? ^v^^^ LIBRARY. PLATES. THIS Book must not be kept longer than Two weeks after being got out of the LIBRARY, under a penalty of ONE PENNY for every additional week that it is detained It is earnestly requested that the greatest care may be taken to keep the Book clean, as atten- tion to this will be a great saving to the Library. T.U THE ECONOMIC INTERPRETATION OF HISTORY. Ex Libria C. K. OGDEN THE ECONOMIC INTERPRETATION OF HISTORY (LECTURES DELIVERED IN WORCESTER COLLEGE HALL, OXFORD, 1887-8) JAMES E. THOROLD ROGERS PROFESSOR OF POLITICAL ECONOMY IN THE UNIVERSITY OF OXFORD AND OF ECONOMIC SCIENCE AND STATISTICS, KING'S COLLEGE, LONDON, AUTHOR OF "SIX CENTURIES OF WORK AND WAGES,'' "A HISTORY OF AGRICULTURE AND PRICES IN ENGLAND," ETC. T. FISHER UNWIN 26 PATERNOSTER SQUARE NEW YORK: G. P. PUTNAM'S SONS MDCCCLXXXVIII PREFACE. THE lectures contained in this volume were delivered in the hall of the author's College (Worcester, Oxford) in his capacity as lecturer in Political Economy to that Society. They were open to all members of the university, and were very numerously attended. I mention this, because, being printed as they were read, the fact may explain or excuse the various local allusions which they con- tain, and the occasional repetitions of statement which will be found in them. The business of a lecturer is to teach as best he can. I should be the last person to deny that there are economical generalities which are as universal in their application as they are true. Such, for example, are those which affirm that the indi- vidual has an inalienable right to lay out his money, or the pro- duce of his labour to the best advantage, and that any interference with that right is an abuse of power, for which no valid excuse whatever has been, or can be, alleged. In other words, there is no answer to the claim of free exchange. Of course I am well aware that an answer has been attempted, and that civil government con- stantly invades the right. The invasion is brigandage under the forms of law. Other illustrations can be given, as that the police of society must always regulate the trade in instruments of credit, that certain services are part of the function of government, that the satisfaction of contracts, under an equitable interpretation, must be guaranteed, that the only honest rule in taxation is equality of sacrifice, with what such a rule implies or involves, and BO on. It is very likely that in practice government violates these economical principles, and gives more or less plausible reasons for vi PEEFACE. its misconduct. And as wrongs done by government have an endur- ing effect, it is difficult, if not impossible, to interpret any problem in political economy, without taking into account those historical circumstances of which the present problem is frequently the result, and occasionally to examine the present political situation. In brief, any theory of political economy which does not take facts into ac- count is pretty sure to land the student in practical fallacies of the grossest, and in the hands of ignorant, but influential people, of the most mischievous kind. I could quote these fallacies by the dozen. Some have been over and over again refuted ; others still possess vitality. Some are slowly losing their hold, especially in practical politics, which is becoming every day more economical. Many of these errors die hard, especially when they assume the form of a vested interest ; sometimes they are maintained as part of the con- tinuity of policy ; sometimes they are defended by bold and baseless assertions. In time, they become the subjects of parliamentary compromise, at last they are swept away and repudiated. Any student of the economical laws which can be found in the historical statute book, will constantly find that the wisdom of one genera- tion is the folly of another. Many years ago I began to suspect that much of the political economy which was currently in authority was a collection of logomachies, which had but little relation to the facts of social life. Accident, and some rare local opportunities, led me to study these facts in the social life of our forefathers, facts of which the existence was entirely unsuspected. I began to collect materials, chiefly in the form of prices, and at first of the necessaries of life. But I soon widened my research, and included in my inquiry everything which would inform me as to the social condition of Englishmen, six centuries ago and onwards. Gradually, I came to see how Englishmen lived through these ages, and to learn, what, perhaps, I can never tell fully, the continuous history of social life in this country, up to nearly recent times, or at least till that time in which the modern conditions of our experience had been almost stereotyped. By this study, I began to discover that much which popular economists believe to be natural is highly artificial ; that what they call laws are too often hasty, inconsiderate, and in- accurate inductions ; and that much which they consider to be PREFACE. vii demonstrably irrefutable is demonstrably false. I have often had to conclude that the best-intentioned thinkers and writers have been supremely mischievous, and that in attempting to frame a system, they have wrecked all system. It must, I think, be admitted that political economy is in a bad way : its authority is repudiated, its conclusions are assailed, its arguments are com pared to the dissertations held in Milton's Limbo, its practical suggestions are conceived to be not much better than those of the philosophers in Laputa, and one of its authorities, as I myself heard, was contemptuously advised to betake himself to Saturn. Now all this is very sad. The books which seemed to be wise are often compared to those curious volumes of which the converts at Ephesus made a holocaust. And the criticism is just. The distrust in ordinary political economy has been loudly ex- pressed by working men. And, to speak truth, one need not wonder at it. The labour question has been discussed by many economists with a haughty loftiness which is very irritating. The economist, it is true, informs them, that all wealth is, the product of labour, that wealth is labour stored in desirable objects, that capital is the result of saved labour, and is being extended and multiplied by the energies of labour. Then he turns round, and rates these workmen for their improvidence, their recklessness, their incontinence in foolishly increasing their numbers, and hints that we should be all the better off if they left us in their thousands, while there are many thousands of well-off people whose absence from us would be a vast gain. I have never read in, any of the numerous works which political economists have written, any attempt to trace the historical causes of this painful spectacle, or to discover whether or no persistent wrong doing has not been the dominant cause of Eng- lish pauperism. The attempts which workmen have made to better their condition have been traduced, or ignored, or made the subject of warnings as to the effects which they will induce on the wage fund, this wage fund, after all,, being a phantasm, a logomachy. In the United States the case is worse. A writer will publish a book on wages, and deliberately ignore the effect of the American tariff on the real wages of workers. If he knows anything at all of what he is writing about, and is not merely writing for office, he should be aware that no fertile customs revenue can come from anything viii PREFACE. but the expenditure of the poor, and should not need that Mr. "Washbourne, the late Minister of the Union at Paris, should tell him, that smuggling is an all-devouring passion with the wealthy American, and the corruption of revenue officers the constant machinery for the practice. Two things have discredited political economy the one is it& traditional disregard for facts ; the other, its strangling itself with definitions. The economist has borrowed his terms from common life. Now, unless the words one uses are strictly limited in mean- ing, as those are which express geometrical forms, or chemical compounds, no word, and for the matter of that no definition of the word, ordinarily covers what the man who uses the word intends by it. He gives, may be, a definition of the thing or thought, and succeeding writers who inherit his word begin to expand or vary it, not taking counsel with the facts, but only with their own experiences or impressions. Now word-splitting and definition -extending is a most agreeable occupation. It does not require knowledge. It is sufficient to be acute. Persons can spin out their definitions from their inner consciousness by the dozen, aye, and catch the unwary in the web. But, above all things, the economist claims to be practical. He is engaged, as he tells you, in the analysis of social man, from a particular point of view. This view is especially the function of government and the state. If his conclusions are taken rightly, they are, or should be, the basis of Parliamentary and Administrative action. But it is appalling to think of what the consequences would have been, if some so-called economical verities had been translated into law. It is grievous enough to note what the consequences have been, when some of these rash inferences have been accepted as guides in statesmanship. I have attempted to illustrate what I mean in these lectures. The lawyer gives an arbitrary meaning to words or phrases, and will not suffer these meanings to be traversed. Unless he did so, the practice of law would be an impossible chaos. It does not signify to him that a conveyance to a man and his heirs was meant to give two estates. He insists that in his language it only gives one, in the first place, probably, for Biblical reasons. The same fact applies to the meaning which it assigns to words implying certain commercial instruments. Mr. Justice PREFACE. ix Byles defines the legal meaning of a bill of exchange, and his defi- nition is accepted as conclusive, as regards