POLITICAL ECONOMY: 
 
 OBJECTS, USES, AND PRINCIPLES: 
 
 CONSIDERED WITH REFERENCE TO THE CON- 
 DITION OF THE AMERICAN PEOPLE. 
 
 WITH A SUMMARY, FOR THE USE OF STUDENTS. 
 
 A Libre 
 
 x^.E%-^tj 
 
 HARPER & BROTHERS, 82 CLIFF-STREET. 
 
 1840. 
 

 Entered, according to Act of Congress, in the year 1840, by 
 
 HARPER & BROTHERS, 
 In the Clerk's Office of the Southern District of New-York. 
 
ADVERTISEMENT. 
 
 THIS volume consists of four parts. 
 
 The fast part, entitled Preliminary Chapter, dis- 
 cusses the Object, Uses, and History of Political 
 Economy. 
 
 The second part is an exposition of the funda- 
 mental principles of the science, in connexion with 
 various questions of practical interest. 
 
 The third part, or Supplementary Chapter, is a 
 special application of these principles to the condi- 
 tion of labouring men in the United States. 
 
 The fourth part is a brief Summary of the same 
 principles for convenient reference, and especially 
 for the use of students in seminaries of learning. 
 
 The second part is substantially a reprint of the 
 first ten chapters of Scrope's Political Economy, a 
 work published in England in 1833 by G. Poulett 
 Scrope, Esq., a member of the House of Com- 
 mons, and well known in his own country as an 
 able writer on Currency, Taxation, &c. In adopt- 
 ing that portion of the work which contains the el- 
 ements of the science, it was found necessary to 
 abridge a few chapters, to enlarge others, and to 
 modify various statements of the author, in order 
 A2 
 
VI ADVERTISEMENT. 
 
 either to adapt them to the meridian of this coun- 
 try, or to make them more consonant with the ed. 
 itor's views of truth. So many alterations of this 
 kind have been hazarded, that they could not, with, 
 out inconvenience, nor without some appearance 
 of pedantry, be specified in notes ; and hence the 
 alternative has been taken of issuing the work 
 without the name of Mr. Scrope in the title-page, 
 that he may not be held responsible for doctrines 
 which he does not teach. Wherever it has been 
 found expedient, instead of altering the text, to add 
 a note, that course has been adopted, and the note 
 designated by the abbreviation (Ed.). 
 
 The three remaining parts of the volume are from 
 the pen of the editor. 
 
 Two objects have been kept in view in prepa- 
 ring this work : first, to provide a treatise for gen- 
 eral readers, adapted to the times, and especially 
 to the wants of our country, which should not be 
 encumbered unnecessarily with controversial mat- 
 ter or with abstract discussions ; secondly, to fur- 
 nish a cheap and convenient manual for seminaries, 
 in which larger and more expensive text-books 
 could not well be used, or in which it might be 
 thought desirable to confine the student's attention 
 to such doctrines as are best established and most 
 generally useful. 
 
 This volume will probably be followed by an- 
 
ADVERTISEMENT. 
 
 Vll 
 
 other, in which the subjects of Pauperism, Taxa- 
 tion, Currency, Banking, and Trade will be dis- 
 cussed, with direct reference to the state and pros- 
 pects of our own country. 
 
 The editor takes this opportunity of acknowl- 
 edging his obligations, while preparing this volume, 
 to a learned and valued friend, Professor Tell- 
 kampf, late of the University of Gottingen, but 
 now of Union College. Besides many valuable 
 suggestions, this gentleman has contributed an Es- 
 say on Currency and Banking, which will be in- 
 serted in a future volume. 
 
CONTENTS. 
 
 PRELIMINARY CHAPTER Page 13 
 
 CHAPTER I. 
 
 Definition of the Science. The Study of the Happiness of So- 
 cieties so far as it depends on the Abundance and Distribu- 
 tion of their Wealth. Its Principles capable only of Moral, 
 not Mathematical Proof 51 
 
 CHAPTER II. 
 
 Definition of Wealth and of Labour. All Labour productive. 
 Labour rather a Pleasure than a Sacrifice : must, however, 
 be free, and sufficiently remunerated. Minimum of sufficient 
 Remuneration. Wealth no certain measure of Happiness. 
 Test proposed 54 
 
 CHAPTER III. 
 
 Conditions of the Production of Wealth. The Institution of 
 private Property. Labour. Land. Capital . . .69 
 
 CHAPTER IV. 
 
 Labour. Exchanges of its Produce. Right to Free Exchange. 
 Division of Labour. Its Advantages. Co-operation and 
 mutual Dependance of all Labourers. Barter. Money. Its 
 use. Coin. Credit. General use of . . .76 
 
 CHAPTER V. 
 
 Wages. Ample and continually increasing Wages secured to 
 Labourers by the Principles of Free Labour and Free Ex- 
 change. Inequality of Wages in different Employments and 
 of different Individuals. Ability, even of the lowest Class, 
 increases, and its Reward ought to rise proportionately, with 
 the Progress of Civilization . . . . . .92 
 
CONTENTS. 
 
 CHAPTER VI. 
 
 Land. Its Appropriation essential to Production.- History and 
 Causes of its Appropriation in different Ages and Countries. 
 In the East by the Sovereign. In Europe by the Aristocracy. 
 In America by the People. Influence of these different 
 Systems on Production and National Welfare. Natural 
 Laws of Property in Page 102 
 
 CHAPTER VII. 
 
 CAPITAL. 
 
 The Result of previous Labour Not affixed to Land Nor in- 
 corporated with Human Ability Nor reserved for private 
 Consumption But employed, or reserved for Employment, 
 in Production, with a View to Profit from sale of its Produce. 
 Necessity of so restricting the Meaning of the Term. 
 Utility of Capital. Profit on Capital. Nature of Profit, and 
 Natural Right to its Enjoyment. Mistaken Views of those 
 who declaim against the Profits of Capital. Fixed and Cir- 
 culating Capitals. Elements of Profit. Net Profit, or Inter- 
 est of Money. Inequality of Gross Profits. Equality of Net 
 Profit in the same Country 123 
 
 CHAPTER VIII. 
 
 VALUE. 
 
 Value necessarily Relative. No real Value. General Value.- 
 Means " Purchasing Power." Elements of Value. Monop- 
 oly. Costs of Production. Rent, the Result of Monopoly. 
 Does not enter into Price. Distinction between good and bad 
 Monopolies. Demand and Supply. Their Variations and re- 
 ciprocal Action. Cost of Production. Consists in Labour, 
 Capital, Time, Monopoly, and Taxation. Competition of Pro- 
 ducers, by which Supply and Demand are kept nearly Level. 
 Different Investments of Capital and Labour. Partial Glut. 
 General Glut impossible, except through a Scarcity of 
 Money . . . ... . . . .149 
 
CONTENTS. XI 
 
 CHAPTER IX. 
 
 DISTRIBUTION OF WEALTH. 
 
 Natural and necessary Inequality of Conditions and Property. 
 Adventitious Advantages. Natural Right of Succession to 
 Property by Will or Inheritance. Variety of Conventional 
 Rules. Test of their Equity. Natural Distribution of new 
 Wealth among Labourers, Land-owners, and Capitalists 
 can be determined only by the Principle of free Exchange.- 
 The same Principle tends to the greatest Increase of distribu- 
 table Produce. Limitation of Interference of Government to 
 the securing of Persons and Property . . . Page 195 
 
 CHAPTER X. 
 
 PRODUCTIVE INTERESTS. 
 
 Agriculture. Manufactures. Commerce. Progress, Subdi- 
 visions, and Utility of each. Their community of Interest, 
 and equal Importance. Preference awarded to Agriculture, 
 owing to the unnatural existing relations of Population and 
 Subsistence 210 
 
 SUPPLEMENTARY CHAPTER 233 
 
 SUMMARY OP PRINCIPLES . .... 303 
 
IN entering upon any department of Learning, 
 it is desirable, in the first place, to form some no- 
 tion of its precise Object and Uses, as well as of 
 its past History and present State. To meet this 
 want is the aim of the present chapter. 
 
 I. OBJECT OF POLITICAL ECONOMY. 
 
 This branch of science proposes to investigate 
 the laws which regulate the PRODUCTION and DISTRI- 
 BUTION of property in a nation, and from these laws 
 to deduce practical rules for the guidance of a peo- 
 ple both in their private pursuits and in respect to 
 legislation. It forms one department of the more 
 general science of Politics. It considers men in 
 society as occupied in acquiring property, and it 
 proposes to explain the principles by which they 
 are governed in this pursuit, the causes which most 
 contribute to their success, and the influence of such 
 success on their general welfare. It begins by as- 
 suming that property is not only a legitimate object 
 of desire, but also a most powerful agent in the 
 work of civilization ; that it owes its existence, in 
 all cases, directly or indirectly, to human skill and 
 industry co-operating with nature ; and that it be- 
 comes of the highest importance, therefore, to as- 
 certain in what way such skill and industry can 
 B 
 
14 PRELIMINARY CHAPTER. 
 
 be rendered most effective and useful. These are 
 preliminary truths, each of which merits elucida- 
 tion. We have only room, however, in this place, 
 to commend them to the notice and reflection of 
 the reader. 
 
 II. USES OF POLITICAL ECONOMY. 
 
 At first sight there would appear to be little, 
 if any, occasion for such a science. All men know 
 that industry and economy are the conditions on 
 which alone, as a general rule, individuals can 
 hope to acquire property ; and it may be said that 
 what is obvious in respect to individuals, is riot less 
 obvious in respect to communities, which are made 
 up of individuals. Where the people are all indus- 
 trious in creating value, and where they are care- 
 ful, from year to year, to consume, each one, less 
 than he produces, it must be evident that wealth 
 will accumulate, and the nation ultimately become 
 rich. What then remains for political economy 
 to teach ? Does not this simple truth comprise all 
 that can be known upon the subject ; or all, at 
 least, that the mass of mankind can be made to 
 comprehend or act upon 1 The answers to these 
 questions will serve to indicate some of the claims 
 which this study is thought to have on our regard, 
 both as a subject for reading and inquiry, and also 
 as a branch of elementary education. 
 
 I. In the first place, then, instruction is needed 
 to demonstrate, and, above all, to enforce the truth, 
 that labour and economy are the true sources of 
 wealth. Truism though it now seems, this prin- 
 ciple was overlooked to a great extent even by 
 
PRELIMINARY CHAPTER. 15 
 
 statesmen before the time of Adam Smith, and at 
 this moment it is recognised and acted upon much 
 less generally than might be supposed. Is not the 
 world still full of expedients by which men are to 
 become rich suddenly and without pains ? By too 
 many is not labour still regarded as a great hard- 
 ship rather than the necessary condition of their 
 highest welfare and enjoyment, while almost all are 
 ready to stigmatize frugality as a niggardly vir- 
 tue? How many of the exchanges of property 
 which take place by way of what is termed spec- 
 ulation, add nothing to the aggregate wealth of a 
 people ; being but delusive expedients for creating 
 value without industry or economy, and serving to 
 absorb a vast proportion of talent and capital 
 which might have been usefully employed? So 
 in chanty. If the benevolent duly appreciated 
 this fundamental truth of political economy, they 
 would be more careful so to bestow their bounty 
 as not to paralyse industry or engender a spirit of 
 improvidence. It is melancholy to observe how 
 much injury can be occasioned by even the noblest 
 sentiments when misdirected, or when indulged by 
 the ignorant and unreflecting. So, again, in gov- 
 ernment. In older countries, many live in idleness 
 and ennui, as pensioners on the public purse, who 
 would have been useful and happy producers of 
 wealth had government placed a proper estimate 
 on industry, relieving, on the one hand, none but 
 unavoidable indigence, and rewarding, on the other, 
 only those who have rendered actual service ; doing 
 this, however, promptly and adequately. 
 
 II. Instruction is also needed to unfold the va- 
 
16 PRELIMINARY CHAPTER. 
 
 rious agencies which conspire with industry in the 
 production of wealth ; and more especially the ra- 
 rious forms assumed by industry and economy when 
 these are most productively employed. Besides 
 industry, the workman, in order to fabricate any. 
 thing valuable, must have materials, tools, knowl. 
 edge, temporary subsistence, &c. When fabrica- 
 ted, the article may require to be transported to 
 a distant market, and to be left for a time in care 
 of some one in order to be sold ; as, when sold, the 
 proceeds may need to be exchanged for other ar- 
 ticles more desired by the artificer, or to be placed 
 in deposite for safe-keeping. So, again, the artifi- 
 cer may be sick, and require medical aid to enable 
 him to resume his labours ; or his legal rights may 
 be invaded, and he may need the professional ser- 
 vices of an attorney to protect him from oppression 
 or loss. 
 
 It is obvious, then, that he is dependant for much 
 of his efficiency as a producer on the co-operation 
 of others. Of these, some furnish him with ma- 
 terials and food (or money to purchase them), the 
 results of previous labour, which have been saved 
 by economy, i. e., by abstinence from present grati- 
 fication. Others contribute kinds of labour differ- 
 ent from his own, but without which his own would 
 have been in no demand, or would have been com- 
 paratively unproductive. Thus, for example, the 
 bread which we eat is not the produce of the ba- 
 ker's industry merely, nor of the miller's, nor of 
 the farmer's, but of all these combined ; and not 
 only combined, but in the case of each one aided 
 and enforced by capital. Neither one of these 
 could have supplied bread where it is wanted by 
 
PRELIMINARY CHAPTER. 17 
 
 the city consumer, of the right quantity and qual. 
 ity, and at precisely the right time, unless he had 
 been aided by all the rest ; nor could all of them 
 together have done it, unless each in his proper 
 sphere had been supplied with the accumulated 
 results of previous labour in the form of capital. 
 
 We are thus brought to the one great and indis- 
 pensable condition of all efficient production in so- 
 ciety, viz., CO-OPERATION involving division of la- 
 bour, exchange, and capital. 1. There must be la- 
 bour, but that labour, in order to be made skilful 
 and more productive, must be so distributed that 
 each one shall be able, by devoting himself to 
 a single employment, to acquire facility. 2. To 
 render such distribution possible, there must be 
 mutual exchanges of the surplus remaining to each 
 labourer after his own wants have been supplied. 
 3. To enable this skilled and distributed labour to 
 apply itself continuously and in the most efficient 
 manner, it must avail itself of the stores which 
 have been laid up by a provident economy, i. e., 
 of capital. 
 
 It will be perceived, then, that a commodity, 
 when at length it reaches the consumer, owes its 
 value to several species of labour, each of which 
 alike has been applied to it, and to each of 
 which, therefore, remuneration is due ; and also 
 to capital, for the use and risking of which the 
 owner, no less evidently, is entitled to profit. Un- 
 der whatever form labour is exerted, whether by 
 the husbandman in furnishing the raw material, or 
 by the mechanic in so transforming that material 
 as to adapt it to our use, or by the merchant in 
 transporting, preserving, and selling it, or by the 
 B 2 
 
18 PRELIMINARY CHAPTER. 
 
 physician in taking charge meanwhile of the la- 
 bourer's health, or by the attorney and magistrate 
 in securing to him the protection of law, or by the 
 teacher in augmenting his knowledge or the knowl- 
 edge of his children ; in whichever of these forms 
 industry is applied, it is evident that the agent is a 
 productive member of society, and, as such, may 
 claim his rightful share of respect and reward. 
 Not less is he a productive agent, who, by self-de- 
 nial, forecast, or activity, provides capital, that 
 "giant labourer," without which the arm of the 
 husbandman or artisan would be all but powerless. 
 These are truths, which, when thus stated, cannot 
 but appear almost self-evident. In practice, how- 
 ever, they are frequently overlooked. One class of 
 labourers rails at another, as if its members alone 
 were producers of wealth, and the rest but drones 
 in the social hive. The capitalist expatiates upon 
 the power and useful agency of capital until he for- 
 gets that it would be worthless unless wielded by 
 the steady hand of industry ; the industrious, in 
 their turn, speak of the capitalist as a bloated rep- 
 tile, who fattens at their expense, and yields back 
 nothing to sustain or enrich society. These prej- 
 udices, vulgar as they may appear, have controlled 
 not a little of the legislation of the world, and are 
 at this moment active in our own country. The 
 relative rights of capital and labour, and of differ- 
 ent kinds of labour as compared with each other, 
 is the question lying at the foundation, not only of 
 ancient and imbittered controversies in England, 
 and of strikes and Trades Unions in America, but 
 of discussions now much more rife. Happily, 
 however, with us, capital and labour are so gener- 
 
PRELIMINARY CHAPTER. 19 
 
 ally held and applied by the same person, that error 
 on such subjects is less prevalent, and, where prev- 
 alent, is less pernicious than it is abroad. Yet 
 even here it still broods over many minds, and is 
 entirely dispelled from, 1 had almost said, none. 
 We argue, then, in behalf of the study of Political 
 Economy among the people, because we believe it 
 will impress those of different pursuits with a deep- 
 er sense of their relative rights and respective 
 usefulness, inspiring them with feelings of stronger 
 cordiality, and with a greater disposition to co-op- 
 erate in promoting their own and the general weal. 
 
 III. Instruction in Political Economy will serve, 
 again, to enforce and recommend the all-important 
 truth, that the productive power of both labour and 
 capital may be vastly increased. If property is a 
 blessing, it becomes alike the interest and duty of 
 every one to augment it, by giving to the instru- 
 ments of production the utmost efficiency. Now 
 Political Economy proposes to teach how this may 
 be done : 1st. By knowledge, i. e., by such an ac- 
 quaintance with the laws of nature and the state of 
 the world as enables both workman and capitalist 
 to choose the shortest and most certain road to 
 their objects. Bleaching cloth, which was former- 
 ly the work of months, is now, by the aid of chym- 
 ical science, performed in a few hours. The na- 
 tives of South America spent (Ulloa tells us) even 
 years in weaving, without machinery, a piece of 
 cloth which a workman, aided only by a hand-loom, 
 would produce now in a few days. Enable the 
 same workman to substitute the power of steam or 
 water for his own strength, and you add, again, a 
 
20 PRELIMINARY CHAPTER. 
 
 hundred, and, in some instances, a thousand fold to 
 his productive capacity. With the self-acting mule, 
 one girl, in spinning cotton, will do the work of 
 from eight to twelve hundred. These, of course, 
 are but specimens of the advantage which results 
 from coupling science with labour and capital : an 
 advantage which is experienced in every depart- 
 ment of the arts, and which seems to admit of al- 
 most unlimited extension. 
 
 2dly. Political Economy also shows how the 
 productive power of labour, and even of capital, 
 may be increased ly the moral and intellectual cul- 
 ture of the labourer, i. e., by raising his character. 
 It must be admitted, however, that this truth has 
 not usually held that prominent place in the science 
 to which it is entitled. By scientific writers, as 
 well as by manufacturers and capitalists, it seems 
 to have been too often assumed, that the progress- 
 ive degradation of the operative must be the inev 
 itable result of the triumphs of modern industry,* 
 and that education could do little except for the 
 employer. To this melancholy conviction they 
 have seemed too ready to resign themselves, not 
 
 * The views of Smith and other writers in respect to the ten- 
 dency of the division of labour to deaden the faculties and circum- 
 scribe the intelligence of the operative, may be taken as an ex- 
 ample. They seem to have overlooked the fact that this tenden- 
 cy might be more than counteracted by the intimate intercourse 
 and associations among workmen induced by such division ; by 
 a view of the new and wonderful improvements in machinery, 
 &c., which are constantly forced upon their attention, and which 
 are the result of knowledge, and by the habits of readiness and 
 activity which are cultivated in large manufactories. It may be 
 added, that the very monotony of employment occasioned by 
 such division not only facilitates, but is likely to constrain the 
 application of the mind to other subjects on which it can expend 
 its surplus activity. 
 
PRELIMINARY CHAPTER. 21 
 
 considering that such triumphs, however splendid, 
 might be purchased at too dear a rate, and that 
 the wheels of modern enterprise had better roll 
 back, than advance only to crush beneath their 
 ruthless weight the hopes of so large a proportion 
 of mankind. But we cannot believe that there is 
 any such dire alternative. It seems like an im- 
 peachment not only of the goodness, but of the wis- 
 dom of God, to suppose that he can have connected 
 the ultimate and highest achievements of industry 
 with the deterioration of the industrious classes ; 
 to suppose that men who have become besotted by 
 vice and enslaved by ignorance are to be employed 
 as the most efficient instruments of production. 
 That in some countries the arts may have im- 
 proved and wealth been accumulating while the 
 labourer has , appeared to degenerate, we do not 
 deny. But we hold it to be equally clear that such 
 was not the purpose of Providence, and that, by 
 this very circumstance, the increase of wealth has 
 been greatly retarded. The power of every indi- 
 vidual as a producer will be augmented in exact 
 proportion to his intelligence and virtue. By in- 
 creased intelligence he is able not only to perform 
 his allotted task better, but to suggest improve- 
 ments ; and by increased virtue he becomes at 
 once more useful to society in educating his chil- 
 dren, husbanding his property, &c., and more val- 
 uable in his employment, inasmuch as he is more 
 worthy of confidence. No one can have visited 
 those of our manufacturing villages which have 
 been brought under the combined influence of good 
 schools, temperance societies, and churches, with- 
 out being amazed at the consequent increase, not 
 
22 PRELIMINARY CHAPTER. 
 
 only of comfort, but also of productive energy. 
 Instead of the vice, idleness, and squalid poverty 
 which other countries may have taught us to asso- 
 ciate with manufacturing industry, we find that in 
 such villages, as elsewhere, order, competence, and 
 comfort are the invariable result of a proper sys- 
 tem of culture, and that the value of a workman's 
 services to his employer always rises in a ratio 
 with his own moral and intellectual elevation. In- 
 deed, the whole history of New-England, rich at 
 first in nothing but the intelligence and virtue of 
 its people, and yet always pre-eminent for its pro- 
 ductive power, is full of instruction on this subject. 
 That history teaches that FREEDOM, EDUCATION, and 
 MORAL WORTH constitute with every people the 
 grand elements of material prosperity no less than 
 of social and individual welfare. 
 
 3d. Instruction in Political Economy will teach 
 us farther how to increase production, by teaching 
 us to distinguish between a true and a false economy. 
 There was a time when men thought that, in order 
 to become rich, they must hoard their property. 
 We now begin to understand that, if we would 
 have it accumulate most rapidly, we must keep it 
 employed. Still, the true uses of capital -the im- 
 portance, on the one hand, of having it actively 
 employed, and yet the advantage, on the other, of 
 many investments which yield but a slow return 
 the immense difference to the community, as well 
 as to ourselves, between productive and unproduc- 
 tive expenditure all these and many other kindred 
 subjects are still but imperfectly understood, and, 
 even when understood, are not always reduced to 
 practice. On the one hand there is much of that 
 
PRELIMINARY CHAPTER. 23 
 
 penurious expenditure, by both individuals and 
 states, which has been described as " penny wise 
 and pound foolish," and on the other there has been 
 great and almost unlimited profusion in regard to 
 objects which could yield no equivalent of pleasure 
 to the individual, or of benefit to the community. 
 One man allows his property to lie unproductive, 
 because he dreads an outlay which will be sure, 
 however, in a few years, to repay him liberal- 
 ly; while another invests in a splendid mansion 
 or in sumptuous furniture capital which he needs 
 for his business. Even the same man may be 
 seen one day mourning over the prodigality with 
 which money is lavished on railroads or canals, 
 and the next day encouraging his wife or daughter 
 to pay $50 for a pocket-handkerchief or $1000 
 for a necklace. We are far from denouncing the 
 luxuries of life ; but we cannot but entertain more 
 respect for him who, after providing handsomely 
 for the wants of his family, employs his remaining 
 income in permanent improvements on his estate, 
 in reclaiming unoccupied or regenerating exhaust- 
 ed soils, in erecting useful buildings, than for him 
 who expends the same amount on grand dinners, 
 fine houses, or masquerade balls. In a country 
 where there is " ample room and verge enough" 
 for the productive employment of capital, and 
 where, too, there are such noble objects of public 
 utility to which we may apply our surplus gains, 
 one cannot but lament the precocious extravagance 
 with which such gains are often wasted. Let him 
 who has five hundred dollars to spend, and who is 
 tempted to such extravagance, but reflect upon the 
 different results which would be likely to follow 
 
24 PRELIMINARY CHAPTER. 
 
 were it devoted to the intellectual culture, or to 
 the religious and moral instruction of his country, 
 men or of the world. 
 
 4th. Another means of increasing the productive 
 power of both labour and capital is to transfer to 
 useful employments the vast amounts of loth which 
 are now misdirected, being employed in fabricating 
 useless or pernicious commodities. Experience has 
 taught, for instance, that the use of intoxicating 
 substances as beverage or refreshment is never ad- 
 vantageous, and almost invariably hurtful ; that it 
 tends insidiously to excess, and that, through such 
 excess, a fearful and almost incalculable amount of 
 property, as well as of life and happiness, is annu- 
 ally sacrificed. It is too evident for argument, 
 that, while these substances, when thus employed, 
 do, according to the most eminent physicians, no 
 good, they, on the other hand, are, in cases almost 
 innumerable, disabling the labourer, absorbing a 
 large proportion of his gains, and debasing him in 
 his character. In what light, then, must Political 
 Economy regard the application of capital and 
 labour to the manufacture of such substances for 
 such a use : a manufacture which destroys no small 
 part of our bread-stuffs, occupies many thousand 
 hands, diverts from useful employments an im- 
 mense amount of capital, and which can flourish 
 only by spreading abroad poverty, wretchedness, 
 disease, and death? To be able to answer this 
 question, we have simply to consider what effect 
 would follow were this vast amount of capital and 
 enterprise transferred in a single day to the culti. 
 vation of the soil, and the fabrication of useful 
 and elegant commodities ; were those instruments, 
 
PRELIMINARY CHAPTER. 25 
 
 which are now productive only of evil, transformed 
 at once, as if by enchantment, into the beneficent 
 ministers of humanity and civilization ! The les- 
 sons of Public Economy are here, as everywhere 
 else, in unison with the voice of morality. This 
 science protests against distilling and brewing on 
 the same principle as it protests against gambling 
 and war. With the relative innocence of these 
 pursuits it has no concern. Its only appropriate 
 province is to point out their relative influence on 
 production, and, considered in this respect, they ev- 
 idently belong to the same class, and must incur 
 the same condemnation. 
 
 I have thus specified three principal ways in 
 which the study of Political Economy would be 
 likely to be useful. It may not be improper to 
 add here, that there is much in our own age, and 
 especially in this country, which recommends this 
 study to peculiar favour. It is the age pre-emi- 
 nently of the people ; an age in which their welfare 
 and prosperity have become the great objects of 
 attention as well to the statesman as to the philan- 
 thropist. It is also an age of peace ; one in which 
 men have discovered that the game of war is ex- 
 pensive to both parties alike, and that the intelli- 
 gent application of a nation's powers to the useful 
 and liberal arts is the only true way to enduring 
 greatness. It is, in fine, an age of industry ; one 
 in which the true agency of property, as an ele- 
 ment in human improvement and civilization, is 
 beginning to be understood ; in which the influence 
 of the industrious classes is proportionably in- 
 creased, andjn which, of course, it becomes more 
 than ever important that that influence should be 
 C 
 
26 PRELIMINARY CHAPTER. 
 
 well directed. If this be true of the world at large, 
 it is yet more true of our people, who are nearly all 
 devoted to the work of production in some one of its 
 forms, and who are accustomed to measure every 
 enterprise and every question in no small degree 
 by its bearings on that work. In "such an age, and 
 especially in such a land, where many of the topics 
 discussed in works on Political Economy are per- 
 petually before the people, it seems doubly impor- 
 tant that they should be made familiar with great 
 fundamental truths, and not be occupied only with 
 details. It is important, too, that they should be 
 accustomed to efforts of comprehensive thought 
 and inquiry, and be taught to look in their own 
 plans beyond the present. Above all is it impor- 
 tant that they should be led to raise their minds 
 from the survey of mere production, to its uses in 
 advancing the dignity and welfare of man ; to read 
 those solemn moral lessons which this science ad- 
 dresses to the reflecting and conscientious ; to be- 
 hold that perfect harmony which the Creator has 
 established between his moral, intellectual, and eco- * 
 nomic laws, and thus to lay deeply to heart the 
 truth that virtue and self -improvement, as they con- 
 stitute the grand end of life, so are they means most 
 efficient for the attainment even of property. 
 
 IV. Hitherto I have spoken of the uses of Po- 
 litical Economy to individuals when engaged in 
 their private pursuits. It must be considered, 
 however, that in this country each one sustains re- 
 lations to the public and to the great work of le- 
 gislation which render his acquaintance with this 
 subject doubly desirable. Many of our laws are 
 
PRELIMINARY CHAPTER. 27 
 
 intended to bear favourably on the production and 
 distribution of wealth. That they often fail of 
 their object is but too evident, and it is hardly less 
 evident that this failure must be ascribed to the 
 want of large and enlightened views, not merely 
 in those who frame laws, but yet more, perhaps, in 
 those who, by their votes, determine the selection, 
 or by their influence direct the policy of legisla- 
 tors. We are far from supposing that every per- 
 son can be made to comprehend thoroughly all the 
 intricate questions which this science presents. 
 Not a few of them, as we well know, are encum- 
 bered with insuperable difficulties even to the clear- 
 est and most sagacious minds. Still it might be 
 well if the people were so far instructed, even with 
 regard to such questions, that they could appreciate, 
 at least to some extent, the magnitude of these dif- 
 ficulties. It would dispose them to be more toler- 
 ant towards those entertaining different opinions ; 
 and, above all, it would teach them the necessity 
 of greater caution before they venture on sudden 
 or material changes in public law or policy. No- 
 thing, probably, has contributed more to bring this 
 study into disrepute, than the rash and inconsiderate 
 manner in which some of its principles have been 
 applied to legislation. A few sweeping and com- 
 prehensive maxims, that have passed from the wri- 
 tings of Smith into vulgar currency, are seized 
 upon, and, without regard to the nice limitations 
 under which they were originally put forth and 
 must always be employed, they are applied to ev- 
 ery case, however peculiar or critical. " Nothing 
 is more adverse to the tranquillity of a statesman," 
 says the author of an eloge on the administration 
 
28 PRELIMINARY CHAPTER. 
 
 of Colbert, " than a spirit of moderation ; because 
 it condemns him to perpetual observation, shows 
 him every moment the insufficiency of his wisdom, 
 and leaves him the melancholy sense of his own 
 imperfection ; while, under the shelter of a few 
 general principles, a systematical politician enjoys 
 a perpetual calm. By the help of one alone, that 
 of a perfect liberty of trade, he would govern the 
 world, and would leave human affairs to arrange 
 themselves at pleasure, under the operations of the 
 prejudices and self-interests of individuals. If these 
 run counter to each other, he gives himself no anx- 
 iety about the consequence ; he insists that the re- 
 sult cannot be judged of till after a century or two 
 shall have elapsed. If his contemporaries, in con- 
 sequence of the disorder into which he has thrown 
 public affairs, are scrupulous about submitting quiet- 
 ly to the experiment, he accuses them of impa- 
 tience. They alone, and not he, are to blame for 
 what they have suffered ; and the principle con- 
 tinues to be inculcated with the same zeal and the 
 same confidence as before." 
 
 The student of Political Economy cannot be too 
 often reminded, that the principles laid down in 
 books, however true in the- abstract, rarely admit 
 of immediate and unqualified application to public 
 affairs. By the great masters of the science they 
 are usually stated with some reserve, and as rep- 
 resenting the ultimate rather than the immediate 
 objects at which governments ought to aim. " It 
 must," says Mr. Hume, " be advantageous in all 
 cases to know what is most perfect in the kind, 
 that we may be able to bring any real constitution 
 or form of government as near it as possible, by 
 
PRELIMINARY CHAPTER. 29 
 
 such gentle alterations and innovations as may not 
 give too great disturbance to society." The great 
 error of theorists is, that they do not appreciate 
 the impediments which must always oppose the 
 practical adoption of any new system, and they 
 are therefore impatient of "gentle alterations" 
 They do not consider that a vicious system may 
 " not only introduce," to use the language of Smith, 
 " very dangerous disorders into the state of the 
 body politic, but disorders which it is often difficult 
 to remedy, without occasioning, for a time at least, 
 still greater disorders :" that "the man whose pub. 
 lie spirit is prompted altogether by humanity and 
 benevolence will," to borrow again from the same 
 high authority, " respect the established powers and 
 privileges even of individuals, and still more of 
 societies, though he should consider them as in 
 some measure abusive. When he cannot conquer 
 the rooted prejudices of the people by reason and 
 persuasion, he will accommodate, as well as he can, 
 his public arrangements to them. If he cannot 
 establish the right, he will not disdain to amelio- 
 rate the wrong ; but, like Solon, when he cannot 
 establish the best system of laws, he will endeav- 
 our to establish the best that the people can bear." 
 It is much to be regretted that the writings of po- 
 litical economists have not contained more of this 
 kind of counsel. Principles are too frequently 
 stated without the necessary qualification, and as 
 if they were fitted for immediate and universal 
 adoption. It seems to have been almost forgotten, 
 too, that the first and safest place for applying 
 these principles is in private life ; and by drawing 
 illustrations only from subjects of a public or na- 
 C 2 
 
30 PRELIMINARY CHAPTER. 
 
 tional character, the erroneous impression has been 
 conveyed, that in respect to these alone could the 
 science assist us. 
 
 I cannot close this subject without adverting to 
 an error, the opposite of that which has just been 
 noticed. If some persons are too much addicted 
 to mere speculation, there are others who seem to 
 be deeply infected with a dread of all theories, and, 
 indeed, of all attempts at scientific inquiry. That 
 a theory may be framed without proper regard to 
 all the facts, is true ; and equally true is it that the 
 disciple of such a theory may blind himself to oc- 
 currences which ought to have corrected his views, 
 and may thus fail to profit by experience. But is 
 it not also true, that they who boast of being prac. 
 tical men are often partial in their observations 
 and inconclusive in their reasoning ? They are, 
 in truth, no less theorists than those against whom 
 they object. No general opinions can be formed 
 or expressed, in relation to trade and industry, 
 without theorizing onYacts ; and, since these facts 
 are of constant recurrence, hardly a day can pass 
 or a conversation be held that we do not pronounce 
 some judgment which is, in substance, a theory in 
 political economy. So with books. Every trav- 
 eller, who, in recording his notices of a foreign 
 land, speculates upon the causes or tendencies of 
 facts ; every historian, who attempts to trace the 
 progressive steps by which nations have risen or 
 declined ; and even every poet, who, like Goldsmith, 
 muses over the ruins of a *' Deserted Village," or 
 touches in any way on the vicissitudes of the body 
 politic, is engaged in theorizing ; and, if he does it 
 ignorantly and rashly, his speculations may con- 
 
PRELIMINARY CHAPTER. 31 
 
 tribute more to diffuse errors in political economy 
 than the most formidable quartos of a Malthus. 
 They, then, who claim to be practical merely be- 
 cause they disregard books and science, are but 
 theorists who reason crudely from an insufficient 
 number of cases ; whereas the truly practical man 
 is one who would enlarge his own experience and 
 reflections by the accumulated wisdom of the 
 world ; who, having gathered principles from books, 
 and modified them by his own observation, stands 
 ready still farther to correct and modify them, as 
 the progress of events or the enlargement of his 
 own views shall require. He knows that many 
 of his opinions are at best but approximations to 
 truth ; and that, instead of dismissing all farther 
 inquiry, it becomes him to lose no opportunity of 
 rectifying his data, and of subjecting his reason- 
 ings to new and severer tests. 
 
 III. HISTORY OF POLITICAL ECONOMY. 
 
 This science is of recent origin. Its principles 
 can hardly be said to have formed a distinct subject 
 of inquiry until within the last two centuries.* 
 The respective parts taken in this inquiry by 
 France and Italy on one side, and by England and 
 America on the other, may serve as an apt illus- 
 tration of the great difference which marks the in- 
 tellectual character and habits of these nations. 
 The two former had the merit of first proposing 
 
 * The labours of Aristotle form, perhaps, the only exception. 
 In his work on Politics (Book I.), as well as his Ethics (Book 
 V.), he has anticipated several of the most important doctrines 
 of modern economists. This is especially the case with the sub- 
 ject of money, the proper agency of labour in production, and the 
 importance of freedom to trade and industry. 
 
32 PRELIMINARY CHAPTER. 
 
 theories on the subject, and of giving them a scien- 
 tific form. The latter were distinguished for the 
 able discussion of particular questions, and for the 
 early adoption of improved systems of national 
 economy. The writers of the former were little 
 conversant in practice with affairs of state; but 
 addicted, both by taste and habit, to speculation, 
 they drew out their views in formal propositions, 
 and held these propositions forth as the subjects of 
 a free, but not always sufficiently cautious. or com- 
 prehensive discussion. Those who, in the two lat- 
 ter countries, took up their pens, were for the most 
 part either merchants or legislators, and were ac- 
 customed to consider only such questions as were 
 of immediate concern, and in regard to which they 
 were called to act as .well as think. It required a 
 mind like that of Adam Smith, combining the spirit 
 of both schools, to give at once sufficient scope, 
 and yet sufficient moderation to the study, and to 
 impart to its conclusions an authority which would 
 command regard alike from the scholar and the 
 statesman. Living in a commercial town, intimate 
 with its merchants, and wont, like all his country- 
 men, to discuss freely all public questions, while, on 
 the other hand, he was withdrawn, by his pursuits 
 from the strife of faction, and accustomed to large 
 and comprehensive views of truth, he was pre-em- 
 inently fitted for the great work of prosecuting an 
 Inquiry into the Nature and Causes of the Wealth 
 of Nations. That work he performed, in a man- 
 ner which entitled him, in the estimation of Sir 
 James M'Intosh, to a place beside Grotius, Mon- 
 tesquieu, and Locke. Says that judicious and able 
 writer, " The Treatise on the Law of War and 
 
PRELIMINARY CHAPTER. 33 
 
 Peace, the Essay on the Human Understanding, 
 The Spirit of Laws, and the Inquiry into the 
 Causes of the Wealth of Nations, are the works 
 which have most directly influenced the opinion of 
 Europe during the last two centuries. They are 
 also the most conspicuous landmarks in the scien- 
 ces to which they belong." 
 
