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 SITY OF CALIFORNIA 
 T LOS ANGELES
 
 A LETTER 
 
 LORD ASHLEY, 
 
 PRINCIPLES WHICH REGULATE WAGES 
 
 ON THE MANNER AND DEGREE 
 
 WAGES WOULD BE REDUCED, 
 
 BY THE PASSING OF 
 
 A TEN HOURS BILL. 
 
 By R TORRENS, Esq., F.RS. 
 
 LONDON: 
 SMITH, ELDER, AND CO., CORNHILL. 
 
 1844. 
 
 Price Two Shillings. 
 
 \\i
 
 LONDON; 
 
 Printed by William Clowes and Sons, 
 
 Stamford Street. 

 
 
 CONTENTS. 
 
 Page 
 The Maximum of Wages -__--- 1 
 
 ^ The aiinimumof Wages _.-_-- 5 
 
 ' " On the circumstances which determine the point at which actual 
 
 Q Wages settle _--__-_ 6 
 
 ^^ How the proportion between Capital and Labour regulates actual 
 
 Wages ________ 7 
 
 f^ Beyond a certain point, the proportion between Capital and Labour 
 CD 
 
 ceases to have any influeuce on Wages - - - - 11 
 
 - - On the Effect of Machinery upon Wages - - - _ 13 
 
 I ' On the manner in which the relative efficacy of British and of Foreign 
 "^ Labour limits the amount of Wages - _ _ _ 22 
 
 On the manner in which the Import Duties imposed by Foreign 
 ' States upon British Goods reduce Wages - - - 30 
 
 On the Effect of Combinations for reducing Wages - - - 39 
 
 In a country not depending upon foreign markets, Combinations may 
 raise Wages to their maximum, provided the supply of Labou 
 does not increase in a greater proportion than the work to be 
 performed -------- 47 
 
 In a country depending upon foreign markets, Combinations for 
 raising Wages beyond the limit determined by foreign compe- 
 tition, ultimately occasion, not an advance, but a reduction of 
 Wages _-__-_-- 49 
 
 
 X 
 
 f*t. <v_*' '4-/ . li _ _ a. .«^
 
 iy CONTENTS. 
 
 Page 
 In a country possessing superiority in manufacturing for the foreign 
 markets, Wages may be raised within the limits of such su- 
 
 • • 59 
 
 penority ------- 
 
 On the manner and degree in which Wages would be reduced by the 
 
 passing of a Ten Hours Bill - - - - - 64
 
 LETTER TO LORD ASHLEY, 
 
 S('c. Sfc. ^v. - 
 
 My Lord, 
 
 The principles which regulate the wages of labour 
 form, without any exception, the most interest in g'^and the 
 most important division of Political Economy. The labour- 
 ing classes compose the great bulk of every community; 
 and a country is happy or miserable, as they are well or ill 
 supplied with the necessaries, comforts, and enjoyments of 
 life. The study of political economy, if it did not teach 
 the way in which labour may obtain an adequate reward, 
 might serve to gratify a merely speculative curiosity, but 
 could scarcely conduce to any purposes of practical utility. 
 It claims the peculiar attention of the benevolent and good, 
 mainly because it explains the causes which depress and 
 elevate wages, and thereby points out the means by which 
 we may mitigate the distress and improve the condition of 
 the great majority of mankind. Political economy is not, as 
 has been erroneously stated, the appropriate science of the 
 statesman and the legislator ; it is peculiarly and empha- 
 tically the science of the people. 
 
 The Maximum of Wages. 
 
 As wages are paid out of the produce of industry, it is 
 obvious that there are natural and necessary limits, beyond 
 
 B
 
 2 
 
 which they cannot be pL'rmanently increased. Thus, if 100 
 labourers expend 200 quarters of corn for seed and imple- 
 mentSj and raise a return of 500 quarters, it is physically 
 impossible that their wages should continue to be more than 
 300 quarters ; because if they did, seed and implements 
 would not be replaced, and the capitalists could not continue 
 the cultivation of the earth. Again, if it were necessary to 
 resort to an inferior soil, upon which 100 labourers, with an 
 expenditure of 200 quarters for seed and implements, could 
 raise no more than 400 quarters, then_, for the same reason, 
 it wo'ald become physically impossible that the annual wages 
 of 100 men should exceed 200 quarters of corn. 
 
 In the above cases the labourer is supposed to receive as 
 his wages the whole produce of labour, which remains after 
 the replacement of the capitalist's other advances. This 
 can occur only in those rare instances in which the 
 capitalist, without seeking any profit for himself, employs 
 labourers from pure benevolence and charity. In the vast 
 majority of actual cases, the capitalist, in addition to the 
 replacement of all his advances, will reserve a portion of the 
 produce of industry as his profit; and though there will 
 exist no physical, yet there will be a moral impossibility 
 that wages should exceed that which remains after the 
 capitalist's other advances have been replaced, with the 
 lowest rate of increase, for the sake of which he will carry 
 on his business. This, then, we may call the moral 
 maximum of wages. The labourer may receive more, as a 
 benevolent gift, from men of fortune, who do not live upon 
 their industry; but he cannot receive more, in exchange for 
 common labour, in those great and permanent branches of 
 employment which supply the community with the neces- 
 saries and comforts of life. 
 
 The rate of increase, which is sufficient to induce the 
 capitalist to continue in business, varies from causes which it 
 is not necessary here to explain. We may for the present
 
 safely assume that the eapitahst will not engage in the work 
 of production, unless he can obtain a profit of 7 per cent. 
 
 If we take 7 per cent, as the lowest rate of profit, then 
 the maximum, beyond which wages cannot rise, will be that 
 portion of the produce which remains, after replacing the 
 advances not consisting of wages, and deducting what is 
 equivalent to 7 per cent, upon the whole advances. Thus, 
 if a farmer advance to 100 labourers 200 quarters of corn 
 as wages, with 200 quarters more for seed and implements ; 
 and if he obtain a return of 428 quarters, wages will be at 
 the maximum, for if we take from the whole produce of 428 
 quarters 200 quarters to replace the seed and implements 
 consumed, and also deduct 28 quarters, or 7 per cent,, upon 
 the whole advance of 400 quarters, then just 200 quarters 
 will remain to be again advanced as wages. Under these 
 circumstances it is self-evident that wages could not i^ise 
 above 200 quarters for 100 men, for were more than this 
 given to the labourers loo little would remain, either for 
 seed and implements, or for that lowest rate of profit which 
 will induce the farmer to cultivate. 
 
 It is obvious that the maximum of wages may be raised, 
 either by the cultivation of land of a better quality, or by 
 improvements in the effective powere of industry ; and that 
 it may be lowered, either by resorting to poorer soils, or by 
 a falling off in the effective po^vers of industry. In an 
 improving country better modes of cultui-e are gradually 
 introduced, and labom* is more effectually applied, par- 
 ticularly in manufactures. But the effect of such improve- 
 ments, in raising the maximum of wages, is in general coun- 
 terbalanced by the necessity of resorting to inferior soils for 
 the supply of food and material. 
 
 The circumstances which raise the maximum of wages to 
 the highest point are those in which an old and thickly- 
 peopled country, excelling in manufacturing industry, carries 
 on a perfectly free trade with new and thinly-peopled conn- 
 
 b2
 
 tries, in which none but soils of first-rate quality are under 
 tiUage. A simple illustration will demonstrate this. 
 
 If a master manufacturer employ 100 labourers, who 
 fabricate for liim 428 suits of clothinor, and if, from the 
 inferior qualitv of the soil under cultivation, he is obHo-ed to 
 give 200 suits for the materials he works up, it is evident 
 that the highest point to which the wages of the 100 
 labourers can ascend will be 200 suits of clotliing; because 
 if more were given for labour the capitalist would have less 
 than the lowest rate of profit, which is necessary to induce 
 him to continue in business. 
 
 Now, let an unrestricted commerce in raw materials be 
 established with a new country, cultivating none but first- 
 rate soils, and let raw materials be in consequence so 
 reduced in value, as compared with wrought goods, that the 
 manufacturer can purchase his raw material for 100, instead 
 of for 200 suits of clothing ; and immediately the maximum 
 of wages, for the 100 labourers, will rise from 200 to 300 
 suits, because the capitalist, obtaining 428 suits and ad- 
 vancing only 100 for materials, may give 300 to his 
 labourers, and yet retain 28 suits, or 7 per cent, upon his 
 whole advance of 400 suits. Measured in clotliing, maxi- 
 mum wages will have risen 50 per cent., measured in raw 
 produce they will appear to have risen 300 per cent. 
 
 England having acquired in manufacturing industry an 
 efficacy unexampled in the history of the world, and having 
 the new countries of her vast colonial empire open to her 
 commerce on principles of perfect reciprocity, is placed in 
 that precise situation in which the maximum of wages may 
 be elevated to the highest attainable point. But the vast, the 
 incalculable advantages of this situation cannot be developed 
 without the adoption by the Government of an extended 
 scheme of colonization.
 
 The Minimum of Wages. 
 
 Tlie minimum below which '.^ages cannot permanently 
 fall, consists in a quantity of the necsssaries and conveniences 
 of life sufficient to preserve the labourer in working con- 
 dition, and to induce him to keep up the race of labourers. 
 The point, below which wages cannot fall, is not a fixed and 
 immutable point, but is, on the contrary, liable to considerable 
 variation. The shelter and clothing indispensable in one 
 country may be unnecessary in another. A labourer in 
 Hindostan may continue to work with perfect vigoin* while 
 receiving a supply of clothing which would be insufficient to 
 preserve a labourer in Russia from perishing. Even in coun- 
 tries situated in the same climate, different habits of living 
 will often occasion variations in the minimum of wages as 
 considerable as those which are produced by natural causes. 
 
 The labourer in Ireland will rear a family under circum- 
 stances which would not only deter an English workman 
 from marriage, but would force him on the parish for 
 personal support. Now, it is certain that a gradual intro- 
 duction of capital into Ireland, accompanied by such a dif- 
 fusion of instruction amongst the people as would impart to 
 them a taste for the comforts of life, might raise the minimum 
 of wages in that country to an equality with their minimum 
 in England; and we can conceive a succession of impoverish- 
 ing and calamitous causes, which might so reduce the spirit 
 of the people of England as to render them satisfied with 
 the scanty pittance that the labourer obtains in the sister 
 island. Alterations, however, in the minimum of wages 
 cannot be suddenly effected. So far as this minimum 
 depends upon climate, it is unchangeable ; and even so far 
 as it is determined by the habits of living, and the established 
 scale of comfort, it can be effected only by those circum- 
 stances of prosperity or decay, and by those moral causes of 
 instruction and civilization, which are ever gradual in their
 
 oporatioii. The miiiiinimi ol" wages, llieretbre, though it 
 varies imdei- difVerent eliiuutes, and with the different stages 
 of national improvement, may, in any given time and place, 
 be regarded as very nearly stationary. 
 
 On the Circumstances which determine the Point at which 
 actual Wages settle. 
 
 We have seen that the minimum of wages is that quantity 
 of the products of industry which climate and custom render 
 necessary, in order to support the labourer while at work, 
 and to induce him to keep up the race of labourers ; and it 
 has appeared that the maximum of wages is that quantity 
 of the products of industry which remains after replacing the 
 advances, not consisting of wages, and paying the capitalist 
 the lowest rale of profit, which will induce him to continue 
 the work of production. 
 
 Now, when climate and custom have fixed the minimum 
 below which the reward of labour cannot fall, and when the 
 quality of the soil, the skill with which labour is applied, 
 and the degree of freedom which is allowed to trade, have 
 determined the maximum bev^ond which it cannot rise, what 
 is the precise circumstance which fixes the point at which 
 actual wages settle? 
 
 In order to put this important question in a more exact 
 and definite form, we will assume that tlie minimum wages 
 of the labourer are five quarters of corn a-year, and that the 
 minimum profit, for the sake of which the capitalist will 
 make advances, is 7 per cent. ; and we will suppose 
 that a farmer, by employing 100 labourers, and advancing 
 500 quarters of corn for seed and implements, obtains a 
 reproduction of 1605 quarters. In this case, what is to 
 determine the wao-es which the 100 labourers shall receive? 
 They may receive only 500 quarters, should wages fall to 
 the minimum, or they may receive 1000 quarters, should
 
 wages rise to the maximum ; because, as the farmer obtains 
 a reproduction of 1G05 quarters, he may, in addition to his 
 advance of 500 quarters for seed and implements, pay 
 1000 quarters to his 100 labourers, and still have, upon this 
 whole advance of 1500 quarters, the minimum profit of 
 7 per cent., which is sufficient to induce him to continue 
 his business. What then determines whether the 100 
 labourers shall receive as their wages 500 quarters or 
 1000 quarters, or some medium quantity between these 
 two extremes ? 
 
 The answer to this question is, that the one and the only 
 cause which can determine where, between the maximum 
 and minimum, the wages of these 100 labourers shall be 
 fixed, is the proportion between the number of labourers and 
 the quantity of that component part of our farmer's capital 
 which he can exchange for labour. A mere statement of the 
 relation between the amount of the capital and the quantity 
 of the labour will render this self-evident. 
 
 How the Proportion between Capital and Labour regulates 
 actual Wages. 
 
 The farmer, on commencing business, commands, we will 
 say, a capital of 1000 quarters of corn; 500 quarters of 
 which he advances for seed and implements. Over and 
 above his necessary expenditure for these component parts of 
 agricultural capital, he has but 500 quarters disposable ; 
 and therefore it is physically impossible that he should give 
 to his 100 labourers more than those 500 quarters as their 
 wages. 
 
 The farmer obtains a reproduction of 1605 quarters; but 
 if 605 quarters of these are absorbed in the current expenses 
 of his family, his capital, at the commencement of the second 
 year, will remain exactly the same as it was at the commence- 
 ment of the first, and any increase of wages will continue to 
 be impossible.
 
 8 
 
 • 
 
 But supposing that o\ir larnier, out oi' the GU5 quartei-s 
 formerly devoted to the current expenses of his family, con- 
 trives to save 250 quarters, and adds them to his capital of 
 1000 quarters, then it will immediately become possible for an 
 advance of wages to take place ; and assunjing that the num- 
 ber of labourers remain as before, an advance of wages equal 
 to the increase of capital necessarily will take place ; the 100 
 labourers receiving 725 quarters instead of 500 quarters. 
 For when the farmer, in order to extend his cultivation, makes 
 an addition to his capital, he will require a greater number of 
 hands, and will seek to tempt them into his employ by the 
 offer of higher wages. But as the increase of capital is sup- 
 posed to be general, all other capitalists will require additional 
 hands as well as our farmer, and will be offering higher w ages 
 also. All the capitalists will be unwilling to let their ad- 
 ditional capital lie idle for want of hands, and, with the two- 
 fold object of retaining their own labourers, and of obtaining 
 those of their neighbours, will go on advancing wages, until 
 the whole of their additional capital is absorbed. 
 
 Assuming that all the labourers are already employed 
 and that no addition is made to their numbers, it is morally 
 cei'tain that the whole of every new accumulation of capital 
 will assume the form of increased wages, until the reward of 
 the labourer has reached its maximum. New accumulations 
 of capital are made for the sake of obtaining advantage there- 
 from. But it is impossible that new accumulations of capi- 
 tal should be advantageously employed, unless labourers can 
 be procured. The new capital, accumulated for the purpose 
 of gaining an advantage by the employment of labourers^ 
 comes into the market and bids for hands; the old capital,' 
 in order to retain its hands, is compelled to bid against the 
 new, and this process goes on until the whole existing capital 
 is invested in wages, seed, materials, and machinery. But 
 as a given number of hands can use only a given quantity of 
 seed, materials, and machinery, these ingredients or com-
 
 ponent parts of capital cannot be increased, while the quan- 
 tity of labour remains the same; and therefore it is only in 
 the form of increased wages that the new accumulations of 
 capital can appear. 
 
 When the number of labourers remains the same, nothing 
 can prevent new accumulations of capital from appearing 
 under the form of increased wages, except such an intimate 
 understanding and concert amongst capitalists, as would in- 
 duce each individual of the class, instead of seeking for ad- 
 ditional hands, to allow all his new accumulations of capital 
 to remain idle and unproductive. But the supposition of an 
 intimate concert amongst capitalists, for such a purpose, in- 
 volves this manifest contradiction and absurdity — namely, 
 that they accumulate capital for the sake of employing it ad- 
 vantageously, at the same time that they resolve not to em- 
 ploy it at all. If there were an understanding that all new 
 capital should be kept unemployed, no new accumulation 
 would take place. Whenever new accumulations do take place, 
 they supply a complete demonstration that no combination 
 for the purpose of not employing them exists. If such new 
 accumulations are made, it is in order that they may be 
 emplojipd ; and if they are employed the quantity of labour, 
 and the state of knowledge in applying mechanical power 
 remaining the same, there is no form in which they can ap- 
 pear, except in that of increased wages. 
 
 On this principle, if our farmer, employing^ as before, 100 
 laboin-ers, advancing 500 quarters of corn as seed and im- 
 plements, and obtaining a reproduction of 1605 quarters, 
 were, out of the 605 quarters formerly devoted to the cur- 
 rent expenses of his family, to save 500 quarters instead of 
 250 quarters, then the second 250 quarters thereby added to 
 his capital would, like the first, take the form of increased 
 wages, and the reward of the 100 labourers, which had be- 
 fore risen from 500 to 750 quarters, would now rise to 1000 
 quarters. Here wages would have reached their maximum ;
 
 10 
 
 for the farmer, aclvimcing 500 (jiiarters lor seed, ami 1000 
 quarters for labour, and obtaining a rejjroiluction of 1605 
 quarters, would gain no more than the mininnmi profit of 
 7 per cent., which, by the supposition, is necessary, to induce 
 him to carry on his business. 
 