drawer, acceptor, and negotiators. It is no use to wrangle whether the judge's definition is capable of amendment. It is sufficient that the interpretation is fixed, beyond cavil or dispute. But there are subjects of the pro- foundest human interest in which no such final authority is accepted. These have been strangled by dogmas, definitions, logomachies, till the spirit of the whole matter evaporates in airy metaphysics. Now in the midst of this idle and unprofitable strife of tongues, it is not wonderful that there are people who think that the Gallios ought not to be censured for indifference. But where authority is not allowed to define words, the wrangle as to their meaning is perennial. My treatment, then, of my subject is as follows. You have a number of social or economical facts, many of them containing problems of a serious and urgent character. So serious are they that many persons an increasingly large number of persons demand,, if no other solution is to be given, that society must be recon- structed on new lines, as Frankenstein made his man, or monster. To meet these people with the law of supply and demand, to point out to them the bliss of unrestricted competition, and to rebuke them with the Malthusian law of population, the Eicardian theory of rent, and the margin of unproductive cultivation, is to present them with logomachies which they resent. They believe that economists are uttering optimism to order. In a vague way, they are under the impression that the greater part of the misery which they see is the direct product of laws, enacted and maintained in the interest of particular classes. And, on the whole, they are in the right. Most of the problems which vex society have an his- torical origin, sometimes a present cause, though more rarely. Now I made it my business in these lectures, as I have done in others, since I have been restored to an office of which I was de- prived because I traced certain social mischiefs to their origin, twenty years ago, to examine into and expound the history of social facts. Of course I am almost entirely the authority for the facts which I cite, with one notable exception, i.e., the economical laws in the Statute Book. These laws are not to be found in the volumes which go by the name of the statutes at large, for when the law has x PEE FACE. been repealed, or become obsolete, or was temporary only, it is dropped out of these collections, and very few lawyers know anything of the history of law. They are to be found only in the collection which was published at the beginning of the century, and was continued to the accession of the House of Hanover. These lec- tures, then, are mainly founded on the facts which are collected in my history of prices, and I presume that even the most arrogant of the metaphysical economists will allow that the facts of social life go for something in the solution of economical questions. If he does not, I will leave him, like the poet in Horace, to his mad- ness. My reader will find that I occasionally refer to the experiences which I gained when I was in the House of Commons. Many of my audience were young men, to whom this kind of position is likely to be an early object of ambition. Now I am not one of those who deprecate party strife. I know that rightly taken, party is the perpetual struggle of good against evil, and I have a tolerably clear instinct, fortifiedinto conviction, of where the evil always is with which the good battles. But the experience of Parliamentary life, to him who will learn, teaches one how just but angry discontent is baffled, of how one must wait for opportunities in order to undo wrong-doing, and how, under the name of compromises, one has to accept half for whole truths. And besides, the sphere of political action is so vast and so complicated, the forms of our Constitution give so enormous a power to the Administration, and all administra- tions are so enamoured of the possible, instead of the true, that no more instructive education can be given one than to watch and take part in the battle of Parliamentary forces. To the his- torical economist, the lesson is invaluable. I think I have almost exhausted the lesson in my own person, or at least to my own capacity. It is no doubt more profitable to an economist to be an optimist or an alarmist, to dilate on the numbers and the wages of the working classes with one, to predict the exhaustion of coal with another, and to dwell on the margin of cultivation with a third. But the pro- gress of the working classes is exceedingly unsatisfactory, and has been enormously exaggerated by those who have written on it ; while the exhaustion of coal and the margin of cultivation are scares, PREFACE. xi which, I think, I have generally disposed of in these pages. But, in point of fact, these economists have generally been fairly well-to-do people, who have only had a lofty sympathy with those who struggle for a living. And the worst of it is, that they are so profoundly ignorant of the social facts on which they profess to be dogmatic. A man will chatter over the margin of cultivation who does not know a field of wheat from a field of barley ; of the exhaustion of coal deposits when he does not know their extent, and is not aware of the economies of their use ; of the condition of workmen, when he is entirely unacquainted with the fact that they were cruelly oppressed up to recent times. For political economy like this I have, and I trust I always shall have, the heartiest contempt. Of course a resolute determination to look into and substantiate the causes which have so mightily hindered the economic progress of my countrymen is unpopular with the least deserving and least valuable, but often most powerful, classes of the community. I had some time ago to demand of the chivalrous Lord Iddesleigh, that he should substantiate a charge of communism which he made against me, by reference to anything which I had said or written in favour of a violent reconstruction of society. He was constrained to admit that he had found, and could find nothing, and politely congratulated me on not being associated with such a platform. But I have constantly noticed that men who are entirely devoid of any sense of political and social justice are fond of charging their critics with sinister designs against property and order. So I am told that some of the frantic advocates of violent reconstruction allege that I am a socialist without knowing it. But I know very well what is the issue, the natural, just, and inevitable issue, of all attempts to cure wrong-doing by violence, and to meet the misdeeds of government by a propaganda of anarchy. The strength of communism lies in the misconduct of admini- strations, the sustentation of odious and unjust privilege, and the support of what are called vested interests, i.e., what is in the main an indefensible position or an indefensible claim to economic existence. I have pointed out what is the nature of some among these grave social evils in the following pages, and though I cannot foresee that the English people will be induced to accept the theories of those who would recast society by the forcible appro- xii PREFACE. priation of land and capital, yet it is quite reasonable to predict that they who have hitherto taken an unfair advantage of their position and their influence, may hereafter get less than justice from in- structed discontent. The policy which puts all local taxation on occupiers, which allows the owners of mansions and parks to be judges of their own contributions to taxation, the rapine which con- fiscates improvements under the pretence of free contracts, will sooner or later be met with a reversal which will be far from agree- able to those who profit by present conditions. In nothing is this more visible than in agriculture, where the confiscation of the tenants' capital has been followed by the destruction of British agriculture, and as yet by ignorant discontent. But it is clear that the control of the landowner's power in the disposition of his rights is imminent, that it is nearly completed in Ireland, that it is mak- ing great progress in other parts of Great Britain, and that it is rapidly coming within the range of practical politics. The joint ownership of landlord and tenant, in which the interest of the former is to be fixed, that of the latter is to be improvable, is already advocated by persons of no mean influence. The Agricultural Holdings Act is an instalment, a compromise, the complement of which is not far distant. The claim made to the unearned incre- ment is met by the demand that this very increment should be the object of exceptional taxation, and the demand is daily becoming more minatory and coherent. Englishmen are beginning to see that their domestic troubles are mostly of their own making, and when they learn the causes, they will be wholesale in their remedial measures. Political economy, rightly taken, is the interpretation of all social conditions. It is justly distrusted if it is suspected of being a de- fence of abuses. In the theory as to how wealth is distributed, the true centre of all economical inquiries, the suspicion that it deliberately advocates an unjust distribution, hopelessly discredits it. And when men despair of equity, the just rights of those who have strained those rights are in danger. I cannot agree with Mr. George, but I am amazed to find how popular his theory is. It is entirely the outcome of economical fallacies, hitherto treated as indisputable truths. The unearned and, according to Mr. George, the entirely undeserved increment is the key to the passionate and PREFACE. xiii seductive proposals of " Progress and Poverty." Now the impulses bred by this remarkable book are not met by definitions and logo- machies. They may be explained away in great part by historical facts, and by the accurate analysis of present conditions. But they never will be as long as people cling to Eicardo, and to obsolete theories of an analogous kind. The instincts of men revolt against a doctrine which teaches that a limited class of property holders is to take an increased toll on the earnings of capital and labour ; that there is no escape from this bondage ; and that the more intelligent and acute labour becomes, the more heavy will be the tribute which the idle and worthless can exact from society. There is no more mischievous person living than a rapacious landlord, who uses to the full all the powers which existing law gives him. But, on the other hand, there is no more useful and deserving person than a wise and just landlord, who respects his neighbour's true rights, while he preserves his own. Unluckily the former are common, the latter are rare. The contrast may be extended into other forms of pro- perty and other callings ; and the result is, that the doctrine of laissez faire is on its trial In some quarters, the verdict has been already given. These lectures were compiled in 1887, though some were delivered in the early part of 1888. I mention this in order to designate the date to which some allusions in the text refer. OXFORD, June, 1888. CONTENTS. i. PAGE. THE ECONOMICAL SIDE OF HISTORY . . 