habitual among the laborers, a rise of the price of food,
or any other disadvantageous change in their circumstances,
may operate in two ways : it may correct itself by a rise of
wages, brought about through a gradual efifect on the pruden-
tial check of population ; or it may permanently lower the
standard of living of the class, in case their previous habits in
respect of population prove stronger than their previous habits
in respect of comfort. In that case the injury done to them
will be permanent, and their deteriorated condition will be-
come a new minimum, tending to perpetuate itself as the more
ample minimum did before. It is to be feared that of the two
modes in which the cause may operate, the last is the most fre-
quent, or at all events sufficiently so, to render all propositions
ascribing a self-repairing quality to the calamities which befall
the laboring classes, practically of no validity. There is con-
siderable evidence that the circumstances of the agricultural
laborers in England have more than once in our history sus-
tained great permanent deterioration, from causes which
operated by diminishing the demand for labor, and which, if

WAGES 32,3

population had exercised its power of self-adjustment in obedi-
ence to the previous standard of comfort, could only have had a
temporary effect : but unhappily the poverty in which the class
was plunged during a long series of years, brought that pre-
vious standard into disuse ; and the next generation, growing
up without having possessed those pristine comforts, multi-
plied in turn without any attempt to retrieve them.*

The converse case occurs when, by improvements in agri-
culture, the repeal of corn laws, or other such causes, the neces-
saries of the laborers are cheapened, and they are enabled with
the same wages, to command greater comforts than before.
Wages will not fall inmiediately ; it is even possible that they
may rise ; but they will fall at last, so as to leave the laborers
no better off than before, unless, during this interval of pros-
perity, the standard of comfort regarded as indispensable by
the class, is permanently raised. Unfortunately this salutary
efTect is by no means to be counted upon : it is a much more
difficult thing to raise, than to lower, the scale of living which
the laborers will consider as more indispensable than marrying
and having a family. If they content themselves with enjoying
the greater comfort while it lasts, but do not learn to require it,
they will people down to their old scale of living. If from pov-
erty their children had previously been insufficiently fed or im-
properly nursed, a greater number will now be reared, and the
competition of these, when they grow up, will depress wages,
probably in full proportion to the greater cheapness of food.
If the effect is not produced in this mode, it will be produced by
earlier and more numerous marriages, or by an increased num-
ber of births to a marriage. According to all experience, a great
increase invariably takes place in the number of m^arriages, in
seasons of cheap food and full employment. I cannot, there-
fore, agree in the importance so often attached to the repeal ot
the corn laws, considered merely as a laborer's question, or to
any of the schemes, of which some one or other is at all times
in vogue, for making the laborers a very little better off.
Things which only affect them a very little, make no perma-
nent impression upon their habits and requirements, and they

• See the historical sketch of the con- others which have been published in the
dition of the English peasantry, pre- present generation, by its rational treat-
pared from the best authorities by Mr. ment of questions affecting the eco-
William Thornton, in his work entitled nomical condition of the laboring
" Over- Population and Its Remedy": a classes,
work honorably distinguished from most

334

POLITICAL ECONOMY

soon slide back into their former state. To produce permanent
advantage, the temporary cause operating upon them must be
sufficient to made a great change in their condition — a change
such as will be felt for many years, notwithstanding any stimu-
lus which it may give during one generation to the increase of
people. When, indeed, the improvement is of this signal char-
acter, and a generation grows up which has always been used
to an improved scale of comfort, the habits of this new genera-
tion in respect to population become formed upon a higher
minimum, and the improvement in their condition becomes
permanent. Of cases in point, the most remarkable is France
after the Revolution. The majority of the population being
suddenly raised from misery, to independence and comparative
comfort ; the immediate effect was that population, notwith-
standing the destructive wars of the period, started forward
with unexampled rapidity, partly because improved circum-
stances enabled many children to be reared who would other-
wise have died, and partly from increase of births. The suc-
ceeding generation however grew up with habits considerably
altered ; and though the country was never before in so pros-
perous a state, the annual number of births is now nearly sta-
tionary,* and the increase of population extremely slow.f

§ 3. Wages depend, then, on the proportion between the
number of the laboring population, and the capital or other
funds devoted to the purchase of labor ; we will say, for short-
ness, the capital. If wages are higher at one time or place than
at another, if the subsistence and comfort of the class of hired
laborers are more ample, it is for no other reason than because
capital bears a greater proportion to population. It is not the
absolute amount of accumulation or of production, that is of

* Supra, pp. 177, 178.

t A similar, though not an equal im-
provement in the standard of living took
place among the laborers of England
during the remarkable fifty years from
1715 to 1765, which were distinguished
by such an extraordinary succession of
fine harvests (the years of decided fiefi-
ciency not exceeding five in all that
period) that the average price of v/heat
during those years was much lowei- than
during the previous half century. Mr.
Malthus computes that on the average
of sixty years preceding 1720, the la-
borer could purchase with a day's earn-
ings only two-thirds of a peck of wheat,
while from 1720 to i75;o he could pur-
chase a whole peck. The average price
of wheat according to the Eton tables,
for fifty years ending with 1715, was 41s.

7%d. the quarter, and for the last twenty-
three of these, 45s. 8d., while for the
fifty years following, it was no more
than 34s. iid. So considerable an im-
provement in the condition of the labor-
ing class, though arising from the acci-
dents of seasons, yet continuing for more
than a generation, had time to work a
change in the habitual requirements of
the laboring class; and this period is
always noted as the date of " a marked
improvement of the quality of the food
consumed, and a decided elevation in
the standard of their comforts and con-
veniences."— (Malthus, " Principles of
Political Economy," p. 225.) For the
character of the period, see Mr. Tooke's
excellent " History of Prices," vol. i.
pp. 38 to 61, and for the prices of corn,
the Appendix to that work.

WAGES

335

importance to the laboring- class ; it is not the amount even of
the funds destined for distribution among the laborers : it is
the proportion between those funds and the numbers among
whom they are shared. The condition of the class can be bet-
tered in no other way than by altering that proportion to their
advantage : and every scheme for their benefit, which does
not proceed on this as its foundation, is, for all permanent pur-
poses, a delusion.

In countries like North America and the Australian colonies,
where the knowledge and arts of civilized life, and a high
effective desire of accumulation, co-exist with a boundless ex-
tent of unoccupied land ; the growth of capital easily keeps
pace with the utmost possible increase of population, and is
chiefly retarded by the impracticability of obtaining laborers
enough. All, therefore, who can possibly be born, can find
employment without overstocking the market : every labor-
ing family enjoys in abundance the necessaries, many of the
comforts, and some of the luxuries of life ; and, unless in case
of individual misconduct, or actual inability to work, poverty
does not, and dependence needs not, exist. A similar advan-
tage, though in a less degree, is occasionally enjoyed by some
special class of laborers in old countries, from an extraordinar-
ily rapid growth, not of capital generally, but of the capital
employed in a particular occupation. So gigantic has been the
progress of the cotton manufacture since the inventions of Watt
and Arkwright, that the capital engaged in it has probably
quadrupled in the time which population requires for doubling.
While, therefore, it has attracted from other employments
nearly all the hands which geographical circumstances and the
habits or inclinations of the people rendered available ; and
while the demand it created for infant labor has enlisted the im-
mediate pecuniary interest of the operatives in favor of pro-
moting, instead of restraining, the increase of population ;
nevertheless wages in the great seats of the manufacture are
generally so high, that the collective earnings of a family
amount, on an average of years, to a very satisfactory sum ; and
there is, as yet, no sign of permanent decrease, while the ef-
fect has also been felt in raising the general standard of agricul-
tural wages in the counties adjoining.

But those circumstances of a country, or of an occupation,
in which population can with impunity increase at its utmost

336 POLITICAL ECONOMY

rate, are rare, and transitory. Very few are the countries pre-
senting the needful union of conditions. Either the industrial
arts are backward and stationary, and capital therefore in-
creases slowly ; or the effective desire of accumulation being
low, the increase soon reaches its limit ; or, even though both
these elements are at their highest known degree, the increase
of capital is checked, because there is not fresh land to be re-
sorted to, of as good quality as that already occupied. Though
capital should for a time double itself simultaneously with popu-
lation, if all this capital and population are to find employment
on the same land, they cannot without an unexampled succes-
sion of agricultural inventions continue doubling the produce ;
therefore, if wages do not fall, profits must ; and when profits
fall, increase of capital is slackened. Besides, even if wages did
not fall, the price of food (as will be shown more fully hereafter)
would in these circumstances necessarily rise ; which is equiva-
lent to a fall of wages.

Except, therefore, in the very peculiar cases which I have just
noticed, of which the only one of any practical importance is
that of a new colony, or a country in circumstances equivalent
to it ; it is impossible that population should increase at its
utmost rate without lowering wages. Nor will the fall be
stopped at any point, short of that which either by its physical
or its moral operation, checks the increase of population. In
no old country, therefore, does population increase at anything
like its utmost rate ; in most, at a very moderate rate : in some
countries not at all. These facts are only to be accounted for in
two ways. Either the whole number of births which nature
admits of, and which happen in some circumstances, do not
take place ; or if they do, a large proportion of those who are
born, die. The retardation of increase results either from mor-
tality or prudence ; from Mr. Malthus's positive, or from his
preventive check : and one or the other of these must and does
exist, and very powerfully too, in all old societies. Wherever
population is not kept down by the prudence either of indi-
viduals or of the state, it is kept down by starvation or disease.

Mr. Malthus has taken great pains to ascertain, for almost
every country in the world, which of these checks it is that
operates: and the evidence which he collected on the subject,
in his Essay on Population, may even now be read with advan-
tage. Throughout Asia, and formerly in .most European coun-

WAGES

337

tries in which the laboring classes were not in personal bond-
age, there is, or was, no restrainer of population but death. The
mortality was not always the result of poverty : much of it pro-
ceeded from unskilful and careless management of children,
from uncleanly and otherwise unhealthy habits of life among
the adult population, and from the almost periodical occur-
rence of destructive epidemics. Throughout Europe these
causes of shortened life have much diminished, but they have
not ceased to exist. Until a period not very remote, hardly any
of our large towns kept up its population, independently of the
stream always flowing into them from the rural districts : this
was still true of Liverpool until very recently ; and even in Lon-
don, the mortality is larger, and the average duration of life
shorter, than in rural districts where there is much greater
poverty. In Ireland, epidemic fevers, and deaths from the ex-
haustion of the constitution by insufficient nutriment, have al-
ways accompanied even the most moderate deficiency of the
potato crop. Nevertheless, it cannot now be said that in any
part of Europe, population is principally kept down by disease,
still less by starvation, either in a direct or in an indirect form.
The agency by which it is limited is chiefly preventive, not
(in the language of Mr. Malthus) positive. But the preventive
remedy seldom, I believe, consists in the unaided operation of
prudential motives on a class wholly or mainly composed of
laborers for hire, and looking forward to no other lot. In Eng-
land, for example, I much doubt if the generality of agricultural
laborers practise any prudential restraint whatever. They gen-
erally marry as early, and have as many children to a marriage,
as they would or could do if they were settlers in the United
States. During the generation which preceded the enactment
of the present Poor Law, they received the most direct encour-
agement to this sort of improvidence : being not only assured
of support, on easy terms, whenever out of employment, but
even when in employment, very commonly receiving from the
parish a weekly allowance proportioned to their number of chil-
dren ; and the married with large families being always, from
a short-sighted economy, employed in preference to the un-
married ; which last premium on population still exists. Un-
der such prompting, the rural laborers acquired habits of reck-
lessness, which are so congenial to the uncultivated mind, that
in whatever manner produced, they in general long survive
Vol. I. — 22

338 POLITICAL ECONOMY

their immediate causes. There are so many new elements at
work in society, even in those deeper strata which are inacces-
sible to the mere movements on the surface, that it is hazardous
to affirm anything positive on the mental state or practical im-
pulses of classes and bodies of men, when the same assertion
may be true to-day, and may require great modification in a
few years' time. It does, however, seem, that if the rate of in-
crease of population depended solely on the agricultural la-
borers, it would, as far as dependent on births, and unless re-
pressed by deaths, be as rapid in the southern counties of
England as in America. The restraining principle lies in the
very great proportion of the population composed of the mid-
dle classes and the skilled artisans, who in this country almost
equal in number the common laborers, and on whom prudential
motives do, in a considerable degree, operate.

§ 4. Where a laboring class who have no property but their
daily wages, and no hope of acquiring it, refrain from over-
rapid multiplication, the cause, I believe, has always hitherto
been, either actual legal restraint, or a custom of some sort
which, without intention on their part, insensibly moulds their
conduct, or affords immediate inducements not to marry. It
is not generally known in how many countries of Europe direct
legal obstacles are opposed to improvident marriages. The
communications made to the original Poor Law Commission
by our foreign ministers and consuls in different parts of Eu-
rope, contain a considerable amount of information on this
subject. Mr. Senior, in his preface to those communications,*
says that in the countries which recognize a legal right to reliel,
" marriage on the part of persons in the actual receipt of relief
appears to be everywhere prohibited, and the marriage of those
who are not likely to possess the means of independent support
is allowed by very few. Thus we are told that in Norway no
one can marry without ' showing, to the satisfaction of the cler-
gyman, that he is permanently settled in such a manner as to
offer a fair prospect that he can maintain a family.'

" In Mecklenburg, that ' marriages are delayed by conscrip-
tion in the twenty-second year, and military service for six
years ; besides, the parties must have a dwelling, without which
a clergyman is not permitted to marry them. The men marry

* Forming an Appendix (F) to the and also published by authority as a
General Report of the Commissioners, separate volume.

WAGES 339

at from twenty-five to thirty, the women not much earHer, as
both must first gain by service enough to estabHsh themselves.'

" In Saxony, that ' a man may not marry before he is twenty-
one years old, if liable to serve in the army. In Dresden, pro-
fessionists (by which word artisans are probably meant) may
not marry until they become masters in their trade.'

" In Wurtemberg, that ' no man is allowed to marry till his
twenty-fifth year, on account of his military duties, unless per-
mission be especially obtained or purchased: at that age he
must also obtain permission, which is granted on proving that
he and his wife would have together sufficient to maintain a
family or to establish themselves ; in large towns, say from
800 to 1000 florins (from £66 13s. 4d. to £84 3s. 4d ;) in smaller,
from 400 to 500 florins : in villages, 200 florins (ii6 13s. 4d.)' " *

The minister at Munich says, " The great cause why the
number of the poor is kept so low in this country arises from
the prevention by law of marriages in cases in which it cannot
be proved that the parties have reasonable means of subsist-
ence ; and this regulation is in all places and at all times strictly
adhered to. The effect of a constant and firm observance of
this rule has, it is true, a considerable influence in keeping down
the population of Bavaria, which is at present low for the ex-
tent of country, but it has a most salutary effect in averting
extreme poverty and consequent misery." f

At Lubeck, " marriages among the poor are delayed by the
necessity a man is under, first, of previously proving that he is
in a regular employ, work, or profession, that will enable him
to maintain a wife : and secondly, of becoming a burgher, and
equipping himself in the uniform of the burgher guard, which
together may cost him nearly £4." J At Frankfort, " the gov-
ernment prescribes no age for marrying, but the permission to
marry is only granted on proving a livelihood." §

The allusion, in some of these statements, to military duties,
points out an indirect obstacle to marriage, interposed by the
laws of some countries in which there is no direct leeral re-
straint. In Prussia, for instance, the institutions which com-
pel every able-bodied man to serve for several years in the army,
at the time of life at which imprudent marriages are most likely

•Preface, p. xxxix. t Appendix, p. 419. § Ibid., p. 567.

t Preface, p. xxxiii., or p. 554 of the
Appendix itself.

340

POLITICAL ECONOMY

to take place, are probably a full equivalent, in effect on popu-
lation, for the legal restrictions of the smaller German states.

" So strongly," says Mr. Kay, " do the people of Switzerland
understand from experience the expediency of their sons and
daughters postponing the time of their marriages, that the
councils of state of four or five of the most democratic of the
cantons, elected, be it remembered, by universal suffrage, have
passed laws by which all young persons who marry before they
have proved to the magistrate of their district that they are able
to support a family, are rendered liable to a heavy fine. In
Lucerne, Argovie, Unterwalden, and I believe, St. Gall,
Schweitz, and Uri, laws of this character have been in force for
many years." *

§ 5. Where there is no general law restrictive of marriage,
there are often customs equivalent to it. When the guilds or
trade corporations of the Middle Ages were in vigor, their by-
laws or regulations were conceived with a very vigilant eye to
the advantage which the trade derived from limiting competi-
tion : and they made it very effectually the interest of artisans
not to marry until after passing through the two stages of ap-
prentice and journeyman, and attaining the rank of master. f

* Kay, as before cited, i. 68.

t " In general," says Sismondi, " the
number of masters in each corporation
was fixed, and no one but a master could
keep a shop, or buy and sell on his own
account. Each master could only train
a certain number of apprentices, whom
he instructed in his trade; in some cor-
porations he was only allowed one. Each
master could also employ only a lim-
ited number of workmen, who were
called companions, or journeymen; and
in the trades in which he could only
take one apprentice, he was onlj; al-
lowed to have one, or at most two jour-
neymen. No one was allowed to buy,
sell, or work at a trade, unless he was
either an apprentice, a journeyman, or a
master; no one could become a journey-
man without having served a given num-
ber of years as an apprentice, nor a
master, unless he had served the same
number of years as a journeyman, and
unless he had also executed what was
called his chef d'ceimre (masterpiece) a
piece of work appointed in his trade,
and which was to be judged of by the
corporation. It is seen that this organi-
zation threw entirely into the hands of
the masters the recruiting of the trade.
They alone could take apprentices; but
they were not compelled to take any;
accordingly they required to be paid,
often at a very high rate, for the favor;
and a young man could not enter into
a trade if he had not, at starting, the

sum required to be paid for his appren-
ticeship, and the means necessary for
his support during that apprenticeship;
since for four, five, or seven years, all
his work belonged to his master. His
dependence on the master during that
time was complete; for the master's will,
or even caprice, could close the door of
a lucrative profession upon him. After
the apprentice became a journeyman he
had a little more freedom; he could en-
gage with any master he chose, or pass
from one to another; and as the condi-
tion of a journeyman was only accessi-
ble through apprenticeship, he now be-
gan to profit by the monopoly from
which he had previously suffered, and
was almost sure of getting well paid for
a work which no one else was allowed
to perform. He depended, however, on
the corporation for becoming a master,
and did not, therefore, regard himself as
being yet assured of his lot, or as hav-
ing a permanent position. In general
he did not marry until he had passed as
a master.

" It is certain both in fact and in
theory that the existence of trade cor-
porations hindered, and could not but
hinder, the birth of a superabundant
population. By the statutes of almost
all the guilds, a man could not pass as
master before the age of twenty-five: but
if he had no capital of his own, if he
had not made sufficient savings, he con-
tinued to work as a journeyman much

WAGES 341

In Norway, where the labor is chiefly agricultural, it is forbid-
den to engage a farm-servant for less than a year ; which was
the general English practice until the poor laws destroyed it,
by enabling the farmer to cast his laborers on parish pay when-
ever he did not immediately require their labor. In conse-
quence of this custom, and of its enforcement by law, the whole
of the rather limited class of agricultural laborers in Norway
have an engagement for a year at least, which if the parties are
content with one another, naturally becomes a permanent en-
gagement : hence it is known in every neighborhood whether
there is, or is likely to be, a vacancy, and unless there is, a young
man does not marry, knowing that he could not obtain em-
ployment. The custom still exists in Cumberland and West-
moreland, except that the term is half a year instead of a year ;
and seems to be still attended with the same consequences.
The farm-servants are " lodged and boarded in their masters'
houses, which they seldom leave until, through the death of
some relation or neighbor, they succeed to the ownership or
lease of a cottage farm. What is called surplus labor does not
here exist." * I have mentioned in another chapter the check
to population in England during the last century, from the
difficulty of obtaining a separate dwelling place. f Other cus-
toms restrictive of population might be specified: in some
parts of Italy, it is the practice, according to Sismondi, among
the poor, as it is well known to be in the higher ranks, that all
but one of the sons remain unmarried. But such family ar-
rangements are not likely to exist among day-laborers. They
are the resource of small proprietors and metayers, for pre-
venting too minute a subdivision of the land.

In England generally there is now scarcely a relic of these in-
direct checks to population; except that in parishes owned by
one or a very small number of landowners, the increase of resi-
dent laborers is still occasionally obstructed, by preventing cot-
tages from being built, or by pulling down those which exist;
thus restraining the population liable to become locally charge-
able, without any material effect on population generally, the

longer; some, perhaps the majority of of Political Economy," book iv., chap.

artisans, remained iourneymcn all their 10. See also Adam Smith, book i., chap.

lives. There was, however, scarcely an 10, part 2.

instance of their marrying before they * See Thornton on *' Over-Popula-

were received as masters: had they been tion," page 18, and the authorities there

so imprudent as to desire it, no father cited.

would have given his daughter to a man t Supra, p. 99.

without a position."—" New Principles

342 POLITICAL ECONOMY

work required in those parishes being performed by laborers
settled elsewhere. The surrounding districts always feel them-
selves much aggrieved by this practice, against which they can-
not defend themselves by similar means, since a single acre of
land owned by anyone who does not enter into the combination,
enables him to defeat the attempt, very profitably to himself,
by covering that acre with cottages. To meet these complaints
it has already been under the consideration of Parliament to
abolish parochial settlements, and make the poor rate a charge
not on the parish, but on the whole union. If this proposition
be adopted, which for other reasons is very desirable, it will re-
move the small remnant of what was once a check to popula-
tion: the value of which, however, from the narrow limits of its
operation, must now be considered very trifling.

§ 6. In the case, therefore, of the common agricultural la-
borer, the checks to population may almost be considered as
non-existent. If the growth of the towns, and of the capital
there employed, by which the factory operatives are maintained
at their present average rate of wages notwithstanding their
rapid increase, did not also absorb a great part of the annual ad-
dition to the rural population, there seems no reason in the
present habits of the people why they should not fall into as
miserable a condition as the Irish previous to 1846; and if the
market for our manufactures should, I do not say fall off, but
even cease to expand at the rapid rate of the last fifty years,
there is no certainty that this fate may not be reserved for us.
Without carrying our anticipations forward to such a calamity,
which the great and growing intelligence of the factory popula-
tion would, it may be hoped, avert, by an adaptation of their
habits to their circumstances; the existing condition of the la-
borers of some of the most exclusively agricultural counties.
Wiltshire, Somersetshire, Dorsetshire, Bedfordshire, Bucking-
hamshire, is suf^ciently painful to contemplate. The laborers
of these counties, with large families, and eight or perhaps nine
shillings for their weekly wages when in full employment, have
for some time been one of the stock objects of popular com-
passion : it is time that they had the benefit also of some applica-
tion of common sense.

Unhappily, sentimentality rather than common sense usually
presides over the discussion of these subjects; and while there
is a growing sensitiveness to the hardships of the poor, and a

WAGES 343

ready disposition to admit claims in them upon the good offices
of other people, there is an all but universal unwillingness to
face the real difficulty of their position, or advert at all to the
conditions which nature has made indispensable to the improve-
ment of their physical lot. Discussions on the condition of the
laborers, lamentations over its wretchedness, denunciations of
all who are supposed to be indifferent to it, projects of one kind
or another for improving it, were in no country and in no time
of the world so rife as in the present generation; but there is a
tacit agreement to ignore totally the law of wages, or to dismiss
it in a parenthesis, with such terms as " hard-hearted Mal-
thusianism; " as if it were not a thousand times more hard-heart-
ed to tell human beings that they may, than that they may not,
call into existence swarms of creatures who are sure to be mis-
erable, and most likely to be depraved; and forgetting that the
conduct, which it is reckoned so cruel to disapprove, is a degrad-
ing slavery to a brute instinct in one of the persons concerned,
and most commonly, in the other, helpless submission to a re-
volting abuse of power.

So long as mankind remained in a semi-barbarous state, with
the indolence and the few wants of the savage, it probably was
not desirable that population should be restrained: the pressure of
physical want may have been a necessary stimulus, in that stage
of the human mind, to the exertion of labor and ingenuity re-
quired for accomplishing that greatest of all past changes in hu-
man modes of existence, by which industrial life attained pre-
dominance over the hunting, the pastoral, and the military or
predatory state. Want, in that age of the world, had its uses,
as even slavery had; and there may be corners of the earth
where those uses are not yet superseded, though they might
easily be so were a helping hand held out by more civilized com-
munities. But in Europe the time, if it ever existed, is long
past, when a life of privation had the smallest tendency to make
men either better workmen or more civilized beings. It is, on
the contrary, evident, that if the agricultural laborers were bet-
ter off, they would both work more efficiently, and be better
citizens. I ask, then, is it true, or not, that if their numbers were
fewer they would obtain higher wages? This is the question,
and no other: and it is idle to divert attention from it, by at-
tacking any incidental position of Malthus or some other writer,
and pretending that to refute that, is to disprove the principle of

344 POLITICAL ECONOMY

population. Some, for instance, have achieved an easy victory
over a passing remark of Mr. Malthus, hazarded chiefly by way
of ilkistration, that the increase of food may perhaps be assumed
to take place in an arithmetical ratio, while population increases
in a geometrical: when every candid reader knows that Mr.
Malthus laid no stress on this unlucky attempt to give numerical
precision to things which do not admit of it, and every person
capable of reasoning must see that it is wholly superfluous to his
argument. Others have attached immense importance to a cor-
rection which more recent political economists have made in the
mere language of the earlier followers of Mr. Malthus. Several
writers have said that it is the tendency of population to increase
faster than the means of subsistence. The assertion was true in
the sense in which they meant it, namely that population would
in most circumstances increase faster than the means of subsist-
ence, if it were not checked either by mortality or by prudence.
But inasmuch as these checks act with unequal force at dif-
ferent times and places, it was possible to interpret the language
of these writers as if they had meant that population is usually
gaining ground upon subsistence, and the poverty of the people
becoming greater. Under this interpretation of their meaning,
it was urged that the reverse is the truth : that as civilization ad-
vances, the prudential check tends to become stronger and pop-
ulation to slacken its rate of increase, relatively to subsistence ;
and that it is an error to maintain that population, in any im-
proving community, tends to increase faster than, or even so
fast as subsistence. The word tendency is here used in a totally
dififerent sense from that of the writers who affirmed the propo-
sition: but waiving the verbal question, is it not allowed on
both sides, that in old countries, population presses too closely
upon the means of subsistence? And though its pressure di-
minishes, the more the ideas and habits of the poorest class of
laborers can be improved, to which it is to be hoped that there is
always some tendency in a progressive country, yet since that
tendency has hitherto been, and still is, extremely faint, and (to
descend to particulars) has not yet extended to giving to the
Wiltshire laborers higher wages than eight shilllings a week, the
only thing which it is necessary to consider is, whether that is
a sufficient and suitable provision for a laborer? for if not, popu-
lation does, as an existing fact, bear too great a proportion to the
wages fund; and whether it pressed still harder or not quite so

POPULAR REMEDIES FOR LOW WAGES 345

hard at some former period, is practically of no moment, except
that, if the ratio is an improving one, there is the better hope
that by proper aids and encouragements it may be made to im-
prove more and faster.

It is not, however, against reason, that the argument on this
subject has to struggle; but against a feeHng of dislike, which
' will only reconcile itself to the unwelcome truth, when every
device is exhausted by which the recognition of that truth can
be evaded. It is necessary, therefore, to enter into a detailed ex-
amination of these devices, and to force every position which is
taken up by the enemies of the population principle, in their de-
termination to find some refuge for the laborers, some plausible
means of improving their condition, without requiring the ex-
ercise, either enforced or voluntary, of any self-restraint, or any
greater control than at present over the animal power of multi-
plication. This will be the object of the next chapter.

Chapter XII. — Of Popular Remedies for Low Wages

§ I. The simplest expedient which can be imagined for keep-
ing the wages of labor up to the desirable point, would be to fix
them by law: and this is virtually the object aimed at in a variety
of plans which have at different times been, or still are, current,
for remodelling the relation between laborers and employers.
No one probably ever suggested that wages should be absolutely
fixed ; since the interests of all concerned, often require that they
should be variable; but some have proposed to fix a minimum
of wages, leaving the variations above that point to be adjusted
by competition. Another plan, which has found many advocates
among the leaders of the operatives, is that councils should be
formed, which in England have been called local boards of
trade, in France " conscils de prudhommcs," and otlier names ;
consisting of delegates from the workpeople and from the em-
ployers, who, meeting in conference, should agree upon a rate
of wages, and promulgate it from authority, to be binding gen-
erally on employers and workmen; the ground of decision be-
ing, not the state of the labor-market, but natural equity; to
provide that the workmen shall have reasonable wages, and the
capitalists reasonable profits.

Others again (but these are rather philanthropists interesting
themselves for the laboring classes, than the laboring people

346 POLITICAL ECONOMY

themselves) are shy of admitting the interference of authority
in contracts for labor: they fear that if law intervened, it v^ould
intervene rashly and ignorantly; they are convinced that two
parties, with opposite interests, attempting to adjust those in-
terests by negotiation through their representatives on principles
of equity, when no rule could be laid down to determine what
was equitable, would merely exasperate their differences instead
of healing them; but what it is useless to attempt by the legal
sanction, these persons desire to compass by the moral. Every
employer, they think, ought to give sufficient wages ; and if he
does it not willingly, should be compelled to it by general opin-
ion; the test of sufificient wages being their own feelings, or
what they suppose to be those of the public. This is, I think, a
fair representation of a considerable body of existing opinion on
the subject.

I desire to confine my remarks to the principle involved in all
these suggestions, without taking into account practical diffi-
culties, serious as these must at once be seen to be. I shall sup-
pose that by one or other of these contrivances, wages could be
kept above the point to which they would be brought by com-
petition. This is as much as to say, above the highest rate which
can be afforded by the existing capital consistently with em-
ploying all the laborers. For it is a mistake to suppose that
competition merely keeps down wages. It is equally the means
by which they are kept up. When there are any laborers un-
employed, these, unless maintained by charity, become com-
petitors for hire, and wages fall ; but when all who were out of
work have found employment, wages will not, under the freest
system of competition, fall lower. There are strange notions
afloat concerning the nature of competition. Some people seem
to imagine that its effect is something indefinite; that the com-
petition of sellers may lower prices, and the competition
of laborers may lower wages down to zero, or some un-
assignable minimum. Nothing can be more unfounded.
Goods can only be lowered in price by competition, to the point
which calls forth buyers sufficient to take them off; and wages
can only be lowered by competition until room is made to admit
all the laborers to a share in the distribution of the wages-fund.
If they fell below this point, a portion of capital would remain
unemployed for want of laborers; a counter-competition would
commence on the side of capitalists, and wages would rise.