 Under those circumstances, it is plain that if the 'number 
 of labourers did not increase, wages would continue at their 
 maximum. Should the labourinef class, durinof the increase 
 of capital ar.d advance of wages, have acquired a taste for 
 superior modes of living, the minimum, below which wages 
 cannot fall without reducing the supply of labour, might 
 be made to coincide with the maximum, beyond which they 
 cannot rise without suspending the employment of capital. 
 When the coincidence of minimum and maximum wages is 
 brought about by superior habits of living among the people, 
 raising the former to the level of the latter, the labouring 
 classes will be in the most affluent condition in which, in the 
 nature of things, it is possible they should be placed. 
 
 This affluent condition can be preserved to the labouring 
 classes so long only as they may refuse to burthen themselves 
 with families sufficient to keep up the race, unless they receive 
 the highest wages which can be paid, without trenchi»g upon 
 the minimum rate o!" profit. An increase in the number of 
 labourers, without a contemporaneous and proportional increase 
 in the quantity of those ingredients of capital by which labour is 
 maintained, is inevitably followed by a decline of wages. While 
 our farmer's capital consists of seed and implements sufficient 
 to employ 100 labourers, and of a quantity of necessaries suf- 
 ficient to pay them wages at tlie rate of ten quarters of corn per 
 man, it is physically impossible that he should, with this capital, 
 give employment to 110 labourers, at the same wages. 
 
 It necessarily follows, from the principles of rent, that when, 
 on the last land resorted to, the smallness of the produce ob- 
 tained deprives the farmer of the power of giving his labourers 
 more than is suflicient for the support of animal life, the higlr
 
 11 
 
 iviit which competition causes to be paid for all the more fertile 
 soils^ reduces the cultivator of the best to the same level with 
 the cultivator of the vvorstj and brings down^, univ"ersally, the 
 maximum of wages to the minimum. 
 
 Hitherto we have taken our proofs and illustrations from 
 agricultural labour, because in agriculture the principal things 
 expended, such as food and seed, being homogeneous, with the 
 things reproduced, we are enabled to form a direct comparison 
 between the quantities expended and the quantities reproduced, 
 and thus to give a simplicity and distinctness to our illustrations 
 which could not otherwise be obtauied. Tiie principles, however, 
 which regulate wages in agriculture also regulate them in ma- 
 nufactures. Where, as is now the case in tliis country, com- 
 petition is allowed to operate, the value of the common labour 
 employed in producing the first necessaries of life will regulate 
 the value of all ot .er kinds of labour, allowance being made 
 for different degrees of hardship and of hazard, and for the time 
 and expense required in learning a trade. 
 
 Beyond a certain Point, the Proportion between Cajntal and 
 Labour ceases to have any injluence on JVayes. 
 
 It has appeared that minimum wages are fixed by climate 
 and by the habits of living prevalent among the labouring 
 classes; that maximum wages are determined by the quality 
 of the soil under cultivation, and by the skill ^vith wliich labour 
 is applied ; and that the point at which actual wages settle is 
 regulated by ths proportion which exists between the number 
 of labourers to be maintained and the quantity of those ingre- 
 dients of capital which are destined for their maintenance. 
 
 Tile ratio between labour and capital appears sometimes to 
 be considered as the only regulator of wages. If the condition 
 of the great body of the people be easy and comfortable, it is 
 contended that all that is necessary to keep it so is to make 
 capital increase as fast as population ; oi-, on the other hand.
 
 12 
 
 to prevent population iVoni increasing faster than capital; and 
 that, if" the condition ot" the ])eople be not easy and comfortable, 
 it can be made so only by quickening the rate at which capital 
 increases, or by retarding the rate at which population increases. 
 
 This is taking a narrow and incomplete view of the circum- 
 stances wltich regulate wages. The ratio between labour and 
 capital is not tJie only cause ; it is but one out of the several 
 causes by wliich wages are governed. When climate and 
 oust ini have determined the point below which the reward of 
 labour caiuiot fall, and when the quality of the soil, and the 
 skill with which industry is applied, have fixed the maximum 
 beyond wliich it cannot rise, then the ratio between population 
 and capital, or, more correctly, between the quantity of labo.r 
 and the quantity of the ingredients of capital destined for its 
 maintenance, determines the intermediate point at which actual 
 wages settle. But, tho 'gh labour and capital should go on 
 increasing in the same proportion, and though they should con- 
 stantly preserve the same ratio to each other, yet tlie necessity 
 of resorting to inferior soils might gradually reduce the max- 
 imum of wao^es until it coincided with the extreme minimum, 
 below which labour cannot be sustained. At this point the 
 supply of labour could be no further increased ; and if habits 
 of frugality amongst the opulent classes continued to convert 
 revenue into capital, the ratio of capital to population might 
 go on increasing, without producing the slightest advance of 
 wages. 
 
 When, in the progress of wealth and population, wages and 
 profits have fallen to their minimum, and when the next quality 
 of land to be taken in caimot be made to yield a reproduction 
 sufficient to pay these minim' im wages and to replace advances 
 with minimum profits, then that which is saved from revenue 
 to be added to capital cannot be employed at home, and, unless 
 poured out upon the fertile wastes of colonial dependencies, 
 will be invested in foreign loans and foreign adventures. At 
 this point the most rapid accumulation of capital, though going
 
 13 
 
 on while population remained stationary, could have no possible 
 influence on wages. 
 
 On the Effect of Machinery iipon Wages. 
 
 From the principles established in the precsding sections, it 
 must be evident that, in whatever degree the employment of 
 machinery may diminish the cost of production, it must in the 
 same degree raise maximum or possible wages. Assuming, as 
 before, that 7 per cent, is the lowest rate of profit for the sake 
 of which industry will be continued, then if a farmer employing 
 100 labourers, with an expenditure of 500 quarters for seed 
 and implements, could raise 749 quarters, the maximum 
 wages of the 100 men, should no rent be paid, would be 200 
 quarters, or two quarters per man. Now, suppose that the 
 farmer, by introducing a threshing machine, a winnowing 
 machine, and a sowing machine, can raise 749 quarters from 
 the land under cultivation, with the labour of 50 instead of 100 
 men, then it is self-evident that maximum or possible wages 
 will be doubled, and will rise from two quartei-s to four 
 quarters per man. Before the introduction of these macliines, 
 it was physically impossible that any effort of prudence, any 
 diminution of the supply of labour, or any increase in the 
 demand for it, could enable the labourer to earn, as their per- 
 manent wages, more than two quarters per man ; but, now 
 that the cost of production has been lovAered by the employ- 
 ment of macliinery, an increase in the demand for labour, or a 
 diminution in its supply, may double wages. A capability of 
 bettering the condition of the working people has been created 
 — the obstacle (formerly insuperable) to their improvement 
 has been removed. 
 
 But the practically important questions are — Would im- 
 provement really take place when it ceased to be impossible ? 
 Would actual wages rise because maximum wages had risen ? 
 Let us see. 
 
 The employment of the machines has caused an enormous
 
 14 
 
 increase in the profits of the I'arnier. While his produce, 
 equivalent to 749 quarters, remains as before, his expendittu-e. 
 which was 500 quarters for seed and implements, and 200 
 quarters for wages for 100 men, is now reduced to 500 
 quarters for seed and implements, with 100 quarters for 
 wages for fifty men. His profit is therefore raised from 7 to 
 24 per cent. Now this increased rate of profit, occasioned 
 by the diminished cost of production, will be followed by an 
 increase in actual as well as in maximum wages. 
 
 The 100 quarters which the farmer formerly paid as 
 wages to fifty men, and which are now added to his profits, 
 he cannot eat, and he will not destroy. He will expend 
 them, either unproductively as revenue, or productively as 
 capital. Should he expend them unproductively, upon an 
 additional quantity of articles of dress and furniture j)roduced 
 within the covxntry, they will go to pay the wages of the 
 additional number of labourers required to fabricate this 
 additional supply of home-made goods. Should he expend 
 them unproductively upon foreign luxuries, they will go to 
 pay the wages of the additional number of labourers, required 
 to produce the additional quantity of home-made goods, with 
 which the additional supply of foreign luxuries must be pur- 
 chased. In either case the unproductive expenditure of the 
 100 quarters, added to the farmer's profits, will create a new 
 demand for labour, exactly equal to the quantity of labour 
 thrown out of employ by the introduction of the machines. 
 The diminished demand for agricultm-al labour will be 
 balanced by the increased demand for manufacturing labour, 
 and the aggregate demand will remain vindiminished. The 
 change of occupation will, in the first instance, be accom- 
 panied by considerable local distress ; but after the new 
 proportions between the agricultural and manufacturing 
 populations have been adjusted, the same number of la- 
 bourers will be employed at the same rate of wages as before. 
 On the supposition, therefore, that the farmer expends the
 
 lo 
 
 whole of his increased profits uuproductively. the ultimate 
 effect will be, that maximum wages will be increased, while 
 actual wages will remain unchanged. The quantities of raw 
 materials and food, the funds for employing and maintaining 
 labour^ will remain as before ; and should no variation take 
 place in the numbers to be employed and maintained, wages 
 will remain as before. 
 
 But when the introduction of the machines increased the 
 farmer's profit from 7 to 24 per cent., the whole of this in- 
 creased profit would not be expended vm productively. In- 
 creasing profits always occasion a more rapid accumulation 
 of capital, and an increase of productive expenditure. We 
 have thei'efore to consider what effect would be produced 
 upon actual wages by the more I'apid accumulation of 
 capital, and the increased productive expenditure consequent 
 upon the employment of the machines. 
 
 Previous to the employment of the machines, the farmer 
 obtained, from the most inferior soils then under tillage, the 
 rate of profit requisite to induce him to invest capital in 
 cultivation. He can now obtain this rate of profit from 
 lands which could not before be tilled. When the expen- 
 diture, upon a given quantity of land, was 700 quarters, the 
 lowest quality of soil which could be cultivated with the 
 minimum profit of 7 per cent, must have yielded 749 
 quarters; now that the machines have reduced the expen- 
 diture upon this quantity of land to 600, a quality of soil 
 yielding 642 will afford this rate of profit ; a new and ex- 
 tensive field for the employment of accumulating capital 
 will be created ; that portion of the farmer's increased profits 
 which he adds to his capital will be employed in bringing 
 additional land into tillage, an increased quantity of sub- 
 sistence will be raised, and, unless the supply of labour 
 should increase in the same proportion, actual wages will 
 advance. 
 
 The employment of improved machinery in manufactures
 
 16 
 
 would produce pivcisely similar rrtVu-ts. Lcjt us take llie 
 instance of tht; power-loom, and, for the sake of distinctness, 
 let us trace the result in figures. 
 
 A manufacturer's expenditure is, in the first instance, raw 
 material and wear and tear, equivalent to 500 quarters, and 
 wages to 100 hand-loom weavers, equivalent to 200 quarters, 
 and with this expenditure he fabricates cloth equivalent to 
 749 quarters. He subsequently introduces the power-loom, 
 which, by enabling him to get the same work done by fifty 
 labourers, effects a saving of the wages formerly advanced 
 to the other fifty, who are thrown out of employ. The 
 things constituting the wages thus saved, the manufacturer 
 will not destroy — he will advance them either in purchasnig 
 or in producing other things ; and in either case the aggre- 
 gate quantity of food and clothing appropriated to the main- 
 tenance of the labouring classes will suffer no diminution. 
 The new distribution of employment will, for a considerable 
 period, be accompanied by great privation and distress ; but 
 when a sufficient number of the hand-loom weavers, for 
 whose work there is a diminished demand, shall be trans- 
 ferred to those other trades, in which there is an increased 
 demand, there will not be, upon the whole, any reduction in 
 actual wages, even upon the supposition that the whole 
 saving in the cost of production is expended unproductively, 
 and that no addition is made to those ingredients of capital 
 which are applicable to the maintenance of labour. But 
 this supposition would be contrary to fact. The saving 
 which the introduction of improved machinery would effect 
 in the cost of producing manufactured necessaries, would 
 speedily occasion an increased creation of the funds ap- 
 plicable to the maintenance of labour ; and unless a pro- 
 portional increase should at the same time take place in the 
 supply of labour, would cause actual wages to advance. Ilie 
 demand for labour would be rendered either more intense or 
 more extensive, or, in other words, either the same number
 
 17 
 
 of labourers would be employed at higher wages, or else a 
 greater mimber at the same wages. Tlie reduction in the 
 cost of preparing wrought goods, occasioned by the employ- 
 ment of machinery in manufactures, reduces the value of 
 that portion of the farmer's advances which consists of 
 clothing, furniture, and implements, and thereby enables him 
 to obtain additional supplies of food and raw materials from 
 tracts which could not formerly be tilled. Let us take an 
 example. 
 
 We will assume that, before the introduction of improved 
 machinery in manufactures, that part of the farmer's ad- 
 vances which consists of wrought goods is of equal value 
 with that part which consists of raw produce. In this case, 
 if he advance 100 quarters as food and seed, he must also 
 advance clothing, furniture, and implements equivalent to 
 100 quarters ; and he will be unable to cultivate, with the 
 minimum profit of 7 per cent., any land which does not yield 
 to this advance a produce of 214 quarters. Now let the 
 employment of improved machinery in manufactures diminish 
 by one-half the productive cost, and the value of wrought 
 goods, and the farmer's advance, which was before equivalent 
 to 200 quarters, will now be equivalent only to 150 quarters ; 
 and he will be able to cultivate, \\ath the minimvim of 7 per 
 cent., land yielding only 160^ quarters. Tracts which covdd 
 not formerly be reclaimed from their original wild and forest 
 state, will now be brought under the plough, and there will 
 not only be a greatly increased demand for agricultural 
 labour, but large additional supplies of food and raw material 
 will be raised, to maintain and employ a more numerous 
 manufacturing population. 
 
 Machines work, but do not eat. When they displace labour, 
 and render it disposable, they at the same time displace and 
 render disposable the real wages, the food and clotliing, wliich 
 maintained it. The aggregate fund for the support of labour is 
 not diminished, and, therefore, \inless the numbers to be main- 
 
 c
 
 18 
 
 taiued should incivasL', each individual, as soon as the free 
 subsistence and Tree labour are rc-adjusted to each other, will 
 have the same command of the necessaries of" life as before. 
 But machines not only leave the aggregate fund for the main- 
 tenance of labour undiminished, they actually increase it. They 
 are employed, because they reduce productive cost ; and whether 
 SLich reduction take place in agriculture or in manufactures, it 
 allows cultivation to extend over districts which co ild otherwise 
 be tilled, and causes additional funds for the maintenanc3 of 
 labour to ba created. When a machine is employed in agri- 
 CiJture, the quantity of ibod and clothing expended in raising a 
 given produce is reduced ; and when it is employed in manu- 
 factures, the value of the clothing and implements expended in 
 raising a given produce is reduced ; and, therefore, in either 
 case the plough is driven over regions into which cultivation 
 could not otherwise extend — the same effect is produced as if 
 increased natural fertility had descended on the soil — the fund 
 for the maintenance of labour is enlarged, and the same num- 
 bers will obtain higher wages, or additional numbers will 
 obtain employment. 
 
 Mr. Ricardo has stated an hypothetical case, in which the 
 employment of machinery might diminish the fund for the 
 maintenance of labour, and injure the working classes. The 
 case is this. Should any number of labourers, now employed 
 in producing the necessaries of life, be withdrawn from that 
 occupation, and employed in constructing machines, the imme- 
 diate consequence would be a diminution in the quantity of the 
 necessaries of life ; and as the diminished quantity \vould have 
 to be divided amongst the same number of persons as before, 
 a less quantity would fall to the share of each individual, and 
 real wages would be reduced. The diminution of the funds 
 for the maintenance of labour, and the consequent fall of real 
 wages, could only be temporary. As soon as ihe machines 
 were completed, the labourers employed in constructing them 
 would again become disposable for the production of necessaries.
 
 19 
 
 while tilt; increased efficiency of" industry, occasioned by a more 
 extended application of mechanical power in aid of labour, 
 would lead to extended tillage, and cause augmented supplies 
 of food and raw material to be raised from soils which could 
 not before remunerate the cultivator. 
 
 It is toba observed that this hypothetical case, put by Mr. 
 Ricardo, never occurs in practice. The labourers employed 
 in agriculture, and in manufacturing necessary articles of 
 clothing and furniture, are never withdrawn from these occu- 
 potions for the purpose of constructing machines.* If, in any 
 given year, the manufacture of machinery were to increase 
 ten-fold, such increase would not occasion, even in that same 
 year, any perceptible diminution in the supply of the neces- 
 saries of life. 
 
 The only case in which the employment of machinery can 
 in practice diminish the funds for the maintenance of labour, 
 is that in wliich the machinery is worked, not by mechanical, 
 but by animal power. Should 100 labourers, employed in 
 spade husbandry, consume 200 quarters of corn, and produce 
 220 quarters, the farmer, who advanced their consumption, 
 would obtain 20 quarters as his profit. Now, let the plough 
 be substituted for the spade, and horses for labourers, and then 
 it is possible that the profits of the farmer may be increased, 
 while the funds for the maintenance of labour are diminished. 
 For if 20 horses, consuming 40 quarters, can do the work of 
 50 men, consuming 100 quarters, the farmer's whole expen- 
 diture will be reduced from 200 quarters to 140 quarters, and 
 his return of 220 quarters to this reduced expenditure will 
 leave 80 quarters instead of 20 quarters as his profit. But in 
 this case the fund for the maintenance of labour would be 
 reduced to the whole extent of the consumption of the horses. 
 There will be 50 agricultural labourers thrown out of employ- 
 ment ; but there will not be, as if the ploughs were worked by 
 
 * See Senior's able Lectures on Wages. 
 
 c2
 
 20 
 
 a non-food-consuming power, an equivalont supply of subsist- 
 ence set free to support them in other occupations. 
 