1 II. LEGISLATION ON LABOUR AND ITS EFFECTS . . .23 III. THE CULTIVATION OF LAND BY OWNERS AND OCCUPIERS . . 46 IV. THE SOCIAL EFFECT OF RELIGIOUS MOVEMENTS . . .6$ V. DIPLOMACY AND TRADE . . . . . .92 VI. THE CHARACTER OF EARLY TAXATION W . .-115 VII. THE DISTRIBUTION OF WEALTH IN ENGLAND AT DIFFERENT EPOCHS . . 188 CONTENTS. THE HISTORY OF AGRICULTURAL RENTS IN ENGLAND . .160 IX. METALLIC CURRENCIES , . . . . .183 X. PAPER CURRENCIES 205 XI. THE ORIGIN AND PROGRESS OF ENGLISH PAUPERISM . . 227 XII. HISTORICAL EFFECTS OF HIGH AND LOW PRICES . . . 249 XIII. DOMESTIC MANUFACTURES ..... 272 XIV. THE GUILD AND APPRENTICE SYSTEM .... 295 XV. THE RISE AND PROGRESS OF THE COLONIAL TRADE . . 818 XVI. LAISSEZ FAIRE; ITS ORIGIN AND HISTORY . . . 341 XVII. THE HISTORY OF THE PROTECTIONIST MOVEMENT IN ENGLAND 365 XVIII. THE INTERPRETATION OF EXPORT AND IMPORT TABLES . '. . 889 CONTENTS. xvii XIX. PAGE THE ESTATE OF THE CROWN, AND THE DOCTRINE OF RESUMPTION 412 XX. PUBLIC DEBTS . . . . . . . 434 XXI. THE THEORY OF MODERN TAXATION .... 45G XXII. THE OBJECT AND CHARACTER OF LOCAL TAXATION IN ENGLAND 479 XXIII. THE POLICY OF GOVERNMENT IN UNDERTAKING SERVICE AND SUPPLY ...... 501 INDEX . 525 ERRATA. Page 13 line 14 from bottom, for friend read view. ,, 13 ,, 17 ,, for were read was. 15 16 for three read these. ,, 17 ,, 17 for labour, capital read labourer capitalist. 25 ,, 3 for Lowland read Lombard. ,, 60 ,, 10 from bottom, for rescue read reserve. 71 5 ,, for Canosa read Canossa. 73 ,, 14 for heighth read height. 74 12 after tenets, " of " omitted. 154 ,, 17 for fours read four. ,, 172 ,, 13 for persons read parcels. ,,218 ,, 11 for depends read depend. ,, 221 ,, 16 for even read every. 284 ,, 14 " of " omitted at end of line. 284 16 for Kitchen read Kitchin. ,, 293 ,, 7 for was read were. 303 ,, 4 from bottom, for work read week. ,,309 ,,13 after supplied insert "and". ,, 349 ,, 14 at end of line " of " omitted. 462 ,, 6 from bottom, after distributed, insert " it >: 480 ,, 11 for waged read raged. THE ECONOMICAL INTEEPKETATION OF HISTORY. i. THE ECONOMICAL SIDE OF HISTOKY. Narrow views on history and political economy The abundance of materials The philosophy of history Speculative political economy The political influence of English wool 1278-1603, and the conquest of Egypt by the Turks, illustrations of the aid given to history by economical facts Early English institutions in parishes and towns Self-government in the villages Famines Labour and capital : their several functions Incidents of labour and capital The wages of labour and the profits of capital iden- tical in principle The Great Plague of 1349, and the insurrection of 1381. IN nearly all histories, and in nearly all political economy, the col- lection and interpretation of economical facts, by which I mean such records as illustrate social life and the distribution of wealth at different epochs of the history of mankind, have been habitually neglected. But the neglect renders history inaccurate or at least imperfect, political economy a mere mental effort, perhaps a mis- chievous illusion. Every historian will tell you that no history is 2 2 THE ECONOMICAL SIDE OF HISTORY. worth preserving which does not at once illustrate the progress of a race, or a permanent influence. So a political economist who does not, in his estimate of present industrial forces or agents, take into account the circumstances which have created or modified these forces would, except by a miracle, assuredly blunder in his in- ferences. History, which does not attempt to distinguish the relative importance of facts, and does not inquire how any contemporaneous set of facts can be pressed into the interpretation, is a mere disordered and imperfect dictionary. Political economy, when it disdains the correction of evidence, is a crude metaphysic, which gives a very artificial and erroneous account of actual life. I hope to be able to illustrate these positions by numerous instances. I have said that nearly all history, and nearly all political economy, is in this condition. But the barest annals recognize some of these facts, even when they fail to interpret them. Every historian, for instance, notices the great plague of the fourteenth century. He observes that the English kings, in their attempts on France, invariably strove to get the Netherlands on their side. He records the fact that there was a formidable insurrection in England in the last quarter of the fourteenth century, an embittered civil war in the fifteenth, a serious weakening of English reputation in the sixteenth. But these historians have never attempted to discover whether any economical facts contributed powerfully to these events. So entirely was the seventeenth century absorbed in the great struggle of that time, that it has simply left unrecorded all facts of an economical character, which in any other country, even the rudest, would have arrested attention. The political history of this century has been written over and over again. Its social or economical history has been entirely neglected. To the study of this aspect of history I have given the best years of my life. I hope in these lectures to introduce you to some of the facts and ,some of the inferences which I have collected, and I think I shall be able to show that very often the cause of great political events and great social movements is economical, and has hitherto been undetected. By far the largest amount of the materials which I have collected for my purpose are from documents which have probably never been read alter the immediate object for which they were compiled was VIEWS ON EISTOliY AND POLITICAL ECONOMY. 3 satisfied. Farming accounts, elaborate accounts of buildings and the materials purchased for their erection, with the labour paid for, have been examined, audited, and laid aside. It may be asked, Why were such documents preserved at all after their use was over ? The answer is that, up to recent times, the facts which they recite might be useful as evidence of property. Two generations ago a title to land might be impugned or defended by evidence adduced on either side for six centuries and a half, and, therefore, all proof of title might be valuable. We owe the vast mass of records preserved in public and private collections to a barbarous rule of law. It is likely that what prudence first dictated became a habit, and all papers and documents were preserved because it was necessary to treasure some. I do not make my charges against the historian and economist -without reason. At the latter end of the eleventh century a most remarkable document was compiled, a survey of nearly all England. It is rightly deemed to be one of the .choicest antiquarian and historical treasures which the nation possesses. It has long since been printed. It has frequently been examined for antiquarian purposes. But it has never been analysed. My friend, Professor Freeman, has published a very copious history of the Norman Con- quest. He has, I do not doubt, collected every scrap of history, in the common meaning of the word, which could be procured from very source, domestic and foreign, and commented on them with a fulness which is almost overwhelming. But he has made little use of Domesday Book, which, after the skeleton of facts is arranged, contains far more genuine living material than all his other au- thorities. Due weight has been given by some writers to the habits and life of primitive communities. But it is to be regretted that more atten- tion has not been bestowed on their later development. The evidence on this, in the court rolls of manors, is exceedingly abundant in England. These documents are remarkably illustrative of village life and of the surviving relics of the communal system, and especially of that local self-government which has, perhaps, been disadvan- tageous^ superseded by the later expedients of justices and quarter sessions. But I should have learnt little of the life which our ancestors lived centuries ago, of the mutual liabilities of the villagers, 4 THE ECONOMICAL SIDE OF HISTORY. of their local courts, and their very effectual administration of justice, civil and criminal, if I had not read these manor rolls by hundreds. Mr. Hallam once regretted that we could not recall the life of a single medieval village. But the means for doing so exists in abundance, and the student of these documents must have a dull imagination indeed if he cannot picture to himself the life of an Englishman in the days of the Plantagenets from his cradle to his grave, realize all the persons "with whom he was necessarily brought in contact, and give their weight to all the elements of the little society in which he lived. Again, the materials for the history of administration of govern- ment and of finance are exceedingly abundant, but have been very inadequately pressed into the service of the historian. England has an