 Thus the history of Political Economy naturally 
 resolves itself into two periods ; one preceding and 
 the other following the publication of the " Wealth 
 of Nations." During the former, two theories had 
 possession successively of the mind of Europe : 
 the first, called the mercantile ; the second, the ag- 
 ricultural, physiocratical, or economical system. 
 
 According to the first of these theories, wealth 
 was derived principally from trade, the great ob- 
 ject being to secure what was termed a favourable 
 balance, i. e., a balance of exports over imports, 
 which was to be paid in gold and silver. This 
 theory seems to have had its rise, partly in the be- 
 lief then prevalent throughout the world, that all 
 wealth was to be measured by the quantity of the 
 precious metals actually in possession, and partly in 
 the desire which the inhabitants of cities (i. e., mer- 
 chants and manufacturers) had to secure to them- 
 selves a monopoly of trade against foreigners. In 
 order to keep the balance in favour of the nation, or, 
 in other words, to produce a constant influx of specie 
 and bullion, importation was discouraged and expor- 
 tations stimulated. According to Mr. M'Culloch, 
 Melon and Farbonnais in France, Genovesi in It- 
 aly, Mun, Sir Josiah Child, Dr. Davenant, the au- 
 thors of the British Merchant, and Sir James Stu- 
 art in England, were the ablest writers who es. 
 
34 PRELIMINARY CHAPTER. 
 
 paused, some with more and some with fewer 
 exceptions, the leading principles of the Mercan- 
 tile System. 
 
 The Agricultural or Economical System was the 
 fruit of a natural reaction. The importance of ag- 
 riculture having been underrated in the Mercantile 
 System, it was but natural, when the error was 
 discovered, that writers should verge to the oppo- 
 site extreme. Hence Quesnay, the founder of this 
 school, and, indeed, the first modern writer who 
 seems to have investigated and analyzed the sources 
 of wealth with the intention of ascertaining the fun- 
 damental principles of Political Economy, main- 
 tained that agriculture was the only species of in- 
 dustry which contributed to increase the riches of a 
 nation. He was a physician attached to the court 
 of Louis XV. Having been educated in the coun- 
 try, he was inclined to regard agriculture with more 
 than ordinary partiality ; a partiality which, in his 
 case, was stimulated by seeing its depressed state at 
 that time in France, as well as the evils induced by 
 commercial extravagance. In regard to mercan- 
 tile and manufacturing industry, he contended that 
 all the value they added to the raw material on 
 which they operated was but just equivalent to the 
 stock and capital consumed by them in the course 
 of such operation. Hence they were regarded as 
 unproductive employments ; and the Economists 
 (as this school were usually termed) may be Re- 
 garded as the legitimate precursors of those who 
 in our own age are so prone to stigmatize as ww- 
 productive all kinds of industry except their own. 
 It must be admitted, however, that the Economist 
 went farther than the orator of the Trades' Union. 
 
PRELIMINARY CHAPTER. 35 
 
 The latter is willing to recognise any form of la- 
 bour as productive, provided only that it be manual 
 labour, and that the employer does not apply it. 
 Instead of regarding (with Sully, the great minis- 
 ter) both " Commerce and Agriculture as teats of 
 the state," they held that the latter alone was the 
 source of wealth, and, that it might x be fostered, 
 there must be unlimited freedom of industry. 
 Laisses faire et laisses passer* (i. e., let every one 
 do as he pleases, and everything take its course) 
 was their motto. They reasoned as many now 
 reason ; " since the public interest consists in the 
 union of all individual interests, individual interest 
 will guide each man more surely to the public in- 
 terest than any government can do." They over- 
 looked the obvious but much-neglected truth, that 
 an individual may find it his interest to prose- 
 cute some business which tends to impoverish the 
 community ; and, farther, that the proposition that 
 his own judgment is the best and only guide he can 
 have in consulting his private interest, is a propo- 
 sition which needs to be received with some limit- 
 ation. The leading doctrines of the Economists 
 became universal in France, and obtained no little 
 authority in England. Next to Quesnay, Dupont 
 de Nemours, Turgot, Condorcet, and Raynal may 
 be regarded as their ablest expounders ; and, with 
 all their errors, there can be no doubt that these 
 writers did much to promote a thorough and accu- 
 rate analysis of the sources of wealth, and of the 
 laws which regulate its production and distribution. 
 The narrow views which were taken by this sys- 
 
 * The reply made by the French merchants vwhen asked by 
 Colbert what he, as minister, could do to serve them. 
 
36 PRELIMINARY CHAPTER. 
 
 tern of the nature and functions of labour, could 
 not but strike many minds. For Adam Smith, 
 however, long a professor of moral philosophy in 
 the University of Glasgow, and afterward a resi- 
 dent for several years on the Continent, where he 
 was a close observer of public affairs as well as of 
 philosophical theories for him it was reserved, 
 not only to demonstrate this pervading fallacy 
 of the Economists, but to substitute in its place a 
 new and more complete system. To him belongs 
 the honour of having first assigned to labour its 
 true place as the primitive source of all wealth. 
 He abolished the imaginary distinction between 
 agricultural and other kinds of industry, and show- 
 ed that, when employed in commerce or manufac- 
 tures, labour is not less productive of utility than 
 when employed in husbandry. He unfolded, in a 
 clear and beautiful manner, the means by which 
 labour is rendered more effective ; and his disser- 
 tations on the division of labour, on the use of 
 machinery and the functions of capital, have rare- 
 ly, if ever, been surpassed. The prevailing error 
 that wealth consisted in an abundance of gold and 
 silver, he may be said to have finally dispelled ; 
 and his attack upon the multitudinous and most 
 vexatious restraints which at that time fettered 
 the internal as well as external trade of every 
 country in Europe, was so masterly and over- 
 whelming, that it may be ranked among the most 
 powerful of the causes which have contributed to 
 their abolition. 
 
 So great a change, however, has since taken 
 place in the political condition of the world, that 
 much of this great treatise is already obsolete. It 
 
PRELIMINARY CHAPTER. 37 
 
 must be admitted, too, that it is by no means free 
 from error ; that more than one of its fundamental 
 propositions is questionable ; that the spirit which 
 pervades it is too utilitarian ; and that, if applied 
 to legislation in this age, and especially in this 
 country, its principles would not always be found 
 safe, much less salutary. Considered, too, as a 
 work of art, it is by no means perfect. The ar- 
 rangement has been often censured as perplexed 
 and illogical ;* the digressions are numerous, and* 
 
 * Since writing this passage I have met, not without sur- 
 prise, with the following passage in an " Account of the Life 
 and Writings of. Adam Smith," prepared by the late Dugald 
 Stewart, and read before the Royal Society of Edinburgh ia 
 1793. " It may be doubted," says Professor Stewart, " with 
 respect to Mr. Smith's ' Inquiry,' if there exists any book beyond 
 the circle of the mathematical and physical sciences which is at once 
 so agreeable in its arrangement to the rules of sound logic, and so ac- 
 cessible to the examination of ordinary readers. Abstracting 
 entirely from the author's peculiar and original speculations, I 
 do not know that, upon any subject whatever, a work has been 
 produced in our time containing so methodical, so comprehen- 
 sive, and so judicious a digest of all the most profound and en- 
 lightened philosophy of the age." He remarks, in another pas- 
 sage, that no one had " approached Mr. Smith in the precision 
 and perspicuity with which he had stated" the doctrines of free 
 trade, " or in the scientific and luminous manner in which he 
 had deduced it from elementary principles." Accustomed to 
 regard the opinions of Mr. Stewart with great deference, I 
 might be tempted to retract the criticism on which J have ven- 
 tured in the text, did I not find that, in addition to the authority 
 of Sir James M'Intosh, which I have subsequently mentioned* 
 I am sustained by the authority of almost every editor or critic 
 of the work. Mr. M'Culloch, in his late edition, speaks of the 
 " perplexed and illogical arrangement" of the " Wealth of Na- 
 tions" as a great defect, and the writer of a critical notice of 
 that edition, in a recent number of the Edinburgh Review, adds 
 to this complaint that " his" (Smith's) " wanderings are so very 
 extensive, his involutions of digression within digression so 
 very complex, that it is next to impossible to read his work in 
 any other way than as a series of slightly-connected essays on 
 a variety of interesting subjects ! !" The conviction of this has 
 
 D 
 
38 PRELIMINARY CHAPTER. 
 
 in many instances, long ; and the exposition of pri- 
 ciples not always sufficiently precise. Yet the 
 style is so clear and attractive ; the illustrations 
 so rich and pointed ; the very absence of arrange- 
 ment, and the desultory mode of discussion, render 
 it so agreeable to the majority of readers, and the 
 range of information displayed is so vast, that no 
 work on this subject is likely soon to supersede it. 
 " Its very faults," to borrow again the language of 
 Sir James M'Intosh> " have, perhaps, contributed 
 in some degree to its specific usefulness ; and, by 
 rendering its contents more accessible to the ma- 
 
 led an able French writer (M. Gamier) to prepare what he terms 
 a " Method of facilitating the study of Dr. Smith's work, "which 
 is, in truth, nothing less than an entire rearrangement of the va- 
 rious topics discussed. The reason assigned for preparing this 
 "Method" is, that " the Wealth of Nations exhibits a striking in- 
 stance of that defect for which English authors have so often 
 bsen blamed, viz., a want of method, and a neglect in their sci- 
 entific works of those divisions and arrangements which serve 
 to assist the memory of the reader and to guide his understand- 
 ing. The author," continues M. Gamier, ** seems to have seiz- 
 ed the pen at the moment when he was most elevated with the 
 importance of his subject and with the extent of his discoveries. 
 He begins by displaying before the eyes of his readers the in- 
 numerable wonders effected by the division of labour ; and with 
 this magnificent and impressive picture he opens his course of 
 instructions. He then goes back to consider those circumstan- 
 ces which give rise to, or limit this division ; and is led by his 
 subject to the definition of values, to the laws which regulate 
 them, to the analysis of their several elements, and to the rela- 
 tions subsisting between those of different natures and origin : 
 all of which are preliminary ideas, which ought naturally to 
 have been explained to the reader before exhibiting to him the 
 complicated instrument of the multiplication of wealth, or un- 
 veiling the prodigies of the most powerful of its resources. On 
 the other hand, he has often introduced long digressions, which 
 interrupt the thread of his discussion, and in many cases com- 
 pletely destroy the connexion of its several parts." See Smith's 
 
 Wealth of Nations, with a Commentary by the Author of " Eng- 
 land and America" vol. i., p. ' 
 
 . 123, London, 1835. 
 
PRELIMINARY CHAPTER. 39 
 
 jority of readers, have more completely blended its 
 principles with the common opinion of mankind," 
 
 Since the time of Smith several eminent writers 
 have appeared, among whom are Ricardo, Mal- 
 thus, M'Culloch, and Senior in Great Britain, Say, 
 Gamier, and Sismondi in France, and Sartorius 
 and Storch in Germany. Ricardo is thought by 
 many to have thrown much new light on the theo- 
 ry of Rent, and on the reciprocal influence of Wages 
 and Profits. Malthus, though the author of several 
 new doctrines, is principally known by his Princi- 
 ple of Population, according to which it would ap- 
 pear that population tends to increase in a ratio 
 much more rapid than capital or the means of sub- 
 sistence ; and hence that its growth, if left to itself, 
 must ultimately plunge multitudes into want and 
 starvation. M'Culloch and Senior are distinguish- 
 ed rather for clear and impressive expositions of 
 existing doctrines than for originality. This is 
 also the chief merit of Say and Gamier, who, with 
 Storch, may be regarded as the most enlightened 
 followers of Smith on the Continent. Sismondi, 
 an able and acute writer, is opposed to the views 
 of Ricardo in relation to Rent, to the theory of Mai. 
 thus in regard to Population, and generally to what 
 are termed the doctrines of Free Trade. It is a 
 subject of much doubt whether the discoveries 
 which are alleged to have been made by some of 
 these writers are entitled to that name. 
 
 It would be improper to close this brief historical 
 sketch without adverting to the labours in this de- 
 partment of science of our own countrymen. The 
 love of freedom, and the spirit of bold and restless 
 enterprise which characterized the early settlers, 
 
40 PRELIMINARY CHAPTER. 
 
 rendered them impatient of the restrictions which 
 were then imposed on the trade and industry of the 
 colonists ; and hence it was that they were ripe 
 for the practical adoption of many new and impor- 
 tant principles before they were even discovered in 
 Europe. Nothing in our history is more remark- 
 able than the clearness and force with which such 
 principles were wont to be put forth in their ad- 
 dresses to the throne, in occasional pamphlets, and 
 in petitions for the redress of grievances. It would 
 seem as if the migration of well-trained and educa- 
 ted minds to a wilderness world, and the experience 
 afforded by a position so entirely new, were among 
 the necessary means of emancipating mankind 
 from many of the errors which for ages had rested 
 like a spell on legislation.' Among the writers of 
 pamphlets and occasional essays, Franklin, of 
 course, stands pre-eminent. In his views respecting 
 freedom of trade, the mutual benefits conferred by 
 commercial exchanges on both parties, and the 
 folly of attempting to force a favourable balance by 
 prohibiting the exportation of gold and silver, as 
 well as in his opinions respecting the tendency of 
 English corn and poor laws, and the influence of 
 the South American mines on money prices and on 
 the value of the precious metals on these as well 
 as on other subjects, he clearly anticipates the 
 doctrines of Smith, and shows how much the public 
 mind on this continent was, in regard to such ques- 
 tions, in advance of that of England.* After the 
 
 * Many of the Essays of Franklin were written more thai* 
 twenty years before the publication of the Wealth of Nations j. 
 and it is also said, on what authority we have not seen, that* 
 while preparing this great work* Mr. Smith was in 
 tion with Dr. Franklin, 
 
PRELIMINARY CHAPTER. 41 
 
 elose of the war of the revolution and the adoption 
 of the Constitution, vast service was rendered to 
 the science, as well as to the country, by the wri- 
 tings of Hamilton. His reports as secretary of 
 the treasury, on the Public Credit, on a National 
 Bank, and on Manufactures, were fraught with in- 
 struction adapted to the state of the country at that 
 time ; and there can be no doubt that they contrib- 
 uted most powerfully to the adoption of the policy 
 which has developed, with such wonder-working 
 rapidity, the resources of an infant but mighty 
 empire. 
 
 IV. PRESENT STATE OF THE SCIENCE. 
 
 v The progress which has been made by Political 
 Economy, as well as its present state, may be infer- 
 red from the opposite opinions expressed in regard 
 to it by writers of authority. By one class its 
 principles are represented to be so clear and in- 
 contestable, that they merit the name of " Political 
 Mathematics." By another it is said, that " per- 
 haps no study of the day which bears the name of 
 science presents more vague theory, grave, mys- 
 terious empiricism, dull prolixity, inconsequential 
 arguments, gratuitous assumptions; jejune discus- 
 sions, and elaborate triviality. There are (contin- 
 ues a writer) many useful truths which pass under 
 the name of Political Economy ; but a large pro- 
 portion of the treatises, from that of Adam Smith 
 downward, seem to bear the same relation to an in- 
 telligible practical development of the causes and 
 phenomena of national growth, wealth, and decline, 
 jthat alchymy does to modern chymistry."* Mr. 
 * See Encyclopedia Americana, art. Political Economy' 
 E2 
 
42 PRELIMINARY CHAPTER, 
 
 Senior, one of the most recent and highly respect* 
 ed authorities, speaking of several of its principles, 
 says that " they appear almost too plain for formal 
 statement," though he admits that out of England 
 they are not all embraced, and some of them not 
 even comprehended. On the other hand, M . Neck- 
 ar gives it as his judgment, that " the subjects it 
 involves are so run into one another, that people 
 pass and repass them over and over without ever 
 distinguishing their beginning or end." One able 
 writer* says, " In the far greater part of its doc- 
 trines there is nothing perplexing or obscure \' y 
 another, perhaps not less able,")* gives it as his 
 opinion that " the science is yet in its infancy. 
 If I may venture," adds he, "to call myself an / 
 economist, our alphabet is unformed and our knowl- 
 edge most imperfect." " The known principles of 
 the science leave unexplained some of its most 
 important phenomena." From these contradicto- 
 ry statements, what would be inferred by an un- 
 instructed but impartial reader? Would he not 
 conclude that the science in question was impor- 
 tant, but, as yet, by no means perfect ; that, while 
 some of its principles were doubtless cle'ar and 
 certain, admitting, too, of very useful applications, 
 others ought to be regarded as mere hypotheses ? 
 
 Such, we have no doubt, is the truth. No one, we 
 conceive, can be even modei-ately conversant with 
 the writings of Political Economists, without per- 
 ceiving that the terms which they employ are often 
 indefinite ; that some of their first principles are still 
 
 * Edinburgh Review, vol. xliii., p. 1, seq. 
 f Wakefield, see Preface to Smith's V^ealth of Nations, with 
 a commentary by the author of " England and America." 
 
PRELIMINARY CHAPTER. 43 
 
 matters of earnest debate ; and that doctrines bear- 
 ing the sanction of the most renowned names, and 
 considered at one time as unquestionable, are now 
 losing authority. Whoever will turn to an article 
 on Ambiguous Terms, prepared by Mr. Senior for 
 Whately's Logic, will see that, in his estimation, 
 even the most important terms appropriated by 
 this science are used not only in different senses 
 by different writers, but in vague and inconsistent 
 senses even by the same writer in different parts 
 of his work.* It is thus apparent that the first 
 condition of scientific accuracy, viz., precision in 
 the use of terms, is still unattained, and that the 
 attempt to raise Political Economy to a place be- 
 side mathematics is akin to that made in former 
 times to imbody, in the shape of algebraic formu- 
 lae, the great truths of moral science, j- We may be 
 allowed, perhaps, to express some surprise, that, 
 having thus frankly acknowledged the obscurity 
 which hangs over even the symbols employed in 
 economical reasoning, Mr. Senior should in other 
 places have claimed the merit of such rigorous ex- 
 actitude for its conclusions. 
 
 On the other hand, it deserves to be considered, 
 that the terms employed in a study may be indefi- 
 
 * Mr. Ricardo appears (says Mr. Senior) to set out by admit- 
 ting Adam Smith's definition of value in exchange. But in the 
 greater part of his "Principles of Political Economy" he uses 
 the word as synonymous with cost : and by this one ambiguity 
 has rendered his great work a long enigma. Whately's Logic, p. 311. 
 
 f The attempt here referred to was made by Dr. Francis 
 Hutcheson, one of the most acute and able of those philosophers 
 who resolve all virtue into benevolence. So well satisfied was 
 he of the truth and correctness of his principles, that, in conform- 
 ity to them, he constructed the formulae referred to in the text, 
 by which he proposed to compute mathematically the morality of 
 fictions. 
 
44 PRELIMINARY CHAPTER. 
 
 nite, and many of the principles enunciated more 
 than doubtful, and yet the study itself be far from 
 useless. How is it with the moral sciences gener- 
 ally? with Law, Ethics, and the Philosophy of 
 Mind ? In each of these we encounter at every 
 step ambiguous language, unsatisfactory analysis, 
 and inconclusive reasoning. Yet we do not, on 
 this account, the less claim in their behalf the re- 
 gard and application of the student. We still be- 
 lieve that there are great truths which they unfold, 
 and valuable intellectual habits which they cul- 
 tivate. It is so with Political Economy. Some 
 most important truths it evolves for the first time 
 before the. student ; others it illustrates and enfor- 
 ces. It gives a new and useful direction to the 
 thoughts ; provokes a spirit of inquiry ; fastens on 
 the mind certain practical convictions which are 
 invaluable ; and arms us against errors which pre- 
 vail around us. It is in these respects, rather than 
 as a text-book for legislators, that we should be 
 disposed to recommend it. 
 
 It would be neither useful nor proper to enter in 
 this place on an examination of the many ques. 
 tions which are in dispute among Political Econo- 
 mists. I shall merely call the attention of the 
 reader to one or two defects, which seem to me to 
 characterize most of their speculations, and against 
 which the student cannot too carefully guard. 
 
 The first of these is premature induction. Too 
 many works in Political Economy have been writ- 
 ten in view of the condition of but one or two coun- 
 tries ; assuming that such condition was natural, 
 and destined, unless prevented by special effort, to 
 become universal. It may be, however, that it 
 
PRELIMINARY CHAPTER. 45 
 
 was purely artificial, having been superinduced by 
 a vicious system of legislation or other cause ; and 
 that countries living under happier auspices may 
 not be destined to the same sad experience. Thus, 
 the excess of population complained of in some 
 countries, instead of being the result (as taught by 
 Malthus) of the superfecundity of the human spe- 
 cies, may have arisen from defects in the social 
 systems of those countries which interfered seri- 
 ously with the natural increase of the means of 
 subsistence. So with many other phenomena. It 
 would seem that, in order to a perfect development 
 of the laws of wealth; distinguishing natural from 
 artificial causes, we need a much more thorough 
 and extended examination of the industrial history 
 of different nations than we yet possess. The 
 prosperity of England first taught economists that 
 low wages were not, as they supposed, essential to 
 the growth of national wealth. So the history of 
 our own country has already served to refute more 
 than one specious but narrow theory, and seems 
 destined to do the same work on others. 
 
 One great evil of conclusions drawn from a lim- 
 ited observation is, that what is truth only for one 
 nation or one state of society, is taught as universal 
 truth, entitled to reception and practical applica- 
 tion everywhere. Thus the economists of Europe, 
 writing in view of a multitude of absurd and costly 
 regulations, which had fettered every species of in- 
 dustry around them, have used language which, 
 under such circumstances, was not unnatural. The 
 difficulty is, that, not content with announcing what 
 was truth for England or France simply as suck, 
 they have announced it as truth for the whole 
 
46 PEELIMINARY CHAPTER, 
 
 world. They have not considered that a country 
 like the United States, with a vast and unoccupied 
 territory, having little capital, and where industry 
 has, from the beginning, been almost without direc- 
 tion from government, that such a country does 
 not need the kind of legislation which may be want- 
 ed in an old and thickly- peopled one, burdened with 
 restrictions, and having an industrial skill and cap- 
 ital which gives it great advantage over all other 
 nations. The latter would derive from more in- 
 tercourse with foreigners, benefits which the latter 
 might be able to attain only by cultivating its in- 
 ternal trade and industry. It is, at all events, quite 
 clear, that language which, written and read in 
 England, would be substantially correct, might, if 
 brought to our country, and read and construed with 
 reference to our institutions, be equivalent to gross 
 error. 
 
 This is conceived to be one of the disadvantages 
 under which, as a people, we have laboured in re- 
 spect to this science. We have borrowed our Po- 
 litical Economy from England, and from works 
 which have been written for the express purpose of 
 operating on British legislation. The changes in 
 industrial and commercial policy, which these works 
 are intended to hasten abroad, were incorporated 
 with our system at its commencement. We al- 
 ready enjoy, in most respects, the utmost freedom 
 of trade towards which other nations so earnestly 
 aspire. Yet, forgetting this, and reading such 
 works as if they had been composed expressly for 
 our use, we apply to salutary, and, perhaps, indis- 
 pensable provisions of a wise, paternal policy, the 
 condemnation which they levelled only at burdens 
 
PRELIMINARY CHAPTER. 47 
 
 and restrictions, not, perhaps, at first without use, 
 but now superfluous and oppressive. 
 
 Another fault in the speculations of Political 
 Economy to which we may be permitted to refer 
 very briefly, is the want of more generous and com- 
 prehensive views. The science is frequently treat- 
 ed as if within itself, and independent on the one 
 hand of Ethics, and on the other of general Poli- 
 tics, it embraced all the elements of social welfare. 
 The production of wealth, too, is dicussed as if this 
 were the ultimate and only end of human pursuit, 
 and man but its passive instrument. That man is 
 its chief instrument is true ; but by no means that 
 he is a passive one. We shall never comprehend 
 thoroughly the laws of production until we learn to 
 do justice to his active powers and faculties. Nor 
 shall we impart to such production its utmost effi- 
 ciency, until we consider that the value of this, its 
 human instrument, depends chiefly upon his intel- 
 ligence and virtue, and hence that the cultivation 
 of his higher nature must be regarded as the first 
 and most important step towards it. 
 
 Again, if man is the instrument of production, he v 
 is yet more its end ; such production being useful 
 only as it supplies the wants and gratifies the de- 
 sires of the greatest possible number of human be- 
 ings ; while, by affording them leisure and inciting 
 their minds to greater activity, it contributes at 
 the same time, both directly and indirectly, to their 
 intellectual and moral improvement. To consider 
 wealth irrespective of these its ends, is not only 
 to infuse into the inquiry too sordid a spirit, but it 
 is to overlook one of the professed objects of Eco- 
 nomical Science. This science professes to show, 
 
48 PRELIMINARY CHAPTER. 
 
 not merely how the greatest amount of wealth may / 
 be produced, but also how it may be so distributed 
 as best to promote the greatest happiness of the 
 greatest number. To be able to decide this ques- 
 tion, we must have previously ascertained in what 
 happiness consists, and how property can be made 
 to concur with other agencies in advancing it 
 among a whole people. So, in order to compre- 
 hend man's agency as a producer, it is not suffi- 
 cient to assume, with Smith, that, in all his indus- 
 trial efforts, he is governed merely by self-interest, 
 and that the only principles antagonist to this are 
 aversion to labour, and the desire of immediate in 
 place of remote gratification. A more thorough 
 analysis would disclose other and more generous 
 principles co-operating with this desire of gain, and 
 would require us also to make allowance for other 
 counteracting causes. In one word, as Political y - 
 Economy forms but a branch of the Philosophy of 
 Man, it should begin, we conceive, by borrowing 
 more largely from that philosophy its first princi- 
 ples. It should accustom us to look at man, not 
 merely as the slave of a narrow self-love, who not 
 only may, but must care only for himself, but as 
 the member of a vast family, to whose claims he 
 may not be insensible, and for whose advance- 
 ment he was ordained to labour. Instead of with- 
 drawing itself from other and kindred branches of 
 study, it should become more intimately associated 
 with them, and should thus teach us to entertain 
 larger and more generous views of the duty and 
 destiny of man. Not content to deal only with 
 propositions which, like those of Geometry, are 
 
PRELIMINARY CHAPTER. 49 
 
 true but in the abstract,* it should aim to speak 
 to the business and bosoms of men. Then will 
 it richly merit the too partial praise bestowed by 
 M. Gamier on the Wealth of Nations. " The sci- 
 ence of Political Economy," says he, "considered 
 according to the view of the French economists, 
 must be classed with the natural sciences, which 
 are purely speculative, and can have no other end 
 than the knowledge of the laws which regulate the 
 object of their researches ; while, viewed according 
 to the doctrine of Smith, Political Economy be- 
 comes connected with the other moral sciences, 
 which tend to ameliorate the condition of their ob- 
 ject, and to carry it to the highest perfection of 
 which it is susceptible." 
 
 * Says a very able writer and admirer of the science, " The 
 conclusions of Public Economy, like those of Geometry, are only 
 true, as the common phrase is, in the abstract ; that is, they are 
 only true under certain suppositions, in which none but general 
 causes causes common to the whole class of cases under con- 
 sideration are taken into the account." Westminster Revieu>, 
 October, 1836. 
 
 E 
 
PRINCIPLES 
 
 OF 
 
 POLITICAL ECONOMY, 
 
 DEDUCED FROM THE NATURAL LAWS OF SOCIAL 
 WELFARE. 
 
 CHAPTER I. 
 
 Definition of the Science. The Study of the Happiness of So- 
 cieties so far as it depends on the Abundance and Distribu- 
 tion of their Wealth. Its Principles capable only of Moral, 
 not Mathematical Proof. 
 
 POLITICAL Economy teaches the art of managing 
 the pecuniary resources of a society to the best 
 advantage of its members. It embraces the mor- 
 al and religious education, the political constitu- 
 tion, or the personal protection of a people no far- 
 ther than these influence the production or dis- 
 tribution of property, i. e., of those things which 
 are the result of labour and the objects of exchange ; 
 and which, when accumulated to any considerable 
 extent, are ordinarily spoken of as wealth. 
 
 Hence it has been usually designated as the 
 study of " the nature and causes of the wealth of 
 nations." This definition is, however, incomplete, 
 inasmuch as it does not include individual as well 
 as national wealth among the objects of the science ; 
 find inasmuch also as it seems to restrict inquiry to 
 
52 POLITICAL ECONOMY, 
 
 the means of increasing the gross amount of na- 
 tional wealth, without regard to its diffusion, or to 
 the influence of different modes of production and 
 distribution on "happiness. Again, it has been call- 
 ed the science of " the happiness of states ;" but 
 this would extend it over too wide a field. Its true 
 subject of inquiry is, we think, the happiness of so- 
 cieties, so far as that happiness depends on the 
 abundance and distribution of their wealth.* 
 
 The principles of Political Economy must obvi- 
 ously be deduced from maxims relative to the con- 
 duct and feelings of mankind which have been 
 framed upon general and extensive observation. 
 But neither the feelings nor the conduct of a being 
 
 * There is much difficulty in defining with precision the 
 province of Political Economy. Its title would lead us to sup- 
 pose that, in its practical bearings, it must be to a state what 
 domestic economy is to a household. It is, however, much lesa 
 comprehensive ; including, of State Economy, only so much as 
 relates to the production and distribution of property. By most 
 writers, again, such production or distribution are considered 
 as the ultimate objects of inquiry ; while some hold with the 
 author, that happiness or welfare being the great end of a wise 
 public economy, only that production and distribution of wealth 
 is to be considered which conduces to this end. The truth 
 doubtless is, that the production which most conduces to wel- 
 fare is that, also, which most conduces to wealth, and vice versa ; 
 so that at first sight it might seem sufficient, as well as more 
 consistent with the rigorous forms of science, to limit our in- 
 quiries to mere production and distribution. Still, this indisso- 
 luble connexion between the highest welfare and wealth is so 
 often overlooked ; so many write of the latter as though it 
 were the end of life, and there are, again, so many modes of ac- 
 quiring property which are conducive to anything but welfare, 
 or in their last results even to wealth, that I have preferred to 
 retain the language of the author. The attempt to exclude 
 from this science all moral considerations is not only pernicious, 
 but futile, since we can establish hardly one principle for distrib~ 
 uting wealth without inquiring what is just, or what most con- 
 ducive to the general good. Ed. 
 
POLITICAL ECONOMY. 53 
 
 like man, endowed with freedom of volition, and 
 infinitely-varying degrees of sensibility, can, with 
 truth, be assumed as uniform and constant under 
 the same circumstances. Hence the highest de- 
 gree of certainty which can belong to the princi- 
 ples of Political Economy must fall far short of 
 the accuracy that characterizes the laws of the 
 physical sciences. This consideration should have 
 prevented the attempts which have been made by 
 many writers on Political Economy to attribute 
 the force of mathematical demonstration to its con- 
 clusions. The fashion just now among this class 
 of inquirers is to designate their favourite study 
 as " Political Mathematics ;" but it would obvious- 
 ly be just as reasonable to give the name of " Ethi- 
 cal Mathematics" to the sister science of morals ; 
 since the principles of both are to be ascertained 
 only by studying the same variable course of hu- 
 man action, and with a reference to the same in- 
 definite end, viz., the welfare of the species. 
 
 Still, though the nature of the subject precludes 
 any approach to mathematical certainty, the gen- 
 eral laws of human action and human happiness 
 are to be ascertained with a correctness amply suf- 
 ficient for the formation of general rules. Though 
 the conduct of an individual cannot, with complete 
 confidence, be predicted from a knowledge of the 
 circumstances surrounding him, yet that of the 
 generality of men of the great masses of man- 
 kind may be determined beforehand with the ut- 
 most probability ; and the object of the political 
 economist, like that of the moralist, being to act 
 upon the masses, this knowledge is sufficient for 
 his purpose. 
 
 E2 
 
54 POLITICAL ECONOMY. 
 
 CHAPTER II. 
 
 Definition of Wealth and of Labour. All Labour productive. 
 Labour rather a Pleasure than a Sacrifice : must, however, 
 be free, and sufficiently remunerated. Minimum of sufficient 
 Remuneration. Wealth no certain measure of Happiness. 
 Test proposed. 
 
 WEALTH, then, in its relation to happiness, is the 
 subject of the investigations of Political Economy ; 
 and by wealth we profess to understand all the ne- 
 cessaries, comforts, and luxuries of life which are 
 habitually bought and sold, or exchanged. If a 
 brief definition of wealth were desired, it might be 
 declared to comprehend all " the purchaseable 
 means of human enjoyment." 
 
 There are many things which contribute to the 
 enjoyment of man, such as air, water, the light 
 and warmth of the sun, the beauties of nature, the 
 blessings of health, and the exercise of the social 
 affections, which yet are not considered (unless 
 metaphorically) as wealth. They are valuable 
 in the common sense of the term ; but they pos- 
 sess no value in exchange. They are not ca- 
 pable of being made the subject of purchase and 
 sale, or of being guarantied by the law as proper- 
 ty ; the economist, therefore, has no concern with 
 them. The range of his inquiries is limited to 
 such objects of human desire as are capable of ap- 
 propriation by the law, and of transfer by sale or 
 exchange. The regulation of those elements of 
 happiness, physical or mental, over whose supply 
 
POLITICAL ECONOMY. 55 
 
 man exercises no control, he leaves to Providence ; 
 while to the moralist, the divine, the physician, he 
 leaves the study of those which fall within their 
 respective spheres. His peculiar object is to as- 
 certain the means of augmenting the happiness of 
 mankind, in as far as that happiness may be affect- 
 ed by the abundance, or distribution, or quality* of 
 those things which, being matters of purchase, are 
 capable of being measured or appreciated.f 
 
 * To the words "abundance or distribution" in the text I 
 have added or quality, because, in estimating the effects of wealth 
 on happiness, it is important to consider the nature of those 
 things which are reckoned to have exchangeable value, as well 
 as their abundance. Were a nation so depraved in taste that it 
 attached more value, in consumption, to opium or brandy than 
 to good books, good food, or good houses, it is evident that its 
 wealth, however great, would conduce but little to happiness. 
 The use of such articles, being prejudicial to health, industry, 
 and virtue, would in the same proportion induce unhappiness, 
 and would also react upon production to diminish it, i. e., to make 
 the nation poorer. Hence, whether we consider the means of 
 simply producing and distributing wealth, or the means of so do- 
 ing it as to promote happiness, we should in neither case over- 
 look the quality of the things which are recognised as having 
 exchangeable value. According as a nation is led by its tastes 
 and habits to attach value in exchange to one or another class 
 of objects, in consumption, will be its productive energy and its 
 aggregate happiness. It would seem, then, that, before under- 
 taking to unfold the laws of production, we ought to distinguish 
 between the various " purchaseable means of enjoyment," and 
 show how important both to the productive power and welfare of 
 a nation is a high standard of physical, intellectual, and moral 
 taste. Ed. 
 
 t Mr. Malthus and other economists have much puzzled 
 themselves and their disciples by raising a needless debate 
 about some particular things, of which it is disputed whether 
 they are to be considered wealth, and, therefore, within the 
 range of Political Economy or not. For example, the ser- 
 vices of menials, and of artists and actors, &c., have caused 
 much dispute. Mr. Malthus excludes them from the category 
 of wealth on the ground that they are immaterial. Inasmuch 
 as they are habitually bought and sold, I should consider them 
 
56 POLITICAL ECONOMY. 
 
 One of two circumstances is necessary to con- 
 fer exchangeable value on an object, in addition to 
 its useful or desirable qualities, viz., that it require 
 some labour to produce it, or that it exist in less 
 quantity than is wanted in technical terms, that 
 its supply be short of the demand for it. Water, 
 however useful, nay, necessary to man however 
 valuable in the ordinary meaning of the word 
 yet, wherever it is to be had in abundance without 
 trouble, as by the side of a river, has no exchange- 
 able value : it costs nothing, and will, therefore, 
 sell for nothing. But at a distance from springs 
 or rivers, as in a town, where water is not to be 
 obtained without some trouble, it acquires a value 
 in exchange, and that value will depend chiefly 
 upon the trouble or labour it costs to procure it. 
 An additional element in value is scarcity, or an 
 insufficient supply to meet the demand. In the 
 deserts of Africa, a skin of water may at times ac- 
 
 comprehended in the definition of wealth given above. I can 
 see no essential distinction between the services of a nobleman's 
 outrider and those of the horse he rides: between the value 
 conferred upon a piece of canvass by an artist, and that con- 
 ferred upon a piece of cotton by a calico-printer : they are equal- 
 ly reckoned as the signs of wealth by others ; they are equally 
 enjoyed as wealth by their possessor. But, in truth, the at- 
 tempt to refine upon the subject with such minute accuracy of 
 definition is much more likely to lead to confusion than clear- 
 ness. [It is doubtful whether mere ability, or " services" of 
 any kind should be regarded as wealth. As an all-important 
 element of production, they must hold a prominent place in 
 Political Economy, and, when they are possessed in abundance 
 by a nation, they enable it to become rich, but of themselves do 
 not make it so. In an inventory of its actual wealth, i. e., of 
 riches in possession, they could not be enumerated. A noble- 
 man's horse has exchangeable value, and, therefore, forms a part 
 of his wealth. Not so the servant who rides him, unless in a 
 slave country ; yet, as an agent of production, the servant may 
 be much more useful than the animal. -Ed.] 
 
POLITICAL ECONOMY. 57 
 
 quire a value infinitely exceeding the cost of con- 
 veying it there from the nearest well. A rare 
 jewel, or book, or object of art, often obtains a val- 
 ue bearing no relation to the labour by which it 
 was procured or produced. But the primary ele- 
 ment of value in most things is cost of procure- 
 ment ; and the cost of procurement consists almost 
 wholly of the trouble or labour necessary for pro- 
 curing the article. 
 
 What, for example, gives their value in market 
 to the fruits of the earth ? Not their adaptation 
 to the appetite of man. The finest fruits, if they 
 grew spontaneously in such abundance over all the 
 inhabited earth that every one might satisfy his 
 longings for them by the mere trouble of lifting his 
 hand to them, would have no selling value. But, 
 inasmuch as fruits grow only in particular situa- 
 tions, and require much trouble in planting, pro- 
 tecting, gathering, and bringing them to market, 
 they acquire a proportionate value ; since those 
 who wish to obtain them must either take them- 
 selves all the trouble necessary for procuring them, 
 or must give to those who do take it a fair equiv- 
 alent. 
 