 It is to be remarked, however, ihat the injurious effect of 
 substituting horse-power for human labour would be gradually 
 counteracted by the extended tillage, rendered practicable by 
 the diminution effected in the cost of production. While the 
 farmer employed in spade husbandry 100 men, consuming 
 200 quarters, he could not cultivate, with the minimum profit 
 ot seven per cent., any land yielding to this expenditure a 
 less produce than 214 quarters. But when the substitution of 
 ploughs and horses reduces his expenditure from 200 to 
 140 quarters, he can immediately extend cultivation over 
 inferior soils, yielding to this reduced expenditure a produce 
 of only 1 50 quarters ; and thus, by the extension of tillage, 
 the funds for the maintenance of labour would be again 
 enlarged. In a country not exporting the raw produce of 
 the soil, the permanent interest of the working classes must 
 always be promoted by the substitution of a cheaper for a 
 more expensive instrument of production. When cheaper 
 instruments of production are employed, maximum or pos- 
 sible wages are raised, and unless the supply of labour in- 
 creases with the increased power of extending cultivation over 
 inferior soils, actual wages are made to approximate to their 
 maximum. 
 
 The funds for the maintenance of labour receive their 
 greatest possible increase when, in the working of machines, 
 horse-power is superseded. In this case human subsistence 
 is augmented, not only by the extension of tillage rendered 
 practicable by the reduction in the cost of production, but also 
 by the whole quEftitity of produce which the horses formerly 
 consumed. This most important augmentation in the supply 
 of human subsistence has now commenced. Already in this 
 coimtry steam is superseding horses; and it is scarcely pos- 
 sible to measure the extent to which this supplanting process 
 may be carried. In a few years draught horses may disappear
 
 21 
 
 from all the great lines of traffic throughout England ; and 
 it seems not improbable that, at no distant period, the plough 
 and the harrow will be moved by steam, as well as the car- 
 riage and the waggon. Upon the funds for the maintenance 
 of labour, the substitution of steam for cattle will have the 
 same effect as that which would be produced by doubling the 
 fertility of the soil. There will be an unprecedented increase 
 in the demand for labour ; double the number of people may 
 be employed at the same wages, or the same number at 
 double wa^es. 
 
 From this examination of the results of machinery, it ap- 
 pears that all inventions for abridging labour and diminishing 
 the cost of production, with the exception of those in which 
 cattle ai'e employed as the moving power, augment the flinds 
 for the mainteufince of labour, and have the effect of increasing 
 both maximum and actual wages. It also appears that the 
 general good which results from the employment of new and 
 improved machinery is accompanied by partial evil. While 
 the public acquires additional wealth, the individuals who are 
 supplanted in their accustomed occupations are reduced to 
 poverty. Humanity and justice demand that those who thus 
 suffer for the public good should be relieved at the public 
 expense. Whenever a new application of mechanical power 
 throws a particular class of operatives out of employment, a 
 national fund should be provided to aid them ui betaking 
 themselves to other occupations. It is a disgrace to the 
 Legislature and to the country that the numerous body of 
 hand-loom weavers should have been left so long in misery and 
 destitution, and toiling to the death in hopeless competition 
 with the power-loom. A comprehensive plan for their relief 
 ought to have been one of the earliest measures of the reformed 
 Parliament.
 
 22 
 
 On the Manner in which the relative ejficacy of British 
 and of Foreign Labour limits the Amount of Money - 
 wages in this Country. 
 
 It may be assumed, as a proposition not open to contro- 
 versy, that in countries exporting the same description of 
 manufactured goods, the money-wages of the operatives em- 
 ployed in the preparation of such goods, other things remain- 
 ing the same, will gravitate towards a common level. ShoiJd 
 England and Germany export cottons and woollens to America, 
 and should the advantages, with regard to the production of 
 these articles be equal in the two countries, then it would be 
 evidently impossible for the English manufacturer to pay 
 higher money-wages than the German. But, on the other 
 hand, should England possess an advantage over Germany 
 with regard to the cheapness of fuel, to the efficiency of ma- 
 chinery, or to the skill and energy with which manual labour 
 is applied ; then, in either of these cases, the English manu- 
 facturer who prepared cottons and woollens for the foreign 
 market, could afford to pay higher money-wages than the 
 German to the extent of the superiority possessed. For ex- 
 ample, should the superiority possessed by England be such as 
 to enable 100 operatives to execute in tliis country the same 
 quantity of work which it required 125 to execute in Germany, 
 then the English capitalist could afford to advance, as the 
 wages of 100, the same sum which might be advanced in 
 Germany as the wages of 125. Under the circumstances 
 assumed, money-wages would remain 25 per cent, higher in 
 England than in Germany. 
 
 For a long series of years England possessed such superior 
 advantages in manufacturing industry, that she was enabled to 
 execute, with a given number of hands, a much greater quan- 
 tity of work than that which could be executed by the same 
 number of hands in other countries; and the necessary con- 
 sequence was, that money-wages became considerably higher
 
 28 
 
 ill England tlian on the continent ot" Europe. While the wars 
 of" the French revolution paralysed the industry of the con- 
 tinent, England, mistress of the seas, enjoying internal security, 
 and employed in developing the new mechanical power created 
 by her Watts and Arkwrights, was possessed of exclusive 
 advantages, whicli conferred upon the produce of any given 
 quantity of her labour a value far exceeding that which, under 
 the then existing circumstances, it was possible for the produce 
 of the same q antity of continental labour to acquire. It 
 would be scarcely too much to say that, in some branches of 
 manufacture, one English operative, during the early de- 
 velopment and application of the new mechanical power, could 
 execute a greater quantity of work than that which could be 
 performed by 100 operatives in other manufacturing countries. 
 On the lowest average estimate, the goods produced by one 
 pair of hands in England were of greater value than the goods 
 produced by ten pair of hands out of England. Tlie English 
 manufacturer, who sent his fabrics to tl e countries of the mines, 
 received, in proportion to the labour employed upon them, a 
 much larger quantity of the precious metals than that which 
 could be obtained by the foreign manufacturer. As the 
 produce of a given qiiantity of English labour exchanged for a 
 greater quantity of gold than the produce of the same quan- 
 tity of foreign labour, the English labourer was enabled to 
 command higher money- wages than the foreign. High money- 
 wages created a high money demand for provisions, and for 
 all home productions, the cost of which the new mechanical 
 power had not reduced. The value of all foreign prod' ctions, 
 including the precious metals, fell in relation to the produce 
 of domestic labour, to that labour ilself, to land, to taxation, 
 and to the p'lblic debt. The condition of the industrious 
 classes improved through the combined operation of these 
 causes. While money wages and profits, estimated in money, 
 rose, the prices of those articles of comfort and convenience to 
 which the progressive improvements in mechanical power
 
 24 
 
 could be applied, gradually declined; the prices of foreign 
 commodities, whether necessaries or comforts, did not rise in 
 an equal proportion to the rise in money-wages, while the high 
 value of the produce of given quantities of labom- in relation 
 to land, and to other descriptions of fixed property, tended to 
 abate the pressure of taxation. Under these circumstances, 
 the real reward of labour, and the general scale of comfort, 
 became higher hi England than on the continent of Europe. 
 The world became tributary to England. The extent of the 
 superiority which the people of this country acquired from the 
 exclusive possession of the improvements in mechanical 
 power, and from the monopoly of commerce, growing out of 
 the incidents of the revolutionary war, it would be difficult to 
 estimate. It appears to be generally admitted, that it was 
 the almost miraculous increase in the productive power of 
 British industry, coincident with the war, which supplied the 
 means by which the war was carried on. While some have 
 affirmed that " James Watt was the real conqueror of Na- 
 poleon," others have seen in the inexhaustible resources so 
 suddenly and so ' opportunely conferred upon England, a 
 special interposition of Providence for the deliverance of 
 Europe. " The war was unquestionably one of finance. It 
 could not have been carried on in Europe without an enor- 
 mous and wholly unexampled expenditure. It was necessary 
 to pay the thrones of the whole continent even to fight for 
 themselves. Without our loans, they must have submitted 
 and increased the vassals and the armies of France. The 
 power of lending is not imlimited ; and England had long » 
 felt tliat she had reached the natural limit of taxation. To 
 avoid this pressure by sharing it with America, she had even 
 hazarded and suffered the loss of her colonies. And just 
 then, as the very crisis was approaching which was to lay 
 upon her a burthen which she had never calculated on bear- 
 ing, or being able to bear — a crisis, too, which, near as it 
 was, no man had been able to foresee, an extraordinary
 
 25 
 
 means of wealth was put into her hands; sustained and 
 CoUowed by the sudden disco\ery of the most powerful in- 
 strument of skill and labour ever given to man; and the 
 combined effort did enahle England to subsidize all Europe^ 
 to fight the universal tyrant in defence of the universal cause, 
 to pour out millions upon millions amidst universal bank- 
 ruptcy, and, finally, to achieve a miraculous deliverance. 
 \^liat can be more complete than the proof, except the 
 actual pouring down of a stream of gold from heaven before 
 our eyes ? The stream of gold was actually poured ; and 
 though it did not come in the shape of miracle, yet its source 
 might not be the less providential for its winding its way 
 through the ten thousand channels of society to issue in the 
 noblest use of the wealth of nations. Extensive interests were 
 dependent on success ; the ultimate overthrow of the revo- 
 lution with all its evils, the restoration of European order, 
 and the palpable triumph of sound principles in government 
 and religion, were so clearly connected with this country, 
 that we, at least, should not be surprised to find that its 
 success had been provided for by the great Protector of 
 human happiness." * 
 
 In achieving the deliverance of Europe, England resigned 
 some portion of the exclusive advantages by which the 
 means of continuing the contest had been supplied. With 
 the restoration of peace, the industry of tlie Continent revived ; 
 tile seas were opened to the flags of the world; and the 
 facility of international communication extended to other 
 commercial countries that knowledge in the application of 
 scientific power which had for so long a period been confined 
 to England, The diflference between the efficacy of British 
 and of foreign labour became less and less. The goods pro- 
 duced in England, by a single pair of hands, would no longer 
 exchange for the goods produced in other countries by many 
 pairs of hands ; and as the produce of British industry ex- 
 
 * "Blackwood's Magazine,' for October, 1842.
 
 26 
 
 changed for a less quantity of foreign productions, including 
 the precious metals, money-wages, and the prices of home 
 productions, necessarily declined. It is now too late to in- 
 quire to what extent the depression occasioned by the transi- 
 tion from war to peace might have been mitigated by the 
 early adoption of an enlightened course of commercial policy. 
 Erroneous legislation aggravated the evil. The restrictive 
 system, of which we set the example, has been turned against 
 us. The industrial processes indigenous to England have 
 been acclimated in other countries. Our former customers 
 are our present rivals. How this state of things might liave 
 been prevented, postponed, or mitigated, is not the problem 
 which has now to be solved ; the duty which devolves upon 
 the statesman of the present day is, to save the industrious 
 millions from the effects of a transition partly resulting from 
 the progress of knowledge, and of improvement in other 
 countries, and partly created by the tariff war, waged univer- 
 sally against British commerce. 
 
 We must ascertain the character of the disease before we 
 can apply an appropriate remedy ; we must probe the wound 
 to the bottom before we can determine the extent of the 
 operation which it may be necessary to perform. Before 
 proceeding to tlie consideration of practical measures, it will 
 be expedient to revert to the circumstances which have occa- 
 sioned the progressive decline of wages in England, and to 
 meastire the extent to which, if not counteracted, the de- 
 pression is likely to proceed. 
 
 The superior advantages which have hitherto rendered the 
 produce of a given quantity of English labour more valuable 
 than the produce of the same quantity of foreign labour, and 
 which have consequently enabled the English to command 
 higher wages than the continental operative, are, mechanical 
 inventions, manual dexterity, and productive coal mines. 
 Now, ever since the termination of the wars of the French 
 revolution, foreign countries have been approaching nearer
 
 27 
 
 and nearer to an equality with England, with regard to these 
 advantages ; and the consequence has been, that die value ot* 
 the products of foreign industry has been gradually rising, 
 in relation to the products of British industry ; or, to ex- 
 press the same resvdt in other words, the value of the produce 
 of British industry has been gradually falling, in relation 
 to the products of foreign industry, including in these 
 products ihe precious metals. This decline in the value 
 of British goods involved, as its inevitable consequence, a 
 decline in money-wages. As the master manufacturer 
 obtained a less quantity of gold for the produce of the same 
 quantity of labour, his only alternative was, to pay less wages, 
 or to carry on a losing trade, terminating in bankruptcy, and 
 in a total cessation of wages. 
 
 Should the causes now adverted to continue in operation, 
 wages must continue to decline. Should foreign countries 
 attain to an equality with England, as regards the advan- 
 tages which give efficacy to industiy, English wages must 
 fall to the foreign level. And should our Continental rivals, 
 in their rapid progress of improvement, acquire superiority 
 in manufacturing any principal staple for exportation, then 
 wages in England will continue to decline, not only until 
 they shall have touched the Continental level, but until they 
 shall have sunk below it. Let the comparative efficacy of 
 industry be such that it requires in England 110 pair of 
 hands to produce, for exportation, the same goods which can 
 be supplied by 100 pair of hands in rival countries, and 
 then the money-wages of the English operative will fall 10 
 per cant, below the foreign level. The circumstances which 
 may be expected to affect the comparative efficacy of British 
 and of foreign industry form one of the most important sub- 
 jects of inquiry which, in the actual condition of England, 
 can be brought under the consideration of the practical 
 statesman. 
 
 The main causes which have hitherto conferred upon the
 
 28 
 
 produce of a given quantity of British labour, the power of 
 purchasing the produce oi' a greater quantity of foreign labour, 
 are, as has been ah-eady stated, the employment of superior 
 machinery, greater energy and skill in the application of 
 manual labour, and the possession of more accessible coal 
 mines. Is it reasonable to suppose that, in the present cir- 
 cumstances of the world, England can maintain a permanent 
 monopoly of the advantages which enable a given number of 
 hands to execute a greater quantity of work in one locality 
 than another? In the actual state of knowledore and of in- 
 ternational communication, the adoption of the latest improve- 
 ments in scientific power cannot be confined to any particular 
 country. A rigid enforcement of laws against the expor- 
 tation of machinery might possibly retard, but could not 
 ultimately prevent the inevitable result. If the exportation 
 of our machines could be prevented, the makers of our 
 machines would be induced to emigrate; and in the long run, 
 we should lose the advantage of manufacturing superior 
 machines for the foreign market, without being able to secure 
 their exclusive application. As regards energy and skill hi 
 the application of manual labour, it would be presumptuous 
 to assume that the English operative will continue ever supe- 
 rior to the robust and persevering German. These artificial 
 advantages rival nations will acquire. 
 
 In the employment of machinery, and in the efficacy of 
 manual labour, England cannot continue to retain any 
 marked superiority over other manufacturing countries. With 
 respect, however, to the natural advantage of accessible coal 
 fields, the case may be different. Coal abounds in Belgium, 
 and in Prussia; but it is believed that the coal of these 
 countries is of an inferior quality to that found in many parts 
 of Britain ; while it is less conveniently situated, with respect 
 to the seats of manufacturing industry. Should this be the 
 case, then, to whatever extent the possession of the natiu'al 
 advantage of cheaper fuel may enable a given number of
 
 29 
 
 hands in England to execute a greater quantity of work than 
 the same number of hands can execute upon the Continent, 
 to that extent, and to that extent alone, can the English 
 opei-ative, who works for the foreign market, continue to re- 
 ceive higher money-wages than the Continental operative, 
 wlio works for the same market. Other things beinof the 
 same, the amount which the master manufacturer saves by 
 the purchase of cheaper fuel, he may employ in the payment 
 of higher wages. If, in the production of a given quantity 
 of goods in England, ninety-five men are employed in the 
 factory, and five in providing fuel, while in the production of 
 the same quantity of goods upon the Continent, ninety-five 
 men are employed in the factory, and ten in providing fuel, 
 then the amount of money- wages which is paid to 105 work- 
 men on the Continent, may be paid to 100 in England. 
 But it is obvious that, under the circumstances assumed, 
 money-wages in England could not exceed money-wages on the 
 Continent, by more than 5 per cent. For should the English 
 operatives succeed for a time in compelling their employers to 
 pay money-wages exceeding the Continental level by more than 
 the difference in the price of fuel, the inevitable consequences 
 would be, that the English manufacturer would be under- 
 sold in the foreign market, and that the operative would be 
 thrown out of work. No combination amongst labourers, no 
 liberality on the part of capitalists, and no interference on 
 the part of the Legislature, could by possibility avert these 
 results. In a country extensively engaged in manufacturing 
 for foreign markets, no artificial mounds can be created for 
 damming up money-wages above the level determined by 
 foreign competition.
 
 30 
 
 0« the Manner in which the Import Duties imposed hij 
 Foreign States on British Goods lower the Value of 
 British Labour. 
 