enormous wealth of diplomatic instruments ; not perhaps so^ copious as the great collection of Muratori, or the monumental work of Dumont, but still of remarkable fulness. The mass of financial records is absolutely prodigious, for the pipe rolls exist in an unbroken series from the days of the first Plantagenet king down to the fifth of the Hanoverian house. But they are hardly explored. Their volume would, I admit, daunt the boldest student. But there should be nothing to prevent the historian from examining the rolls of Parliament. I venture on asserting that if he did so, he could sweep away many ancient delusions as to persons and events, delu- sions which seem to be permanently imbedded in the popular- histories. I do not deny, I gladly acknowledge, that the solid study of his- tory has made considerable progress. The narrative is no longer merely one of war and peace, of royal genealogies, of unrelated dates, of those annals about which the adage was uttered that happy is the nation which has no history. History has begun to include the study of constitutional antiquities, though even here there is too' strong a tendency to anticipate a late development in early begin- nings, and to lay too much stress on doubtful meanings. History, again, has begun to recognize the progress of jurisprudence, though it has rarely recognized the economical conditions to which the development of jurisprudence was due. It has touched lightly, very lightly, on social history, on the condition of the people, 011 the vary- ing fortunes of land and labour, and on the circumstances under ABUNDANCE OF MATERIALS. 5 ^vhich industries have been naturalized and developed amongst us. The seventeenth century is an age of intellectual and political giants, who carried on a long and unbroken warfare. It will always be studied. It is the favourite topic or theme of writers. But as it has been hitherto written, it is nothing but the record of their drama, the estimate of their characters, who were the agents of this colossal strife. To me the century has another and a very different aspect the history of the people, whose fortunes have hitherto been passed over in silence. In one direction, indeed, history has made great strides. I refer to that philosophy which seeks to interpret the characters and motives of statesmen and of princes, when princes were statesmen. It is almost needless to say that such writers, according to the vigour of their powers, are constantly open to the charge of partisan- ship or paradox. The historian may be honestly convinced that he is drawing a faithful picture of the men and their times, and he may be as faithful as he believes he is. But the more vigorous his imagination is, the better stored and more orderly it is, the more liable he is to the charge of overcolouring his picture, perhaps to the risk of its life. Latterly I have been engaged in an inquiry into the early years of the Bank of England, as I discovered some un- known and unexpected information as to the fluctuations in the price of its stock. I had to go for a few years, with the limited pur- pose of illustrating the fortunes of the Bank, over the same ground which Macaulay had traversed, and to use some of the same au- thorities which he used. My inquiry was simply into a new and great commercial adventure, not into the complicated problem of Kevolution politics. As' in duty bound, I bore testimony, for I had proof before me, to the cautious fairness of the historian. But a friend of mine, a very eminent statesman, demurred to my eulogy. " The vast colouring power of his fancy," he said, " was against his accuracy." In the philosophy of history it is difficult to avoid partisanship ; impossible, I believe, to escape the imputation of it. The volcano may be extinct, the crust of the lava may be crossed by the way- farer, but deep in the crevices of the cooling mass there may remain .a dull red glow. The criticism of great men in past times is sure to be interpreted as implying analogies in the present. The dispute 6 THE ECONOMICAL SIDE OF HISTOBY. about the virtues and vices of Mary Stuart is not yet hushed. The reputation of Penn is still angrily defended. There are honest apologists for Wentworth, for Laud, for Shaftesbury. Some of you know that Mr. Gardiner has latterly shown not a little skill in exhibit- ing the first two of these historical personages in a new light, and even of suggesting a fresh aspect to the great Parliamentary struggle. I cannot, indeed, quite accept the ingenious inferences of this able writer. I do not want indeed to be told that Wentworth was not a mere adventurer. I do not take my estimate of him from Baillie or Clarendon. I do not want to be told that Laud was not a mere driveller. I do not get my opinion of him from the coarse invec- tives of Prynne or the coarse eulogies of Heylin. Nor has Mr, Christie removed my suspicions, well-founded suspicions I believe, as to the motives and character of Shaftesbury. Still, it is some- thing that in the days of the second Charles a man could have held office under the Crown without becoming portentously and indispu- tably wicked. I could multiply these illustrations. I will only add that, as great historians of the philosophic school can hardly escape the imputation of partisanship, so the meaner masters of the craft almost invariably fall into transparent paradox and grotesque exaggeration. There is a further stage, in which an attempt is made to draw a likeness, and the failure is complete. I cannot accept Lord Stanhope's portrait of anybody. The student of history who attempts the less ambitious but more laborious task of economical interpretation occupies a safer, a more unchallengeable position. If I can point out to you that the price of wheat rose frequently, in the first half of the seventeenth cen- tury, to 55s. and more a quarter, and that the peasant's wages were forcibly kept down, by the best expedient that the administration could devise, to less than sixpence a day, I am not concerned at the criticism of those who would deny that this was oppression. If I can show you that agricultural land let a generation ago at ten times the amount which it let at in the same first half of the seven- teenth century, I shall not be deterred by a legion of Kicardos, into expressing the gravest doubts as to whether that eminent person gave an exhaustive account of the rent of land. Such corrections of popular political economy have constantly come before me. The political economist of the later school has thoroughly carried THE PHILOSOPHY OF HISTORY. 7 out in his own person the economical law which he sees to be at the bottom of all industrial progress ; that of obtaining the largest possible result at the least possible cost of labour. He has, there- fore, rarely been at the pains of verifying his conclusions by the evidence of facts. He has, therefore, constantly exalted into the domain of natural law, what is after all, and at the best, a very dubious tendency, and may be a perfectly baseless hypothesis. His conclusions have been rejected by workmen, and flouted by statesmen. The former have accused him of partisanship, the latter of unreality. He is not infrequently inconsistent with himself and his own theory. In one page he insists on the intrinsic wisdom of free competition, in another he accords the privilege of protection to young and rising communities. One of the less judicious of these writers may advocate, nay, has advocated, a regulated issue of notes under one set of circumstances, and counselled the discretionary issue of paper money at another, when the latter situation was wholly indefensible. Men have written about the " law of diminishing returns," without having given a moment's attention to the practice of agriculture, and getting a fraction of the experience which may be derived from witnessing that practice, and have rated the British workman for improvidence and recklessness, without having troubled themselves to discover the very traceable historical causes which have induced that character on him. Perhaps the most remarkable Nemesis which has come on the speculative economist is that the definition of Population by Malthus, and the definition of Eent by Eicardo, have been made the keystone to Mr. Henry George's theory, under which he demands the confiscation of Eent in the interests of Population. The truth, when the economist has tested, and as far as possible verified his inferences or hypothesis by the evidence of facts, he may be able to- predict. His predictions may be exceedingly accurate, and may be exceedingly alarming. He may show, for example, by a study of the conditions under which agricultural rent has been developed and increased in this country, that a revival of agricultural rent, unless the conditions of occupancy are wholly altered, either by the spontaneous and reawakened intelligence of the landowners, or by the operation of law, in the probable absence of such intelligence, is not only unlikely, but that matters will go 8 THE ECONOMICAL SIDE OF HISTOEY. on from bad to worse, without any visible hope of recovery. The economist has satisfied his function when he has justified his pre- diction. Then begins the position of the statesman, whose duty it is to say, and that speedily and peremptorily, " What you say and prove will happen, must not happen, but law must be invoked, if obstinacy and stupidity requires its intervention." The student of the conditions of health alleges, and with perfect truth, that given such and such circumstance, disease and loss of life are inevitable. The statesman gives effect to his demonstration by passing sanitary laws, and enforcing their satisfaction. The wise habit of developing inferences from evidence has been cultivated by at least one modern writer. The range of Mr. Giffen's speculations is not wide, and in some investigations which he has made, he has not, I am confident, gone far enough back in his researches. But in those which bear on monetary science and trade, his method leaves