 All saleable property, or wealth, therefore, is 
 the produce of trouble or labour. And, in order to f 
 avoid confusion, it is desirable to confine this term 
 labour to such exertion as is productive of wealth. 
 Men exert themselves for amusement, health, or 
 recreation, and may fatigue themselves as much in 
 so doing as a ploughman or a mason ; but their 
 exertion neither produces nor is intended to pro- 
 duce anything which can be exchanged or sold, 
 and it will be desirable, therefore, not to call such 
 
58 POLITICAL ECONOMY. 
 
 exertion labour. The limitation of the term la- 
 bour to such occupations as are pursued for the 
 sake of gain, and result in an increase of the com- 
 mon stock of wealth, may serve to put an end to 
 the unprofitable discussion, so common in works 
 on political economy, as to what kinds of labour 
 are productive and what unproductive.* 
 
 Though it is a law of nature that labour in some 
 shape is necessary for the support of man's exist- 
 ence, since even the necessaries of life are in no 
 quarter of the globe to be procured without it, yet 
 those persons are surely in error who consider this 
 condition as an evil, and labour as essentially a 
 sacrifice or hardship. Eating and drinking are 
 likewise necessary for the maintenance of life ; 
 but they are not on that account usually consider- 
 ed as sacrifices. As has just been remarked, we 
 often see the amateur artist, gardener, farmer, or 
 mechanic, fatigue himself as much for the mere 
 pleasure afforded by the employment, as those who 
 do the same things for their daily bread or for 
 gain. So far from complete inaction being perfect 
 enjoyment, there are few sufferings greater than 
 that which the total absence of occupation gener- 
 ally induces. Count Caylus, the celebrated French 
 antiquary, spent much time in engraving the plates 
 
 * The difficulties with which the ultra refining and mathe- 
 matical school of political economists have to contend, are well 
 exhibited in the disputes between them as to the limits of pro- 
 ductiveness. Mr. Malthus denies that the labour of a cook, a 
 coachman, an author, or an actor is productive, though assert- 
 ing the productiveness of that of a butcher, a coachmaker, a 
 printer, and a scene-painter. Mr. M'Culloch, running into the 
 other extreme, insists that the occupations of billiard-playing, 
 blowing soap-bubbles, nay, of eating, drinking, and sleeping, are 
 productive ! See on this subject Preliminary Chapter, p. 17, 
 
POLITICAL ECONOMY. 59 
 
 which illustrate his valuable works. When his 
 friends asked him why he worked so hard at such 
 an almost mechanical occupation, he replied, " Je 
 grave pour ne pas me pendre."* When Napoleon 
 was slowly withering away, from disease and ennui 
 together, on the rock of St. Helena, it was told 
 him that one of his old friends, an ex-colonel in 
 his Italian army, was dead. " What disease killed 
 him ?" asked Napoleon. " That of having nothing 
 to do," it was answered. " Enough," sighed Na- 
 poleon, " even had he been an emperor." 
 
 Even severe manual labour is not necessarily a 
 sacrifice. There is an animal pleasure in toil. 
 It is questionable whether the mental or bodily ex- 
 ertion to which the highest and wealthiest classes 
 are driven as a resource against ennui, communi- 
 cates, in genera], so pleasurable an excitement as 
 the muscular exertions of the common labourer 
 when not overworked. Nature has beneficently 
 provided, that if the greater proportion of her sons 
 must earn their bread by the sweat of their brow, 
 that bread is far sweeter for the previous eifort 
 than if it fell spontaneously into the hand of list- 
 less indolence. It is scarcely to be questioned, 
 then, that labour is desirable for its own sake, as 
 well as for the substantial results which it affords ; 
 and, consequently, that it by no means lessens, but 
 rather adds to the general chance of happiness, 
 that nearly all the members of society should, in 
 some shape or other, be placed under an obligation 
 to labour for their support.f 
 
 * I engrave, lest I should hang myself, 
 t In a popular farce, Deputy Figgins, a London shopkeeper, 
 when persuaded by the solicitation of his wife to leave nis shop 
 
60 POLITICAL ECONOMY. 
 
 Nor is it much to be regretted that some modes 
 of employment are less agreeable or more irksome 
 than others. Besides a difference in the original 
 tastes of men, leading some to prefer occupations 
 which to others would be irksome, habit has a pow- 
 erful effect. Hundreds of facts might be adduced 
 to prove that persons engaged in employments 
 which to those of different habits appear intolera- 
 bly disagreeable, become, after some practice, not 
 merely reconciled, but attached to them. There 
 are few workmen, indeed, who, if asked, will not 
 declare their preference for the branch of labour 
 to which they have been brought up or long accus- 
 tomed. They might have entered upon it, at first, 
 from necessity ; they continue in it from choice. 
 Whether an individual ply his occupation by sea 
 or land, in the open air, in the interior of crowded 
 towns or manufactories, or in the bowels of the 
 earth, these circumstances seem to affect, but in a 
 slight degree, his happiness. And farther, what- 
 ever inconveniences do attend particular employ- 
 ments, are usually compensated by the proportion- 
 ately increased remuneration which, under a sys- 
 tem of free labour, is awarded to them ; and that 
 this compensation is complete in the estimation of 
 the labourers themselves, is proved by there being 
 as much competition for such employments as for 
 any other.* 
 
 for a day and take an excursion to Richmond, exclaims, " Well, 
 my dear, since we must give up the day to pleasure, let us make 
 it as like business as possible. 1 And the sentiment is so true 
 to nature, that the hit always tells through the theatre. 
 
 * The competition here spoken of by the author is provoked, 
 we apprehend, not so much by the supposed sufficiency of the 
 compensation, as by the fact that other and more agreeable oc- 
 
POLITICAL ECONOMY. 61 
 
 This brings us to the important consideration, 
 that, in order not to interfere with happiness, Za- 
 bour must be FREE, that is to say, voluntarily exert- 
 ed, and left at liberty to take whatever direction it 
 shall please the labourer to give to it. Compulsion 
 is itself a hardship, so that an occupation which 
 might be undertaken and exercised with pleasure 
 by any one of his free will, becomes a grievance 
 and a burden if forced upon him. 
 
 But not only is forced labour less pleasurable 
 than free, it is likewise incomparably less produc- 
 tive. All observation confirms what our instinc- 
 tive sentiments will suggest, that, to encourage a 
 man to put forth his powers to the utmost, he must 
 be left free in his choice as to the nature and quan- 
 tity of his work. It is scarcely necessary to refer, 
 in proof of this, to the notorious idleness, apathy, 
 and obstinacy of the slave. But it may be well to 
 advert to the decisive fact, that by far the most 
 productive labour of all is that of the mind, which 
 is not susceptible of compulsion. A man may be 
 forced to dig a field or spin a web, but he cannot 
 be forced to improve a plough or a loom, much less 
 to produce a masterpiece in poetry or art. Nor, 
 even if compulsion could extort such results of 
 mental labour from those who were capable of it, 
 could a master know beforehand where lay the dor- 
 mant capacity. No artificially prescribed contri- 
 vances can direct the ingenuity of individuals into 
 those lines of thought or action for which they are by 
 nature best qualified. Perfect liberty in the choice 
 
 cupations are taken up ; and by the farther fact, that multitudes, 
 from want of education, are fitted only for inferior pursuits, and, 
 therefore, can compete for no other. Ed. 
 
 F 
 
62 POLITICAL ECONOMY. 
 
 of occupations is absolutely necessary to ensure the 
 adoption of such as are most suitable to the pecu- 
 liar qualifications of the individual, and likely, in 
 consequence, to be most productive, as well as 
 most agreeable. And thus the freedom of labour 
 becomes doubly important, as necessary for in- 
 creasing both the happiness of the labourer and the 
 productiveness of his toil. 
 
 Neither must labour, to be pleasurable or pro- 
 ductive, be without an object. It is the cheering 
 anticipation of some gratifying result which sweet- 
 ens the toils of labour, relieves its irksomeness, 
 and appears to shorten its duration. Though in 
 itself no evil, yet it is the prospect of its reward 
 that gives it much of its zest ; and, if this be scan- 
 ty and inadequate, the toil endured for its sake is 
 imbittered. If, on the other hand, it be sufficiently 
 remunerated, labour cannot, under a system of 
 freedom, be a source of suffering. The temptation 
 of high wages may, it is true, induce some indi- 
 viduals to overwork themselves, and thus prema- 
 turely exhaust their strength and health. But 
 these are rare exceptions. We deal only in gen- 
 erals ; and, as a general rule, it cannot be doubted 
 that, where a sufficient remuneration is to be ob- 
 tained by moderate labour, it may be most safely 
 left to the labourers themselves how far they will 
 or will not exceed that point. 
 
 With respect to what constitutes a sufficient re- 
 muneration for labour, there may be some uncer- 
 tainty. This, however, may be laid down as un- 
 questionable, that it must not be less than will find 
 the labourer and his family, if he have one, in a 
 sufficiency of wholesome and agreeable food, warm 
 
POLITICAL ECONOMY. 6$ 
 
 and decent clothing, and convenient lodging ; in 
 short, in the means of comfortable subsistence, be- 
 sides enabling him to improve his mind by reading, 
 to educate his children, to indulge in an occasional 
 holyday, and to lay by a provision against sickness, 
 casualty, and old age. 
 
 If, as we think will hardly be denied, these views 
 are correct, we arrive through them at something 
 like a general principle as to the economical con- 
 ditions essential to the general happiness ; namely, 
 that the labour, which we must believe will always 
 be necessary for the support and gratification of 
 the great mass of mankind, be voluntary and free V 
 in the choice of its direction ; and that by moderate 
 exertion it obtain as its recompense at least a suffi- 
 ciency of the necessaries and principal comforts of 
 life, both for the present consumption of the labour- 
 er and his family, and for a reserve against the fu- 
 ture. 
 
 These conditions fulfilled, every farther increase 
 of the comforts or luxuries which falls to be divi- 
 ded among the members of a community is an in- 
 crease to their general means of happiness, pro- 
 portionate, cateris paribus, to the equality with 
 which they are distributed. But these conditions 
 must be fulfilled before an increase of the general 
 wealth can be assumed to be an addition to the gen- 
 eral happiness, and therefore a desirable object in 
 the eyes of the political economist ; who, mindful 
 of the true end of his science, looks to wealth only 
 as a means of happiness, and declares against all 
 such measures as, though tending to augment the 
 mass of wealth, do not tend to distribute it in such 
 a manner as to promote that end. 
 
64 POLITICAL ECONOMY. 
 
 That every increase of wealth is not a proper- 
 tionate increase of the aggregate means of enjoy- 
 ment nay, that some kinds of wealth may be much 
 augmented at a great sacrifice of human happiness 
 is easily demonstrable. Suppose, for example, 
 a race of absolute sovereigns, having a taste for 
 jewels, were to employ several thousands of their 
 subjects or slaves, generation after generation, in 
 toiling to procure them : these treasures will be 
 wealth of enormous value, but will add barely any- 
 thing to the aggregate, means of enjoyment. Sup. 
 pose another race of sovereigns to have employed 
 equal numbers of workmen during the same time 
 in making roads, canals, docks, and harbours 
 throughout their dominions, and in erecting hospitals 
 and public buildings for education or charity ; these " 
 acquisitions to the wealth of the country, having 
 cost the same labour, may be of equal exchange* 
 able value with the diamonds of the other sover- 
 eign ; but are they to be reckoned only equally 
 useful equal accessions to the aggregate of hu- 
 man gratification ? Suppose two tracts of ground 
 of equal extent and fertility, one laid down as a 
 race-course for the sole pleasure of a few wealthy 
 individuals, the other divided into moderate-sized 
 farms, each affording to the landlord a fair rent, to 
 the occupant employment and maintenance, and to 
 the community an enlarged supply of food. Such 
 tracts may be equally valuable if sold in the mar- 
 ket, but are they equal in their influence on the 
 sum of human enjoyment ? Even Slavery itself 
 may be a means (though far from the most produc- 
 tive) of increasing the quantity of exchangeable 
 wealth in the world ; but will any one recommend 
 
POLITICAL ECONOMY. 65 
 
 it as a means of augmenting the mass of human 
 happiness ? No ! wealth may be purchased at too 
 high a price, if that price be the degradation and 
 suffering of those who produce it. Wealth is only 
 to be measured by its exchangeable value. In this 
 sense increase of wealth assuredly is no true meas- 
 ure of the increase of enjoyment ; and the science 
 of wealth, if the attention be confined to the means 
 of increasing its aggregate amount, may just as 
 frequently lead to what will injure as to what will 
 benefit the human race. If the greatest happiness 
 of the community is the true and only end of all 
 institutions, it follows that a government which 
 should take political economy of this kind as a 
 guide to its legislation, without continually correct- 
 ing its conclusions by reference to the principles 
 on which the happiness, not the wealth, of man de- 
 pends, must often sacrifice the real interests of the 
 people it presides over for a glittering fiction. 
 
 It may be said that such inquiries would be dif- 
 ficult and complicated ; that it is impossible to mete 
 out happiness, or establish a graduated scale by 
 which to ascertain the utility of legislative meas- 
 ures towards this end. But the same argument 
 might evidently be urged with equal force against 
 all moral science. The happiness of society is 
 the only end of every moral as of every economic 
 precept. If it be, as we readily admit, impossible 
 to ascertain to a fraction the precise extent in 
 which any given measure is likely to affect the 
 happiness of a community, still this can be no 
 reason for adopting so obviously false a standard 
 as the increase of its aggregate wealth alone. 
 There are other tests which there can be no good 
 
66 POLITICAL ECONOMY, 
 
 reason for neglecting ; there are, in the pursuit of 
 economic as of moral policy, some broad landmarks 
 to which it would be folly to shut our eyes ; some 
 palpable boundaries which it would be madness to 
 cross ; some clear general rules which point the 
 direction of our path, and reduce the chances of 
 error within very trifling limits, if we do not mad. 
 ly refuse to walk by their light. 
 
 One of these criteria, and by far the most im- 
 portant, is the proposition, which we do not hesi- 
 tate to lay down as a fundamental truth, that the 
 amount of human enjoyment principally depends on 
 the number of human beings enabled, without exces- 
 sive toil, to obtain a comfortable subsistence, with 
 satisfactory security for its continuance. 
 
 That the happiness of individuals does not ne- 
 cessarily increase with their wealth, is attested by 
 the combined authority of all the philosophers and 
 moralists of past ages. The most cursory obser- 
 vation of mankind proves that there is often as 
 much enjoyment of life beneath a straw roof as a 
 painted ceiling, under a smock frock as a silken 
 robe. Nay, there are who very plausibly urge that 
 
 " Quei che felici son non ban camicia "* 
 
 * Casti, la Camicia delV Uomo Felice ; one of the few of his 
 Novelle that can be read with a relish for the philosophy, un- 
 disturbed by disgust at the profligacy, of this clever satirist. A 
 sick sovereign is recommended, as an infallible specific for his 
 disorder, the application of "the shirt of a happy man." His 
 emissaries in vain ransack all countries in search of such a 
 being. At last they discover an individual who acknowledges 
 himself to be happy, in the shape of a wild mountain shepherd. 
 But, alas ! he has no shirt ! on which the tale ends with the 
 above exclamation, " Those only are happy who have no shirts 
 to wear." So D'Alembert used to say, " Qui est ce qui est heu- 
 reux ? Quelque miserable 1" 
 
POLITICAL ECONOMY. 67 
 
 the cares of life increase with the increase of prop, 
 erty. 
 
 Without heaping together commonplaces on the 
 subject, it will be disputed by few, that, beyond a 
 certain point, the amount of enjoyment shared by 
 the different classes of society is pretty equal. 
 " Life," says a shrewd writer, herself of the most 
 elevated class, " affords disagreeable things in plen- 
 ty to the highest ranks, and comforts to the lowest ; 
 so that, on the whole, things are more equally divi- 
 ded among the sons of Adam than they are gener- 
 ally supposed to be."* " Whoever enjoys health," 
 says Jean Jacques, " and is in no want of necessa- 
 ries, is rich enough ; 'tis the aurea mediocritas of 
 Horace." 
 
 The means, then, of comfortable ' subsistence, 
 compose the competence which admits of perhaps 
 as keen and complete enjoyment of life as any for- 
 tune can bestow. That this comfortable subsist- 
 ence is to be procured only by labour, so that it be 
 voluntary, free in its direction, and not excessive, 
 is, as I have attempted to show, no detraction from 
 the enjoyment it affords, but rather, if anything, an 
 addition to them. 
 
 If, however, we come to the conclusion that an in- 
 dividual who has within his easy reach the means 
 of comfortable subsistence, enjoys as fair a chance 
 of happiness as those who occupy stations in the 
 common opinion of the world more enviable, it is 
 very clear that less than this will not afford the same 
 chance. Though the enjoyments of wealth may be, 
 on the whole, counterbalanced by the cares that ac- 
 company it, the evils of poverty are real and uncom- 
 * Letters of Lady M. W. Montague. 
 
68 POLITICAL ECONOMY. 
 
 pensated. An individual who wants the means of 
 subsistence nay, of comfortable subsistence, to- 
 gether with satisfactory security for its continuance, 
 is in a state of suffering 1 Coarse diet may please 
 the hungry appetite of the peasant as much, or more, 
 than do costly viands the palate of the rich gour- 
 mand, and a frieze coat may be as pleasant wear 
 as superfine ; but scanty, unvaried, and ill-flavour- 
 ed food, or deficient clothing and fuel, or intellectu- 
 al and moral degradation, each, if it does not entire- 
 ly prevent, must greatly detract from the enjoyment 
 of life. 
 
 The conclusion then is, that every individual who 
 has assured to him the means of comfortable sub- 
 sistence without excessive toil, has a tolerably equal 
 chance for happiness with those who possess a lar- 
 ger share of wealth ; but that any falling off from 
 this condition will proportionably lessen the individ- 
 ual chance of enjoyment. Consequently, the means 
 of enjoyment possessed by any society must be judg- 
 ed of principally by the number of those who pos- 
 sess the means of comfortable and rational subsist- 
 ence on these terms, compared with that of those 
 who fail in obtaining them. And we thus acquire 
 a primary measure of national happiness, independ- 
 ent of the aggregate amount of wealth in its pos- 
 session, which cannot but be of service in the study 
 of the domestic economy of communities, 
 
 The inference we deduce from this position is, 
 that the first economical object with every people 
 ought to be the securing to each individual the means 
 of comfortable subsistence in return for his labour, 
 and the certainty of its continuance ; and that, un- 
 til this is effected, no general augmentation of the 
 
POLITICAL ECONOMY. 69 
 
 national wealth ; no signs of increased luxury 
 among the higher or middle classes ; no swelling 
 of the import or export lists, or other supposed tests 
 of national prosperity, can be depended on. The 
 increase of wealth may add to the means of grati. 
 fication of the few who have already more than they 
 can possibly enjoy, but it may be accompanied by a 
 falling off in the means of the many, who even now 
 have less than the minimum necessary to save them 
 from positive suffering. 
 
 How this great object is to be accomplished ; 
 what are the steps which should be taken to pro- 
 mote so desirable a state of things, can only be dis- 
 covered by a study of the natural laws which de- 
 termine the production and distribution of wealth, 
 and particularly of those things which compose the 
 necessaries and primary comforts of life; To this 
 study we now proceed. 
 
 CHAPTER HI. 
 
 Conditions of the Production of Wealth. The Institution of 
 private Property. Labour. Land. Capital, 
 
 IT appears that man has everywhere and always, 
 from the first traces we possess of his history, la- 
 boured in the production of wealth on that simple 
 principle of appropriation, that whatever an individ- 
 ual creates or redeems from a state of nature by 
 his labour, is his, and ought to be at his disposal. 
 
70 POLITICAL ECONOMY. 
 
 In some rare instances, however, this principle of 
 private property has been exchanged for that of a 
 community of goods between all the members of a 
 society. But the experiment may be pronounced 
 to have never succeeded in practice. Indeed, it will 
 appear upon reflection to be irreconcilable with the 
 most obvious principles of human nature. One of 
 the strongest of these is the desire of individual ap- 
 propriation. Sympathy is no doubt a very power- 
 ful sentiment ; but it is provided by Nature with a 
 view, as we may well believe, to the preservation of 
 the species, that the instinct of self-appropriation 
 should for the most part prevail over it. In the 
 common phrase, one's self stands as number one. 
 In the extremity of want or danger, this instinct be- 
 trays itself most conspicuously. Next to a man's 
 own self, in his estimation, usually stand his chil- 
 dren, his parents, and the wife of his bosom* These 
 are almost a part of himself ; and their gratification 
 is nearly as strong a motive for exertion as his own. 
 But the sentiment, becomes diluted by an attempt to 
 expand it over a wide circle. And it is certain that, 
 as a general rule, man will not labour for others than 
 his immediate family, or for the increase of any com- 
 mon fund to be shared in alike by the members of a 
 large community, with anything like the zest and 
 willingness, the assiduity and perseverance with 
 which he will toil for himself. 
 
 Even within the limits of a family circle, the 
 same rule holds good among those who have at- 
 tained to an age rendering them capable of labour. 
 History presents us with many examples, and some 
 are yet to be found existing, of patriarchal fami- 
 }ies in which all the members, comprehending seY* 
 
POLITICAL ECONOMY. 71 
 
 eral generations, labour for one common funcL 
 But, though these communities frequently offer en* 
 gaging pictures of domestic happiness, they have 
 been rarely, if ever, observed to make much ad- 
 vance in the arts of production or in the accumu- 
 lation of wealth ; but are found to stagnate in a 
 condition barely removed above want, until some- 
 thing occurs by which they are broken up, and the 
 strong stimulus of individual gratification is sub- 
 stituted for the less cogent one of the general 
 benefit* 
 
 An additional objection to a community of prop* 
 erty is, that it necessarily puts an end to all indi- 
 vidual liberty of choice as to the direction or amount 
 of labour. Each labourer must have his specific 
 task allotted to him by some superior power estab* 
 lished for the purpose, which task he must be com- 
 pelled to execute under pain of some forfeiture or 
 privation. But we have already shown, that to en- 
 courage the utmost productiveness of labour, as 
 well as to render it pleasurable, the labourer must 
 be left free to choose both the nature and the quan* 
 tity of his work. 
 
 It is the neglect of these principles which is 
 even now betraying many misguided persons into 
 signal and mischievous absurdities. Such is the 
 case with the followers of Owen in this country and 
 Great Britain, and of St. Simon in France, with 
 other similar sects which are spreading through 
 Germany and the United States. Struck by the 
 remarkable fact that the vast advance made of late 
 years by civilized nations in the art of production, 
 and in wealth has not added proportionately to 
 the share of enjoyment that falls to the great body 
 
72 POLITICAL ECONOMY. 
 
 of the people, whose labour is the primary instru- 
 ment of all production, they have hastily jumped to 
 the conclusion that, in order to ensure the more 
 equal distribution of the products of industry, all 
 that is wanting is a new arrangement of society on 
 the basis of a community of property. Now no- 
 thing can look more pleasing upon paper, or sound 
 more enchantingly in a lecture upon social happi- 
 ness-, than a proposal to put an end to all the strug- 
 gles of individual competition, and the painful con- 
 trast of contiguous wealth and poverty ; to substi- 
 tute love, friendship, and common enjoyment for 
 hatred, jealousy, and exclusive self-gratification, 
 But is it possible to realize this beatific vision? 
 There is not the slightest ground for supposing so. 
 Its authors forget that the industry, of which, in the 
 present advanced state of society, they witness the 
 fruits, has been awakened, and has hitherto grown 
 and thriven, only under the shelter of the institution 
 of private property and the stimulus of competition ; 
 and that neither history nor observation warrants 
 the assumption that this industry could be main- 
 tained except on these conditions. The establish- 
 ment of a community of property would most prob- 
 ably, by damping industry and discouraging pro- 
 duction, shortly leave no property whatever to di- 
 vide* >The desire of individual acquisition has hith- 
 ' erto been the main motive to every exertion. Take 
 if away, by sharing the result of a man's labours 
 equally, or in certain proportions, fixed by others, 
 among his neighbours, so that he himself shall not 
 be specially benefited by its increase, and who will 
 guaranty the continuance of his exertions with the 
 same vigour- and energy which he now evinces, if 
 
POLITICAL ECONOMY. 73 
 
 he even continue them at all? Experience has 
 proved the constitution of the human mind to be 
 such, that freedom in the direction of labour, and 
 security for the personal enjoyment or disposal of 
 its products, are the conditions on which alone in- 
 dustry will be effectually put forth and production 
 advanced. The proposal of a community of goods 
 as a remedy for their unequal distribution, is like 
 an attempt to cure a horse of stumbling by cutting 
 off his legs. 
 
 That the products of industry are at present too 
 unequally distributed in many countries of Europe 
 is most true ; but surely some remedy may be de- 
 vised short of the complete annihilation of the prin- 
 ciple itself of production. That such means are 
 attainable indeed, and this by the simplest exertion 
 of forethought and pre-arrangement, I trust to be 
 able to show. 
 
 All wealth is the product of labour, but not of 
 labour alone. Labour can create nothing. All 
 that it does is to alter the disposition of things al- 
 ready existing in what is usually called a state of 
 nature. To produce anything, the labourer must 
 operate upon some natural substance, and call in 
 the ever-active powers of nature to his aid. The 
 agriculturist, for example, does not create corn ; 
 he only applies the seed after a certain method 
 which his knowledge, obtained through experience 
 or precept, teaches him to be best adapted for pro- 
 moting its growth ; and the powers of the soil and 
 the atmosphere, the moisture of the heavens, and 
 the genial warmth of the sun bring about the pro- 
 duction of his crop. These powers, therefore, of 
 earth, air, water, and heat (which the ancients, in 
 G 
 
74 POLITICAL ECONOMY. 
 
 their ignorance of chymistry, considered, and in 
 their equally ignorant though pardonable grati- 
 tude, worshipped as primary elements), or, to speak 
 more correctly, the natural affinities of the mate- 
 rial substances occurring on the surface of the earth 
 must co-operate with the labourer, or his toil is ut- 
 terly unproductive. 
 
 Nor is this generally enough. There are few 
 things which an individual, though availing himself 
 of all the powers of nature within his reach, can 
 produce by himself, or by a single effort of labour. 
 He must call in the aid of others ; he must like- 
 wise exert himself at repeated intervals ; and he 
 must avail himself of the results of his previous 
 labour, or that of others, generally of both. Take 
 the simplest case the labour by which a man may 
 sometimes satisfy his hunger by gathering berries 
 from a bush. Even here nature must have first 
 produced and ripened the fruit to his hand. Wild 
 fruits, however, are but scantily supplied by na- 
 ture. If, then, to supply his wants, a man desire 
 animal food, he must provide himself with some 
 product of previous labour (his own or of others), 
 a club, a bow, a trap, or a gun ; and he must ac- 
 quire, moreover, by previous labour, both of mind 
 and body, a knowledge of the haunts and habits of 
 the animals he wishes to take, or he has but a 
 small chance of breaking his fast upon them. If 
 wild fruits and animals become equally scarce, and 
 he is led by Necessity, the fertile mother of Inven- 
 tion, to sow or plant the herbs and trees which pro- 
 ? duce the former, and to domesticate the latter for 
 the supply of his wants, still more observation, 
 forethought, contrivance, and preparation are ne- 
 
POLITICAL ECONOMY. 75 
 
 cessary on his part. He must acquire a knowledge 
 of the habits and characters of these plants and 
 animals ; of the best methods of cultivating, im- 
 proving, and storing them ; he must provide the 
 proper seed and plants ; tools with which to dig 
 up the soil, clean it, and gather his crops ; fences 
 to keep off wild animals, and confine his tame 
 ones, with a store of fodder for their sustenance. 
 All these preparations are the result of previous 
 labour, accumulated for the purpose of aiding him 
 in the production of food. Similar provisions will 
 be required to supply him with clothing, shelter, 
 and other desirable objects. 
 
 The results of labour so accumulated, or provi- 
 ded beforehand for productive purposes, are called 
 by the general term Capital. 
 
 It is thus made clear, that labour can produce 
 nothing, or scarce anything, without the aid both 
 of capital and natural substances. These, then, 
 are the primary elements of human production^ 
 Labour, Capital, and certain natural powers, which, 
 as inherent in the earth or attached to its surface, 
 may be classed under the somewhat vague title of 
 Land.* And if, as would seem proper, we com- 
 prehend under the term labour all the ability or 
 productive capacity of man, natural or acquired ; 
 under that of capital all the substantial results of 
 labour, stored up and employed in farthering pro- 
 duction ; and under that of land all the natural 
 
 * " The word ' land' includes not only the face of the earth, 
 but everything under it or over it. Therefore, if a man grants 
 all his lands, he grants thereby all his mines of metal and other 
 fossils, his woods, his waters, and his houses, as well as his 
 fields and meadows." Blackstone's Commentaries, ii., c. ii., p. 18. 
 
76 POLITICAL ECONOMY. 
 
 qualities of those substances met with on the face 
 of the earth, which can be appropriated and ren- 
 dered available for productive purposes, we shall 
 embrace under these several heads everything 
 that in any shape co-operates in the production 
 of wealth. These elements of production we now 
 proceed to consider separately, in the order in 
 which they have been mentioned, namely, LA- 
 BOUR, LAND, and CAPITAL. 
 
 CHAPTER IV. 
 
 Labour. Exchanges of its Produce. Right to Free Exchange. 
 Division of Labour. Its Advantages. Co-operation and 
 mutual Dependance of all Labourers. Barter. Money. Its 
 use. Coin. Credit. General use of. 
 
 THE first essential towards production is labour. 
 To play its part efficiently in this great business, 
 the labour of individuals must be combined, or, in 
 other words, the labour required for producing cer- 
 tain results must be distributed among several in. 
 dividuals, and those individuals thus be enabled to 
 co-operate.* 
 
 * The principle here referred to is usually called the division 
 of labour. The phrase is objectionable, since the fundamental 
 idea is that of concert and co-operation, not of division. The 
 term division applies only to the process ; this being subdivided 
 into several operations, and these operations being distributed 
 or parcelled out among a number of operatives. It is thus a 
 combination of labourers effected through a subdivision of processes. 
 The language of the author has been somewhat altered in con- 
 formity with this distinction. Ed. 
 
POLITICAL ECONOMY. 77 
 
 If a man were to attempt to raise from the 
 earth's surface all the food required by himself and 
 his family, and all the materials for their clothing, 
 furniture, and shelter, and likewise to prepare them 
 for use, it is clear that whatever he could obtain 
 in this way would only be of the poorest and scan- 
 tiest description ; not, under the most favourable cir- 
 cumstances, equal to that which Robinson Crusoe is 
 described as having provided for himself in his in- 
 land solitude ; for Crusoe had obtained a knowledge 
 of many of the arts of civilized life by education 
 in a society where exchanges of labour had long 
 been practised. Had all men persisted in labour- 
 ing on a system of isolation, each for himself only, 
 all must have remained in a state of barbarism. 
 None of the useful arts could have existed. The 
 metals would have slept untouched in the rock ; 
 the timber would have rotted unhewn in the forest ; 
 the soil would never have been turned up by the 
 plough or spade. A few raw fruits stripped from 
 the wild bushes, and the precarious produce of the 
 chase for food ; clothing of skins, and the rude 
 shelter of the cave or branch-hut, would have 
 made up the sum total of human possessions. Un- 
 der this system, the numbers of mankind must have 
 been kept within very narrow limits by disease and 
 by a continual dearth of subsistence. Countries 
 which now contain millions of civilized men, en- 
 joying, for the most part, an abundance of comforts, 
 could scarcely have supported as many hundreds 
 of half-starved savages. 
 
 But, happily, such a state of things does 'not long 
 continue. Man is formed to live in society ; and, 
 as we have seen, necessity suggests to every soci- 
 G 2 
 
78 POLITICAL ECONOMY. 
 
 ety the general recognition of the right of each 
 individual to freedom in the direction of his indus- 
 try, and a private property in its produce. Now, 
 wherever these two fundamental principles of so- 
 ciety are acknowledged, exchanges of the produce 
 of labour immediately must commence among in- 
 dividuals. One, for instance, has gathered more 
 fruits than he can consume, and another has a 
 larger stock of skins fit for clothing than he. can 
 make use of. The first is in want of clothing, the 
 latter of fruit, and each finds his advantage in ex- 
 changing the excess of the article he possesses for 
 that of the other. The exchange being wholly 
 voluntary on both sides, the advantage is mutual, 
 and by both parties is considered equal. So long 
 as exchanges are free and voluntary, so long it is 
 evident that the benefit to the exchanging parties 
 is mutual and equal, otherwise each would not 
 .agree to it. 
 
 The right to freedom of \exchange is included in 
 the right to a free disposal of the produce of la* 
 bour, and rests on the same ground of expediency ; 
 since it is evident that, in whatever degree the la- 
 bourer is at any time prevented from exchanging 
 the produce of his industry with others, for what, 
 ever he can obtain for it most desirable to himself, 
 to that extent are his exertions discouraged, their 
 productiveness diminished, and their reward less- 
 ened. 
 
 The adoption of this system of exchanging the 
 products of labour makes it exceedingly conve- 
 nient and advantageous for each labourer to confine 
 himself to the production of one, or, at most, only 
 a few commodities, and to exchange all that he 
 
POLITICAL ECONOMY. 79 
 
 produces beyond his own consumption with others, 
 who in their turn do the same. Each is thus ena- 
 bled to avail himself of any peculiar natural ad- 
 vantages he may possess, whether of personal pow- 
 ers or of position, for the production of a particu- 
 lar commodity ; and likewise to acquire, by the 
 force of habit and undivided' attention, a higher 
 degree of skill. By help of these natural and ac- 
 quired advantages, he is enabled to produce far 
 more, and, consequently, to obtain by exchange a 
 greater quantity of the things he desires to con- 
 sume, than he could by any possible efforts direct- 
 ly produce of himself. 
 
 It is by this division of labour among a variety 
 of classes of labourers, each of which takes a dif- 
 ferent branch of industry, that the gross amount 
 of production is vastly augmented. Under the 
 sanction of just and well-administered laws, enfor- 
 cing the fulfilment of contracts for the exchange 
 of labour or of goods, and giving security to pri- 
 vate property, this division is carried in some coun- 
 tries to an extraordinary extent ; and its effect in 
 augmenting the wealth and comforts of all classes 
 is almost incalculable.' It forms, indeed, the true, 
 as well as only practicable community of goods. 
 
 Dr. Smith was the first writer who called atten- 
 tion to the extraordinary increase in the produc- 
 tive powers of industry caused by the division of 
 employments, and his mode of treating and illus- 
 trating the subject has been but little improved 
 upon by any succeeding writer. He classes the 
 advantages gained as, 
 
 First, increased skill and manual dexterity in 
 workmen. A nailmaker, for example, by confining 
 
80 POLITICAL ECONOMY. 
 
 himself exclusively to the manufacture of that ar- 
 ticle, will make two or three thousand nails in a 
 day ; where an ordinary smith, who only turned 
 his hand occasionally to this process, could make 
 but as many hundreds. A man who wanted such 
 a common thing as a few pins, might, if he attempt- 
 ed to fabricate them for himself, spend a day in 
 making a dozen of very bad ones ; whereas, by 
 giving their attention exclusively to this branch of 
 industry, and subdividing its various processes 
 among themselves, ten men will, in a pin manu- 
 factory, make in one day as many as 50,000 well- 
 finished pins, and their cost to the consumer is 
 proportionately reduced. The rapidity with which 
 the operations of some manufactures are perform- 
 ed, exceeds what the human hand could, by those 
 who had never seen them, be supposed capable of 
 acquiring. 
 
 Secondly, the saving of time. An individual who 
 carries on many different employments in pla- 
 ces often necessarily far apart, must waste much 
 time in moving from one to the other, which will 
 be saved by attaching himself exclusively to one 
 occupation. This is Adam Smith's argument ; but 
 he might have thrown a far stronger light on the 
 economy of time that results from a well-regulated 
 division of labour, if he had noticed the power it 
 frequently gives to one individual to do the work 
 of numbers, quite as effectually as they could do it 
 themselves. An excellent illustration of this ben- 
 efit is given by Dr. Whately* in the establishment 
 of a postoffice and letter-carriers, without which 
 every letter would require a special messenger to 
 * Lectures on Political Economy, Oxford, 1831. 
 
POLITICAL ECONOMY. 81 
 
 convey it to its destination. A postman who car- 
 ries a thousand letters from the office, and delivers 
 them in remote parts of the city in the course of a 
 few hours, may be said to do the work which, with- 
 out such a contrivance, would engage a thousand 
 persons for nearly the same time. The carriage 
 of goods of all kinds by persons who specially ad- 
 dict themselves to that calling, whether by sea or 
 land, is, of all branches into which employment is 
 divided, one of the most generally useful ; because 
 it operates to a vast extent in economizing the 
 time and labour of individuals. At what rate 
 would production of any kind advance, if every 
 labourer were obliged to proceed in person to fetch 
 every article he required from the spot where it 
 was raised, and to carry everything he produces to 
 the place where it is to be consumed ? 
 
 It is evident that, by these and many other con- 
 trivances, there is not only effected a vast econo- 
 my of time, but of power likewise, through the di. 
 vision of labour. Without it a man would be of- 
 ten employed in doing what a child <sould equally 
 well perform ; and a workman of consummate 
 skill or natural capacity for some particular branch 
 of industry, would be forced to let his great powers 
 of production remain dormant for the greater part 
 of his time, while he was providing for his varied 
 necessities in a number of occupations which 
 might be as well pursued by those who are capa- 
 ble of nothing else. 
 
 Thirdly, the invention of tools, machines, and 
 processes for shortening labour and facilitating pro- 
 duction. It is evident that a man who is frequent. 
 ly shifting from one occupation to another for the 
 
82 POLITICAL ECONOMY* 
 
 supply of his various wants, will not be near so 
 likely to invent ingenious methods for shortening 
 or saving his labour, as one whose attention is de- 
 voted exclusively to a particular branch of indus- 
 try. In fact, by far the greater number of im- 
 provements in tools and machinery have been pro- 
 duced by the efforts of workmen and artificers to 
 economize their time and trouble, and to increase 
 the productiveness of their peculiar employments. 
 
 Perhaps in no trade has the division of labour 
 been successfully carried to so great an extent as 
 in that of watchmaking. In an examination be- 
 fore a committee of the House of Commons, it was 
 stated that there are a hundred and two distinct 
 branches of this art, to each of which a boy may 
 be apprenticed. 
 