POPULAR REMEDIES FOR LOW WAGES 347

Since, therefore, the rate of wages which results from compe-
tition distributes the whole wages-fund among the whole labor-
ing population; if law or opinion succeeds in fixing wages above
this rate, some laborers are kept out of employment; and as it
is not the intention of the philanthropists that these should starve,
they must be provided for by a forced increase of the wages-
fund ; by a compulsory saving. It is nothing to fix a minimum
of wages, unless there be a provision that work, or wages at
least, be found for all who apply for it. This, accordingly, is al-
ways part of the scheme; and is consistent with the ideas of
more people than would approve of either a legal or a moral
minimum of wages. Popular sentiment looks upon it as the
duty of the rich, or of the state, to find employment for all the
poor. If the moral influence of opinion does not induce the rich
to spare from their consumption enough to set all the poor to
work at " reasonable wages," it is supposed to be incumbent on
the state to lay on taxes for the purpose, either by local rates or
votes of public money. The proportion between labor and the
wages-fund would thus be modified to the advantage of the la-
borers, not by restriction of population, but by an increase of
capital,

§ 2. If this claim on society could be limited to the existing
generation ; if nothing more were necessary than a compulsory
accumulation, sufficient to provide permanent employment at
ample wages for the existing numbers of the people; such a
proposition would have no more strenuous supporter than my-
self. Society mainly consists of those who live by bodily labor;
and if society, that is, if the laborers, lend their physical force to
protect individuals in the enjoyment of superfluities, they are
entitled to do so, and have always done so, with the reservation
of a power to tax those superfluities for purposes of public util-
ity; among which purposes the subsistence of the people is the
foremost. Since no one is responsible for having been born, no
pecuniary sacrifice is too great to be made by those who have
more than enough, for the purpose of securing enough to all
persons already in existence.

But it is another thing altogether, when those who have pro-
duced and accumulated are called upon to abstain from con-
suming, until they have given food and clothing, not only to all
who now exist, but to all whom these or their descendants may
think fit to call into existence. Such an obligation acknowl-

348 POLITICAL ECONOMY

edged and acted upon, would suspend all checks, both positive
and preventive; there would be nothing to hinder population
from starting forward at its rapidest rate; and as the natural
increase of capital would, at the best, not be more rapid than
before, taxation, to make up the growing deficiency, must ad-
vance with the same gigantic strides. The attempt would of
course be made to exact labor in exchange for support. But
experience has shown the sort of work to be expected from
recipients of public charity. When the pay it not given for the
sake of the work, but the work found for the sake of the pay, in-
efficiency is a matter of certainty: to extract real work from
day-laborers without the power of dismissal, is only practicable
by the power of the lash. It is conceivable, doubtless, that this
objection might be got over. The fund raised by taxation might
be spread over the labor-market generally, as seems to be in-
tended by the supporters of the " right to employment " in
France; without giving to any unemployed laborer a right to
demand support in a particular place or from a particular func-
tionary. The power of dismissal, as regards individual laborers,
would then remain; the government only undertaking to create
additional employment when there was a deficiency, and reserv-
ing, like other employers, the choice of its own workpeople.
But let them work ever so efficiently, the increasing population
could not, as we have so often shown, increase the produce pro-
portionally: the surplus, after all were fed, would bear a less
and less proportion to the whole produce and to the population:
and the increase of people going on in a constant ratio, while
the increase of produce went on in a diminishing ratio, the sur-
plus would in time be wholly absorbed ; taxation for the support
of the poor would engross the whole income of the country; the
payers and the receivers would be melted down into one mass.
The check to population either by death or prudence, could not
then be staved ofif any longer, but must come into operation sud-
denly and at once; everything which places mankind above a
nest of ants or colony of beavers, having perished in the interval.
These consequences have been so often and so clearly pointed
out by authors of reputation, in writings known and accessible,
that ignorance of them on the part of educated persons is no
longer pardonable. It is doubly discreditable in any person set-
ting up for a public teacher, to ignore these considerations; to
dismiss them silently, and discuss or declaim on wages and poor-

POPULAR REMEDIES FOR LOW WAGES 349

laws, not as if these arguments could be refuted, but as if they
did not exist.

Everyone has a right to live. We will suppose this granted.
But no one has a right to bring creatures into life, to be sup-
ported by other people. Whoever means to stand upon the
first of these rights must renounce all pretension to the last. If
a man cannot support even himself unless others help him, those
others are entitled to say that they do not also undertake the
support of any offspring which it is physically possible for him
to summon into the world. Yet there are abundance of writers
and public speakers, including many of most ostentatious pre-
tensions to high feeling, whose views of life are so truly brutish,
that they see hardship in preventing paupers from breeding
hereditary paupers in the workhouse itself. Posterity will one
day ask with astonishment, what sort of people it could be
among whom such preachers could find proselytes.

It would be possible for the state to guarantee employment
at ample wages to all who are born. But if it does this, it is
bound in self-protection, and for the sake of every purpose for
which government exists, to provide that no person shall be born
without its consent. If the ordinary and spontaneous motives
to self-restraint are removed, others must be substituted. Re-
strictions on marriage, at least equivalent to those existing in
some of the German States, or severe penalties on those who
have children when unable to support them, would then be in-
dispensable. Society can feed the necessitous, if it takes their
multiplication under its control; or (if destitute of all moral feel-
ing for the wretched ofifspring) it can leave the last to their dis-
cretion, abandoning the first to their own care. But it cannot
with impunity take the feeding upon itself, and leave the multi-
plying free.

To give profusely to the people, whether under the name of
charity or of employment, without placing them under such in-
fluences that prudential motives shall act powerfully upon them,
is to lavish the means of benefiting mankind, without attaining
the object. Leave the people in a situation in which their condi-
tion manifestly depends upon their numbers, and the greatest
permanent benefit may be derived from any sacrifice made to
improve the physical well-being of the present generation, and
raise, by that means, the habits of their children. But remove
the regulation of their wages from their own control; guarantee

350 POLITICAL ECONOxMY

to them a certain payment, either by law, or by the feeling of the
community; and no amount of comfort that you can give them
will make either them or their descendants look to their own
self-restraint as the proper means for preserving them in that
state. You will only make them indignantly claim the continu-
ance of your guarantee, to themselves and their full complement
of possible posterity.

On these grounds some writers have altogether condemned
the English poor-law, and any system of relief to the able-bodied,
at least when uncombined with systematic legal precautions
against over-population. The famous Act of the 43d of Eliza-
beth undertook, on the part of the public, to provide work and
wages for all the destitute able-bodied: and there is little doubt
that if the intent of that Act had been fully carried out, and no
means had been adopted by the administrators of relief to neu-
tralize its natural tendencies, the poor-rate would by this time
have absorbed the whole net produce of the land and labor of
the country. It is not at all surprising, therefore, that Mr. Mal-
thus and others should at first have concluded against all poor-
laws whatever. It required much experience, and careful ex-
amination of different modes of poor-law management, to give
assurance that the admission of an absolute right to be supported
at the cost of other people, could exist in law and in fact, without
fatally relaxing the springs of industry and the restraints of pru-
dence. This, however, was fully substantiated, by the investiga-
tions of the original Poor Law Commissioners. Hostile as they
are unjustly accused of being to the principle of legal relief, they
are the first who fully proved the compatibility of any Poor Law
in which a right to relief was recognized, with the permanent in-
terests of the laboring class and of posterity. By a collection of
facts, experimentally ascertained in parishes scattered through-
out England, it was shown that the guarantee of support could
be freed from its injurious effects upon the minds and habits of
the people, if the relief, though ample in respect to necessaries,
was accompanied with conditions which they disliked, consist-
ing of some restraints on their freedom, and the privation of
some indulgences. Under this proviso, it may be regarded as
irrevocably established, that the fate of no member of the com-
munity needs be abandoned to chance; that society can, and
therefore ought to insure every individual belonging to it against
the extreme of want; that the condition even of those who are

POPULAR REMEDIES FOR LOW WAGES 351

unable to find their own support, needs not be one of physical
suffering, or the dread of it, but only of restricted indulgence,
and enforced rigidity of discipline. This is surely something
gained for humanity, important in itself, and still more so as a
step to something beyond; and humanity has no worse enemies
than those who lend themselves, either knowingly or uninten-
tionally, to bring odium on this law, or on the principles in
which it originated.

§ 3. Next to the attempts to regulate wages, and provide arti-
ficially that all who are willing to work shall receive an adequate
price for their labor, we have to consider another class of popu-
lar remedies, which do not profess to interfere with freedom of
contract; which leave wages to be fixed by the competition of
the market, but, when they are considered insufificient, endeavor
by some subsidiary resource to make up to the laborers for the
insufficiency. Of this nature was the expedient resorted to by
parish authorities during thirty or forty years previous to 1834,
generally known as the Allowance System. This was first intro-
duced, when through a succession of bad seasons, and conse-
quent high prices of food, the wages of labor had become inade-
quate to afford to the families of the agricultural laborers the
amount of support to which they had been accustomed. Senti-
ments of humanity, joined with the idea then inculcated in high
quarters, that people ought not to be allowed to suffer for hav-
ing enriched their country with a multitude of inhabitants, in-
duced the magistrates of the rural districts to commence giving
parish relief to persons already in private employment; and
when the practice had once been sanctioned, the immediate in-
terest of the farmers, whom it enabled to throw part of the
support of their laborers upon the other inhabitants of the par-
ish, led to a great and rapid extension of it. The principle of
this scheme being avowedly that of adapting the means of every
family to its necessities, it was a natural consequence that more
should be given to the married than to the single, and to those
who had large families than to those who had not: in fact, an
allowance was usually granted for every child. So direct and
positive an encouragement to population is not, however, in-
separable from the scheme: the allowance in aid of wages might
be a fixed thing, given to all laborers alike, and as this is the
least objectionable form which the system can assume, we will
give it the benefit of the supposition.

352 POLITICAL ECONOMY

It is obvious that this is merely another mode of fixing a min-
imum of wages; no otherwise differing from the direct mode,
than in allowing the employer to buy the labor at its market
price, the difference being made up to the laborer from a public
fund. The one kind of guarantee is open to all the objections
which have been urged against the other. It promises to the
laborers that they shall all have a certain amount of wages, how-
ever numerous they may be: and removes, therefore, alike the
positive and the prudential obstacles to an unlimited increase.
But besides the objections common to all attempts to regulate
wages without regulating population, the allowance system has
a peculiar absurdity of its own. This is, that it inevitably takes
from wages with one hand what it adds to them with the other.
There is a rate of wages, either the lowest on which the people
can, or the lowest on which they will consent, to live. We will
suppose this to be seven shillings a week. Shocked at the
wretchedness of this pittance, the parish authorities humanely
make it up to ten. But the laborers are accustomed to seven, and
though they would gladly have more, will live on that (as the
fact proves) rather than restrain the instinct of multiplication.
Their habits will not be altered for the better by giving them
parish pay. Receiving three shillings from the parish, they will
be as well off as before though they should increase sufficiently
to bring down wages to four shillings. They will accordingly
people down to that point; or perhaps, without waiting for an
increase of numbers, there are unemployed laborers enough in
the workhouse to produce the effect at once. It is well known
that the allowance system did practically operate in the mode
described, and that under its influence wages sank to a lower
rate than had been known in England before. During the last
century, under a rather rigid administration of the poor-laws,
population increased slowly, and agricultural wages were con-
siderably above the starvation point. Under the allowance sys-
tem the people increased so fast, and wages sank so low, that
with wages and allowance together, families were worse off than
they had been before with wages alone. When the laborer de-
pends solely on wages, there is a virtual minimum. If wages
fall below the lowest rate which will enable the population to
be kept up, depopulation at least restores them to that lowest
rate. But if the deficiency is to be made up by a forced con-
tribution from all who have anything to give, wages may fall

POPULAR REMEDIES FOR LOW WAGES 353

below starvation point; they may fall almost to zero. This de-
plorable system, worse than any other form of poor-law abuse
yet invented, inasmuch as it pauperizes not merely the unem-
ployed part of the population but the whole, has been abohshed,
and of this one abuse at least it may be said that nobody professes
to wish for its revival.

§ 4. But while this is (it is to be hoped) exploded, there is
another mode of relief in aid of wages, which is still highly popu-
lar; a mode greatly preferable, morally and socially, to parish
allowance, but tending, it is to be feared, to a very similar eco-
nomical result: I mean the much-boasted Allotment System.
This, too, is a contrivance to compensate the laborer for the
insufficiency of his wages, by giving him something else as a
supplement to them : but instead of having them made up from
the poor-rate, he is enabled to make them up for himself, by
renting a small piece of ground, which he cultivates like a garden
by spade labor, raising potatoes and other vegetables for home
consumption, with perhaps some additional quantity for sale.
If he hires the ground ready manured, he sometimes pays for it
at as high a rate as £8 an acre : but getting his own labor
and that of his family for nothing, he is able to gain several
pounds by it even at so high a rent.* The patrons of the system
make it a great point that the allotment shall be in aid of wages,
and not a substitute for them ; that it shall not be such as a la-
borer can live on, but only sufificient to occupy the spare hours
and days of a man in tolerably regular agricultural employment,
with assistance from his wife and children. They usually limit
the extent of a single allotment to a quarter, or something be-
tween a quarter and half an acre. If it exceeds this, without
being enough to occupy him entirely, it will make him, they say,
a bad and uncertain workman for hire: if it is sufficient to take
him entirely out of the class of hired laborers, and to become
his sole means of subsistence, it will make him an Irish cottier:
for which assertion, at the enormous rents usually demanded,
there is some foundation. But in their precautions against cot-
tierism, these well-meaning persons do not perceive, that if the
system they patronize is not a cottier system, it is, in essentials,
neither more nor less than a system of conacre.

There is no doubt a material difference between eking out in-

• See the Evidence on the subject of Allotments, collected by the Commis-'
sioners of Poor Law Inquiry.

Vol. I.— 23

354

POLITICAL ECONOMY

sufficient wages by a fund raised by taxation, and doing the
same thing by means which make a clear addition to the gross
produce of the country. There is also a difiference between
helping a laborer by means of his own industry, and subsidizing
him in a mode which tends to make him careless and idle. On
both these points, allotments have an unquestionable advantage
over parish allowances. But in their effect on wages and popu-
lation, I see no reason why the two plans should substantially
dififer. All subsidies in aid of wages enable the laborer to do
with less remuneration, and therefore ultimately bring down the
price of labor by the full amount, unless a change be wrought in
the ideas and requirements of the laboring class; an alteration
in the relative value which they set upon the gratification of their
instincts, and upon the increase of their comforts and the com-
forts of those connected with them. That any such change in
their character should be produced by the allotment system,
appears to me a thing not to be expected. The possession of
land, we are sometimes told, renders the laborer provident.
Property in land does so; or what is equivalent to property, oc-
cupation on fixed terms and on a permanent tenure. But mere
hiring from year to year was never found to have any such
effect. Did possession of land render the Irishmen provident?
Testimonies, it is true, abound, and I do not seek to discredit
them, of the beneficial change produced in the conduct and con-
dition of laborers, by receiving allotments. Such an effect is to
be expected while those who hold them are a small number; a
privileged class, having a status above the common level, which
they are unwilling to lose. They are also, no doubt, almost al-
ways, originally a select class, composed of the most favorable
speciments of the laboring people: which, however, is attented
with the inconvenience that the persons to whom the system
facilitates marrying and having children, are precisely those
who would otherwise be the most likely to practice prudential
restraint. As affecting the general condition of the laboring
class, the scheme, as it seems to me, must be either nugatory
or mischievous. If only a few laborers have allotments, they
are naturally those who could do best without them, and no good
is done to the class: while, if the system were general, and every
or almost every laborer had an allotment, I believe the effect
would be much the same as when every or almost every laborer
had an allowance in aid of wages. I think there can be no doubt

POPULAR REMEDIES FOR LOW WAGES 355

that if, at the end of the last century, the Allotment instead of
the Allowance system had been generally adopted in England, it
would equally have broken down the practical restraints on
population which at that time did really exist; population would
have started forward exactly as in fact it did; and in twenty
years, wages plus the allotment would have been, as wages plus
the allowance actually were, no more than equal to the former
wages without any allotment. The only difference in favor of
allotments would have been, that they make the people grow
their own poor-rates.

I am at the same time quite ready to allow, that in some cir-
cumstances, the possession of land at a fair rent, even without
ownership, by the generality of laborers for hire, operates as
a cause not of low, but of high wages. This, however, is when
their land renders them, to the extent of actual necessaries, inde-
pendent of the market for labor. There is the greatest dififer-
ence between the position of people who Hve by wages, with
land as an extra resource, and of people who can, in case of ne-
cessity, subsist entirely on their land, and only work for hire
to add to their comforts. Wages are likely to be high where
none are compelled by necessity to sell their labor. " People
who have at home some kind of property to apply their labor to,
will not sell their labor for wages that do not afford them a better
diet than potatoes and maize, although in saving for themselves
they may live very much on potatoes and maize. We are often
surprised in travelling on the Continent, to hear of a rate of
day's wages very high, considering the abundance and cheap-
ness of food. It is want of the necessity or inclination to take
work, that makes day-labor scarce, and, considering the price of
provisions, dear, in many parts of the Continent, where property
in land is widely diffused among the people." * There are parts
of the Continent where, even of the inhabitants of the towns,
scarcely one seems to be exclusively dependent on his ostensible
employment; and nothing else can explain the high price they
put on their services, and the carelessness they evince as to
whether they are employed at all. But the effect would be far
different if their land or other resources gaVe them only a frac-
tion of a subsistence, leaving them under an undiminished neces-
sity of selling their labor for wages in an overstocked market.
Their land would then merely enable them to exist on smaller

• Laing's " Notes of a Traveller," p. 456.

356 POLITICAL ECONOMY

wages, and to carry their multiplication so much the further be-
fore reaching the point below which they either could not, or
would not, descend.

To the view I have taken of the effect of allotments, I see no
argument which can be opposed, but that employed by Mr.
Thornton,* with whom on this subject I am at issue. His de-
fence of allotments is grounded on the general doctrine, that it
is only the very poor who multiply without regard to conse-
quences, and that if the condition of the existing generation
could be greatly improved, which he thinks might be done by
the allotment system, their successors would grow up with an in-
creased standard of requirements, and would not have families
until they could keep them in as much comfort as that in which
they had been brought up themselves. I agree in as much of
this argument as goes to prove that a sudden and Very great
improvement in the condition of the poor, has always, through
its effect on their habits of life, a chance of becoming permanent.
What happened at the time of the French Revolution is an exam-
ple. But I cannot think that the addition of a quarter or even half
an acre to every laborer's cottage, and that too at a rack rent,
would (after the fall of wages which would be necessary to ab-
sorb the already existing mass of pauper labor) make so great a
difference in the comforts of the family for a generation to come,
as to raise up from childhood a laboring population with a really
higher permanent standard of requirements and habits. So
small a portion of land could only be made a permanent benefit,
by holding out encouragement to acquire by industry and sav-
ing, the means of buying it outright: a permission which, if ex-
tensively made use of, would be a kind of education in fore-
thought and frugality to the entire class, the effects of which
might not cease with the occasion. The benefit would however
arise, not from what was given them, but from what they were
stimulated to acquire.

No remedies for low wages have the smallest chance of being
efficacious, which do not operate on and through the minds and
habits of the people. While these are unaffected, any contriv-
ance, even if successful, for temporarily improving the condi-
tion of the very poor, would but let slip the reins by which
population was previously curbed; and could only, therefore, con-
tinue to produce its effect, if, by the whip and spur of taxation,

• See Thornton on " Over-Population," chap. viii.

REMEDIES FOR LOW WAGES 357

capital were compelled to follow at an equally accelerated pace.
But this process could not possibly continue for long together,
and whenever it stopped, it would leave the country with an in-
creased number of the poorest class, and a diminished propor-
tion of all except the poorest, or, if it continued long enough,
with none at all. For " to this complexion must come at last "
all social arrangements, which remove the natural checks to
population without subsistuting any others.

Chapter XIII. — The Remedies for Low Wages Further

Considered

§ I. By what means, then, is poverty to be contended against?
How is the evil of low wages to be remedied? If the ex-
pedients usually recommended for the purpose are not adapted
to it, can no others be thought of? Is the problem incapable
of solution? Can political economy do nothing, but only object
to everything, and demonstrate that nothing can be done ?

If this were so, political economy might have a needful, but
would have a melancholy, and a thankless task. If the bulk
of the human race are always to remain as at present, slaves
to toil in which they have no interest, and therefore feel no
interest — drudging from early morning till late at night for
bare necessaries, and with all the intellectual and moral defi-
ciencies which that implies — without resources either in mind
or feelings — untaught, for they cannot be better taught than
fed ; selfish, for all their thoughts are required for themselves ;
without interests or sentiments as citizens and members of
society, and with a sense of injustice rankling in their minds,
equally for what they have not, and for what others have ; I
know not what there is which should make a person with any
capacity of reason, concern himself about the destinies of the
human race. There would be no wisdom for anyone but in
extracting from life, with Epicurean indifference, as much
personal satisfaction to himself and those with whom he sym-
pathizes, as it can yield without injury to anyone, and letting
the unmeaning bustle of so-called civilized existence roll bv
unheeded. But there is no ground for such a view of human
affairs. Poverty, like most social evils, exists because men
follow their brute instincts without due consideration. But
society is possible, precisely because man is not necessarily a

358 POLITICAL ECONOMY

brute. Civilization in every one of its aspects is a struggle
against the animal instincts. Over some even of the strongest
of them, it has shown itself capable of acquiring abundant con-
trol. It has artificialized large portions of mankind to such an
extent, that of many of their most natural inclinations they
have scarcely a vestige or a remembrance left. If it has not
brought the instinct of population under as much restraint as is
needful, we must remember that it has never seriously tried.
What efforts it has made, have mostly been in the contrary di-
rection. Religion, morality, and statesmanship have vied with
one another in incitements to marriage, and to the multiplica-
tion of the species, so it be but in wedlock. Religion has not
even yet discontinued its encouragements. The Roman Catholic
clergy (of any other clergy it is unnecessary to speak, since no
other have any considerable influence over the poorer classes)
everywhere think it their duty to promote marriage, in order
to prevent fornication. There is still in many minds a strong
religious prejudice against the true doctrine. The rich, pro-
vided the consequences do not touch themselves, think it im-
pugns the wisdom of Providence to suppose that misery can
result from the operation of a natural propensity : the poor
think that " God never sends mouths but he sends meat." No
one would guess from the language of either, that man had any
voice or choice in the matter. So complete is the confusion
of ideas on the whole subject: owing in a great degree to
the mystery in which it is shrouded by a spurious delicacy,
which prefers that right and wrong should be mismeasured and
confounded on one of the subjects most momentous to human
welfare, rather than that the subject should be freely spoken
of and discussed. People are little aware of the cost to man-
kind of this scrupulosity of speech. The diseases of society
can, no more than corporal maladies, be prevented or cured
without being spoken about in plain language. All experience
shows that the mass of mankind never judge of moral questions
for themselves, never see anything to be right or wrong until
they have been frequently told it ; and who tells them that they
have any duties in the matter in question, while they keep within
matrimonial limits? Who meets with the smallest condemna-
tion, or rather, who does not meet with sympathy and benevo-
lence, for any amount of evil which he may have brought upon
himself and those dependent on him, by this species of inconti-

REMEDIES FOR LOW WAGES 359

nence? While a man who is intemperate in drink, is discoun-
tenanced and despised by all who profess to be moral people,
it is one of the chief grounds made use of in appeals to the
benevolent, that the applicant has a large family and is unable
to maintain them.*

One cannot wonder that silence on this great department of
human duty should produce unconsciousness of moral obliga-
tions, when it produces oblivion of physical facts. That it is
possible to delay marriage, and to live in abstinence while un-
married, most people are willing to allow : but when persons
are once married, the idea, in this country, never seems to enter
anyone's mind that having or not having a family, or the num-
ber of which it shall consist, is amenable to their own control.
One would imagine that children were rained down upon mar-
ried people, direct from heaven, without their being art or part
in the matter ; that it was really^ as the common phrases have
it, God's will, and not their own, which decided the numbers
of their offspring. Let us see what is a Continental philoso-
pher's opinion on this point ; a man among the most benevolent
of his time, and the happiness of whose married life has been
celebrated.

" When dangerous prejudices," says Sismondi,f " have not
become accredited, when a morality contrary to our true duties
toward others, and especially toward those to whom we have
given life, is not inculcated in the name of the most sacred
authority ; no prudent man contracts matrimony before he is
in a condition which gives him an assured means of living,
and no married man has a greater number of children than
he can properly bring up. The head of a family thinks, with
reason, that his children may be contented with the condition
in which he himself has lived ; and his desire will be that the
rising generation should represent exactly the departing one :
that one son and one daughter arrived at the marriageable age
should replace his own father and mother; that the children
of his children should in their turn replace himself and his wife ;
that his daughter should find in another family the precise
equivalent of the lot which will be given in his own family to
the daughter of another, and that the income which sufficed

* Little improvement can he expected and clerpy are foremost to set the ex-

in morality until the producinK lar^e ample of this kind of incontinence

families is repnrded with the same feel- what can he expected from the poor?
inijs as drunkenness or any other i)hysi- t " New Principles of Political Econo-

cal excess. But while the aristocracy my," book vii. chap. 5.

360 POLITICAL ECONOMY

for the parents will suffice for the children." In a country in-
creasing in wealth, some increase of numbers would be admis-
sible, but that is a question of detail, not of principle. " When-
ever this family has been formed, justice and humanity require
that he should impose on himself the same restraint which is
submitted to by the unmarried. When we consider how small,
in every country, is the number of natural children, we must
admit that this restraint is on the whole sufficiently effectual.
In a country where population has no room to increase, or in
which its progress must be so slow as to be hardly perceptible,
when there are no places vacant for new establishments, a
father who has eight children must expect, either that six of
them will die in childhood, or that three men and three women
among his cotemporaries, and in the next generation three of
his sons and three of his daughters, will remain unmarried on
his account."

§ 2. Those who think it hopeless that the laboring classes
should be induced to practise a sufficient degree of prudence in
regard to the increase of their families, because they have hith-
erto stopped short of that point, show an inability to estimate
the ordinary principles of human action. Nothing more would
probably be necessary to secure that result, than an opinion
generally diffused that it was desirable. As a moral principle,
such an opinion has never yet existed in any country : it is
curious that it does not so exist in countries in which, from the
spontaneous operation of individual forethought, population is,
comparatively speaking, efficiently repressed. What is prac-
tised as prudence, is still not recognized as duty ; the talkers
and writers are mostly on the other side, even in France, where
a sentimental horror of Malthus is almost as rife as in this
country. Many causes may be assigned, besides the modern
date of the doctrine, for its not having yet gained possession
of the general mind. Its truth has, in some respects, been its
detriment. One may be permitted to doubt whether, except
among the poor themselves (for whose prejudices on this sub-
ject there is no difficulty in accounting) there has ever yet
been, in any class of society, a sincere and earnest desire that
wages should be high. There has been plenty of desire to keep
down the poor-rate, but, that done, people have been very will-
ing that the working classes should be ill off. Nearly all who
are not laborers themselves, are employers of labor, and are

REMEDIES FOR LOW WAGES 361

not sorry to get the commodity cheap. It is a fact, that even
Boards of Guardians, who are supposed to be official apostles
of anti-population doctrines, will seldom hear patiently of any-
thing which they are pleased to designate as Malthusianism.
Boards of Guardians in rural districts, principally consist of
farmers, and farmers, it is well known, in general dislike even
allotments, as making the laborers " too independent." From
the gentry, who are in less immediate contact and collision of
interest with the laborers, better things might be expected, and
the gentry of England are usually charitable. But charitable
people have human infirmities, and would, very often, be se-
cretly not a little dissatisfied if no one needed their charity:
it is from them one oftenest hears the base doctrine, that God
has decreed there shall always be poor. When one adds to this,
that nearly every person who has had in him any active spring
of exertion for a social object, has had some favorite reform to
effect, which he thought the admission of this great principle
would throw into the shade ; has had corn laws to repeal, or
taxation to reduce, or small notes to issue, or the charter to
carry, or the church to revive or abolish, or the aristocracy to
pull down, and looked upon everyone as an enemy who thought
anything important except his object ; it is scarcely wonderful
that since the population doctrine was first promulgated, nine-
tenths of the talk has always been against it, and the remaining
tenth only audible at intervals ; and that it has not yet pene-
trated far among those who might be expected to be the least
willing recipients of it, the laborers themselves.

But let us try to imagine what would happen if the idea
became general among the laboring class, that the competition
of too great numbers was the principal cause of their poverty ;
so that every laborer looked (with Sismondi) upon every other
who had more than the number of children which the circum-
stances of society allowed to each, as doing him a wrong — as
filling up the place which he was entitled to share. Anyone
who supposes that this state of opinion would not have a great
effect on conduct, must be profoundly ignorant of human nat-
ure ; can never have considered how large a portion of the
motives which induce the generality of men to take care even
of their own interests, is derived from regard for opinion —
from the expectation of being disliked or despised for not doing
it. In the particular case in question, it is not too much to

362 POLITICAL ECONOMY

say that over-indulgence is as much caused by the stimulus of
opinion as by the mere animal propensity ; since opinion uni-
versally, and especially among the most uneducated classes, has
connected ideas of spirit and power with the strength of the
instinct, and of inferiority with its moderation or absence; a
perversion of sentiment caused by its being the means, and the
stamp, of a dominion exercised over other human beings. The
effect would be great of merely removing this factitious stimu-
lus; and when once opinion shall have turned itself into an
adverse direction, a revolution will soon take place in this de-
partment of human conduct. We are often told that the most
thorough perception of the dependence of wages on population
will not influence the conduct of a laboring man, because it is
not the children he himself can have that will produce any effect
in generally depressing the labor market. True : and it is also
true, that one soldier's running away will not lose the battle ;
accordingly it is not that consideration which keeps each soldier
in his rank : it is the disgrace which naturally and inevitably
attends on conduct by any one individual, which if pursued
by a majority, everybody can see would be fatal. Men are
seldom found to brave the general opinion of their class, unless
supported either by some principle higher than regard for opin-
ion, or by some strong body of opinion elsewhere.

It must be borne in mind also, that the opinion here in ques-
tion, as soon as it attained any prevalence, would have powerful
auxiliaries in the great majority of women. It is seldom by
the choice of the wife that families are too numerous ; on her
devolves (along with all the physical suft'ering and at least a
full share of the privations) the whole of the intolerable domes-
tic drudgery resulting from the excess. To be relieved from
it would be hailed as a blessing by multitudes of women who
now never venture to urge such a claim, but who would urge
it, if supported by the moral feelings of the community. Among
the barbarisms which law and morals have not yet ceased to
sanction, the most disgusting surely is, that any human being
should be permitted to consider himself as having a right to
the person of another.

If the opinion were once generally established among the
laboring class that their welfare required a due regulation of
the numbers of families, the respectable and well-conducted of
the body would conform to the prescription, and only those

REMEDIES FOR LOW WAGES 363

would exempt themselves from it, who were in the habit of
making light of social obligations generally; and there would
be then an evident justification for converting the moral obliga-
tion against bringing children into the world who are a burden
to the community, into a legal one ; just as in many other cases
of the progress of opinion, the law ends by enforcing against
recalcitrant minorities, obligations which to be useful must be
general, and which, from a sense of their utility, a large major-
ity have voluntarily consented to take upon themselves. There
would be no need, however, of legal sanctions, if women were
admitted, as on all other grounds they have the clearest title
to be, to the same rights of citizenship with men. Let them cease
to be confined by custom to one physical function as their means
of living and their source of influence, and they would have
for the first time an equal voice with men in what concerns that
function : and of all the improvements in reserve for mankind
which it is now possible to foresee, none might be expected to
be so fertile as this in almost every kind of moral and social
benefit.