nothing to be desired, and the student, who is anxious to go beyond the common chatter of text-books and manuals, will learn more and better political economy from Mr. Giffen's essays than he would if he browsed for ever on the thorns and thistles of abstract political economy. I commend, in par- ticular, to your notice, the essays contained in the second series. I will now proceed to show by way of illustration how economical facts lend themselves to the interpretation of history. I stated just now that the Plantagenet kings always used Flanders as the fulcrum from which to make their attacks on France, and that our Edward III. and Henry V. sedulously cultivated the friendship of the Flemings and their rulers. The means which they employed to further these diplomatic ends, was the free or restrained exportation of English wool. From the thirteenth to the sixteenth century, " wool was king." A quarter of a century ago, the seceding states of the American Union avowed that " cotton was king," and that a stint of this necessary material of British industry would assuredly effect a diplomatic revolution in England, enforce the acknowledgment of Southern independence, and con- strain the inhabitants of the United Kingdom to reconsider their hatred of slavery. The cessation of a cotton supply induced great misery, but, for reasons which will appear further on, the partisans of the South erred in their reckoning. THE POLITICAL INFLUENCE OF ENGLISH WOOL. 9 England was the only wool-producing country in Europe. To some extent, this remarkable industrial phenomenon is due to its climate and soil, though some parts of England are, and have been for centuries, more fitted for this product than others. In a petition to parliament presented in 1454, it is suggested that certain kinds of wool, forty-four in number, should not be exported, except at the prices named in the schedule. These prices range from 260s. the sack, the value assigned to a certain kind of Hereford wool, to 52s., that assigned to Suffolk produce. These are, beyond doubt, to use a modern phrase, brands well known in the wool trade of the time. More than a century before this time, permission was given to export wool in certain quantities at certain prices, the prices not being quite so high as those in the schedule of 1454. It is possible that the object of the petition was to encourage the English cloth trade, it is equally probable that it was intended, had the prayer been granted, to force the Flemings into active co-operation with those designs on France which had been so disastrously disap- pointed the year before, when Shrewsbury had been defeated and slain at Chatillon. The practical monopoly which the English possessed of the wool supply was less due to the climate and soil of England, than it was to the maintenance of order in the kingdom. For a long time, -every one in England, from the king to the serf, was an agriculturist. After the landowners had been constrained to give up arable farming, they still remained sheep masters, produced wool and sold it. Now when, owing to the diffusion or distribution of property, every one is interested in maintaining the rights of property, there is very little temptation given to theft or violence, and every incli- nation to detect and punish it. Hence Englishmen could keep sheep, the most defenceless of agricultural animals. Every one who knows anything about the state of "Western Europe from the thirteenth to the seventeenth century, knows that the husbandman did not keep sheep, for they would have certainly been plundered of them by the nobles and their retainers if they had. The king's peace was the protection of the sheep master. England then had a monopoly of wool. The monopoly was so complete, and the demand for the produce so urgent, that the English Parliaments were able to grant an export duty on wool 10 THE ECONOMICAL SIDE OF HISTOEY. equal to more than the market value of the produce without diminishing its price. In other words, the export duty was paid by the foreign consumer, a financial success which every government has desired, which many governments have tried, and in which all,, with this English exception, have failed. The reason is, that in order that an export duty should be paid by the foreign consumer,, four conditions, very rarely satisfied, have to be in existence : 1. The article must be a necessary of life. 2. There must be absolutely no other source of supply, except the country from which it is derived. 3. There must be no substitute for the article in question, 4. There must be no appreciable economy possible in the use of it. These conditions were satisfied in the case of English wool during; the period tbat it was so powerful a diplomatic force. During the course of my economic studies, I have not seen them satisfied in any other commodity whatever, and I submit that this aspect of the relation of England to Flanders and its rulers, is incomparably more instructive than the pedigree of the Dukes of Burgundy, or the barren account of military operations on the French frontier of the Low Countries. The best wool in England was worth 20s, a tod in the fifteenth century, i.e., about four quarters of wheat. Three centuries later, when other prices had risen from nine to- twelve times, English wool of excellent quality was sold at less than half the sum which it had been appraised at in the period which I have taken for illustration. I will take another example by way of proving to you how much the interpretation of history gains by the study of economic facts. In the twelfth and thirteenth centuries there were numerous and. well-frequented routes from the markets of Hindostan to the Western world, and for the conveyance of that Eastern produce which was so greatly desired as a seasoning to the coarse and often unwholesome diet of our forefathers. The principal ports to which this produce was conveyed were Seleucia (latterly called Licia) hi the Levant, to Trebizond on the Black Sea, and to Alexandria. From these ports this Eastern produce was collected mainly by the Venetian and Genoese traders, and conveyed over the passes of the Alps to the Upper Danube and the Ebine. Here it was a source of great wealth to the cities which were planted on these waterways, from Eatisbon and Nurenberg, to Burges and Antwerp. The stream THE CONQUEST OF EGYPT BY THE TURKS. 11 of commerce was not deep or broad, but it was singularly fertilizing, and every one who has any knowledge of the only history worth knowing, knows how important these cities were in the later Middle Ages. In course of time, all but one of these routes had been blocked by the savages who desolated Central Asia, and still desolate it ; the most hateful and mischievous of these races being still en- camped in what was once the most prosperous part of the world,. Greece and Asia Minor, and keeping it in hopeless savagery. It was, therefore, the object of the most enterprising of the Western nations to get, if possible, in the rear of these destructive brigands, by discovering a long sea passage to Hindostan. All Eastern trade depended on the Egyptian road being kept open, and this remaining road was early threatened. The beginning of this discovery was the work of a Portuguese prince. The expedition of Columbus was an attempt to discover a passage to India over the Western sea. By a curious coincidence, the Cape Passage was doubled, and the New World was discovered, almost simultaneously. These discoveries were made none too soon. Selim I. (1512-20), the Sultan of Turkey, conquered Mesopotamia and the holy towns of Arabia and annexed Egypt during his brief reign. This con- quest blocked the only remaining road which the Old World knew. The thriving manufactures of Alexandria were at once destroyed. Egypt ceased to be the highway from Hindostan. Selim had all the energy of the race to which he belonged, and more than all of its vices. I discovered that some cause must be at work which had been hitherto unsuspected, in the sudden and enormous rise of price in all Eastern products, at the close of the first quarter of the six- teenth century, and found that it must have come from the conquest of Egypt. The river of commerce was speedily dried up. The cities which had thriven on it were gradually ruined, at least in so far as this source of their wealth was concerned. The Nile became flumcn epotum Medo in a commercial sense, and the trade of the Danube and the Rhine ceased. The Italian cities fell into rapid decay. The German nobles, who had got themselves incorporated among the burghers of the free cities, were impoverished, and betook themselves to the obvious expedient of reimbursing their losses by the pillage 12 THE ECONOMICAL SIDE OF HISTORY. of their tenants. Then came the Peasants' War, its ferocious inci- dents, its cruel suppression, and the development of those wild sects which disfigured and arrested the German Eeformation. The battle of the Pyramids, in which Selim gained the Sultanate of Egypt for the Osrnanli Turks, brought loss and misery into thousands of homes where the event had never been heard of. It is such facts as these which the economic interpretation of history illustrates and expounds. I shall have occasion in the course of these lectures, to supply you with a multitude of examples as significant as these two which I have quoted. I am not, I hope, too much absorbed in the study which I have pursued for so many years, as to overvalue the facts which I have discovered and marshalled. But I am convinced that to omit or neglect these economical facts is to make the study of history barren, and its annals unreal. With every effort that can be given to it, the narrative of the historian can never be much more than an imperfect or suggestive sketch. We may get the chronology correct, the sequence of events exact, the details of cam- paigns precise, the changes of frontier reasonably accurate, but may still be far off from the controlling motives of public action, may be entirely in the dark as to the real causes of events. Nor shall we be greatly helped by the more or less successful criticism of the career and purposes of public men. During the great drama of the wars of religion, we may make a more or less intelligent estimate of Philip II. and William of Orange, of Henry of Navarre and Elizabeth of England, of Maurice, Barneveldt, Eichelieu, Bucking- ham, of the English Puritans, of Laud and Strafford, of Eliot, Pym, Hampden, Falkland, Cromwell, of Ferdinand of Styria, Maximilian of Bavaria, Gustavus Adolphus, and Wallenstein ; but we shall never, with all our pains, obviate the revision of our judgments. But when we have economical facts of great and far-reaching import to guide us, we can arrive at conclusions which cannot be modified, because they cannot be disputed. I shall not pretend to say that I have discovered the meaning of many among the facts which I have collected. It has been always my opinion, an opinion which I have constantly avowed, that my researches will very possibly yield in other hands more than I have been able to infer, and will serve to illustrate and interpret the past and present to a greater extent than I have been or shall be able to effect. EARLY ENGLISH INSTITUTIONS. 