 An equal gain results from the division of the 
 labour of the head as from that of the hands. 
 "As society advances, the study of particular 
 branches of science and philosophy becomes the 
 principal or sole occupation of the most ingenious 
 men. Chymistry becomes a distinct science from 
 natural philosophy ; the physical astronomer separ- 
 ates himself from the astronomical observer ; the 
 political economist from the politician ; and each, 
 meditating exclusively or principally on his pecu- 
 liar department of science, attains to a degree of 
 proficiency and expertness in it which the general 
 scholar seldom or never reaches. And hence, in 
 labouring to promote our own ends, we all neces- 
 sarily adopt that precise course which is most ad- 
 vantageous to all. Like the different parts of a 
 well-constructed engine, the inhabitants of a civil- 
 ized country are all mutually dependant on, and 
 
POLITICAL ECONOMY. 83 
 
 connected with each other. Without any pre- 
 vious concert, and obeying only the powerful and 
 steady impulse of self-interest, they universally con- 
 spire to the same great end ;* and contribute, each 
 in his respective sphere, to furnish the greatest 
 supply of necessaries, luxuries, conveniences, and 
 enjoyments, "f 
 
 The system of the .division of labour might, as 
 we have said, be called with more propriety the 
 combination of labour, since its effect is the co- 
 operation of many labourers to produce a common 
 result. In fact, wherever this system has made 
 any considerable progress, the society assumes 
 emphatically a Co-operative character. Every 
 member is dependant on the aid of others in ev- 
 erything that he does and for everything he en- 
 joys. The ploughman cannot turn a furrow with- 
 out the help of the wheelwright and smith ; these 
 can do nothing without that of the timber and iron 
 merchant, the miner and the smelter. These, 
 
 * This is the fundamental principle of the modern school of 
 Political Economists. It represents individual self-interest as 
 the only and all-sufficient guide of men in promoting as well 
 the general good as their own. It is spoken of by the author in 
 a subsequent passage as an " unerring instinct." He forgets 
 that the law is often obliged to interpose in order to restrain and 
 direct this unerring instinct ; and that, governed by it, individu- 
 als sometimes engage and persist in undertakings not the most 
 conducive to their own interest, much less to that of the public. 
 The exaggerated notion which is entertained of the sagacity 
 and exclusive supremacy of this principle of human nature, forms 
 a great and prevailing fallacy in the writings of the author and 
 of most other Political Economists. It recurs so frequently in 
 the course of this volume, that the editor has not been able in 
 all cases to exclude it. He therefore takes this opportunity of 
 entering his protest against it, and of giving the reader a gener- 
 al caution in regard to it. Ed. 
 
 t M'Culloch, Political Economy, p. 95, 
 
84 POLITICAL ECONOMY. 
 
 again, must be assisted by the ropemaker, the 
 powder manufacturer, the engineer, the carrier, and 
 several others; while all depend upon the baker, 
 the mealman, the butcher, the farmer, the grazier, 
 &c., for their supplies of food ; and on the tailor, 
 the cotton and cloth weavers, the flax and wool 
 grower, the importer, &c., for their clothing. All 
 society is, in fact, one closely- woven web of mu- 
 tual dependance, in which every individual fibre 
 gains in strength and utility from its entwinement 
 with the rest. But, while all the members of so- 
 ciety co-operate for a common purpose, the in- 
 crease of the general welfare, each individual is 
 still strictly occupied in pursuing what he consid- 
 ers his own private and exclusive interest in what- 
 ever way he likes best. 
 
 And here is to be seen the vast superiority of 
 the principle of freedom over that of compulsion : 
 of the system of co-operation which springs nat- 
 urally and spontaneously from the mutual wants of 
 men, over that artificial, forced, and premeditated 
 system of co-operation, which of late has been put 
 forward as the true rule of social arrangement by 
 the erratic and visionary philanthropist, Mr. Owen, 
 and some of his followers. Had the wisest of 
 mortals, at any former period in the history. of this 
 country, been intrusted with full powers to frame 
 and organize a co-operative system, assigning to 
 each individual in the state the task he was to per- 
 form for the common welfare, and distributing to 
 each the share considered to belong to him of the 
 common produce, can it be supposed for a moment 
 that he would have been able to devise arrange- 
 ments capable of securing anything like the effi- 
 
POLITICAL ECONOMY. 85 
 
 ciency and perfection with which the principles of 
 free labour, private property, and free exchange 
 perform at present the supply of all the varied and 
 complicated wants of a vast population ? 
 
 If we confine our attention to the mode in 
 which the inhabitants of a great metropolis are 
 provided with the necessaries of life, we may see 
 the benefits of this system of co-operation wonder- 
 fully exemplified. If the management of this im- 
 portant business were intrusted to a few individu- 
 als, a neglect, a mistake, an indiscretion on their 
 part might occasionally bring upon this mighty 
 centre of wealth and industry all the horrors of 
 famine,' and compromise the existence of hundreds 
 of thousands of people. What is it, then, that per- 
 forms this important function ? that supplies this 
 great population with its daily food, so quietly and 
 so effectually ; without bustle, without even organ- 
 ization ; without excess, as without waste ; the sup- 
 ply so equally adjusted to the demand, that the 
 prices of butchers' meat and bread do not, perhaps, 
 suffer a variation of a farthing throughout the 
 year, which is not to be accounted for by natural 
 causes affecting the original sources of supply? 
 What is it that performs this daily miracle, which 
 only does not excite our continual admiration be- 
 cause it is self-effected with all the order, ease, and 
 certainty of a great natural process ? Why, the 
 principle of competition ; the free and open rivalry 
 of thousands of individuals, each acting according 
 to his own discretion in his own self-appointed 
 sphere ; each actuated by the unerring instinct* of 
 
 * It is the same unerring instinct that leads otters to keep ga- 
 H 
 
86 POLITICAL ECONOMY* 
 
 self-interest, which prompts him to produce as 
 much as he can sell with profit, but no more ; to 
 keep the supply full, but to prevent excess. An 
 abundant supply causes each producer to lower his 
 prices, thus enabling the public to enjoy that abun- 
 dance, while, on the other hand, an actual or ap- 
 prehended scarcity causes him to demand a higher 
 price, or to keep back his goods in expectation of 
 a rise. " For doing this the dealers of provisions 
 are often exposed to odium, as if they were the 
 cause of the scarcity ; while, in reality (unless op- 
 erating in secret concert, and aided, perhaps, by 
 the vast capital of banks, when they richly merit 
 all the execration they receive),* they only perform 
 the important service of husbanding the supply in 
 proportion to its deficiency, and thus warding off 
 the calamity of famine. The dealers usually de- 
 serve neither censure for the scarcity they are ig- 
 norantly supposed to produce, nor credit for the 
 important public service they in reality perform. 
 They are merely occupied in gaining a fair liveli- 
 hood. And, in the pursuit of this object, without 
 any comprehensive wisdom, or any need of it, they 
 co-operate, unknowingly, in conducting a system 
 which, we may safely say, no human wisdom di- 
 rected to that end could have conducted so well, 
 the system by which this enormous population is 
 fed from day to day."f 
 
 The advantages of the division and combination 
 
 ming-tables or brothels. Is there not occasion, then, for a high- 
 er principle to regulate production ? Ed. 
 
 * It is proper to state, that the words included in brackets 
 have been inserted by the editor. Ed. 
 
 t Whately's Lectures, p. 108. 
 
POLITICAL ECONOMY. 87 
 
 of labour will still farther appear when we come 
 to treat of the several classes into which society 
 divides itself as civilization advances. 
 
 The direct exchange of goods of -any kind for 
 goods is called barter ; and, as it is the most sim- 
 ple mode of exchange, so we find it still the only 
 one in use among some uncivilized nations. But 
 its excessive inconvenience must suggest, even to 
 a very low degree of intelligence, the advantage 
 of improving upon it. Suppose a savage, for ex- 
 ample, to have taken and killed a bullock or other 
 large animal, which he would find a difficulty in 
 consuming alone. He is desirous of exchanging 
 the surplus for a variety of other objects which he 
 is in want of. His neighbours, on their side, are 
 anxious to purchase his meat, but it is highly improb- 
 able that each should have by him, and be able to 
 spare for the purpose, one of the precise objects of 
 which he is in pursuit. To obviate this difficulty, 
 which must be continually recurring, one or other 
 of two very simple methods would suggest them- 
 selves : the one, that he who had the meat or other 
 object to dispose of should give credit to him who 
 wanted it, on his engagement to repay him either 
 the same or such other object as may be agreed 
 upon, when able to do so, or at some definite time ; 
 the other, that individuals should generally keep 
 by them a stock of some one article in general 
 request, a portion of which would be readily taken 
 by every seller in exchange for his commodity. 
 The first of these methods of facilitating exchanges 
 is that of credit, the second of money. Both were 
 probably coeval in their origin. Both have con- 
 tinued in use with more or less of improvement 
 
88 POLITICAL ECONOMY. 
 
 among all nations, civilized as well as uncivilized, 
 to the present day. 
 
 Of the commodities that have been, and, in some 
 instances, still are in use as money by different na- 
 tions, we may instance oxen, shells, salt, leather, 
 and iron, &c. But in nearly all countries men 
 seem to have been, at an early period, determined, 
 by irresistible reasons, to employ in preference for 
 this purpose the more valuable metals, copper, sil- 
 ver, and gold. These reasons are, their possessing 
 qualities fitting them for this peculiar office in a 
 far superior degree to any other commodity of in- 
 trinsic worth. They may be kept almost any time 
 without loss ; they are of such rarity, and so much 
 esteemed (that is, of such great intrinsic value), that 
 small portions of them, easy to be carried about 
 (more especially of the two precious metals), will 
 exchange for comparatively large quantities of most 
 other goods ; and they may be divided without loss 
 into any number of parts, and reunited again, through 
 their fusibility, with the same ease. The only dif- 
 ficulty was that of ascertaining their precise quan- 
 tity and quality. For this purpose it would be 
 necessary both to weigh and assay them. But as 
 the process of weighing and assaying each piece 
 of metal every time it was taken in exchange 
 would have been an endless one, wholly destructive 
 of all the convenience to be derived from its use 
 as money, it seems to have been very soon discov- 
 ered that the government of every country, in order 
 to prevent imposition as to the weight or quality of 
 these pieces, should affix a certain stamp on them in- 
 dicative of their quantity and fineness ; at the same 
 time prohibiting by law the issue, or mintage, as it 
 
POLITICAL ECONOMY. 89 
 
 is called, of money by private individuals, and pun- 
 ishing the imposition upon the public of false mon- 
 ey, when detected, by the heaviest penalties. So 
 stamped, money is called coin ; and on the faith 
 of this government stamp, and the laws by which 
 its imitation is prohibited, coined money passes 
 current by tale, without the troublesome process of 
 weighing or assaying. It is in this form that the 
 precious metals, gold and silver, have become the 
 universal measure of the value of other commodi- 
 ties, and the principal instrument or medium for 
 their exchange. 
 
 But we have already mentioned the existence 
 and general use of another medium for conducting 
 exchanges besides money of intrinsic value ; name- 
 ly, CREDIT, or the confidence placed by one indi- 
 vidual in the engagement of another to pay him at 
 a certain time a certain quantity of goods or mon- 
 ey. This mode of conducting exchanges has one 
 great and evident advantage over the use of money, 
 namely, that it saves individuals the necessity of 
 keeping by them a stock of an expensive commod- 
 ity, for no other purposes than that which their 
 credit, if unquestionable, would answer equally 
 well. On the other hand, the drawback to the use 
 of credit, as a medium of exchange, is its insecuri- 
 ty. Every one may know, in the circle of his 
 neighbours and acquaintances, individuals whom, 
 from their character for rectitude and honesty, he 
 would trust to any extent " with untold gold ;" but, 
 unfortunately, our moral nature is by no means so 
 perfect as to admit of such confidence being univer- 
 sal, or anything like it ; nor, again, is dishonesty 
 the only cause of the failure of engagements. In 
 H 2 
 
90 POLITICAL ECONOMY. 
 
 order, therefore, to prevent, as far as possible, frauds 
 upon the over-credulous or other loss, it has been 
 found" necessary, in all countries, for the govern- 
 ment to enforce by laws the fulfilment of engage- 
 ments : a necessity parallel to that which led, as 
 has just been explained, to the laws for regulating 
 the coinage of money. Supported by this guaran- 
 tee, credit has performed its part as an instrument 
 of exchange in all parts and countries where com- 
 merce has made any progress, and that to an ex^ 
 tent seldom, perhaps, fully recognised by writers on 
 these subjects. Because the precious metals, coin* 
 fid or uncoined, have been almost always and ev* 
 erywhere employed as the measure of. value, they 
 have been hastily concluded to have been likewise 
 the principal, if riot the only, instrument of exchange. 
 But these two things are perfectly distinct, and a 
 very little examination would suffice to convince 
 us that the employment of credit in commerce, as 
 a medium of exchange, has been very considerably 
 underrated ; that it has always carried on a much 
 larger amount of business than money ; and, indeed, 
 that, without it, commerce could have made but 
 very little progress, cramped and fettered as it 
 would have been by the disadvantages incident to 
 the use of metallic money, which is, in truth, only 
 a somewhat superior kind of barter. 
 
 This inquiry, however, may be better reserved 
 for a future occasion. I will only mention here 
 three facts, illustrative of the vastly superior extent 
 to which, in commercial countries, credit is neces- 
 sarily employed as an instrument of exchange be- 
 yond real or metallic money. These are, first, that 
 the entire commerce of Scotland, both foreign and 
 
POLITICAL ECONOMY. 91 
 
 domestic, is carried on without the practical use of 
 a single gold piece. Secondly, that, at the banker's 
 clearing-house in London, exchange transactions 
 are daily settled to the extent of five millions ster- 
 ling on some days of thirteen millions without 
 the intervention of any coin whatever, and by the 
 -employment of a floating balance of only about 
 200,000 in Bank, of England notes, themselves 
 .merely representing the credit of that establish- 
 ment. Thirdly, that there is at every moment in 
 existence in England an aggregate mass of trans- 
 ferable credit in the shape of book debts, foreign 
 and inland bills of exchange, mortgages, annuities, 
 and other moneyed liabilities, including the great na- 
 tional debt itself, to an extent, as regards the whole 
 empire, certainly of several thousand millions in val- 
 ue, the whole of which is strictly in continual employ- 
 ment as a medium of exchange ; an instrument, 
 that is, whereby one individual obtains possession, 
 by consent, of the produce or property of another ; 
 while the amount of real or metallic currency cir- 
 culating through the same countries does not, per- 
 haps, exceed thirty millions, and might probably, as 
 in Scotland, "be dispensed with altogether, without 
 affecting in the least the extent of this prodigious 
 niass of transactions on credit. 
 
92 POLITICAL ECONOMY. 
 
 CHAPTER V. 
 
 Wages. Ample and continually increasing Wages secured to 
 Labourers by the Principles of Free Labour and Free Ex- 
 change. Inequality of Wages in different Employments and 
 of different Individuals. Ability, even of the lowest Class, 
 increases, and its Reward ought to rise proportionately, with 
 the Progress of Civilization. 
 
 HOWEVER directed, the chief motive to labour, 
 freely exercised, must be the result accruing to the 
 labourer. This is technically called his wages. 
 And, since the more productive labour is rendered 
 by machinery, by subdivision of employments, and 
 facilitation of exchanges, the greater must be the 
 aggregate quantity of the good things of life pro- 
 duced, it seems self-evident that the share falling 
 to the lot of each individual labourer, as his rec- 
 ompense or wages, ought to be proportionately 
 augmented. And such doubtless would be the 
 case were the labourer, his employer, and other 
 joint partners in the work of production left free 
 to apportion among themselves thejr respective 
 shares, untrammelled on the one hand by unwise 
 laws, and on the other by unfair combinations ; it 
 being supposed, of course, that each party is honest 
 and moderately intelligent. The great principles, 
 in short, of free labour, and free disposal of its 
 produce, would seem, in such case, amply suffi- 
 cient to secure an equitable distribution of proper- 
 ty among the several classes who contribute to its 
 creation ; and the benefits they thence derive 
 
POLITICAL ECONOMY. 93 
 
 would so stimulate their exertions as to cause a 
 continued increase, not merely in the wealth of the 
 society, but also in the share of that wealth falling 
 to the lot of any individual member. We believe 
 that if, in some societies which have reached a 
 highly artificial and complicated state, this, its nat- 
 ural and legitimate consequence, has not always fol- 
 ]owed every improvement in the means of produc- 
 tion, it must necessarily be owing, and can in every 
 case, by some little attention, be traced either to 
 the want of proper education among the people, or 
 to the interference of erroneous institutions an 
 interference adopted sometimes, doubtless, in igno- 
 rance of its mischievous effects to the community 
 at large, but sometimes also with more or less of a 
 fraudulent intention of diverting the produce of in- 
 dustry into other hands than those into which the 
 just system of free labour and free exchange would 
 distribute it. 
 
 But, under a system of free and equitable ex- 
 change, the recompense (wages) of every labourer 
 will be by no rheans equal, nor even exactly pro- 
 portioned to the severity or duration of his em- 
 ployment. It must be determined by the value of 
 his produce in'the market. And this will increase 
 in proportion to the talent, skill, and application of 
 the labourer, or any other circumstances which 
 may render his labour more productive than that of 
 another. A man whose natural powers of body or 
 mind enable him to contribute more efficiently to 
 the general work of production than another, may 
 equitably expect, and will, under the system of 
 free exchange, receive a larger share of the gross 
 general produce. The same is true of one who, by 
 
94 POLITICAL ECONOMY. 
 
 advantages of education or continued application, 
 has acquired a superior degree of skill or knowl- 
 edge in any of the arts of industry, and of one, 
 too, whose reputation for integrity and vigilance 
 in his employer's service secures him peculiar 
 confidence. The increased reward thus obtained 
 by increased productiveness is the motive and ne- 
 cessary stimulus to most of those efforts for ren- 
 dering labour more productive, which have carried 
 mankind forward from the savage to the civilized 
 state, and must be depended upon for inciting him 
 to yet farther advances. Every attempt to equal- 
 ize the wages of different employments or individ- 
 uals by compulsory arrangements has the certain 
 effect of damping the ardour of industry, putting a 
 stop to improvement, and thus checking the march 
 of production. 
 
 The powers of an individual to produce, or co- 
 operate in the production of wealth, may be called 
 his ability. The lowest degree of ability consists of 
 the rude, unskilled powers of the common work- 
 man. The great body of labourers in most coun- 
 tries are possessed of little more than this inferior 
 ability. But the recompense (wages) of this low- 
 est class of labourers varies, notwithstanding, very 
 much in different countries. In a savage state of 
 society, for example, mere human strength can do 
 but little, for want of tools with which to work, and 
 instructions how to employ them. By practice, 
 and the exercise of his native ingenuity in contri- 
 ving expedients and fabricating instruments, a 
 clever savage may increase the productiveness,, 
 and, consequently, the reward of his labour far be- 
 yond that of his companions ; but, even under the 
 
POLITICAL ECONOMY. 95 
 
 most favourable circumstances, his exertions will 
 not be near so productive as those of the most stu- 
 pid clown in a civilized country, armed with the 
 instruments which the accumulated ingenuity of 
 ages has contrived, and applying them, however 
 mechanically, after those methods which experi* 
 ence has proved to be most efficient. On this ac- 
 count, the inferior degrees of ability will obtain far 
 higher wages in a highly advanced than in the 
 earlier stages of society. The produce of the 
 daily labour of an English ploughman, shepherd, 
 or common mechanic, is at present probably three 
 times as much as that of similar classes of labour- 
 ers in the time of Elizabeth, and six times as much 
 as at the period of the Conquest. If their wages, 
 or the amount of the necessaries and conveniences 
 of life which they obtain in return for their labour, 
 have not increased quite in the same proportions, 
 it must be in consequence of the faulty direction 
 given to the distribution of the produce of labour 
 by the causes to which we have already referred. 
 In the same way, the productiveness of an English 
 day-labourer is perhaps twice as great as that of a 
 Frenchman, four times that of a Russian, and six 
 or eight times that of a Hindoo. His wages 
 ought, therefore, to be proportionate, and probably 
 would be so under an equitable system of econom- 
 ical policy. 
 
 The reward of the industry of the higher class- 
 es of labourers will in the same manner rise with 
 its productiveness. An artisan of superior natural 
 abilities, who has had the advantage of the instruc- 
 tions of a master in some peculiar business, and 
 has applied himself assiduously to acquire the 
 
96 POLITICAL ECONOMY. 
 
 manual dexterity and the practical arts of his trade, 
 has gained a degree of ability which, as contrib- 
 uting much more largely than that of an inferior 
 workman to the marketable means of enjoyment, 
 is enabled to command in the market a propor- 
 tionately larger share of the general stock. The 
 wages, or market value, of personal ability of any 
 kind will depend partly on the degree of study or 
 application, and partly on the amount of time re- 
 quired on the average to produce it. It is also 
 influenced, in a great degree, by the more or less 
 exclusive possession of ability of any description* 
 It is the rarity of particular kinds of talent that 
 confers the greater part of their value upon them.. 
 The average wages of fiddlers is, perhaps, taking 
 into consideration the time spent in acquiring the 
 art, little more than that of ploughmen ; but when 
 the combination of rare genius with equally rare 
 assiduity creates a Paganini, he is able to com. 
 mand almost any price in return for his exertions. 
 There occurs but one Lawrence in a century,, 
 and this it is which enables such an artist to put a 
 value on his productions, perhaps a hundred times 
 greater than an ordinary dauber is happy to get 
 for the same quantity of paint, canvass, time, and 
 trouble. 
 
 But the possessor of superior ability in any line 
 of industry is not only enabled to put a higher 
 value on the produce of his labour directly exert- 
 ed, he has it likewise in his power, in many in- 
 stances, to communicate that ability to others by 
 instruction ; and while he requires, of course, pay- 
 ment from them in exchange for such instruction, 
 he puts it in their power to obtain, in turn, a pro- 
 
POLITICAL ECONOMY. 97 
 
 portionately higher recompense for their own in- 
 dustry. The value of such instructions is some- 
 limes heightened by the communication of secret 
 processes, which give to their possessor a decided 
 advantage over his competitors in the same line of 
 art. In general, however, it consists in the com- 
 munication of a variety of delicate and difficult 
 manipulations, such as can only be learned by 
 actual exhibition and repeated experiment under 
 the eye and tuition of an experienced master.* 
 The high premiums of apprenticeship taken by 
 those who are engaged in the superior departments 
 
 * A remarkable instance in proof of the necessity of per- 
 sonal instruction in some of the useful arts, was related by 
 Mr. Ostler, a manufacturer of glass beads and other toys, to 
 the Committee of the House of Commons on artisans and 
 machinery; and is quoted in Mr. Babbage's valuable work 
 on the Economy of Manufactures. Mr. Ostler, it seems, had 
 received, some years since, an order for upward of five hun- 
 dred pounds' worth of doWs eyes. But, notwithstanding his 
 having some of the most ingenious glass toymaker's in the 
 kingdom in his service, he could not succeed in making the 
 article, and was obliged to renounce the order. " About 
 eight months ago," he continues, " I accidentally met with 
 a poor fellow who had impoverished himself by drinking, 
 and who was dying in a consumption, in a state of great 
 want. I showed him ten sovereigns ; and he said he would 
 instruct me in the process. He was in such a state that he 
 could not bear the effluvia of his own lamp ; but, though 1 
 was very conversant with the manual part of the business, 
 and it related to things I was daily in the habit of seeing, I felt 
 I could do nothing from his description. (I mention this to 
 show how difficult it is to convey by description the mode of 
 working.) He took me into his garret, where the poor fellow 
 had economized to such a degree, that he actually used the en- 
 trails and fat of poultry from Leadenhall market to save oil 
 (the price of the article having been latterly so much reduced 
 by competition at home). In an instant, before I had seen him 
 make three, 1 felt competent to make a gross ; and the difference 
 between his mode and that of my own workmen was so trifling, 
 that I felt the utmost astonishment." 
 I 
 
98 POLITICAL ECONOMY. 
 
 of the useful and ornamental arts, arise chiefly 
 from this source ; and the proportionately high 
 wages that are earned by journeymen or masters 
 in these several callings follow necessarily from 
 the expensive course of instruction they have un- 
 dergone, the assiduity with which they have en- 
 deavoured to perfect themselves in their art, and 
 the more or less rare excellence to which, by these 
 means, aided perhaps by superior natural abilities, 
 they have attained in its practice. 
 
 In this way the skill or acquired ability of one 
 man is handed down from father to son, or from 
 master to pupil, through successive stages, accu- 
 mulating, as it passes on, the added improvements 
 of its various possessors. But, as every pupil or 
 apprentice is enabled to instruct a considerable 
 number of others, there is a constant tendency in 
 every improved process or secret to spread through 
 a wider circle. There are, moreover, many pro- 
 cesses of art which can be communicated by written 
 directions, without personal exhibition ; and these, 
 sooner or later, transpire and become extensively 
 known. This is the case especially wherever the 
 blessing of a press, more especially of a, free press, 
 exists. Once committed to printing, a receipt or 
 peculiar process travels in all directions, not only 
 through the country where it was invented, but 
 through many others likewise, and is handed down, 
 with little or no chance of loss, to distant ages and 
 generations. It is to the splendid invention of let- 
 ters and printing, and to the freedom with which 
 knowledge now circulates, that we owe the rapidi- 
 ty with which the process of mutual instruction in 
 the productive arts is now daily increasing the 
 
POLITICAL ECONOMY. 99 
 
 wealth of modern societies. Without their aid, 
 example and precept might hand down some im- 
 provements in human ability ; but they would be 
 subject to frequent loss and destruction ; and the 
 intercourse of minds must, under such circumstan- 
 ces, be comparatively slow, torpid, and unfruitful. 
 
 These are the things that constitute "useful 
 knowledge." The vast superiority in the produc- 
 tiveness of a Watt, an Arkwright, or a Wedge- 
 wood, over that of a clever savage, is almost en- 
 tirely owing to the influence of accumulated abili- 
 ty of this nature stored up in books, and operating 
 in the development of intellectual powers, which 
 would otherwise have remained dormant and use- 
 less towards enriching the individual, or, as in the 
 case of the three great men we have named, to- 
 wards the lasting benefit of the whole human race. 
 Such wonderful inventions, when thus proclaimed 
 to the world, become public property, a gratuitous 
 addition of vast amount to the ability of all pres- 
 ent and future labourers in the peculiar arts to 
 which they are applicable. 
 
 It may, it is true, be long before the Calmucs or 
 Chinese avail themselves of the increased power 
 such inventions put at their disposal ; but, in the 
 mean time, even these distant nations profit from 
 them through the greater cheapness of the com- 
 modities with which they are supplied, by the 
 growing ability of Europeans and Americans. And, 
 in the mean time, the latter are improving even 
 upon these inventions far more rapidly than other 
 nations can adopt them ; so that the superiority 
 they have once obtained is continually increasing 
 rather than diminishing. 
 
100 POLITICAL ECONOMY. 
 
 We have hitherto spoken of wages (real wages) 
 in the sense of the quantity of the necessaries and 
 conveniences which the labourer can command in 
 the market in exchange for his services. Such ap. 
 pears to be the most correct meaning of the expres. 
 sion. But, in common language, wages are gen- 
 erally understood as referring to the sum in money 
 (money-wages) which the labourer obtains. These 
 two meanings are, of course, very distinct. The 
 money-wages of a labourer may rise, while the 
 quantity of necessaries and comforts he can obtain 
 in exchange for them, and upon which alone his 
 condition in fact depends, is decreasing. This was 
 notoriously the case in Britain in the early part of 
 the present century, when, owing to a succession of 
 bad harvests, the money-price of necessaries reach- 
 ed an exorbitant elevation ; and, though the money- 
 wages of nearly every class of labourers rose like- 
 wise, their purchasing power was greatly lessened. 
 It was the case, again, in our own country in the 
 years 1836, 7, &c., when, owing to the sudden 
 expansion of the currency and other causes, the 
 prices of articles of prime necessity to the labourer 
 rose so much more rapidly than his wages, that, 
 though the latter did increase, his command over 
 such articles was continually diminishing. 
 
 Enough has been said to show that, in a country 
 which has already made great progress in the arts 
 of production, and is still daily improving upon 
 them, the remuneration for labour, even of the 
 lowest kind,, ought to be considerable, as compared 
 with earlier periods, and ought, likewise, always to 
 be on the increase ; never, unless locally and tern- 
 porarily, to fall off in its amount. 
 
ECON 
 
 POLITICAL ECONOMY. 101 
 
 If, therefore, in such a country, the wages of the 
 mass of labourers are at any time not sufficient to 
 command for them a competence of the necessaries 
 and comforts of life ; if wages are found, during pe- 
 riods of considerable duration, through extensive 
 districts, and in a variety of occupations, to de- 
 crease in amount instead of advancing, we may 
 rest assured that such a state of things can only be 
 the result of something faulty in the institutions, or 
 in the intellectual and moral condition of the peo- 
 ple. And the study of the naturally just and equi- 
 table principles on which such institutions ought to 
 have been modelled and, when proved to be in 
 fault, ought to be corrected becomes one of the 
 most important and interesting subjects of inquiry 
 to which the attention of any reasonable friend to 
 humanity can be addressed. 
 
 Before, however, we can prosecute our research- 
 es into the nature of such errors and the mode of 
 correcting them, we must first examine the other 
 elements which co-operate with labour in the great 
 business of production ; and the owners of which 
 have, of course, an equal right with the labourers 
 to share in the joint produce. 
 
 These are, as we have seen. Land and Capital. 
 12 
 
102 POLITICAL ECONOMY. 
 
 CHAPTER VI. 
 
 Land. Its Appropriation essential to Production, History and 
 Causes of its Appropriation in different Ages and Countries. 
 In the East by the Sovereign. In Europe by the Aristocracy. 
 In America by the People. Influence of these different 
 Systems on Production and National Welfare. Natural 
 Laws of Property in. 
 
 POLITICAL Economists, following the example of 
 lawyers, comprehend under the term land, when 
 speaking of it as a source of wealth, all the natural 
 powers of the surface of the globe which can be 
 made available for the use of man, including, to- 
 gether with its soils, mines, quarries, and waters, 
 the animals and vegetables found thereon in a wild 
 state. 
 
 These gifts of Nature, our common mother, are 
 poured forth in all but infinite profusion for the 
 common use of mankind. But, in order to avail 
 himself of them for his various purposes, man must, 
 as has been shown, appropriate them by his la- 
 bour ; and, having done so. he acquires an equita- 
 ble title to. their possession, founded on this labour. 
 If fruit grew spontaneously, on herb or tree, in suf- 
 ficient abundance to supply the wants of all, the la- 
 bour of gathering were alone necessary to give an 
 individual an equitable property in fruit. With 
 the fish of the sea, and many of the fowls of the 
 air, and some wild animals, this rule indeed holds 
 good in law at the present day, even in countries 
 where society has -in many respects attained a most 
 
POLITICAL ECONOMY. 103 
 
 artificial and complicated condition.* But of the 
 fruits of the earth, and the animals most fitted for 
 food, there is no such spontaneous abundance ; and, 
 in order to ensure the production of a sufficiency 
 of these for the wants of man, it is necessary that 
 much pains should be taken by some one ; that the 
 soil be enclosed with fences to prevent the ravages 
 of wandering animals, broken up by tillage, planted 
 and sown with the fitting vegetables, and the grow- 
 ing crops protected, as well as gathered. Now no 
 one, it is plain, would take the trouble to enclose 
 and cultivate a piece of ground, and plant or sow 
 it several months, perhaps years, before the crop 
 can be fit to gather, unless he were secured (so 
 far, at least, as human confidence can be secured) 
 in the exclusive privilege of gathering and appro- 
 priating the fruits of his labour when ready for 
 use. And the same may be said of the land em- 
 ployed for breeding, rearing, and fattening domes- 
 tic animals. For this simple reason, it becomes 
 absolutely necessary, in order to admit of the pro- 
 duction of artificial crops or stocks of cattle, to se- 
 cure in the strongest possible manner a property in 
 land to him who encloses and cultivates it, or in 
 any way renders it productive. And this necessi- 
 ty has been perceived and acted on throughout all 
 the known and cultivated regions of the globe, 
 though in a great variety of ways ;f some of which 
 
 * Our law maxims with regard to fish, game, and such things 
 as are "ferae natures" assert that they are " nullius in bonis" or no 
 man's goods ; and that of them " Capiat qui capere possit," catch 
 who catch can. A qualified property is still to be acquired in 
 these and some other things "per industriam." See Blackstone, 
 ii., 391. 
 
 t The exclusive property in wells appears from Scripture to 
 
104 POLITICAL ECONOMY. 
 
 afford more, some less, encouragement than others 
 to production. That system is evidently to be 
 preferred which affords the most. 
 
 It has, indeed, seldom been sufficiently remark, 
 ed by those who have studied the nature and causes 
 of national wealth, to what a pre-eminent degree 
 the social and economical condition of a people is 
 influenced by the laws and customs that prevail 
 among them respecting the occupation and owner- 
 ship of land. There is no exaggeration in the as- 
 sertion that, by these circumstances almost alone, 
 the position of any nation in the scale of civiliza- 
 tion is practically determined. Nor will any one 
 be inclined to doubt this when he adverts to the 
 simple consideration that it is from the land, and the 
 land alone, that nations derive as well the whole 
 of the food on which they are supported, as the 
 raw materials out of which, by their industry and 
 ingenuity, they elaborate all the other necessaries, 
 comforts, and luxuries of life ; so that it must 
 chiefly depend upon the more or less easy and 
 equitable terms on which the cultivation of the soil 
 by those who possess the means, is permitted or 
 encouraged, whether the production of every kind 
 of wealth be restrained within the narrowest limits, 
 or be developed to the utmost extent of which hu- 
 man industry is capable. 
 
 have been established in the first digger or occupant, even in 
 places where the ground and herbage remained yet in common. 
 See Blackstone, ii., c. i., p. 5, who also states, " It is agreed upon 
 all hands that occupancy gave the original right to the permanent 
 property in the substance pf the earth, which excludes every 
 one else but the owner from the use of it." Occupancy by use 
 and improvement must be intended, though Blackstone does 
 not clearly express this. It is not probable that any individual 
 would have been allowed to appropriate more land than he could 
 occupy in this sense. Id., p. 5. 
 
POLITICAL ECONOMY. 105 
 
 The terms on which the cultivators of the soil 
 are admitted to its occupation vary materially in 
 different parts of the globe ; and a review of these 
 different customs, and of the influence they several- 
 ly exercise over the moral, economical, and politi- 
 cal condition of the countries in which they prevail, 
 would in itself be a work of great interest. The 
 space we can afford to this branch of our subject 
 is less than it deserves. 
 
 I. Wherever despotic power exists, whether the 
 result of domestic treachery or foreign invasion, 
 there property, as well in land as of all other 
 kind and even life itself is, of course, held only 
 at the will of the ruler. And, accordingly* we find, 
 in countries which appear to have been subjected to 
 this form of government, that the exclusive proprie- 
 torship of the land, as the primary source of all 
 wealth, has been claimed by the sovereign. - 
 
 In some parts of the world this claim has been 
 practically exercised up to the present day, in 
 others but nominally ; the right of occupying and 
 using the soil having been transferred by grant of 
 the sovereign to inferior holders, and his claim con- 
 tinued, perhaps, only in name. Throughout all 
 Asia, from China to Turkey (excepting only the 
 Russian provinces), the revenue of the ruler is still, 
 and always has been, raised from the cultivators of 
 the soil by a sort of land-tax, consisting of a pro- 
 portion of the produce, which varies, as may natu- 
 rally be imagined, with the tyranny or mildness of 
 the reigning sovereign, and the greater or less pow- 
 ers of exaction with which the intermediate collect- 
 ors are armed. The cultivator is by some persons 
 
106 POLITICAL ECONOMY. 
 
 considered to be, throughout this large portion of the 
 globe, the legal owner of his plot of land. And, in- 
 deed, he has some of the supposed characteristics of 
 ownership, since he is empowered, in general, to 
 mortgage, sell, or alienate it ; and it descends at his 
 decease, if not otherwise disposed of, in equal por- 
 tions to his heirs. There is, however, an almost in- 
 finite variety in the local customs which determine 
 this tenure ; every petty province having some mi- 
 nute peculiarity. And it is even yet a matter of dis- 
 pute among writers who have deeply studied the in- 
 stitutions of the Indian empire, which of the three 
 parties who have everywhere a joint interest in the 
 land, the peasant-cultivator (or ryot), the tax-collect- 
 or (or zemindar), or the sovereign, is its real legiti- 
 mate proprietor. In practice, each has a lien upon 
 its produce, and to that extent each may be reckon- 
 ed its owner. The tax-collector, like the ryot, has 
 an hereditary and transferable interest in his post, 
 which brings him a revenue in a per centage of the 
 sum he collects from the ryots for the sovereign. 
 
 The question,' however, as to who is the legal 
 owner of the soil, seems to us susceptible of a very 
 simple solution. Throughout the East, the will of 
 the sovereign has always been law ; so that to hold 
 land by that will was to hold it by law. It is only 
 when law acquires a power above that of the sov- 
 ereign that private property in its true sense can 
 be said to exist. We must not ask, then, with re- 
 gard to Asia, what is the law, but what is the cus- 
 tom and the fact ; and the answer is, that the ne- 
 cessity of affording to the peasant-cultivator some 
 guarantee for his continued occupation of the soil 
 he ploughs and sows, in order to induce him to 
 
POLITICAL ECONOMY. 107 
 
 labour, has compelled Asiatic despots to allow him 
 a partial and limited proprietorship ; that is to say, 
 they have permitted him and his descendants to 
 occupy and cultivate his spot of ground on con- 
 dition of paying whatever proportion of its produce 
 the sovereign chooses directly, or through his of. 
 fibers, to exact. And he has seldom, or never, 
 been content to take less than could be extorted by 
 threat or violence. The cultivator is, then, in law, 
 custom, and fact, the slave of his sovereign,* and 
 his property is wholly at the command of the latter. 
 If, therefore, as seems presumable, the owner of land 
 can only be defined as one who has the right of prof- 
 iting by whatever circumstances may improve the 
 value of his land, the ryot has been always consid- 
 ered, in theory, the landowner, never in practice* 
 He was continually promised this right by sover- 
 eigns or their collectors, who wished to tempt him 
 to improve his land ; but who, so soon as it was 
 improved, raised their demands on him in propor- 
 tion, so as to leave him none of the benefit. 
 