 The effect of hostile tariffs upon wattes remains to be 
 traced. We have seen that when the labour and capital 
 employed in supplying foreign markets with British fabrics 
 increase in a higher ratio than the labour and capital em- 
 ployed in foreign countries in supplying equivalents, the 
 money-wages of the British operative must be pressed down 
 below the amount which would otherwise be due to his 
 energy and skill. Now we shall find, upon a due con- 
 sideration of the subject, that the fall of wages, occasioned 
 by the disproportionate increase in the labour and capital 
 employed in manufacturing for foreign markets, must receive 
 a grievous aggravation from the heavy import duties imposed 
 by foreign countries upon British goods. 
 
 Goods of the same kind and quality cannot be sold in the 
 same market at different prices. Were the efficacy of 
 industry greater by 10 per cent, in England than in Belgium, 
 and were a perfectly free trade established between the two 
 countries, then a bale of goods produced in England by the 
 labour of 100, would sell in the Belgian market for the same 
 sum which a similar bale produced in Belgium by the labour 
 of 110 would sell for; and, consequently, the money- wages 
 of the English might exceed by 10 per cent, the money 
 wages of the Belgian operatives. But the commerce between 
 England and Belgium, instead of being perfectly free, is 
 restricted by import duties. Belgium, in order to protect 
 her domestic manufactures, imposes a duty of 10 per cent. 
 ad valorem upon the importation of woollen cloths ; and, 
 consequently, the British manufacturer who sends woollens 
 to the Belgian market can obtain, after the deduction of the 
 duty, only 90/. for the same quantity and quality of goods 
 for which the Belgian manufacturer obtains 100/. The
 
 31 
 
 amount of the Belgian duty is deducted from English wages. 
 If, as we have just assumed, the superior efficacy of British 
 industry were such that 90 English operatives could execute 
 as much work as 100 Belgians, then English wages, instead 
 of maintaining a due proportion to the efficacy of EngUsh 
 labour, would fall to the Belgian level. 
 
 Again, the Belgian tariff imposes a duty of 21 per cent. 
 ad valorem upon certain descriptions of linen fabrics. The 
 British manufacturer who should send such fabrics to the 
 Belgian market, could obtain, after the deduction of the duty, 
 only 79/. for a bale of the same description of linen goods for 
 which the Belgian manufacturer obtained 100/.; and, con- 
 sequently, if the whole of the labour, direct and indirect, em- 
 ployed in preparing the bale of linens were 90 in England 
 and 100 in Belgium, the sum received as wages by 90 English 
 labourers would be less by 21/. (the amount of the duty) than 
 the sum received by 100 Belgians. In other words, the 
 English operative employed in the linen trade could earn, 
 notwithstanding the superior efficacy of his labour, amounting 
 by the supposition to upwards of 10 per cent., only \7s. 6^c?., 
 where his Belgian rival would earn 1/. 
 
 Previous to the recent modification of the tariff of the 
 German Customs Union, the duties payable upon British 
 goods, throughout the immense territory comprised within the 
 Zolverein, were equivalent to 90 per cent, ad valorem upon 
 coarse fabrics, 32 per cent, upon superior shirting, 15 percent, 
 upon printed cottons, worth \s. 6(/. per yard, and about 9 per 
 cent, upon fine printed cottons, ivorth 2s. 6c/. per yard. By 
 the new tariff, the duty upon cotton warps is advanced from 
 the former amount of two dollars per hundred weight to three 
 dollars, being an increase of 50 per cent.; on worsted, and 
 worsted and cotton mixed goods, if printed, embroidered, or 
 hroche, the duty is increased from 30 to 50 dollars per 
 hundred weight, or G6 per cent. ; while upon hardware the 
 increase of duty amounts to cent, per cent.
 
 32 
 
 The operation of these duti(»s, as regards comparative 
 wages, will be immediately apparent. It is obvious that the 
 British manufacturer, who competes with the German manu- 
 facturer in the markets of the German union, mnst be com- 
 pensated for the whole amo mt of the duty which he may be 
 required to pay, either by the superiority of British labour as 
 compared with German labour, or by the degradation of 
 British wages below the German level. But Germany, with 
 her orderly and persevering population, with her coal mines, 
 her navigable rivers, and her projected railroads, is gradually 
 approaching towards an equality with England in all that 
 relates to the efficacy of industry. The ca'ises are already in 
 fiill and resistless operation, which will render it impossible 
 for the British manufacturer to retain possession of the German 
 market, except upon the condition of a progressive reduction 
 of wages in England. 
 
 The tariffs of the other principal states of Eiu'ope are yet 
 more injurious than that of the German union. The import 
 duties imposed by France limit our exports to that country 
 to an inconsiderable amount; the charges upon imports 
 exacted by Russia deprive us of the power of paying in 
 manufactured goods for the enormous amount of produce 
 which we annually receive from her ; and by the Austrian 
 tariff duties equivalent to 60 per cent, ad valorum are im- 
 posed upon all kinds of cotton manufacture, upon earthen- 
 ware, hardware, and woollen goods of all kinds. It would 
 be superfluous to repeat the details of the process by which 
 these hostile tariffs contribute to depress the wages of labour 
 in England. The modus opermidi is alike in all. As com- 
 modities of the same kind and quality cannot be sold in the 
 same market at different prices, the price which the British 
 manvifacturer, who exports goods to any foreign country, can 
 actually realize, must be less, by the amount of the import 
 duty which he pays, than the price realized by the manu- 
 facturers of that country for similar goods. For this dimi-
 
 3.3 
 
 nutioii ill his receipts the British manufacturer must be 
 indemnified, either by the superior efficacy of the labour 
 which he employs, or by the inferior price which he pays 
 for it. But the progress of knowledge and of improvement 
 is gradually bringing up the efficacy of foreign labour to an 
 equality with that of British labour; audit follows, as an 
 inevitable consequence, that the British man'ifacturer who 
 continues to work for foreign markets will be compelled to 
 enforce a reduction in wages equivalent to the import duties 
 charged upon his goods. 
 
 England possesses no superiority over ihe United States of 
 North America as regards the advantages, whether natural 
 or acquired, by which the efficacy of industry is increased. 
 Within the Union there are coal fields and water power to an 
 almost unlimited extent ; some of our latest improvements in 
 the application of mechanical power have been borrowed 
 from the States; our transatlantic brethren are in no way 
 inferior to us in energy, dexterity, and skill, and they grow, 
 while we import, the raw material of our most important 
 manufacture. There is no cause in operation which can 
 enable a given number of hands to execute a greater quantity 
 of work in England than in the United States. Were it not 
 that wages are lower in England than in America, British 
 fabrics could not be sold in the markets of the United States. 
 In the coarser cotton fabrics, the greater cheapness of the 
 raw material appears sufficient to indemnify the American 
 manufacturer for the higher wages which he pays, and to 
 enable him to compete successfully with his British rival in 
 distant markets. Wages pressed down something below the 
 American level, would be the condition upon which alone the 
 British could undersell the American manufacturer in the 
 American market, even if America could be induced to 
 abandon her tariff, and to admit British fabrics duty free. 
 This we cannot hope for. Under the Compromise Act, and 
 previous to the recent modification of the American tariff, the 
 
 D
 
 34 
 
 import clufios were lo be liniilod to 20 per cent. These 
 duties have now been enormously increased, and it is the 
 avowed design of the Whig party m the Union to adopt 
 the protective system to such an extent as to give the 
 American manufacturer a monopoly in the home market. 
 Should this policy prevail, a fall of wages in J*2ngland, to the 
 lowest level at which life can be sustained, will be the 
 melancholy condition upon which alone an extended sale 
 of British goods in the American Union can be effected. 
 But a result less disastrous may perhaps be anticipated. 
 High protecting duties in favour of the manufacturers of the 
 northern states must prove so injurious to the cultivators of 
 the southern states that it seems not unreasonable to hope 
 that the continuance of such duties may be successfully 
 resisted, and the more liberal policy of the Compromise Act 
 re-established. Let us take the most favourable view of the 
 subject, and endeavour to estimate the relative amount of 
 wages in England and America, under the supposition that 
 America will consent to abandon her existing tariff, and to 
 revert to the policy by which her import duties were to be 
 limited to 20 per cent. 
 
 It is evident that British and American goods of the same 
 kind and quality, must be sold to the consumer in the Ame- 
 rican market at the same price ; and it is equally evident, 
 that if the British manufacturer has to pay a charge of 20 
 per cent, from which his competitor is exempt, he must be 
 enabled, either by employing fewer hands or by paying 
 lower wages, to effect a diminution in the cost of production 
 equivalent to the impost. But as industry is not less effective 
 in the United States than in England, the British manufac- 
 turer cannot employ fewer hands than the American, in 
 bringing his commodity to market ; and it follows, as a ne- 
 cessary consequence, that the import duty imposed by Ame- 
 rica upon British goods, must fall on British wages. 
 
 The manner in which an American import duty of 20 per .
 
 35 
 
 cent, would affect British wages may- be thus analysed. 
 England and the United States being on a footing of equality 
 with regard to the efficacy of their industry, an Americaii 
 manufacturer, after advancing 100/. on account- of the wear 
 and tear of machinery, fuel, and raw material, and another 
 1 00/. on account of wages, produces a bale of cotton goods, 
 which he sells for 220/., or at a profit of 10 per cent. ; while 
 the British manufacturer, after advancing 100/. for machinery, 
 fuel, and materials, and employing the same number of hands 
 as the American, sends to the American market a similar bale 
 of goods, sells them there for the same price of 220/., and 
 pays the import duty of 20 per cent, or 45/. upon them. In 
 this case it is self-evident that if the British manufacturer had 
 paid, like the American, 100/. for wages, he would have suf- 
 fered a loss of 25/, upon the transaction. Though the price 
 paid by the consumers was 220/., yet the price realized by the 
 maimfacturer, after the deduction of duty, was only 1 75/. ; and 
 consequently, if his profit was to be 1 0.per cent, liis whole outlay, 
 in sending his bale of cottons to market, could not have ex- 
 ceeded 158/. Of this sum, he must have paid 100/. on ac- 
 count of machinery, moving power, and materials (England 
 and the United States being by the supposition on an equality 
 in these particulars), and, consequently, the British manufac- 
 turer could have paid only 58/. to the same number of ope- 
 ratives to whom the American manufacturer paid 100/. 
 
 The hypothetical case thus assumed, for the sake of illus- 
 tration, will perhaps be sufficient to explain the manner and 
 degree in wliich the tariff" of the United States tends to force 
 down English wages below the American level. England 
 and the United States are so nearly upon an equality with 
 regard to all the circumstances which contribute to give effi- 
 cacy to industry, that the British manufacturer cannot pro- 
 cure machinery, moving power, and raw material, at less cost 
 than the American manufacturer ; and it therefore follows, 
 that when British manufactures, similar to the protected 
 
 d2
 
 36 
 
 An)erican manufactures, are sold in the American markets, 
 it is upon the wages of the Encjlish operative that the Ame- 
 rican import duties must uhimately fall. 
 
 It may be asked, why is it necessary that the English 
 capitalist should dispose of his goods upon the same advan- 
 tageous terms as the American capitalist? and why should 
 not the import duty, imposed on British fabrics, be deducted 
 from the profit of the master, instead of from the wages of 
 the operative. 
 
 The first answer to these questions is, that the ratio in 
 which the value of finished goods can be made to exceed 
 the cost of their production, is not sufficient to allow of the 
 payment of heavy import, duties out of the master's profit. 
 The second answer is, that were it even practicable to give 
 to manufactured goods a marketable value, exceeding their 
 productive cost in such a proportion as to leave a margin 
 equivalent to the duty charged upon them, that duty could 
 not be made to fall on profits, without disturbing the equi- 
 librium which capital throughout the commercial world has 
 a constant tendency to maintain. Profits conform to a ge- 
 neral level more rapidly than wages ; money is transferred 
 from one country to another with little dififjculty, and at 
 little cost; labour is so transferred with considerable diffi- 
 culty, and at considerable cost. A bill of exchange wafts 
 capital across the Atlantic ; to convey the operative requires 
 an expensive voyage, the cost of which he may be unable to 
 defray. A slight difference in the rate of profit moves 
 masses of capital from one locality to another ; a consider- 
 able difference in the amount of wages is insufficient to occa- 
 sion a corresponding transference of labour. Were the 
 English manufacturer, who prepares goods for the American 
 market, to pay the same wages which are paid to the Ame- 
 rican operative, manufacturing profits would be less in Eng- 
 land than in America, by the amount of the import duty 
 cnarged on British fabrics ; and the inevitable consequence
 
 37 
 
 would be, that manufacturinij caj)ital would migj-ato from 
 England to the United States, and that the operative would 
 be left in utter destitution. The melancholy alternative is — 
 reduced wages, or no wages at all. Powers of production 
 outgrowing the field of employment, foreign competition, and 
 hostile tariffs, have already degraded, and if remedial mea- 
 sures be not speedily applied, must continue still fnrther to 
 degrade the condition of the industrious masses, dependent 
 upon foreign trade for the means of subsistence. 
 
 This fearful change cannot be confined to those who are 
 directly depending upon foreign trade. The operatives em- 
 ployed in preparing cottons, and woollens, and linens, and 
 hardware, for the home market, cannot command higher 
 wages than those who may be employed in preparing similar 
 articles for the foreign market. Unless remedial measures com- 
 mensurate to the magnitude of the evil be adopted, the price 
 of labour throughout all the manufacturing districts of the 
 kingdom will continue to decline. Nor will the decline be 
 limited to manual labour. The money demand for every 
 species of personal service will become less and less. As 
 foreign rivalry, hostile tariffs, and powers of production out- 
 growing the field of employment, reduce the value of the 
 produce of British labo-r in relation to the produce of foreign 
 labour, including gold and silver, foreign countries will 
 command a greater, and England a less proportion of the 
 precious metals circulating throughout the commercial world. 
 The hitherto existing distribution of the metals will be pro- 
 gressively altered, to the disadvantage of England ; and the 
 necessary result of such alteration will be, a general fall in 
 the price of all non-imported commodities, or, in other words, 
 a rise in the value of money, in relation to British labour and 
 its products. 
 
 The fall in real wages will be greater than the fall in 
 money-wages. As the distribution of the precious metals 
 changes to the disadvantage of England, the fall in the price 
 
 25mA3
 
 38 
 
 of the produce of British labour will be accompanied by a 
 rise in the price of the produce of foreign labour. Now 
 while England continues to import corn, and other articles 
 of food, the price of the necessaries of life in the home mar- 
 ket must be regulated by their price in the foreign countries 
 from which they are imported ; and hence tlie fall in money- 
 wages may be expected to be followed by a comparative 
 advance in the price of food. 
 
 The prospect which lies before us is distressing. Hitherto 
 the standard of comfort has been higher in England than in 
 the other countries of Europe. This higher standard may 
 now be lowered. Should the efficacy of foreign labour rise 
 to an equality with that of British labour, English wages 
 must descend to the foreign level ; should the disproportionate 
 increase of the capital and labour employed in foreign trade 
 compel us to force our fabrics into markets where they are 
 met by hostile tariffs, the wages of the labour by which they 
 are prepared must fall, not merely to a level with the wages 
 of equally effective labour employed upon similar goods in 
 the country to which we may export, but to such a depth 
 below that level, as may be determined by the amount of 
 the import duty imposed upon our goods. The English 
 artisan would be compelled to exchange his wheat en loaf for 
 the black bread of the continent ; to reduce his accustomed 
 supply of animal food, and to relinquish the tea and sugar 
 hitherto regarded as amongst the necessaries of life. The 
 fall would be severe. It would be a descent, not from su- 
 periority to equality, but from superiority to inferiority. The 
 condition of the industrious classes in England, with regard 
 to food, clothing, and lodging, would sink below that of the 
 same classes throughout the Continent of Europe. In what 
 spirit would the calamitous vicissitude be borne? What 
 effects might be expected to result from this progressive 
 deterioration of the physical condition of the working classes ?
 
 39 
 
 On the Effect of Combinations foj' reducing Wages. 
 
 In order to tracj the effect o(" combinations for lowering 
 wages, let us suppose, in the first instance, that the farmers in 
 an agricultural parish, in addition to their seed and imple- 
 ments, have each a fund of 200 quarters of corn for the main- 
 tenance of labour, which funil is advanced to fifty labourers. 
 In this case, the real wages (estimated in corn) of each labourer 
 will be four quarters. 
 
 Let us now suppose, in the second instance, that all the 
 farmers of the parish enter into a combination for reducing the 
 wages of their workmen from four to three quarters, and that 
 to this reduction the labourers are compelled to submit. The 
 important question is, what would be the final effects of this 
 combination ? 
 
 It is obvious that the first effect must be a great increase in 
 the profits of the farmers. All that the labourers lost the 
 farmers would gain. 
 
 It is equally obvious that the farmers could retain this ad- 
 vantage only so long as they agreed amongst themselves to 
 employ their increased profits, not in adding to their capital, 
 but in augmenting their unproductive expenditure. They 
 could not employ additional capital without bidding against 
 each other for additional hands, and thus breaking up the 
 combination for the reduction of wages. The existence of the 
 combination involves the necessity of devoting the whole of the 
 increased profits resulting from it to immediate enjoyment. 
 