13 I mentioned in an early part of this lecture, that Hallam had lamented the disappearance of the annals of the poor, the recovery of which would throw so much light on the past. This excellent, laborious, and conscientious writer, whose works are more profitably studied than others of more antiquarian pretensions, derived all his information from printed books. His powers of inference and his- torical construction were therefore limited by his materials, and none of the writers which he consulted, with the exception of Madox, had drawn information from original documents. Madox, too, appears to have consulted very little beyond some of the Pipe rolls, and those cursorily. There were printed authorities, such as Fitz- herbert's treatises, from which Hallam might have gathered much. Some English institutions have had a most tenacious existence. It has been observed that the vestry or parish meeting is in direct succession from the assembly of freemen in the Teutonic mark. The system of grand and petty juries had their beginning in the presentments of the minor courts, and the levy of fines, sometimes of the highest penalties, on offenders. The penalties of treason are copied from the punishments inflicted on offenders against the sanctity of the mark and its boundaries. The peculiar position of the steward or seneschal of the manor, when he sat on the judgment seat were similar to, and a precedent for, the circuits and authority of the judges of assize. The perambulation of the boundaries and the attendance of the boys at this ceremony seems to be the survival of the friend of frank pledge and registration in the decenna. The taxing rolls of the Plantagenets, in which the owners of all personal property in the several parishes are named, would with a little care serve as a census of the parishes at the time when the assessors visited the inhabitants. The parish held from thirty to one hundred inhabitants or more. It contained one or two lords of manors, for sometimes the parish was divided among two or more overlords. This lord was frequently non-resident, and only visited his domain and tenants occasionally. The most important functionary was the rector or parson, practically the head man of the village, and when the lord or steward were not holding court, the permanent chairman of the village gatherings. If his tithes had not been appropriated by some monastery, his income derived from these and from offerings and dues, ordinary 14 THE ECONOMICAL SIDE OF HISTORY. and extraordinary, was for the time considerable, and it was common lor him to select, educate, train, and send to the university some bright and intelligent village lad, even though he might be of servile birth, in order that he might become a priest. In the same way, without regard to his origin, an ambitious and courageous youth might enter the king's army; and the former might become a learned doctor and bishop, as Grostete became, the latter a captain and knight, as Sale did, both having been of mean birth. The houses of the villagers, built of wattles, smeared inside and out with mud or clay, were crowded near the church, in the street of the settlement, though there were in large parishes, outlying homesteads. In all cases the church was the common hall of the parish, and a fortress in time of danger, occupying the site of the stockade which had been built when the first settlers occupied the ground. In the body of the church were frequently stored produce, corn and wool. Here too, I believe, the common feasts of the parish were held, till such time as the proceeds from the local guild enabled the people to erect their own guild-house. The only houses of any pretension in the village were the lord's, the parson's, and the miller's, who by prescription took toll of all the inhabitants, who were bound to grind at his mill, who is a busy, and according to current report, not an over- scrupulous personage in his dealings with his fellow villagers. Most of the villagers held land as freeholders under fixed rents, and copyholders under no less fixed services. The arable land was in open fields, strips of which, divided by balks on which the grass was left growing, were, in greater or less quantity, the property of the lord, the parson, and the tenants. When the scanty harvest was gathered, the arable land became for a time common pasture. Beside these fields were the commons, the lord's waste, and the lord's wood, the latter being generally on the village bounds. Some of the villagers had only cottages with curtilages, and were the hired labourers in husbandry ; though the small farmer, when his work on his small holding was done, was ready to better himself by taking work. All, as I have said, paid rent, in money, in kind, or in labour; but in the historical period, the labour, rents, and ultimately the rents in kind were always commutable for money, the money equivalent being always less than the ordinary rate of wages. SELF-GOVEENMENT IN THE VILLAGE. 15 Beyond their agricultural labours, the villagers met informally in council, under the presidency of the rector, and formally at the times, generally three times a year, when the lord's courts \vere held. In these courts they were trained in habits of self-govern- ment, some presenting offenders, some sitting as a jury of com- purgators. For in early times, at least, it seems that no stranger could be harboured in the settlement, a breach of the rule beyond a certain time being punishable with a fine. Most villages of any -size had an annual fair. Then there were markets and fairs in other towns. The earliest writer on English husbandry, Walter de Henley, allows several days for periodical visits to these places of business and pleasure. Few parishes were probably without guild lands from which the aged and the poor were nourished, till, on the plea that they were devoted to superstitous uses, they were stolen, under an Act of Parliament, by Protector Somerset. The surroundings of these villagers' houses were unclean and unwholesome, just as they are near an Irish cottier's house in our own time, and it was the lord's interest to encourage the drain from the cottager's middens over his own meadows, which generally lay near the village stream. Perhaps the life of a mediaeval Englishman was less uneventful than that of the modern peasant. He had to :get all that he wanted, beyond what he procured by his own labour, for himself and his family, at three periodical fairs, or less ad- vantageously at the shops of the few and small towns which he was able to frequent. Here he sold his surplus produce, in order to pay his dues, and to get what he needed for farm and homestead. Apart from these periodical absences from home, he learnt the news from the numerous itinerant priests who constantly visited the villages. In later times, if he sympathized with Wiklif and his poor priests, he would take counsel with these migratory preachers, confide in them his troubles and discontents, and even concert with them the means of armed resistance, resistance which once nearly shook England to its foundations. The essence of contracts for the occupation of laud, if these nncient tenures could be called contracts, was that the liabilities of the tenant should be fixed and unchangeable. This idea of a fixed rent in an estate of inheritance pervaded all relations of landlord and vassal. It affected the subsidies granted to the Crown, the 16 THE ECONOMICAL SIDE OF HISTORY. county valuations of which appear to have been unchanged from, the days of the Plantagenets to the days of the Stuarts. So with the fee farm rents paid by freeholders, the labour, and subsequently the commuted rents paid by the copyholders. The principle that a, tax should be unchanged was adopted in William III. land tax,, an assessment which has never been revised after the lapse of nearly two centuries. So in arguing in the House of Commons, in 1881, in favour of a produce rent in Ireland, which the expectants of the unearned increment refused to accept, I ventured on predicting that an arbitrated money rent, that which the House of Commons ulti- mately adopted, would never be raised, but might be diminished. Time has shown that my prediction is verified. I believe, indeed, that under ordinary circumstances the means- of life were more abundant during the Middle Ages than they are- under our modern experience. There was, I am convinced, iiO' extreme poverty. His dues paid, the small farmer's property and profits were as secure as the landlord's domain. In this the condi- tion of the English peasant was in marked contrast to the lot of the- French roturier and the Teutonic bauer. There was but a small surplus population quartered on the products of the soil. The labour of the husbandman was not constrained, as in later times,, to support a mass of idlers and consumers. But in other respects- his condition was far less satisfactory. His diet, owing to the lack of winter food and nearly all vegetables, was unwholesome during half the year, when he was constrained to live on salt provisions.. Leprosy and scurvy were common diseases in mediaeval England.. In the fourteenth century it is probable that life was healthier in the towns than it was in the country. In the seventeenth these conditions were reversed. In healthy seasons the death rate in London was 41^ per thousand, in unhealthy times the deaths were- double the births. In this same century, the deaths in country places were calculated at 29 in the thousand. England suffered from occasional famines. Of these by far the most formidable were the harvest failures of 1315, 1316, and 1321, when incessant rain in summer destroyed the crop, as incessant rain always does. It would seem that at this time there must have been a considerable loss of human life. This is told us, indeed, by the chroniclers of the age, but there is a stronger proof than their FAMINES. LABOUR AND CAPITAL. 