 The Asiatic system is evidently a compromise 
 between the usurped and unlimited power of the 
 despot, and the ancient and natural privilege of 
 private property as the result of appropriation by 
 labour ; a compromise extorted from the chief by 
 the necessity of persuading his people to exercise 
 their industry, lest he should prove, like Sultan 
 Mahmoud in the Arabian Nights, a ruler only 
 over owls and ruins, barren plains and dead car. 
 casses. 
 
 * He is punishable with stripes if he neglect to cultivate duly 
 his land his pretended property. He is, therefore, not even 
 master of his own limbs and actions, but essentially a slave. 
 
108 POLITICAL ECONOMY. 
 
 There is nothing necessarily mischievous in the 
 theory of the Eastern forms of land occupation. 
 On the contrary, it approximates to that which we 
 consider the most natural, equitable, and beneficial 
 arrangement, namely, the securing a permanent 
 property in the land to him who renders it produc- 
 tive, and to his heirs, subject only to a payment to 
 the state proportioned to the value of the produce, 
 for the purpose of defraying the expenses neces- 
 sary for the protection of this and other property. 
 The misery suffered by the land-cultivators in Asia 
 and the wretched state of their agriculture are a 
 consequence not of the original rule of the coun- 
 try, but of its continual infraction. It is their ex. 
 posure to the desolating violence of almost perpet- 
 ual warfare, the insatiate tyranny of despotic pow- 
 er, and the extortionate rapacity of its minions, 
 that has dried up the naturally abundant sources 
 of production throughout Asia, repressed industry, 
 and prevented the acquisition of skill or capital. 
 Had there existed in India any defined legal rights, 
 any power beyond the mere caprice of an individ- 
 ual, by which the demands of the state upon the 
 cultivators could have been so far restrained as to 
 leave the latter the power of bettering their condi- 
 tion by their industry, the vast quantity of waste 
 but exuberantly fertile land in that country, and 
 the luxuriance of its climate, would have admitted 
 of an increase of production which must have 
 raised the prosperity of the natives and the re- 
 sources of the government to an almost incalcula- 
 ble extent. The regulations which, with the most 
 humane intentions, have been lately enforced for 
 securing to the ryots the legal ownership of their 
 
POLITICAL ECONOMY. 109 
 
 land, and permanently fixing the proportion of 
 their contribution to the state, are likely, in no long 
 time, to change the entire face of the country, and 
 benefit all parties in an extraordinary degree.* 
 
 The remarks we have been led to make at some 
 length on the systems of land occupation in the 
 East, will enable us to understand the more easily 
 the origin and real character of those Which pre- 
 vail in Europe and the United States. 
 
 II. In Europe the power of the sovereign never 
 became absolute as in Asia. His principal vassals 
 were always more or less independent of him. 
 Each had his own clan or body of vassals, who 
 looked up to him as their only head, and were 
 ready to obey his orders at any time, whether to 
 act for or against his suzerain. And a league of 
 these chieftains could often overawe, and occa- 
 sionally succeeded in dethroning their sovereign. 
 Much of the history of Europe, in -fact, is but 
 the narrative of continued struggles between sov- 
 ereigns and some of their vassal nobles, in which 
 now one, now another party obtained the mastery. 
 Under the immediate successors of Clovis, the 
 Frank conqueror of Gaul, the royal authority was 
 uppermost. But the nobles soon contrived to re- 
 gain the power which their negligence alone had 
 allowed the sovereign to usurp, and which that of 
 the feeble kings of the line of Clovis enabled them 
 easily to resume. The chief vassals of the crown 
 
 * Mr. Jones's work "On the Distribution of Wealth" con- 
 tains in its Appendix some valuable information from Col. Tod's 
 Rajast'han and other sources, upon the interesting topic of the 
 land-tenure of our Indian possessions. 
 
 K 
 
110 POLITICAL ECONOMY. 
 
 succeeded in obtaining a full recognition of their 
 hereditary right to their patrimonial possessions, to 
 which the royal investiture gave more of orna- 
 ment than sanction. " From the death of Charle- 
 magne the kingdom of France was a bundle of 
 fiefs, and the king little more than one of a num- 
 ber of feudal nobles, differing rather in dignity 
 than in power from the rest."* 
 
 The independence of the German aristocracy 
 reached its height towards the middle of the thir- 
 teenth century. Since that period the sovereigns 
 found it necessary to strengthen themselves against 
 their nobles by calling in the aid of their people, 
 and particularly of the commercial and manufac- 
 turing towns, which, with this view, they fostered 
 by immunities, privileges, and protection from the 
 extortions of the neighbouring counts and barons. 
 From these elements sprung the political condi- 
 tion of the European states, which unquestionably 
 owe the freedom they enjoy to the necessity which 
 drove the sovereign to conciliate the mass of the 
 people as a counterpoise to a powerful aristocracy. 
 
 The land, meantime, was cultivated almost whol- 
 ly by hereditary slaves, who were bred and treated 
 in all respects like cattle. Their numbers were 
 also recruited by the prisoners taken in war, and 
 to a certain extent, in the most turbulent times, by 
 freemen, who were actually driven to enrol them- 
 selves among the slaves of powerful chieftains in 
 order to preserve their lives ; a petty freeman be- 
 ing a common prey to all parties, whereas the 
 slaves of a chief were of course protected by him 
 from all others. There were some distinctions 
 * Hallam, i., p. 244. 
 
POLITICAL ECONOMY. Ill 
 
 among slaves not, however, of much importance. 
 Some were certainly saleable like cattle, and might 
 be severed from the land ; others were, by cus- 
 tom, or perhaps in virtue of the original bargain 
 under which they or their ancestors had submit- 
 ted themselves as slaves to the chief, attached to 
 the soil (adscripti gleba), and could only be al- 
 ienated with it. They derived their subsistence 
 by cultivating for their own use small tracts of 
 land allotted to them by the lord for this purpose 
 (a cheap contrivance for making them maintain 
 themselves), and for the remainder of their time 
 they laboured on the demesne land, or portion re- 
 served for the lord's own use, the produce of which 
 formed his revenue. Even the kings of France 
 and Lombardy supplied the expenses of their rude 
 courts from their demesne lands. Charlemagne 
 himself was a farmer, and regulated the economy 
 of his farms with the minuteness of a steward.* 
 
 Nearly the whole of Europe was at one time 
 cultivated in this manner by slaves, or, as they are 
 generally called, serfs. But the labouring classes 
 of the Western states have, by slow degrees, con- 
 trived to emancipate themselves from personal bon- 
 dage, and to obtain the invaluable natural right of 
 either working on their own account, or of disposing 
 of their services to the highest bidder. Among 
 several of the Northern and Eastern nations serf- 
 ship still prevails ;f in some, as Russia, for exam- 
 ple, in its unmitigated form ; the owner having al- 
 most unlimited power over the persons of his serfs ; 
 
 * Hallam, chap, ii., part ii. 
 
 t In most of Russia, in Poland, Bohemia, Hungary, and parts 
 of Austria. Ed. 
 
112 POLITICAL ECONOMY. 
 
 beating, mutilating, and even putting them to death 
 at his will. 
 
 The disadvantages of a system of serfship or 
 villeinage are obvious, and are attested by the low 
 state of civilization, the poverty, and the imperfect 
 cultivation of the countries in which it prevails. 
 The labour compulsorily exacted from tenants on 
 the grounds or on behoof of their landlords, is 
 sure to be performed in a very slovenly manner. 
 Men do not exert themselves with spirit or effect 
 unless they are working on their own account, 
 and are allowed to reap the advantages of their 
 superior industry. It has been proved that one 
 Middlesex mower will cut as much grass in a day 
 as three Russian serfs. And the necesary ab- 
 sence under such a system of all improved imple- 
 ments or processes of husbandry, augments the 
 comparative inefficiency of serf-labour. Indolence 
 and carelessness are the habitual characteristics 
 of a peasantry in this condition ; their want of 
 skill, means, and energy must have a disastrous in- - 
 fluence on the annual produce of the land and la- 
 bour of their territory, and must tend to keep the 
 country they inhabit in a state of poverty and po- 
 litical feebleness, from which it will be impossible 
 for it to emerge while so deleterious a system is 
 suffered to prevail. These disadvantages are, in 
 fact, very generally recognised by all the enlight- 
 ened classes in serf countries, and they have given 
 rise to the numerous attempts now going on to 
 substitute payments of produce or money in lieu 
 of labour as the rent of land. The great end in 
 view is, of course, to encourage the industry of the 
 cultivator, by placing him in a position to improve 
 
POLITICAL ECONOMY. 113 
 
 his own circumstances, as well as those of his land- 
 lord, by increased skill and exertion. For the de- 
 tails of these efforts and their varied success, we 
 must refer to the valuable work of Mr. Jones.* 
 
 III. The system of serf-cultivation, though for- 
 merly common through a very large extent of Eu- 
 rope, was not universal. In some countries, from 
 a very early period, the landowners have accepted 
 from the cultivators of their estates a share of the 
 produce as rent. The existence of such a state 
 of things indicates a more advanced condition of 
 society than that which accompanies the serf sys- 
 tem. The serf, in fact, is a mere slave, compelled 
 to till his master's land, and cheaply maintained by 
 the permission to cultivate for himself a patch of 
 soil barely enough to provide him with subsistence. 
 The metayer (as he is termed in Italy), on the con- 
 trary, is, in all respects, a voluntary tenant, who 
 enters into a sort of joint-stock partnership with 
 his landlord ; the latter finding the land, and the 
 seed, tools, and stock necessary for its cultivation ; 
 the former the equally necessary labour. The 
 produce is divided between them, generally in 
 equal shares, from which division the name (me- 
 tayer, medietarius) is derived. This form of hold- 
 ing is to be traced very clearly to Greece, whence 
 it was introduced among the Romans, and has per- 
 petuated itself, in some degree, in most of the coun- 
 tries which were formerly provinces of that em- 
 pire ; though partly superseded by that of serfship 
 and villeinage, which, as we have seen, grew up 
 
 * Jones on Rent, 1831. 
 K2 
 
114 POLITICAL ECONOMY. 
 
 under the feudal system. In Italy, Savoy, and 
 Spain, metayer tenancy is common ; and in France, 
 before the revolution, four sevenths of the whole 
 surface was occupied en metairie. Even now, in 
 spite of the multiplication of small proprietors con- 
 sequent on the revolution, this class of tenants are 
 supposed to cultivate one half of France, and the 
 greater part of Italy and Spain. 
 
 Though the metayer has many apparent advan- 
 tages over the serf, in his personal freedom, and in 
 the power he enjoys of cultivating his farm as he 
 pleases, freed from the tyranny and irksome super- 
 intendence of the proprietor, yet he is found, in 
 practice, to be very little, if at all, more advan- 
 tageously situated. It would seem, at first sight, 
 that the reward of his toil, consisting in a definite 
 share of the produce, would increase with his in- 
 dustry and skill, and therefore stimulate him to ex- 
 ertion. But the shortsighted covetousness of the 
 proprietors has almost everywhere prevented this, 
 by inducing them, when they could not by agree- 
 ment directly increase their share, to do so indi- 
 rectly, by throwing the government taxes on the 
 tenant, and by claiming for themselves an exemp- 
 tion from all imposts. By this and other similar 
 contrivances, the share of the v metayer has been 
 generally so reduced as to leave him but a bare 
 subsistence, and no hope of bettering his condition 
 by any exertion of industry. The metayers of 
 France are described by Turgot before the revolu- 
 tion, and by other writers of the present day, as 
 existing in the depth of misery, always in arrear 
 to their landlord, and consequently entirely at his 
 znercy, from their utter inability even to live upon 
 
POLITICAL ECONOMY. 115 
 
 their half of the produce of their farms. This 
 misery, of course, reacts injuriously upon their 
 landlords' interests, by giving a careless, slovenly 
 character to their mode of cultivation, and putting 
 anything like energy or a spirit of improvement 
 out of the question. 
 
 Again, the divided interest which exists in the 
 produce is a bar to improvement. The tenant is 
 unwilling to listen to the suggestions of his land- 
 lord ; the landlord to intrust additional means to 
 an ignorant, prejudiced, and careless tenant. When 
 stock is to be advanced by one person and used by 
 another, some waste and neglect in the receiving 
 party, great jealousy and reluctance in the contrib- 
 uting party, naturally . ensue. Hence the imple- 
 ments and stocks placed at the disposal of the me- 
 tayers are, in general, very scanty, and of an in- 
 different quality ; and their land, on the whole, is 
 very imperfectly cultivated. These disadvantages 
 must continue severely to affect the condition of 
 countries in which this imperfect system of land- 
 occupation prevails. Their agriculture must be 
 exceedingly unproductive, as compared with the 
 capacity of the soil and the amount of labour ex- 
 isting upon it ; and since the produce of land forms, 
 as we have seen, the substratum of all other wealth, 
 the production of the aggregate stock of the means 
 of enjoyment must be proportionately slow, lan- 
 guid, and contracted. 
 
 IV. Such, with very trifling variations, are the 
 imperfect systems on which land has been occu- 
 pied for the purpose of cultivation throughout the 
 entire continent of Asia and nearly the whole of 
 
116 POLITICAL ECONOMY. 
 
 Europe. In Great Britain, Holland, and the Neth- 
 erlands, a different mode has been adopted, to which, 
 in a great measure, is to be ascribed the extraordi- 
 nary comparative progress which agriculture has 
 made in this corner of Europe. 
 
 At a very early period, as has been already men- 
 tioned, the stipulated services of the villeins or ma- 
 norial tenants in England began to be commuted for 
 annual payments in money. About the same time, 
 it became not uncommon for the lord to lease out 
 for the duration of certain lives, or for a term of 
 years, upon payment of a money fine, portions of 
 the manorial waste to such persons as were desi- 
 rous and able to reduce it to tillage. As these 
 leases expired, the lands, whose value had increased 
 through the cultivation bestowed on them, were 
 relet for an augmented fine, or at an annual money- 
 rent ; frequently for both. And the lord in time 
 found it much more convenient to lease out in this 
 manner his demesne lands likewise, than to farm 
 them himself through a bailiff. In this manner, the 
 greater portion of the land of England came to be 
 occupied by tenants on lease. Many small plots 
 were still cultivated by their owners, the liberi ten- 
 entes, or freeholders, who had acquired them by 
 purchase, or by descent from the freemen and 
 military tenants of the feudal era. Other estates 
 still remained in the hands of the descendants or 
 purchasers from the ancient villeins, holding, as it 
 was called, at the will of the lord by copy of court 
 roll (the record of such grants). To the latter 
 tenure, custom, and the indulgence of the lords of 
 manors in never resuming the grant, in process of 
 time, gave a prescriptive right, recognised by the 
 
POLITICAL ECONOMY. 117 
 
 courts as a valid claim according to the common 
 (or customary) law of the land. But even of these 
 smaller properties, many, when they fell into the 
 hands of minors or women, or were purchased by 
 persons engaged in trade or otherwise, were in 
 their turn leased out to tenants willing to pay their 
 owners a money-rent for their occupation. So 
 that, by degrees, nearly the whole surface of Eng- 
 land, as well the small estates of the inferior class 
 of land-owners as the extensive domains of the 
 lords of manors, the nobles, the crown, or the 
 church, came to be cultivated in portions of mod. 
 erate extent, by tenants who undertook to farm 
 these portions on leases for certain protracted pe- 
 riods, stipulating for payment to the owner of an 
 annual rent. 
 
 Now it is immediately evident that such a sys- 
 tem of occupation must afford much scope for the 
 development of industry and economy. A culti- 
 vator, secured by a lease in the possession of all 
 that he can raise off his farm over and above the 
 rent he has stipulated to pay its owner, in many 
 respects stands for the term of his occupation in 
 the position of its owner. Though not induced to the 
 same prospective calculations and investments as 
 if he were proprietor, nor having the same motive 
 to economy and self-dependance, his interest will 
 still prompt him to steady and systematic effort. 
 It is to the assiduous industry of these leasehold 
 tenants, and the smaller occupying freeholders, 
 that England is indebted for the great advances 
 she has made in agricultural skill, and for the fer- 
 tilization of almost every corner of her surface 
 where the plough can enter. To their steady 
 
118 POLITICAL ECONOMY. 
 
 economy she owes the accumulated mass of agri- 
 cultural capital which renders the labour of Brit- 
 ish farmers so greatly more effective than that of 
 continental cultivators. 
 
 The advantages inherent in the leasehold system 
 of occupation would, however, have been ineffec- 
 tual but for the protection which the law extended 
 to the tenants from the rapacity of their landlords, 
 and the countenance which the courts of Britain 
 have, wi-th very rare exceptions, at all times liber- 
 ally afforded to the efforts of the industrious classes 
 of society to emancipate themselves from the thral- 
 dom in which they had been bound by the feudal 
 system. Perhaps it is to the spirit of independence 
 and love of liberty uniformly inspired by commercial 
 pursuits, that we are to attribute the success which 
 at so early a period attended the efforts of the 
 English, the Dutch, and some other maritime states, 
 to free themselves from the shackles of feudalism. 
 Serfship was almost wholly extinguished in England 
 in the time of. Elizabeth. While the cultivators 
 of nearly all Europe were abject slaves, subjected 
 to the whip, knot, or gallows of their feudal lords, 
 the merry and stalwart yeomen of England had 
 rights recognised by law, which they well knew, 
 and, " knowing, dared maintain." They tilled the 
 fields of proud and wealthy barons, not on such 
 terms as a master imposes on his slave, but on 
 those of free contract for mutual benefit, such as 
 left the lord as much indebted to his tenant as the 
 tenant to his lord. In gaining this high compara- 
 tive condition, the cultivators of England were as- 
 sisted by the sovereign, who felt the advantage of 
 being backed by their honest and hearty loyalty in 
 
POLITICAL ECONOMY. 119 
 
 his disputes with disloyal nohles ; and also by the 
 judges of the law-courts appointed by him, them- 
 selves sprung from the people, and naturally in- 
 clined to favour the liberty of the subject. Black- 
 stone truly says that " the law of England has al- 
 ways been ready to catch at anything in favour of 
 liberty." 
 
 One other remarkable circumstance contributed 
 to favour the advance of the class of English 
 farmers in wealth and independence, namely, the 
 continued fall in the value of money during the 
 three successive centuries which followed the dis- 
 covery of America. The abundance of gold and 
 silver flowing from the New World into the Old 
 lowered their value, and with them that of money. 
 The sovereigns, during the same period, frequently 
 resorted to the trick of debasing the coin of the 
 realm, in order to pay their old debts in money of 
 less intrinsic worth. And the consequence was, 
 that leasehold tenants, who had contracted at the 
 beginning of a long term of occupation for pay- 
 ment of a fixed annual rent, proportioned in 
 amount to the value of money at that time, profited 
 greatly as its value was subsequently lessened, and 
 the money- price of every product of their farms 
 proportionately increased. The landowners were, 
 of course, losers in the same proportion ; but the 
 nation at large benefited to an extraordinary de- 
 gree. For, had this difference passed into the 
 hands of the landlords, to whom in equity, perhaps, 
 it was due, it would have been spent by them as 
 revenue on more sumptuous clothing, furniture, and 
 feasting, and on larger trains of menials ; whereas, 
 in the hands of their tenants it was economized, 
 
120 POLITICAL ECONOMY. 
 
 and accumulated into capital, being expended by 
 them in the more vigorous cultivation of their 
 farms, in bringing fresh lands under culture, in the 
 erection of farm buildings and in other permanent 
 improvements, by which the general productive- 
 ness of the national soil was increased. 
 
 V. In the northern division of the New World 
 we may see a system in practice very different 
 from any of those we have been employed in con. 
 templating ; a system approaching, perhaps, as 
 nearly as is desirable to the natural and equitable 
 law of land. proprietorship. These vast territo- 
 ries, throughout which man, up to a very late pe- 
 riod, was a comparative stranger, offered an almost 
 boundless extent of surface for his occupation. 
 The adventurers that migrated from the Old 
 World to settle on these fair shores, bringing with 
 them both a knowledge of the arts of civilized 
 life, and the habits and maxims of regulated free- 
 dom, found on their arrival no powerful monopo- 
 lists, claiming, on the plea of ancient grants or 
 modern conquest, to exclude them from their just 
 place at the bosom of mother earth ; no arbitrary 
 despot proclaiming himself, by right divine, lord of 
 earth and all that is therein ; they had 
 
 " The world before them where to choose, 
 And Providence their guide." 
 
 Each took possession of as much land as he found 
 it convenient to cultivate, and rejoiced to find oth- 
 ers fixing their choice in his immediate vicinity, 
 and sharing with him the well-known advantages 
 of a division and exchange of labour. As the set- 
 
POLITICAL ECONOMY. 121 
 
 tlements advanced, and it was found to be for the 
 common interest that the occupation of fresh land 
 should be regulated in a systematic manner, for 
 the sake of more effectually securing proper com- 
 munications and measures for internal security and 
 external defence, the state was appointed proprie- 
 tor of all the unoccupied lands, but only with the 
 view of their being dealt out to all who might wish 
 to settle, upon such terms and in so regulated a 
 manner as would ultimately be most conducive to 
 the benefit of the settlers themselves. 
 
 Here was a practical adoption, through an ex- 
 tensive tract of country, of those simple and natu- 
 ral principles which we have shown ought every- 
 where to regulate the appropriation of land, the 
 common bounty of the Creator. We see its re- 
 sults in the extraordinarily rapid increase of wealth 
 and population among the settlers wherever they 
 enjoy internal tranquillity and the protection of wise 
 and equal laws, as in the United States. In the 
 provinces formerly colonized by Spain and Portu- 
 gal, civil dissension, combined with the prevailing 
 want of intelligence and moral: culture, has unhap- 
 pily marred the lot of their inhabitants ; while in 
 the British Provinces, the colonial policy of the 
 mother country has produced, though in a much 
 less degree, the same melancholy effect. 
 
 Political economists are in the habit of explain- 
 ing the high wages and prosperous condition of 
 the cultivators of the United States by the single 
 circumstance of these newly-settled countries pos- 
 sessing vast tracts of uncultivated land, from which 
 it is easy for any industrious man, by the labour of 
 his own arm, to procure a comfortable subsistence 
 L 
 
122 POLITICAL ECONOMY. 
 
 for himself and his family. But the fact is, that 
 many of the most ancient states of the Old World, 
 as well as all parts of the New, contain an almost 
 equal abundance of untilled lands, of high natural 
 fertility, and provided by nature with every requi- 
 site quality for the occupation and enjoyment of man, 
 upon the sole condition that he exert the powers 
 with which she has furnished him in the develop- 
 ment of their productiveness. It is to the vices of 
 the governments and institutions of these countries, 
 not to the deficiency or exhaustion of its rich, and, 
 through a vast extent, yet virgin soils, that we must 
 attribute whatever is to be found of misery in the 
 condition of their people. It is by the strong re- 
 maining taint of feudal slavery, the weight of de- 
 spotic tyranny, the unnatural restraints imposed on 
 industry by invidious legislation, and the ignorance, 
 vice, and bigotry which a long course of systemat- 
 ic oppression has engendered in both people and 
 rulers, that the development of their natural re- 
 sources is impeded. There can be no stronger 
 proof of this assertion than the comparatively un- 
 improved condition in which the Spanish and Por- 
 tuguese colonies have stagnated, though planted 
 for centuries on new and highly fertile soils ; while 
 the Northern states of America have made, in a 
 third part of the time, such rapid progress as to 
 present already to the delighted friend of humanity 
 one of the most powerful, wealthy, prosperous, and 
 civilized nations of the globe. The difference can 
 be attributed to nothing but the different political 
 institutions and moral training prevailing in those 
 countries. 
 
POLITICAL ECONOMY. 123 
 
 CHAPTER VIII. 
 
 CAPITAL. 
 
 The Result of previous Labour Not affixed to Land Nor in- 
 corporated with Human Ability Nor reserved for private 
 Consumption But employed, or reserved for Employment, 
 in Production, with a View to Profit from sale of its Produce. 
 Necessity of so restricting the Meaning of the Term. 
 Utility of Capital. Profit on Capital. Nature of Profit, and 
 Natural Right to its Enjoyment. Mistaken Views of those 
 who declaim against the Profits of Capital. Fixed and Cir- 
 culating Capitals. Elements of Profit. Net Profit, or Inter- 
 est of Money. Inequality of Gross Profits. Equality of Net 
 Profit in the same Country. 
 
 LABOUR, as we have seen, without the assistance 
 of the powers of nature as developed on the sur- 
 face of the earth, can do nothing. But neither 
 can labour do much, even with the possession of 
 land, and the aid of all the powers of nature, in 
 the absence of much previous preparation, the re- 
 sult of preceding labour ; and especially of a stock 
 of tools to work with, of materials to work upon, 
 and of food, clothing, and other necessaries for the 
 maintenance of the labourer while at work. A 
 few berries from the bush, water from the spring, 
 and now and then a stray animal, taken by supe- 
 rior swiftness of foot, must compose the sole sub- 
 sistence of the man who has within reach no pre- 
 pared reserve, either of food, or of instruments for 
 obtaining it. The poorest savage generally pos- 
 sesses some stores of this nature, the products of 
 previous labour, nor always depends for his daily 
 
124 POLITICAL ECONOMY. 
 
 meal upon the chance of obtaining it by his daily 
 exertion. But, in an advanced state of society, 
 few things can be produced and prepared for con- 
 sumption except by processes which require mueh 
 time days, months, often years during which the 
 labourers employed must be supplied with food, 
 clothing, and other necessaries of subsistence. A 
 variety of tools, instruments, and machinery are 
 equally necessary, as well as a stock of materials ; 
 all of which things have to be provided at an ex- 
 pense of much time and labour, before any of the 
 ordinary operations of industry can commence. 
 Stocks of all these things, it is evident, must be 
 accumulated somewhere at hand, for the use of the 
 various classes of labourers, or production of no 
 kind could be carried on. The agricultural la- 
 bourer could neither turn the soil, nor deposite a 
 grain in it, if he were unprovided with the spade, 
 plough, harrow, and other implements of husband. 
 ry. The smith and the carpenter must cease to 
 work unless they can find somewhere a stock of 
 iron and timber prepared to their hands, as well as 
 the fuel, forge, and workshop, with the tools and 
 instruments peculiar to their trades. And these, 
 and all other classes of labourers, depend likewise 
 for their daily sustenance and comforts on the due 
 provision of food, clothes, furniture, and houses, 
 either in their own possession or within their reach. 
 The results of previous labour, accumulated in 
 any country, constitute, with land, its stock of wealth 
 or of the materials for producing wealth. But 
 of these results a very considerable portion is so 
 far incorporated with, or affixed to the soil, as to 
 be by law, custom, or necessity, inseparable from 
 
POLITICAL ECONOMY. 125 
 
 it. Such are the permanent improvements which 
 have been made upon the land at various times 
 since its first occupation, with the view of aug- 
 menting its productiveness ; such as fences, dura- 
 ble manures, roads, canals for irrigation or traffic, 
 plantations of fruit or forest trees, and buildings of 
 various kinds ; all of which are ranked by law and 
 custom, together with the land to which they are 
 affixed, in the general class of " immoveables," or 
 landed property ; and the returns derived from 
 them are merged in rent. Nor can Political Econ- 
 omy, when taking a general view of the sources of 
 wealth, without inextricable confusion, depart in 
 this generic nomenclature from the established 
 usage. 
 
 Another portion of the accumulated results of 
 labour resides in the acquired skill and knowledge 
 of individuals, in the acquisition of which much 
 time and trouble has been expended. The entire 
 body of the useful arts and sciences forms a part, 
 and the most valuable part, of the stock of society. 
 It is the accumulated result of intense preceding 
 labour on the part of the great benefactors of man- 
 kind, for ages back, preserved to us through suc- 
 cessive generations, and with continual improve, 
 ments, by tradition or writing. These treasures 
 of knowledge, however, before they can be pro- 
 ductively applied, must be appropriated by individ- 
 uals with additional labour on their part, and so 
 far mixed up with their natural qualifications as to 
 become personal to them. This kind of stock, 
 therefore, enters into the category of ability or hu- 
 man powers of production, under which head we 
 L 2 
 
126 POLITICAL ECONOMY. 
 
 have already considered it. Its returns properly 
 fall under the appellation of wages. 
 
 The third and remaining portion of the aggre- 
 gate stock of a community consists of the material 
 products of previous labour, that are separable 
 from the soil as well as from individuals ; and it 
 is therefore properly designated as " moveables" or 
 moveable stock. 
 
 Moveable stock is itself to be distinguished into 
 two great divisions, according as it is kept or used 
 for the purpose of producing wealth, or simply for 
 individual gratification without any ulterior object. 
 
 Thejirst division comprehends the various tools, 
 machinery, materials, necessaries of subsistence, 
 or other things provided for sale, or for the con. 
 sumption and use of labourers while employed in 
 the production of saleable commodities ; and is 
 properly designated, as we have already explained, 
 by the term capital. The remaining portion of 
 moveable stock, which is not kept for sale, or con. 
 surned with the view of facilitating farther produc- 
 tion, but only for that which is, in truth, the real 
 end and object of all production the gratification of 
 its owner is indifferently called revenue, wealth, 
 property, goods and chattels, &c. ; but must not 
 be confounded with capital. 
 
 Though it may be difficult in all cases to deter, 
 mine of every particular object, whether it is pro- 
 ductively engaged, and, therefore, to be reckoned 
 capital or not, yet this need no more prevent our 
 distinguishing the whole moveable stock of a coun- 
 try under two great heads, according as it is em- 
 ployed with a view to the reproduction of more 
 wealth, or only with a view to immediate gratifica- 
 
POLITICAL ECONOMY. 127 
 
 tion, than we need be interdicted from classifying 
 natural objects into minerals, vegetables, and ani- 
 mals, because there are some few intermediate 
 species which can be with difficulty referred to ei- 
 ther class. No useful conclusions can possibly be 
 come to upon what is going forward in society, 
 if we do not distinguish between those masses of 
 wealth which are habitually consumed in a pro- 
 ductive manner in such a way, that is, as to pro- 
 dcce an equal or greater quantity of wealth from 
 those which are consumed unproductively, or so as 
 to leave no equivalent behind. When an individ- 
 ual consumes a certain quantity of his stock with 
 no other aim or result than the gatification of 
 himself or his friends, the mass of wealth is pro 
 tanto diminished ; and, though gratification is the 
 ultimate end of all production, yet, since a portion 
 of the means of gratification is destroyed, and no 
 similar portion produced, such consumption is ev- 
 idently unproductive.* What is consumed in this 
 way is usually said to be expended as revenue. 
 When an individual, on the other hand, purposely 
 
 * In whatever degree the desire of such gratification stimu- 
 lates the labourer to increased efforts that he may have the 
 means of procuring it, in the same degree does it conduce to 
 production, and hence such consumption ought not to be re- 
 garded as wholly unproductive, unless it tends to disable the la- 
 bourer from future efforts. For instance, the desire of using 
 
 and 
 
 sugar as a luxury may incite the labourer to more sirenuous an 
 to better-directed efforts, and may thus render him a better pro- 
 ducer. Such, generally, is the tendency of innocent gratifica- 
 tions, more especially those of an intellectual and moral char- 
 acter. On the other hand, such a taste as that for spirituous li- 
 quors, though it may prompt to occasional efforts in order to get 
 means of indulgence, has a direct tendency to lessen in the la- 
 bourer both the ability and the disposition for steady employ- 
 ment. Ed. 
 
128 POLITICAL ECONOMY. 
 
 expends stock in such a way as that its consump- 
 tion is the means of producing an equal or greater 
 quantity as, for example, the consumption of seed 
 and husbandry implements by a farmer no por- 
 tion of the aggregate of wealth is destroyed ; but, 
 on the contrary, there is, in almost every case, an 
 increase, which forms what is usually called profit, 
 and is the motive for such expenditure. We 
 should therefore define capital as that portion of 
 moveable stock which is employed, or reserved for 
 employment, in production * 
 
 * The term capital is employed, we think, by Smith and most 
 other economists in far too extended a sense, and requires to be 
 more strictly limited than it usually is by writers on the subject, 
 if we desire to preserve any distinction between this and the 
 other main elements of production, land and labour. We can- 
 riot acknowledge acquired skill, lor instance, to be properly 
 called capital, unless by metaphor. Otherwise, what is pure 
 labour ? The mere brute force of man is rarely, if ever, exert- 
 ed without some little skill to aid its application, a skill ac- 
 quired by practice or precept. There is no occupation so me- 
 chanical, not even that of carrying a load, or breaking stones on 
 the highway, in which some skill may not be acquired, so as to 
 enable one man to do more work than another who is less skill- 
 ed. It is true that much capital is often expended by labourers 
 in the acquisition of skill and knowledge, which eventually 
 bring in to their owners an increased return ; but when capital 
 has been thus incorporated with man himself in the increase of 
 his productive powers, we must consider it more accordant with 
 usage, and less likely to create confusion, that it should thence- 
 forward go by the name of ability, not capital; and its returns 
 be called wages, not profit. 
 
 Again, when capital has been expended upon the permanent 
 improvement of land, as in clearing, fencing, draining, and fer- 
 tilizing it, in roads, canals, bridges, and buildings, we can no 
 longer think it properly designated as capital. It is incorpora- 
 ted with land, so as to be inseparable from it, except by an ex- 
 tremely slow process ; and its returns are practically merged in 
 rent. This portion of rent undoubtedly represents the profit of 
 the capital which has been spent on the land, just as the in- 
 creased wages of an artificer represent the profit of the capital 
 
POLITICAL ECONOMY. 129 
 
 No labourer, we have said, can work at anything 
 but with the aid of capital, either produced by him- 
 
 expended in teaching him his trade ; and we need not forget 
 this, though it may be more convenient and more accordant 
 with usage, instead of calling them both profits, to call one 
 rent, the other wages. If labour, land, and capital are to be 
 distinguished by any intelligible line of separation, we think it 
 can only be by including, under the first term, all the produc- 
 tively engaged powers of man, natural or acquired ; under the 
 second, those of the soil and the things permanently affixed to 
 it ; under the third, those of the moveable substances man has 
 stored up with a view to production. In Political Economy 
 much labour has been expended in vain, and great confusion in- 
 troduced, where all is really plain enough, by over refining, and 
 by ill-judged endeavours to give a mathematical accuracy to 
 definitions and propositions which, from the nature of their sub- 
 ject, can pretend to no more than the grouping of phenomena 
 according to their most striking general characters. If, as the 
 definitions and language of some economists would contend, 
 everything on which capital has been expended with a view to a re- 
 turn is still to be called capital, there is an end to all distinction 
 between the three primary elements of wealth. All labour, 
 then, is capital, and all land. The labourer must be reared on 
 capital for years before he can do any work ; he must be fed 
 daily on capital, or his ability vanishes ; land must be cleared 
 and cultivated by capital, or it will produce nothing. Both la- 
 bour and land are, therefore, by this rule essentially capital, 
 and wages and rents are in fact profits ! And so, indeed, says 
 Mr. M'Culloch, with all gravity (Principles of Political Econ- 
 omy, p. 118), quite regardless of the circumstance that every 
 one of his works, even that in which he comes to so startling a 
 conclusion, is entirely made up of a series of disquisitions on 
 the reciprocal influence of land, labour, and capital, rent, wages, and 
 profit. We need hardly observe that things which are identical 
 can have no reciprocal ar.tion on each other. The same spirit 
 of ultra refinement has driven him into the equally monstrous 
 inconsistency of defining labour to be " any sort of action or op- 
 eration, whether performed by man, the lower -animals, ma- 
 chinery, or natural agents, that tends to bring about a desirable 
 result" ( Edition of Wealth of Nations); thus making labour 
 include both capital and land. Again, his definition of capital, as 
 " all that can be made to aid in production," includes in it land, 
 labour levenue, and profit itself: while his astounding declara- 
 tion that bubble-blowing and turtle-eating are productive occu- 
 pations, necessarily follows from these premises. If such defi- 
 
130 POLITICAL ECONOMY. 
 
 self or procured from others. But production 
 could advance only with the utmost slowness if ev- 
 ery labourer were to endeavour to fabricate for 
 himself the tools he woiks with, and to raise from 
 the soil the materials he employs and the food he 
 consumes. At a very early period in the progress 
 of improvement, it must have been discovered by 
 experience to facilitate greatly the object of all la- 
 bour, production, for some classes of labourers to 
 occupy themselves exclusively in making tools and 
 machinery of different sorts for the use of the re- 
 mainder ; others in the cultivation and preparation 
 of the different kinds of raw material required for 
 the several processes of industry ; and others, again, 
 in the growth and provision of the food, clothing, 
 and various articles which are necessary for the 
 subsistence of the whole. 
 
 The stock of these things which an individual 
 has produced, not for his own use, but with a view 
 to their employment or consumption by others, are 
 of course as much his property as if he had intend- 
 ed them for his own use, and he has the right to 
 dispose of them to those who want them on the 
 most advantageous terms he can make. He can 
 either sell them outright ; or, if it be more conve- 
 nient both to him and to those who wish to employ 
 the things, lend them, on condition of receiving a 
 stipulated remuneration for their loan, in addition 
 to the repayment of the things themselves, or their 
 equivalent. Or, as a third alternative, he may re- 
 tain some portion of his capital in his possession, 
 such as machinery and implements, and with an- 
 
 nitions are adopted, Political Economy becomes at once a jum- 
 ble of meaningless phrases. 
 
POLITICAL ECONOMY. 131 
 
 other portion, consisting, perhaps, of the necessa- 
 ries of subsistence, or their equivalent, purchase the 
 labour of such individuals as are willing to work 
 for him, employing his capital. 
 
 If the entire capital a labourer works with be- 
 long to himself, whether by right of purchase or 
 production, the whole produce of his labour will 
 likewise properly belong to him. But if he works 
 with the capital of another, it is/ evident that a part 
 of the produce which results from the joint employ- 
 ment of his labour and the other's capital belongs 
 of right to the owner of the capital. Thus if A 
 supplies B with either food, or tools, or materials, 
 upon which to work at making any article, it is clear 
 that a proportionate part of the article or of its value 
 rightfully belongs to A. What this part should be 
 what, in short, should be the several shares of the 
 labourer and the capitalist in any case, must depend 
 on the relative value of the capital supplied by the 
 one and the labour furnished by the other ; and this 
 can only be equitably settled by previous agree- 
 ment between the parties, voluntarily entered into 
 by both for their mutual advantage. 
 