 This being thi case, the reduction in agricultural wages 
 gives to each farmer an additional revenue of fifty quarters of 
 corn to be expended by his family in the decorations of dress 
 and furniture. In the manufacturing towns, therefore, there 
 will be an increased demand for those articles, while there will 
 be a diminished demand for the wrought necessaries used by 
 the agricultural labourers whose wages are reduced. But the 
 increase in the demand for manufaclured luxuries will be
 
 40 
 
 greater than the diniiiuition in the demand for manufactured 
 necessaries, because the revenue whidi tlie agricuhural labourers 
 have lost was partly expended upon food and partly upon ma- 
 nufactured goods ; while the whole of the revenue which the 
 farmcM's have gained, and which is equivalent to the whole 
 which the labourers have lost, is expended upon manufactured 
 luxuries. The result must therefore be a considerable increase 
 in the demand for manufactured goods. 
 
 The increased demand for manufactured goods will create 
 an increased demand for labour in the manufacturing towns ; 
 and in those towns, therefore, wages will advance. But if 
 wages rise in the towns, while they fall in the country, a por- 
 tion of the rural population will seek employment in the towns. 
 A diminution in the supply of labour in the agricultural dis- 
 tricts, threatening to contract cultivation, will therefore compel 
 the farmers, notwithstanding their combination, to consent to 
 an advance of wages. 
 
 But suppose that the combination for the reduction of wages 
 extends to the towns, and that all master manufacturers agree 
 together to reduce the wages of their workmen in the same 
 proportion in which the farmers have reduced the wages of 
 agricultural labour. The effects of this more extended com- 
 bination it will be important to trace. 
 
 When, in the towns, the employers of labour have reduced 
 wages by one-fourth, a considerable reduction will take place 
 in the quantity and quality of the food consumed by the 
 labouring classes in the towns. Hence, while the reduction of 
 wages, and the consequent diminution in the consumption of 
 food in the country districts, leave the farmers a greater quantity 
 of agricultural produce to bring to market, the town demand 
 for their produce will decline. One-fourth of the food and 
 raw materials of necessaries, formerly consumed by the 
 labouring class, will be unsaleable; one-fourth of the land 
 must be thrown out of cultivation; and one-fourth of the agri- 
 cultural population must be transferred to the towns, there to
 
 41 
 
 fabricate tho increased quantity of manufactured luxuries, for 
 which the increase of profits creates a demand. 
 
 Wliile tliis process is going on, there will be a great destruc- 
 tion of agricultural capital, and many farmers will be involved 
 in distress and ruin. But we assume, for the sake of argu- 
 ment, that notwithstanding the distress and ruin through 
 which the class of farmers must pass in attaining their object, 
 they nevertheless adhere to the combination, and ultimately 
 succeed in effecting a universal reduction of one-fourth in the 
 rate of wages. Let us endeavour to trace the consequences 
 which would flow from this reduction. 
 
 The first effect of the iniiversal reduction of wages w^ould be 
 an enormous rise in the rate of profit. We can estimate, not 
 indeed the exact, but the proximate extent of this rise. It will 
 be determined by the average proportion wliich, before they 
 were reduced, wages bore to the whole advances of the capi- 
 talist. Thus, if wages, before they were reduced, constituted 
 one-half of the capitalist's advances, their reduction by a 
 fourth would diminish his advances by an eighth; and, as his 
 return would remain the same as before, the extent of the 
 increase of profits will immediately appear ; for if, before the 
 reduction of wages, the farmers or other capitalists advanced 
 100 quarters as wages, and 100 quarters for other outgoings, 
 and obtained a reproduction of 220 quarters, or a profit of 10 
 per cent., then it is evident that when wages are reduced from 
 100 to 75, the capitalist's reproduction of 220 to his reduced 
 expenditure of 175 will yield him a profit of 25 per cent. It 
 is obvious that, if on the average wages constituted more than 
 one-half of the whole advances, the rise of profits would be 
 greater; while, if wages constituted less than one-half the 
 whole advances, the rise of profits would be less. The prin- 
 ciple is, that any given fall in the general rate of wages will 
 cause a greater or less rise in the rate of profits, according as 
 wages, on the average, form a greater or a less proportion of
 
 42 
 
 tlu? capitalist's wlutK^ advances. Fqv the purposes of our 
 argument, it is a sufficient approximation to the actual state 
 of things to assume that wages form one-half of the capitalist's 
 advances ; and that, therefore, a general fall of wages, to the 
 extent of one-fourth, will raise the rate of profit, if it had been 
 10 per cent, before the fall of wages, to 25 per cent. 
 
 Now, the important practical questions for our consideration 
 are — Would it be possible to keep tilings in this state ? Would 
 it be practicable to perpetuate this forced deprossion of wages 
 and rise of profits ? A little careful inquiry will convince us 
 that it would be quite impracticable, and that the final effect 
 of the combination would be, not to raise profits at the expense 
 of wages, but, on the contrary, to elevate wages at the expense 
 of profits. Let us consider, in the first place, the circum- 
 stances which would render it impracticable to keep wages at 
 the reduced level to which the combination of employers had 
 forced them down, and then proceed to trace the re-action and 
 recoil by which they woiJd ascend, not merely to their former, 
 but to a still higher level. 
 
 To keep wages at the low level to which, by the supposition, 
 the combination has reduced them, it would be necessary that 
 the following circumstances, each morally impossible, should 
 concur : — 
 
 First. — It would ba necessaiy that the whole of the em- 
 ployers of labour tliroughout the country should expend the 
 whole of their profits unprodvictively. No addition must be 
 made to the aggregate amount of capital which they employ. 
 The farmer must not extend his cultivation, nor the manufac- 
 turer increase his transactions. Children must not be put out 
 to trade, but must continue to be dependent upon the profits 
 reahzed by their parents, mitil their parents die off an(,l make 
 place for them to carry on business on their own accoimt. 
 Should any of these events occur (and unless the principles 
 and motives of human conduct were reversed, they would
 
 43 
 
 occur perpetually), the combination would be neutralized, the 
 demand for labour would be increased, and wages would 
 advance. 
 
 Secondly. — It would be necessary, not only that all 
 farrriers and master manufacturers, actually and directly em- 
 ploying labour, shoidd abstain, as above, from increasing 
 their capital, and extending tbeir transactions ; but also that 
 all monied capitalists, bankers, merchants, traders, an- 
 nuitants, civil and military functionaries, together with all 
 landed proprietors throughout the country, should become 
 parties to a combination for oppressing the labourer, and 
 inflicting positive evil and grievous injury upon themselves. 
 The whole of these classes must spend the whole of their 
 incomes unproductively ; or, if they make savings, must hoard 
 them. Their accumulations, when made, they must neither 
 employ productively themselves, nor lend out to be em- 
 ployed productively by others. The reduction of wages has 
 caused the rate of profit to rise to 25 per cent., and the 
 throwing out of one-fourth of the land which supplied the 
 labouring classes with food and the raw materials of manu- 
 factured necessaries, by limiting the necessary extent of tillage 
 to soils of a superior quality, must have occasioned a still 
 further increase of profits, and have raised them to 30, per- 
 haps to 35 per cent. The natural effect of a high rate of 
 profit is td raise the rate of interest also. If 30, or even 25 
 per cent, could be made by the employment of borrowed 
 capital, individuals destitute of capital themselves, but having 
 the skill, industry, and integrity, which command credit, 
 might be willing to give 15 or 20 per cent, for the use of 
 money. But if money be lent to be employed productively 
 the combination cannot be maintained. In order to main- 
 tain it, it is necessary that persons having money at command 
 should hoard it in strong boxes, or bury it under ground, 
 rather than lend it at 15 or 20 per cent. Again, the com- 
 bination for the reduction of wages has thrown Qut of culti-
 
 44 
 
 valion one-fourth of the laiitl which formerly supplied the 
 labouring population with food and the materials of wrought 
 necessaries, and has therefore occasioned a total loss of rent 
 upon all the lands throw n out, and a considerable fall of rents 
 upon all the better soils still remaining under tillage. In 
 order to maintain the combination, it is further necessary 
 that the landed proprietors should join in the league for 
 reducing and destroying the value of their own property. 
 They must not lend their money, or their credit, at an 
 interest of 15 or 20 per cent, to industrious and honest 
 tenants, who would cultivate the lands which had been thrown 
 out, and occasion a recovery of rents ; because, should they 
 advance their money, or their credit, for such a purpose, the 
 funds for the maintenance of labour would be increased, 
 wages would rise, and the effect of the combination would be 
 destroyed. 
 
 Thirdly. — It would be necessary, in order to maintain the 
 combination, that the influx of foreign capital should be pro- 
 hibited. Though all the farmers and master manufacturers 
 throughout the country should join in the conspiracy for the 
 reduction of wages ; and though monied capitalists, and 
 merchants, and bankers, and annuitants, and public func- 
 tionaries, and landed proprietors, should enter into a solemn 
 league and covenant to lend neither money, nor credit, to any 
 one desirous of engaging in the work of production, yet the 
 combination would be inoperative and abortive if the im- 
 portation of foreign capital were permitted. The rate of 
 profit has a tendency to preserve a certain level, not only 
 throughout the several districts of the same country, but also 
 throughout the several countries of the commercial world. 
 Should the depression of wages, and the throwing out of in- 
 ferior land, rais3 the rate of profit in England, in any consi- 
 derable degree above the level it had ordinarily preserved, in 
 relation to the rates of profit in Holland and in France, the 
 disengaged ani floating capital of these countries would flow
 
 45 
 
 into England, and tlicre seek productive investment, Tlio 
 combination would therefore be ineffectual, unless the con- 
 spirators against wages could secure the co-operation of the 
 Legislature, and obtain an Act of Parliament proliibiting the 
 importation of food and of raw materials, and all the ingre- 
 dients of directly productive capital, which constitute the fund 
 for the maintenance of labour. 
 
 After this enumeration of the circumstances which must 
 concur, in order to give effect to a combination for the re- 
 duction of wages, it would be superfluous to go into any 
 argument or illustration to show that the maintenance of such 
 a combination would be utterly impracticable. It is only 
 necessary to trace out the process by which, were it possible, 
 which it clearly is not, to give such a combination a brief and 
 partial existence, it would necessarily counterwork itself, and 
 ultimately tend, not to depress, but to elevate wages. 
 
 We have seen that the minimum below which wages cannot 
 permanently fall, consists of that quantity of the necessaries 
 of life which is requisite to keep up the labouring population ; 
 and we have seen that this quantity of necessaries is not a 
 fixed immutable quantity, but varies under different climates, 
 and under the influence of different habits of living. It is 
 self-evident, that should wages be at their physical minimum, 
 as determined by climate, a combination depressing them 
 below this point would cut off a portion of the population ; 
 that it would diminish the supply of labour in relation to the 
 demand ; and that its ultimate effect would be, not to depress 
 but to elevate wages. A moment's consideration will render 
 it apparent, that should wages be at the moral minimum, as 
 determined by habits of living, a combination for depressing 
 them, if for a time successful, would be followed by similar 
 results. 
 
 Custom is a second nature, and things not originally neces- 
 sary to healthful existence become so from habit. Though 
 the Irish peasantry, living upon potatoes and butter-milk, are
 
 46 
 
 not subjected to gr^niter mortality than their neighbours, yet 
 were the labouring classes in England, brought up upon the 
 more substantial diet of bread and cheese, and butchers' meat, 
 redu(^ed to the loss nutritious food which use has rendered not 
 inihcalthful in Ireland, debility and disease would ra})idly 
 thin their ranks. A higher rate of mortality among the 
 labouring classes would speedily follow the establishment of a 
 combination for reducing wages. Where there were numerous 
 families they would be thinned by death ; the delicate and 
 infirm would sink prematurely to the grave ; and while more 
 died, fewer would be born. The cautious and tlie prudent, 
 and those who were attached to the former superior scale of 
 comfort, would abstain from marriage, and from encumbering 
 themselves with families ; and thus, by rendering deaths more 
 numerous and births less frequent, an effectual combination 
 for the reduction of wages, however brief its existence, would, 
 for a whole generation, reduce the supply of labour in rela- 
 tion to the demand. Nothing could now prevent the recoil 
 of wages. An effective combination for the reduction of wages 
 would bear within it the principle of almost immediate self- 
 destruction ; and, after a brief existence, would leave wages 
 at a higher level than that from which they had fallen. For, 
 the instant the combination should be broken up, increased 
 capital accumulated at home, or imported from abroad, 
 would be employed in cultivating the land which had been 
 abandoned, and in supplying the renewed consumption of the 
 necessaries of life. Thus there would be an increased demand 
 for labour acting upon a diminished supply. The supply of 
 labour, in relation both to land and capital, would be less than 
 before, and, therefore, upon the principles already explained, 
 both maximum and actual wages would be higher than before. 
 From all that has been said it must be apparent that an 
 effectual combination for the reduction of wages can never by 
 possibility exist. In the first place such a combination could 
 not be established ; and, in the second place, if it could be
 
 47 
 
 established it could not be maintained. W not immediately 
 broken up by productive advances made from income, or by 
 the importation of capital from abroad, it would speedily 
 perish by self-destruction ; and its evil influence, after having 
 for a time afflicted the labouring classes, would recoil upon 
 the insane conspirators, lowering, instead of raising, the rate of 
 profit, and elevating, instead of depressing, wages. 
 
 In a Country not depending ujwn Foreign Markets, Combina- 
 tions amongst Workmen, coidd they be maintained, might 
 raise Wages to their maximum, provided the supply of 
 Labour did not increase. 
 
 The labouring classes form the great majority of every 
 community, and, as has been already observed, a country 
 must be considered as happy or miserable in proportion as 
 those classes are abundantly or scantily supplied with the 
 necessaries and comforts of life. From this principle it 
 necessarily follows that combinations for lowering wages, 
 could they be effectual, must be regarded as conspiracies for 
 increasing human misery ; and that combinations for raising 
 wages, could they be effectual, must be aj^proved as associa- 
 tions for the promotion of human happiness. In the whole 
 compass of economical science the most important practical 
 question is this, namely. Can combinations amongst the la- 
 bouring classes effect a permanent increase of u ages ? 
 
 It is evident that, if wages were already at their maximum, 
 a combination which should have the immediate effect of 
 raising wages must speedily terminate in reducing them. 
 When wages are at their maximum, profits are at their mini- 
 mum; but when profits are at their minimum, an increase of 
 wages must check production, diminish the fund for the 
 maintenanc.3 of labour, and leave for each labourer a less 
 quantity of the comforts and necessaries of life. 
 
 Supposing, as in our former cases, that the lowest rate of 
 profit, for the sake of which the capitalist will continue the
 
 48 
 
 work of prodiiclion, is 7 \)qi' cpiit., then, slioiild the i'urmer, 
 advancing 100 quarters of corn for s^ed, and 100 quarters for 
 the wages of 25 men, cultivate a tract of land yielding 
 214 quarters, profits would be at their minimum, and wages 
 at their maximum. Under those circumstances, if the 25 la- 
 bourers were to combine together and refuse to work, unless 
 their wages were raised from 100 to 115 quarters, it is evident 
 that all profit would be absorbed, that the tract of land must 
 be abandoned, and that the 25 labourers, instead of continu- 
 ing to receive the increased wages which they demanded 
 from the farmer, would, at no distant period, be thrown out 
 of work. 
 
 Now, suppose that profits, instead of being at the minimum 
 of 7 per cent., were 10 per cent. In this case wages might 
 rise so as to reduce profits by 3 per cent, before the last 
 quality of land under tillage would be thrown out of cultiva- 
 tion. Our 25 labourers might, therefore, combine until 
 each received as his wages four quarters and the fraction of 
 a quarter, instead of four quarters. But should this imme- 
 diate improvement in their condition, by diminishing deaths 
 or increasing births, cause their numbers to increase from 
 25 to 27, the ultimate result would be, not an advance, but a 
 decline of wages. When the farmer, cultivating a tract of 
 land yielding 220 quarters, advanced 100 quarters as seed 
 and 100 quarters as wages to 25 labourers, he realised a 
 profit of 10 quarters, which is 3 per cent, above the assumed 
 minimum. But if he advances 100 quarters as seed and 
 4 quarters each to 27 labourers, his advances will be 208 quar- 
 ters, and will yield a profit less than the minimum of 7 per 
 cent. He will, therefore, either reduce the wages of his 
 27 labourers below the original rate of 4 quarters a man, or 
 else abandon his farm, and throw them out of employment. 
 
 In a country growing its own supphes of raw produce, not 
 exporting manufactured goods, and, therefore, not exposed to 
 foreign competition, a combination for raising wages can be
 
 49 
 
 maintained only when accompanied by an auxiliary combina- 
 tion amongst the labouring classes for preventing the increase 
 of their numbei-s. Let us proceed to consider the effect of a 
 combination for raising wages in a coiuitry which, importing 
 raw materials and exporting manufactured goods, is exposed 
 to foreign competition, Tliis is the practical, and, to the ope- 
 ratives of England, the vitally important branch of the subject. 
 
 In a Country depending uj)on Foreign Markets, Combinations 
 for raising Wages hcgond the limit determined hg Foreign, 
 Competition, ultimately occasion, not an advance, hut a re- 
 duction of Wages. 
 
 As before, we mil assume, for the sake of illustration, that 
 the actual rates of profit in England and in France are 10 per 
 cent., and that, in both countries, the minimum rate of profit, 
 without which the capitalist will not continue production, is 
 7 per cent. Under these circumstances, let us suppose that 
 the operatives in England combine, and obtain such an in- 
 crease of wages as will reduce the profits of their masters to 
 the minimum of 7 per cent. In this case the English manu- 
 facturer cannot permanently reduce the price of liis goods in 
 the foreign market, because, if he did, he could not realize 
 minimum profits. But the French manufacturer can afford 
 to undersell the British manufacturer in the foreign market by 
 1, 2, or 3 per cent., and still realize his minimum profit of 
 7 per cent. ; and, therefore, the necessary effect of the com- 
 bination will be to cause the manufacturers of France to drive 
 the manufacturers of England out of the foreign market. 
 