17 narrative supplies, for the rate of wages rose 10 per cent, after the occurrence of the calamity. In this case, and in the far graver events which followed on the pestilence of 1349, the greatest increase was effected in what was previously the worst paid kind of labour, as, for instance, threshing oats and women's labour, for it is a law of prices which I have constantly verified by an examina- tion of facts that, whenever a scarcity occurs in any necessary agent or product, the rise among the severally related forms of the service or product is always greatest in that which had hitherto been the lowest. Thus, in materials, when a scarcity occurred a quarter of a century ago in cotton, Surat produce rose vastly more than Sea Island did. Thus, after the plague to which I have just referred, the rise in the cost of threshing wheat was 33 per cent., of oats. 88 per cent., while women's labour was paid double or treble its old prices. It may assist us in illustrating the facts which will perpetually occur in dealing with economic history, if I state briefly what are the relations of the labour and the capital. Wealth is of two kinds, passive or unproductive, and active or productive, the former being constantly and regularly a reserve on which the latter may draw. This double function of wealth explains the rapidity with which in times of exalted demand wealth is readily turned into the active form, profits increase, workmen are employed, and finally wages rise. Mr. Mill has alleged, and no doubt has puzzled you greatly by the allegation, that demand for commodities is not a demand for labour, a statement which contravenes all experience. Mr. Mill's error, and an error he acknowledged this famous paradox to be in the later years of his life, arose from his believing that wealth destined to active uses was at any given time a fixed quantity, just as at any given time a balance at a banker's is. But, in point of fact, the wealth available at any given time for the purpose of affording con- tinuity to industry is a very indefinite qiiantity, is capable of great and sudden extension, especially in the form of loanable wealth. The function of capital is to secure the continuous employment of labour, and as far as possible to equalise prices and profits. The labourer lends his labour for a week or a fortnight, or longer, to the employer, and it is easy to conceive, when a turnover is rapid, that 8 18 THE ECONOMICAL SIDE OF HISTORY. the employer has secured his profit long before he repays his work- men for the advance which the latter has made to him. In the great majority oi cases, however, the profit of the employer is post- poned till long after he has repaid his workman. But the principal service which the employer does is to give the labourer the prospect of continuous employment, and as the division of employments is developed, and human labour is aided, or perhaps displaced, by costly machinery, the expediency of finding continuous employment for labour is stimulated by the knowledge that the cessation of ( employment would be a rapidly growing loss. Again, it is the business of the capitalist employer to maintain as far as possible an equal money value or price. The most violent fluctuations of price - occur when the producer is constrained to sell at the discretion or demand of the buyer. But the capitalist dealer withholds his goods from the market until such time as he can command his price, and the shrewdest producer or dealer, the man who in the long run commands the best service, and gains the largest profits, is he who can anticipate with the greatest accuracy the demand of the market. I refer to these facts, in which what I am stating will not be found to differ materially from the views entertained by most economists, because, at the present time, the crudest ideas are afloat about the relations of labour and capital, in .which the functions of the latter are vilified, and a violent competition is proposed between the state on the one hand, that is, all who have no property, and the private capitalist on the other. The experi- ment of the state, or rather the taxpayer, finding competitive capital has been tried. It was the theory of Elizabeth's last poor law, and it failed disastrously, to the condign misery of the workman, a misery prolonged for centuries, as I hope to show. Nothing is gained by exaggerating the benefits which capital confers. Nothing will be gained by depreciating its real services. It has been shrewdly observed that capital and labour are like the two blades of a pair of scissors, powerless apart, but apt to their function when properly fitted. Now all economists agree, that profits in the general sense are made up of three elements, interests on advances, whether made from his property by the capitalist agent, or supplemented by loans from INCIDENTS AND LABOUR AND CAPITAL. 19 those who, being imable to employ their own wealth, are willing for a consideration to lend it to others. The rate of interest is high when loan capital is scarce, low when loan capital is abundant. But it is always a measurable quantity. A second element is risk, a quantity which cannot be measured, for if it were measureable it would cease to be risk, but must be estimated. It varies exceed- ingly in different callings. It is probably greatest in the case of the agriculturist, particularly if his principal culture is exposed to numerous unforeseen accidents. I mention this mainly to show how serious an element risk is, in the tender of an agricultural rent. In the course of these lectures I shall be able to give numerous illus- trations from economical history of the disturbance which this contingency has caused. The third is the labour of superintendence ; the time, toil, anxiety, skill which the capitalist employer must give to the details of his business. To these one may add a fourth, which is, perhaps, only a modification of the second, the inevitable 'wear of implements, and the rapidity with which machinery becomes obsolete or comparatively inefficient. Now it will be plain that, in the language of logicians, the first two elements of profit are objec- tive, i.e., they are external to the agent, and determined by condi- tions which the agent cannot control. The third, his own labour, is subjective, and it is plain that on this his real profits depend. -Our analysis, therefore, shows that the capitalist employer is a labourer, and that his remuneration depends entirely on the efficiency of his labour. Whether or no he gets too much in the distribution of the gross value is another question, but the more necessary workmen make him, by being as much as possible unlike him, the greater will be his share. Now let us turn to the recipient of wages, the labourer or work- man strictly so called. The Greek philosophers, by a happy generalization, called him t^v^ov opyavov, a living machine, and the phrase is far more significant to us than it was to them, for they degraded labour by permitting slavery. The labourer in our days is a machine which has been constructed at no little cost; but far more important than the cost is the aptitude, whether it be heredi- tary or imitative, with which the civilized man grapples with industrial avocations. You have all of you seen many of those wonders of mediaeval art, the great cathedrals and churches of this 20 THE ECONOMICAL SIDE OF HISTORY. country, indeed of Western Europe. In most cases, the architects of these marvellous works are unknown, for the very sufficient reason that they were designed by workmen. The mason or carpenter who can draw out his plot, i.e., furnish the design of the structure which his hands set up, is mentioned over and over again in our early Statute Book. Familiar as I am with agriculture, I am constantly amazed at the numerous accomplishments of a first-class farm-hand, who is most fit by the multiplication of, his employ- ments, as the artizan or factory hand is by their division. He will draw a furrow across a hundred-acre field with a precision of an artist, and prove the correctness of his eye, by the completeness- with which he finishes the field. To make a serviceable ditch with its proper inclination is no slight feat. To build and thatch a rick squarely, to trim a hedge neatly, to reap and mow evenly require much practice and skill. The shears which the shepherd plies are rude instruments, but in practised hands they do their work deftly A good farm-hand generally knows as much practical husbandry as- his employer, and is as skilful in the treatment of cattle as a farrier. On such training as this interest has to be paid, as surely as on the property or loans of the employer. The form it takes is in sufficient income for the industrial education of his successors, and the fortunes of a country will decline if the successor is not forthcom- ing, or if folly drives him away from his native soil. The element of risk, the inevitable wear, and the ultimate extinc- tion, of this living instrument are manifest enough. His remunera- tion must cover this contingent charge, or it must be covered at the expense of others. The machinery of the English poor law enables the employer, who reaps the profit of the workman's labour, to transfer to the shoulders of all occupiers the insurance of the labourers' risk. To be sure, with commendable forethought, the best workmen, either through benefit societies or labour partnerships r seek to effect their own insurance. In the Middle Ages they did it through their guilds, purchasing lands and houses all over England for charitable service to their own order. Unluckily for them, as the piety of the age considered prayers for the dead to be a charity, these guild lands were confiscated on the plea that the use was superstitious, and people wonder that workmen became improvident. The London guilds made ransom, with the result that the charitable LABOUR WAGES AND CAPITAL PROFITS IDENTICAL. 