 The share of the labourer is the remuneration of 
 his labour, and forms his wages. The share of the 
 capitalist goes, for . the most part, to replace that 
 portion of his capital which has been consumed, 
 damaged, or worn out in its employment. But 
 there must remain to the latter some surplus be- 
 yond this ; for it would be worth no man's while to 
 employ his capital productively, if he can gain no- 
 thing by so doing. The jurpjus which accrues to 
 the capitalist after his capital lias been replaced, is 
 his only remuneration for its employment, and is 
 
132 POLITICAL ECONOMY. 
 
 called its profit. Profit is the inducement of the 
 capitalist to employ his capital in production, just as 
 wages form the inducement of the labourer to exert 
 his skill and strength in the same manner. The 
 former has obviously as much right to be paid for 
 the use of his capital, as the latter for the use of his 
 labour. Both have combined to produce a joint re- 
 suit, which could not have existed in the absence 
 of either. Without the capital, the labour would 
 have been nearly unproductive ; without the labour, 
 the capital must have remained dormant and unin- 
 creased, even if secure from waste. The right to 
 possess and freely dispose of capital, and to receive 
 whatever return or profit is to be obtained by ac- 
 commodating other parties with its loan, or by em- 
 ploying the hired labour of others in rendering it 
 productive, stands evidently on precisely the same 
 ground as the right to possess or dispose of any 
 other thing, equally the produce of labour. The 
 expediency of protecting the free use and employ- 
 ment of property as capital, that is to say, produc- 
 tively, and the free enjoyment of its returns, is evi- 
 dent from the simple consideration that, in the ab- 
 sence of such protection, no one would produce 
 such things as are necessary for aiding produc- 
 tion ; at all events, no more of them than he want- 
 ed for his own use. Every labourer must then 
 make his own tools, and raise from the earth his 
 raw materials and his food. There would be an 
 end at once to all that vast increase of the general 
 stock of the means of enjoyment which results from 
 the division of labourers into the various classes of 
 tool-makers, growers and preparers of raw mate- 
 rial and of food, house-builders, furniture-makers, 
 
POLITICAL ECONOMY. 133 
 
 manufacturers of clothing, ornaments, &c. Soci- 
 ety would be resolved into its first elements. Each 
 man must betake himself to the cave or hollow tree 
 for shelter, his nails for tools, berries and game his 
 sole food, skins his only clothing ; and famine and 
 want must rapidly cut down the numbers of man- 
 kind to the meager hordes that could alone support 
 themselves on such terms. 
 
 The profit obtained by the owner of capital from 
 its productive employment, whether in his own 
 hands or those of another party, to whom it is lent, 
 is to be viewed in the light of a compensation to 
 him for abstaining for a time from the consumption 
 of that portion of his property on his personal grat- 
 ification ; and the compensation is, therefore, pro- 
 portioned to the time during which his capital is so 
 engaged, instead of being spent upon himself as rev- 
 enue. It has been said time is a mere word a 
 sound ; can do nothing, is nothing ; and can there- 
 fore neither have nor give value.* This is a very 
 great and extraordinary mistake. What gives 
 value in exchange to labour ? Only that no one 
 will, under a free system, give his labour for no- 
 thing, and, consequently, those who require the la- 
 bour of others must pay for it. But the same cause 
 gives value to time. No one will sacrifice time 
 by allowing it to operate on his property will sow 
 his wheat, for instance, and allow it to remain a 
 twelvemonth in the ground, or leave his wine in a 
 cellar for years, instead of consuming these things, 
 or their equivalents, at once unless he expects 
 them to acquire additional value in proportion to 
 
 * M'Culloch, Political Economy, p. 314 ; Mill's Elements of 
 Political Economy, p. 9. 
 
 M 
 
134 POLITICAL ECONOMY. 
 
 the time during which they are so kept unconsumed. 
 That they do thus acquire additional value, owing to 
 certain natural laws the sown wheat multiplying 
 itself in its crop, the kept wine improving in flavour 
 . is notorious. And if this additional value were 
 not to be allowed to their owner in the price he ob- 
 tains on parting with them, it is evident there would 
 be no inducement to him to employ his property in 
 this productive manner. Wheat would riot be 
 sown for a future crop wine would not be placed 
 in cellars to improve. Were it not for the certain 
 prospect of the profit to be obtained at a distant 
 time by the productive employment of capital, and 
 that the profit, too, will be proportioned to the time 
 which elapses before the production is completed, 
 no one would employ any portion of his wealth pro- 
 ductively, except for the relief of his own immedi- 
 ate wants ; no one would accumulate wealth in a 
 productive shape, except for his own consumption. 
 Capital, in its true sense, would almost cease to ex- 
 ist. If, under these circumstances, property were 
 accumulated, as no doubt it still would be, through 
 the influence of the strong natural passion for ac- 
 cumulation which exists in most minds, it would be 
 hoarded in the form of substances that could be kept 
 by their owners without injury, but without utility : 
 gold, jewels, plate, pictures, furniture, 
 
 " Rich stuffs and ornaments of household." 
 
 And, in fact, in barbarous ages, when there existed 
 ^ a prejudice against the taking of interest on property 
 lent, these were the forms exclusively assumed by 
 accumulated wealth. The owner of such treas- 
 ures might perhaps occasionally gloat over them 
 
POLITICAL ECONOMY. 135 
 
 with a miserly satisfaction, but still with less grati- 
 fication than if they had been increasing through 
 their productive employment, while to none but him- 
 self could they be of any service whatever. And 
 thus they remained locked up in chests and closets, 
 without contributing in any degree to the benefit of 
 any person, until, perhaps, the strong temptation 
 they offered to the cupidity of the robber or the ty- 
 rant caused the destruction of their possessor and 
 the dispersion of his treasure into other hands, there 
 to lie equally useless, or to be wasted in riot and 
 debauchery. 
 
 But, when freedom is afforded to the employ- 
 ment of capital, and security to the enjoyment of 
 its returns when no impediment is offered by 
 mistaken legislation, grasping tyranny, or vulgar 
 prejudice, to the voluntary and mutually beneficial 
 agreement of two parties, one of which is desirous 
 of productively using for a season what the other 
 has painfully produced or carefully saved in such 
 case, every one who is able to save is anxious to 
 give his savings a productive form, by lending them 
 out in the shape of tools, buildings, materials, ma- 
 chinery, &c., to labourers, on condition of receiving 
 for their use a share of the increase of wealth they 
 assist the latter in producing. In this way the 
 miser of former days is converted into the em- 
 ployer of labour, and the promoter of every useful 
 and valuable branch of industry. And thus those 
 selfish feelings of our nature, which prompt to the in- 
 crease and accumulation of wealth not as a means 
 merely, but an end are enlisted in behalf of the 
 general happiness. The miser of the present day 
 may yet, like his prototype in the dark ages, gloat 
 
136 POLITICAL ECOMOMY. 
 
 over his wealth ; but he now keeps it by him in 
 the form, not of gold ingots, jewels, and costly stuffs, 
 but of bills, bonds, and securities, the represents 
 lives of that substantial wealth which, instead of 
 rotting in close coffers, is employed in the hands 
 of ceaseless industry, levelling the forest, and cul- 
 tivating the plain, quarrying the mine, giving mo. 
 tion to the loom, and ploughing the ocean, taking 
 a thousand shapes, perhaps, but in each aiding man 
 to avail himself of the prolific powers of nature, and 
 multiply his means of subsistence and enjoyment. 
 True it is, this capital would produce no increase 
 without the skill and labour of those who employ 
 it ; but it is equally true that their skill and labour 
 would produce nothing nay, that they could not 
 even maintain their existence, without the capital 
 which they employ, and that by which they are 
 maintained while at work. The wealth which is 
 produced by the union of capital with skill and la. 
 bour, is evidently, as we have already said, the 
 joint property of the owners of the capital and of 
 the skilled labour. Each has contributed to its 
 production, and each has a right to a share of it. 
 If the capitalist were to be unjustly denied his 
 share, accumulated property would thenceforth 
 never take the form of capital, except that small 
 portion which each man could employ by himself 
 and for his own immediate purposes. 
 
 All this seems so obvious to the most ordinary 
 capacity as hardly to be worth dwelling upon. 
 And yet there are persons who still in the pres. 
 ent light of civilization, in the nineteenth century, 
 and in the midst of all the evidence which is af. 
 forded, wherever we turn our eyes, of the prodi. 
 
POLITICAL ECONOMY. 137 
 
 gious part which capital is playing in the produc- 
 lion of the necessaries, comforts, and luxuries of 
 human life declaim against capital as the poison 
 of society, and the taking of interest on capital by 
 its owners as an abuse, an injustice, a robbery of 
 the class of labourers !* Such blindness is to me 
 truly unaccountable. That those who observe the 
 prevalence of great misery among the inferior 
 classes of workmen in some wealthy countries 
 who witness and deplore the fact, that, in spite of 
 all the manifold improvements which are continu- 
 ally adding to the productiveness of labour, the 
 share of the gross production which falls to the 
 common labourer does not increase, perhaps even 
 diminishes that, on viewing this anomaly, they 
 should conclude something to be wrong, is no source 
 of astonishment to me, for I arrive at the same 
 necessary conclusion from the same observation. 
 But that any sane person should attribute the evil to 
 the existence of capital that is, to the employment 
 of wealth in aiding the production of farther wealth, 
 instead of being unproductively consumed, almost, 
 if not quite, as fast as it is created, or unproduc- 
 tively hoarded to satisfy the lust of the miser is 
 indeed wonderful. Why, without capital, the Isl- 
 and of Great Britain would not afford subsistence 
 to a hundredth part of its present population. De- 
 stroy the security for the free enjoyment or disposal 
 of capital, deny its owner the privilege of accept- 
 ing what any one may find it for his advantage to 
 give for its use, and every individual will soon be 
 
 * See Hodgskin's Popular Political Economy, " Labour de- 
 fended against the Claims of Capital," and other works of the 
 same author. 
 
138 POLITICAL ECONOMY. 
 
 reduced to his unaided resources. He will find 
 nowhere any store of food on which to live while 
 he is digging, and sowing, and protecting his im- 
 mature crop ; no stock of tools with which to work, 
 or of clothes and other necessaries of existence. 
 All trades would stop at once, for every trade is 
 carried on by means of capital. Men would at once 
 be reduced to the isolation and helplessness of bar- 
 barism. 
 
 But perhaps it is in the imagination of these 
 schemers that there should not be a general de- 
 struction, but only a general division, of the cap- 
 ital now existing among the present race of la- 
 bourers ; so that each, it is thought, would for 
 some time, at least, be provided with a stock of 
 food, clothes, and tools, with which to continue the 
 business of production. We suppose something 
 like this is contemplated. But, putting out of sight 
 the injustice, confusion, and attendant horrors of 
 the frightful scramble which is here disguised under 
 the smooth name of a general division of property 
 (a scramble which, in the extremely complicated 
 and artificial state of society characterizing a coun- 
 try like ours, must be attended with infinitely more 
 violence, convulsion, and disturbance than any po- 
 litical catastrophe on record), how, we must beg to 
 ask, is production to go on afterward ? In a very 
 short time, a large part of the population all the 
 idle and in such a crisis there can be but little 
 industry will have consumed their share of the 
 plunder in riot and excess. Admitting that others 
 have gone to work industriously in the production 
 of the things they require, each for himself; have 
 ploughed and sown, and spun and wove ; have 
 
POLITICAL ECONOMY. 139 
 
 stored corn in their granaries, and cattle in their 
 homesteads, and fuel, and clothing, and comforts of 
 various kinds in their lofts, and cellars, and ware- 
 houses, what is to become of all that large body 
 who, having squandered away their share of the 
 general booty, will have left no means of main- 
 tenance ? It is clear that one of two things must 
 occur. Either they will, if sufficiently numerous 
 and strong, call for another division of property, that 
 is, once more plunder the barns, granaries, home- 
 steads, and warehouses of the industrious ; or, if 
 they are not strong enough to attempt this, they 
 will humble themselves to the owners of these same 
 barns and warehouses, and petition for food and 
 clothing in return for all they have to offer, their 
 labour ; that is to say, they will apply to them for 
 employment and wages. If the owners of property 
 refuse their petition, starvation and disease must 
 rapidly carry them off; not, however, before they 
 have robbed, and plundered, and done all the in- 
 jury to the remainder of society which their despair 
 and destitution will prompt. If their request is ac- 
 ceded to, the old system of masters and men, cap- 
 italists and labourers, will recommence ; and the 
 society at least whatever portion of it we can sup. 
 pose to have survived the shock of such a convul- 
 sion will be reconstituted on its old and natural 
 principles, to recommence the difficult march of 
 improvement, and with the feeble hope of regain- 
 ing, after the lapse of years, perhaps of ages, the 
 elevated position we are at present so fortunate as 
 to occupy, as yet unscathed ; to reproduce slowly 
 and painfully the vast stock of accumulated capital 
 which it once possessed, but which, in a fit of pop- 
 
140 POLITICAL ECONOMY. 
 
 ular insanity, had been broken down and scattered 
 to the winds. 
 
 The security of property, and the liberty of con- 
 suming or employing it in whatever way the own- 
 er pleases or finds most for his interest, is. as has 
 been truly observed, the first of the rights of indus- 
 try, and the essential condition of its progressive 
 activity. But of all modes of employing property, 
 the very last which it would occur to an enlighten- 
 ed friend of humanity to obstruct, is its employ- 
 ment in aiding production that is, as capital. It 
 is quite clear that the profit or interest to be gained 
 by the employment of capital is the principal motive 
 to its accumulation, and the only one to its employ- 
 ment in furthering production. It is quite clear that, 
 if the owner of capital is not allowed to make what 
 profit he can upon it by lending it to others, no one 
 will accumulate more capital than he can use him- 
 self; and nearly all savings would thenceforward 
 be hoarded in cellars and closets, instead of aiding 
 industry and facilitating production. 
 
 Adam Smith and other economists distinguish 
 two kinds of capital, fixed and circulating. The 
 latter is defined to consist of such things as are 
 continually going from and returning again to their 
 owner, and afford a profit only on being parted 
 with : such is the money which a master keeps by 
 him to pay his workmen, his stock of materials 
 and of worked. up goods, and the stock in trade of 
 all wholesale or retail tradesmen. Capital is said 
 to be fixed which is invested in buildings, machin- 
 ery, implements for facilitating labour, improve- 
 ments of land, roads, canals, bridges, railways, 
 
POLITICAL ECONOMY. 141 
 
 &c. ; things which yield a profit, not by being 
 parted with, but while remaining in their owner's 
 hands, and employed in producing other things. 
 Smith considers as fixed capital the acquired skill 
 and ability of the members of society. 
 
 It is doubtless serviceable to distinguish those 
 kinds of capital which are rapidly circulated, that 
 is, consumed and replaced within brief periods, as 
 a year, for example, from capital of a more dura- 
 ble nature. But it may be surmised that, except 
 in the time during which they remain unconsumed 
 in the employer's hands, there is no real distinc- 
 tion between the two classes of capital here men- 
 tioned. The capital laid out by a manufacturer, 
 farmer, or tradesman in the payment of his labour, 
 er's wages, circulates most rapidly, being turned 
 perhaps once a week (if his men are paid weekly), 
 by the weekly receipts on his bills or sales. That 
 invested in his materials and stock in hand circu- 
 lates less quickly, being turned perhaps twice, per- 
 haps four times in the year, according to the time 
 consumed between his purchases of the one and 
 sales of the other, supposing him to buy and sell 
 on equal credits. The capital invested in his im- 
 plements and machinery circulates still more slow- 
 ly, being turned, that is, consumed and renewed, 
 on the average, perhaps but once in five or ten 
 years ; though there are many tools that are worn 
 out in one set of operations. The capital which is 
 embarked in buildings, as mills, shops, warehouses, 
 barns, in roads, irrigation, &c., may appear scarce- 
 ly to circulate at all. But, in truth, these things 
 are, to the full, as much as those we have enumer- 
 ated, consumed in contributing to production, and 
 
142 POLITICAL ECONOMY. 
 
 must be reproduced in order to enable the producer 
 to continue his operations ; with this only differ, 
 ence, that they are consumed and reproduced by 
 slower degrees than the rest. The continual re- 
 pairs they require attest their consumption and re- 
 production ; and the capital invested in them may 
 be turned perhaps every twenty or fifty years. If, 
 then, the terms fixed and circulating capital are to 
 be retained, I would confine the latter to such por- 
 tions of capital as are renewed or repurchased, and 
 consumed or parted with within a year ; that of 
 fixed capital to such as remain more than a year 
 with the person who employs them for profit.* 
 
 In some trades the whole capital embarked is 
 turned or circulated several times within the year. 
 In others a part is turned oftener than once a year, 
 another part less often. It is the average period 
 which his entire capital takes in passing through 
 his hands, or making one revolution, from which a 
 capitalist must calculate his profits. Suppose, for 
 example, that a person engaged in a particular 
 business has one half of his capital invested in 
 buildings and machinery, so as to be turned only 
 once in ten years ; that one fourth more, the cost 
 
 * The futility of Smith's distinction is seen in his efforts to 
 separate a farmer's stock into fixed or circulating capital, ac- 
 cording as it is kept by him or parted with for profit. Thus the 
 cattle and sheep a farmer milks and shears are said to be fixed, 
 those he grazes and breeds, circulating capital. The seed he 
 throws into the ground to produce next year's crop of corn is a 
 fixed, the hay he feeds his breeding or lean cattle upon to produce 
 next year's crop of lambs or fat beef, a circulating capital. The 
 truth is, that with a farmer as with any other producer, of the 
 capitalwhich the extent of his business requires, part circulates 
 more, part less slowly. The average period in which his entire 
 capital is turned, that is, parted with and reproduced, is the time 
 upon which his profit is calculated. 
 
POLITICAL ECONOMY. 143 
 
 of his tools, &c., is turned once in two years ; and 
 the remaining fourth, employed in paying wages 
 and purchasing material, is turned twice in one 
 year. Say that his entire capital is $50,000. 
 Then his annual expenditure will be, 
 
 $25,000-H10=$2,500 
 12,500H- 2= 6,250 
 12,500 X 2=25,000 
 
 $33,750 
 71 per cent, on $50,000= 3,750 
 
 $37,500 
 
 To wnich sum his annual sales should amount 
 in order to clear seven and a half per cent, profit 
 on his capital, and for this end he must charge a 
 profit of ten per cent, on the value of his goods ; the 
 mean term in which his capital is turned being six- 
 teen months. 
 
 Take another case, in which the fixed capital re- 
 quired bears a smaller proportion to that which cir- 
 culates rapidly. Say that one fourth of the entire 
 capital circulates in ten years, one fourth in one 
 year, and one half twice in the year. Then the 
 annual expenditure will be, 
 
 $12,500-7- 10=$1,250 
 12,500 = 12,500 
 25,000 X 2=50,000 
 
 $63,750 
 7J- per cent, on $50,000= 3,750 
 
 Annual sales .... $67,500 
 
144 POLITICAL ECONOMY, 
 
 In this case a profit of little more than five and 
 a half per cent, on the value of the goods will bring 
 in to the producer seven and a half per cent, of an- 
 nual profit upon his capital ; the entire capital cir- 
 culating in a mean period of less than nine months. 
 
 Should the greater part of the capital embarked 
 circulate still more rapidly, a much smaller per 
 centage on the articles sold will pay a fair profit 
 on the capital. Should the capital, for instance, 
 be turned five times on the average in the year, a 
 profit of one per cent, on the sales will bring in 
 five per cent, annual profit on the capital. 
 
 The higher the profit that can be obtained on 
 capital, the greater, of course, the encouragement 
 to its accumulation and employment. 
 
 But, before we can speak of profits as high or 
 low, we must learn to distinguish matters which, 
 in ordinary language, go by the name of profits, 
 from the interest or net profit on capital. 
 
 Many capitalists are themselves personally en- 
 gaged in productive occupations. The manufac- 
 turer, the merchant, the tradesman, the farmer, the 
 master-mechanic, are all capitalist-labourers. The 
 surplus by which the sum they realize from the sale 
 of their produce exceeds the sum they have expend- 
 ed in its production, is in common language called 
 their profits, or living profits. But some portion of 
 this is unquestionably of the nature of .wages, the 
 recompense of their personal labour, skill, and in- 
 genuity. Another portion often consists of gains 
 arising from the possession of exclusive advantages, 
 such as secret processes, patent instruments or ma- 
 chinery, superior connexions, information, facilities 
 of local position, &c. Another portion consists of 
 
POLITICAL ECONOMY. 145 
 
 a compensation for the peculiar risks incident to 
 the business in which the capital is engaged. It is 
 the remainder only that properly forms the net 
 profit or interest of capital ; that return for its 
 temporary use which can b$ got without personal 
 labour or extraordinary hazard. This is usually 
 calculated as a per centage on the value in money 
 of the capital employed. And it is itself made up 
 of, 1. Compensation for the sacrifice of immediate 
 personal gratification; 2. Ensurance against the 
 risk of loss through circumstances which may af- 
 fect the general security of property. The latter 
 element of interest depends on the internal tran- 
 quillity of the country ; the chance of foreign inva- 
 sions or political convulsions, such as endanger 
 property ; the efficacy of the laws which enforce 
 contracts ; the pure administration of justice, and 
 other similar considerations, varying in an extreme 
 degree in different times and places ; insomuch 
 that a half per cent, in England will be perhaps a 
 fuller compensation for such risk than two per cent, 
 in Ireland, three per cent, in Russia or France, and 
 ten per cent, in Turkey. 
 
 Under similar circumstances of political risk, the 
 interest of money, or net profit of capital, will vary 
 according to the quantity of capital seeking employ- 
 ment as compared to the demand for it. The sup- 
 ply and the demand of capital depend on the rela- 
 tive force of two powerful principles in human na- 
 ture continually opposed to each other ; the desire 
 to consume, and the desire to save or amass. Were 
 every individual in a country to consume the whole 
 of his income, whether derived from rent, wages, 
 N 
 
146 POLITICAL ECONOMY. 
 
 or profit, the amount of capital would remain sta- 
 tionary. Were the owners of capital to consume 
 annually a portion of their stock, while the labour- 
 ers consumed the whole of their wages, and the 
 landlords the whole of their rents, capital would 
 decrease. The history of nations, however, teach- 
 es that, wherever institutions exist affording any 
 tolerable security to the peaceful possession and 
 enjoyment of property, the saving principle is sure 
 so far to prevail over its antagonist (chiefly among 
 the industrious classes) as to cause a continual in- 
 crease of capital, through the accumulation of por- 
 tions of income abstracted from revenue to be em- 
 ployed as capital. 
 
 But not only does the rate at which capital in- 
 creases, and, therefore, its supply, depend on the rel- 
 ative predominance of the saving over the spending 
 passion, but the demand for it is influenced in the 
 inverse sense by the same circumstance. If we 
 suppose the passion of saving carried to excess in 
 any country were every member of society to con- 
 tent himself with the mere necessaries of life, and 
 endeavour to employ as capital all the remainder 
 of his income it is evident that the home demand 
 for commodities would be limited to the bare ne- 
 cessaries of life for that number of individuals. All 
 the various productions which art and ingenuity 
 now supply to gratify the infinite wants and ca- 
 prices of mankind, would glut the market without 
 a purchaser. The demand for capital would shrink 
 almost to nothing, and profits fall to the merest 
 trifle. This, however, is an extreme supposition, 
 which can never be realized; for, if profits fall 
 
POLITICAL ECONOMY. 147 
 
 through the competition of increased capital, the 
 inducement to save is weakened, while that to 
 spend is increased. It may, therefore, be safely 
 left to the mutually counteracting influences of the 
 two passions we have spoken of, to determine that 
 current average rate of net profit which is the 
 measure of the degree in which the owners of cap- 
 ital prefer prospective gain to present enjoyment. 
 From what we have now advanced, it is evident 
 that no conclusion can be come to upon the rela- 
 tive advantages of any two trades, or ways of em- 
 ploying capital, from a mere statement of the gross 
 profits returned by each. One may return twelve 
 per cent., the other only six ; yet the net profit, or 
 real advantages derived from the capital embarked 
 in each by its owners, may be, in reality, equal. 
 The gross profits of the first business may be swell- 
 ed by the circumstance of its requiring a much 
 higher class of ability to exercise it (as the trade 
 of making chronometers compared to that of ma- 
 king wooden clocks) ; or through its being carried 
 on with the help of some secret process, patented 
 machinery, or peculiar advantage of position (such 
 as the vicinity of coal or iron mines, canals, rail- 
 roads, or other facilities of transport) ; or by rea- 
 son of the greater comparative risks to which the 
 business is subjected, as that of gunpowder-making 
 or ship ensu ranee, over occupations not so exposed 
 to casualties ; or of trades in which long and large 
 credits are given (a London tailor's, for example) 
 over those in which the returns are quick and sure. 
 If the two trades whose profits are compared are 
 not carried on in the same country, or under the 
 
148 POLITICAL ECONOMY. 
 
 same laws and government, then the variation in 
 their gross profits may be still farther swelled by 
 the difference of the risk each is subjected to from 
 political circumstances affecting the security of 
 property in general ; as in the instance of Ireland 
 and Great Britain. Nothing, therefore, can be 
 more fallacious than the idea that the amount of 
 the profits realized in any business (in the vulgar 
 meaning of the term, in which it has likewise 
 been used by most political economists) forms a 
 just measure of the real surplus returns of the 
 capital engaged in it ; nor can any proposition be 
 more erroneous than that there ever will or can 
 be anything like an equalization of the gross profits 
 of every business. 
 
 Making abstraction, however, of all the above- 
 mentioned extraneous circumstances of risk, trou- 
 ble of personal superintendence, or peculiar advan- 
 tages, it is evident that the net profit, or interest of 
 capital to be realized from different modes of em- 
 ployment in the same country or under the same 
 political circumstances, will always tend towards 
 equality. And for the reason that, as fresh capital 
 is being continually accumulated from fresh savings, 
 there will be a number of persons continually on 
 the look-out for the means of employing their cap. 
 ital to the greatest advantage ; and if any one oc- 
 cupation promised a higher return than others, 
 making allowance for its peculiar compensatory 
 risks, difficulties, labour, and other circumstances, 
 it would be chosen in preference by so many of 
 these speculators, as by the competition of their prod- 
 uce in the market must soon bring down the returns 
 
POLITICAL ECONOMY. 149 
 
 of that particular trade to the general level, perhaps 
 for some time below it. There is, in fact, a con- 
 tinual oscillation of this sort going on in the returns 
 of capital in most employments, about the mean 
 level or average of net profit, and it is accompanied, 
 or rather caused, by an analogous oscillation in the 
 market value or selling price of commodities about 
 the mean cost of their production. These are mat- 
 ters into which, now that we have obtained a tol- 
 erably clear notion of the nature of the primary el- 
 ements of production, labour, land, and capital, we 
 must enter with more detail. 
 
 CHAPTER VII. 
 
 VALUE. 
 
 Value necessarily Relative. No real Value. General Value. 
 Means " Purchasing Power." Elements of Value. Monop- 
 oly. Costs of Production. Rent, the Result of Monopoly. 
 Does not enter into Price. Distinction between good and bad 
 Monopolies. Demand and Supply. Their Variations and re- 
 ciprocal Action. Cost of Production. Consists in Labour, 
 Capital, Time, Monopoly, and Taxation. Competition of Pro- 
 ducers, by which Supply and Demand are kept nearly Level. 
 Different Investments of Capital and Labour. Partial Glut. 
 General Glut impossible, except through a Scarcity of 
 Money. 
 
 MUCH confusion has attended the use of this word 
 in political economy, which a simple analysis of 
 its meaning might have obviated. In common lan- 
 guage, everything which is desirable, as health, wit, 
 
 N2 
 
150 POLITICAL ECONOMY. 
 
 beauty, goodness, is said to have value. But po- 
 litical economy meddles only with things which are 
 the subject of exchanges ; and in the discussions of 
 the science, value therefore must mean always 
 commercial value, or value in exchange. In this 
 sense, in order to have value, it is not enough that 
 an object be desirable. Many things are highly 
 desirable for their useful or agreeable qualities (as 
 air, light, and water, for example) ; but yet, under 
 ordinary circumstances, have no value, because, 
 their supply being unlimited, and no trouble re- 
 quired from any one to obtain as much of them as 
 he can want, no one will give anything in exchange 
 for them. The moment their supply falls short of 
 the quantity required in other words, of the de- 
 mand or that it becomes necessary to take some 
 trouble to obtain the quantity required, they ac- 
 quire an exchangeable value. On board ship, in 
 the deserts of Africa, and in other places where 
 the stock of water falls short of the quantity re- 
 quired, it obtains a value, which rises with its scar- 
 city. In cities, water is habitually sold at a con- 
 siderable price ; and this price is generally propor- 
 tioned to the trouble necessary for supplying the 
 quantity required. 
 
 When, then, we speak of the value of anything, 
 we must always have reference to some object of 
 comparison or exchange. In ordinary phrase, 
 money is the understood object of reference. But 
 money being merely, as has been said, some one 
 commodity selected for particular qualities to be 
 used as a general measure of value and medium of 
 exchange, is itself liable to vary in value ; it is 
 therefore clear that value is not in strictness to be 
 
POLITICAL ECONOMY. 151 
 
 determined by quantity of money. When employ, 
 ed alone, in scientific arguments, without reference 
 to money or any other single specific object, com- 
 mercial value must be understood to mean ex- 
 changeable worth in the general market, or what 
 Adam Smith called " purchasing power." An ob- 
 ject, in fact, Whether gold, silver, cotton, or any 
 other article, is said to have risen or fallen in value 
 when it will command in exchange a larger or a 
 smaller quantity of other things in the gross than 
 before. The expression is purely relative. Nor 
 can there be such a thing as positive, absolute, or 
 real value.* 
 
 * Smith and his followers have insisted much on everything 
 having a real value, which they define to consist of the quantity 
 of labour required to produce it ; and they accordingly call labour 
 the natural standard or measure of value. But it is indispensa- 
 ble for a standard measure to be something both definite in its 
 nature, and as nearly as possible invariable in value. 
 
 But what can be more vague and indefinite in its meaning, ot 
 more variable in its value, than labour? In some countries labour 
 is habitually far more severe and unremitting than in another ; so 
 that a day's labour in each by no means expresses an equal quan- 
 tity of exertion. Again, an hour's labour of one man may in the 
 same place be worth a year's labour of another. It is impossi- 
 ble that anything so variable in meaning and value can be fitly 
 employed as a fixed general measure of the value of other things. 
 
 It has, however, been urged, that the exchangeable value of 
 anything will always depend on the quantity of labour necessary 
 to procure or produce it, and on this ground it is proposed as the 
 best measure of value. One would have supposed that the com- 
 monest facts might have sufficed to prevent the promulgation of 
 this position. What causes the workmanship of one artist to 
 sell for ten times as much as that of another ? Certainly not the 
 greater proportion of labour bestowed on it. Why will a statue 
 of Chantrey, a portrait by Lawrence, a novel by Scott, bring 
 twenty times the money which the productions of inferior la- 
 bourers will command ? Why, again, is an acre of land at Bat- 
 tersea more valuable than one on Dartmoor ; a diamond than a 
 
152 POLITICAL ECONOMY. 
 
 When a desirable commodity is to be obtained 
 in any quantity that can be required by a proportion- 
 ate outlay of labour, like water from a copious 
 spring, or stone from an inexhaustible quarry, its 
 value will, in the long run, be determined solely by 
 the comparative labour required to procure it. But 
 many commodities can only be obtained at all in 
 
 bit of glass ; an antique brass coin than a modern gold one ? Not, 
 surely, because of the greater quantity of labour worked up in 
 them. It is true that these writers sometimes attempt to qualify 
 their rule by admitting exceptions in the case of those commodi- 
 ties whose supply is limited by monopoly, or the exclusive facili- 
 ties for the production of which is possessed by certain individ- 
 uals. But is there any commodity which is not more or less af- 
 fected by monopoly ? Is there any in the production of which 
 superior advantages are not enjoyed by some parties over others, 
 enabling them to raise its price in the market ? All land, to be- 
 gin with the primary source of every commodity, is, in nearly all 
 civilized societies, monopolized. And the superior advantages 
 of position or quality belonging to one tract of land over others, 
 enable its owner to place a far higher value on its produce than 
 will just cover the labour of production. All mines of coal and 
 metal, quarries, woods, water-power, &c., are in the same pre- 
 dicament. And if we reflect that there is no commodity which 
 is not, in part or altogether, made up of materials produced un- 
 der these monopolies, we shall be led, perhaps, to conclude that 
 the proposition of the economists in question is the very reverse 
 of the truth ; and that there is scarcely any commodity the value 
 of which is solely determined by the quantity of labour required 
 to produce it. 
 
 The fact is, that all these attempts to identify value with la- 
 bour, or to distinguish real from relative value, are founded in a 
 misconception of the nature of value, which, as we have said 
 above, like length, weight, bulk, or any other quality suscepti- 
 ble of measurement, has essentially a relative only, not a positive 
 meaning. What is real length, or real weight, or real bulk ? Just 
 as unintelligible as real value. Value is " comparative estima- 
 tion as an object of exchange ;" and, when used without refer- 
 ence, expressed or implied, to any particular commodity as its 
 measure, means general value, or value in exchange against 
 goods in general ; as Adam Smith phrased it, " purchasing pow- 
 er in the general market." 
 
POLITICAL ECONOMY. 153 
 
 limited quantities ; and when the quantity required, 
 or the demand, exceeds the quantity produced, or 
 the supply, their value is proportionately enhanced. 
 This permanent scarcity, or rarity, as it is called, 
 is the cause of the greater part of the value of all 
 precious stones and metals, superior works of art, 
 scarce and fine wines, antiquities, and curiosities 
 of all sorts. The increased value which the own- 
 ers of such objects are enabled, from their rarity, to 
 obtain for them, beyond the mere cost of labour or 
 capital by which they may have been procured or 
 produced, is sometimes called monopoly value. The 
 owner of the vineyard which produces Johannis- 
 berg is in possession of a monopoly which enables 
 him to put a much higher price on his wine than 
 can be obtained for the produce of other vineyards 
 cultivated with the same expenditure of labour and 
 capital. A person passing through the streets of 
 a town is struck by a stained and dirtied piece of 
 canvass at a broker's door. He buys it for a trifle, 
 cleans it with a little labour and expense, and it 
 proves to be a Claude or a Raphael, worth a hun- 
 dred times, after this discovery, what it was before. 
 It is the rarity of fine pictures by such artists that 
 confers a monopoly value on them. Objects which 
 are unique of their sort are often of great value in 
 consequence. When there are but two known 
 copies of a scarce work, it has happened that the 
 possessor of one has bought the other at an extrav- 
 agant price, for the purpose of destroying it ; his 
 single copy being, in its unique state, of greater 
 value in the market than the two were before. 
 This species of value arises likewise from other cir- 
 cumstances of considerable moment, and particu- 
 larly from the following : 
 
154 POLITICAL ECONOMY. 
 
 Many commodities indeed, the larger proportion 
 of goods in every market can be supplied in in- 
 creased quantities only by an increased proportion- 
 ate outlay. This principle teems with very impor- 
 tant consequences, and follows necessarily from a 
 very simple circumstance, which, if it had received 
 the attention it deserved from political economists, 
 might have prevented their falling into no little 
 confusion and error. 
 
 Value, we must beg our readers to observe, has 
 a strict relation to time and place. The value of 
 a thing is the quantity of other goods or of money, 
 that is, the price it will command at a particular 
 time and at a particular place. A thing may have 
 a high value at one time, as ice in the dogdays ; 
 and no value at another, as the same ice in Janu- 
 ary. Again, that which is of little value in one 
 place is of great value in another, as the old 
 proverb about coals at Newcastle teaches. When, 
 therefore, the value of anything is spoken of, ref- 
 erence is generally had to some particular time 
 and place ; and when value in the general market is 
 spoken of, the average of local markets is intend- 
 ed ; and, unless otherwise expressed, the present 
 time. 
 
 Few objects are either sold or consumed at the 
 time and place in which they are created. Near- 
 ly all articles require more or less of both time and 
 labour, not merely to grow, prepare, and put them 
 in marketable condition, but likewise to bring them 
 from the spot where they are prepared to the mar- 
 ket or place where they are sold. In fact, the 
 greater proportion of the most important objects of 
 commerce those which compose the food of man, 
 
POLITICAL ECONOMY. 155 
 
 and the raw materials of his clothing, comforts, 
 and luxuries are raised by cultivation from the 
 surface of the earth. But the process by which 
 they are raised is one which requires much time 
 one season at least, often many as well as an ex- 
 tensive surface of soil ; and a very small propor- 
 tion of them are consumed on the spot where they 
 are grown, or immediately upon their production. 
 Consequently, the cost or expenditure necessary to 
 produce these things for the bulk of their consu- 
 mers, must consist not only of the labour of raising 
 them, but likewise of the time consumed in their 
 growth and preservation, and also of the time and 
 labour employed in bringing them to market. 
 
 The value added to goods by the time necessary 
 for preparing, preserving, and bringing them to 
 market, is, as we have seen, charged under the 
 name of profit on the capital expended. That the 
 cost of carriage of goods from the spot where they 
 are prepared to the market where they are sold, is 
 likewise a main element in their value, will not be 
 disputed. In some articles, as stone, coals, water, 
 &c., it makes up by far the greater part of their 
 cost. In order to diminish this as much as possi- 
 ble, the demand of a particular market for any 
 things which are raised by cultivation of the soil, 
 will be supplied from the soils nearest at hand 
 that are most fitted for the purpose. But it is ob- 
 vious that, as the demand in that particular spot 
 increases, the supply has to be procured at an in- 
 creased cost, either from more distant soils caus- 
 ing an increased expense of carriage to market 
 or from such soils as, though nearer at hand, are 
 of inferior productive quality to those first taken 
 
156 POLITICAL ECONOMY. 
 
 into tillage, that is, which require a greater expen- 
 diture of labour or capital upon them to ensure the 
 same quantity of produce. 
 