It remains to consider what chance there is that opinion and
feelings, grounded on the law of the dependence of wages on
population, will arise among the laboring classes ; and by what
means such opinions and feelings can be called forth. Before
considering the grounds of hope on this subject, a hope which
many persons, no doubt, will be ready, without consideration,
to pronounce chimerical, I will remark, that unless a satisfac-
tory answer can be made to these two questions, the industrial
system prevailing in this country, and regarded by many writers
as the ne plus ultra of civilization — the dependence of the whole
laboring class of the community on the wages of hired labor —
is irrevocably condemned. The question we are considering is,
whether, of this state of things, overpopulation and a degraded
condition of the laboring class are the inevitable consequence.
If a prudent regulation of population be not reconcilable with
the system of hired labor, the system is a nuisance, and the
grand object of economical statesmanship should be (by what-
ever arrangements of property, and alterations in the modes
of applying industry), to bring the laboring people under the
influence of stronger and more obvious inducements to this
kind of prudence, than the relation of workmen and employers
can afford.

364 POLITICAL ECONOMY

But there exists no such incompatibiHty. The causes of pov-
erty are not so obvious at first sight to a population of hired
laborers, as they are to one of proprietors, or as they would
be to a socialist community. They are, however, in no way
mysterious. The dependence of wages on the number of com-
petitors for employment, is so far from hard of comprehension,
or unintelligible to the laboring classes, that by great bodies
of them it is already recognized and habitually acted on. It is
familiar to all Trades Unions ; every successful combination
to keep up wages, owes its success to contrivances for restrict-
ing the number of the competitors ; all skilled trades are anxious
to keep down their own numbers, and many impose, or endeavor
to impose, as a condition upon employers, that they shall not
take more than a prescribed number of apprentices. There is,
of course, a great difference between limiting their numbers by
excluding other people, and doing the same thing by a restraint
imposed on themselves : but the one as much as the other shows
a clear perception of the relation between their numbers and
their remuneration. The principle is understood in its applica-
tion to any one employment, but not to the general mass of em-
ployment. For this there are several reasons : first, the opera-
tion of causes is more easily and distinctly seen in the more
circumscribed field : secondly, skilled artisans are a more in-
telligent class than ordinary manual laborers ; and the habit
of concert, and of passing in review their general condition as
a trade, keeps up a better understanding of their collective in-
terests : thirdly and lastly, they are the most provident, because
they are the best off, and have the most to preserve. What,
however, is clearly perceived and admitted in particular in-
stances, it cannot be hopeless to see understood and acknowl-
edged as a general truth. Its recognition, at least in theory,
seems a thing which must necessarily and immediately come
to pass, when the minds of the laboring classes become capable
of taking any rational view of their own aggregate condition.
Of this the great majority of them have until now been inca-
pable, either from the uncultivated state of their intelligence,
or from poverty, which leaving them neither the fear of worse,
nor the smallest hope of better, makes them careless of the con-
sequences of their actions, and without thought for the future.
§ 3. For the purpose therefore of altering the habits of the
laboring people, there is need of a twofold action, directed si-

REMEDIES FOR LOW WAGES 365

multaneously upon their intelligence and their poverty. An
effective national education of the children of the laboring class,
is the first thing needful : and, coincidently with this, a system
of measures which shall (as the Revolution did in France) ex-
tinguish extreme poverty for one whole generation.

This is not the place for discussing, even in the most general
manner, either the principles or the machinery of national edu-
cation. But it is to be hoped that opinion on the subject is
advancing, and that an education of mere words would not
now be deemed sufficient, slow as our progress is toward pro-
viding anything better even for the classes to whom society
professes to give the very best education it can devise. Without
entering into disputable points, it may be asserted without
scruple, that the aim of all intellectual training for the mass of
the people, should be to cultivate common sense; to qualify
them for forming a sound practical judgment of the circum-
stances by which they are surrounded. Whatever, in the intel-
lectual department, can be superadded to this, is chiefly orna-
mental ; while this is the indispensable groundwork on which
education must rest. Let this object be acknowledged and kept
in view as the thing to be first aimed at, and there will be little
difficulty in deciding either what to teach, or in what manner
to teach it.

An education directed to diffuse good sense among the people,
with such knowledge as would qualify them to judge of the ten-
dencies of their actions, would be certain, even Vv^ithout any
direct inculcation, to raise up a public opinion by which intem-
perance and improvidence of every kind would be held discred-
itable, and the improvidence which overstocks the labor market
w^ould be severely condemned, as an offence against the common
weal. But though the sufficiency of such a state of opinion, sup-
posing it formed, to keep the increase of population within
proper limits, cannot, I think, be doubted ; yet, for the forma-
tion of the opinion, it would not do to trust to education alone.
Education is not compatible with extreme poverty. It is im-
possible effectually to teach an indigent population. And it
is difficult to make those feci the value of comfort who have
never enjoyed it, or those appreciate the wretchedness of a pre-
carious subsistence, who have been made reckless by always
living from hand to mouth. Individuals often struggle upward
into a condition of ease ; but the utmost that can be expected

366 POLITICAL ECONOMY

from a whole people is to maintain themselves in it ; and im-
provement in the habits and requirements of the mass of un-
skilled day laborers will be difficult and tardy, unless means can
be contrived of raising the entire body to a state of tolerable
comfort, and maintaining them in it until a new generation
grows up.

Toward effecting this object there are two resources avail-
able, without wrong to anyone, without any of the liabilities
of mischief attendant on voluntary or legal charity, and not
only without weakening, but on the contrary strengthening
every incentive to industry, and every motive to forethought.

§ 4. The first is, a great national measure of colonization.
I mean, a grant of public money, sufficient to remove at once,
and establish in the colonies, a considerable fraction of the
youthful agricultural population. By giving the preference, as
Mr. Wakefield proposes, to young couples, or when these can-
not be obtained, to families with children nearly grown up,
the expenditure would be made to go the furthest possible to-
ward accomplishing the end, while the colonies would be sup-
plied with the greatest amount of what is there in deficiency
and here in superfluity, present and prospective labor. It has
been shown by others, and the grounds of the opinion will be
exhibited in a subsequent part of the present work, that coloni-
zation on an adequate scale might be so conducted as to cost
the country nothing, or nothing that would not be certainly
repaid ; and that the funds required, even by way of advance,
would not be drawn from the capital employed in maintaining
labor, but from that surplus which cannot find employment at
such profit as constitutes an adequate remuneration for the
abstinence of the possessor, and which is therefore sent abroad
for investment, or wasted at home in reckless speculations. That
portion of the income of the country which is habitually inef-
fective for any purpose of benefit to the laboring class, would
bear any draught which it could be necessary to make on it for
the amount of emigration which is here in view.

The second resource would be, to devote all common land,
hereafter brought into cultivation, to raising a class of small
proprietors. It has long enough been the practice to take these
lands from public use, for the mere purpose of adding to the
domains of the rich. It is time that what is left of them should
be retained as an estate sacred to the benefit of the poor. The

REMEDIES FOR LOW WAGES 367

machinery for administering it already exists, having been cre-
ated by the General Inclosure Act. What I would propose
(though, I confess, with small hope of its being soon adopted)
is, that in all future cases in which common land is permitted
to be inclosed, such portion should first be sold or assigned as
is sufficient to compensate the owners of manorial or common
rights, and that the remainder should be divided into sections
of five acres or thereabouts, to be conferred in absolute property
on individuals of the laboring class who would reclaim and
bring them into cultivation by their own labor. The prefer-
ence should be given to such laborers, and there are many of
them, as had saved enough to maintain them until their first
crop was got in, or whose character was such as to induce some
responsible person to advance to them the requisite amount on
their personal security. The tools, the manure, and in some
cases the subsistence also, might be supplied by the parish, or
by the state ; interest for the advance, at the rate yielded by
the public funds, being laid on as a perpetual quit-rent, with
power to the peasant to redeem it at any time for a moderate
number of years' purchase. These little landed estates might,
if it were thought necessary, be made indivisible by law ; though,
if the plan worked in the manner designed, I should not appre-
hend any objectionable degree of subdivision. In case of in-
testacy, and in default of amicable arrangement among the
heirs, they might be bought by government at their value, and
regranted to some other laborer who could give security for
the price. The desire to possess one of these small properties
would probably become, as on the Continent, an inducement to
prudence and economy pervading the whole laboring popula-
tion; and that great desideratum among a people of hired la-
borers would be provided, an intermediate class between them
and their employers ; affording them the double advantage, of
an object for their hopes, and, as there would be good reason
to anticipate, an example for their imitation.

It would, however, be of little avail that either or both of
these measures of relief should be adopted, unless on such a
scale, as would enable the whole body of hired laborers remain-
ing on the soil to obtain not merely employment, but a large
addition to the present wages — such an addition as would en-
able them to live and bring up their children in a degree of com-
fort and independence to which they have hitherto been stran-

368 POLITICAL ECONOMY

gers. When the object is to raise the permanent condition of
a people, small means do not merely produce small effects, they
produce no effect at all. Unless comfort can be made as habit-
ual to a whole generation as indigence is now, nothing is ac-
complished; and feeble half measures do but fritter away re-
sources, far better reserved until the improvement of public
opinion and of education shall raise up politicians who will not
think that merely because a scheme promises much, the part of
statesmanship is to have nothing to do with it.

I have left the preceding paragraphs as they were written,
since they remain true in principle, though it is no longer urgent
to apply their specific recommendations to the present state of
this country. The extraordinary cheapening of the means of
transport, which is one of the great scientific achievements of
the age, and the knowledge which nearly all classes of the people
have now acquired, or are in the way of acquiring, of the con-
dition of the labor market in remote parts of the world, have
opened up a spontaneous emigration from these islands to the
new countries beyond the ocean, which does not tend to dimin-
ish, but to increase ; and which, without any national measure
of systematic colonization, may prove sufficient to effect a mate-
rial rise of wages in Great Britain, as it has already done in
Ireland, and to maintain that rise unimpaired for one or more
generations. Emigration, instead of an occasional vent, is be-
coming a steady outlet for superfluous numbers ; and this new
fact in modern history, together with the flush of prosperity
occasioned by free trade, have granted to this overcrowded
country a temporary breathing time, capable of being employed
in accomplishing those moral and intellectual improvements in
all classes of the people, the very poorest included, which would
render improbable any relapse into the overpeopled state.
Whether this golden opportunity will be properly used, depends
on the wisdom of our councils ; and whatever depends on that,
is always in a high degree precarious. The grounds of hope
are, that there has been no time in our history when mental
progress has depended so little on governments, and so much
on the general disposition of the people ; none in which the
spirit of improvement has extended to so many branches of
human affairs at once, nor in which all kinds of suggestions
tending to the public good, in every department, from the hum-
blest physical to the highest moral or intellectual, were heard

DIFFERENCES OF WAGES 369

with so little prejudice, and had so good a chance of becoming
known and being fairly considered.

Chapter XIV. — Of the Differences of Wages in Different

Employments

§ I. In treating of wages, we have hitherto confined our-
selves to the causes which operate on them generally, and en
masse; the laws which govern the remuneration of ordinary
or average labor: without reference to the existence of differ-
ent kinds of work which are habitually paid at different rates,
depending in some degree on different laws. We will now take
into consideration these differences, and examine in what man-
ner they affect or are affected by the conclusions already es-
tablished.

A well-known and very popular chapter of Adam Smith *
contains the best exposition yet given of this portion of the
subject. I cannot indeed think his treatment so complete and
exhaustive as it has sometimes been considered ; but as far as
it goes, his analysis is tolerably successful.

The differences, he says, arise partly from the policy of Eu-
rope, which nowhere leaves things at perfect liberty, and partly
" from certain circumstances in the employments themselves,
which either really, or at least in the imaginations of men, make
up for a small pecuniary gain in some, and counterbalance
a great one in others." These circumstances he considers to
be : " First, the agreeableness or disagreeableness of the em-
ployments themselves ; secondly, the easiness and cheapness,
or the difficulty and expense of learning them ; thirdly, the con-
stancy or inconstancy of employment in them ; fourthly, the
small or great trust which must be reposed in those who exer-
cise them ; and fifthly, the probability or improbability of suc-
cess in them."

Several of these points he has very copiously illustrated:
though his examples are sometimes drawn from a state of facts
now no longer existing. " The w'ages of labor vary with the
ease or hardship, the cleanliness or dirtiness, the honorableness
or dishonorableness of the employment. Thus, in most places,
take the year round, a journeyman tailor earns less than a
journeyman weaver. His work is much easier." Things have

* " Wealth of Nations," book i. chap. lo.
Vol. I.— 24

370 POLITICAL ECONOMY

much altered, as to a weaver's remuneration, since Adam
Smith's time; and the artisan whose work was more difficult
than that of a tailor, can never, I think, have been the common
weaver. " A journeyman weaver earns less than a journeyman
smith. His work is not always easier, but it is much cleanlier."
A more probable explanation is, that it requires less bodily
strength. " A journeyman blacksmith, though an artificer, sel-
dom earns so much in twelve hours as a collier, who is only
a laborer, does in eight. His work is not quite so dirty, is less
dangerous, and is carried on in daylight, and above ground.
Honor makes a great part of the reward of all honorable pro-
fessions. In point of pecuniary gain, all things considered,"
their recompense is, in his opinion, below the average. " Dis-
grace has the contrary effect. The trade of a butcher is a
brutal and an odious business ; but it is in most places more
profitable than the greater part of common trades. The most
detestable of all employments, that of public executioner, is,
in proportion to the quantity of work done, better paid than
any common trade whatever."

One of the causes which make hand-loom weavers cling to
their occupation in spite of the scanty remuneration which it
now yields, is said to be a peculiar attractiveness, arising from
the freedom of action which it allows to the workman. " He
can play or idle," says a recent authority,* " as feeling or incli-
nation lead him ; rise early or late, apply himself assiduously
or carelessly, as he pleases, and work up at any time, by in-
creased exertion, hours previously sacrificed to indulgence or
recreation. There is scarcely another condition of any portion
of our working population thus free from external control. The
factory operative is not only mulcted of his wages for absence,
but, if of frequent occurrence, discharged altogether from his
employment. The bricklayer, the carpenter, the painter, the
joiner, the stonemason, the outdoor laborer, have each their
appointed daily hours of labor, a disregard of which would lead
to the same result." Accordingly, " the weaver will stand by
his loom while it will enable him to exist, however miserably ;
and many, induced temporarily to quit it, have returned to it
again, when work was to be had."

" Employment is much more constant," continues Adam

• Mr. Muggeridge's Report to the Handloom Weavers Inquiry Commis-
sion.

DIFFERENCES OF WAGES 371

Smith, " in some trades than in others. In the greater part of
manufactures, a journeyman m.ay be pretty sure of employ-
ment almost every day in the year that he is able to work " (the
interruptions of business arising from overstocked markets,
or from a suspension of demand, or from a commercial crisis,
must be excepted). " A mason or bricklayer, on the contrary,
can work neither in hard frost nor in foul weather, and his em-
ployment at all other times depends upon the occasional calls
of his customers. He is liable, in consequence, to be frequently
without any. What he earns, therefore, while he is employed,
must not only maintain him while he is idle, but make him some
compensation for those anxious and desponding moments which
the thought of so precarious a situation must sometimes occa-
sion. When the computed earnings of the greater part of man-
ufacturers, accordingly, are nearly upon a level with the day
wages of common laborers, those of masons and bricklayers
are generally from one-half more to double those wages. No
species of skilled labor, however, seems more easy to learn than
that of masons and bricklayers. The high wages of those work-
men, therefore, are not so much the recompense of their skill,
as the compensation for the inconstancy of their employment.

" When the inconstancy of the employment is combined with
the hardship, disagreeableness, and dirtiness of the work, it
sometimes raises the wages of the most common labor above
those of the most skilful artificers. A collier working by the
piece is supposed, at Newcastle, to earn commonly about double,
and in many parts of Scotland about three times, the wages of
common labor. His high wages arise altogether from the hard-
ship, disagreeableness, and dirtiness of his work. His employ-
ment may, upon most occasions, be as constant as he pleases.
The coal-heavers in London exercise a trade which in hardship,
dirtiness, and disagreeableness, almost equals that of colliers;
and from the unavoidable irregularity in the arrivals of coal-
ships, the employment of the greater part of them is necessarily
very inconstant. If colliers, therefore, commonly earn double
and triple the wages of common labor, it ought not to seem un-
reasonable that coal-heavers should sometimes earn four or five
times those wages. In the inquiry made into their condition
a few years ago, it was found that at the rate at which they
were then paid, they could earn about four times the wages of
common labor in London. How extravagant soever these earn-

372 POLITICAL ECONOMY

ings may appear, if they were more than sufficient to compen-
sate all the disagreeable circumstances of the business, there
would soon be so great a number of competitors as, in a trade
which has no exclusive privilege, would quickly reduce them
to a lower rate."

These inequalities of remuneration, which are supposed to
compensate for the disagreeable circumstances of particular
employments, would, under certain conditions, be natural con-
sequences of perfectly free competition: and as between em-
ployments of about the same grade, and filled by nearly the
same description of people, they are, no doubt, for the most part,
realized in practice. But it is altogether a false view of the
state of facts, to present this as the relation which generally
exists between agreeable and disagreeable employments. The
really exhausting and the really repulsive labors, instead of
being better paid than others, are almost invariably paid the
worst of all, because performed by those who have no choice.
It would be otherwise in a favorable state of the general labor
market. If the laborers in the aggregate, instead of exceeding,
fell short of the amount of employment, work which was gen-
erally disliked would not be undertaken, except for more than
ordinary wages. But when the supply of labor so far exceeds
the demand that to find employment at all is an uncertainty, and
to be offered it on any terms a favor, the case is totally the
reverse. Desirable laborers, those whom everyone is anxious
to have, can still exercise a choice. The undesirable must take
what they can get. The more revolting the occupation, the
more certain it is to receive the minimum of remuneration, be-
cause it devolves on the most helpless and degraded, on those
who from squalid poverty, or from want of skill and education,
are rejected from all other employments. Partly from this
cause, and partly from the natural and artificial monopolies
which will be spoken of presently, the inequalities of wages are
generally in an opposite direction to the equitable principle of
compensation erroneously represented by Adam Smith as the
general law of the remuneration of labor. The hardships and
the earnings, instead of being directly proportional, as in any
just arrangements of society they would be, are generally in
an inverse ratio to one another.

One of the points best illustrated by Adam Smith, is the in-
fluence exercised on the remuneration of an employment by the

DIFFERENCES OF WAGES 373

uncertainty of success in it. If the chances are great of total
failure, the reward in case of success must be sufficient to make
up, in the general estimation, for those adverse chances. But,
owing to another principle of human nature, if the reward comes
in the shape of a few great prizes, it usually attracts competitors
in such numbers that the average remuneration may be reduced
not only to zero, but even to a negative quantity. The success
of lotteries proves that this is possible : since the aggregate
body of adventurers in lotteries necessarily lose, otherwise the
undertakers could not gain. The case of certain professions is
considered by Adam Smith to be similar. " The probability
that any particular person shall ever be qualified for the em-
ployment to which he is educated, is very different in different
occupations. In the greater part of mechanic trades, success
is almost certain, but very uncertain in the liberal professions.
Put your son apprentice to a shoemaker, there is little doubt
of his learning to make a pair of shoes ; but send him to study
the law, it is at least twenty to one if ever he makes such pro-
ficiency as will enable him to live by the business. In a per-
fectly fair lottery, those who draw the prizes ought to gain all
that is lost by those who draw the blanks. In a profession where
twenty fail for one that succeeds, that one ought to gain all that
should have been gained by the unsuccessful twenty. The
counsellor-at-law, who, perhaps, at near forty years of age,
begins to make something by his profession, ought to receive
the retribution, not only of his own so tedious and expensive
education, but of that of more than twenty others who are
never likely to make anything by it. How extravagant soever
the fees of counsellors-at-law may sometimes appear, their real
retribution is never equal to this. Compute in any particular
place what is likely to be annually gained, and what is likely
to be annually spent, by all the different workmen in any com-
mon trade, such as that of shoemakers or weavers, and you
will find that the former sum will generally exceed the latter.
Rut make the same computation with regard to all the coun-
sellors and students of law, in all the different inns of court,
and you will find that their annual gains bear but a small pro-
portion to their annual expense, even though you rate the
former as high, and the latter as low, as can well be done."

Whether this is true in our own day, when the gains of the
few are incomparably greater than in the time of Adam Smith,

374 POLITICAL ECONOMY

but also the unsuccessful aspirants much more numerous, those
who have the appropriate information must decide. It does
not, however, seem to be sufficiently considered by Adam Smith,
that the prizes which he speaks of comprise not the fees of coun-
sel only, but the places of emolument and honor to which their
profession gives access, together with the coveted distinction
of a conspicuous position in the public eye.

Even where there are no great prizes, the mere love of ex-
citement is sometimes enough to cause an adventurous employ-
ment to be overstocked. This is apparent " in the readiness
of the common people to enlist as soldiers, or to go to sea.
. . . The dangers and hair-breadth escapes of a life of adven-
tures, instead of disheartening young people, seem frequently
to recommend a trade to them. A tender mother, among the
inferior ranks of people, is often afraid to send her son to school
at a sea-port town, lest the sight of the ships and the conversa-
tion and adventures of the sailors should entice him to go to
sea. The distant prospect of hazards, from which we can hope
to extricate ourselves by courage and address, is not disagree-
able to us, and does not raise the wages of labor in any employ-
ment. It is otherwise with those in which courage and address
can be of no avail. In trades which are known to be very un-
wholesome, the wages of labor are always remarkably high.
Unwholesomeness is a species of disagreeableness, and its ef-
fects upon the wages of labor are to be ranked under that gen-
eral head."

§ 2. The preceding are cases in which inequality of remu-
neration is necessary to produce equality of attractiveness, and
are examples of the equalizing effect of free competition. The
following are cases of real inequality, and arise from a different
principle. " The wages of labor vary according to the small
or great trust which must be reposed in the workmen. The
wages of goldsmiths and jewellers are everywhere superior to
those of many other workmen, not only of equal, but of much
superior ingenuity ; on account of the precious materials with
which they are intrusted. We trust our health to the physician,
our fortune and sometimes our life and reputation to the lawyer
and attorney. Such confidence could not safely be reposed in
people of a very mean or low condition. Their reward must
be such, therefore, as may give them that rank in society, which
so important a trust requires."

DIFFERENCES OF WAGES 375

The superiority of reward is not here the consequence of
competition, but of its absence ; not a compensation for disad-
vantages inlierent in the employment, but an extra advantage ;
a kind of monopoly price, the effect not of a legal, but of what
has been termed a natural monopoly. If all laborers were trust-
worthy it would not be necessary to give extra pay to working
goldsmiths on account of the trust. The degree of integrity
required being supposed to be uncommon, those who can
make it appear that they possess it are able to take advantage
of the peculiarity, and obtain higher pay in proportion to its
rarity. This opens a class of considerations which Adam
Smith, and most other political economists, have taken into
far too little account, and from inattention to which, he has
given a most imperfect exposition of the wide difference be-
tween the remuneration of common labor and that of skilled
employments.

Some employments require a much longer time to learn,
and a much more expensive course of instruction than others ;
and to this extent there is, as explained by Adam Smith, an in-
herent reason for their being more highly remunerated. If
an artisan must work several years at learning his trade before
he can earn anything, and several years more before becoming
sufficiently skilful for its finer operations, he must have a pros-
pect of at last earning enough to pay the wages of all this past
labor, with compensation for the delay of payment, and an
indemnity for the expenses of his education. His wages, con-
sequently, must yield, over and above the ordinary amount,
an annuity sufficient to repay these sums, with the common
rate of profit, within the number of years he can expect to live
and be in working condition. This, which is necessary to place
the skilled employments, all circumstances taken together, on
the same level of advantage with the unskilled, is the smallest
difference which can exist for any length of time between the
two remunerations, since otherwise no one would learn the
skilled employments. And this amount of difference is all
which Adam Smith's principles account for. When the dis-
parity is greater, he seems to think that it must be explained by
apprentice laws, and the rules of corporations, which restrict
admission into many of the skilled employments. But, inde-
pendently of these or any other artificial monopolies, there is a
natural monopoly in favor of skilled laborers against the un-

376 POLITICAL ECONOMY

skilled, which makes the difference of reward exceed, some-
times in a manifold proportion, what is sufficient merely to
equalize their advantages. If unskilled laborers had it in their
power to compete with skilled, by merely taking the trouble
of learning the trade, the difference of wages might not exceed
what would compensate them for that trouble, at the ordinary
rate at which labor is remunerated. But the fact that a course
of instruction is required, of even a low degree of costliness, or
that the laborer must be maintained for a considerable time
from other sources, suffices everywhere to exclude the great
body of the laboring people from the possibility of any such
competition. Until lately, all employments which required
even the humble education of reading and writing, could be
recruited only from a select class, the majority having had no
opportunity of acquiring those attainments. All such employ-
ments, accordingly, were immensely overpaid, as measured by
the ordinary remuneration of labor. Since reading and writ-
ing have been brought within the reach of a multitude, the
monopoly price of the lower grade of educated employments
has greatly fallen, the competition for them having increased
in an almost incredible degree. There is still, however, a much
greater disparity than can be accounted for on the principle of
competition. A clerk from whom nothing is required but the
mechanical labor of copying, gains more than an equivalent for
his mere exertion if he receives the wages of a bricklayer's
laborer. His work is not a tenth part as hard, it is quite as easy
to learn, and his condition is less precarious, a clerk's place be-
ing generally a place for life. The higher rate of his remunera-
tion, therefore, must be partly ascribed to monopoly, the small
degree of education required being not even yet so generally
diffused as to call forth the natural number of competitors ;
and partly to the remaining influence of an ancient custom,
which requires that clerks should maintain the dress and
appearance of a more highly paid class. In some manual em-
ployments, requiring a nicety of hand which can only be ac-
quired by long practice, it is difficult to obtain at any cost work-
men in sufficient numbers, who are capable of the most delicate
kind of work ; and the wages paid to them are only limited by
the price which purchasers are willing to give for the com-
modity they produce. This is the case with some working
watchmakers, and with the makers of some astronomical and

DIFFERENCES OF WAGES 377

optical instruments. If workmen competent to such employ-
ments were ten times as numerous as they are, there would be
purchasers for all which they could make, not indeed at the
present prices, but at those lower prices which would be the
natural consequence of lower wages. Similar considerations
apply in a still greater degree to employments which it is at-
tempted to confine to persons of a certain social rank, such as
what are called the liberal professions ; into which a person of
what is considered too low a class of society, is not easily ad-
mitted, and if admitted, does not easily succeed.

So complete, indeed, has hitherto been the separation, so
strongly marked the line of demarcation, between the different
grades of laborers, as to be almost equivalent to a hereditary
distinction of caste ; each employment being chiefly recruited
from the children of those already employed in it, or in employ-
ments of the same rank with it in social estimation, or from the
children of persons who, if originally of a lower rank, have suc-
ceeded in raising themselves by their exertions. The liberal
professions are mostly supplied by the sons of either the profes-
sional, or the idle classes : the more highly skilled manual em-
ployments are filled up from the sons of skilled artisans, or
the class of tradesmen who rank with them : the lower classes of
skilled employments are in a similar case ; and unskilled la-
borers, with occasional exceptions, remain from father to son
in their pristine condition. Consequently the wages of each
class have hitherto been regulated by the increase of its own
population, rather than of the general population of the coun-
try. If the professions are overstocked, it is because the class
of society from which they have always mainly been supplied,
has greatly increased in number, and because most of that class
have numerous families, and bring up some at least of their
sons to professions. If the wages of artisans remain so much
higher than those of common laborers, it is because artisans
are a more prudent class, and do not marry so early or so in-
considerately. The changes, however, now so rapidly taking
place in usages and ideas, are undermining all these distinc-
tions : the habits or disabilities which chained people to their
hereditary condition are fast wearing away, and every class is
exposed to increased and increasing competition from at least
the class immediately below it. The general relaxation of con-
ventional barriers, and the increased facilities of education

378 POLITICAL ECONOMY

which already are, and will be in a much greater degree,
brought within the reach of all, tend to produce, among many
excellent effects, one which is the reverse ; they tend to bring
down the wages of skilled labor. The inequality of remunera-
tion between the skilled and the unskilled is, without doubt,
very much greater than is justifiable ; but it is desirable that
this should be corrected by raising the unskilled, not by lower-
ing the skilled. If, however, the other changes taking place
in society are not accompanied by a strengthening of the
checks to population on the part of laborers generally, there
will be a tendency to bring the lower grades of skilled laborers
under the influence of a rate of increase regulated by a lower
standard of living than their own, and thus to deteriorate their
condition without raising that of the general mass ; the stim-
ulus given to the multiplication of the lowest class being suffi-
cient to fill up without difficulty the additional space gained by
them from those immediately above.

§ 3. A modifying circumstance still remains to be noticed,
which interferes to some extent with the operation of the prin-
ciples thus far brought to view. While it is true, as a general
rule, that the earnings of skilled labor, and especially of any
labor which requires school education, are at a monopoly rate,
from the impossibility, to the mass of the people, of obtaining
that education ; it is also true that the policy of nations, or the
bounty of individuals, formerly did much to counteract the
effect of this limitation of competition by offering eleemosynary
instruction to a much larger class of persons than could have
obtained the same advantages by paying their price. Adam
Smith has pointed out the operation of this cause in keeping
down the remuneration of scholarly or bookish occupations
generally, and in particular of clergymen, literary men, and
schoolmasters, or other teachers of youth. I cannot better set
forth this part of the subject than in his words :

" It has been considered as of so much miportance that a
proper number of young people should be educated for certain
professions, that sometimes the public, and sometimes the piety
of private founders, have established many pensions, scholar-
ships, exhibitions, bursaries, etc., for this purpose, which draw
many more people into those trades than could otherwise pre-
tend to follow them. In all Christian countries, I believe, the
education of the greater part of churchmen is paid for in this

DIFFERENCES OF WAGES 379

manner. Very few of them are educated altogether at their
own expense. The long, tedious, and expensive education,
therefore, of those who are, will not always procure them a
suitable reward, the church being crowded with people who,
in order to get employment, are willing to accept of a much
smaller recompense than what such an education would other-
wise have entitled them to ; and in this manner the competition
of the poor takes away the reward of the rich. It would be
indecent, no doubt, to compare either a curate or a chaplain
with a journeyman in any common trade. The pay of a curate
or a chaplain, however, may very properly be considered as of
the same nature with the wages of a journeyman. They are, all
three, paid for their work according to the contract which they
mav happen to make with their respective superiors. Till after
the middle of the fourteenth century, five marks, containing
as much silver as ten pounds of our present money, was in Eng-
land the usual pay of a curate or a stipendiary parish priest, as
we find it regulated by the decrees of several different national
councils. At the same period fourpence a day, containing the
same quantity of silver as a shilling of our present money, was
declared to be the pay of a master-mason, and threepence a
day, equal to ninepence of our present money, that of a journey-
man mason.* The wages of both these laborers, therefore,
supposing them to have been constantly employed, were much
superior to those of the curate. The wages of the master-
mason, supposing him to have been without employment one-
third of the year, would have fully equalled them. By the 12th
of Queen Anne, c. 12, it is declared ' That whereas for want of
sufficient maintenance and encouragement to curates, the
cures have in several places been meanly supplied, the bishop
is therefore empowered to appoint by writing under his hand
and seal a sufficient certain stipend or allowance, not exceeding
fifty, and not less than twenty pounds a year.' Forty pounds
a year is reckoned at present very good pay for a curate, and
notwithstanding this act of parliament, there are many cura-
cies under twenty pounds a year. This last sum does not ex-
ceed what is frequently earned by common laborers in many
country parishes. Whenever the law has attempted to regulate
the wages of workmen, it has always been rather to lower them
than to raise them. But the law has upon many occasions at-

* See the Statute of Laborers, 25 Edw. III.