21 and social funds which were given by traders and artisans have been appropriated by those who are in no other sense their successors. The costs of training and the risks of the calling are, as in the ease of the employer, objective charges ; the remuneration for work actually done is subjective. So that we come to the conclusion, that the wages of the employer and of the workmen are generically identical and only specifically different. The question between the two parties engaged in the joint product is, what is the share which each party shall receive, the cost of materials being deducted in the residual distribution. Here, of course, the problem is insoluble as long as each is the interpreter of his own value. In old days the distribution was determined by an oppressive authority, the resistance to which was naturally unreasoning violence. Gradually both parties began to see that the question was arguable, and they fre- quently had recourse to arbitration. We are beginning to hope that masters' unions and labour partnerships will ere long settle their differences by some self-acting machinery. Now I have referred to these elementary economical principles, not only because a right conception of them is essential towards the interpretation of all economical problems, but because, in these lectures on the economical interpretation of English history, I shall have frequent occasion to show how the industrial partnership and the subsequent distribution of the product have been warped from their natural bias by legislative violence. Five or six centuries ago, the industry of English life was very simple. Three-fourths of the people were husbandmen, cultivating their small farms. There was always, it seems, a certain number of agricultural labourers, who sought work in the villages. It is clear that during the harvest all but the very few men of leisure were engaged in field labour, for the rule against strangers was relaxed in the case of the harvest man. Employers purchased materials, iron, steel, lead, lime, stone, timber, which the craftsmen worked up, as they do in Hindostaii now. When it was possible, piece- work was the rule. It is highly probable, nay, almost certain, that even the artisans were during parts of the year husbandmen. I have seen frequent evidence of the fact. Suddenly a great plague, the like of which was not recorded, attacked Europe almost simultaneously. Like most plagues, it was 22 THE ECONOMICAL SIDE OF HISTORY. much more deadly at first than it was subsequently, though it held its own in England for more than three centuries. It probably killed a third of the population. The wages of labour were instantly doubled, and the ruin of the great proprietors seemed imminent. The profits of capitalist agriculture sank from 20 per cent, to near zero. Now, the great proprietor saw no harm in a high price for what he had to sell, but deemed that a high price in what he had to buy was a grievous wrong. So he made use of the constitution that is, of the Administration and Parliament in order to secure or recover his fortunes. It is true that the means by which unfair or impossible contracts were enforced was not brought to the perfection which we witness in modern times, and for a long time the employers of labour were baffled. The fact is, a new criticism of existing institutions had been encouraged. The riches and the immunities of the monastic orders caused much dissatisfaction. Why should not the opulent monks be made to pay a large share of taxation ? Why should the Pope be allowed to levy toll and tribute in England ? These dis- contents found frequent expression, and the radical reformer and his emissaries were welcomed and caressed in high places. But in course of time, the same bold theorists began to examine into the moral title of all property, to declare that lordship was founded in grace, that is, on deserts, and to dispute all other claims to ownership. They even declared that useful labour was more valuable than birth, and rhymed on the relative antiquity of honest work and gentle blood. They became the mouthpiece, the agents, the organizers of the peasantry, and they managed their function with secrecy and efficiency. At last, out of a clear sky, in June, 1381 r the storm burst, and England was in insurrection simultaneously from Southampton to Scarborough. The insurrection was quelled,, the leaders were executed, the teaching which was once so popular was branded as heresy, and the secular arm was constrained to support the clergy, but lately so unpopular, with fire and faggot. But the solid victory remained for nearly three centuries with the peasants, till at last a combination of circumstances reversed the situation, and the employers became the masters of the field. It is to the history of this long battle that I intend on the next occasion to invite your attention. II. LEGISLATION ON LABOUR AND ITS EFFECTS. The effects of the Great Plague Regulation of prices by authority customary when there were labour prices The first Statute of Labourers Successive Statutes of Labourers The appeal of the workmen to Domesday The events of 1381 Legislation of Henry IV., V., VI. Guilds of artificers Henry VII. and Henry VIII. Habits of the latter His issue of base money The position of Elizabeth The Elizabethan Statute of Labourers The object* of the statute Indirect resources of labourers Wages actually paid Assessments more generous under the Commonwealth. IT is inevitable, in a series of lectures like the present, where far- reaching and present effects are traced to distant causes, that one should seem discursive when one strives to be connected. The war- fare of capital and labour in England has been more prolonged than any other historical struggle. Dynastic wars, wars of religion, wars on behalf of the balance of power, wars for supremacy in commerce have been, as you well know, waged in Europe for lengthened periods. But none has been so lasting as that between employer and labourer. None has hitherto been BO obscure. The history of the contest is to be extracted from the Statute Book, in laws long since repealed or modified, or become obsolete, in laws which no modern edition of the statutes at large reprints. I doubt whether they exist in any other printed form than in the numerous folio volumes in which all, or nearly all, the English laws ever enacted were published, by authority of Parliament, in extenso, but are found, I believe, only in the greatest of our public libraries. 24 LEGISLATION ON LABOUR AND ITS EFFECTS. These laws, however, would be only indefinite, incoherent, and more or less effectual explosions of wrath and discontent, were it not for the contemporaneous evidence of wages actually paid, evi- dence which I have been able to supply, having long been an assiduous and solitary worker in this field of research. The law and the facts illustrate each other. But I must say, with some regret, that the inferences which I am constrained to draw, inferences which are genuine and irrefutable history, have not increased my reverence for the machinery by which the social state of England has been developed. There is, I must confess, a sordid side to the most energetic efforts of collective, I do not say individual, patriotism, and the student of the economical history of England has to prepare himself for painful experiences, even during the most heroic ages of our political history. At the same time, men are not to be blamed for taking advantage of what law accords them. It is to their credit that, in course of time, they became more merciful than the law, as I have found that they constantly were. They never, to be sure, when they made the machinery of their discipline, and what they called law and order, more searching and more severe, declared that they had created 110 new crime, when their principal and successful effort was to render it impossible, by studiously demoralizing the agents of law, to distinguish between innocence and guilt. I have referred, in the last lecture, to the magnitude of the calamity known as the Plague, and more recently, it seems, as the Black Death. Before this event, and the consequences which ensued from it, these consequences having been almost immediate, every one, from the king to the serf, cultivated land for his own profit. It is impossible to conceive any social condition which would be so certain to breed a reverence for law and property as one in which every person was possessed of property, which, unless pro- perty were respected, was so open to marauders as agricultural pro- duce was. I have no doubt that the singular respect for property in agricultural produce which so distinguished Englishmen in the fourteenth century, and, for the matter of that, onwards, and the honour in which husbandry was held, had a good deal to do with the formation of the early English character among all classes. Even in the severest time I can give the negative testimony of my THE EFFECTS OF THE GREAT PLAGUE. 25 own inquiries it was rare indeed that farm produce was stolen. I