 Writers upon commercial policy, whose opinions are entitled 
 to great respect, have contended that a rise of wages has no 
 influence upon foreign trade. They maintain that a rise of 
 wages is accompanied by a corresponding fall of profits, and 
 does not, therefore, raise prices ; and they further affirm that 
 a fall in the rate of profit does not subject the country in which 
 
 E
 
 50 
 
 it takes place to be undersold in tlio foreign market by other 
 countries in Avhicli profits are higher.* The reason advanced 
 for the doctrine, that liigh wages and low profits do not sub- 
 ject a country to any disadvantage in the foreign market is 
 this — Should a lower rate of wages render the cost of produc- 
 tion in France 3 per cent, higher in France than in England, 
 and should the rate of profit be 3 per cent, higher in France 
 than in England, the French producers might sell their 
 goods in any foreign market 3 per cent, lower than the r^nglish 
 producers could sell similar goods, by consenting, like the 
 English producers, to accept a profit of 7 per cent. But it is 
 contended that, imder these circumstances, the French pro- 
 ducers would not consent to mamifacturc for the foreig-n market 
 at a profit of 7 par cent., for the obvious reason, that they 
 could make 10 per cent, upon their cajDital in any occupation. 
 This argument, when stated in general terms, appears, at 
 first sight, satisfactory ; but when considered strictly and 
 analytically, it will be seen to be wholly fallacious. The 
 subject is so very important that it requires a detailed exami- 
 nation. 
 
 Let us suppose that an English and a French manu- 
 facturer have each invested 50,000/. in buildings and ma- 
 chinery, and that they each expend in a year 50,000/. in 
 materials and wages. Let us also suppose that, in conse- 
 quence of lower wages in France, the French manufacturer 
 is able to employ more labo\n-ers, and to use more material 
 than the English, and therefore fabricates, by 6 per cent, 
 upon his floating capital, a greater quantity of goods. The 
 goods being similar in kind and in quality, the prices ob- 
 tained for them in the foreign market will be in propor- 
 tion to their quantities, and the French manufacturer will sell 
 his goods for a greater sum by 6 per cent, upon his floating 
 capital of 50,000/. than the English. If the English goods 
 sold for 57,000/., the French, being greater in quantity in 
 * M'Culloch.
 
 51 
 
 the proportion stated, would sell for 60,000/. Undor these 
 circumstances, would it bo the interest of the French manu- 
 facturer to sell his greater quantity of goods for the same 
 sum that the English manufacturer sold the less quantity, 
 and thus secure a superiority in the foreign market? 
 
 When the Englishman sells his goods for 57,000/., he re- 
 places his floating capital, and obtaias a profit of 7 per cent., 
 both upon his floating and upon his fixed capital ; and when 
 the Frenchman sells his goods for 60,000/., he replaces his 
 advance for wages and materials, and realizes a profit of 10 
 per cent, upon his whole capital. Now, if the Frenchman 
 would sell his greater quantity of goods for the same sum for 
 which the Englishman sells the less quantity, and would be 
 satisfied for a short time with 7 per^cent. upon his original 
 capital of 100,000/., he might undersell the English manu- 
 facturer and drive his goods out of the foreign market. The 
 French manufacturer might now sell double his former quan- 
 tity of goods. He might advance an additional 50,000/. in 
 wages and materials, and sell the additional quantity of 
 goods for an additional sum of 57,000/. ; and should no ad- 
 ditional outlay be requisite for buildings and machines, this 
 would yield him, on his second portion of floating capital, a 
 profit, not of 7 but of 14 per cent. It is self-evident, there- 
 fore, that if a greater quantity of materials can be worked up 
 without an additional outlay for fixed capital, it will he the 
 interest of the French manufacturer to take less than the 
 average rate of profit in France upon the first portion of his 
 advances, in order to gain more than this average rate upon 
 the additional portions of floating capital, which he can 
 employ by underselling the English manufacturer, and beat- 
 ing him out of the foreign market. 
 
 It must be apparent, that the force of this argument 
 depends upon the fact, whether in manufacturing industry, 
 additional floating capital can be employed without a pro- 
 portionate addition cf fixed capital. Now with respect to 
 
 e2
 
 52 
 
 the matter of fact tlicro can be no doubt. The market is 
 occasionally under-stocked^ and occasionally over-stocked 
 with manufactured goods. When the supply of such goods 
 is deficient their production is increased ; and when their 
 supply is in excess their production is diminished. But 
 when the production of manufactured goods diminishes, the 
 fixed capital of the manufacturer ceases to be fully employed. 
 It is self-evident, therefore, that amid the ebbings and flow- 
 ings of the market, and the alternate contractions and ex- 
 pansions of demand, occasions will constantly recur, in 
 which the manufacturer may employ additional floating 
 capital, without employing additional fixed capital. It 
 admits of the strictest demonstration, that if additional quan- 
 tities of raw material can be worked up without incurring an 
 additional expense for buildings and machinery, the manu- 
 facturers of the country in which the rate of profit is com- 
 paratively high, will have an interest in lowering their 
 prices in the foreign market, so as to beat out the fabrics of 
 the country in which the rate of profit is comparatively low. 
 
 The French and English manufacturers invest each 
 50,000/. in buildings and machines, and when their fixed 
 capital is in full action, each can employ a floating capital 
 of 50,000/. in wages and raw materials. The Frenchman, 
 paying less for labour, is able to work up more material, and 
 produces a quantity of goods greater to the extent of 6 per 
 cent upon his floating capital of 50,000?. than the quantity 
 produced by the Englishman. The goods of each being 
 similar in kind and quality, if those of the Englishman sell 
 for 57,000/. those of the Frenchman will sell for 60,000/. 
 Now it is self-evident that, under these circumstances, it 
 would not be the interest of the French manufacturer to 
 undersell the English, and drive him from the foreign market. 
 For his machinery being fully employed, he cannot advance 
 additional floating capital for wages and materials without 
 making a proportional addition to his fixed capital ; and he
 
 53 
 
 cannot realize 10 per cent., the customary rate ot" prodt in 
 France^ upon his advances, unless the goods produced by a 
 fixed capital of 50,000/., and a floating capital of 50,000/,, 
 continue to sell in tiie foreign market for 60,000/. He 
 cannot therefore undersell the English manufacturer without 
 employing additional capital in the foreign trade, at a less 
 rate of profit than that which he might obtain in other occu- 
 pations. 
 
 Veiy different would be the result, should a revulsion of 
 trade check production, and prevent the fixed capital invested 
 in manufactures from being fully employed. Let us sup- 
 pose that the quantity of goods on hand is so much in excess 
 that our manufacturers are obliged to diminish the supply, 
 and instead of employing a floating capital of 50,000/. each, 
 can employ floating capital of only 25,000/. each. In this 
 case the factories will work only half time ; only half the 
 quantity of goods will be produced, and prices remaining 
 the same,* the Frenchman's goods, instead of selling for 
 60,000/., will sell for only 30,000/. This will replace his 
 floating capital of 25,000/. with a surplus of 5000/., which 
 will amount to a profit of 6-|- per cent, upon his whole capital 
 of 75,000/. Under these circumstances it will be the decided 
 interest of the French manufacturer to lower his prices, and 
 drive the English manufacturer out of the foreign market. 
 By doing so he mil be able to employ an additional floating 
 capital of 25,000/., without incurring an additional expense 
 for fixed capital, and may produce an additional quantity of 
 goods, greater by 3 per cent, than the quantity which the 
 English manufacturer sold for 28,500/. Should he sell his 
 greater quantity for the same sum of 28,500/., for which the 
 English mamifacturer sold his less quantity, he will drive 
 the English manufacturer out of the foreign market, and 
 obtain a return of 28,500/. for an advance of 25,000/. This 
 
 * Under the circumstances, prices would fall ; but this, instead of weak- 
 ening the ease as now put, would render it still stronger.
 
 54 
 
 will be a profit of 14 per cent, upon tlie additional floating 
 capital employed. Now, by the supposition, the general rate 
 of profit in France is only 10 per cent. Instead of obtaining 
 less, the French manufacturer will gain much more than the 
 customary rate of profit, by employing all the floating capital 
 he can command in fabricating more goods at lower prices, 
 and thereby expelling competitors from the foreign market. 
 
 Thus we see that the argument, so confidently advanced in 
 support of the doctrine that a rise of wages has no injurious 
 ■ effect upon foreign trade is altogether erroneous, and involves 
 the fallacy, imfortunately too prevalent amongst economical 
 writers, of confounding distinctions by hasty generalizations, 
 and of attributing to different things the same common pro- 
 perties, because we class them under the same common name. 
 The buildings and machines of the manufacturer, as well 
 as the money with which he pays his wages and purchases 
 his raw materials, are classed under the general denomination 
 of capital; and those who, in their proneness for general 
 reasoning, forget that science is analysis, fall into the error of 
 conceiving that because capital, consisting of money, may 
 pass from employment to employment, in c rder to obtain the 
 customary rate of profit, capital, consisting of buildings and 
 machinery, may be equally locomotive. The reasoning in 
 support of the position that high comparative wages, and low 
 comparative profits, are not injurious to foreign trade, and do 
 not involve the danger of foreign competition, would be per- 
 fectly correct, provided fixed capital were not fixed. If 
 money stmk in buildings and machinery could be made to 
 realize the same customary rate of profit when the machinery 
 is not employed as when it is employed, then indeed the 
 manufacturers in a country in which profits were compara- 
 tively high would have no inducement to undersell the manu- 
 facturer of a country in which the customary rate of profits 
 were low ; because, in this case, the high comparative rate of 
 profit might at all times be obtained upon the whole capital,
 
 55 
 
 fixed as well as floating, which the manufacturers of the 
 high-profit country employed. But so long as buildings and 
 machinery, when not in work, exist as dead stock, realizing 
 no profit at all, so long will it be the interest of producers to 
 employ, at the customary rate of profit, as much of their 
 floating capital as possible, without reference to the consider- 
 ation whether, by so employing it, they realize the customary 
 profit upon their fixed capital also. This is a consideration 
 wliich will always determine whether new and additional 
 buildings and machines shall be erected ; but when once 
 they are erected, it will be the decided interest of the manu- 
 facturer to keep them in full work, provided he can thereby 
 secure the customary profit upon the floating capital employed 
 in paying wages and in purchasing raw materials. Hence, 
 when the foreign market is overstocked, it will be the in- 
 terest of the manufacturer of the high-profit country to con- 
 tinue to supply it at prices greatly below those ordinary prices 
 which gave the customary return upon his whole capital, 
 fixed and floating. This customary profit on liis whole capital 
 was necessary to induce him to commence business, but is not 
 necessary to induce him to continue it. To secure this, it is 
 sufficient that he obtains the customary profit upon that 
 portion of his capital which he can transfer without loss to 
 otlier occupations. 
 
 An objection may here be urged. It may be contended 
 that the argument cuts both ways, and is as applicable 
 to the manufacturers of the low-profit as to the manu- 
 facturers of the high-profit country. If it be the interest 
 of the latter to continue to supply the foreign market, at 
 prices so reduced as to leave the customary rate of profit 
 only on the moveable portion of their capital, it must be the 
 interest of the former to do so likewise. But if the manu- 
 facturers of the low-profit country found it their interest 
 to continue to supply the foreign market at a reduction 
 of prices which left them customary profits on their
 
 floating capital only, the manufacturers of the high-profit 
 country could not undersell them without a diminution 
 of their customary rate of profit upon that portion of 
 their capital which ihey could transfer to more advantageous 
 occupations. It follows, therefore, that a comparatively 
 low rate of profit cannot have the effect of contracting 
 the extent of foreign trade. 
 
 This objection proceeds upon the assumption, that prices 
 in the foreign market never fall below that point at 
 which the manufacturer obtains his customary rate of profit 
 upon that portion of his capital which can be transferred 
 without loss to other occupations ; and, were this assump- 
 tion conformable to fact, the objection would be valid and 
 conclusive. But the assumption is contrary to fact. 
 Frequent is the fall of prices below the point supposed. 
 Revulsions occasionally occur, during which the manu- 
 facturer scarcely obtains a return sufficient to replace 
 the floating capital he advances. Nay, in the vibrations 
 of the market, the depression of trade will sometimes be so 
 great that the manufacturer cannot, at existing prices, replace 
 his floating capital, and that he continues to advance wages 
 and materials at a positive loss, because he cannot, without 
 incurring a greater loss, abandon his buildings and ma- 
 chinery; or because he is able to keep his goods j on hand 
 until the glut is removed and prices have recovered. Now, 
 on all such occasions, the manufacturers of the high-profit 
 c6untry will have a decided advantage over those of the low- 
 profit country, and will drive them out of the foreign market. 
 Let us exemplify this process by a reference to our former 
 case. 
 
 A French manufacturer advances a floating capital of 
 50,000Z., and produces 10,300 bales of goods ; an English 
 manufacturer also advances a floating capital of 50,000Z., but, 
 as from the higher rate of wages which he pays, can employ 
 fewer hands, and purchase less material, he produces only
 
 10,000 bales. Under these circumstances, let us suppose tliat 
 the prices of the foreign market fall so low, that the English 
 10,000 bales sell there for no more than 50,000/., while the 
 French 10,300 bales, of the same kind and quaUty, sell for a 
 greater sum in proportion to their greater quantity, or for 
 51,500Z. In this case the English manufacturer just saves 
 liimself, while the French manufacturer realizes a profit of 
 3 per cent, upon his floating capital. 
 
 Let us now suppose that the prices in the foreign market 
 continue to decline, until the Frenchman's 10,300 bales, 
 produced by a floating capital of 50,000/., sell for no more 
 than 50,000/., and the Englishman's bales, produced by 
 the same expenditure, sell for a less sum in proportion to 
 their less quantity. In this case the Frenchman will just 
 save himself, while the Englishman will incur a positive loss. 
 
 Thus it is self-evident, that in all revulsions of foreign trade 
 there will be, in the country in which profits are comparatively 
 low, a much heavier loss, and a much greater destruction of 
 capital, than in countries in which profits are comparatively 
 high. Should the difference in the rates of profit be con- 
 siderable, the high-profit coiuitry may continue to realize 
 moderate gains under a revulsion of foreign trade, and 
 depression^ of the markets, which spread bankruptcy and ruin 
 throughout the manufacturing districts of the low-profit 
 country. 
 
 One other consideration remains, and it is a most important 
 one. Floating capital has a constant tendency to transfer 
 itself from cotnitries in which profits are low to those in which 
 they are high. Love of country, the inconvenience of con- 
 forming to foreign manners, and the difficulty of acquiring 
 foreign languages, may, to a certain extent, counteract this 
 tendency; but, notwithstanding these barriers to a perfect 
 equalization, this tendency of profits, throughout the com- 
 mercial countries of the civilized world, to gravitate towards a 
 common level, will prevent capital from resting on those
 
 58 
 
 places whore the cost of production has been unduly elevated. 
 We may lay it down as a principle established by a complete 
 induction from experience, that manufacturing industry will 
 establish and extend itself in those coinitries in which manu- 
 facturing capital obtains a high comparative reward; and 
 will partly ba driven, and partly retire of its own accord, 
 from those districts in which manufacturing profits are 
 comparatively low. 
 
 From these illustrations, which the vital importance of the 
 subject has led us thus to extend into demonstrative details, 
 we can distinctly trace the ultimate effect, upon the working 
 classes, of combinations for raising wages in a country which 
 exports manufactured goods. In such country the price of 
 manufactured goods in the foreign market cannot exceed the 
 price at which they can be supplied by the foreign producer. 
 Now% when the price of goods is thus fixed, every increase 
 of wao-es, other things remaining the same, must increase 
 the cost of production upon the domestic producer, and lower 
 the rate of his profit ; and this reduction of profit must ex- 
 pose him to the successful competition of those foreign manu- 
 facturinty countries in which a corresponding increase of 
 wages has not occasioned a similar fall in the rate of profit. 
 Upon every revulsion of trade, and stagnation of the market, 
 this fall of profits will cause the domestic producer to be 
 undersold in the foreign market ; will compel him to contract, 
 or to discontinue his operations, and to throw his labourers 
 partially, or wholly, out of employment. The labourers, 
 thus thrown out, will not be able to obtain other employment 
 at the same rate of wages as before ; because, as a less quan- 
 tity of manufactured goods can be exported, a less quantity 
 of raw material and of food can be imported, and the general 
 fund for the maintenance of labour will be diminished. Now, 
 if the whole of the fund for the maintenance of labour, the 
 whole quantity of food and material, be diminished, it is 
 X'lf-evident that, the number of labourers remaining the
 
 59 
 
 same, each individual must receive less real wages than 
 before. It thus appears, by proof amounting to strictly 
 mathematical demonstration, that in a country exporting 
 manufactured goods, an effectual combination for increasing 
 wages, which should have the effect of lowering the rate of 
 profit below the rate obtained in other manufacturing coun- 
 tries, must ultimately terminate, not in an advance, but in a 
 reduction of waofes. 
 
 In a Country possessing superiority in manufacturing for the 
 Foreign Markets, Wages may he raised within the limits of 
 such superiority. 
 