380 POLITICAL ECONOMY

tempted to raise the wages of curates, and for the dignity of
the Church, to obhge the rectors of parishes to give them more
than the wretched maintenance which they themselves might
be wilhng to accept of. And in both cases the law seems to
have been equally ineffectual, and has never been either able
to raise the wages of curates or to sink those of laborers to the
degree that was intended, because it has never been able to
hinder either the one from being willing to accept of less than
the legal allowance, on account of the indigence of their situa-
tion and the multitude of their competitors ; or the other from
receiving more, on account of the contrary competition of those
who expected to derive either profit or pleasure from employ-
ing them."

" In professions in which there are no benefices, such as law (?)
and physic, if an equal proportion of people were educated
at the public expense, the competition would soon be so great
as to sink very much their pecuniary reward. It might then
not be worth any man's while to educate his son to either of
those professions at his own expense. They would be entirely
abandoned to such as had been educated by those public char-
ities ; whose numbers and necessities would oblige them in
general to content themselves with a very miserable recom-
pense.

" That unprosperous race of men, commonly called men of
letters, are pretty much in the situation which lawyers and
physicians probably would be in upon the foregoing supposi-
tion. In every part of Europe, the greater part of them have
been educated for the church, but have been hindered by dif-
ferent reasons from entering into holy orders. They have gen-
erally, therefore, been educated at the public expense, and their
numbers are everywhere so great as to reduce the price of
their labor to a very paltry recompense.

" Before the invention of the art of printing, the only em-
ployment by which a man of letters could make anything by
his talents, was that of a public or private teacher, or by com-
municating to other people the curious and useful knowledge
which he had acquired himself: and this is still surely a more
honorable, a more useful, and in general even a more profitable
employment than that other of writing for a bookseller, to
which the art of printing has given occasion. The time and
study, the genius, knowledge, and application requisite to

DIFFERENCES OF WAGES 381

qualify an eminent teacher of the sciences, are at least equal to
what is necessary for the greatest practitioners in law and
physic. But the usual reward of the eminent teacher bears no
proportion to that of the lawyer or physician ; because the trade
of the one is crowded with indigent people who have been
brought up to it at the public expense, whereas those of the
other two are encumbered with very few who have not been
educated at their own. The usual recompense, however, of
public and private teachers, small as it may appear, would un-
doubtedly be less than it is, if the competition of those yet more
indigent men of letters who write for bread was not taken out
of the market. Before the invention of the art of printing, a
scholar and a beggar seem to have been terms very nearly
synonymous. The different governors of the universities be-
fore that time appear to have often granted licenses to their
scholars to beg."

§ 4. The demand for literary labor has so greatly increased
since Adam Smith wrote, while the provisions for eleemosynary
education have nowhere been much added to, and in the coun-
tries which have undergone revolutions have been much dimin-
ished, that little effect in keeping down the recompense of
literary labor can now be ascribed to the influence of those
institutions. But an effect nearly equivalent is now produced
by a cause somewhat similar — the competition of persons who,
by analogy with other arts, may be called amateurs. Literary
occupation is one of those pursuits in which success may be
attained by persons the greater part of whose time is taken
up by other employments ; and the education necessary for
it, is the common education of all cultivated persons. The
inducements to it, independently of money, in the present state
of the world, to all who have either vanity to gratify, or per-
sonal or public objects to promote, are strong. These motives
now attract into this career a great and increasing number of
persons who do not need its pecuniary fruits, and who would
equally resort to it if it afforded no remuneration at all. In our
own country (to cite known examples), the most influential,
and on the whole most eminent philosophical writer of recent
times (Bentham), the greatest political economist (Ricardo),
the most ephemerally celebrated, and the really greatest poets
(Byron and Shelley), and the most successful writer of prose
fiction (Scott), were none of them authors by profession ; and

382 POLITICAL ECONOMY

only two of the five, Scott and Byron, could have supported
themselves by the w^orks which they wrote. Nearly all the high
departments of authorship are, to a great extent, similarly
filled. In consequence, although the highest pecuniary prizes
of successful authorship are incomparably greater than at any
former period, yet on any rational calculation of the chances,
in the existing competition, scarcely any writer can hope to
gain a living by books, and to do so by magazines and reviews
becomes daily more difficult. It is only the more troublesome
and disagreeable kinds of literary labor, and those which con-
fer no personal celebrity, such as most of those connected with
newspapers, or with the smaller periodicals, on which an edu-
cated person can now rely for subsistence. Of these, the re-
muneration is, on the whole, decidedly high ; because, though
exposed to the competition of what used to be called " poor
scholars " (persons who have received a learned education
from some public or private charity), they are exempt from that
of amateurs, those who have other means of support being
seldom candidates for such employments. Whether these con-
siderations are not connected with something radically amiss
in the idea of authorship as a profession, and whether any so-
cial arrangement under which the teachers of mankind con-
sist of persons giving out doctrines for bread, is suited to be,
or can possibly be, a permanent thing — would be a subject well
worthy of the attention of thinkers.

The clerical, like the literary profession, is frequently adopted
by persons of independent means, either from religious zeal,
or for the sake of the honor or usefulness which may belong
to it, or for a chance of the high prizes which it holds out ; and
it is now principally for this reason that the salaries of curates
are so low ; those salaries, though considerably raised by the
influence of public opinion, being still generally insufficient as
the sole means of support for one who has to maintain the ex-
ternals expected from a clergyman of the established church.

When an occupation is carried on chiefly by persons who
derive the main portion of their subsistence from other sources,
its remuneration may be lower almost to any extent, than the
wages of equally severe labor in other employments. The
principal example of the kind is domestic manufactures. When
spinning and knitting were carried on in every cottage, by fam-
ilies deriving their principal support from agriculture, the price

DIFFERENCES OF WAGES 383

at which their produce was sold (which constituted the remu-
neration of the labor) was often so low, that there would have
been required great perfection of machinery to undersell it.
The amount of the remuneration in such a case, depends
chiefly upon whether the quantity of the commodity, produced
by this description of labor, suffices to supply the whole of the
demand. If it does not, and there is consequently a necessity
for some laborers who devote themselves entirely to the em-
ployment, the price of the article must be sufficient to pay
those laborers at the ordinary rate, and to reward therefore
very handsomely the domestic producers. But if the demand
is so limited that the domestic manufacture can do more than
satisfy it, the price is naturally kept down to the lowest rate at
which peasant families think it worth while to continue the
production. It is, no doubt, because the Swiss artisans do not
depend for the whole of their subsistence upon their looms,
that Zurich is able to maintain a competition in the European
market with English capital, and English fuel and machinery.*
Thus far, as to the remuneration of the subsidiary employ-
ment ; but the effect to the laborers of having this additional
resource, is almost certain to be (unless peculiar counteracting
causes intervene) a proportional diminution of the wages of
their main occupation. The habits of the people (as has already
been so often remarked) everywhere require some particular
scale of living, and no more, as the condition without which
they will not bring up a family. Whether the income which
maintains them in this condition comes from one source or
from two, makes no difference : if there is a second source of
income, they require less from the first ; and multiply (at least
this has always hitherto been the case) to a point which leaves
them no more from both employments than they would prob-
ably have had from either if it had been their sole occupation.
For the same reason it is found that, ccctcris paribus, those
trades are generally the worst paid, in which the wife and chil-
dren of the artisan aid in the work. The income which the
habits of the class demand, and down to which they are almost
sure to multiply, is made up, in those trades, by the earnings
of the whole family, while in others the same income must be

• Four-fift!is of the manufacturers of a tenth part of the population; and they

the Canton of Zurich arc small farmers, consume a prcatcr quantity of cotton

generally proprietors of their farms. The per inhabitant than either France or

cotton manufacture occupies either EnRland. See the Statistical Account of

wholly or partially 23,000 people, nearly Zurich, formerly cited, pp. 105, 108, no.

384 POLITICAL ECONOMY

obtained by the labor of the man alone. It is even probable
that their collective earnings will amount to a smaller sum
than those of the man alone in other trades ; because the pru-
dential restraint on marriage is unusually weak when the only
consequence immediately felt is an improvement of circum-
stances, the joint earnings of the two going further in their
domestic economy after marriage than before. Such accord-
ingly is the fact, in the case of hand-loom weavers. In most
kinds of weaving, women can and do earn as much as men,
and children are employed at a very early age ; but the ag-
gregate earnings of a family are lower than in almost any other
kind of industry, and the marriages earlier. It is noticeable
also that there are certain branches of hand-loom weaving in
which wages are much above the rate common in the trade, and
that these are the branches in which neither women nor young
persons are employed. These facts were authenticated by the
inquiries of the Hand-loom Weavers Commission, which made
its report in 1841. No argument can be hence derived for the
exclusion of women from the liberty of competing in the labor
market ; since even when no more is earned by the labor of a
man and a woman than would have been earned by the man
alone, the advantage to the woman of not depending on a mas-
ter for subsistence may be more than an equivalent. It can-
not, however, he considered desirable as a permanent element
in the condition of a laboring class, that the mother of the fam-
ily (the case of single women is totally different) should be
under the necessity of working for subsistence, at least else-
where than in their place of abode. In the case of children,
who are necessarily dependent, the influence of their competi-
tion in depressing the labor market is an important element in
the question of limiting their labor, in order to provide better
for their education.

§ 5. It deserves consideration, why the wages of women are
generally lower, and very much lower, than those of men.
They are not universally so. Where men and women work at
the same employment, if it be one for which they are equally
fitted in point of physical power, they are not always unequally
paid. Women, in factories, sometimes earn as much as men :
and so they do in hand-loom weaving, which, being paid by
the piece, brings their efficiency to a sure test. When the
efficiency is equal, but the pay unequal, the only explanation

DIFFERENCES OF WAGES 385

that can be given is custom ; grounded either in a prejudice,
or in the present constitution of society, which, making almost
every woman, socially speaking, an appendage of some man,
enables men to take systematically the lion's share of whatever
belongs to both. But the principal question relates to the
peculiar employments of women. The remuneration of these
is always, I believe, greatly below that of employments of equal
skill and equal disagreeableness, carried on by men. In some
of these cases the explanation is evidently that already given :
as in the case of domestic servants, whose wages, speaking
generally, are not determined by competition, but are greatly
in excess of the market value of the labor, and in this excess,
as in almost all things which are regulated by custom, the male
sex obtains by far the largest share. In the occupations in
which employers take full advantage of competition, the low
wages of women as compared with the ordinary earnings of
men. are a proof that the employments are overstocked : that
although so much smaller a number of women, than of men,
support themselves by wages, the occupations which law and
usage make accessible to them are comparatively so few, that
the field of their employment is still more over-crowded. It
must be observed, that as matters now stand, a sufBcient degree
of overcrowding may depress the wages of women to a much
lower minimum than those of men. The wages, at least of
single women, must be equal to their support ; but need not be
more than equal to it ; the minimum, in their case, is the pit-
tance absolutely requisite for the sustenance of one human
being. Now the lowest point to which the most superabundant
competition can permanently depress the wages of a man, is
always somewhat more than this. Where the wife of a labor-
ing man does not by general custom contribute to his earn-
ings, the man's wages must be at least sufficient to support
himself, a wife, and a number of children adequate to keep
up the population, since if it were less, the population would
not be kept up. And even if the wife earns something, their
joint wages must be sufficient to support, not only themselves,
but (at least for some years) their children also. The nc plus
ultra of low wages, therefore, (except during some transitory
crisis, or in some decaying employment,) can hardly occur in
any occupation which the person employed has to live by,
except the occupations of women.
Vol. I. — 25

386 POLITICAL ECONOMY

§ 6. Thus far, we have, through this discussion, proceeded
on the supposition that competition is free, so far as regards
human interference ; being limited only by natural causes, or
by the unintended efifect of general social circumstances. But
law or custom may interfere to limit competition. If appren-
tice laws, or the regulations of corporate bodies, make the ac-
cess to a particular employment slow, costly, or difficult, the
wages of that employment may be kept much above their
natural proportion to the wages of common labor. They might
be so kept without any assignable limit, were it not that wages
which exceed the usual rate require corresponding prices, and
that there is a limit to the price at which even a restricted num-
ber of producers can dispose of all they produce. In most
civilized countries, the restrictions of this kind which once ex-
isted have been either abolished or very much relaxed, and will,
no doubt, soon disappear entirely. In some trades, however,
and to some extent, the combinations of workmen produce a
similar effect. Those combinations always fail to uphold wages
at an artificial rate, unless they also limit the number of com-
petitors. But they do occasionally succeed in accomplishing
this. In several trades the workmen have been able to make it
almost impracticable for strangers to obtain admission either
as journeymen or as apprentices, except in limited numbers,
and under such restrictions as they choose to impose. It was
given in evidence to the Hand-loom Weavers Commission,
that this is one of the hardships which aggravate the grievous
condition of that depressed class. Their own employment is
overstocked and almost ruined ; but there are many other
trades which it would not be difficult for them to learn : to this,
however, the combinations of workmen in those other trades
are said to interpose an obstacle hitherto insurmountable.

Notwithstanding, however, the cruel manner in which the
exclusive principle of these combinations operates in a case
of this peculiar nature, the question, whether they are on the
whole more useful or mischievous, requires to be decided on an
enlarged consideration of consequences, among which such a
fact as this is not one of the most important items. Putting
aside the atrocities sometimes committed by workmen in the
way of personal outrage or intimidation, which cannot be too
rigidly repressed ; if the present state of the general habits of
the people were to remain forever unimproved, these partial

DIFFERENCES OF WAGES 387

combinations, in so far as they do succeed in keeping up the
wages of any trade by limiting its numbers, might be looked
upon as simply intrenching round a particular spot against the
inroads of over-population, and making the wages of the class
depend upon their own rate of increase, instead of depending
on that of a more reckless and improvident class than them-
selves. What at first sight seems the injustice of excluding
the more numerous body from sharing the gains of a compara-
tively few, disappears when we consider that by being ad-
mitted, they would not be made better ofif, for more than a short
time ; the only permanent effect which their admission would
produce, would be to lower the others to their own level. To
what extent the force of this consideration is annulled when a
tendency commences towards diminished over-crowding in the
laboring classes generally, and what grounds of a different
nature there may be for regarding the existence of trade com-
binations as rather to be desired than deprecated, will be con-
sidered in a subsequent chapter of this work, with the subject
of Combination Laws.

§ 7. To conclude this subject, I must repeat an observation
already made, that there are kinds of labor of which the wages
are fixed by custom, and not by competition. Such are the
fees or charges of professional persons : of physicians, sur-
geons, barristers, and even attorneys. These, as a general rule,
do not vary, and though competition operates upon those
classes as much as upon any others, it is by dividing the busi-
ness, not, in general, by diminishing the rate at which it is paid.
The cause of this, perhaps, has been the prevalence of an opin-
ion that such persons are more trustworthy if paid highly in
proportion to the work they perform ; insomuch that if a law-
yer or a physician offered his services at less than the ordi-
nary rate, instead of gaining more practice, he would probably
lose that which he alreafly had. For analogous reasons it is
usual to pay greatly beyond the market price of their labor,
all persons in whom the employer wishes to place peculiar
trust, or from whom he requires something besides their mere
services. For example, most persons who can afford it, pay to
their domestic servants higher wages than would purchase in
the market the labor of persons fully as competent to the work
required. They do this, not merely from ostentation, but also
from more reasonable motives ; either because they desire that

388 POLITICAL ECONOMY

those they employ should serve them cheerfully, and be anx-
ious to remain in their service ; or because they do not like to
drive a hard bargain with people whom they are in constant
intercourse with ; or because they dislike to have near their
persons, and continually in their sight, people with the appear-
ance and habits which are the usual accompaniments of a mean
remuneration. Similar feelings operate in the minds of per-
sons in business, with respect to their clerks and other em-
ployees. Liberality, generosity, and the credit of the employer,
are motives which, to whatever extent they operate, preclude
taking the utmost advantage of competition: and doubtless
such motives might, and even now do, operate on employers
of labor in all the great departments of industry ; and most
desirable is it that they should. But they can never raise the
average wages of labor beyond the ratio of population to cap-
ital. By giving more to each person employed, they limit the
power of giving employment to numbers ; and however ex-
cellent their moral effect, they do little good economically, un-
less the pauperism of those who are shut out, leads indirectly to
a readjustment by means of an increased restraint on popula-
tion.

Chapter XV.— Of Profits

§ I. Having treated of the laborer's share of the produce, we
next proceed to^ the share of the capitalist ; the profits of capital

\j or stock ; the gains of the person who advances the expenses
of production — who, from funds in his possession, pays the
wages of the laborers, or supports them during the work ; who
supplies the requisite buildings, materials, and tools or machin-
ery ; and to whom, by the usual terms of the contract, the
produce belongs, to be disposed of at his pleasure. After in-
demnifying him for his outlay, there commonly remains a sur-
plus, which is his profit ; the net income from his capital : the
amount which he can afford to expend in necessaries or pleas-
ures, or from which by further saving he can add to his wealth.
As the wages of the laborer are the remuneration of labor,
so the profits of the capitalist are properly, according to Mr.
Senior's well-chosen expression, the remuneration of absti-

4 nence. They are what he gains by forbearing to consume his
capital for his own uses, and allowing it to be consumed by
productive laborers for their uses. For this forbearance he re-

■^

PROFITS 389

quires a recompense. Very often in personal enjoyment he
would be a gainer by squandering his capital, the capital
amounting to more than the sum of the profits which it will yield
during the years he can expect to live. But while he retains
it undiminished, he has always the power of consuming it if he
wishes or needs ; he can bestow it upon others at his death ;
and in the meantime he derives from it an income, which he
can without impoverishment apply to the satisfaction of his
own wants or inclinations.

Of the gains, however, which the possession of a capital en-
ables a person to make, a part only is properly an equivalent
for the use of the capital itself ; namely, as much as a solvent
person would be willing to pay for the loan of it. This, which
as everybody knows is called interest, is all that a person is
enabled to get by merely abstaining from the immediate con
sumption of his capital, and allowing it to be used for pro
ductive purposes by others. The remuneration which is ob- /
tained in any country for mere abstinence, is measured by the*^
current rate of interest on the best security ; such security as
precludes any appreciable chance of losing the principal. What .
a person expects to gain, who superintends the employment of*'
his own capital, is always more, and generally much more, than .
this. The rate of profit greatly exceeds the rate of interest.^

*^rrhe surplus is partly compensation for risk. By lending his
capital, on unexceptionable security, he runs little or no risk.
But if he embarks in business on his own account, he always
exposes his capital to some, and in many cases to very great,
danger of partial or total loss. For this danger he must be
compensated, otherwise he will not incur it. He must likewise
be remunerated for the devotion of his time and labor. The

. control of the operations of industry usually belongs to the per-
• son who supplies the whole or the greatest part of the funds
by which they are carried on. and who, according to the ordi-
nary arrangement, is either alone interested, or is the person
most interested (at least directly), in the result. To exercise
this control with efficiency, if the concern is large and com-
plicated, requires great assiduity, and often, no ordinary skill.
This assiduity and skill must be remunerated.

*^ The gross profits from capital, the gains returned to those
who supply the funds for production, must suffice for these
three purposes. They must afford a sufficient equivalent for

V

390 POLITICAL ECONOMY

abstinence, indemnity for risk, and remuneration for the labor
and skill required for superintendence. These different com-
pensations may be either paid to the same, or to different per-
sons. The capital, or some part of it, may be borrowed : may
belong to someone who does not undertake the risks or the
trouble of business. In that case, the lender, or owner, is the
person who practices the abstinence; and is remunerated for
it by the interest paid to him, while the difference between the
interest and the gross profit remunerates the exertions and risks
of the undertaker.* Sometimes, again, the capital, or a part
of it, is supplied by what is called a sleeping partner; who
shares the risks of the employment, but not the trouble, and
who, in consideration of those risks, receives not a mere inter-
est, but a stipulated share of the gross profits. Sometimes the
capital is supplied and the risk incurred by one person, and the
business carried on exclusively in his name, while the trouble
of management is made over to another, who is engaged for
that purpose at a fixed salary. Management, however, by hired
servants, who have no interest in the result but that of preserv-
ing their salaries, is proverbially inefficient, unless they act un-
der the inspecting eye, if not the controlling hand, of the per-
son chiefly interested : and prudence almost always recom-
mends giving to a manager not thus controlled, a remuneration
partly dependent on the profits ; which virtually reduces the
case to that of a sleeping partner. Or finally, the same person
may own the capital, and conduct the business ; adding, if he
will and can, to the management of his own capital, that of as
much more as the owners may be willing to trust him with.
But under any and all of these arrangements, the same three
things require their remuneration, and must obtain it from the
gross profit : abstinence, risk, exertion. And the three parts t
into which profit may be considered as resolving itself, may be
described respectively as interest, insurance, and wages of super-
intendence.

(^^ The lowest rate of profit which can permanently exist, is
that which is barely adequate, at the given place and time, to
afiford an equivalent for the abstinence, risk, and exertion im-
plied in the employment of capital. From the gross profit, has
first to be deducted as much as will form a fund sufficient on'

* It is to be rcpretted tliat this word, enjoy a great advantage in being able to
in this sense, is not familiar to an Eng- speak currently of les profits de Ventre-
lish ear. French political economists preneur.

^

PROFITS 391

the average to cover all losses incident to the employment. Next,
it must afford such an equivalent to the owner of the capital
for forbearing to consume it, as is then and there a sufficient
motive to him to persist in his abstinence. How much will be
required to form this equivalent, depends on the comparative
value placed, in the given society, upon the present and the
future: (in the words formerly used) on the strength of the
effective desire of accumulation. Further, after covering all
losses, and remunerating the owner for forbearing to consume,
there must be something left to recompense the labor and skill
of the person who devotes his time to the business. This recom-
pense too must be sufficient to enable at least the owners of the
larger capitals to receive for their trouble, or to pay to some
manager for his, what to them or him will be a sufficient in-
ducement for undergoing it. If the surplus is no more than
this, none but large masses of capital will be employed pro-
ductively, and if it did not even amount to this, capital would
be withdrawn from production, and unproductively consumed,
until, by an indirect consequence of its diminished amount, to
be explained hereafter, the rate of profit was raised.

Such, then, is the minimum of profits : but that minimum is
exceedingly variable, and at some times and places extremely
low ; on account of the great variableness of two out of its
three elements. That the rate of necessary remuneration for
abstinence, or in other words the efifective desire of accumula-
tion, differs widely in different states of society and civilization,
has been seen in a former chapter. There is a still wider differ-
ence in the element which consists in compensation for risk.
I am not now speaking of the differences in point of risk be-
tween different employments of capital in the same society, but
of the very different degrees of security of property in different
states of society. Where, as in many of the governments of
Asia, property is in perpetual danger of spoliation from a
tyrannical government, or from its rapacious and ill-controlled
officers ; where to possess or to be suspected of possessing
wealth, is to be a mark not only for plunder, but perhaps for
personal ill-treatment to extort the disclosure and surrender
of hidden valuables ; or where, as in the European middle ages,
the weakness of the government, even when not itself inclined
to oppress, leaves its subjects exposed without protection or
redress to active spoliation, or audacious withholding of just

392

POLITICAL ECONOMY

rights, by any powerful individual ; the rate of profit which
persons of average dispositions will require, to make them
forego the immediate enjoyment of what they happen to possess,
for the purpose of exposing it and themselves to these perils,
must be something very considerable. And these contingencies
affect those who live on the mere interest of their capital, in
common with those who personally engage in production. In
a generally secure state of society, the risks which may be at-
tendant on the nature of particular employments seldom fall
on the person who lends his capital, if he lends on good secur-
ity; but in a state of society like that of many parts of Asia,
no security (except perhaps the actual pledge of gold or jewels)
is good : and the mere possession of a hoard, when known or
suspected, exposes it and the possessor to risks, for which
scarcely any profit he could expect to obtain would be an equiv-
alent ; so that there would be still less accumulation than there
is, if a state of insecurity did not also multiply the occasions
on which the possession of a treasure may be the means of
saving life, or averting serious calamities. Those who lend,
under these wretched governments, do it at the utmost peril of »
never being paid. In most of the native states of India, the '
lowest terms on which anyone will lend money, even to the
government, are such, that if the interest is paid only for a
few years, and the principal not at all, the lender is tolerably
well indemnified. If the accumulation of principal and com-
pound interest is ultimately compromised at a few shillings in
the pound, he has generally made an advantageous bargain.
•^§ 3. The remuneration of capital in different employments,
much more than the remuneration of labor, varies according to *
the circumstances which render one employment more attrac->'
five, or more repulsive, than another. The profits, for example,
of retail trade, in proportion to the capital employed, exceed
those of wholesale dealers or manufacturers, for this reason
among others, that there is less consideration attached to the
employment. The greatest, however, of these differences, is that
caused by difference of risk. The profits of a gunpowder manu-
facturer must be considerably greater than the average, to make
up for the peculiar risks to which he and his property are con-
stantly exposed. When, however, as in the case of marine ad-
venture, the peculiar risks are capable of being, and commonly
are, commuted for a fixed payment, the premium of insurance

PROFITS

393

takes its regular place among the charges of production; and
the compensation which the owner of the ship or cargo receives
for that payment, does not appear in the estimate of his profits,
but is included in the replacement of his capital.

The portion, too, of the gross profit, which forms the remuner-
ation for the labor and skill of the dealer or producer, is very
different in different employments. This is the explanation al-
ways given of the extraordinary rate of apothecaries' profit; the
greatest part, as Adam Smith observes, being frequently no more
than the reasonable wages of professional attendance ; for which,
until a late alteration of the law, the apothecary could not de-
mand any remuneration, except in the prices of his drugs. Some
occupations require a considerable amount of scientific or tech-
nical education, and can only be carried on by persons who com-
bine with that education a considerable capital. Such is the busi-
ness of an engineer, both in the original sense of the term, a
machine-maker, and in its popular or derivative sense, an under-
taker of public works. These are always the most profitable
employments. There are cases, again, in which a considerable
amount of labor and skill is required to conduct a business neces-
sarily of limited extent. In such cases a higher than common
rate of profit is necessary to yield only the common rate of re-
muneration. " In a small seaport town," says Adam Smith, " a
little grocer will make forty or fifty per cent, upon a stock of a
single hundred pounds, while a considerable wholesale merchant
in the same place will scarcely make eight or ten per cent, upon
a stock of ten thousand. The trade of the grocer may be neces-
sary for the conveniency of the inhabitants, and the narrowness
of the market may not admit the employment of a larger capital
in the business. The man, however, must not only live by his
trade, but live by it suitably to the qualifications which it re-
quires. Besides possessing a little capital, he must be able to
read, write, and account, and must be a tolerable judge, too, of
perhaps fifty or sixty different sorts of goods, their prices, quali-
ties, and the markets where they are to be had cheapest. Thirty or
forty pounds a year cannot be considered as too great a recom-
pense for the labor of a person so accomplished. Deduct this
from the seemingly great profits of his capital, and little more
will remain, perhaps, than the ordinary profits of stock. The
greater part of the apparent profit is, in this case, too, real
wages."

394

POLITICAL ECONOMY

All the natural monopolies (meaning thereby those which are
created by circumstances, and not by law) which produce or
aggravate the disparities in the remuneration of different kinds
of labor, operate similarly between different employments of
capital. If a business can only be advantageously carried on by
a large capital, this in most countries limits so narrowly the
class of persons who can enter into the employment, that they
are enabled to keep their rate of profit above the general level.
A trade may also, from the nature of the case, be confined to so
few hands, that profits may admit of being kept up by a com-
bination among the dealers. It is well known that even among
so numerous a body as the London booksellers, this sort of com-
bination long continued to exist. I have already mentioned the
case of the gas and water companies.
'"■"^^ 4. After due allowance is made for these various causes of

J inequality, namely, differences in the risk or agreeableness of
different employments, and natural or artificial monopolies; the
rate of profit on capital in all employments tends to an equality.
Such is the proposition usually laid down by political economists,
and under proper explanations it is true.
^ That portion of profit which is properly interest, and which
forms the real remuneration for abstinence, is strictly the same,
at the same time and place, whatever be the employment. The
rate of interest on equally good security, does not vary according
to the destination of the principal, though it does vary from time
to time very much, according to the circumstances of the mar-
ket. There is no employment in which, in the present state of
industry, competition is so active and incessant as in the lending
and borrowing of money. All persons in business are occasion-
ally, and most of them constantly, borrowers : while all persons
not in business, who possess moneyed property, are lenders. Be-
tween these two great bodies, there is a numerous, keen, and in-
telligent class of middlemen, composed of bankers, stockbrokers,
discount brokers, and others, aHve to the slightest breath of
probable gain. The smallest circumstance, or the most transient
impression on the public mind, which tends to an increase or di-
minution of the demand for loan, either at the time or prospec-
tively, operates immediately on the rate of interest: and cir-
cumstances in the general state of trade, really tending to cause
this difference of demand, are continually occurring, sometimes
to such an extent, that the rate of interest on the best mercantile

J

y

PROFITS 395

bills has been known to vary in little more than a year (even
without the occurrence of the great derangement called a com- ji
mercial crisis) from four or less, to eight or nine per cent. But,
at the same time and place, the rate of interest is the same, to
all who can give equally good security. The market rate of in-
terest is at all times a known and definite thing.

It is far otherwise with gross profit; which, though (as will
presently be seen) it does not Vary much from employment to
employment, varies very greatly from individual to individual,
and can scarcely be in any two cases the same. It depends on
the knowledge, talents, economy, and energy of the capitalist
himself, or of the agents whom he employs; on the accidents of
personal connection; and even on chance. Hardly any two
dealers in the same trade, even if their commodities are equally
good and equally cheap, carry on their business at the same ex-
pense, or turn over their capital in the same time. That equal
capitals give equal profits, as a general maxim of trade, would
be as false as that equal age or size gives equal bodily strength,
or that equal reading or experience gives equal knowledge. The
effect depends as much upon twenty other things, as upon the
single cause specified.

But though profits thus vary, the parity, on the whole, of dif-
ferent modes of employing capital (in the absence of any natural
or artificial monopoly) is in a certain, and a very important sense,
maintained. On an average (whatever may be the occasional
fluctuations) the various employments of capital are on such a
footing, as to hold out, not equal profits, but equal expectations of
profit, to persons of average abilities and advantages. By equal,
I mean after making compensation for any inferiority in the
agreeableness or safety of an employment. If the case were not
so; if there were evidently, and to common experience, more
favorable chances of pecuniary success in one business than in
others, more persons would engage their capital in the business,
or would bring up their sons to it ; which in fact always happens
when a business, like that of an engineer at present, or like any
newly established and prosperous manufacture, is seen to be a
growing and thriving one. If, on the contrary, a business is not
considered thriving; if the chances of profit in it are thought to
be inferior to those in other employments; capital gradually
leaves it, or at least new capital is not attracted to it; and by
this change in the distribution of capital between the less profit-

396 POLITICAL ECONOMY

able and the more profitable employments, a sort of balance is
restored. The expectations of profit, therefore, in different em-
ployments, cannot long continue very dififerent: they tend to a
common average, though they are generally oscillating from
one side to the other side of the medium.