 It is, however, certain that there cannot be two 
 prices (or values) for goods of the same quality in 
 the same market and at the same time, since no 
 seller will take less from one buyer than he can 
 get from another, and no buyer will knowingly 
 give more to one seller than another will take for 
 the same article. The competition of buyers and 
 of sellers with one another in the same market, 
 will always bring the value of articles of the same 
 quality in one market to the same level. It fol- 
 lows, then, that as the demand in a market for 
 such objects as are produced under the circum- 
 stances just spoken of increases, the value in that 
 market of the whole supply of them must keep up 
 to the level of the value of that part of the supply 
 which is produced in the market at the greatest 
 cost. If this portion of the supply could not com- 
 mand that price (excluding, of course, the results 
 of temporary and accidental miscalculations), it 
 would not be brought to market. And if that por- 
 tion can command that price, so will all the rest of 
 the quantity sold. The producers of this last por- 
 tion will be repaid precisely for the labour and time 
 they have consumed in growing or fabricating their 
 article and bringing it to market (in other words, 
 the costs of its production the capital employed in 
 producing it being replaced with a profit, and the 
 labour repaid at ordinary wages). But the pro- 
 ducers of all the other portions, which were pro- 
 duced under easier circumstances, will get a sur- 
 plus beyond the costs of production. And this 
 
POLITICAL ECONOMY. 157 
 
 surplus will be the greater in proportion to the 
 greater comparative advantages of proximity to the 
 market, of quality of soil, facility of communica- 
 tion, or other favouring circumstances.* 
 
 Rent, however, it must be recollected, includes, 
 in its ordinary acceptation, many other things be- 
 sides the gain arising in the manner we have de- 
 scribed from natural or casual advantages, whether 
 of soil or position. A vast amount of labour and 
 capital has been laid out by its successive owners 
 or occupiers ; much of which remains permanently 
 invested in the soil, adding to its value and pro- 
 ductiveness. And the portion of rent, which is at- 
 tributable to these acquired or artificial advantages, 
 must be considered as representing the profit on 
 the capital so expended. If the expenditure were 
 to be calculated which has been from first to last 
 
 * We beg the reader to observe that, whenever we employ 
 the word to produce, or any of its derivatives, producer, produc- 
 tion, and produce, we have reference to the production of an 
 article at the market where it is offered for sale. It would be very 
 convenient, and tend materially to settle many disputed ques- 
 tions of political economy, if all writers would bear in mind and 
 adhere to this rule in their employment of the term. The pro- 
 ducer of corn is properly not the farmer alone who raises it 
 from the soil, but also the person, whether farmer or corn-deal- 
 er, who produces it at the market. The farmer is the grower 
 simply, until he, or some other for him, brings it to market and 
 offers, i. e., produces it for sale. The cost of production in- 
 cludes the cost of carriage to market as well as of the growth 
 of the corn. In manufactures, it is not the man who weaves 
 the cloth or cotton that is its producer, but the person who, 
 having defrayed the costs of the raw material, the manufacture, 
 and the carriage to market of the whole operation, in short, to 
 which its existence is owing, produces it there for sale. So the 
 producer of an article, raised or fabricated abroad to be sold in 
 this country, is not the foreign grower or manufacturer, but the 
 person, whether foreign or native, who produces it for sale in 
 our markets. (To produce, v. a., to offer to notice ; to exhibit 
 to the public ; to bring forward. Johnson-) 
 
 o 
 
158 POLITICAL ECONOMY. 
 
 kid out in permanent improvements of the land of 
 this country, for example, in the original clearing 
 and enclosure, in drainage, making of roads, farm- 
 buildings, fences and gates, water-courses, planta- 
 tions, irrigation, &c., it would appear that by far 
 the larger part of the rent received for landed es- 
 tates consists of the necessary profit on this outlay. 
 Of the remainder, part accrues from peculiar ad- 
 vantages with respect to proximity to markets or 
 manures ; part from superior natural fertility of 
 soil. It is to this last portion only of the ordinary 
 rent of land that the greater number of political 
 economists have confined their attention ; and this 
 exceedingly narrow and imperfect view of the na- 
 ture of rent has necessarily led them into much in- 
 consistency and error.* 
 
 * " Rent," says Mr. Ricardo (and Messrs. M'Culloch, Mill, 
 and many other economists have adopted his definition), " Rent 
 is that portion of the produce of the earth which is paid to the 
 landlord for the use of the original and indestructible natural powers 
 of the soil" (Ricardo, Political Economy, chap. ii. ; Mill's Ele- 
 ments, p. 39; M'Culloch's Principles, p. 431.) This definition 
 excludes all that large portion of rent which we have noticed 
 above as resulting from artificial improvements, as well as all 
 that other large portion which is the consequence of favourable 
 position with respect to markets, communications, manures, 
 &c. The " original indestructible powers" of the British soil 
 were the same in the time of the Heptarchy as they are now. 
 How is it, then, that they brought in no rent, or next to none, 
 at that time ? If rent depends solely on natural fertility of soil, 
 why do some acres of land in England let for ten pounds a year, 
 while an acre of equal fertility in Canada will not command a 
 sixpence of rent ! While this school of political economists de- 
 clare rent to be solely owing to the " difference in natural fertil- 
 ity of soils," and build their whole science upon this principle 
 or "theory of rent," as they call it, other writers have set up 
 another in its place, viz., that rent is solely owing to the 
 "pressure of population against produce, causing a rise in 
 prices." (Westminster Review ; True Theory of Rent, &c.) 
 This explanation, however, is not much nearer the truth than 
 
POLITICAL ECONOMY. 159 
 
 Besides the peculiar gains which are derived in 
 husbandry from superior fertility -of soils or from 
 proximity to market, manures, &c., there are anal- 
 ogous gains which, in every branch of industry, 
 result from secret processes, patented machinery, 
 extraordinary powers of body or mind, advanta- 
 geous connexions, and, in short, from every instru- 
 ment of production which is not universally access- 
 ible. Each of these affords a revenue quite dis- 
 tinct from that which is yielded by the capital and 
 labour employed in producing an article. For the 
 sake of convenience, this species of revenue has 
 been termed, as we have said, a monopoly gain ; 
 but the term is unfortunate, inasmuch as it conveys 
 to most minds the impression that the advantage 
 enjoyed is at the expense of others, and has been 
 obtained by unfairly excluding them from competi- 
 tion. It is evident, however, that, in many instan- 
 ces, this is not the case. One who has been en- 
 
 the other. Rent may certainly exist in a society whose numbers 
 are in no degree excessive ; nay, it may increase, at the same 
 time, with an increase in the productiveness of agriculture, and 
 in the share of its produce falling to each individual inhabitant ; 
 just as it may arise and increase where all soils are alike in fer- 
 tility. It is, in fact, the simple consequence of an increased 
 local demand requiring an increased local supply, which supply 
 must be procured either from inferior soils close at hand, or from 
 the best soils at a greater distance. It may and does often hap- 
 pen, that the increased supply can be sold, through continued 
 improvements in agriculture or the arts, at a less price, or can be 
 commanded by the individual consumers in greater quantity than 
 at an earlier period : and yet there will be an increase of rent 
 arising from the superior advantages of position or quality, &c,, 
 of some lands over others, for supplying the actual demand. 
 Rent consists, then, of the difference between the expense of 
 producing that portion of the required supply which is produced 
 under the least favourable circumstances, and that produced 
 from the land which yields the rent. 
 
160 POLITICAL ECONOMY. 
 
 dowed by nature with extraordinary powers, or has 
 acquired superior skill by patient application, and 
 perhaps at much expense, is clearly entitled to 
 whatever benefits he can compass by a fair exer- 
 cise of such powers or skill. So he who has spent 
 years, and laid out thousands in perfecting a ma- 
 chine or process by which one man can do the 
 work of ten, ought to be repaid for his labour and 
 expense ; and hence the equity of protecting him 
 by law (or patent) in the exclusive use of his in- 
 vention for a term of years. If the law cannot or 
 will not interpose for this purpose, he has evidently 
 a right to protect himself by keeping his invention 
 a secret. This is not only just, but eminently 
 useful to the public. Production is facilitated, and 
 the advantage of this must be experienced by oth- 
 ers as well as by himself. Such peculiar advan- 
 tages, too, when possessed by one person, provoke 
 to emulation. They hold up to view the prizes 
 that are to be gained by excellence of any kind ; 
 and thus each producer is stimulated to increase 
 to the utmost his own advantages over others. 
 
 It is not easy to define accurately in words the 
 distinction which separates beneficial or harmless 
 from injurious monopolies. Generally speaking, 
 that which results from superiority, acquired and 
 exercised in a fair and open manner, is beneficial ; 
 such as are obtained or supported by fraud or force 
 are publicly injurious. No one blames Chantrey 
 or Lawrence for charging as high a price as they 
 can obtain for their productions. No one disputes 
 the general advantage of allowing the grazier who 
 produces the best ox, or the farmer who brings up 
 the finest sample of corn, in the market, to carry 
 
POLITICAL ECONOMY. 161 
 
 away the topping price. No one doubts the right 
 of a merchant, who, from superior sagacity, has fore- 
 seen the probable future deficiency of some article 
 in the market, and provided a stock of it against the 
 time, to make what extra profit he can of his spec- 
 ulation. So no one quarrels with great landed pro- 
 prietors for charging as high a ground-rent as they 
 can obtain, even though it reach five guineas a foot, 
 for their land in the vicinity of wealthy and populous 
 towns. But if the owners of such land, not content 
 with the extra price or rent they may freely com- 
 mand for its employment as building-sites, pleas- 
 ure-grounds, market-gardens, accommodation-pas- 
 tures, and from the saving in the expense of con- 
 veyance of its produce to market occasioned by 
 its proximity if, we say, not content with these 
 accidental and natural, but just and fair advanta- 
 ges, they were to attempt to enhance the value of 
 their monopoly, supposing them to have the power, 
 by any legislative interference with the freedom of 
 trade, as, for instance, by interdicting the inhabi- 
 tants of the town from obtaining their supplies of 
 vegetables, meat, butter, &o., from other lands 
 such monopoly would undoubtedly be one of a most 
 unfair and pernicious character. It would be no- 
 thing less than a conspiracy to raise the price ot 
 the necessaries of life. 
 
 Another hurtful kind of monopoly is that obtain- 
 ed by the combination or conspiracy of parties, who, 
 being enabled to command the entire supply of any 
 article to a market, use this power for the purpose 
 of putting an extraordinary price upon it, restrict- 
 ing the supply to the community in order to enhance 
 its value, and, consequently, to increase their surplus 
 O 2 
 
162 POLITICAL ECONOMY. 
 
 profits upon their expenditure. An instance of this 
 is the combination of the great coal-owners of the 
 north of England, which was exposed in a late com- 
 mittee of the House of Lords. Another, that of 
 the companies by which London is supplied with 
 water, who have divided the town among them- 
 selves, engaging mutually to confine themselves 
 within their several districts ; by which they are en- 
 abled, without fear of competition, to charge the pub- 
 lic an exorbitant price for this most necessary arti- 
 cle, and to clear extravagant profits for their share- 
 holders. If any attempt is made by a stranger to 
 compete with these banded monopolists, they can, 
 by their combined influence, and by a temporary 
 relaxation of their prices, deter him effectually 
 from the vast outlay of capital which would be ne- 
 cessary before he can even commence his compe- 
 tition, and, having thus driven him away, they can 
 return to their old charges. So that the public are 
 completely at their mercy. 
 
 For several centuries there prevailed a strong 
 prejudice against the forestallers of grain and oth- 
 er provisions : dealers, that is, who, in the appre- 
 hension of a scarcity, buy them up with the inten- 
 tion of obtaining a monopoly of the market, and 
 being able to retail (regrate) them out afterward 
 with a high profit. But the growing enlighten- 
 ment of the age has placed within the comprehen- 
 sion of nearly every one, that such a process, un- 
 less the result of combination, is, on the whole, far 
 more beneficial than hurtful to the people who con- 
 sume the provisions. And this because the fore- 
 staller, anticipating the dearth of provisions at an 
 earlier period than others, by his demand raises 
 
POLITICAL ECONOMY. 163 
 
 their price, and thus discourages their consump. 
 tion and waste, and diminishes the severity of the 
 subsequent scarcity. The forestaller may gain a 
 high profit by selling dear that which he bought 
 cheap ; but if his sagacity had not led him to spec- 
 ulate on obtaining this high profit by large purcha- 
 ses and reserves, the probability is that there would 
 have been no supply at all for the public ; at all 
 events, much less than has been secured by his 
 providence. In fact, such speculating provision- 
 dealers tend, by their operations, to distribute the 
 supply pretty equally throughout the year, which, 
 without their aid, would be necessarily so irregular 
 as to occasion profusion and waste at one period, 
 and dearth and famine, as their consequence, at 
 another. 
 
 The true rule, therefore, with respect to monop- 
 olies, seems to be, that every one should be left at 
 liberty to avail himself of whatever peculiar advan- 
 tages fall to him by accident, or through his own 
 exertions fairly and freely exercised in concurrence 
 with other competitors ; but that no one be permit- 
 ted to increase his own superiority by destroying 
 or unfairly restraining the powers of others. And, 
 likewise, that the law (except in cases when the 
 public benefit is unquestionably interested) should 
 abstain altogether from either conferring exclusive 
 advantages, or breaking them down when adventi- 
 tiously established and not unfairly exercised. 
 
 DEMAND AND SUPPLY. 
 
 What we have advanced on the elements of val- 
 ue makes it evident that the value (or selling price) 
 of an article at any time and place is determined 
 
164 POLITICAL ECONOMY. 
 
 by the proportion of the demand to the supply at that 
 time and place. And it is a change in that propor- 
 tion which occasions the rising or falling of prices. 
 The extent of the demand for, and supply of arti- 
 cles, and, consequently, their relation to each other 
 in any market, is liable to be affected by a variety 
 of circumstances, some temporary, others more or 
 less permanent in their operation. 
 
 I. The extent of the Demand for a thing depends 
 on the intensity of the desire for its possession 
 among a larger or smaller number of persons, and 
 likewise upon their means of purchasing it. As 
 Adam Smith long since said, " Every beggar may 
 desire a coach and six;" but to be effectual, to make 
 itself sensible as a demand to the coachmakers, the 
 desire must be accompanied by a power of pur- 
 chase ; that is, by an equivalent supply of money 
 or money's worth. 
 
 The demand for those objects which are employ, 
 ed as the principal subsistence and necessary com- 
 forts of a people varies least of all, being chiefly 
 determined by the number of the population to be 
 supported, which is not liable to sudden change, 
 and to their habits, which, though varying in the 
 course of long periods of time, are equally unsus- 
 ceptible of sudden fluctuations. A deficiency in 
 the means at the disposal of the mass of the pop- 
 ulation for purchasing the necessaries of life, such 
 as is occasioned by a sudden rise in their price, un- 
 accompanied by a proportionate rise in the wages 
 of labour, cannot but diminish the effectual demand 
 for them ; not, however, in the proportion of the in- 
 creased price ; every other possible sacrifice being 
 
POLITICAL ECONOMY. 165 
 
 naturally made to obtain a sufficiency of necessa- 
 ries. A fall in the price of these things, on the oth- 
 er hand, does not occasion a fully proportionate in- 
 crease of demand, except in those countries, and 
 they are unhappily many, the bulk of whose inhab- 
 itants are at all times ill supplied with necessaries, 
 and are, therefore, limited in their demand for them 
 only by a deficiency of their " power of purchase." 
 The demand for articles of ornament and conve- 
 nience is liable to much more rapid and frequent 
 changes. The caprice of man exercises, it is well 
 known, a far more powerful sway over the intensity 
 of his desire for superfluities than over his neces- 
 sary wants. Fashion prides itself on singularity, 
 and is ever in search of novelty. So that change 
 is of its very essence. And such changes must oc- 
 casion- a proportionate fluctuation in the demand 
 for these articles, as well as for all such as are con- 
 sumed in their production and supply. The intro- 
 duction of a new article which obtains favour with 
 the public, will suddenly give rise to a new and ex- 
 tensive demand for that particular commodity, and 
 proportionately diminish the demand for some oth- 
 er whose place it takes. Thus cotton or Berlin 
 gloves have of late been very generally substituted 
 for leather gloves, to the great temporary detriment 
 of the makers of the latter article, and the proper- > 
 tionate benefit of the cotton hosiers. The gilt-but- 
 ton-makers have been severe sufferers from the gen- 
 eral introduction of the fashion of covered silk but- 
 tons. At one time printed cotton goods are the 
 universal wear, and the next year silks, perhaps, 
 are in almost equal vogue. A general mourning 
 in England, occasioned by the death of one of the 
 
166 POLITICAL ECONOMY. 
 
 royal family, raises the demand for all dark goods, 
 and depresses that for the gayer fashions. For- 
 tunately for the producers of such articles of dress, 
 these changes of taste, though often very rapid in 
 a particular class, rarely occur simultaneously 
 throughout all the classes of society. A mode of 
 dress which has gone out of fashion among one 
 class, will perhaps be just introducing itself in 
 another, to descend, when the latter have worn it 
 out, to the lower and more numerous. So that the 
 demand, when slackening in one quarter, is usually 
 increasing in another. And the stuffs which have 
 been long discarded by those whose caprice origi- 
 nates a fashion, are for a considerable time after- 
 ward in full demand among a herd of tardy imita- 
 tors. 
 
 II. The supply of goods is determined by the 
 circumstances that affect their production, and is 
 subject to still greater variations than the demand. 
 Those things which are raised directly from the 
 soil by agriculture, comprehending not only food, 
 but the raw material of nearly all manufactures, 
 are liable to great and frequent fluctuations in sup- 
 ply, from the variable character of the seasons. 
 Abundant crops, occasioned by favourable seasons, 
 cause the market to overflow with a quantity of 
 such commodities far beyond the average supply. 
 Unfavourable seasons create a general deficiency 
 below the average. Other obvious circumstances 
 often affect for a time the supply of a market with 
 particular commodities, such as the early setting in 
 of a frost, by which the harbours in high latitudes 
 are blocked up before the vessels loading there can 
 
POLITICAL ECONOMY. 167 
 
 get away ; the imposition of an embargo on the 
 exporting harbour ; or the interruption of the com- 
 merce between different countries by the breaking 
 out of war. 
 
 These causes of variation in the supply of goods 
 are more or less temporary and casual in their na- 
 ture. The circumstances which determine per- 
 manently, and on the whole, the average supply of 
 goods to meet the demand for them, are those 
 which may be included under the general designa- 
 tion of their necessary costs of production. 
 
 The cost of producing any article comprehends, 
 1. The labour, capital, and time required to create 
 and bring it to market in sufficient quantity to 
 meet the effectual demand for it. 2. The addi- 
 tional charges occasioned through the entire sup- 
 ply being produced under monopoly of any kind. 
 3. Whatever additional charges are occasioned by 
 the amount of taxation, to which it, or any of the 
 materials employed in its production, may be sub- 
 jected by the authorities possessing that power. 
 
 1. That portion of cost which consists of the 
 labour, capital, and time required for creating and 
 bringing to market a sufficient supply of the article, 
 is by far the most important. The money cost of 
 the requisite labour will depend on the current or 
 ordinary remuneration of such labour at the sev- 
 eral places where it may be required. Thus the 
 expense of producing corn in Great Britain or the 
 United States will materially depend on the current 
 wages of agricultural labourers in those countries. 
 Any general fall or rise in the wages of any class 
 of labourers engaged in production, goes to lower 
 or raise the money cost of the articles they pro- 
 
168 POLITICAL ECONOMY. 
 
 duce. Hence one reason of the struggle which so 
 often arises between labourers and their employers 
 as to the rate of wages ; it being the apparent in- 
 terest of the employer to diminish this main item 
 in his expenses, with the view of increasing his 
 share of the sum for which he expects to sell his 
 commodity. 
 
 Again, the money cost of the capital consumed 
 will depend, not on its amount only, but also on 
 the time during which it is engaged, the risks to 
 which it is exposed, and the current rate of inter- 
 est which its owner will, of course, expect to re- 
 ceive for its employment. 
 
 But the real cost, or actual amount of labour, 
 capital, or tinae required for the production of any. 
 thing, will vary with the greater or less skill, knowl- 
 edge, and appliances of all kinds available in aid 
 of it. 
 
 Every improvement in the processes by which 
 commodities of any kind are produced, contributes 
 towards the great end of lessening the producing 
 costs of commodities by the saving of time, capi- 
 tal, or labour. Every step that is made in any of 
 the arts and sciences subservient to production, 
 tends directly to increase man's power over na- 
 ture ; to render a fixed amount of his labour more 
 efficient, that is to say, productive of a larger 
 amount of the objects of his desire. Some of the 
 most striking of such improvements are those con- 
 tinually made in the means of communication. 
 The formation of new roads, canals, and rail- 
 roads, with the introduction of steam navigation, 
 have been most conspicuous among the causes 
 which have operated of late years to reduce the 
 
POLITICAL ECONOMY. 169 
 
 cost and facilitate the supply of commodities, par- 
 ticularly of the more bulky articles. An instance 
 in point is afforded by the vast increase in the traf- 
 fic between Ireland and the western coast of Eng- 
 land since 1824, the period when steamboats were 
 first employed in the Irish channel. The markets 
 of England have thus received a prodigious addi- 
 tion to their supplies of provisions. Lancashire 
 has especially profited, from the contemporaneous 
 opening of her great railroad, which, receiving the 
 Irish produce from the vessels at Liverpool, car- 
 ries it forward with the utmost expedition, and for 
 a trifling charge, to Manchester and its neighbour- 
 hood. Fresh meat, eggs, and butter are thus con- 
 veyed, with almost miraculous cheapness and ce- 
 lerity, from the very centre of Ireland (whence ca- 
 nals take them to Dublin) into the heart of the most 
 populous manufacturing district of Britain. The 
 cost of provisions in these latter places must be 
 proportionately diminished. 
 
 The capital employed in production consists 
 chiefly of appliances of various kinds for facilita- 
 ting labour. The main object of the invention of 
 tools and machines of every description is the 
 economy of labour, with a view to diminish the 
 real cost of production. It is chiefly to the won- 
 derful progress made of late years in the arts of 
 mechanical invention that we are indebted for the 
 superiority of modern society over that of earlier 
 ages, in the abundance of luxuries, comforts, and 
 conveniences at the disposal of every class. The 
 immense wealth that has been produced and accumu- 
 lated is to be ascribed almost entirely to the stupen- 
 dous inventions and discoveries of Watt, Wedge- 
 P 
 
170 POLITICAL ECONOMY. 
 
 wood, Hargraves, Arkwright, Fulton, Compton, 
 Cartwright, Whitney, and a few others. " These 
 added so prodigiously to our capacities of produc- 
 tion, that we went on rapidly," says a British wri- 
 ter, " increasing in population and wealth, notwith- 
 standing an expenditure of blood and treasure un- 
 paralleled in the history of the world. It is be- 
 lieved that an individual can, at this moment, by 
 means of the improved machinery now in use, 
 produce about two hundred times the quantity of 
 cotton goods that an individual could produce at 
 the accession of George III. in 1760 ! The im- 
 provement in other branches, though for the most 
 part less striking than in the cotton manufacture, 
 is still very great ; and in some, as in the lace 
 manufacture, it is little, if at all, inferior."* The 
 loom is one of those inventions which have most 
 signally advanced the productive capacity of man. 
 " Ulloa mentions that the Indians of South Amer- 
 ica have no other mode of making cloth than by 
 taking up thread after thread of the warp, and 
 passing the woof between them by the hand ; and 
 he adds that they are thus frequently engaged for 
 two or three years in the weaving of hammocks, 
 coverlets, and other coarse cloths, which a Euro- 
 pean would, by means of his loom, produce in as 
 many days, or probably hours. "f 
 
 Facts like these strongly illustrate the immense 
 benefits derived by society from improvements in 
 machinery, by which the real cost of consumable 
 goods, or the time and labour required for their 
 production, are diminished. The prejudice against 
 
 * Edinburgh Review, No. cxii., p. 314. 
 f Ibid., p. 315. 
 
POLITICAL ECONOMY. 171 
 
 machinery, still prevalent among the ignorant, and 
 which has often shown itself in outrage and rioting, 
 arises from the circumstance that any change in 
 the mode of production of particular goods throws 
 out of employment for a time many of those who 
 were occupied on the superseded method; and 
 who are unfitted, by their habits, situation, want 
 of skill, and other circumstances, to supply the de- 
 mand which must immediately spring up, some- 
 where or other, for labour of another kind, to be 
 employed in the improved method. The pressure 
 of such changes (like those we have traced to 
 changes in fashion and demand) is often very se- 
 vere and enduring ; as in the instance of the un- 
 fortunate hand-loom weavers, who have, for twenty 
 years past, in Great Britain, been engaged in a 
 hard but unavailing competition with the improve- 
 ments of the power-loom. And these sufferings 
 ought undoubtedly to be mitigated at the expense 
 of society by direct relief, but still more by the 
 adoption of means for raising the standard of edu- 
 cation among the labouring population, and also 
 for facilitating the transition of labourers from one 
 branch of employment or one locality in which 
 they are no longer wanted, to other employments 
 or places in which the demand of labour is brisker. 
 Any interference with improvements from which 
 society at large profits so greatly, for the sake of 
 protecting those whose employments are about to 
 be superseded, is obviously indefensible. 
 
 Interference has often been asked for by the suf- 
 ferers in these cases and their advocates. But 
 such a principle, once admitted, it is evident, would 
 tend directly to stop all improvement; it would 
 
172 POLITICAL ECONOMY. 
 
 have necessitated the prohibition of printing for 
 the protection of manuscript copyists ; of steam, 
 boats for the protection of sailmakers ; and of 
 bridges for the protection of ferrymen ; it would 
 go to prevent the employment of every contrivance 
 by which human labour is aided in any branch of 
 industry, and reduce us, as was well observed by 
 a Glasgow operative before a committee of the 
 House of Commons, to the teeth and nails as the 
 sole instruments of production. The sure result 
 of every improvement in machinery is an increased 
 production of the means of enjoyment. Whatever 
 partial evils attend that beneficial result, may and 
 ought to be mitigated by other means than by pla- 
 cing obstacles in the way of the march of improve- 
 ment. ! 
 Capital which consists in tools or machinery is 
 more or less durable, and will usually aid in the 
 successive production of a large quantity of com- 
 modities before it is wholly consumed. The por- 
 tion of such capital that is consumed in production 
 enters as an element into cost, together with the 
 current rate of profit upon it for the time during 
 which it has been advanced. Thus the cost of 
 one hundred quarters of corn to the grower in- 
 cludes, besides his labourers' wages and his own, 
 the value of that portion of his stock (viz., seed- 
 corn, ploughs, harrows, and other implements, 
 horses, horse-provender, manure, &c.) which has 
 been consumed in raising his crop, together with 
 the current profit on the value of every several 
 portion of this capital for the time during which it 
 has been employed in the production of his corn. 
 Hence, improvements which save any part of the 
 
POLITICAL ECONOMY. 173 
 
 time necessarily consumed in the business of pro- 
 duction, effect a reduction in the cost of the pro- 
 duce, by lessening the amount of profit chargeable 
 on the capital employed, as well as the amount of 
 wages chargeable for the labour of those who as- 
 sist in, or superintend the work. The improve, 
 ments we have just noticed in communications of 
 every kind, and, above all, the extraordinary ac- 
 celeration which has taken place of late years in 
 the conveyance of both public and private intelli- 
 gence throughout this and other countries, have 
 contributed, in a remarkable degree, to diminish 
 the producing costs of many objects, by enabling 
 their producers to save much of the time which 
 was formerly wasted in the intervals between the 
 different stages of the process of production, as 
 well as between its completion and final sale. If 
 a manufacturer is able, through such circum- 
 stances, to turn his capital twice in the year where 
 formerly he could have turned it but once, that 
 portion of the producing cost of his article which 
 consists of the profit on the capital employed, and 
 of the wages of himself, and perhaps several of his 
 assistant labourers, his clerks, &c., will be but half 
 what it was at the former period. 
 
 2. When the entire supply of a commodity, or 
 of any of the elements necessary to the production 
 of a commodity, is produced under a monopoly, 
 the extraordinary charges which the owner of the 
 monopoly is thereby enabled to make, go to swell 
 the amount of its cost. Thus the proprietor of a 
 patent or secret process, by which a particular ar- 
 ticle is exclusively produced, has it in his power to 
 charge for his article, beyond the amount of the 
 P 2 
 
174 POLITICAL ECONOMY. 
 
 ordinary wages and profits on the labour and cap- 
 ital consumed in its production, a sum sufficient to 
 defray the cost of invention. So the owner of a 
 vineyard, which exclusively produces fruit of a pe- 
 culiarly fine quality, is enabled to raise the price 
 of its produce to those who buy of him far beyond 
 the ordinary remuneration for the capital and la- 
 bour expended upon it. And these extraordinary 
 charges enter into the producing cost of the article, 
 because their payment is the necessary condition of 
 its production for sale. Unless their terms are 
 agreed to, the monopolists may decline to produce 
 or sell the article at all. This remark applies, of 
 course, to all commodities which, i^ any stage of 
 their production, or in any one of their necessary 
 elements, are subject to similar charges for exclu- 
 sive powers or privileges. But it must be observed, 
 that the payment of all such monopoly charges is 
 wholly voluntary on the part of the consumer, who 
 has no right to complain of its exaction so long as 
 he is left free to purchase or procure the article in 
 any cheaper manner, if he can. 
 
 When, however, only a portion of the entire sup- 
 ply is produced under a monopoly, the necessary 
 cost of the article is not affected by such monopoly, 
 but consists solely of the labour, time, and capital 
 required to produce that portion of the supply which 
 is brought to market under the least favourable 
 circumstances to its producers, and, consequently, 
 under no monopoly. Though the parties concern- 
 ed in the production of the remaining portion of the 
 supply receive a monopoly profit, they do not there- 
 by raise the price of their article. It is out of their 
 power, by refusing to produce or by any other 
 
POLITICAL ECONOMY. 175 
 
 means, to raise the price one jot beyond that at 
 which the commodity can be supplied by other par- 
 ties who will be content to get the current profit on 
 capital and wages of labour. The proprietor of a 
 peculiarly rich or well-situated coal-mine, for ex- 
 ample, obtains a monopoly profit upon his produce, 
 consisting of the difference between the cost of pro- 
 ducing the article from his mine, and the cost of 
 the same article from the poorest or worst situated 
 mine of all by which the market is habitually sup- 
 plied. But the price of the entire supply of coal 
 is determined by the cost of this latter portion, and 
 is therefore in no degree raised by the superior ad- 
 vantages enjoyed by the owner of the best mines. 
 The same law, as we have already seen, applies to 
 all raw produce derived from land ; the cost of 
 which is in no degree affected by the rent of the 
 best lands, but is determined by the labour, capital, 
 and time required for its production from the least 
 favourably situated lands of all that habitually sup- 
 ply the same market. 
 
 3. It is obvious that the amount of taxation to 
 which a commodity is liable, in itself or in any of its 
 component elements, must add just so much to the 
 cost of producing it for sale in the market, together 
 with the current rate of profit on the sums so paid 
 for the time during which they have been advanced. 
 A diminution of the customs' duties on foreign prod- 
 uce,* or of the taxes levied on articles of home 
 
 * Such has not been the case in the United States. It has 
 been often remarked, that the repeal of a duty on foreign goods 
 is followed here, not by a/aZ/, but by a rise in price. Two rea- 
 sons for this will readily occur to the reader : 1st. The duty has 
 the effect of inducing a greater number of capitalists to engage 
 in the production of the article, the competition between whom 
 
176 POLITICAL ECONOMY. 
 
 growth or manufacture, or on any of the materials 
 employed in their production, has the effect of di- 
 minishing their cost to the producer. So also the 
 breaking out of a war, by increasing the premium 
 on marine ensurances, adds to the producing cost 
 of all imported goods.* 
 
 keeps the price down. When the duty is repealed, many of 
 these withdraw. 2dly. It is part of the policy of British manu- 
 facturers to glut American markets with such articles as we are 
 endeavouring, by the aid of duties, to produce. This they are 
 enabled to do by manufacturing a surplus of goods beyond their 
 orders; and this surplus being produced at little comparative 
 cost, it is thought to be good policy to throw it into foreign 
 markets, where they are trying to build up domestic manufac- 
 tures, and to sell it so low that the native goods will be driven 
 out. When a duty is repealed, the motive to this course ceases, 
 the supply is diminished, and the goods rise, till they pay both 
 the costs of production and a good profit to the foreign manu- 
 facturer. Ed. 
 
 * The majority of political economists, in pursuance of the 
 fallacy already exposed of identifying value with labour, resolve 
 cost of production into the quantity of labour only required for 
 producing the article. It is scarcely necessary to say more in 
 refutation of so palpable an error. Land and capital must unite 
 with labour in the production of everything, and the owners of 
 land and capital, no less than the owners of labour, have the 
 power of demanding, and are in the habit of receiving, a share of 
 the value of every commodity in return for what they contrib- 
 ute towards its production. And even though we should ex- 
 clude from consideration all monopoly charges, and view the 
 value of land and capital as the result merely of anterior labour, 
 yet it would be in the highest degree irrational to refuse to dis- 
 tinguish the labour that enclosed and cleared a field, planted an 
 oak, or raised a building centuries ago, or that which built a 
 ship, or framed a machine several years back, from the labour 
 which is employed at the present time in using the land, build- 
 ing, timber, vessel, or machine, in the preparation of something 
 for immediate sale. Nor even, though we admitted all land and 
 capital to owe their value to labour, would this suffice to resolve 
 cost ultimately into labour. For it will not be denied that profit 
 is a constant element in cost. And this, as we have proved, is 
 a compensation not for labour, but for the time during which the 
 owner of capital has allowed it to be employed productively with 
 a view to ultimate remuneration, instead of consuming it imme- 
 
POLITICAL ECONOMY. 177 
 
 It is quite evident, that the cost of producing any 
 article must, in the long run, determine its price (or 
 selling value). For, unless a price can be obtained 
 sufficient to cover this cost, no one will continue to 
 produce it for sale. 
 
 A sudden increase of demand, or a casual defi- 
 ciency of supply, will frequently raise prices above 
 this level ; as a diminished demand, or an acci- 
 dental increase of the supply beyond the demand, 
 will lower them beneath it. Such effect is, how. 
 ever, but temporary. The constant tendency both 
 of demand and supply is to come to an equilibrium, 
 and the point about which they oscillate is that sell- 
 ing price of the commodity which will just cover 
 the cost of its production at any particular time 
 and place. 
 
 Should the price fall below this level, producers 
 find that particular branch of industry a less ad- 
 vantgeous mode of employing their capital and la- 
 bour than others, and some are therefore led to dis- 
 continue it ; or those who were on the point of em- 
 barking in it are led to prefer another occupation. 
 The supply is thus generally diminished, until it 
 is brought down at least to the level of that extent 
 of demand which will pay the producing cost. 
 
 When, on the other hand, the supply is deficient 
 as compared to the demand, the price rising in 
 consequence above the cost of production, produ- 
 cers are encouraged, by an increase of profits, to 
 enlarge their business, and invest additional capi- 
 
 diately on his personal gratification. It is also clear, as has 
 been shown above, that monopoly charges, as well as taxation, 
 wherever they exist, are included in costs of production, togeth- 
 er with the ordinary elements. 
 
178 POLITICAL ECONOMY. 
 
 tal and labour in that particular trade, until the in- 
 creased supply meets the demand, and brings down 
 the price to the level of the producing cost. 
 
 These oscillations of price about the mean level 
 of the costs of production are continually taking 
 place ; the circumstances which influence supply 
 and demand being of so complicated a character, 
 that the one can never, for a length of time, remain 
 exactly adjusted to the other. The producers can 
 never anticipate with precision the extent of the 
 demand, and will therefore usually be something 
 within or beyond it. Moreover, as we have seen, 
 supply and demand act and react on each other. 
 An increased supply, by lowering price, not only 
 tempts those that employed the article previously 
 to enlarge their consumption, but likewise brings 
 it within reach of a wider circle of consumers, 
 who acquire a taste for it, which usually continues 
 even when the price has again risen. Hence a 
 
 Eermanent increase of demand is generally estab- 
 shed by a temporary fall of price. An increased 
 demand, by augmenting profits, attracts fresh spec- 
 ulators into the business, and, in turn, raises the 
 supply. 
 
 The competition of individual producers is in this 
 way constantly tending to equalize the supply and 
 demand. Each acting in his own sphere, and ac- 
 tuated by the instinct of self-interest, endeavours to 
 produce as much as he can sell with a fair profit, 
 and yet to produce no more than he can so dis- 
 pose of: each and all endeavour, for their several 
 interests, to keep the supply full, but to prevent ex- 
 cess. 
 Competition is, indeed, the soul of industry, the 
 
POLITICAL ECONOMY. 179 
 
 animating spirit of production, the ever-present, 
 all-pervading elastic principle, which, like the pow- 
 er of gravitation on the atmosphere and ocean, fills 
 every vacuum in the market of exchanges, equal- 
 izes the quantity for every commodity to the ne- 
 cessity for it, and preserves their relative values 
 at the mean level of their comparative estimation 
 in the regard of the great body of consumers. Ev- 
 ery one who sees his neighbour getting an advan- 
 tage which lies open to himself a higher profit or 
 a larger wage anxious to share in the benefit, 
 starts as his rival, if it be possible for him to do 
 so ; and the number of competitors who thus throw 
 themselves into any peculiarly advantageous busi- 
 ness, must speedily reduce its profits to the gen- 
 eral level, and its prices to the necessary costs of 
 production. 
 
 Monopoly and competition are antagonist prin- 
 ciples, working constantly against each other, but 
 in such a way as to benefit society by the result 
 of their joint forces. The object of the monopo- 
 list is to control the supply, either permanently or 
 for a time, in order to raise the price. The strug- 
 gle of competitors to share the advantages of the 
 monopolist tends to increase the supply, and there- 
 fore lowers the price. The first principle befriends 
 the public by holding out high encouragement to 
 invention, skill, and improvement ; the other, by 
 reducing the price the public have to pay for such 
 improvements to the lowest point consistent with 
 their sufficient encouragement. 
 
 The mode in which the principles we have been 
 analyzing determine the direction and extent of 
 
180 POLITICAL ECONOMY. 
 
 productive operations, will be seen, perhaps, with 
 greater clearness, if we examine briefly some of 
 the simplest habitual modes of employing capital 
 and labour. 
 