 By the terms in which the important principle demon- 
 strated in the preceding section is stated, it will be apparent 
 that it is liable, in practice, to two exceptions. It is by in- 
 creasing the cost of production, and by rendering profits 
 comparatively low, that successful combinations for raising 
 wages contract the field of industry, and limit foreign trade, 
 and thus ultimately terminate in throwing labour out of em- 
 ployment, and in rendering wages lower than before. It 
 follows, that, were they formed under circumstances which 
 should prevent an increase in the cost of production, and a 
 relative fall in the rate o^ profit, such combinations, instead 
 of creating this injurious re-action, might permanently secure, 
 to the labouring classes, a larger share of the necessaries and 
 comforts of life. Here, then, a very important practical 
 question arises, namely, what accompanyhig circumstances 
 will prevent a rise of wages from increasing the cost of pro- 
 duction, and from reducing the rate of profit below the rates 
 obtained in other countries ? Let us inquire. 
 
 Should a labourer, when he demands, and obtains, an 
 advance of wages, execute an additional quantity of work 
 proportional to this advance, it is evident that no increase of 
 productive cost, no decline in the rate of profit, could be
 
 GO 
 
 thereby occasionetl. It' the Ikrmer and ihe manufacturer 
 paid more lor labour, they would cultivate and manufacture 
 more. The increase in their returns being in the same pro- 
 portion as the increase in their advances, the cost of produc- 
 tion, and the rate of profit, would remain the same. A 
 greater quantity of necessaries and comforts would be pro- 
 duced, the fiind for the maintenance of labour would be 
 increased ; and this increased fund, divided amongst the same 
 uuniber of individuals, would give an increased quantity of 
 necessaries to each. It is obvious, nay, it is self-evident, that 
 should a combination for raising wages be accompanied by 
 an ancillary combination for increasing the hours of labour, 
 and the quantity of work, in the same proportion in which 
 wages might be increased, it would give to the labouring 
 classes an increased supply of the comforts and necessaries of 
 life. It might be difficult, it might be impracticable, to 
 establish these co-operating combinations ; but, were they once 
 fairly estabUshed, no injurious re-action, or recoil, could be 
 occasioned, and wages would be permanently increased. 
 
 There is another limitation of the principle that in a 
 country exporting manufactured goods, and importing food 
 and raw materials, the ultimate effect of combinations for 
 raising wages is to reduce them below the previous level. In 
 such a country, the manner in which a compulsory elevation 
 occasions a permanent depression of wages is by reducing the 
 rates of profit below the rates obtained in other manufacturing 
 countries, and thus giving to such countries a superiority in 
 the foreign market. Now, should the particular country in 
 which the compulsory rise of wages took place possess an 
 advantage over other manufacturing countries in supplying the 
 articles demanded in the foreign market, this particular 
 country might pay high comparative wages, and yet retain 
 its superiority with respect to foreign trade, provided the dis- 
 advantage created by the high wages were less than the 
 advantage arising from other causes. For example, if, in
 
 61 
 
 fabricating a givon quantily of clotli, tht> English manufacturer 
 expends 100/, in fuel and machinery, 100/. in materials, and 
 100/. in wages, while the French manufacturer expends 150/. 
 in fuel and machinery, 100/. in material, and 100/. in wages, 
 then it is evident that a combination might raise wages in 
 England from 100/. to 140/., and yet leave to England the 
 power of underselling France in the foreign market. Tlie 
 disadvantage arising from the high price of labour in 
 England would be more than counterbalanced by the ad- 
 vantage created by the low price of fuel and machinery. 
 After the rise of wages, the whole cost of producing the 
 cloth in Eng^land will be 340/., while in France it will be 
 350/., and the French manufacturer will still be unable to 
 compete with the English in the foreign market. Nor would 
 such a rise in the reward of labour be injurious to the 
 employers of labour. 
 
 In a country which can manufacture for the foreign market 
 at a less cost than others, a compulsory rise of wages, pro- 
 vided it did not go the length of equalizing productive cost, 
 would not have the effect of reducing manufacturing profits. 
 Under such circumstances, the price of manufactured goods 
 would rise in the foreign market, and it would be the foreign 
 consumer, and not the home capitalist, who would pay the 
 advance of wages obtained by the operative class. The 
 great value and importance of this fact will justify us in again 
 resorting to the details of an illustrative example. 
 
 If in England and in France the cost of production were 
 equal, and the ordinary rate of profit 10 per cent., then should 
 the English and the French manufacturer expend each 100/. 
 in fabricating and conveying a given quantity of cloth for the 
 foreign market, in that market this quantity of cloth would 
 sell for 110/. Now, suppose that in England the discovery 
 of cheaper fuel, or an improved machine, enables the manu- 
 facturer to fabricate and convey this quantity of cloth for 90/., 
 instead of for 100/, ; then, while it continues to sell in the
 
 62 
 
 foreign niarkol for 1 10/. lie will realize a profit of 22 per 
 cent. But this high rate of profit would attract capital to 
 the business of fabricating cloth, until the increasing supply 
 of the article so reduced its price as to leave the producer no 
 more than the ordinary profit of 10 per cent. The quantity 
 of cloth which had sold for 110/., when its productive cost 
 was 100/., will sell for no more than 99/. when its cost is 
 reduced to 90/. The French manufacturer would be driven 
 out of the foreign market ; but though the English manu- 
 facturer w'Ould obtain the exclusive supplying of that market, 
 and would consequently be able to sell a much larger quan- 
 tity of goods than before, yet domestic comjjetition would 
 effectually prevent him from realizing a higher rate of profit 
 than before. 
 
 Let us now suppose, that, after these effects have been 
 produced, the operatives in England combine, and obtain an 
 advance of wages, which raises the cost of fabricating the 
 given quantity of cloth from 90/. to 98/., while this quantity 
 of cloth continues to sell in the foreign market for no more 
 than 99/. This advance of wages will reduce the manu- 
 facturer's profit from 10 to little more than 1 percent. But 
 capital would gradually be withdrawn from an occupation 
 yielding so slender a return ; and, even if not withdrawn 
 from the actual fabrication of cloth, the more wealthy manu- 
 facturers would keep their goods on hand until the diminished 
 supply in the foreign market elevated prices, and enabled 
 them to realize ordinary profits. The quantity of cloth 
 which, before the rise of wages, and the consequent increased 
 cost of production, had sold for 99/., will now sell for 108/. 
 in the foreign market. This rise in the price of British 
 goods will not, however, deprive the British manufacturer of 
 the exclusive supply of the foreign market ; for by this sup- 
 position, he is still able to vuidersell the French manufac- 
 turer by nearly two per cent. But, if the British manufac- 
 turer realizes the same rate of profit as before, and retains.
 
 63 
 
 as befovo, the cxclvisive supply of the foreign market, it is 
 evident that the advance of wages obtained by the operative, 
 must be paid by the foreign consumer, in the increased 
 price of cloth. 
 
 Thus it appears, upon the fullest evidence, that in a country 
 possessing a superiority over other manufacturing countries, 
 in producing goods for the foreign market, the rate of wages 
 may be increasefl above the rates obtained in other countries 
 to nearly the whole extent of such superiority, without reduc- 
 ing the rate of profit, or exposing the manlifacturer to foreign 
 competition. But it will also appear, upon evidence equally 
 conclusive, that this higher scale of wages cannot be main- 
 tained, if the ojDeratives increase their numbers beyond the 
 demand for labour. If, in any neighbourhood, 1000 hands 
 are required to fabricate the goods demanded in the foreign 
 market, and if the hands increase from 1000 to 1100, no 
 possible combination amongst the operatives can avert a fall 
 of wages. We have seen that all that it is possible for the 
 most perfect combination to perform is, to increase the rate 
 of wages to nearly the whole extent of whatever superiority 
 the country may possess in supplying goods for the foreign 
 market. When a rise of wages to this extent has been ob- 
 tained for that number of labourers which may be required 
 to fabricate the quantity of goods demanded in the foreign 
 market, the price of labour cannot be flirther increased with- 
 out losing the foreiofn market. But if a combination so 
 limited the ho\irs of labour that it required 1100 to do the 
 work formerly done by 1000, and if each of the 1100 should 
 receive the same wages formerly received by each of tlie 
 1000, the price of labour and the cost of production would bo 
 increased, the foreign market woidd be lost, and the whole of 
 the laboui-ers which supplied it would be thrown out of em- 
 ployment. If the combination should limit the hours of 
 labour, the wages of each labourer must be reduced in pro- 
 portion to the diminution in the work he performed ; and 
 should the combination, without reducing the hours of labour,
 
 64 
 
 limit tli(' number of hands ^\\\o should ofTor ihomselvcs for 
 employment, those who were employed would have to main- 
 tain those who were unemployed, which would be the same 
 thing- in effect as a reduction of wages. To retain possession 
 of the foreign market, and at the same time to increase the 
 price of a given quantity of work beyond the proportion of the 
 superiority possessed in supplying the foreign market, is ma- 
 nifestly impossible. But if the price of a given quantity of 
 work cannot be increased, while the hands employed in per- 
 forming it are increased, it is self-evident that the wages of 
 each individual must be reduced. In a country possessing 
 superiority in supplying goods for the foreign market, a com- 
 bination, could it be formed and maintained, might effect an 
 advance of wages within the limits of that superiority, pro- 
 vided the number of hands seeking for employment did not 
 increase in a greater proportion than the quantity of work to 
 be performed.* 
 
 On the manner in which limiting the time of Labour to Ten 
 Hours would reduce Wages. 
 
 The Ten Hours Bill is objected to by many political eco- 
 nomists as contrary to itrinciiAe, as being at variance with 
 the established — the cardinal doctrine of laisscz faire. This 
 objection is untenable. In the majority of instances in which 
 it is put forth, the maxim, laissez faire, is an imitative sound, 
 repeated with as little effort of discriminating thought as 
 that which distinguishes 
 
 " The coxcomb bird so talkative and grave." 
 
 Governments are established for the benefit of the 
 governed ; and every species of interference on the part of 
 the governing body, which is beneficial to any decided 
 majority of the governed, must be a legitimate interference. 
 The principle of non-interference can be applicable to those 
 
 * A considerable portion of the preceding pages has been taken from a 
 tract by the same author, published several years ago, and now out of print.
 
 65 
 
 circumstances only, in which interference would be productive 
 of mischief; in all those cases in which the interference of 
 the central authority in the transactions between man and 
 man, is capable of effecting good or averting evil, laissez 
 faire is a criminal abandonment of the functions for the 
 performance of which a central authority is established and 
 maintained. The hasty generalization which erects the 
 principle of laissez faire into an absolute tinith, applicable 
 under all circumstances, and to be adhered to for its intrinsic 
 excellence, is empiricism under the guise of science. 
 
 The expediency of a Ten Hours Bill must be determined 
 by the self-same rules, which we have applied in determining 
 the expediency of combinations for raising w ages. Combi- 
 nations, unaccompanied by violence or intimidation, are 
 expedient and legitimate when their object is to raise wages 
 to their maximum, and are inexpedient and illegitimate when 
 they proceed a step further, and attempt to raise wages above 
 their maximum. We have seen that when wages are at their 
 maximum, profits are at their minimum; and that when 
 profits are at their minimum, any temporary advance of 
 wages must check production, diminish the demand for 
 labour, and thus terminate in a reduction of wages below their 
 former level. Analogous effects would be produced by a 
 Ten Hours Bill. If, in the actual state of manufactvu-ing: 
 industry in this country, wages are below the maximum, and 
 profits above the minimum, then the same wages might be 
 given for ten hours' labour which are now given for twelve 
 hours, without suspending industry and throwing the operative 
 out of employment; while, if wages be already at their 
 maximum and profits at their minimum, a diminution in the 
 hours of labour must inevitably lead to a corresponding 
 diminution in the amount of w'ages. 
 
 Foreign competition and foreign tariff's are progressively 
 depriving the British manufacturer of the superiority which 
 he has hitherto possessed over the foreign manufacturer. 
 
 F
 
 66 
 
 Let me entreat your Lordship to consider whether, in the 
 actual circumstances of the world, it would be possible that 
 the British operative should continue to receive for ten hours' 
 work the same amount of wages which he now receives for 
 twelve hours' work. Is there a foreign market in the world 
 to which our fabrics could be exported with a profit^, were the 
 cost of their production to be increased by the payment for 
 the labour of ten hours, of the same amount of wages which 
 is now paid for twelve ? Let us examine this most mo- 
 mentous question in detail. 
 
 Our most important market is that of the United States. 
 Under a Ten Hours Bill could this market be retained with- 
 out a reduction of wages proportionate to the reduction of 
 time ? The United States possess districts of the finest coal 
 and iron in juxtaposition, and lying near the surface ; water 
 power to an incalculable extent ; indigenous supplies of cotton 
 wool, with machinery, enterprize, and persevering industry 
 not inferior to our own. Were America to open her ports to 
 British fabrics, duty free, the wages of the English operative 
 might possibly equal, but could not by possibility exceed, 
 the wages of the American operative. But America, instead 
 of receiving our fabrics duty free, charges a duty of 40 per 
 cent, upon them. The price which the English manufacturer 
 realizes for his goods in the American market, must be less 
 by the amount of the import duty than the price which the 
 American manufacturer realizes in the same market for the 
 same goods. Under such circumstances it is morally im- 
 possible that the English manufacturer who supplies goods to 
 the market of the United States, should pay to the operative 
 an amount of wages equal to that paid by the American 
 manufacturer. Let the hours of labour remain the same in 
 the two countries, and the English operatives who work for the 
 American market can continue to obtain employment only 
 by consenting to receive an amount of wages so much below 
 the amount received by the American operative, as may be
 
 67 
 
 sufficient to indemnify the English manufacturer for the duty 
 charged by America upon British goods. Let the time of 
 labour be ten hours in England and twelve in America, and 
 then the English operative cannot obtain employment in 
 working for the American market, unless he will consent, not 
 only to receive an amount of wages reduced below the 
 American level to an extent equivalent to the duty imposed 
 upon British goods, but to submit to a further depression 
 equivalent to the difference between twelve and ten. This 
 result may be more distinctly shown by an illustrative case. 
 
 Let us suppose, as the basis of our illustration, that the 
 rate of manufacturing profit in England is 7 per cent., and in 
 America is 10 per cent.; that an English manufacturer and 
 an American manufacturer have each a fixed capital of 
 100,000/. invested in buildings and machinery; that in the 
 course of a year each works up materials to the amount of 
 20,000Z., employs 400 operatives, expends 5000/. in keeping 
 his fixed capital unimpaired, produces 1000 packages of 
 goods, and sells them in the American market for 125,000/. 
 Under these assumed circumstances (and they are sufficiently 
 analogous to actual circumstances to show the practical 
 operation of the American tariff upon British wages), the 
 American operative would receive 2*. as wages for every 
 shilling which would be received by the English operative. 
 The accounts of the two manufactures would stand as follows. 
 
 CASE L 
 
 Account of the Expenditure and Return of the American 
 Manifacturer. 
 
 Expenditure. 
 
 £. 
 Raw materials 20,000 
 
 Wages to 400, at 4/. per week, for 50 weeks, 80,000 
 
 £100,000 
 f2
 
 GS 
 
 Return. £, 
 
 Sold 1000 packages of goods . . . 125,000 
 Deduct expenditure 100,000 
 
 Gross profit 25,000 
 
 Deduct replacement of fixed capital . 5,000 
 
 Net profit being 10 per cent, upon the 
 whole capital, fixed and circulating, 
 of 200,000/ £20,000 
 
 CASE II. 
 
 Account of the Expenditure and Return of the English 
 Manufacturer. 
 
 Expenditure. £. 
 
 Raw materials 20,000 
 
 Wages to 400, at 21. per week, for 50 weeks, 40,000 
 
 60,000 
 
 Return. 
 
 Realized by the sale of 1000 packages for 
 125,000/. after payment of the duty of 
 40 per cent 75,000 
 
 Deduct expenditure 60,000 
 
 Gross profit 15,000 
 
 Deduct replacement of fixed capital . 5,000 
 
 Net profit being less than 7 per cent, upon 
 the whole, fixed and circulating capital, 
 of 160,000/ £10,000 
 
 These figures, my Lord, bring out startling results. They 
 show that one operative in an American cotton-mill may earn 
 an amount of wages equal to the amount which can be 
 earned by two operatives employed in an English cotton-mill ;
 
 69 
 
 or, to express the same thing in other words, that au 
 American operative may receive for one day's work the same 
 amount of wages which tlie Enghsh operative can obtain for 
 two days' work. 
 
 Your Lordship will not deny that the results of these 
 figures are in melancholy accordance with existing facts. 
 They exhibit with appalling accuracy the causes of the wide 
 disparity which exists between the condition of the manufac- 
 turing population in England and in the United States. 
 Mr. Dickens has exhibited the enviable position of the factory 
 girls in the establishments of tlie Union ; your Lordship has 
 unveiled the degradation^ physical and moral, into which the 
 women and children employed in the establishments of 
 England have fallen. The contrast is humiliating and ap- 
 palling. No heart which a spark of humanity ever warmed 
 can withhold from your Lordship the homage of respect, ap- 
 proval, and sympathy, for the untiring zeal and noble dis- 
 regard of personal considerations, witli which you have devoted 
 yourself to the removal of the moral plague spot from the 
 land, and to the performance of the Christian labour, of giving 
 to our manufacturing population the means of social elevation, 
 by securing to them a "fair day's wage for a fair day's work." 
 Your motives are beyond all praise. The only question is, 
 whether the measures which you propose would not aggravate 
 the evils which they are intended to remove. Let us endeavour 
 to solve this momentous question by tracing, through the 
 unerring evidence of figures, the effects which a Ten Hours' 
 Bill would have on the wages of the operative classes engaged 
 in supplying the demand of our most important foreign 
 market. 
 