This equalizing process, commonly described as the transfer
of capital from one employment to another, is not necessarily
the onerous, slow, and almost impracticable operation which it
is very often represented to be. In the first place, it does not
always imply the actual removal of capital already embarked
in an employment. In a rapidly progressive state of capi-
tal, the adjustment often takes place by means of the new
accumulations of each year, which direct themselves in
preference towards the more thriving trades. Even when
a real transfer of capital is necessary, it is by no means
implied that any of those who are engaged in the un-
profitable employment, relinquish business and break up their
establishments. The numerous and multifarious channels of
credit, through which, in commercial nations, unemployed capi-
tal diffuses itself over the field of employment, flowing over in
greater abundance to the lower levels, are the means by which
the equalization is accomplished. The process consists in a lim-
itation by one class of dealers or producers, and an extension by
the other, of that portion of their business which is carried on
with borrowed capital. There is scarcely any dealer or producer
on a considerable scale, who confines his business to what can
be carried on by his own funds. When trade is good, he not
only uses to the utmost his own capital, but employs, in addition,
much of the credit which that capital obtains for him. When,
either from oversupply or from some slackening in the demand
for his commodity, he finds that it sells more slowly or obtains
a lower price, he contracts his operations, and does not apply to
bankers or other money dealers for a renewal of their advances
to the same extent as before. A business which is increasing
holds out, on the contrary, a prospect of profitable employment
for a larger amount of this floating capital than previously, and
those engaged in it become applicants to the money dealers for
larger advances, which, from their improving circumstances,
they have no difficulty in obtaining. A different distribution of
floating capital between two employments has as much effect in
restoring their profits to an equilibrium, as if the owners of an

PROFITS 397

equal amount of capital were to abandon the one trade and
carry their capital into the other. This easy, and as it were
spontaneous, method of accommodating production to demand,
is quite sufificient to correct any inequalities arising from the
fluctuations of trade, or other causes of ordinary occurrence. In
the case of an altogether declining trade, in which it is necessary
that the production should be, not occasionally varied, but
greatly and permanently diminished, or perhaps stopped alto-
gether, the process of extricating the capital is, no doubt, tardy
and difficult, and almost always attended with considerable loss;
much of the capital fixed in machinery, buildings, permanent
works, etc. being either not applicable to any other purpose, or
only applicable after expensive alterations; and time being sel-
dom given for effecting the change in the mode in which it
would be effected with least loss, namely, by not replacing the
fixed capital as it wears out. There is besides, in totally chang-
ing the destination of a capital, so great a sacrifice of established
connection, and of acquired skill and experience, that people are
always very slow in resolving upon it, and hardly ever do so until
long after a change of fortune has become hopeless. These,
however, are distinctly exceptional cases, and even in these the
equalization is at last effected. It may also happen that the re-
turn to equilibrium is considerably protracted, when, before one
inequality has been corrected, another cause of inequality arises;
which is said to have been continually the case during a long
series of years, with the production of cotton in the Southern
States of North America; the commodity having been upheld
at what was virtually a monopoly price, because the increase of
demand, from successive improvements in the manufacture,
went on with a rapidity so much beyond expectation, that for
many years the supply never completely overtook it. But it is
not often that a succession of disturbing causes, all acting in the
same direction, are known to follow one another with hardly any
interval. Where there is no monopoly, the profits of a trade
are likely to range sometimes above and sometimes below the
general level, but tending always to return to it; like the oscilla-
tions of the pendulum. ^
In general, then, although profits are very different to dif-^
ferent individuals, and to the same individual in dififerent years,
there cannot be much diversity at the same time and place in the
average profits of different employments (other than the stand-

398 POLITICAL ECONOMY

ing differences necessary to compensate for difference of attrac-
tiveness), except for short periods, or when some great perma-
nent revulsion has overtaken a particular trade. If any popular
impression exists that some trades are more profitable than
others, independently of monopoly, or of such rare accidents as
have been noticed in regard to the cotton trade, the impression
is in all probability fallacious, since if it were shared by those who
have greatest means of knowledge and motives to accurate ex-
amination, there would take place such an influx of capital as
would soon lower the profits to the common level. It is true
that, to persons with the same amount of original means, there
is more chance of making a large fortune in some employments
than in others. But it would be found that in those same em-
ployments bankruptcies also are more frequent, and that the
chance of greater success is balanced by a greater probability
of complete failure. Very often it is more than balanced: for,
as was remarked in another case, the chance of great prizes
operates with a greater degree of strength than arithmetic will
warrant, in attracting competitors; and I doubt not that the
average gains, in a trade in which large fortunes may be made,
are lower than in those in which gains are slow, though com-
paratively sure, and in which nothing is to be ultimately hoped
for beyond a competency. The timber trade of Canada is one
example of an employment of capital, partaking so much of the
nature of a lottery, as to make it an accredited opinion that, tak-
ing the adventurers in the aggregate, there is more money lost
by the trade than gained by it; in other words, that the average
rate of profit is less than nothing. In such points as this,' much
depends on the characters of nations, according as they partake
more or less of the adventurous, or, as it is called when the inten-
tion is to blame it, the gambling spirit. This spirit is much
stronger in the United States than in Great Britain; and in
Great Britain than in any country of the Continent. In some
Continental countries the tendency is so much the reverse, that
safe and quiet employments probably yield a less average profit
to the capital engaged in them, than those which offer greater
gains at the price of greater hazards.

It must not however be forgotten, that even in the countries
of most active competition, custom also has a considerable share
in determining the profits of trade. There is sometimes an idea
afloat as to what the profit of an employment should be, which

PROFITS 399

though not adhered to by all the dealers, nor perhaps rigidly by
any, still exercises a certain influence over their operations.
There has been in England a kind of notion, how widely pre-
vailing I know not, that fifty per cent, is a proper and suitable
rate of profit in retail transactions: understand, not fifty per cent,
on the whole capital, but an advance of fifty per cent, on the
wholesale prices; from which have to be defrayed bad debts,
shop rent, the pay of clerks, shopmen, and agents of all de-
scriptions, in short all the expenses of the retail business. If
this custom were universal, and strictly adhered to, competition
indeed would still operate, but the consumer would not derive
any benefit from it, at least as to price; the way in which it
would diminish the advantages of those engaged in retail trade,
would be by a greater subdivision of the business. In some parts
of the Continent the standard is as high as a hundred per cent.
The increase of competition, however, in England at least, is
rapidly tending to break down customs of this description. In
the majority of trades (at least in the great emporia of trade)
there are numerous dealers whose motto is " small gains and
frequent " — a great business at low prices, rather than high prices
and few transactions; and by turning over their capital more
rapidly, and adding to it by borrowed capital when needed, the
dealers often obtain individually higher profits; though they
necessarily lower the profits of those among their competitors,
who do not adopt the same principle. Nevertheless, competi-
tion, as remarked * in a previous chapter, has, as yet, but a
limited dominion over retail prices; and consequently the share
of the whole produce of land and labor which is absorbed in the
remuneration of mere distributors, continues exorbitant; and
there is no function in the economy of society which supports
a number of persons so disproportionate to the amount of work
to be performed.

§ 5. The preceding remarks have I hope, sufficiently eluci
dated what is meant by the common phrase, " the ordinary rat
of profit;" and the sense in which, and the limitations under
which, this ordinary rate has a real existence. It now remains
to-consider, what causes determine its amount.
vTo popular apprehension it seems as if the profits of business
depended upon prices. A producer or dealer seems to obtain
his profits by selling his commodity for more than it cost him.

* Vide supra, Book II. chap. iv. § 3.

J

400 POLITICAL ECONOMY

Profit altogether, people are apt to think, is a consequence of
purchase and sale. It is only (they suppose) because there are
purchasers for a commodity, that the producer of it is able to
make any profit. Demand — customers — a market for the com-
modity, are the cause of the gains of capitalists. It is by the
sale of their goods, that they replace their capital, and add to its
amount.

This, however, is looking only at the outside surface of the
economical machinery of society. In no case, we find, is the
mere money which passes from one person to another the funda-
mental matter in any economical phenomenon. If we look more
narrowly into the operations of the producer, we shall perceive
that the money he obtains for his commodity is not the cause
of his having a profit, but only the mode in which his profit is
paid to him.

yj The cause of profit is, that labor produces more than is re-
quired for its support. The reason why agricultural capital
yields a profit, is because human beings can grow more food
than is necessary to feed them while it is being grown, including
the time occupied in constructing the tools, and making all
other needful preparations; from which it is a consequence, that
if a capitalist undertakes to feed the laborers on condition of
receiving the produce, he has some of it remaining for himself
after replacing his advances. To vary the form of the theorem:
the reason why capital yields a profit, is because food, clothing,
materials, and tools last longer than the time which was required
to produce them; so that if a capitahst supplies a party of la-
borers with these things, on condition of receiving all they pro-
duce, they will, in addition to reproducing their own necessaries
and instruments, have a portion of their time remaining, to work
for the capitalist. We thus see that profit arises, not from the in-
cident of exchange, but from the productive power of labor; and
the general profit of the country is always what the productive-
power of labor makes it, whether any exchange takes place oi*'»
not. If there were no division of employments, there would be
no buying or selling, but there would still be profit. If the la-
borers of the country collectively produce twenty per cent, more
than their wages, profits will be twenty per cent., whatever prices
may or may not be. The accidents of price may for a time make
one set of producers get more than twenty per cent., and another j
less, the one commodity being rated above its natural value in ""

PROFITS 40I

relation to other commodities, and the other below, until prices
have again adjusted themselves; but there will always be just
twenty per cent, divided among them all.

I proceed, in expansion of the considerations thus briefly in-
dicated, to exhibit more minutely the mode in which the rate of
profit is determined.
-^ § 6. I assume, throughout, the state of things, which, where
the laborers and capitalists are separate classes, prevails, with
few exceptions, universally ; namely, that the capitalist advances ^
the whole expenses, including the entire remuneration of the la-
borer. That he should do so, is not a matter of inherent neces-
sity; the laborer might wait until the production is complete, for
all that part of his wages which exceeds mere necessaries; and
even for the whole, if he has funds in hand, sufficient for his tem-
porary support. But in the latter case, the laborer is to that ex-
tent really a capitalist, investing capital in the concern, by sup-
plying a portion of the funds necessary for carrying it on; and
even in the former case he may be looked upon in the same
light, since, contributing his labor at less than the market price,
he may be regarded as lending the difference to his employer, and
receiving it back with interest (on whatever principle computed)
from the proceeds of the enterprise.

The capitalist, then, may be assumed to make all the advances, »
and receive all the produce. His profit consists of the excess .
of the produce above the advances ; his rate of profit is the ratio v
which that excess bears to the amount advanced. But what do
the advances consist of?

It is, for the present, necessary to suppose, that the capitalist y
does not pay any rent; has not to purchase the use of any ap-
propriated natural agent. This indeed is scarcely ever the exact
truth. The agricultural capitalist, except when he is the owner
of the soil he cultivates, always, or almost always, pays rent:
and even in manufactures (not to mention ground-rent,)
the materials of the manufacture have generally paid rent,
in some stage of their production. The nature of rent however,
we have not yet taken into consideration; and it will hereafter
appear, that no practical error, on the question we are now ex-
amining, is produced by disregarding it.

If, then, leaving rent out of the question, we inquire in what
it is that the advances of the capitalists, for purposes of produc-*^
tion, consist, we shall find that they consist of wages of labor.
Vol. 1.— 26

402 POLITICAL ECONOMY

A large portion of the expenditure of every capitalist consists
in the direct payment of wages. What does not consist of this, is
^ composed of materials and implements, including buildings.
But materials and implements are produced by labor; and as
our supposed capitalist is not meant to represent a single em-
ployment, but to be a type of the productive industry of the
whole country, we may suppose that he makes his own tools,
and raises his own materials. He does this by means of previous
advances, which, again, consist wholly oi w^ges. If we suppose
him to buy the materials and tools instead of producing them,
the case is not altered: he then repays to a previous producer
the wages which that previous producer has paid. It is true,
he repays it to him with a profit; and if he had produced the
things himself, he himself must have had that profit, on this
part of his outlay, as well as on every other part. The fact,
however, remains, that in the whole process of production, be- aI
ginning with the materials and tools, and ending with the fin-
ished product, all the advances have consisted of nothing but
wages; except that certaip of the capitalists concerned have,
for the sake of general convenience, had their share of profit
paid to them before the operation was completed. Whatever,
of the ultimate product, is not profit, is repayment of wages.
•-i\ § 7. It thus appears that the two elements on which, and which
falone, the gains of the capitalists depend, are, first, the magni-
tude of the produce, in other words, the productive power of
^abor; and secondly, the proportion of that produce obtained
by the laborers themelves; the ratio, which the remuneration of
the laborers bears to the amount they produce. These two
things form the data for determining the gross amount divided
as profit among all the capitalists of the country; but the rate
of profit, the percentage on the capital, depends only on the sec-
ond of the two elements, the laborer's proportional share, and
not on the amount to be shared. ^ If the produce of labor were
doubled, and the laborers obtained the same proportional share
as before, that is, if their remuneration was also doubled, the
capitalists, it is true, would gain twice as much; but as they
would also have had to advance twice as much, the rate of their
\ profit would be only the same as before.

*M We thus arrive at the conclusion of Ricardo and others, that
the rate of profits depends on wages; rising as wages fall, and
falling as wages rise. In adopting, however, this doctrine, I

. PROFITS 403

must insist upon making a most necessary alteration in its word-
ing. Instead of saying that profits depend on wages, let us say /
(what Ricardo really meant) that they depend on the cost ofW
labor.

Wages, and the cost of labor; what labor brings in to the la-
borer, and what it costs to the capitalist; are ideas quite dis-
tinct, and which it is of the utmost importance to keep so. For
this purpose it is essential not to designate them, as is almost
always done, by the same nam.e. Wages, in public discussions,
both oral and printed, being looked upon from the point of view
of the payers, much often than from that of the receivers, noth-
ing is more common than to say that wages are high or low,
meaning only that the cost of labor is high or low. The reverse
of this would be often the truth : the cost of labor is frequently
at its highest where wages are lowest. This may arise from two
causes. In the first place, the labor, though cheap, may be in-
efficient. In no European country are wages so low as they are
(or at least were) in Ireland ; the remuneration of an agricultural
laborer in the west of Ireland not being more than half the wages
of even the lowest-paid Englishman, the Dorsetshire laborer.
But if, from inferior skill and industry, two days' labor of an
Irishman accomplished no more work than an English laborer
performed in one, the Irishman's labor cost as much as the Eng-
lishman's, though it brought in so much less to himself. The
capitalist's profit is determined by the former of these two things,
not by the latter. That a difference to this extent really existed
in the efficiency of the labor, is proved not only by abundant
testimony, but by the fact, that notwithstanding the lowness of
wages, profits of capital are not understood to have been higher
in Ireland than in England.

The other cause which renders wages, and the cost of labor,
no i^al criteria of one another, is the varying costliness of the
articles which the laborer consumes. If these are cheap, wages,
in the sense which is of importance to the laborer, may be high,
and yet the cost of labor may be low; if dear, the laborer may
be wretchedly off, though his labor may cost much to the capi-
talist. This last is the condition of a country over-peopled in
relation to its land; in which, food being dear, the poorness of
the laborer's real reward does not prevent labor from costing
much to the purchaser, and low wages and low profits co-exist.
The opposite case is exemplified in the United States of America.

404 POLITICAL ECONOMY

The laborer there enjoys a greater abundance of comforts than
• in any other country of the world, except some of the newest
/colonies; but, owing to the cheap price at which these comforts
can be obtained (combined with the great efficiency of the labor,)
the cost of labor is at least not higher, nor the rate of profit lower,
than in Europe.

J The cost of labor, then, is, in the language of mathematics,
a function of three variables : the efficiency of labor; the wages
of labor (meaning thereby the real reward of the laborer) ; and
the greater or less cost at which the articles composing that real
reward can be produced or procured. It is plain that the cost of

J labor to the capitalist must be influenced by each of these three
circumstances, and by no others. These, therefore, are also the
circumstances which determine the rate of profit ; and it cannot
be in any way affected except through one or other of them. If
labor generally became more efficient, without being more highly
rewarded; if, without its becoming less efficient, its remuneration
fell, no increase taking place in the cost of the articles composing
that remuneration; or if those articles became less costly with-
out the laborer's obtaining more of them; in any one of these
three cases, profits would rise. If, on the contrary, labor became
less efficient (as it might do from diminished bodily vigor in the
people, destruction of fixed capital, or deteriorated education);
or if the laborer obtained a higher remuneration, without any
increased cheapness in the things composing it; or if, without
his obtaining more, that which he did obtain became more cost-
ly; profits, in all these cases, would suffer a diminution. And
there is no other combination of circumstances, in which the
general rate of profit of a country, in all employments indif-
ferently, can either fall or rise.

The evidence of these propositions can only be stated gen-
erally, though, it is hoped, conclusively, in this stage of our
subject. It will come out in greater fulness and force when,
having taken into consideration the theory of Value and Price,
we shall be enabled to exhibit the law of profits in the concrete
— in the complex entanglement of circumstances in which it
actually works. This can only be done in the ensuing Book.
One topic still remains to be discussed in the present one, so
far as it admits of being treated independently of considerations
of Value : the subject of Rent ; to which we now proceed.

RENTS 405

Chapter XVI.— Of Rent

§ I. The requisites of production being labor, capital, and
natural agents; the only person, besides the laborer and the
capitalist, whose consent is necessary to production, and who
can claim a share of the produce as the price of that consent,
is the person who, by the arrangements of society, possesses
exclusive power over some natural agent. The land is the
principal of the natural agents which are capable of being ap-
propriated, and the consideration paid for its use is called rent.
Landed proprietors are the only class, of any numbers or im-
portance, who have a claim to a share in the distribution of
the produce, through their ownership, of something which
neither they nor anyone else have produced. If there be any
other cases of a similar nature, they will be easily understood,
when the nature and laws of rent are comprehended.

It is at once evident, that rent is the effect of a monopoly ;
though the monopoly is a natural one, which may be regu-
lated, which may even be held as a trust for the community
generally, but which cannot be prevented from existing. The
reason why landowners are able to require rent for their land,
is that it is a commodity which many want, and which no one
can obtain but from them. If all the land of the country be-
longed to one person, he could fix the rent at his pleasure. The
whole people would be dependent on his will for the neces-
saries of life, and he might make what conditions he chose.
This is the actual state of things in those Oriental kingdoms in
which the land is considered the property of the state. Rent is
then confounded with taxation, and the despot may exact the
utmost which the unfortunate cultivators have to give. In-
deed, the exclusive possessor of the land of a country could
not well be other than despot of it. The effect would be much
the same if the land belonged to so few people that they could,
and did, act together as one man, and fix the rent by agree-
ment among themselves. This case, however, is nowhere
known to exist : and the only remaining supposition is that
of free competition ; the landowners being supposed to be, as
in fact they are, too numerous to combine.

§ 2. A thing which is limited in quantity, even though its
possessors do not act in concert, is still a monopolized article.
But even when monopolized, a thing which is the gift of nature.

4o6

POLITICAL ECONOMY

and requires no labor or outlay as the condition of its existence,
will, if there be competition among the holders of it, command
a price, only if it exists in less quantity than the demand. If
the whole land of a country were required for cultivation, all
of it might yield a rent. But in no country of any extent do the
wants of the population require that all the land, which is ca-
pable of cultivation, should be cultivated. The food and other
agricultural produce which the people need, and which they are
willing and able to pay for at a price which remunerates the
grower, may always be obtained without cultivating all the
land ; sometimes without cultivating more than a small part
of it ; the lands most easily cultivated being preferred in a very
early stage of society, the more fertile, or those in the more
convenient situations, in a more advanced state. There is al-
ways, therefore, some land which cannot, in existing circum-
stances, pay any rent ; and no land ever pays rent, unless, in
point of fertility or situation, it belongs to those superior kinds
which exist in less quantity than the demand — which cannot
be made to yield all the produce required for the community,
unless on terms still less advantageous than the resort to less
favored soils.

There is land, such as the deserts of Arabia, which will yield
nothing to any amount of labor ; and there is land, Hke some
of our hard sandy heaths, which would produce something,
but, in the present state of the soil, not enough to defray the
expenses of production. Such lands, unless by some applica-
tion of chemistry to agriculture still remaining to be invented,
cannot be cultivated for profit, unless some one actually creates
a soil, by spreading new ingredients over the surface, or mix-
ing them with the existing materials. If ingredients fitted for
this purpose exist in the subsoil, or close at hand, the improve-
ment even of the most unpromising spots may answer as a
speculation : but if those ingredients are costly, and must be
brought from a distance, it will seldom answer to do this for the
sake of profit, though the " magic of property " will some-
times effect it. Land which cannot possibly yield a profit, is
sometimes cultivated at a loss, the cultivators having their
wants partially supplied from other sources ; as in the case of
paupers, and some monasteries or charitable institutions,
among which may be reckoned the Poor Colonies of Belgium.
The worst land which can be cultivated as a means of sub-

RENTS 407

sistence, is that which will just replace the seed, and the food
of the laborers employed on it together with what Dr. Chalmers
calls their secondaries ; that is, the laborers required for sup-
plying them with tools, and with the remaining necessaries
of life. Whether any given land is capable of doing more than
this, is not a question of political economy, but of physical fact.
The supposition leaves nothing for profits, nor anything for
the laborers except necessaries : the land, therefore, can only
be cultivated by the laborers themselves, or else at a pecuniary
loss : and a fortiori, cannot in any contingency afford a rent.
The worst land which can be cultivated as an investment for
capital, is that which, after replacing the seed, not only feeds
the agricultural laborers and their secondaries, but afifords them
the current rate of wages, which may extend to much more
than mere necessaries ; and leaves for those who have ad-
vanced the wages of these two classes of laborers, a surplus
equal to the profit they could have expected from any other
employment of their capital. Whether any given land can
do more than this, is not merely a physical question, but de-
pends partly on the market value of agricultural produce.
What the land can do for the laborers and for the capitalist,
beyond feeding all whom it directly or indirectly employs, of
course depends upon what the remainder of the produce can be
sold for. The higher the market value of produce, the lower
are the soils to which cultivation can descend, consistently
with affording to the capital emiployed, the ordinary rate of
profit.

As, however, differences of fertility slide into one another
by insensible gradations ; and differences of accessibility, that
is, of distance from markets, do the same ; and since there is
land so barren that it could not pay for its cultivation at any
price ; it is evident that, whatever the price may be, there must
in any extensive region be some land which at that price will
just pay the wages of the cultivators, and yield to the capital
employed the ordinary profit, and no more. Until, therefore,
the price rises higher, or until some improvement raises that
particular land to a higher place in the scale of fertility, it can-
not pay any rent. It is evident, however, that the community
needs the produce of this quality of land : since if the lands
more fertile or better situated than it, could have sufficed to
supply the wants of society, the price would not have risen so

4o8 POLITICAL ECONOMY

high as to render its cultivation profitable. This land, there-
fore, will be cultivated ; and we lay it down as a principle, that
so long as any of the land of a country which is fit for cultiva-
tion, and not withheld from it by legal or other factitious ob-
stacles, is not cultivated, the worst land in actual cultivation
(in point of fertility and situation together) pays no rent.

§ 3. If, then, of the land in cultivation, the part which yields
least return to the labor and capital employed on it gives only
the ordinary profit of capital, without leaving anything for rent ;
a standard is afforded for estimating the amount of rent which
will be yielded by all other land. Any land yields just as much
more than the ordinary profits of stock, as it yields more than
what is returned by the worst land in cultivation. The surplus
is what the farmer can afford to pay as rent to the landlord ; and
since, if he did not so pay it, he would receive more than the
ordinary rate of profit, the competition of other capitalists, that
competition which equalizes the profits of different capitals,
will enable the landlord to appropriate it. The rent, therefore,
which any land will yield, is the excess of its produce, beyond
what would be returned to the same capital if employed on
the worst land in cultivation. This is not, and never was pre-
tended to be, the limit of metayer rents, or of cottier rents ; but
it is the limit of farmers' rents. No land rented to a capitalist
farmer will permanently yield more than this ; and when it
yields less, it is because the landlord foregoes a part of what, if
he chose, he could obtain.

This is the theory of rent, first propounded at the end of the
last century by Dr. Anderson, and which, neglected at the
time, was almost simultaneously rediscovered, twenty years
later, by Sir Edward West, Mr. Malthus. and Mr. Ricardo. It
is one of the cardinal doctrines of political economy ; and until
it was understood, no consistent explanation could be given of
many of the more complicated industrial phenomena. The
evidence of its truth will be manifested with a great increase of
clearness, when we come to trace the laws of the phenomena
of Value and Price. Until that is done, it is not possible to
free the doctrine from every difficulty which may present itself,
nor perhaps to convey, to those previously unacquainted with
the subject, more than a general apprehension of the reasoning
by which the theorem is arrived at. Some, however, of the ob-
jections commonly made to it, admit of a complete answer even
in the present stage of our inquiries.

RENTS 409

It has been denied that there can be any land in cultivation
which pays no rent ; because landlords (it is contended) would
not allow their land to be occupied without payment. Those
who lay any stress on this as an objection, must think that land
of the quality which can but just pay for its cultivation, lies
together in large masses, detached from any land of better
quality. If an estate consisted wholly of this land, or of this
and still worse, it is likely enough that the owner would not
give the use of it for nothing ; he would probably (if a rich man)
prefer keeping it for other purposes, as for exercise, or orna-
ment, or perhaps as a game preserve. No farmer could afford
to offer him anything for it, for purposes of culture, though
something would probably be obtained for the use of its natural
pasture, or other spontaneous produce. Even such land, how-
ever, would not necessarily remain uncultivated. It might be
farmed by the proprietor ; no unfrequent case even in Eng-
land. Portions of it might be granted as temporary allotments
to laboring families, either from philanthropic motives, or to
save the poor-rate ; or occupation might be allowed to squatters,
free of rent, in the hope that their labor might give it value at
some future period. Both these cases are of quite ordinary
occurrence. So that even if an estate were wholly composed
of the worst land capable of profitable cultivation, it would not
necessarily lie uncultivated because it could pay no rent. In-
ferior land, however, does not usually occupy, without inter-
ruption, many square miles of ground ; it is dispersed here and
there, with patches of better land intermixed, and the same per-
son who rents the better land, obtains along with it the in-
ferior soils which alternate with it. He pays a rent, nominally
for the whole farm, but calculated on the produce of those parts
alone (however small a portion of the whole) which are capable
of returning more than the common rate of profit. It is thus
scientifically true, that the remaining parts pay no rent.

§ 4. Let us, however, suppose that there were a validity in
this objection, which can by no means be conceded to it; that
when the demand of the community had forced up food to such
a price as would remunerate the expense of producing it from
a certain quality of soil, it happened nevertheless that all the
soil of that quality was withheld from cultivation, by the ob-
stinacy of the owners in demanding a rent for it, not nominal,
nor trifling, but sufficiently onerous to be a material item in

4IO POLITICAL ECONOMY

the calculations of a farmer. What would then happen?
Merely that the increase of produce, which the wants of so-
ciety required, would for the time be obtained wholly (as it al-
ways is partially), not by an extension of cultivation, but by
an increased application of labor and capital to land already
cultivated.

Now we have already seen that this increased application of
capital, other things being unaltered, is always attended with
a smaller proportional return. We are not to suppose some
new agricultural invention made precisely at this juncture;
nor a sudden extension of agricultural skill and knowledge,
bringing into more general practice, just then, inventions al-
ready in partial use. We are to suppose no change, except a
demand for more corn, and a consequent rise of its price. The
rise of price enables measures to be taken for increasing the
produce, which could not have been taken with profit at the
previous price. The farmer uses more expensive manures ;
or manures land which he formerly left to nature ; or procures
lime or marl from a distance, as a dressing for the soil ; or
pulverizes or weeds it more thoroughly ; or drains, irrigates,
or subsoils portions of it, which at former prices would not
have paid the cost of the operation ; and so forth. These
things, or some of them, are done, when, more food being
wanted, cultivation has no means of expanding itself upon new
lands. And when the impulse is given to extract an increased
amount of produce from the soil, the farmer or improver will
only consider whether the outlay he makes for the purpose will
be returned to him with the ordinary profit, and not whether
any surplus will remain for rent. Even, therefore, if it were the
fact, that there is never any land taken into cultivation, for
which rent, and that too of an amount worth taking into con-
sideration, was not paid ; it would be true, nevertheless, that
there is always some agricultural capital which pays no rent,
because it returns nothing beyond the ordinary rate of profit :
this capital being the portion of capital last applied — that to
which the last addition to the produce was due ; or (to express
the essentials of the case in one phrase), that which is applied
in the least favorable circumstances. But the same amount of
demand, and the same price, which enable this least productive
portion of capital barely to replace itself with the ordinary
profit, enable every other portion to yield a surplus propor-

RENTS 411

tioned to the advantage it possesses. And this surplus it is,
which competition enables the landlord to appropriate. The
rent of all land is measured by the excess of the return to the
whole capital employed on it, above what is necessary to re-
place the capital with the ordinary rate of profit, or in other
words, above what the same capital would yield if it were all
employed in as disadvantageous circumstances as the least pro-
ductive portion of it : whether that least productive portion of
capital is rendered so by being employed on the worst soil,
or by being expended in extorting more produce from land
which already yielded as much as it could be made to part with
on easier terms.

It is not pretended that the facts of any concrete case con-
form with absolute precision to this or any other scientific prin-
ciple. We must never forget that the truths of political econ-
omy are truths only in the rough. They have the certainty,
but not the precision of exact science. It is not, for example,
strictly true that a farmer will cultivate no land, and apply no
capital, which returns less than the ordinary profit. He will
expect the ordinary profit on the bulk of his capital. But
when he has cast in his lot with his farm, and bartered his skill
and exertions, once for all, against v/hat the farm will yield to
him, he will probably be willing to expend capital on it (for an
immediate return) in any manner which will afford him a sur-
plus profit, however small, beyond the value of the risk, and the
interest which he must pay for the capital if borrowed, or can
get for it elsewhere if it is his own. But a new farmer, entering
on the land, would make his calculations differently, and would
not commence unless he could expect the full rate of ordinary
profit on all the capital which he intended embarking in the
enterprise. Again, prices may range higher or lower during
the currency of a lease, than was expected when the contract
was made, and the land, therefore, may be over or under-rented :
and even when the lease expires, the landlord may be unwill-
ing to grant a necessary diminution of rent, and the farmer,
rather than relinquish his occupation, or seek a farm elsewhere
when all are occupied, may consent to go on paying too high
a rent. Irregularities like these we must always expect ; it is
impossible in political economy to obtain general theorems
embracing the complications of circumstances which may af-
fect the result in an individual case. When, too, the farmer

412 POLITICAL ECONOMY

class, having but little capital, cultivate for subsistence rather
than for profit, and do not think of quitting their farm while
they are able to live by it, their rents approximate to the charac-
ter of cottier rents, and may be forced up by competition (if
the number of competitors exceeds the number of farms) be-
yond the amount which will leave to the farmer the ordinary
rate of profit. The laws which we are enabled to lay down re-
specting rents, profits, wages, prices, are only true in so far as
the persons concerned are free from the influence of any other
motives than those arising from the general circumstances of
the case, and are guided, as to those, by the ordinary mercan-
tile estimate of profit and loss. Applying this twofold supposi-
tion to the case of farmers and landlords, it will be true that
the farmer requires the ordinary rate of profit on the whole of
his capital ; that whatever it returns to him beyond this he is
obliged to pay to the landlord, but will not consent to pay more ;
that there is a portion of capital applied to agriculture in such
circumstances of productiveness as to yield only the ordinary
profits ; and that the difference between the produce of this,
and of any other capital of similar amount, is the measure ot
the tribute which that other capital can and will pay, under
the name of rent, to the landlord. This constitutes a law of
rent, as near the truth as such a law can possibly be : though
of course modified or disturbed in individual cases, by pending
contracts, individual miscalculations, the influence of habit,
and even the particular feelings and dispositions of the persons
concerned.

§ 5. A remark is often made, which must not here be omitted^
though, I think, more importance has been attached to it than
it merits. Under the name of rent, many payments are com-
monly included, which are not a remuneration for the original
powers of the land itself, but for capital expended on it. The
additional rent which land yields in consequence of this outlay
of capital, should, in the opinion of some writers, be regarded
as profit, not rent. But before this can be admitted, a distinc-
tion must be made. The annual payment by a tenant almost
always includes a consideration for the use of the buildings on
the farm ; not only barns, stables, and other outhouses, but a
house to live in, not to speak of fences and the like. The land-
lord will ask, and the tenant give, for these, whatever is con-
sidered sufficient to yield the ordinary profit, or rather (risk

RENTS 413

and trouble being here out of the question) the ordinary inter-
est, on the value of the buildings ; that is, not on what it has
cost to erect them, but on what it would now cost to erect
others as good : the tenant being bound, in addition, to leave
them in as good repair as he found them, for otherwise a much
larger payment than simple interest would of course be re-
quired from him. These buildings are as distinct a thing from
the farm, as the stock or the timber on it ; and what is paid
for them can no more be called rent of land, than a payment
for cattle would be, if it were the custom that the landlord
should stock the farm for the tenant. The buildings, like the
cattle, are not land, but capital, regularly consumed and repro-
duced ; and all payments made in consideration for them are
properly interest.

But with regard to capital actually sunk in improvements,
and not requiring periodical renewal, but spent once for all in
giving the land a permanent increase of productiveness, it ap-
pears to me that the return made to such capital loses alto-
gether the character of profits, and is governed by the prin-
ciples of rent. It is true that a landlord will not expend capital
in improving his estate, unless he expects from the improve-
ment an increase of income, surpassing the interest of his out-
lay. Prospectively, this increase of income may be regarded
as profit ; but when the expense has been incurred, and the
improvement made, the rent of the improved land is governed
by the same rules as that of the unimproved. Equally fertile
land commands an equal rent, whether its fertility is natural
or acquired ; and I cannot think that the incomes of those who
own the Bedford Level or the Lincolnshire wolds, ought to be
called profit and not rent, because those lands would have been
worth next to nothing unless capital had been expended on
them. The owners are not capitalists, but landlords ; they have
parted with their capital ; it is consumed, destroyed ; and
neither is, nor is to be, returned to them, like the capital of a
farmer or manufacturer, from what it produces. In lieu of it
they now have land, of a certain richness, which yields the same
rent, and by the operation of the same causes, as if it had pos-
sessed from the beginning the degree of fertility which has been
artificially given to it.

Some writers, in particular Mr. H. C. Carey, take away, still
more completely than I have attempted to do, the distinction

414 POLITICAL ECONOMY

between these two sources of rent, by rejecting one of them
altogether, and considering all rent as the effect of capital ex-
pended. In proof of this, Mr. Carey contends that the whole
pecuniary value of all the land in any country, in England for
instance, or in the United States, does not amount to anything
approaching to the sum which has been laid out, or which it
would even now be necessary to lay out, in order to bring the
country to its present condition from a state of primeval forest.
This startling statement has been seized on by M. Bastiat and
others, as a means of making out a stronger case than could
otherwise be made in defence of property in land. Mr. Carey's
proposition, in its most obvious meaning, is equivalent to say-
ing, that if there were suddenly added to the lands of England
an unreclaimed territory of equal natural fertility, it would not
be worth the while of the inhabitants of England to reclaim it :
because the profits of the operation would not be equal to the
ordinary interest on the capital expended. To which assertion
if any answer could be supposed to be required, it would suffice
to remark, that land not of equal but of greatly mferior qual-
ity to that previously cultivated, is continually reclaimed in
England, at an expense which the subsequently accruing
rent is sufficient to replace completely in a small number of
years. The doctrine, moreover, is totally opposed to Mr.
Carey's own economical opinions. No one maintains more
strenuously than Mr. Carey the undoubted truth, that as so-
ciety advances in population, wealth, and combination of labor,
land constantly rises in value and price. This, however, could
not possibly be true if the present value of land were less than
the expense of clearing it and making it fit for cultivation ;
for it must have been worth this immediately after it was
cleared, and according to Mr. Carey it has been rising in value
ever since. When, however, Mr. Carey asserts that the whole
land of any country is not now worth the capital which has been
expended on it, he does not mean that each particular estate is
worth less than what has been laid out in improving it, and
that, to the proprietors, the improvement of the land has been,
on the final result, a miscalculation. He means, not that the
land of Great Britain would not now sell for what has been laid
out upon it, but that it would nOt sell for that amount, plus
the expense of making all the roads, canals, and railways. This
is probably true, but is no more to the purpose, and no more

RENTS 415

important in political economy, than if the statement had been
that it would not sell for the sums laid out upon it plus the
national debt, or plus the cost of the French Revolutionary war,
or any other expense incurred for a real or imaginary public
advantage. The roads, railways, and canals, were not con-
structed to give value to land : on the contrary, their natural
efifect was to lower its value, by rendering other and rival lands
accessible : and the landholders of the southern counties actu-
ally petitioned Parliament against the turnpike roads on this
very account. The tendency of improved communications is
to lower existing rents, by trenching on the monopoly of the
land nearest to the places where large numbers of consumers
are assembled. Roads and canals are not intended to raise
the value of the land which already supplies the markets, but
(among other purposes) to cheapen the supply, by letting in
the produce of other and more distant lands : and the more
efifectually this purpose is attained, the lower rent will be. If
we could imagine that the railways and canals of the United
States, instead of only cheapening communication, did their
business so efifectually as to annihilate cost of carriage alto-
gether, and enable the produce of Michigan to reach the
market of New York as quickly and as cheaply as the produce
of Long Island — the whole value of all the land of the United
States (except such as lies convenient for building) would be
annihilated ; or rather, the best would only sell for the ex-
pense of clearing, and the government tax of a dollar and a
quarter per acre ; since land in Michigan, equal to the best
in the United States, may be had in unlimited abundance by
that amount of outlay. But it is strange that Mr. Carey should
think this fact inconsistent with the Ricardo theory of rent.
Admitting all that he asserts, it is still true that as long as there
is land which yields no rent, the land which does yield rent,
does so in consequence of some advantage which it enjoys, in
fertility or vicinity to markets, over the other ; and the measure
of its advantage is also the measure of its rent. And the cause
of its yielding rent, is that it possesses a natural monopoly ;
the quantity of land, as favorably circumstanced as itself, not
being sufficient to supply the market. These propositions con-
stitute the theory of rent, laid down by Ricardo ; and if they
are true, I cannot see that it signifies much whether the rent
which the land yields at the present time, is greater or less than

4i6 POLITICAL ECONOMY

the interest of the capital which has been laid out to raise its
value, together with the interest of the capital which has been
laid out to lower its value.

Mr. Carey's objection, however, has somewhat more of in-
genuity than the arguments commonly met with against the
theory of rent : a theorem which may be called the pons
asinorum of political economy, for there are, I am inclined to
think, few persons who have refused their assent to it except
from not having thoroughly understood it. The loose and
inaccurate way in which it is often apprehended by those who
affect to refute it, is very remarkable. Many, for instance, have
imputed absurdity to Mr. Ricardo's theory, because it is absurd
to say that the adtivation of inferior land is the cause of rent
on the superior. Mr. Ricardo does not say that it is the culti-
vation of inferior land, but the necessity of cultivating it, from
the insufficiency of the superior land to feed a growing popula-
tion : between which and the proposition imputed to him there
is no less a difference than that between demand and supply.
Others again allege as an objection against Ricardo, that if
all land were of equal fertility, it might still yield a rent. But
Ricardo says precisely the same. He says that if all lands were
equally fertile, those which are nearer to their market than
others, and are therefore less burdened with cost of carriage,
would yield a rent equivalent to the advantage ; and that the
land yielding no rent would then be, not the least fertile, but
the least advantageously situated, which the wants of the com-
munity required to be brought into cultivation. It is also dis-
tinctly a portion of Ricardo's doctrine, that even apart from
differences of situation, the land of a country supposed to be of
uniform fertility would, all of it, on a certain supposition, pay
rent : namely, if the demand of the community required that
it should all be cultivated, and cultivated beyond the point at
which a further application of capital begins to be attended with
a smaller proportional return. It would be impossible to show
that, except by forcible exaction, the whole land of a country
can yield a rent on any other supposition.

§ 6. After this view of the nature and causes of rent, let us
turn back to the subject of profits, and bring up for reconsid-
eration one of the propositions laid down in the last chapter.
We there stated, that the advances of the capitalist, or in other

RENTS 417

words, the expenses of production, consist solely in wages of
labor ; that whatever portion of the outlay is not wages, is pre-
vious profit, and whatever is not previous profit, is wages.
Rent, however, being an element which it is impossible to re-
solve into either profit or wages, we were obliged, for the mo-
ment, to assume that the capitalist is not required to pay rent
— to give an equivalent for the use of an appropriated natural
agent : and I undertook to show in the proper place, that this
is an allowable supposition, and that rent does not really form
any part of the expenses of production, or of the advances of
the capitalist. The grounds on which this assertion was made
are now apparent. It is true that all tenant farmers, and many
other classes of producers, pay rent. But we have now seen,
that whoever cultivates land, paying a rent for it, gets in re-
turn for his rent an instrument of superior power to other in-
struments of the same kind for which no rent is paid. The
superiority of the instrument is in exact proportion to the rent
paid for it. If a few persons had steam engines of superior
power to all others in existence, but limited by physical law9
to a number short of the demand, the rent which a manufact-
urer would be willing to pay for one of these steam engines
could not be looked upon as an addition to his outlay, because
by the use of it he would save in his other expenses the equiva-
lent of what it cost him : without it he could not do the same
quantity of work, unless at an additional expense equal to the
rent. The same thing is true of land. The real expenses of
production are those incurred on the worst land, or by the
capital employed in the least favorable circumstances. This
land or capital pays, as we have seen, no rent: but the ex-
penses to which it is subject, cause all other land or agricultural
capital to be subjected to an equivalent expense in the form of
rent. Whoever does pay rent, gets back its full value in extra
advantages, and the rent which he pays does not place him in a
worse position than, but only in the same position as, his fel-
low-producer who pays no rent, but whose instrument is one
of inferior eflficiency.

We have now completed the exposition of the laws which
regulate the distribution of the produce of land, labor, and
capital, as far as it is possible to discuss those laws indepen-
dently of the instrumentality by which in a civilized society the
Vol. I. — 27

4i8 POLITICAL ECONOMY

distribution is effected ; the machinery of Exchange and Price.
The more complete elucidation and final confirmation of the
laws which we have laid down, and the deduction of their most
important consequences, must be preceded by an explanation
of the nature and working of that machinery — a subject so ex-
tensive and complicated as to require a separate Book.

CHOICE EXAMPLES OF EARLY PRINTING AND

ENGRAVING.

Fac -similes from Rare and Curious Books.

EARLY VENETIAN PRINTING.

Fac-simile of the title-page of the Thoscanella della Musica of Pietro Aaron
Fiorentino. Printed at Venice in 1523 by Bernardo e Matteo de Vitali. A copy of
ihe work is preserved in the Bibhoteca Marciana.

My^

THOSCANELLO DE LA
MVSICA Dl MESSER

PIETRO AARON FIO/

RENTING CANO/

KICO DA RI'

MINT,

CON PRIVILEGIO*

'4^

j<:'

■♦^w

^

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^"

BOOK HI

EXCHANGE

Chapter I.— Of Value

THE subject on which we are now about to enter fills
so important and conspicuous a position in political
economy, that in the apprehension of some thinkers
its boundaries confound themselves with those of the science
itself. One eminent writer has proposed as a name for PoUtical
Economy, " Catallactics," or the science of exchanges : by
others it has been called the Science of Values. If these de-
nominations had appeared to me logically correct, I must have
placed the discussion of the elementary laws of value at the
commencement of our inquiry, instead of postponing it to the
Third Part ; and the possibility of so long deferring it is alone
a sufficient proof that this view of the nature of Political Econ-
omy is too confined. It is true that in the preceding Books
we have not escaped the necessity of anticipating some small
portion of the theory of Value, especially as to the value of
labor and of land. It is nevertheless evident, that of the two
great departments of Political Economy, the production of
wealth and its distribution, the consideration of Value has to
do with the latter alone ; and with that only so far as compe-
tition, and not usage or custom, is the distributing agency.
The conditions and laws of Production would be the same as
they are, if the arrangements of society did not depend on ex-
change, or did not admit of it. Even in the present system of
industrial life, in which employments are minutely subdivided,
and all concerned in production depend for their remuneration
on the price of a particular commodity, exchange is not the
fundamental law of the distribution of the produce, no more
than roads and carriages are the essential laws of motion, but
merely a part of the machinery for efifecting it. To confoimd
these ideas, seems to me not only a logical, but a practical

419

420 POLITICAL ECONOMY

blunder. It is a case of the error too common in political econ-
omy, of not distinguishing between necessities arising from the
nature of things, and those created by social arrangements :
an error, which appears to me to be at all times producing two
opposite mischiefs ; on the one hand, causing political econ-
omists to class the merely temporary truths of their subject
among its permanent and universal laws ; and on the other,
leading many persons to mistake the permanent laws of Pro-
duction (such as those on which the necessity is grounded of
restraining population) for temporary accidents arising from
the existing constitution of society — which those who would
frame a new system of social arrangements, are at liberty to
disregard.

In a state of society, however, in which the industrial system
is entirely founded on purchase and sale, each individual, for
the most part, living not on things in the production of which
he himself bears a part, but on things obtained by a double
exchange, a sale followed by a purchase — the question of Value
is fundamental. Almost every speculation respecting the eco-
nomical interests of a society thus constituted, implies some
theory of Value : the smallest error on that subject infects with
corresponding error all our other conclusions ; and anything
vague or misty in our conception of it, creates confusion and
uncertainty in everything else. Happily, there is nothing in
the laws of Value which remains for the present or any future
writer to clear up; the theory of the subject is complete: the
only difficulty to be overcome is that of so stating it as to solve
by anticipation the chief perplexities which occur in applying
it : and to do this, some minuteness of exposition, and con-
siderable demands on the patience of the reader, are unavoid-
able. He will be amply repaid, however, (if a stranger to these
inquiries) by the ease and rapidity with which a thorough un-
derstanding of this subject will enable him to fathom most of
the remaining questions of political economy.

§ 2. We must begin by settling our phraseology. Adam
Smith, in a passage often quoted, has touched upon the most
obvious ambiguity of the word value ; which, in one of its
senses, signifies usefulness, in another, power of purchasing ;
in his own language, value in use, and value in exchange. But
(as Mr. De Quincey has remarked) in illustrating this double
meaning, Adam Smith has himself fallen into another am-

VALUE 421

biguity. Things (he says) which have the greatest value in use
have often little or no value in exchange ; which is true, since
that which can be obtained without labor or sacrifice will com-
mand no price, however useful or needful it may be. But he
proceeds to add, that things which have the greatest value in
exchange, as a diamond for example, may have little or no
value in use. This is employing the word use, not in the sense
in which political economy is concerned with it, but in that
other sense in which use is opposed to pleasure. Political
economy has nothing to do with the comparative estimation
of different uses in the judgment of a philosopher or of a moral-
ist. The use of a thing, in political economy, means its capacity
to satisfy a desire, or serve a purpose. Diamonds have this
capacity in a high degree, and unless they had it, would not
bear any price. Value in use, or as Mr. De Quincey calls it,
ideologic value, is the extreme limit of value in exchange. The
exchange value of a thing may fall short, to any amount, of its
value in use ; but that it can ever exceed the value in use, im-
plies a contradiction ; it supposes that persons will give, to
possess a thing, more than the utmost value which they them-
selves put upon it, as a means of gratifying their inclinations.

The word Value, when used without adjunct, always means, in
political economy, value in exchange; or as it has been called
by Adam Smith and his successors, exchangeable value, a phrase
which no amount of authority that can be quoted for it can
make other than bad English. Mr. De Quincey substitutes the
term Exchange Value, which is unexceptionable.

Exchange value requires to be distinguished from Price. The
words Value and Price were used as synonymous by the early
political economists, and are not always discriminated even by
Ricardo. But the most accurate modern writers, to avoid the
wasteful expenditure of two good scientific terms on a single
idea, have employed Price to express the value of a thing in
relation to money; the quantity of money for which it will ex-
change. By the price of a thing, therefore, we shall henceforth
understand its value in money; by the value, or exchange value
of a thing, its general power of purchasing; the command
which its possession gives over purchasable commodities in
general.

§ 3. But here a fresh demand for explanation presents itself.
What is meant by command over commodities in general? The

422 POLITICAL ECONOMY

same thing exchanges for a great quantity of some commodities,
and for a very small quantity of others. A suit of clothes ex-
changes for a great quantity of bread, and for a very small
quantity of precious stones. The value of a thing in exchange
for some commodities may be rising, for others falling. A coat
may exchange for less bread this year than last, if the harvest
has been bad, but for more glass or iron, if a tax has been taken
off those commodities, or an improvement made in their manu-
facture. Has the value of the coat, under these circumstances,
fallen or risen? It is impossible to say: all that can be said is,
that it has fallen in relation to one thing, and risen in respect
to another. But there is another case, in which no one would
have any hesitation in saying what sort of change had taken
place in the value of the coat: namely, if the cause in which the
disturbance of exchange values originated, was something di-
rectly affecting the coat itself, and not the bread, or the glass.
Suppose, for example, that an invention had been made in ma-
chinery, by which broadcloth could be woven at half the former
cost. The effect of this would be to lower the value of a coat,
and if lowered by this cause, it would be lowered not in relation
to bread only or to glass only, but to all purchasable things,
except such as happened to be affected at the very time by a
similar depressing cause. We should therefore say that there
had been a fall in the exchange value or general purchasing
power of a coat. The idea of general exchange value originates
in the fact, that there really are causes which tend to alter the
value of a thing in exchange for things generally, that is, for
all things which are not themselves acted upon by causes of
similar tendency.

In considering exchange value scientifically, it is expedient
to abstract from it all causes except those which originate in
the very commodity under consideration. Those which origi-
nate in the commodities with which we compare it, affect its
value in relation to those commodities; but those which origi-
nate in itself, affect its value in relation to all commodities. In
order the more completely to confine our attention to these last,
it is convenient to assume that all commodities but the one in
question remain invariable in their relative values. When we
are considering the causes which raise or lower the value of
corn, we suppose that woollens, silks, cutlery, sugar, timber, etc.,
while varying in their power of purchasing corn, remain con-

VALUE 423

stant in the proportions in which they exchange for one another.
On this assumption, any one of them may be taken as a repre-
sentative of all the rest: since in whatever manner corn varies
in value with respect to any one commodity, it varies in the same
manner and degree with respect to every other; and the upward
or downward movement of its value estimated in some one thing,
is all that needs be considered. Its money value, therefore, or
price, will represent as well as anything else its general exchange
value, or purchasing power; and from an obvious convenience,
will often be employed by us in that representative character;
with the proviso that money itself do not vary in its general pur-
chasing power, but that the prices of all things, other than that
which we happen to be considering, remain unaltered.

§ 4. The distinction between Value and Price, as we have
now defined them, is so obvious, as scarcely to seem in need of
any illustration. But in political economy the greatest errors
arise from overlooking the most obvious truths. Simple as this
distinction is, it has consequences with which a reader unac-
quainted with the subject would do well to begin early by mak-
ing himself thoroughly familiar. The following is one of the
principal. There is such a thing as a general rise of prices. All
commodities may rise in their money price. But there cannot
be a general rise of values. It is a contradiction in terms. A
can only rise in value by exchanging for a greater quantity of
B and C; in which case these must exchange for a smaller
quantity of A. All things cannot rise relatively to one another.
If one-half of the commodities in the market rise in exchange
value, the very terms imply a fall of the other half; and recipro-
cally, the fall implies a rise. Things which are exchanged for
one another can no more all fall, or all rise, than a dozen runners
can each outrun all the rest, or a hundred trees all overtop one
another. Simple as this truth is, we shall presently see that it is
lost sight of in some of the most accredited doctrines both of
theorists and of what are called practical men. And as a first
specimen, we may instance the great importance attached in
the imagination of most people to a rise or fall of general prices.
Because when the price of any one commodity rises, the cir-
cumstance usually indicates a rise of its value, people have an
indistinct feeling when all prices rise, as if all things simultane-
ously had risen in value, and all the possessors had become en-
riched. That the money prices of all things should rise or fall,

424 POLITICAL ECONOMY

provided they all rise or fall equally, is, in itself, and apart from
existing contracts, of no consequence. It affects nobody's
wages, profits, or rent. Everyone gets more money in the one
case and less in the other; but of all that is to be bought with
money they get neither more nor less than before. It makes no
other difference than that of using more or fewer counters to
reckon by. The only thing which in this case is really altered
in value, is money; and the only persons who either gain or lose
are the holders of money, or those who have to receive or to pay
fixed sums of it. There is a difference to annuitants and to cred-
itors the one way, and to those who are burthened with annui-
ties, or with debts, the contrary way. There is a disturbance, in
short, of fixed money contracts; and this is an evil, whether it
takes place in the debtor's favor or in the creditor's. But as
to future transactions there is no difference to any one. Let it
therefore be remembered (and occasions will often rise of calling
it to mind) that a general rise or a general fall of values is a con-
tradiction; and that a general rise or a general fall of prices is
merely tantamount to an alteration in the value of money, and is
a matter of complete indifference, save in so far as it affects ex-
isting contracts for receiving and paying fixed pecuniary
amounts, and (it must be added) as it affects the interests of the
producers of money.

§ 5. Before commencing the inquiry into the laws of value and
price, I have one further observation to make. I must give
warning, once for all, that the cases I contemplate are those in
which values and prices are determined by competition alone.
In so far only as they are thus determined, can they be reduced
to any assignable law. The buyers must be supposed as studious
to buy cheap, as the sellers to sell dear. The values and prices,
therefore, to which our conclusions apply, are mercantile values
and prices; such prices as are quoted in price-currents; prices
in the wholesale markets, in which buying as well as selling is
a matter of business; in which the buyers take pains to know,
and generally do know, the lowest price at which an article of
a given quality can be obtained; and in which, therefore, the
axiom is true, that there cannot be for the same article, of the
same quality, two prices in the same market. Our propositions
will be true in a much more qualified sense, of retail prices; the
prices paid in shops for articles of personal consumption. For
such things there often are not merely two, but many prices,

VALUE 425

in different shops, or even in the same shop; habit and accident
having as much to do in the matter as general causes. Pur-
chases for private use, even by people in business, are not always
made on business principles; the feelings which come into play
in the operation of getting, and in that of spending their in-
come, are often extremely different. Either from indolence, or
carelessness, or because people think it fine to pay and ask no
questions, three-fourths of those who can afford it give much
higher prices than necessary for the things they consume; while
the poor often do the same from ignorance and defect of judg-
ment, want of time for searching and making inquiry, and not
unfrequently from coercion, open or disguised. For these rea-
sons, retail prices do not follow with all the regularity which
might be expected, the action of the causes which determine
wholesale prices. The influence of those causes is ultimately
felt in the retail markets, and is the real source of such variations
in retail prices as are of a general and permanent character.
But there is no regular or exact correspondence. Shoes of
equally good quality are sold in different shops at prices which
differ considerably; and the price of leather may fall without
causing the richer class of buyers to pay less for shoes. Never-
theless, shoes do sometimes fall in price; and when they do, the
cause is always some such general circumstance as the cheapen-
ing of leather: and when leather is cheapened, even if no differ-
ence shows itself in shops frequented by rich people, the artisan
and the laborer generally get their shoes cheaper, and there is a
visible diminution in the contract prices at which shoes are de-
livered for the supply of a workhouse or of a regiment. In all
reasoning about prices, the proviso must be understood, " sup-
posing all parties to take care of their own interest." Inatten-
tion to these distinctions has led to improper applications of the
abstract principles of political economy, and still oftener to an
undue discrediting of those principles, through their being com-
pared with a different sort of facts from those which they con-
template, or which can fairly be expected to accord with them.

426 POLITICAL ECONOMY

Chapter II Of Demand and Supply, in their Relation to Value

§ I. That a thing may have any value in exchange, two con-
ditions are necessary. It must be of some use; that is (as al-
ready explained) it must conduce to some purpose, satisfy some
desire. No one will pay a price, or part with anything which
serves some of his purposes, to obtain a thing which serves none
of them. But, secondly, the thing must not only have some
utility, there must also be some dififiiculty in its attainment.
" Any article whatever," says Mr. De Quincey,* " to obtain that
artificial sort of value which is meant by exchange value, must
begin by offering itself as a means to some desirable purpose;
and secondly, even though possessing incontestably this pre-
liminary advantage, it will never ascend to an exchange value in
cases where it can be obtained gratuitously and without effort;
of which last terms both are necessary as hmitations. For often
it will happen that some desirable object may be obtained gra-
tuitously; stoop, and you gather it at your feet; but still, be-
cause the continued iteration of this stooping exacts a laborious
effort, very soon it is found, that to gather for yourself virtually
is not gratuitous. In the vast forests of the Canadas, at intervals,
wild strawberries may be gratuitously gathered by shiploads:
yet such is the exhaustion of a stooping posture, and of a labor
so monotonous, that everybody is soon glad to resign the ser-
vice into mercenary hands."

As was pointed out in the last chapter, the utility of a thing
in the estimation of a purchaser, is the extreme limit of its ex-
change value: higher the value cannot ascend; peculiar cir-
cumstances are required to raise it so high. This topic is hap-
pily illustrated by Mr. De Quincey. " Walk into almost any
possible shop, buy the first article you see: what will determine
its price? In the ninety-nine cases out of a hundred, simply
the element D — difficulty of attainment. The other element U,
or intrinsic utility, will be perfectly inoperative. Let the thing
(measured by its uses) be, for your purposes, worth ten guineas,
so that you would rather give ten guineas than lose it; yet, if
the difificulty of producing it be only worth one guinea, one
guinea is the price which it will bear. But still not the less,
though U is inoperative, can U be supposed absent? By no
possibility; for, if it had been absent, assuredly you would not

* " Logic of Political Economy," p. 13.

DEMAND AND SUPPLY 427

have bought the article even at the lowest price. U acts upon
you, though it does not act upon the price. On the other hand,
in the hundredth case, we will suppose the circumstances re-
versed; you are on Lake Superior in a steamboat, making your
way to an unsettled region 800 miles ahead of civilization, and
consciously with no chance at all of purchasing any luxury what-
soever, little luxury or big luxury, for the space of ten years to
come.' One fellow-passenger, whom you will part with before
sunset, has a powerful musical snufif-box; knowing by expe-
rience the power of such a toy over your own feelings, the magic
with which at times it lulls your agitations of mind, you are
vehemently desirous to purchase it. In the hour of leaving Lon-
don you had forgot to do so; here is a final chance. But the
owner, aware of your situation not less than yourself, is deter-
mined to operate by a strain pushed to the very uttermost upon
U, upon the intrinsic worth of the article in your individual esti-
mate for your individual purposes. He will not hear of D as
any controlling power or mitigating agency in the case; and
finally, although at six guineas apiece in London or Paris you
might have loaded a wagon with such boxes, you pay sixty
rather than lose it when the last knell of the clock has sounded,
which summons you to buy now or to forfeit forever. Here,
as before, only one element is operative: before it was D, now
it is U. But after all, D was not absent, though inoperative.
The inertness of D allowed U to put forth its total effect. The
practical compression of D being withdrawn, U springs up like
water in a pump when released from the pressure of air. Yet
still that D was present to your thoughts, though the price was
otherwise regulated, is evident; both because U and D must
coexist in order to found any case of exchange value whatever,
and because undeniably you take into very particular considera-
tion this D, the extreme dii^culty of attainment (which here is
the greatest possible, viz. an impossibility) before you consent
to have the price racked up to U. The special D has vanished;
but it is replaced in your thoughts by an unlimited D. L^n-
doubtedly you have submitted to U in extremity as the regulat-
ing force of the price; but it was under a sense of D's latent pres-
ence. Yet D is so far from exerting any positive force, that the
retirement of D from all agency whatever on the price — this it is
which creates as it were a perfect vacuum, and through that
vacuum U rushes up to its highest and ultimate gradation."

428 POLITICAL ECONOMY

This case, in which the value is wholly regulated by the ne-
cessities or desires of the purchaser, is the case of strict and ab-
solute monopoly; in which, the article desired being only ob-
tainable from one person, he can exact any equivalent, short of
the point at which no purchaser could be found. But it is not
a necessary consequence, even of complete monopoly, that the
value should be forced up to this ultimate limit: as will be seen
when we have considered the law of value in so far as depend-
ing on the other element, difficulty of attainment.

§ 2. The difficulty of attainment which determines value, is
not always the same kind of difficulty. It sometimes consists in
an absolute limitation of the supply. There are things of which
it is physically impossible to increase the quantity beyond cer-
tain narrow limits. Such are those wines which can be grown
only in peculiar circumstances of soil, climate, and exposure.
Such also are ancient sculptures; pictures by old masters; rare
books or coins, or other articles of antiquarian curiosity.
Among such may also be reckoned houses and building-ground,
in a town of definite extent (such as Venice, or any fortified town
where fortifications are necessary to security); the most de-
sirable sites in any town whatever; houses and parks peculiarly
favored by natural beauty, in places where that advantage is un-
common. Potentially, all land whatever is a commodity of this
class; and might be practically so, in countries fully occupied
and cultivated.

But there is another category (embracing the majority of all
things that are bought and sold,) in which the obstacle to at-
tainment consists only in the labor and expense requisite to
produce the commodity. Without a certain labor and expense
it cannot be had: but when any one is willing to incur these,
there needs be no limit to the multiplication of the product. If
there were laborers enough and machinery enough, cottons,
woollens, or linens might be produced by thousands of yards for
every single yard now manufactured. There would be a point,
no doubt, where further increase would be stopped by the in-
capacity of the earth to afford more of the material. But there
is no need, for any purpose of political economy, to contemplate
a time when this ideal limit could become a practical one.