 The expenditure and return of the American manufacturer 
 remains as stated in Case L Under a Ten Hours Bill the 
 expenditure and return of the British manufacturer would be 
 as follows : —
 
 70 
 
 CASE III. 
 
 Showing the Effects of a Ten Hours Bill upon the rate of 
 profit should Wages not he reduced in those branches of 
 Manufacture which are dependant on the Markets of the 
 United States. 
 
 In this case the English manufacturer continues to employ 
 a fixed capital of 100,000/., and to pay 40,000/. in wages, 
 while working for ten hours instead of for twelve ; he ex- 
 pends in materials 16,667/. instead of 20,000/. ; produces 
 833^ packages of goods instead of 1000; and obtains for 
 them in the American market 104,167/. instead of 125,000/, 
 which he formerly obtained for the larger quantity. His 
 account will now stand thus : — 
 
 Expenditure. 
 
 £. 
 Raw materials ....... 16,667 
 
 Wages 40,000 
 
 56,667 
 
 Return. 
 
 Realized by the sale of goods to the 
 amount of 104,167/., after deducting 
 40 per cent, on account of duty . . 62,501 
 
 Deduct expenditure 56,667 
 
 Gross profit 5,834 
 
 Deduct for repair of fixed capital . . 5,000 
 
 Net profit, being little more than ^ per 
 cent, upon the whole capital, fixed 
 and circulating, of 156,667/. . . . £834 
 
 The figures demonstrate, that under the operation of a 
 Ten Hours Bill, it would be impossible that the operatives 
 engaged in those branches of manufacture which are de-
 
 71 
 
 pendant on the markets of the United States should continue 
 to receive the same amount of wages as at present. No 
 Legislative enactment, no human power, can sustain wages 
 above the amount which leaves to the capitalist a rate of 
 profit sufficient to induce him to continue the work of pro- 
 duction. It appeared by Case II., that while the Govern- 
 ment of the United States continues to impose a duty of 
 40 per cent, upon British fabrics, profits would be below 
 their minimum of 7 per cent., even were the English operative 
 to receive only half the wages which are received by the 
 American. But when profits have fallen to their minimum 
 wages have ascended to their maximum. Force wages 
 above the maximum and you suspend production. Enact 
 your Ten flours Bill and one of two events must inevitably 
 ensue : — the manufactures of England will be transferred to 
 foreign lands, or else the operatives must submit to a re- 
 duction of wages to the extent of 25 per cent. That a re- 
 duction of wages to this extent would be necessary, in order 
 to enable the manufacturer to sell his fabrics in the American 
 market at the minimum profit of 7 per cent, the following 
 figures will serve to explain ; — 
 
 CASE IV. 
 
 Showing the Effect of a Ten Hours Bill upon the Wages of 
 the Operatives working for the American Market, under the 
 assumption that Profits are at the Minimum of 7 per Cent. 
 
 Expenditure. 
 
 £. 
 
 Raw materials, as in Case III. . . 16,667 
 Wages reduced by one-fourth, or 25 
 
 per cent, below those of Case III. . 30,000 
 
 £ 46,667
 
 72 
 
 Return. 
 
 Proceeds of sale of goods, after deducting £. 
 
 duty, as in Case III 62,501 
 
 Deduct expenditure 46,667 
 
 Gross profit 15,834 
 
 Deduct replacement of fixed capital . 5,000 
 
 Net profit on fixed and circulating ca- 
 pital, amounting to 146,667/., being 
 less than 7^ per cent £ 10,834 
 
 From the illustrations which I have now presented, it 
 would appear that the effect of a Ten Hours Bill would be 
 to cause a depression in wages, to the extent of 25 per cent., 
 while leaving the manufacturer who supplies our most exten- 
 sive and important foreign market with a rate of profit not 
 exceeding, by ^ per cent., the minimum rate from which the 
 slightest permanent declension would banish manufactures 
 from the land. 
 
 Your Lordship may probably object, that the alarming 
 conclusions at which I have thus arrived, are deduced from 
 assumptions not in accordance with existing circumstances, 
 and therefore not practically true ; tliat profits are not at their 
 minimum and wages at their maximum ; and that there is 
 still a sufficient margin to allow the operative undiminished 
 wages for diminished work, without causing manufacturing 
 capital to emigrate from our shores. Unfeignedly do I wish 
 that this objection were valid. But the facts which are 
 passing around us prove it to be groundless. Capital to an 
 enormous amount already emigrates from our shores. Our 
 unemployed and unemployable accumulations flow off into 
 foreign mines and foreign loans, foreign canals, foreign rail- 
 ways, — foreign factories rivalling our own, have become 
 the perennial creations of British capital. These are pre-
 
 73 
 
 monitory symptoms which it would be dangerous to dis- 
 regard. These are practical, undeniable, irresistible proofs, 
 that the rate of profit in this country is already approaching 
 the minimum at which no margin remains for an advance of 
 wages. 
 
 It is not an hypothesis, but a fact, that the wages of ma- 
 nufacturing labour in this country have had for a long course 
 of years a tendency to decline ; it is not an assumption, but 
 a reality, that all the principal commercial countries of the 
 world have adopted the policy of forcing native manufactures 
 by imposing increasing import duties upon British goods ; and 
 it is not a merely probable conclusion, but a self-evident truth, 
 that in the same markets commodities equal in quality will 
 be equal in value, and that the British manufacturer who 
 exports his fabrics to a foreign country, will realise for them 
 a less price by the amount of the import duty, than the 
 price realised for similar fabrics by the manufactures of that 
 country. Again, it is not an assumption, but a fact, that the 
 Anglo-Saxon race have lost nothing of their skill, and 
 energy, and enterprise, and persevering industry, by crossing 
 the Atlantic ; and it is not a merely probable inference, but 
 a self-evident truth, that while a day's labour in America 
 can produce an article equal in quantity and quality to that 
 produced by a day's labour in England, the maximum wages 
 obtainable by the American operative will exceed, in a pro- 
 portion determined by the amount of duty imposed on British 
 goods, the maximum wages attainable by the English ope- 
 rative who works for the American market. And, niy 
 Lord, it is an equally self-evident truth, that could the 
 wages of the operative, after the passing of your Ten Hours 
 Bill, be sustained for a season above the reduced maximum 
 determined by the diminished quantity of work, profits would 
 be pressed down below the minimum of continuous produc- 
 tion, and British capital would flow out into foreign manu- 
 facturing countries in a fearfully increasing volume, leaving
 
 74 
 
 your protected factory population to emigrate or to perisli. 
 I have reasoned from hypothetical cases, only for the purpose 
 of placing before your Lordship, in a more distinct and 
 definite form, conclusions true — self-evidently tme — in the 
 actual circumstances of society. 
 
 Perhaps your Lordship may contend, that my illustrative 
 cases have been framed in reference to circumstances as they 
 are found to exist in the United States exclusively ; that 
 conclusions, though necessarily true under these assumed 
 circumstances, may not be true in reference to the different 
 circumstances which are found to exist in the other great 
 commercial countries of the world. I might reply, that the 
 markets of the United States are, to the British manufacturer, 
 the most important markets of the world ; and that the 
 ruinous consequences of a Ten Hours Bill are sufficiently 
 demonstrated when it is shown that its operation would be, 
 either to exclude us from the markets of the Union, or else to 
 cause a reduction of wages proportionate to the diminution in 
 the hours of work. But I have another and a still more 
 conclusive answer to the objection. 
 
 The economical condition of the great commercial coun- 
 tries of the continent of Europe afford a perfect verification 
 of the conclusions regarding the effect of short time upon 
 wages, which I have presented for your consideration. The 
 distinguishing difference between the economical condition 
 of the United States and that of the continent of Europe, 
 consists in the different degrees of efficacy with which 
 labour is applied. The efficacy of labour in the United 
 States equals, or perhaps exceeds its efficacy in England ; 
 the efficacy of labour in France is less by one-third than its 
 efficacy in England. This difference in the efficacy of 
 labour causes a corresponding difference in wages. An 
 English cotton spinner produces in a day a greater quantity 
 of yarn, and of a better quality, than a French cotton 
 spinner ; and he consequently receives more money for a
 
 75 
 
 day's work than a French cotton spinner. Gold and silver 
 are one-third dearer, in relation to French labour and its 
 produce, than they are in relation to English labour and its 
 produce. A Frenchman labours for three weeks in exe- 
 cuting the same quantity of work which an Englishman 
 executes in two weeks ; and therefore the Frenchman 
 receives, as the wages of three weeks, no greater amount of 
 money than that which the Englishman receives as the 
 wages of two weeks. These are no theoretical conclusions 
 deduced from premises arbitrarily assumed ; they are exist- 
 ing facts, affording practical proof that the amount of wages 
 depends upon the quantity and value of the work performed, 
 and furnishing irresistible evidence that a Ten Hours Bill 
 wovdd diminish wages in the proportion in which it reduced 
 the number of working hours. 
 
 England's commercial rivals would rejoice and glory in 
 the success of your Lordship's measure for limiting the hours 
 of work in her factories. The commercial greatness of our 
 country has been created by the power which the British 
 operative has hitherto possessed, of executing in a given 
 time, — in a day or in a week, — a greater quantity of work 
 than that which could be executed in the same time by the 
 foreign operative. Remove the cause, and the effect will 
 cease. Diminish the quantity of work executed by the 
 British operative in a given time, and our commercial great- 
 ness declines. Equalize tlie quantity of work executed in a 
 day or week by the British with that executed by the foreign 
 operative, and England ceases to be the envy of the world. 
 The question of shortening the hours of labour by a legisla- 
 tive enactment, is the most important that can engage the 
 attention of the man who loves his country. May I be per- 
 mitted to examine it in further detail ? 
 
 Last year France imposed an additional duty upon British 
 yarn, and the manufacturer, in order to retain possession of 
 the French market, was compelled to reduce the price of the
 
 76 
 
 article. France now meets the reduction of price by a further 
 increase of duty. This will impose upon the manufacturer, 
 if he would retain possession of the French market, another 
 reduction of price ; and the inevitable consequence of this 
 must be a decline of wages. And what is the remedy which 
 you propose for averting this evil ? A compulsory diminution 
 of the hours of labour, — a legislative enactment for diminish- 
 ing the quantity of work the operative may execute. You 
 co-operate with the government of France in pulling down 
 the greatness of England. 
 
 A large and an increasing proportion of the population of 
 the kingdom is dependent on the demands of foreign markets 
 for the means of subsistence. All the great commercial 
 countries of the world have adopted the policy of forcing 
 domestic manufactures, by imposing high import duties upon 
 foreign fabrics. How, under such circumstances, can 
 England hold her own? Must not British goods, when 
 imported into a foreign country, be sold to the consumer at 
 the same prices at which the similar goods of that country 
 are sold to the consumer? And is it not self-evident that if 
 British goods, upon entering the markets of a foreign country, 
 are charged with a duty of 20, or 30, or 40 per cent., the 
 British operative cannot receive an amount of wages equal to 
 the amount obtained by the operatives of that country, unless 
 he can produce in a day, or a week, a quantity of goods, 
 greater, by 20, or 30, or 40 per cent., than the quantity pro- 
 duced in a day, or a week, by his foreign competitor ? Your 
 Lordship's Bill for limiting the hours of labour ought to be 
 entitled, — " A Bill for reducing the Wages of the Operative 
 Classes throughout the United Kingdom." 
 
 You advocate a legislative limitation of the hours of labour 
 upon moral grounds alone, and avowedly discard all con- 
 siderations of the commercial branch of this momentous 
 question. The two branches of tlie subject may be separated, 
 and perhaps conveniently separated, for the purpose of sci-
 
 77 
 
 entific disquisition ; but tliey ought not, they cannot be 
 separated in practical legislation. The moral and intellec- 
 tual improvement of the people has an intimate, a necessary 
 connexion with their physical well-being. Is not poverty an 
 incentive to crime? Can the pressure of distress promote the 
 decencies of life? Will crowded rooms and crowded beds, 
 and contaminating associations, be prevented by a reduction 
 of wages ? Can physical degradation be the precursor of 
 moral elevation? If these questions could be answered in 
 the affirmative, then, indeed, the Ten Hours Bill might be 
 discussed without reference to its eflfects upon the commercial 
 prosperity of the country. 
 
 But it cannot be too often repeated that the moral and 
 commercial branches of this important subject are incapable 
 of separation. The two elements are held together by so 
 close an affinity — they are so entirely incorporated and com- 
 bined — they so act and react upon each other in reciprocal 
 causation — that when we attempt to displace the one we 
 reject an essential portion of the other. They must be dealt 
 with as a whole — as one and indivisible. To reject the moral 
 branch of the question would be not less fatal than to dismiss 
 the commercial. The agitation for shortening the hours of 
 labour in the factories involves moral considerations of the 
 gravest character, affecting not the subjects but the promoters 
 of the proposed legislation. The leaders of this dangerous 
 movement bring themselves under a sacred moral obligation 
 to tell to the working people the truth, the whole truth, and 
 nothing but the truth. The operatives are under the delu- 
 sion that, upon the passing of a Ten Hours Bill, they 
 would receive the wages of twelve hours for the work of ten. 
 He who, by word or by deed, by implication or by inference, 
 should countenance this delusion, would incur an awful 
 responsibility to the misguided people, to his country, and to 
 his God. Look forward, I entreat you, to inevitable results. 
 Picture to yourself what would be the state of the popular
 
 78 
 
 mind in the densely-peopled seats of manufacturing industry, 
 when the masses should liave awakened from their delusion, 
 and found that your Ten Hours Bill had permanently de- 
 prived them of one-fourth part of their accustomed wages. 
 Ask your own heart what your feelings then would be. Ask 
 the least intelligent amongst the masses that now hail you 
 with shouts of devoted gratitude and applause, in what degree 
 of estimation your character would then be held. 
 
 I now conclude. Impressed with a deep conviction that, in 
 the actual condition of this country, a legislative limitation of 
 the hours of labour would be inexpedient and injurious in the 
 highest degree ; believing that such interference, instead of 
 benefiting the working classes, would increase the pressure 
 •under which they are already sinking in the social scale; 
 convinced that the increasing force of foreign competition, 
 and the accumulating disadvantages of hostile tariffs, are the 
 specific causes which diminish the rewards of industry in 
 England ; and regarding it as physically impossible, under 
 the action of these causes, to improve the condition of the in- 
 dustrious classes, unless we can increase the eflSciency of their 
 labour, and enable them to execute a greater quantity of 
 work within a given time : — impressed with these convictions, 
 I have not hesitated to address to your Lordship, throughout 
 the preceding pages, a free and unmitigated expression of my 
 opinions in regard to a measure, the express object of which 
 is to diminish the quantity of work performed within a given 
 time, and of which, as I conceive, the necessary tendency would 
 consequently be to co-operate with foreign competition and 
 hostile tariffs in depriving British industry of the superiority 
 which it has hitherto maintained; to effect a reduction of 
 wages proportionate to the diminution in the quantity of work 
 performed within a given time ; and ultimately to create a 
 bitter spirit of disappointment and despair, endangering the 
 security of life and property, and terminating, it might be 
 possible, in the horroi-s of a servile war. But while attempt-
 
 79 
 
 ing to express my convictions and my apprehensions in terms 
 of appropriate strength, it has been very far from my intention 
 to give utterance to a word personally disrespectful to your 
 Lordship. Your character commands respect. It is my 
 high estimation of the moral power which that character con- 
 fers which prompts this strenuous appeal. On the course 
 which you may take in directing the popular movement incal- 
 culable consequences hang. For good or for evil, for weal or 
 for woe^ for elevating or for degrading the condition of the 
 working classes, for advancing or for destroying the prosperity, 
 the greatness, and the happiness of England, I regard you 
 as a potent instrument in the hand of Providence. Will you 
 be a rose in the garden of your country, or a thistle in her 
 hedge? Whoever will seriously contemplate the economical 
 condition of England must perceive that laissez faire is obso- 
 lete. Oil must be thrown upon the troubled waters. Unless 
 appropriate and effectual means be adopted to mitigate the 
 existing, the increasing pressure upon the labouring popula- 
 tion, days of tribulation are at hand. But appropriate and 
 effectual means for the attainment of this end are placed at 
 our command abundantly, and only require to be skilfully, 
 energetically, and systematically applied. Though, on the 
 present occasion, your Lordship has overlooked these means, 
 and mistaken the path through which the hallowed object of 
 improving the condition of the people can be reached, yet to 
 the self-denying zeal and unabateable perseverance with which 
 you have struggled to achieve it, all honour and confidence 
 are due; and though you may not immediately arrive at the 
 conclusion that short time would be followed by a permanent 
 reduction of wages, and by all the social ills inseparable there- 
 from, yet I cannot but hope, I cannot but confidently believe, 
 that the failure of your Ten Hours' Bill will cause you to seek 
 your beneficent object through more apposite means, and to 
 become the leader of a popular movement, the success of 
 which, while enabling the operative to obtain advancing wages
 
 80 
 
 for shorter time, and while opening to the manufacturer ex- 
 panding markets which hostile tariffs could not reach, would 
 confer upon you a legitimate title to the gratitude of your 
 country and of mankind. 
 
 I have the honour to be. 
 Your Lordship's most obedient servant, 
 
 R. TORRENS. 
 London, April 12, 1844. 
 
 Just published, by the same Author, in 1 vol. 8vo., price 10s. 6rf., 
 
 LETTERS on COMMERCIAL and COLONIAL POLICY, with an 
 Introuuction ; in which the Deductive Method, as presented in Mr. 
 Mills' System of Logic, is applied to the Solution of Controverted Ques- 
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