There is a third case, intermediate between the two preceding,
and rather more complex, which I shall at present merely indi-
cate, but the importance of which in political economy is ex-

DEMAND AND SUPPLY 429

tremely great. There are commodities which can be multipUed
to an indefinite extent by labor and expenditure, but not by a
fixed amount of labor and expenditure. Only a limited quantity
can be produced at a given cost; if more is wanted, it must be
produced at a greater cost. To this class, as has been often re-
peated, agricultural produce belongs ; and generally all the rude
produce of the earth; and this peculiarity is a source of very
important consequences; one of which is the necessity of a
limit to population; and another, the payment of rent.

§ 3. These being the three classes, in one or other of which
all things that are brought and sold must take their place, we
shall consider them in their order. And first, of things abso-
lutely limited in quantity, such as ancient sculptures or pictures.

Of such things it is commonly said, that their value depends
upon their scarcity: but the expression is not sufficiently defi-
nite to serve our purpose. Others say, with somewhat greater
precision, that the value depends on the demand and the supply.
But even this statement requires much explanation, to make it
a clear exponent of the relation between the value of a thing,
and the causes of which that value is an efifect.

The supply of a commodity is an intelligible expression: it
means the quantity offered for sale; the quantity that is to be
had, at a given time and place, by those who wish to purchase
it. But what is meant by the demand? Not the mere desire for
the commodity. A beggar may desire a diamond ; but his desire,
however great, will have no influence on the price. Writers
have therefore given a more limited sense to demand, and have
defined it, the wish to possess, combined with the power of pur-
chasing. To distinguish demand in this technical sense, from
the demand which is synonymous with desire, they call the for-
mer effectual demand.* After this explanation, is it usually
supposed that there remains no further difficulty, and that the
value depends upon the ratio between the effectual demand, as
thus defined, and the supply.

These phrases, however, fail to satisfy anyone who requires
clear ideas, and a perfectly precise expression of them. Some
confusion must always attach to a phrase so inappropriate as
that of a ratio between two things not of the same denomina-

* Adam Smith, who introduced the price, that is, the price which will enable

opression "effectual demand," em- it to be permanently produced and

plvjyed it to denote the demand of those brousht to market. — See his chapter on

who are willing and able to g;ive for the " Natural and Market Price " (book i.

commodity what he calls its natural chap. 7.)

430

POLITICAL ECONOMY

tion. What ratio can there be between a quantity and a desire,
or even a desire combined with a power? A ratio between de-
mand and supply is only intelligible if by demand we mean the
quantity demanded, and if the ratio intended is that between the
quantity demanded and the quantity supplied. But again, the
quantity demanded is not a fixed quantity, even at the same time
and place; it varies according to the value: if the thing is cheap,
there is usually a demand for more of it than when it is dear.
The demand, therefore, partly depends on the value. But it was
before laid down that the value depends on the demand. From
this contradiction how shall we extricate ourselves? How solve
the paradox, of two things, each depending upon the other?

Though the solution of these difficulties is obvious enough,
the difficulties themselves are not fanciful ; and I bring them
forward thus prominently, because I am certain that they ob-
scurely haunt every inquirer into the subject who has not openly
faced and distinctly realized them. Undoubtedly the true solu-
tion must have been frequently given, though I cannot call to
mind anyone who had given it before myself, except the emi-
nently clear thinker and skilful expositor, J. B. Say. I should
have imagined, however, that it must be familiar to all political
economists, if the writings of several did not give evidence of
some want of clearness on the point, and if the instance of Mr.
De Quincey did not prove that the complete non-recognition
and implied denial of it are compatible with great intellectual in-
genuity, and close intimacy with the subject matter.

§ 4. Meaning, by the word demand, the quantity demanded,
and remembering that this is not a fixed quantity, but in gen-
eral varies according to the value, let us suppose that the de-
mand at some particular time exceeds the supply, that is, there
are persons ready to buy, at the market value, a greater quantity
than is offered for sale. Competition takes place on the side of
the buyers, and the value rises: but how much? In the ratio
(some may suppose) of the deficiency: if the demand exceeds
the supply by one-third, the value rises one-third. By no means:
for when the value has risen one-third, the demand may still
exceed the supply; there may, even at that higher value, be a
greater quantity wanted than is to be had; and the competition
of buyers may still continue. If the article is a necessary of life,
which, rather than resign, people are willing to pay for at any
price, a deficiency of one-third may raise the price to double,

DEMAND AND SUPPLY 431

triple, or quadruple.* Or, on the contrary, the competition may
cease before the value has risen in even the proportion of the
deficiency. A rise, short of one-third, may place the article be-
yond the means or beyond the inclinations, of purchasers to the
full amount. At what point, then, will the rise be arrested? At
the point, whatever it be, which equalizes the demand and the
supply: at the price which cuts ofif the extra third from the de-
mand or brings forward additional sellers sufficient to supply it.
When, in either of these ways, or by a combination of both, the
demand becomes equal and no more than equal to the supply,
the rise of value will stop.

The converse case is equally simple. Instead of a demand
beyond the supply, let us suppose a supply exceeding the de-
mand. The competition will now be on the side of the sellers:
the extra quantity can only find a market by calling forth an
additional demand equal to itself. This is accomplished by
means of cheapness; the value falls, and brings the article within
the reach of more numerous customers, or induces those who
were already consumers to make increased purchases. The fall
of value required to re-establish equality, is different in different
cases. The kinds of things in which it is commonly greatest are
at the two extremities of the scale; absolute necessaries, or those
peculiar luxuries, the taste for which is confined to a small class.
In the case of food, as those who have already enough do not
require more on account of its cheapness, but rather expend in
other things what they save in food, the increased consumption
occasioned by cheapness, carries off, as experience shows, only
a small part of the extra supply caused by an abundant harvest ;f
and the fall is practically arrested only when the farmers with-
draw their corn, and hold it back in hopes of a higher price;
or by the operations of speculators who buy corn when it is
cheap, and store it up to be brought out when more urgently
wanted. Whether the demand and supply are equalized by an
increased demand, the result of cheapness, or by withdrawing
a part of the supply, equalized they are in either case.

Thus we see that the idea of a ratio, as between demand and

" " The price of corn in this country the crops amounting to one-third, with-

has risen from loo to 200 per cent, and out any surplus from a former year, and

upwards, when the utmost computed dc- without any chance of relief by importa-

ficiency of the crops has not been more tion, the price might rise five, six, or

than between one-sixth and one-third even tenfold." — Tooke's " History of

belov an average, and when that defi- Prices," vol. i. pp. 13 — 5.

ciency has been relieved by foreign sup- t See Tooke, and the Report of the

plies- U there should be a deficiency of Agricultural Committee of 1821.

432 POLITICAL ECONOMY

supply, is out of place, and has no concern in the matter: the
proper mathematical analogy is that of an equation. De-
mand and supply, the quantity demanded and the quantity sup-
plied, will be made equal. If unequal at any moment, competi-
tion equalizes them, and the manner in which this is done is by
an adjustment of the value. If the demand increases, the value
rises; if the demand diminishes, the value falls: again, if the
supply falls off, the value rises; and falls, if the supply is in-
creased. The rise or the fall continues until the demand and
supply are again equal to one another: and the value which a
commodity will bring in any market, is no other than the value
which, in that market, gives a demand just sufficient to carry
off the existing or expected supply.

This, then, is the Law of Value, with respect to all commodi-
ties not susceptible of being multiplied at pleasure. Such com-
modities, no doubt, are exceptions. There is another law for
that much larger class of things, which admit of indefinite multi-
plication. But it is not the less necessary to conceive distinctly
and grasp firmly the theory of this exceptional case. In the
first place, it will be found to be of great assistance in rendering
the more common case intelligible. And in the next place, the
principle of the exception stretches wider, and embraces more
cases, than might at first be supposed.

§ 5. There are but few commodities which are naturally and
necessarily limited in supply. But any commodity whatever
may be artificially so. Any commodity may be the subject of a
monopoly: like tea, in this country, up to 1834; tobacco in
France, opium in British India, at present. The price of a
monopolized commodity is commonly supposed to be arbitrary;
depending on the will of the monopolist, and limited only (as in
Mr. De Quincey's case of the musical box in the wilds of Amer-
ica) by the buyer's extreme estimate of its worth to himself. This
is in one sense true, but forms no exception, nevertheless, to the
dependence of the value on supply and demand. The monop-
olist can fix the value as high as he pleases, short of what the
consumer either could not or would not pay; but he can only
do so by limiting the supply. The Dutch East India Company
obtained a monopoly price for the produce of the Spice Islands,
but to do so they were obHged, in good seasons, to destroy a
portion of the crop. Had they persisted in selling all that they
produced, they must have forced a market by reducing the

DEMAND AND SUPPLY 433

price, so low, perhaps, that they would have received for the
larger quantity a less total return than for the smaller: at least
they showed that such was their opinion by destroying the sur-
plus. Even on Lake Superior, Mr. De Ouincey's huckster could
not have sold his box for sixty guineas, if he had possessed two
musical boxes and desired to sell them both. Supposing the
cost price of each to be six guineas, he would have taken seventy
for the two in preference to sixty for one; that is, although his
monopoly was the closest possible, he would have sold the boxes
at thirty-five guineas each, notwithstanding that sixty was not
beyond the buyer's estimate of the article for his purposes.
Monopoly value, therefore, does not depend on any peculiar
principle, but is a mere variety of the ordinary case of demand
and supply.

Again, though there are few commodities which are at all
times and forever unsusceptible of increase of supply, any com-
modity whatever may be temporarily so; and with some com-
modities this is habitually the case. Agricultural produce, for
example, cannot be increased in quantity before the next har-
vest; the quantity of corn already existing in the world, is all
that can be had for sometimes a year to come. During that in-
terval, corn is practically assimilated to things of which the
quantity cannot be increased. In the case of most commodities,
it requires a certain time to increase their quantity; and if the
demand increases, then until a corresponding supply can be
brought forward, that is, until the supply can accommodate it-
self to the demand, the value will so rise as to accommodate the
demand to the supply.

There is another case, the exact converse of this. There
are some articles of which the supply may be indefinitely
increased, but cannot be rapidly diminished. There are
things so durable that the quantity in existence is at all
times very great in comparison with the annual prod-
uce. Gold, and the more durable metals, are things of this
sort; and also houses. The supply of such things might be at
once diminished by destroying them; but to do this could only
be the interest of the possessor if he had a monopoly of the
article, and could repay himself for the destruction of a part by
the increased value of the remainder. The value, therefore, of
such things may continue for a long time so low, either from
excess of supply or falling off in the demand, as to put a com-

VOL. I.— 28

434 POLITICAL ECONOMY

plete stop to further production: the diminution of supply by
wearing out being so slow a process, that a long time is req-
uisite, even under a total suspension of production, to restore
the original value. During that interval the value will be regu-
lated solely by supply and demand, and will rise very gradually
as the existing stock wears out, until there is again a remunerat-
ing value, and production resumes its course.

Finally, there are commodities of which, though capable of
being increased or diminished to a great, and even an unlimited
extent, the value never depends upon anything but demand and
supply. This is the case, in particular, with the commodity
Labor: of the value of which we have treated copiously in the
preceding Book: and there are many cases besides, in which
we shall find it necessary to call in this principle to solve diffi-
cult questions of exchange value. This will be particularly ex-
emplified when we treat of International Values; that is, of the
terms of interchange between things produced in different coun-
tries, or, to speak more generally, in distant places. But into
these questions we cannot enter until we shall have examined
the case of commodities which can be increased in quantity in-
definitely and at pleasure; and shall have determined by what
law other than that of Demand and Supply the permanent or
average values of such commodities are regulated. This we
shall do in the next chapter.

Chapter III. — Of Cost of Production, in its Relation to Value

§ I. When the production of a commodity is the effect of
labor and expenditure, whether the commodity is susceptible of
unlimited multiplication or not, there is a minimum value which
is the essential condition of its being permanently produced.
The value at any particular time is the result of supply and de-
mand; and is always that which is necessary to create a market
for the existing supply. But unless that value is sufficient to
repay the Cost of Production, and to afiford, besides, the ordi-
nary expectation of profit, the commodity will not continue to
be produced. Capitalists will not go on permanently producing
at a loss. They will not even go on producing at a profit less
than they can live upon. Persons whose capital is already em-
barked, and cannot be easily extricated, will persevere for a con-
siderable time without profit, and have been known to persevere

COST OF PRODUCTION 435

even at a loss, in hope of better times. But they will not do so
indefinitely, or when there is nothing to indicate that times are
likely to improve. No new capital will be invested in an em-
ployment, unless there be an expectation not only of some profit,
but of a profit as great (regard being had to the degree of eligi-
bility of the employment in other respects, as can be hoped for
in any other occupation at that time and place. When such
profit is evidently not to be had, if people do not actually with-
draw their capital, they at least abstain from replacing it when
consumed. The cost of production, together with the ordinary
profit, may, therefore be called the necessary price or value, of
all things made by labor and capital. Nobody willingly produces
in the prospect of loss. Whoever does so, does it under a mis-
calculation, which he corrects as fast as he is able.

When a commodity is not only made by labor and capital,
but can be made by them in indefinite quantity, this Necessary
Value, the minimum with which the producers will be content,
is also, if competition is free and active, the maximum which
they can expect. If the value of a commodity is such that it re-
pays the cost of production not only with the customary, but
with a higher rate of profit, capital rushes to share in this extra
gain, and by increasing the supply of the article, reduces its
value. This is not a mere supposition or surmise, but a fact
familiar to those conversant with commercial operations.
Whenever a new line of business presents itself, offering a hope
of unusual profits, and whenever any established trade or manu-
facture is believed to be yielding a greater profit than customary,
there is sure to be in a short time so large a production or im-
portation of the commodity, as not only destroys the extra profit,
but generally goes beyond the mark, and sinks the value as
much too low as it had before been raised too high; until the
over-supply is corrected by a total or partial suspension of fur-
ther production. As already intimated, these variations in the
quantity produced do not presuppose or require that any person
should change his employment. Those whose business is thriv-
ing, increase their produce by availing themselves more largely
of their credit, while those who are not making the ordinary
profit, restrict their operations, and (in manufacturing phrase)
work short time. In this mode is surely and speedily effected
the equalization, not of profits perhaps, but of the expectations
of profit, in different occupations.

436 POLITICAL ECONOMY

As a general rule, then, things tend to exchange for one an-
other at such values as will enable each producer to be repaid
the cost of production with the ordinary profit; in other words,
such as will give to all producers the same rate of profit on their
outlay. But in order that the profit may be equal where the
outlay, that is, the cost of production, is equal, things must or
the average exchange for one another in the ratio of their cost
of production; things of which the cost of production is the
same, must be of the same value. For only thus will an equal
outlay yield an equal return. If a farmer with a capital equal to
I, GOO quarters of corn, can produce 1,200 quarters, yielding him
a profit of twenty per cent.; whatever else can be produced in
the same time by a capital of 1,000 quarters, must be worth, that
is, must exchange for, 1,200 quarters, otherwise the producer
would gain either more or less than twenty per cent.

Adam Smith and Ricardo have called that value of a thing
which is proportional to its cost of production, its Natural Value
(or its Natural Price). They meant by this, the point about
which the value oscillates, and to which it always tends to return;
the centre value, towards which, as Adam Smith expresses it,
the market value of a thing is constantly gravitating; and any
deviation from which is but a temporary irregularity, which, the
moment it exists, sets forces in motion tending 10 correct it.
On an average of years sufficient to enable the oscillations on
one side of the central line to be compensated by those on the
other, the market value agrees with the natural value; but it
very seldom coincides exactly with it at any particular time.
The sea everywhere tends to a level; but it never is at an exact
level; its surface is always ruffled by waves, and often agitated
by storms. It is enough that no point, at least in the open sea,
is permanently higher than another. Each place is alternately
elevated and depressed; but the ocean preserves its level.

§ 2. The latent influence by which the values of things are
made to conform in the long run to the cost of production, is
the variation that would otherwise take place in the supply of
the commodity. The supply would be increased if the thing
continued to sell above the ratio of its cost of production, and
would be diminished if it fell below that ratio. But we must not
therefore suppose it to be necessary that the supply should act-
ually be either diminished or increased. Suppose that the cost
of production of a thing is cheapened by some mechanical in-

COST OF PRODUCTION 437

vention, or increased by a tax. The value of a thing would in a
little time, if not immediately, fall in the one case, and rise in
the other; and it would do so, because if it did not, the supply
would in the one case be increased, until the price fell, in the other
diminished, until it rose. For this reason, and from the erro-
neous notion that value depends on the proportion between
the demand and the supply, many persons suppose that this pro-
portion must be altered whenever there is any change in the
value of the commodity; that the value cannot fall through a
diminution of the cost of production, unless the supply is perma-
nently increased; nor rise, unless the supply is permanently
diminished. But this is not the fact: there is no need that there
should be any actual alteration of supply; and when there is,
the alteration, if permanent, is not the cause but the consequence
of the alteration in value. If, indeed, the supply could not be
increased, no diminution in the cost of production would lower
the value : but there is by no means any necessity that it should.
The mere possibility often suffices; the dealers are aware of what
would happen, and their mutual competition makes them an-
ticipate the result by lowering the price. Whether there will be
a greater permanent supply of the commodity, after its produc-
tion has been cheapened, depends on quite another question,
namely, on whether a greater quantity is wanted at the reduced
value. Most commonly a greater quantity is wanted, but not
necessarily. " A man," says Mr. De Quincey,* " buys an article
of instant applicability to his own purposes the more readily and
the more largely as it happens to be cheaper. Silk handkerchiefs
having fallen to half-price, he will buy, perhaps, in threefold
quantity; but he does not buy more steam engines because the
price is lowered. His demand for steam engines is almost al-
ways predetermined by the circumstances of his situation. So
far as he considers the cost at all, it is much more the cost of
working this engine than the cost upon its purchase. But there
are many articles for which the market is absolutely and merely
limited by a pre-existing system, to which those articles are at-
tached as subordinate parts or members. How could we force
the dials or faces of timepieces by artificial cheapness to sell
more plentifully than the inner works or movements of such
timepieces? Could the sale of wine-vaults be increased without
increasing the sale of wine? Or the tools of shipwrights find an

• " Logic of Political Economy," pp. 230 — i.

438 POLITICAL ECONOMY

enlarged market whilst shipbuilding was stationary? . . .
Offer to a town of 3,000 inhabitants a stock of hearses, no cheap-
ness will tempt that town into buying more than one. Offer a
stock of yachts, the chief cost lies in manning, victualling, re-
pairing: no diminution upon the mere price to a purchaser will
tempt into the market any man whose habits and propensities
had not already disposed him to such a purchase. So of pro-
fessional costume for bishops, lawyers, students at Oxford."
Nobody doubts, however, that the price and value of all these
things would be eventually lowered by any diminution of their
cost of production; and lowered through the apprehension en-
tertained of new competitors, and an increased supply: though
the great hazard to which a new competitor would expose him-
self, in an article not susceptible of any considera 'le extension
of its market, would enable the established dealer- to maintain
their original prices much longer than they could do in an arti-
cle offering more encouragement to competition.

Again, reverse the case, and suppose the cost of production
increased, as for example by laying a tax on the commodity.
The value would rise; and that, probably, immediately. Would
the supply be diminished? Only if the increase of value dimin-
ished the demand. Whether this effect followed, would soon
appear, and if it did, the value would recede somewhat, from
excess of supply, until the production was reduced, and would
then rise again. There are many articles for which it requires
a very considerable rise of price, materially to reduce the de-
mand; in particular, articles of necessity, such as the habitual
food of the people : in England, wheaten bread : of which there
is probably almost as much consumed, at the present cost price,
as there would be with the present population at a price con-
siderably lower. Yet it is especially in such things that dearness
or high price is popularly confounded with scarcity. Food may
be dear from scarcity, as after a bad harvest; but the dearness
(for example) which is the effect of taxation, or of corn laws,
has nothing whatever to do with insuf^cient supply: such causes
do not much diminish the quantity of food in a country: it is
other things rather than food that are diminished in quantity by
them, since, those who pay more for food not having so much to
expend otherwise, the production of other things contracts itself
to the Hmits of a smaller demand.

It is, therefore, strictly correct to say, that the value of things

COST OF PRODUCTION 439

which can be increased in quantity at pleasure, does not depend
(except accidentally, and during the time necessary for produc-
tion to adjust itself,) upon demand and supply; on the contrary,
demand and supply depend upon it. There is a demand for a cer-
tain quantity of the commodity at its natural or cost value, and
to that the supply in the long run endeavors to conform. When
at any time it fails of so conforming, it is either from miscalcula-
tion, or from a change in some of the elements of the problem:
either in the natural value, that is, in the cost of pro-
duction; or in the demand, from an alteration in public
taste or in the number or wealth of the consumers. These
causes of disturbance are very liable to occur, and when
any one of them does occur, the market value of the article ceases
to agree with the natural value. The real law of demand and
supply, the equation between them, holds good in all cases: if
a value dififerent from the natural value be necessary to make
the demand equal to the supply, the market value will deviate
from the natural value; but only for a time; for the permanent
tendency of supply is to conform itself to the demand which is
found by experience to exist for the commodity when selling
at its natural value. If the supply is either more or less than
this, it is so accidentally, and affords either more or less than
the ordinary rate of profit; which, under free and active com-
petition, cannot long continue to be the case.

To recapitulate: demand and supply govern the value of all
things which cannot be indefinitely increased; except that even
for them, when produced by industry, there is a minimum value,
determined by the cost of production. But in all things which
admit of indefinite multiplication, demand and supply only de-
termine the perturbations of value, during a period which can-
not exceed the length of time necessary for altering the supply.
While thus ruling the oscillations of value, they themselves obey
a superior force, which makes value gravitate towards Cost of
Production, and which would settle it and keep it there, if fresh
disturbing influences were not continually arising to make it
again deviate. To pursue the same strain of metaphor, demand
and supply always rush to an equilibrium, but the condition of
static equilibrium is when things exchange for each other ac-
cording to their cost of production, or, in the expression we have
used, when things are at their Natural Value.

440 POLITICAL ECONOMY

Chapter IV. — Ultimate Analysis of Cost of Production

§ I. The component elements of Cost of Production have
been set forth in the First Part of this inquiry. The principal
of them, and so much the principal as to be nearly the sole, we
found to be Labor. What the production of a thing costs to its
producer, or its series of producers, is the labor expended in
producing it. If we consider as the producer the capitalist who
makes the advances, the word Labor may be replaced by the
word Wages: what the produce costs to him, is the wages which
he has had to pay. At the first glance indeed this seems to be
only a part of his outlay, since he has not only paid wages to
laborers, but has likewise provided them with tools, materials,
and perhaps buildings. These tools, materials, and buildings,
however, were produced by labor and capital; and their value,
like that of the article to the production of which they are sub-
servient, depends on cost of production, which again is resolv-
able into labor. The cost of production of broadcloth does not
wholly consist in the wages of weavers; which alone are di-
rectly paid by the cloth manufacturer. It consists also of the
wages of spinners and woolcombers, and it may be added, of
shepherds, all of which the clothier has paid for in the price of
yarn. It consists too of the wages of builders and brickmakers,
which he has reimbursed in the contract price of erecting his
factory. It partly consists of the wages of machine-makers, iron-
founders, and miners. And to these must be added the wages
of the carriers who transported any of the means and appliances
of the production to the place where they were to be used, and
the product itself to the place where it is to be sold.

The value of commodities, therefore, depends principally (we
shall presently see whether it depends solely) on the quantity
of labor required for their production ; including in the idea of
production, that of conveyance to the market. " In estimating,"
says Ricardo,* " the exchangeable value of stockings, for ex-
ample, we shall find that their value, comparatively with other
things, depends on the total quantity of labor necessary to
manufacture them and bring them to market. First, there is
the labor necessary to cultivate the land on which the raw cot-
ton is grown; secondly, the labor of conveying the cotton to

* " Principles oi Political Economy and Taxation," chap. i. sect. 3.

ULTIMATE ANALYSIS OF COST OF PRODUCTION 441

the country where the stockings are to be manufactured, which
includes a portion of the labor bestowed in building the ship in
which it is conveyed, and which is charged in the freight of the
goods; thirdly, the labor of the spinner and weaver; fourthly,
a portion of the labor of the engineer, smith, and carpenter,
who erected the buildings and machinery by the help of which
they are made; fifthly, the labor of the retail dealer, and of
many others, whom it is unnecessary further to particularize.
The aggregate sum of these various kinds of labor, determines
the quantity of other things for which these stockings will ex-
change, w^hile the same consideration of the various quantities
of labor which have been bestowed on those other things, will
equally govern the portion of them which will be given for the
stockings.

" To convince ourselves that this is the real foundation of
exchangeable value, let us suppose any improvement to be made
in the means of abridging labor in any one of the various proc-
esses through which the raw cotton must pass before the manu-
factured stockings come to the market to be exchanged for other
things ; and observe the effects which will follow. If fewer men
were required to cultivate the raw cotton, or if fewer sailors
were employed in navigating, or shipwrights in constructing,
the ship in which it was conveyed to us; if fewer hands were
employed in raising the buildings and machinery, or if these,
when raised, were rendered more efficient; the stockings would
inevitably fall in value, and command less of other things. They
would fall, because a less quantity of labor was necessary to their
production, and would therefore exchange for a smaller quantity
of those things in which no such abridgment of labor had been
made.

" Economy in the use of labor never fails to reduce the relative
value of a commodity, whether the saving be in the labor neces-
sary to the manufacture of the commodity itself, or in that neces-
sary to the formation of the capital, by the aid of which it is
produced. In either case the price of stockings would fall,
whether there were fewer men employed as bleachers, spinners,
and weavers, persons immediately necessary to their manufact-
ure; 01 as sailors, carriers, engineers, and smiths, persons more
indirectly concerned. In the one case, the whole saving of labor
would fall on the stockings, because that portion of labor was
wholly confined to the stockings; in the other, a portion only

442 POLITICAL ECONOMY

would fall on the stockings, the remainder being applied to all
those other commodities, to the production of which the build-
ings, machinery, and carriage, were subservient."

§ 2. It will have been observed that Ricardo expresses him-
self as if the quantity of labor which it costs to produce a com-
modity and bring it to market, were the only thing on which
its value depended. But since the cost of production to the
capitalist is not labor but wages, and since wages may be either
greater or less, the quantity of labor being the same; it would
seem that the value of the product cannot be determined solely
by the quantity of labor, but by the quantity together with the
remuneration; and that values must partly depend on wages.

In order to decide this point, it must be considered, that value
is a relative term ; that the value of a commodity is not a name
for an inherent and substantive quality of the thing itself, but
means the quantity of other things which can be obtained in
exchange for it. The value of one thing, must always be under-
stood relatively to some other thing, or to things in general.
Now the relation of one thing to another cannot be altered by
any cause which afTects them both alike. A rise or fall of general
wages is a fact which affects all commodities in the same man-
ner, and therefore affords no reason why they should exchange
for each other in one rather than in another proportion. To
suppose that high wages make high values, is to suppose that
there can be such a thing as general high values. But this is a
contradiction in terms : the high value of some things is
synonymous with the low value of others. The mistake arises
from not attending to values, but only to prices. Though
there is no such thing as a general rise of values, there is
such a thing as a general rise of prices. As soon as we
form distinctly the idea of values, we see that high or low
wages can have nothing to do with them: but that high
wages make high prices, is a popular and wide-spread opin-
ion. The whole amount of error involved in this proposition
can only be seen thoroughly when we come to the theory of
money; at present we need only say that if it be true, there can
be no such thing as a real rise of wages ; for if wages could not
rise without a proportional rise of the price of everything, they
could not, for any substantial purpose, rise at all. This surely
is a sufficient rednctio ad absiirdum, and shows the amazing
folly of the propositions which may and do become, and long

ULTIMATE ANALYSIS OF COST OF PRODUCTION 443

remain, accredited doctrines of popular political economy. It
must be remembered, too, that general high prices, even sup-
posing them to exist, can be of no use to a producer or dealer,
considered as such; for if they increase his money returns, they
increase in the same degree all his expenses. There is no mode
in which capitalists can compensate themselves for a high cost
of labor, through any action on values or prices. It cannot be
prevented from taking its effect in low profits. If the laborers
really get more, that is, get the produce of more labor, a smaller
percentage must remain for profit. From this Law of Distribu-
tion, resting" as it does on a law of arithmetic, there is no escape.
The mechanism of Exchange and Price may hide it from us,
but is quite powerless to alter it.

§ 3. Although, however, general wages, whether high or low,
do not affect values, yet if wages are higher in one employment
than another, or if they rise or fall permanently in one employ-
ment without doing so in others, these inequalities do really
operate upon values. The causes which make wages vary from
one employment to another, have been considered in a former
chapter. When the wages of an employment permanently ex-
ceed the average rate, the value of the thing produced will, in
the same degree, exceed the standard determined by mere
quantity of labor. Things, for example, which are made by
skilled labor, exchange for the produce of a much greater quan-
tity of unskilled labor; for no reason but because the labor is
more highly paid. If, through the extension of education, the
laborers competent to skilled employments were so increased
in number as to diminish the difference between their wages and
those of common labor, all things produced by labor of the su-
perior kind would fall in value, compared with things produced
by common labor, and these might be said therefore to rise in
value. We have before remarked that the difficulty of passing
from one class of employments to a class greatly superior, has
hitherto caused the wages of all those classes of laborers who
are separated from one another by any very marked barrier,
to depend more than might be supposed upon the increase of
the population of each class, considered separately; and that the
inequalities in the remuneration of labor are much greater than
could exist if the competition of the laboring people generally,
could be brought practically to bear on each particular employ-
ment. It follows from this, that wages in different employments

444 POLITICAL ECONOMY

do not rise or fall simultaneously, but are, for short and some-
times even for long periods, nearly independent of one another.
All such disparities evidently alter the relative cost of production
of different commodities, and will therefore be completely rep-
resented in their natural or average value.

It thus appears that the maxim laid down by some of the best
political economists, that wages do not enter into value, is ex-
pressed with greater latitude than the truth warrants, or than ac-
cords with their own meaning. Wages do enter into value. The
relative wages of the labor necessary for producing different
commodities, affect their value just as much as the relative quan-
tities of labor. It is true, the absolute wages paid have no effect
upon values; but neither has the absolute quantity of labor. If
that were to vary simultaneously and equally in all commodities,
values would not be affected. If, for instance, the general ef-
ficiency of all labor were increased, so that all things without
exception could be produced in the same quantity as before with
a smaller amount of labor, no trace of this general diminution of
cost of production would show itself in the values of commodi-
ties. Any change which might take place in them would only
represent the unequal degrees in which the improvement af-
fected different things; and would consist in cheapening those
in which the saving of labor had been the greatest, while those in
which there had been some, but a less saving of labor, would
actually rise in value. In strictness, therefore, wages of labor
have as much to do with value as quantity of labor: and neither
Ricardo nor any one else has denied the fact. In considering,
however, the causes of variations in value, quantity of labor is
the thing of chief importance ; for when that varies, it is generally
in one or a few commodities at a time, but the variations of
wages (except passing fluctuations) are usually general, and have
no considerable effect on value.

§ 4. Thus far of labor, or wages, as an element in cost of pro-
duction. But in our analysis, in the First Book, of the requisites
of production, we found that there is another necessary element
in it besides labor. There is also capital; and this being the re-
sult of abstinence, the produce, or its value, must be sufficient to
remunerate, not only all the labor required, but the abstinence
of all the persons by whom the remuneration of the different
classes of laborers was advanced. The return for abstinence is
Profit. And profit, we have also seen, is not exclusively the sur-

ULTIMATE ANALYSIS OF COST OF PRODUCTION 445

plus remaining to the capitalist after he has been compensated
for his outlay, but forms, in most cases, no unimportant part of
the outlay itself. The flax-spinner, part of whose expenses con-
sists of the purchase of flax and of machinery, has had to pay,
in their price, not only the wages of the labor by which the flax
was grown and the machinery made, but the profits of the
grower, the flax-dresser, the miner, the iron-founder, and the
machine-maker. All these profits, together with those of the
spinner himself, were again advanced by the weaver, in the price
of his material, linen yarn: and along with them the profits of a
fresh set of machine-makers, and of the miners and iron-work-
ers who supplied them with their metallic material. All these
advances form part of the cost of production of linen. Profits,
therefore, as well as wages, enter into the cost of production
which determines the value of the produce.

Value, however, being purely relative, cannot depend upon
absolute profits, no more than upon absolute wages, but upon
relative profits only. High general profits cannot, any more
than high general wages, be a cause of high values, because high
general values are an absurdity and a contradiction. In so far
as profits enter into the cost of production of all things, they
cannot affect the value of any. It is only by entering in a greater
degree into the cost of production of some things than of
others, that they can have any influence on value.

For example, we have seen that there are causes which neces-
sitate a permanently higher rate of profit in certain employments
than in others. The must be a compensation for superior risk,
trouble, and disagreeableness. This can only be obtained by
selling the commodity at a value above that which is due to the
quantity of labor necessary for its production. If gunpowder
exchanged for other things in no higher ratio than that of the
labor required from first to last for producing it, no one would
set up a powder-mill. Butchers are certainly a more prosperous
class than bakers, and do not seem to be exposed to greater risks,
since it is not remarked that they are oftener bankrupts. They
seem, therefore, to obtain higher profits, which can only arise
from the more limited competition caused by the unpleasantness,
and to a certain degree, the unpopularity of their trade. But
this higher profit implies that they sell their commodity at a
higher value than that due to their labor and outlay. All in-
equalities of profit which are necessary and permanent, are rep-
resented in the relative values of the commodities.

446 POLITICAL ECONOMY

§ 5. Profits, however, may enter more largely into the con-
ditions of production of one commodity than of another, even
though there be no difference in the rate of profit between the
two employments. The one commodity may be called upon to
yield profit during a longer period of time than the other. The
example by which this case is usually illustrated is that of wine.
Suppose a quantity of wine, and a quantity of cloth, made by
equal amounts of labor, and that labor paid at the same rate.
The cloth does not improve by keeping; the wine does. Sup-
pose that, to attain the desired quality, the wine requires to be
kept five years. The producer or dealer will not keep it, unless
at the end of five years he can sell it for as much more than the
cloth, as amounts to five years' profit, accumulated at compound
interest. The wine and the cloth were made by the same origi-
nal outlay. Here then is a case in which the natural values, rela-
tively to one another, of two commodities, do not conform to
their cost of production alone, but to their cost of production plus
something else. Unless, indeed, for the sake of generality in the
expression, we include the profit which the wine-merchant fore-
goes during the five years, in the cost of production of the wine:
looking upon it as a kind of additional outlay, over and above his
other advances, for which outlay he must be indemnified at last.

All commodities made by machinery are assimilated, at least
approximately, to the wine in the preceding example. In com-
parison with things made wholly by immediate labor, profits
enter more largely into their cost of production. Suppose two
commodities, A and B, each requiring a year for its production,
by means of a capital which we will on this occasion denote by
money, and suppose to be ii,ooo. A is made wholly by im-
mediate labor, the whole £1,000 being expended directly in
wages. B is made by means of labor which costs £500 ^^^ ^
machine which costs £500, and the machine is worn out by one
year's use. The two commodities will be exactly of the same
value; which, if computed in money, and if profits are twenty
per cent, per annum, will be £1,200. But of this £1,200, in the
case of A, only £200, or one-sixth, is profit: while in the case of
B there is not only the £200, but as much of £500 (the price of the
machine) as consisted of the profits of the machine-maker;
which, if we suppose the machine also to have taken a year for
its production, is again one-sixth. So that in the case of A only
one-sixth of the entire return is profit, whilst in B the element

ULTIMATE ANALYSIS OF COST OF PRODUCTION

447

of profit comprises not only a sixth of the whole, but an addi-
tional sixth of a large part.

The greater the proportion of the whole capital which consists
of machinery, or buildings, or material, or anything else which
must be provided before the immediate labor can commence, the
more largely will profits enter into the cost of production. It is
equally true, though not so obvious at first sight, that greater
durability in the portion of capital which consists of machinery
or buildings, has precisely the same effect as a greater amount
of it. As we just supposed one extreme case, of a machine en-
tirely W'Orn out by a year's use, let us now suppose the opposite
and still more extreme case, of a machine v/hich lasts forever,
and requires no repairs. In this case, which is as well suited for
the purpose of illustration as if it were a possible one, it will be
unnecessary that the manufacturer should ever be repaid the
£500 which he gave for the machine, since he has always the
machine itself, worth £500; but he must be paid, as before, a
profit on it. The commodity B, therefore, which in the case
previously supposed was sold for £1,200, of which sum £1,000
was to replace the capital and £200 was profit, can now be
sold for £700, being £500 to replace wages, and £200 profit on the
entire capital. Profit, therefore, enters into the value of B in the
ratio of £200 out of £700, being two-sevenths of the whole, or
284 per cent., w'hile in the case of A, as before, it enters only
in the ratio of one-sixth, or i6f per cent. The case is of course
purely ideal, since no machinery or other fixed capital lasts for-
ever; but the more durable it is, the nearer it approaches to this
ideal case, and the more largely does profit enter into the return.
If, for instance, a machine worth £500 loses one-fifth of its value
by each year's use, £100 must be added to the return to make
up this loss, and the price of the commodity will be £800. Profit
therefore will enter into it in the ratio of £200 to £800, or one-
fourth, which is still a much higher proportion than one-sixth,
or £200 in £1,200, as in case A.

From the unequal proportion in which, in different employ-
ments, profits enter into the advances of the capitalist, and there-
fore into the returns required by him, two consequences follow
in regard to value. One is, that commodities do not exchange
in the ratio simply of the quantities of labor required to produce
them; not even if we allow for the unequal rates at which
different kinds of labor are permanently remunerated. We have

448 POLITICAL ECONOMY

already illustrated this by the example of wine: we shall now
further exemplify it by the case of commodities made by ma-
chinery. Suppose, as before, an article A, made by a thousand
pounds' worth of immediate labor. But instead of B, made by
£500 worth of immediate labor and a machine worth £500, let us
suppose C, made by £500 worth of immediate labor with the aid
of a machine which has been produced by another £500 worth
of immediate labor: the machine requiring a year for making,
and worn out by a year's use; profits being as before twenty per
cent. A and C are made by equal quantities of labor, paid at
the same rate: A costs i 1,000 worth of direct labor; C, only
£500 worth, which however is made up to £1,000 by the labor
expended in the construction of the machine. If labor, or its
remuneration, were the sole ingredient of cost of production,
these two things would exchange for one another. But will they
do so? Certainly not. The machine having been made in a year
by an outlay of £500, and profits being twenty per cent., the
natural price of the machine is £600: making an additional £100
which must be advanced, over and above his other expenses, by
the manufacturer of C, and repaid to him with a profit of twenty
per cent. While, therefore, the commodity A is sold for £1,200,
C cannot be permanently sold for less than £1,320.

A second consequence is, that every rise or fall of general
profits will have an effect on values. Not indeed by raising or
lowering them generally (which, as we have so often said, is a
contradiction and an impossibility) : but by altering the propor-
tion in which the values of things are affected by the unequal
lengths of time for which profit is due. When two things, though
made by equal labor, are of unequal value because the one is
called upon to yield profit for a greater number of years or
months than the other; this difference of value will be greater
when profits are greater, and less when they are less. The wine
which has to yield five years' profit more than the cloth, will
surpass it in value much more if profits are forty per cent, than
if they are only twenty. The commodities A and C, which,
though made by equal quantities of labor, were sold for £1,200
and £1,320, a difference of ten per cent., would, if profits had
been only half as much, have been sold for £1,100 and £1,155, ^
difference of only five per cent.

It follows from this, that even a general rise of wages, when
it involves a real increase in the cost of labor, does in some de-

ULTIMATE ANALYSIS OF COST OF PRODUCTION 449

gree influence values. It does not affect them in the manner
vulgarly supposed, by raising them universally. But an increase
in the cost of labor, lowers profits; and therefore lowers in nat-
ural value the things into which profits enter in a greater pro-
portion than the average, and raises those into which they enter
in a less proportion than the average. All commodities in the
production of which machinery bears a large part, especially if
the machinery is very durable, are lowered in their relative value
when profits fall; or, what is equivalent, other things are raised
in value relatively to them. This truth is sometimes expressed
in a phraseology more plausible than sound, by saying that a
rise of wages raises the value of things made by labor, in com-
parison with those made by machinery. But things made by
machinery, just as much as any other things, are made by labor,
namely the labor which made the machinery itself: the only
difference being that profits enter somewhat more largely into
the production of things for which machinery is used, though
the principal item of the outlay is still labor. It is better, there-
fore, to associate the effect with fall of profits than with rise of
wages; especially as this last expression is extremely ambigu-
ous, suggesting the idea of an increase of the laborer's real re-
muneration, rather than of what is alone to the purpose here,
namely the cost of labor to its employer.

§ 6. Besides the natural and necessary elements in cost of
production — labor and profits — there are others which are arti-
ficial and casual, as for instance a tax. The tax on malt is as
much a part of the cost of production of that article, as the wages
of the laborers. The expenses which the law imposes, as well as
those which the nature of things imposes, must be reimbursed
v^'ith the ordinary profit from the value of the produce, or the
things will not continue to be produced. But the influence of
taxation on value is subject to the same conditions as the influ-
ence of wages and of profits. It is not general taxation, but
differential taxation, that produces the effect. If all productions
were taxed so as to take an equal percentage from all profits,
relative values would be in no way disturbed. If only a few
commodities were taxed, their value would rise: and if only a
few were left untaxed, their value would fall. If half were taxed
and the remainder untaxed, the first half would rise and the last
would fall relatively to each other. This would be necessary in
order to equalize the expectation of profit in all employments,
Vol. L — 29

45°

POLITICAL ECONOMY

without which the taxed employments would ultimately, if not
immediately, be abandoned. But general taxation, when equally
imposed, and not disturbing the relations of different produc-
tions to one another, cannot produce any effect on values.

We have thus far supposed that all the means and appliances
which enter into the cost of production of commodities, are
things whose own value depends on their cost of production.
Some of them, however, may belong to the class of things which
cannot be increased ad libitum in quantity, and which therefore,
if the demand goes beyond a certain amount, command a scarc-
ity value. The materials of many of the ornamental articles
manufactured in Italy are the substances called rosso, giallo,
and verde antico, which, whether truly or falsely I know not,
are asserted to be solely derived from the destruction of ancient
columns and other ornamental structures: the quarries from
which the stone was originally cut being exhausted, or their
locality forgotten.* A material of such a nature, if in much de-
mand, must be at a scarcity value; and this value enters into
the cost of production, and, consequently into the value, of the
finished article. The time seems to be approaching when the
more valuable furs will come under the influence of a scarcity
value of the material. Hitherto the diminishing number of the
animals which produce them, in the wildernesses of Siberia and
on the coasts of the Esquimaux Sea, has operated on the value
only through the greater labor which has become necessary for
securing any given quantity of the article; since, without doubt,
by employing labor enough, it might still be obtained in much
greater abundance for some time longer.

But the case in which scarcity value chiefly operates in add-
ing to cost of production, is the case of natural agents. These,
when unappropriated, and to be had for the taking, do not enter
into cost of production, save to the extent of the labor which
may be necessary to fit them for use. Even when appropriated,
they do not (as we have already seen) bear a value from the
mere fact of the appropriation, but only from scarcity, that is,
from limitation of supply. But it is equally certain that they
often do bear a scarcity value. Suppose a fall of water, in a
place where there are more mills wanted than there is water-
power to supply them; the use of the fall of water will have a

* Some of these quarries, I believe, have been rediscovered, and are again
worked,

RENT IN ITS RELATION TO VALUE 451

scarcity value, sufficient either to bring the demand down to the
supply, or to pay for the creation of an artificial power, by steam
or otherwise, equal in efficiency to the water-power.

A natural agent being a possession in perpetuity, and being
only serviceable by the products resulting from its continued
employment, the ordinary mode of deriving benefit from its
ownership is by an annual equivalent, paid by the person who
uses it, from the proceeds of its use. This equivalent always
might be, and generally is, termed rent. The question therefore,
respecting the influence which the appropriation of natural
agents produces on values, is often stated in this form: Does
Rent enter into Cost of Production? and the answer of the best
political economists is in the negative. The temptation is strong
to the adoption of these sweeping expressions, even by those
who are aware of the restrictions with which they must be taken;
for there is no denying that they stamp a general principle more
firmly on the mind, than if it were hedged round in theory with
all its practical limitations. But they also puzzle and mislead,
and create an impression unfavorable to political economy, as if
it disregarded the evidence of facts. No one can deny that rent
sometimes enters into cost of production. If I buy or rent a
piece of ground, and build a cloth manufactory on it, the ground-
rent forms legitimately a part of my expenses of production,
which must be repaid by the product. And since all factories
are built on ground, and most of them in places where ground
is peculiarly valuable, the rent paid for it must, on the average,
be compensated in the values of all things made in factories.
In what sense it is true that rent does not enter into the cost of
production or affect the value of agricultural produce, will be
shown in the succeeding chapter.

Chapter V. — Of Rent, in its Relation to Value

§ I. We have investigated the laws which determine the value
of two classes of commodities: the small class which, being
limited to the definite quantity have their value entirely deter-
mined by demand and supply, save that their cost of production
(if they have any) constitutes a minimum below which they can-
not permanently fall; and the large class, which can be multi-
plied ad lihihim by labor and capital, and of which the cost of
production fixes the maximum as well as the minimum at which

452 POLITICAL ECONOMY

they can permanently exchange. But there is still a third kind
of commodities to be considered: those which have, not one,
but several costs of production ; which can always be increased
in quantity by labor and capital, but not by the same amount of
labor and capital; of which so much may be produced at a given
cost, but a further quantity not without a greater cost. These
commodities form an intermediate class, partaking of the char-
acter of both the others. The principal of them is agricultural
produce. We have already made abundant reference to the
fundamental truth, that in agriculture, the state of the art being
given, doubling the labor does not double the produce ; that if
an increased quantity of produce is required, the additional sup-
ply is obtained at a greater cost than the first. Where a hundred
quarters of corn are all that is at present required from the lands
of a given village, if the growth of population made it necessary
to raise a hundred more, either by breaking up worse land now
uncultivated, or by a more elaborate cultivation of the land al-
ready under the plough, the additional hundred, or some part
of them at least, might cost double or treble as much per quarter
as the former supply.

If the first hundred quarters were all raised at the same ex-
pense (only the best land being cultivated) : and if that expense
would be remunerated with the ordinary profit by a price of 20s.
the quarter; the natural price of wheat, so long as no more than
that quantity was required, would be 20s. ; and it could only rise
above, or fall below that price, from vicissitudes of seasons, or
other casual variations in supply. But if the population of the
district advanced, a time would arrive when more than a hun-
dred quarters would be necessary to feed it. We must suppose
that there is no access to any foreign supply. By the hypothesis,
no more than a hundred quarters can be produced in the dis-
trict, unless by either bringing worse land into cultivation, or
altering the system of culture to a more expensive one. Neither
of these things will be done without a rise in price. This rise of
price will gradually be brought about by the increasing demand.
So long as the price has risen, but not risen enough to repay
with the ordinary profit the cost of producing an additional
quantity, the increased value of the limited supply partakes of
the nature of a scarcity value. Suppose that it will not answer to
cultivate the second best land, or land of the second degree of
remoteness, for a less return than 25s. the quarter; and that this

RENT IN ITS RELATION TO VALUE 453

price is also necessary to remunerate the expensive operations
by which an increased produce might be raised from land of the
first quality. If so, the price will rise, through the increased
demand, until it reaches 25s. That will now be the natural
price; being the price without which the quantity, for which
society has a demand at that price, will not be produced. At
that price, however, society can go on for some time longer;
could go on perhaps forever, if population did not increase.
The price, having attained that point, will not again permanently
recede (though it may fall temporarily from accidental abun-
dance); nor will it advance further, so long as society can obtain
the supply it requires without a second increase of the cost of
production.

I have made use of Price in this reasoning, as a convenient
symbol of Value, from the greater familiarity of the idea; and I
shall continue to do so as far as may appear to be necessary.

In the case supposed, different portions of the supply of corn
have different costs of production. Though the 20, or 50, or 150
quarters additional have been produced at a cost proportional to
25s., the original hundred quarters per annum are still produced
at a cost only proportional to 20s. This is self-evident, if the
original and the additional supply are produced on different
qualities of land. It is equally true if they are produced on the
same land. Suppose that land of the best quality, which pro-
duced 100 quarters at 20s., has been made to produce 150 by an
expensive process, which it would not answer to undertake with-
out a price of 25s. The cost which requires 25s. is incurred for
the sake of 50 quarters alone; the first hundred might have con-
tinued forever to be produced at the original cost, and with the
benefit, on that quantity, of the whole rise of price caused by the
increased demand: no one, therefore, will incur the additional
expense for the sake of the additional fifty, unless they alone will
pay for the whole of it. The fifty, therefore, will be produced at
their natural price, proportioned to the cost of their production:
while the other hundred will now bring in 5s. a quarter more
than their natural price — than the price corresponding to, and
sufficing to remunerate, their lower cost of production.

If the production of any, even the smallest, portion of the
supply, requires as a necessary condition a certain price, that
price will be obtained for all the rest. We are not able to buy
one loaf cheaper than another because the corn from which it

454 POLITICAL ECONOMY

was made, being grown on a richer soil, has cost less to the
grower. The value, therefore, of an article (meaning its natural,
which is the same with its average value) is determined by the
cost of that portion of the supply which is produced and brought
to market at the greatest expense. This is the Law of Value of
the third of the three classes into which all commodities are di-
vided.

§ 2. If the portion of produce raised in the most unfavorable
circumstances, obtains a value proportioned to its cost of pro-
duction ; all the portions raised in more favorable circumstances,
selling as they must do at the same value, obtain a value more
than proportioned to their cost of production. Their value is
not, correctly speaking, a scarcity value, for it is determined
by the circumstances of the production of the commodity, and
not by the degree of dearness necessary for keeping down the
demand to the level of a limited supply. The owners, however,
of those portions of the produce enjoy a privilege; they obtain
a value which yields them more than the ordinary profit. If this
advantage depends upon any special exemption, such as being
free from a tax, or upon any personal advantages, physical or
mental, or any peculiar process only known to themselves, or
upon the possession of a greater capital than other people, or
upon various other things which might be enumerated, they re-
tain it to themselves as an extra gain, over and above the general
profits of capital, of the nature, in some sort, of a monopoly
profit. But when, as in the case which we are more particularly
considering, the advantage depends on the possession of a nat-
ural agent of peculiar quality, as, for instance, of more fertile
land than that which determines the general value of the com-
modity; and when this natural agent is not owned by them-
selves; the person who does own it, is able to exact from them,
in the form of rent, the whole extra gain derived from its use.
We are thus brought by another road to the Law of Rent, in-
vestigated in the concluding chapter of the Second Book. Rent,
we again see, is the difiference between the unequal returns to
different parts of the capital employed on the soil. Whatever
surplus any portion of agricultural capital produces, beyond
what is produced by the same amount of capital on the worst soil,
or under the most expensive mode of cultivation, which the ex-
isting demands of society compel a recourse to; that surplus
will naturally be paid as rent from that capital, to the owner of
the land on which it is employed.

RENT IN ITS RELATION TO VALUE 455

It was long thought by political economists, among the rest
even by Adam Smith, that the produce of land is always at a
monopoly value, because (they said) in addition to the ordinary
rate of profit, it always yields something further for rent. This
we now see to be erroneous. A thing cannot be at a monopoly
value, when its supply can be increased to an indefinite extent
if we are only willing to incur the cost. If no more corn than
the existing quantity is grown, it is because the value has not
risen high enough to remunerate any one for growing it. Any
land (not reserved for other uses, or for pleasure) which at the
existing price, and by the existing processes, will yield the ordi-
nary profit, is tolerably certain, unless some artificial hindrance
intervenes, to be cultivated, although nothing may be left for
rent. As long as there is any land fit for cultivation, which at
the existing price cannot be profitably cultivated at all, there
must be some land a little better, which will yield the ordinary
profit, but allow nothing for rent: and that land, if within the
boundary of a farm, will be cultivated by the farmer; if not so,
probably by the proprietor, or by some other person on suffer-
ance. Some such land at least, under cultivation, there can
scarcely fail to be.

Rent, therefore, forms no part of the cost of production which
determines the value of agricultural produce. Circumstances no
doubt may be conceived in which it might do so, and very largely
too. We can imagine a country so fully peopled, and with all its
cultivable soil so completely occupied, that to produce any addi-
tional quantity would require more labor than the produce would
feed: and if we suppose this to be the condition of the whole
world, or of a country debarred from foreign supply, then, if
population continued increasing, both the land and its produce
would really rise to a monopoly or scarcity price. But this state
of things never can have really existed anywhere, unless pos-
sibly in some small island cut off from the rest of the world; nor
is there any danger whatever that it should exist. It certainly
exists in no known region at present. Monopoly, we have seen,
can take effect on value, only through limitation of supply. In
all countries of any extent there is more cultivable land than is
yet cultivated: and while there is any such surplus, it is the
same thing, so far as that quality of land is concerned, as if there
were an indefinite quantity. What is practically limited in supply
is only the better qualities; and even for those, so much rent

456 POLITICAL ECONOMY

cannot be demanded as would bring in the competition of the
lands not yet in cultivation; the rent of a piece of land must be
somewhat less than the whole excess of its productiveness over
that of the best land which it is not yet profitable to cultivate;
that is, it must be about equal to the excess above the worst land
which it is profitable to cultivate. The land or the capital most
unfavorably circumstanced among those actually employed,
pays no rent; and that land or capital determines the cost of pro-
duction which regulates the value of the whole produce. Thus
rent is, as we have already seen, no cause of value, but the price
of the privilege which the inequality of the returns to different
portions of agricultural produce confers on all except the least
favored portion.

Rent, in short, merely equalizes the profits of different farm-
ing capitals, by enabling the landlord to appropriate all extra
gains occasioned by superiority of natural advantages. If all
landlords were unanimously to forego their rent, they would but
transfer it to the farmers, without benefiting the consumer; for
the existing price of corn would still be an indispensable con-
dition of the production of part of the existing supply, and if
a part obtained that price the whole would obtain it. Rent,
therefore, unless artificially increased by restrictive laws, is no
burden on the consumer; it does not raise the price of corn, and
is no otherwise a detriment to the public, than inasmuch as if
the state had retained it, or imposed an equivalent in the shape
of a land-tax, it would then have been a fund applicable to gen-
eral instead of private advantage.

§ 3- Agricultural productions are not the only commodities
which have several different costs of production at once, and
which, in consequence of that difference, and in proportion to it,
afford a rent. Mines are also an instance. Almost all kinds of
raw material extracted from the interior of the earth — metals,
coals, precious stones, etc., are obtained from mines differing
considerably in fertility, that is, yielding very different quantities
of the product to the same quantity of labor and capital. This
being the case, it is an obvious question, why are not the most
fertile mines so worked as to supply the whole market? No
such question can arise as to land; it being self-evident, that the
most fertile lands could not possibly be made to supply the
whole demand of a fully-peopled country; and even of what they
do yield, a part is extorted from them by a labor and outlay as

RENT IN ITS RELATION TO VALUE 457

great as that required to grow the same amount on worse land.
But it is not so with mines; at least, not universally. There are,
perhaps, cases in which it is impossible to extract from a par-
ticular vein, in a given time, more than a certain quantity of ore,
because there is only a limited surface of the vein exposed, on
which more than a certain number of laborers cannot be simul-
taneously employed. But this is not true of all mines. In col-
lieries, for example, some other cause of limitation must be
sought for. In some instances the owners limit the quantity
raised, in order not too rapidly to exhaust the mine: in others
there are said to be combinations of owners, to keep up a monop-
oly price by limiting the production. Whatever be the causes,
it is a fact that mines of different degrees of richness are in opera-
tion, and since the value of the produce must be proportional to
the cost of production at the worst mine (fertility and situation
taken together), it is more than proportional to that of the best.
All mines superior in produce to the worst actually worked, will
yield, therefore, a rent equal to the excess. They may yield
more; and the worst mine may itself yield a rent. Mines being
comparatively few, their qualities do not graduate gently into
one another, as the qualities of land do; and the demand may
be such as to keep the value of the produce considerably above
the cost of production at the worst mine now worked, without
being sufficient to bring into operation a still worse. During
the interval, the produce is really at a scarcity value.

Fisheries are another example. Fisheries in the open sea are
not appropriated, but fisheries in lakes or rivers almost always
are so, and likewise oyster-beds or other particular fishing-
grounds on coasts. We may take salmon fisheries as an exam-
ple of the whole class. Some rivers are far more productive in
salmon than others. None, however, without being exhausted,
can supply more than a very limited demand. The demand of a
country like England can only be supplied by taking salmon
from many different rivers of unequal productiveness, and the
value must be sufificient to repay the cost of obtaining the fish
from the least productive of these. All others, therefore, will if
appropriated afiford a rent equal to the value of their superiority.
Much higher than this it cannot be, if there are salmon rivers ac-
cessible which from distance or inferior productiveness have not
yet contril)utcd to supply the market. If there are not, the value,
doubtless, may rise to a scarcity rate, and the worst fisheries in
use may then yield a considerable rent.

458 POLITICAL ECONOMY

Both in the case of mines and of fisheries, the natural order of
events is liable to be interrupted by the opening of a new mine,
or a new fishery, of superior quality to some of those already in
use. The first efifect of such an incident is an increase of the
supply; which of course lowers the value to call forth an in-
creased demand. This reduced value may be no longer suffi-
cient to remunerate the worst of the existing mines or fisheries,
and these may consequently be abandoned. If the superior
mines or fisheries, with the addition of the one newly opened,
produce as much of the commodity as is required at the lower
value corresponding to their lower cost of production, the fall
of value will be permanent, and there will be a corresponding
fall in the rents of those mines or fisheries which are not aban-
doned. In this case, when things have permanently adjusted
themselves, the result will be, that the scale of qualities which
supply the market will have been cut short at the lower end, while
a new insertion will have been made in the scale at some point
higher up; and the worst mine or fishery in use — the one which
regulates the rents of the superior qualities and the value of the
commodity — will be a mine or fishery of better quality than that
by which they were previously regulated.

Land is used for other purposes than agriculture, especially for
residence; and when so used, yields a rent, determined by prin-
ciples similar to those already laid down. The ground rent of a
building, and the rent of a garden or park attached to it, will
not be less than the rent which the same land would afford in
agriculture: but may be greater than this to an indefinite
amount: the surplus being either in consideration of beauty or
of convenience, the convenience often consisting in superior fa-
cilities for pecuniary gain. Sites of remarkable beauty are gen-
erally limited in supply, and therefore, if in great demand, are
at a scarcity value. Sites superior only in convenience, are gov-
erned as to their value by the ordinary principles of rent. The
ground-rent of a house in a small village is but little higher than
the rent of a similar patch of ground in the open fields : but that
of a shop in Cheapside will exceed these, by the whole amount
at which people estimate the superior facilities of money-mak-
ing in the more crowded place. The rents of wharfage, dock
and harbor room, water-power, and many other privileges, may
be analyzed on similar principles.

§ 4. Cases of extra profit analogous to rent, are more fre-

RENT IN ITS RELATION TO VALUE 459

quent in the transactions of industry than is sometimes sup-
posed. Take the case, for example, of a patent, or exchisive
privilege for the use of a process by which cost of production is
lessened. If the value of the product continues to be regulated
by what it costs to those who are obliged to persist in the old
process, the patentee will make an extra profit equal to the ad-
vantage which his process possesses other theirs. This extra
profit is essentially similar to rent, and sometimes even assumes
the form of it; the patentee allowing to other producers the use
of his privilege, in consideration of an annual payment. So long
as he, and those whom he associates in the privilege, do not
produce enough to supply the whole market, so long the original
cost of production, being the necessary condition of producing
a part, will regulate the value of the whole; and the patentee
will be enabled to keep up his rent to a full equivalent for the
advantage which his process gives him. In the commencement
indeed he will probably forego a part of this advantage for the
sake of underselling others : the increased supply which he brings
forward will lower the value, and make the trade a bad one for
those who do not share in the privilege : many of whom there-
fore will gradually retire, or restrict their operations, or enter
into arrangements with the patentee. As his supply increases
theirs will diminish, the value meanwhile continuing slightly de-
pressed. But if he stops short in his operations before the market
is wholly supplied by the new process, things will again adjust
themselves to what was the natural value before the invention
was made, and the benefit of the improvement will accrue solely
to the patentee.

The extra gains which any producer or dealer obtains
through superior talents for business, or superior business
arrangements, are very much of a similar kind. If all his
competitors had the same advantages, and used them, the
benefit would be transferred to their customers, through the
diminished value of the article: he only retains ft for himself
because he is able to bring his commodity to market at a lower
cost, while its value is determined by a higher. All advantages,
in fact, which one competitor has over another, whether natural
or acquired, whether personal or the result of social arrange-
ments, bring the commodity, so far, into the Third Class, and
assimilate the possessor of the advantage to a receiver of rent.
Wages and profits represent the universal elements in produc-

46o POLITICAL ECONOMY

tion, while rent may be taken to represent the dififerential and
pecuHar: any difference in favor of certain producers, or in
favor of production in certain circumstances, being the source
of a gain, which, though not called rent unless paid periodically
by one person to another, is governed by laws entirely the same
with it. The price paid for a dififerential advantage in producing
a commodity, cannot enter into the general cost of production
of the commodity.

A commodity may, no doubt, in some contingencies, yield a
rent even under the most disadvantageous circumstances of its
production; but only when it is, for the time, in the condition
of those commodities which are absolutely limited in supply,
and is therefore selling at a scarcity value; which never is, nor
has been, nor can be, a permanent condition of any of the great
rent-yielding commodities: unless through their approaching
exhaustion, if they are mineral products (coal, for example), or
through an increase of population, continuing after a further in-
crease of production becomes impossible; a contingency, which
the almost inevitable progress of human culture and improve-
ment in the long interval which has first to elapse, forbids us to
consider as probable.

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/

HB 151 .M5 1899 v.1 SMC
MilL John Stuart.
Principles of political
economy Rev. ed. --

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