 Suppose A. to possess property to the value of a 
 thousand pounds. 
 
 1. If he realize, that is, sell it for a thousand 
 pounds in money, it is then in that form which 
 combines, perhaps, the greatest security and con- 
 venience, as enabling him to make whatever use 
 he pleases of it ; to remove with it to any part of 
 the world ; to expend it on his own gratification ; 
 or to employ it in any productive investment which 
 offers at the moment the highest advantages. But, 
 so long as he retains it in the shape of money in 
 his pocket or his chest, it is of no other advan- 
 tage to him than what he may derive from a feel- 
 ing of its security, and of his power of command, 
 ing, through its means, anything in the market up 
 to that value. If he wish to make a profit of his 
 money, as a source of revenue, he must change its 
 mode of investment. 
 
 2. He may, for example, lend it to some one who 
 is in want of money, on securities of a private na- 
 ture, such as bills, bonds, mortgages of land or 
 buildings, &c., or of a public nature, as govern- 
 ment stock, canal and railroad shares, &c. The 
 latter class of securities are readily available ; that 
 is to say, the owner may realize, or tifhi them again 
 into money whenever he chooses ; but they fluctu- 
 ate in value, and may sell, therefore, for more or less 
 than was given for them. All bear the current in- 
 terest on money, with a difference determined chief- 
 ly by the more or less of risk attached to each, and 
 
POLITICAL ECONOMY. 181 
 
 tile more or less of trouble and expense attending 
 their transfer. 
 
 These moneyed investments are all mere debts, or 
 claims representing money expended (often unpro* 
 ductively), but for which some productive property 
 stands pledged. They may, therefore, be consid- 
 ered as part-ownerships in the property so bur- 
 dened. Some, as mortgages and government stock, 
 have a claim for a definite return which is prior to 
 that of all other owners. Some, as canal and com- 
 pany shares and bank stock, are subject to similar 
 fluctuations in Value as the capital embarked in 
 private concerns. 
 
 Property of this kind, consisting in money obli* 
 gations, is clearly quite distinct from capital, though 
 it is frequently confounded with it in common con- 
 versation. It brings interest to the owner, but is 
 not productive as regards the community generally* 
 It merely represents the claim of one party to a 
 portion of the returns of the land, capital, or labour 
 of some others. If these claims were reckoned in 
 a calculation of the national capital, they would be 
 counted twice over ; once in the hands of those 
 who pay the interest of the debt with which their 
 capital is burdened, and again in the hands of the 
 creditor who receives that interest. The national 
 debt of England, for example, is not capital, but 
 rather the reverse. It is a burden upon the capi* 
 tal and industry of the nation, which are pledged 
 for its payment. If that debt and all other money 
 securities were abolished to-morrow, there would 
 be neither more nor less capital in the country than 
 before. But the profits of capital and the wages of 
 labour would be raised by the annihilation of a claim 
 
 a 
 
182 POLITICAL ECONOMY. 
 
 upon the aggregate produce which is prior to that 
 of the producers themselves. At the same time, 
 the injustice of such a " sponging" process is man- 
 ifest. The creditors have given, and the debtors 
 have received, expended, and profited from what 
 both parties considered an equivalent to the claim* 
 The former may be looked upon as " sleeping part- 
 ners" in the business, which the latter are enabled 
 to carry on by means of the advances of capital or 
 other necessary aid which have been made to them. 
 And the right, therefore, of the national (or any 
 other) creditor to his stipulated share of the na- 
 tional produce is as strong, and rests on the same 
 grounds of equity, as that of the land-owner, the 
 capitalist, and the labourer to their stipulated por- 
 tions of whatever they have voluntarily combined 
 to produce. 
 
 3. But, instead of moneyed securities, A. may 
 prefer to invest his thousand pounds in some prod- 
 uctive business ; in supplying, or aiding the sup. 
 ply of some market with goods. He may do this 
 as a " sleeping partner ;" in which case he will ex- 
 pect only to make a profit on his capital little greater 
 than the current interest of money, after allowing 
 for all the risks to which the business in which it 
 is embarked is exposed. Or he may engage per- 
 sonally in the business ; in which case, besides this 
 profit on his capital, he will expect to gain a re- 
 muneration for his labour. Perhaps he will spec- 
 ulate, as it is called, in goods buying one day, 
 when he considers the prices low and likely to rise, 
 to sell again after an interval or, as a wholesale 
 dealer, he will purchase of the grower, or manu- 
 facturer, or importer of an article, and sell to the 
 
POLITICAL ECONOMY. 183 
 
 retail dealers or, as a retail dealer purchasing of 
 the wholesale dealer, he will sell to the consumers 
 in such quantities as are required for immediate 
 use. In every case he acts with a view to profit, 
 by selling for more money than he gives ; and this 
 profit must, on the average, be sufficient to pay 
 him interest on his capital during the time it is 
 employed ; to repay, moreover, his personal trouble 
 and skill, as well as all expenses incurred between 
 the purchase and sale, as carriage, shop and ware- 
 house rent, taxes, &e. ; and likewise to cover the 
 risk which he takes upon himself of damage to his 
 goods while they remain with him, and of a fall in 
 the market-prices. It is evident that, to cover all 
 these items, a very considerable per centage of 
 gross annual profit on his capital must usually be 
 necessary. In such engagements, however, the 
 capital is seldom long in being realized, or turned 
 again into money. Most capitalists of this class, 
 which comprehends all merchants, wholesale deal- 
 ers, and shopkeepers, turn their capitals more than 
 once, often several times, in the year. So that, as 
 already remarked, a small profit on the price of 
 each article sold may afford a very large annual 
 profit on the capital employed. 
 
 4. Perhaps it may suit the views of A. to expend 
 his capital in the acquisition of the skill and knowl- 
 edge, or ability, requisite for some professional bu- 
 siness ; in studying the law, for instance, or medi- 
 cine, or surgery, or divinity, or commerce, and fit- 
 ting himself for the practice of one of these pro- 
 fessions. These are modes of investing capital 
 subject to much risk, not the least of which is that 
 of 4eath or sickness, by which the value of the ac- 
 
184 POLITIC AJ, ECONOMY. 
 
 quired ability may be annihilated at once. But in 
 proportion to the number of blanks is the greatness 
 of the prizes, so that there is never any want of 
 competition in such occupations. Capital so ex. 
 pended in the acquisition of personal qualifications 
 or advantages, loses its name, and assumes that of 
 ability. Its returns can no longer be properly 
 called profit, but wages, salary, or professional 
 gains. 
 
 5. Or A. may prefer to invest his thousand 
 pounds in the purchase of land. This is geneiv 
 ally reckoned the most permanent and secure of 
 all investments, as being less exposed to loss by 
 commercial or political convulsions; and it con, 
 sequently returns, on the average, a less interest 
 than any other. But it has its disadvantages, par- 
 ticularly in the difficulty of finding a purchaser for 
 land at any time when its owner wishes to sell, 
 owing to the variety of tastes respecting situation, 
 residence, &c. 
 
 When A. has purchased land, he may either let 
 it to those who will pay him, in the shape of rent, 
 the interest on the capital he has so invested ; or 
 he may cultivate it himself, for which purpose he 
 will require an additional capital. 
 
 6. Let us suppose that, instead of purchasing, 
 he employs his capital in cultivating, or, as it is 
 called, " hiring" land. For this he must lay out 
 a part in the purchase of tools and implements of 
 husbandry, called dead stock ; part in cattle, sheep, 
 pigs, horses, &c., or live ptock ; and part he will 
 keep by him in the shape of money, with which to 
 pay the wages of his labourers and other current 
 expenses. He now looks for his profit and per- 
 
POLITICAL ECONOMY. 185 
 
 sonal remuneration to the surplus of the sum for 
 which he sells the annual produce of his farm, be- 
 yond what is necessary to pay his rent, and main- 
 tain his capital at its full former value ; in other 
 words, to compensate for the wear and tear of his 
 dead, and to replace his live stock, and, moreover, 
 to cover his average risk of loss from casualties, 
 bad seasons, &c. His rent will be a matter of 
 agreement between himself and the landlord be- 
 fore he enters on his occupation. But he will not 
 be likely to agree to pay more than what will, ac- 
 cording to the best calculation he can make at the 
 time of the probable produce of the farm, leave 
 him a decent maintenance in return for his own 
 exertions, and a net profit on his capital equal to 
 the ordinary rate which he could have obtained in 
 other lines of business or moneyed investments. 
 Nor, on the other hand, is the owner of the farm 
 likely to let it for less than such a rent, which it is 
 evident he could make for himself by cultivating it 
 on his own account, either personally or through 
 an honest agent. For these reasons, the average 
 rent of land equals, and may be said to consist of, 
 that surplus of its average annual produce which 
 remains after replacing the capital required to cul- 
 tivate it, and paying the current profit upon that 
 capital, and the current remuneration of farming 
 labour. 
 
 If A. rent his farm at the will of his landlord, 
 i. e.,. from year to year, he will usually take .care 
 to expend no more upon his land every year than 
 what he can get off it within the year. But if he 
 rent on a lease for a term of years, or occupy his 
 own land or, in some rare cases of confidence in 
 Q2 
 
186 POLITICAL ECONOMY. 
 
 his landlord, even when occupying as tenant 
 only he will probably lay out some of his capital 
 in durable improvements of his farm ; for example, 
 in draining wet lands, clearing fresh soil, adding to 
 the farm-buildings, or in such a system of manu- 
 ring and cultivation as can only be expected to re- 
 pay the outlay within a period of some years. 
 
 That part of his capital which he expends in this 
 manner is fixecj to the soil, and cannot, like his 
 moveable stock, live and dead, be realized by sale. 
 He can only expect to get it back by degrees, 
 in the form of an increased annual produce from 
 his farm ; which increase, if the improvement be 
 of a permanent nature, assumes thenceforward the 
 character of rent, and, upon the termination of the 
 lease, accrues to the landlord in an increase of his 
 rent. If the improvement is fitted only to last a 
 certain term of years, as the lime-manuring of 
 land, temporary farm-buildings, and improved ro- 
 tations of crops, the increased return must be suf- 
 ficient to replace the capital expended at the end 
 of the term, and pay the usual profit, or the farmer 
 will not be induced to lay out his capital in effect- 
 ing it. Capital expended in the latter way is pre- 
 cisely on the footing of that laid out in perishable 
 implements or dead stock, except in the circum- 
 stance of its not being removeable. And a hun- 
 dred pounds laid out in implements which may be 
 expected to last ten years, ought to bring in the 
 same gross return as a hundred pounds laid out in 
 manuring a field in a mode of which the effect may 
 be expected to last the same time. 
 
 It is clear that lasting improvements on land 
 cannot be expected from farmers who have no 
 
POLITICAL ECONOMY. 187 
 
 leases ; and hence, where tenancy at will prevails, 
 as it does at present over the greater part of Eng- 
 land, the repairs, as well as all permanent improve, 
 ments, have to be undertaken by the landlord, if at 
 all. It is more than doubtful whether, under such 
 a system, the land is cultivated so well, or render- 
 ed so productive, as under a system of leases. But 
 the uncertain prices of late years have naturally 
 indisposed landlords to put their land out of their 
 own disposal for a long term; during which, if 
 prices rise, the tenant reaps the entire benefit ; 
 whereas, if they fall, the landlord finds himself 
 obliged to remit the stipulated rent, lest his tenant 
 ruin his farm by a deficiency of capital for its 
 proper cultivation. Hence leases, in times of great 
 fluctuation in the prices of agricultural produce, 
 are a protection to the tenant, but not to the land- 
 lord. 
 
 7. Should A. prefer the business of a manufac* 
 turer, he, perhaps, lays out a part of his capital in 
 buildings and machinery, fixed, more or less, to 
 the soil, like some of those in the case last con- 
 sidered. Another part of his capital is employed 
 in the occasional purchase of raw material, tools, 
 dec., and another in the frequent payment of the 
 wages of his workmen. Or he may rent the build- 
 ings, machinery, &c., and employ his whole capi- 
 tal in the latter forms. His returns must in this 
 case, as in that of the farmer, be sufficient, besides 
 recompensing his own trouble and skill, to replace 
 his floating capital that, namely (as already ex- 
 plained), which circulates within the year with 
 the ordinary rate of profit ; to replace his fixed 
 or more durable capital at the end of the term 
 
188 POLITICAL ECONOMY. 
 
 which it is calculated to last, with the same profit ; 
 and, moreover, to cover all the risks peculiar to the 
 business, such as that of the article he fabricates 
 being superseded by a change in the taste, and, 
 consequently, in the demand of the public, or the 
 machinery he employs by a new and superior in- 
 vention. The risks of these kinds attached to 
 manufacturing operations are (for reasons we 
 have, in part, already given) much greater than in 
 agriculture ; and hence the compensation or ensu- 
 rance against such risks must be proportionately 
 large. It has not been -uncommon, of late, for 
 buildings and machinery, on which thousands of 
 pounds had been expended, to fall in value in a 
 very brief period, through changes in the demand 
 of the market, the introduction of improved ma- 
 chinery,* or a general depression of trade, to lit- 
 tle or nothing. In times of depression, indeed 
 (such as we have seen but too often), it is not un- 
 common for manufacturers, rather than shut up 
 their factories or works (which would, in that state, 
 rapidly go to -decay), to renounce the idea of get 
 ting any return from their fixed capital, and to 
 
 * " Machinery for producing any commodity in great demand 
 seldom wears out ; new improvements, by which the same op- 
 erations can be executed either more quickly or better, gener- 
 .ally superseding it long before that period arrives : indeed, to 
 make such an improved machine profitable, it is usually reck- 
 oned that in five years it ought to have paid itself, and iri ten to 
 'be superseded by a better." " The improvement which took 
 place not long ago in frames for -making patent net was so great, 
 that a machine in good repair, which cost 1200Z., sold a few years 
 after for 60/. During the great speculations in that trade, the 
 improvements succeeded each other so rapidly, that machines 
 which had never been finished were abandoned in the hands of 
 their makers, because new improvements had superseded their 
 utility." Babbage, Economy of Manufactures, p. 233. 
 
POITICAL ECONOMY. 189 
 
 work on, even under a loss upon their floating 
 capital, in hopes of better times. 
 
 8. Persons who embark their capital in working 
 mines, in building houses or ships, and in a variety 
 of other productive investments, are circumstanced, 
 in all essential points, like the farmer or manufac- 
 turer just described. A part of this capital is fixed 
 in more or less durable objects, and ought to bring 
 in a sufficient annual return to replace the wear 
 and tear, and maintain the value of the capital ; 
 part is floating, or circulating within the year, in 
 the purchase of materials and stocks of goods, and 
 the payment of wages, taxes, rent, &c. 
 
 None of these different modes of employing cap. 
 ital, it is quite evident, would be undertaken if they 
 -did not hold out a fair expectation of such returns 
 as would pay the ordinary rate of profit upon the 
 whole capital employed for the time required for 
 its circulation, and enable its owner to replace it 
 at ihe end of that term, as well as remunerate him 
 for his skill and trouble, according to the standard 
 of remuneration generally expected by his class. 
 No business would be entered upon that did not 
 fairly promise this. And, therefore, for a market 
 to be habitually supplied with any commodity, the 
 necessary condition is that it sell, on an average, 
 for a sufficient price to repay these, the elementary 
 costs of its production. 
 
 When the supply of any goods in any market is 
 in excess over the demand, so as to reduce their 
 selling price below the elementary costs of produc- 
 tion, there is said to be a glut of them. This glut 
 may be partial, as when confined to one market $ 
 
190 POLITICAL ECONOMY. 
 
 in which the evil soon cures itself by a transfer of 
 the goods to other markets, where the demand is 
 brisker. Or it may be general with respect to 
 the markets, but confined to a single article. 
 This likewise is, for the most part, speedily cor- 
 rected, by a portion of the producers transferring 
 their labour and capital to some other and more 
 profitable occupation. 
 
 But can there be a general and simultaneous 
 glut in all the markets of a country, not of one 
 or a few articles only, but of a large majority, or 
 the great mass of commodities ? This is a ques- 
 tion which has been much and hotly disputed by 
 political economists. That goods of all kinds are 
 frequently sold below their prime cost, is but too 
 well known to commercial men. Forced sales, 
 caused by the bankruptcy or temporary embar- 
 rassment of the owners, are continually occur- 
 ring ; and a certain proportion of goods thus con- 
 stantly find their way into the consumer's hands at 
 less than cost price. In times of general embar- 
 rassment and of a scarcity of money in circulation 
 (such as we have witnessed almost periodically 
 for some years past), still larger quantities of 
 goods continue to be produced and sold for some 
 time at a continual loss to their producers. This 
 is chiefly owing to two circumstances : 1st. The 
 impossibility of realizing fixed capital at such times, 
 so that those who have a large proportion of their 
 property embarked in buildings, machinery, stock, 
 or implements, must continue to employ it in pro- 
 duction, though at a tremendous loss, rather than 
 let their fixed capital lay wholly idle, and their 
 buildings, machinery, &c., go to decay for want 
 
POLITICAL ECONOMY. 191 
 
 of use and repairs. 2d. The very distress caused 
 by a want of remunerative prices in some trades 
 tends to increase their production. Workmen, in 
 consequence of the fall in their wages by the piece, 
 work the harder in order to obtain a higher pay 
 by the day. And capitalists likewise, in their 
 struggles to avoid ruin, try to make up for dimin- 
 ished profits by increased sales.* 
 
 All this increase of production, by adding to the 
 glut, tends to cause a yet farther fall in prices, and 
 to occasion farther losses to the producers. But 
 in the economical, as in the moral and physical 
 worlds, there are few evils that do not sooner or 
 later work out their own cure. Even in the ap- 
 parently desperate state of things we have been 
 describing, there are elements in operation of a 
 nature to bring about an improvement. The ex- 
 traordinary cheapness of goods produced in in- 
 creased quantities at a continual loss, opens their 
 consumption to a lower and more numerous class 
 of purchasers* They make their way into new 
 markets, and are employed in substitution for other 
 goods, or for purposes to which they had not previ- 
 ously been applied. A new and enlarged demand 
 thus springs up ; and, in the mean time, the anxiety 
 
 * Mr. T. Attwood, of England, in his Examination before the 
 Committee of Secrecy on the Bank Charter Question in 1831, 
 says, " Nothing is more common than for manufacturers to in- 
 crease their establishments at the very time they are upon the 
 road to ruin. In the iron trade, for example, if they have two 
 furnaces, they will build a third, because the loss upon the two 
 furnaces is 10s. a ton, but upon the three it will be reduced to 5s. 
 a ton. Within the last five or six months, when the iron mas- 
 ters and manufacturers generally are all going to ruin, and in a 
 state I do not like to describe, they are, many of them, enlarging 
 their works, not to partake of profit, but to prolong the path to 
 ruin by diminishing their general charges." 5654-5. 
 
192 POLITICAL ECONOMY. 
 
 of the producers to diminish their expenses forces 
 them to task their ingenuity to the utmost in the 
 invention of new machines or processes by which 
 a saving of cost may be effected ; so that it often 
 happens, by the time a new and enlarged demand 
 has been established through the sacrifice of large 
 stocks of goods at losing prices, that the producers 
 find themselves enabled to supply this demand at 
 these same prices with a profit. We believe the 
 history of the silk, the iron, the glove, and the cot- 
 ton trade, and perhaps of many more, within the 
 last few years, affords decided instances of an ex- 
 tended beneficial demand having been thus bought 
 by temporary sacrifices. 
 
 It is, however, strongly to be suspected that stieh 
 epochs of general embarrassment and distress 
 among the productive classes, accompanied in- 
 deed, brought on by a general glut or apparent 
 excess of the stocks of all goods in market of 
 which excess sad experience has, of late, too fre- 
 quently attested the real existence, in spite of what 
 theory may urge as to its impossibility it is to be 
 suspected, we say, that such phenomena are anom- 
 alies, occasioned, not by the simple and natural laws 
 of production, but by the force of some artificial dis- 
 turbing cause. A few words will explain our 
 meaning as far as we think it necessary to proceed 
 in the development of this important principle in 
 this place. 
 
 We have hitherto spoken of price as synonymous 
 with value. But, in truth, this is only on the as- 
 sumption, which is the basis of all commercial in- 
 terchange, that money is a true measure of value. 
 Unhappily, this assumption is far from well-found- 
 
POLITICAL ECONOMY. 193 
 
 ed. Money, whether of intrinsic value, as coin, or 
 the representative only of value, as bank-notes, is, 
 like every other changeable commodity, liable to 
 vary in value with changes in the relation of its de- 
 mand and supply. Gold and silver money, freely 
 coined, must vary in local value with every altera- 
 tion (and they are very frequent) in the local sup- 
 ply and demand of the precious metals. Bank pa- 
 per, payable on demand in coin, must vary precise- 
 ly in value with the metal into which it is by law 
 convertible at the option of its possessor. Incon- 
 vertible paper-money will vary whenever the quan- 
 tity in circulation is either beyond or within the 
 quantity which is required at the time for the ex- 
 igences of commerce in the country through which 
 the paper circulates. And as these exigences are 
 continually fluctuating, and there exists no test by 
 which their extent can be at any time gauged, this 
 kind of money likewise must be frequently varying 
 in value. 
 
 Bearing in mind this instability of value inherent 
 in money of all kinds, we cannot fail to perceive 
 that a general glut that is, a general fall in the 
 prices of the mass of commodities below their pro- 
 ducing cost is tantamount to a rise in the general 
 exchangeable value of money ; and is a proof, not 
 of an excessive supply of goods, but of a deficient 
 supply of money, against which the goods have to 
 be exchanged. Suppose every article in the mar- 
 ket to have fallen in price fifty per cent. This is 
 no proof that any one article has fallen in value ; 
 that is, in general estimation as compared with the 
 rest. Still less is it any proof that there has been 
 R 
 
194 POLITICAL ECONOMY, 
 
 an over-production of all goods (which is, in fact, an 
 unintelligible proposition, for how can there be too 
 great an abundance of all good things 1 Can the 
 desires of man ever be sated ?). It is simply a 
 proof that the value of money has risen one hundred 
 per cent. 
 
 But money, being employed as the measure of 
 value, ought itself to be essentially invariable. 
 Hence the duty of governments, while enforcing 
 the employment of money of any kind as a medi- 
 um of exchange, to take all possible precautions 
 against its liability to vary in value, and to guard 
 in every way against fluctuations which tend to de- 
 range the whole course of trade, to vitiate all money 
 contracts, and convert, as we have witnessed in 
 late years, the triumphs of invention, the success of 
 industry, the very abundance of produce of every 
 description, into a source of suffering to every class 
 of producers ! 
 
POLITICAL ECONOMY. 195 
 
 CHAPTER IX. 
 
 DISTRIBUTION OF WEALTH. 
 
 Natural and necessary Inequality of Conditions and Property. 
 Adventitious Advantages. Natural Right of Succession to 
 Property by Will or Inheritance. Variety of Conventional 
 Rules. Test of their Equity. Natural Distribution of new 
 Wealthamong Labourers, Land-owners, and Capitalists 
 can be determined only by the Principle of free Exchange. 
 The same Principle tends to the greatest Increase of distribu- 
 table Produce. Limitation of Interference of Government to 
 the securing of Persons and Property. 
 
 IN as far as we have hitherto traced the natural 
 laws which determine the production of wealth, it 
 has, we think, been apparent throughout that the 
 conditions most favourable for its increase are 
 general education, both moral and intellectual, and 
 the free and secure enjoyment by every adult indi- 
 vidual of his personal liberty, natural advantages, 
 and acquired property ; conditions which necessa- 
 rily include freedom of industry and exchange, and 
 the free use of the spontaneous bounty of Heaven. 
 
 There would have been good reason for pre- 
 suming d priori, that the general rules which tend 
 to bring about the greatest aggregate of produc- 
 tion are the most favourable to the interest of all 
 consumers. For the more there is to divide, the 
 larger, it is probable, will be the share of each. 
 
 But we are not left on this point to a mere bal- 
 ancing of probabilities. For it may be made man- 
 ifest that these great and abiding principles, at the 
 
196 POLITICAL ECONOMY. 
 
 same time that they swell the amount of wealth, 
 tend likewise to distribute it in the most equitable 
 manner among the various classes of individuals 
 who have in any way co-operated in its production. 
 The latter tendency is, indeed, the condition and 
 cause of the former. The certainty of freely and 
 fully enjoying the fruits of productive labour and 
 ingenuity, is the most efficient stimulus to the exer- 
 tion of these powers and the increase of their re- 
 sults. It is the main object of this work to prove, 
 that the greatest aggregate production of wealth 
 flows from the same plain and simple principles of 
 natural right which ensure its most equitable dis- 
 tribution, and which tend at the same time to the 
 production of the greatest aggregate of human 
 happiness.* 
 
 We say the most equitable distribution. Great 
 was the mistake of those philanthropists who have 
 interpreted an equitable distribution of the good 
 things of life to mean their equal distribution. No 
 two conditions can be more incongruous than these. 
 Any attempt to effect an equality of property among 
 men, instead of approaching to equity, would in- 
 volve the extreme of injustice; instead of being 
 
 * This is in no degree inconsistent with what was urged in 
 an earlier chapter (p. 64), as to an increase of wealth being no 
 measure of the increase of happiness. Wealth may, for a time, 
 be increased at a great sacrifice of human happiness, as in the 
 instances we there gave ; though, in the long run, such sacrifices 
 will be found to have occasioned a diminution of the aggregate 
 productiveness, by checking the growth of population, and the 
 improvement of the arts and sciences, which require a condition 
 of eas, leisure, and plenty, freedom both of the physical and 
 mental faculties, the stimulus of hope, and the prospect of an 
 indefinite amelioration of our circumstances, for their lull devel- 
 opment. 
 
POLITICAL ECONOMY. 197 
 
 consonant to the law of nature, such a state could 
 only be maintained by the continual infraction of 
 that la\v. 
 
 The difference naturally existing between the 
 bodily and mental powers and dispositions of indi- 
 viduals, must necessarily, under the natural law of 
 production and distribution, create great inequality 
 in their several possessions and stations. How- 
 ever equal their position when they began the 
 world, the industrious, sharp-witted, intelligent, ac- 
 tive, energetic, ingenious, prudent, and frugal must 
 speedily leave behind the idle, slow, stupid, care- 
 less, improvident, and extravagant. The former 
 will acquire considerable property under circum- 
 stances in which the latter will scarcely procure 
 a maintenance. But ajiy attempt to counteract 
 this, the natural law of distribution, which awards 
 to each workman the produce of his own exertions, 
 must proportionately check the disposition of each 
 to avail himself of his natural capacity, or to ac- 
 quire additional powers, and would, therefore, be 
 no less impolitic than unjust. 
 
 Accidental circumstances add, no doubt, to this 
 natural and necessary inequality of conditions. 
 Yet would it not be .safe or right to interfere with 
 their influence, since it is almost impossible to 
 separate the advantages that an individual derives 
 by accident from those which are the consequence 
 of foresight and enterprise. A man's property 
 may certainly be improved by accident ; as, for ex- 
 ample, by the discovery of a productive vein of 
 ietal or coal, or a valuable quarry on his estate. 
 But who is to determine whether his discovery was 
 not in a great degree, perhaps wholly, the result of 
 R2 
 
198 POLITICAL ECONOMY. 
 
 laborious study and research ? Were the right of 
 property denied or interfered with in such things 
 as appeared to derive a value from accident, it is 
 obvious that much of the ingenuity and enterprise, 
 which form one of the mainsprings of economical 
 improvement, would be deadened by the uncertainty 
 of obtaining their reward. 
 
 It has been proposed, as an exceedingly just 
 mode of raising a national revenue, that the reve- 
 nue from land should be directly taxed ; or, at 
 least, that portion of it which is the result of acci 
 dents of position. The same objection (and it is a 
 very strong one) applies to this proposal. It is very 
 true that the value of a landed estate sometimes 
 rises enormously without any evident exertions on 
 the part of its proprietor, but in consequence either 
 of its fortuitous proximity to a flourishing manufac^ 
 turing or commercial town ; or of a new canal or 
 railroad being carried through it ; or of its soil or 
 situation being found peculiarly adapted to the 
 growth of some valuable products. But is it cer. 
 tain that the proprietor of land under such circum- 
 stances is wholly passive, and takes no part in pro- 
 moting and encouraging the improvement which is 
 likely to confer on him so special a benefit ? We 
 do not dispute that, in the case of growing towns, 
 it is the duty of every government, acting for the 
 interests of the public, to make an early and suffi- 
 cient reservation of tracts of land in their immedi. 
 ate neighbourhood, to be applied to purposes of 
 public health and convenience. But farther inter, 
 ference, even in such an extreme case, would prob- 
 ably be deleterious. In the improvement and ex. 
 tension of towns, in the construction of new canals, 
 
POLITICAL ECONOMY. 199 
 
 railroads, and turnpike roads, it is usual to see the 
 proprietors of land, whose interests are likely to be 
 advanced by such measures, take a very prominent 
 part ; and any tax upon the increased rents de- 
 rived from such general improvements would be 
 certain to delay and discourage their execution. 
 
 Of the causes of inequality in the economical 
 condition of men, there are none more strikingly 
 obvious, or more frequently declaimed against as 
 artificial and unjust, than the laws of inheritance 
 rand succession to property. 
 
 In speaking of the natural right to property as 
 founded on the labour by which it is appropriated, 
 we purposely deferred the consideration of the ques- 
 tion as to the transfer of the right on the decease 
 ,of the individual labourer. It would clearly be 
 -quite contrary to the interests of society, that prop- 
 erty, on the death of its owner, should cease to be- 
 long to any one ; since this could not fail to renew 
 all the dangerous personal struggles and ceaseless 
 contentions which it is the object of the primary 
 institutions of society to prevent. It is equally ev- 
 ident that, since the perfect and complete owner- 
 ship of property, necessary, as we have seen, to 
 stimulate its production, includes the power of free- 
 ly disposing of it by sale, loan, or gift, in any man- 
 ner the owner pleases, it must, in reason, include the 
 power of disposing of it after death. For a denial 
 of that power, or any serious restraint upon it, 
 would be easily evaded by disposing of the proper- 
 ty by gift or sale during life, instead of by testa- 
 mentary bequest. The liberty to appoint a suc- 
 cessor to property after death is therefore part 
 and parcel of the natural right to its ownership and 
 
200 POLITICAL ECONOMY. 
 
 free disposal, and cannot be reasonably or safely 
 separated from it. That it has ever been so con- 
 sidered by the unprejudiced sentiments of mankind is 
 shown by the almost universal prevalence, through 
 every age and nation, of a law or custom, giving a 
 dying person the power of disposing of his proper- 
 ty by will. 
 
 In the absence of testamentary disposition, the 
 natural rule is clearly inheritance ; that is to say, 
 that the property devolve on the children, or, in 
 default, on the nearest relatives of the deceased 
 owner, upon the reasonable presumption that, if he 
 had not neglected to make a will, or had not been 
 prevented from doing so by casualty, he would 
 have disposed of his property in that manner.* 
 The necessity is very obvious, that the rules of in- 
 heritance or succession should be strictly laid down 
 by law, in order to prevent that confusion which 
 any doubt as to ownership must occasion. 
 
 The rules established on this ground in different 
 
 * Blackstone calls " the permanent right to property," as well 
 as that of children to the inheritance of their parents, " not a 
 natutal, but a civil right." His learned commentator, Professor 
 Christian, justly corrects this error. " The notion," he says, 
 " of property is universal, and is suggested to the mind of man by 
 reason and nature, prior to all positive institutions. If the laws 
 of the land were suspended, we should be under the same moral 
 obligation to refrain from invading each other's property as from 
 attacking each other's persons." Again : " The affection of pa- 
 rents towards their children is the most powerful and universal 
 principle which nature has implanted in the human breast ; and 
 it cannot be conceived, even in the savage state, that any one is 
 so destitute of affection and of reason as not to revolt at the po- 
 sition that a stranger has as good a right as his children to the 
 property a of deceased parent. H&redes successoresque sui libsri 
 seems not to have been confined to the woods of Germany, but 
 to be one of the first laws of the code of Nature," Blackstone, 
 vol. ii., p. 11. 
 
POLITICAL ECONOMY. 201 
 
 countries have varied greatly ; and all these varie- 
 ties cannot be equally accordant with natural right, 
 that is, with the permanent interests of society. 
 Some, indeed, are manifestly impolitic, from inter- 
 fering too much with the natural laws of distribu- 
 tion, and with that free disposal of the products of 
 industry which is so essential to its encouragement. 
 Others err in the opposite sense, by permitting the 
 owner of landed property to determine its descent 
 not merely to an immediate successor, but to an end- 
 less succession, through continued generations.* 
 To confer such a power on any individual is evi- 
 dently unjustifiable. Property, landed property 
 especially, requires continual protection, repairs, 
 and expensive management. The land-owner 
 who, during a long occupation, has, at much pains 
 and cost to himself, preserved or increased the val- 
 ue of his estate, has earned as equitable a right to 
 dispose of it at his death as any of its former pos- 
 sessors, even as he who may have originally res- 
 cued it from a state of waste. To deny him this 
 power is to lessen his interest in doing justice to 
 Bis property. It is, in fact, acting in opposition to 
 .the very principle which sanctions the establish, 
 ment of a right at all to property in land the expe- 
 diency of encouraging its improvement. There are 
 many other strong grounds of objection, both politi- 
 cal and moral, to endless entails ; perhaps to any 
 kind of entail, and also to the right of primogeniture ; 
 
 * The law of France may be instanced, perhaps, as an exam- 
 pie of the first error, that of Scotland of the last. By the pres- 
 ent French law, a parent is obliged to divide his property equally 
 among his children, except that, having made as many shares as 
 there are children, he may give two of these shares to a favouriti 
 or deserving one, 
 
202 POLITICAL ECONOMY. 
 
 but we forbear to dwell on them, as likely to lead us 
 too far from our subject. It is sufficient to have 
 shown that their tendency is opposed to the very 
 principle on which the right to property in land is 
 founded. The true course which legislation should 
 endeavour to steer is to afford to individuals such 
 power of disposition over their property as may en- 
 courage them to preserve and improve it, and, at 
 the same time, to discourage, if not prevent, the ty- 
 ing up in mortmain* of large properties, and the 
 excessive accumulation of landed estates in few 
 hands. 
 
 It is clear, from what has been said on this point, 
 that the mode in which wealth distributes itself by 
 the free operation of the natural laws of production 
 necessarily occasions great inequalities of proper- 
 ty and position among the members of every soci- 
 ety. Under this natural system of distribution 
 which will be that of all just and wise legislation 
 some may possess wealth beyond what their own 
 exertions have produced, and which has devolved 
 to them by gift or bequest ; but all who have con- 
 tributed to the production of new wealth will be 
 confirmed in the enjoyment and free disposal of 
 whatever they have created. 
 
 Let us take a rapid survey of the different chan- 
 nels into which all newly-created wealth will spon- 
 taneously distribute itself. 
 
 There are, as has been shown, but three ele- 
 mentary sources of wealth, labour, land,f and cap. 
 
 * Property is said to be in mortmain (i. e., dead hands) when 
 its possessor cannot alienate it. 
 
 t It may be proper to remark here (having omitted to do so 
 in the proper place), that this enumeration of the elements of 
 wealth is incomplete. Besides labour, land, and capital, there 
 
POLITICAL ECONOMY. 203 
 
 ital ; and these, in European countries, are generally 
 owned by more or less distinct parties : whence it 
 has become convenient, and is usual, for writers to 
 divide the general body of those who co-operate in 
 production and share its results into three principal 
 classes ; namely, labourers, landowners, and cap- 
 italists.* Between these parties, their joint prod- 
 uce naturally divides itself in the manner and ac- 
 cording to the laws we have already in part noticed, 
 under the name of the wages of labour, the rent of 
 land, and the profit of capital; and the share of 
 each class constitutes its income or revenue. 
 
 This general classification is useful, as facilita- 
 ting the analysis of the phenomena of society. It 
 is obvious, however, that the three classes are by 
 no means nicely distinguishable. On the contrary, 
 there are many individuals who partake, more or 
 less, of two, and some of all three, characters. 
 The labourer, for instance, in this and some other 
 countries, is often the owner of the land he culti- 
 vates, as well as of the tools, live stock, and other 
 small capital with which his labour is aided. In 
 this case, his wages, profit, and rent will be mixed 
 together so as to be indistinguishable. Few labour- 
 ers, in any country, are without some little capital 
 
 is another and a very large source of wealth noticed in a prece- 
 ding chapter, viz., the exclusive possession of instruments and 
 processes, of extraordinary skill, powerful connexions, &c. As 
 these owe their origin in many instances to nature or accident, 
 they are analogous to land ; and hence, instead of making land 
 one of the principal elements of wealth, it should rather have 
 been considered as a species, of which all these natural and ad- 
 ventitious advantages would have formed the genus. See, on 
 this subject, Mr. Senior, in Whately's Logic, p. 320. Ed. 
 
 * It is a happy thing for the American people that this separa- 
 tion, so fruitful in jealousy and strife, has not yet become preva- 
 lent among them. 
 
204 POLITICAL ECONOMY. 
 
 in the tools of their craft. Again, the owners of 
 considerable capital are, for the most part, labour- 
 ers. Merchants, manufacturers, wholesale and re* 
 tail traders, and ship-owners, personally superin- 
 tend the employment of their capital ; and the re- 
 muneration of their labour, as we have before seen, 
 is vulgarly included in the gross profit of their 
 capital, under the term living profits. A man of 
 superior abilities or experience will often employ 
 his capital in such a way as to bring in twice as- 
 large a return as that cleared by his duller neigh- 
 bour ; and it would be no less difficult than unne. 
 cessary to determine whether this is to be reckon- 
 ed increased profit or wages. 
 
 The class of landowners is, in England, rather 
 more broadly distinguished from the others, though 
 not a few, as has just been said, cultivate their land 
 by their own skill and industry, as well as with 
 their own capital. Even the great body of wealthy 
 land-owners of that country, though not personally 
 engaged in the business of cultivation, are in the 
 habit of expending much capital on their estates, 
 in erecting and keeping up fences, drains, roads, 
 farm-buildings, &c., the cost of which is usually 
 defrayed by the landlord. Capital, however, so 
 expended, as has been already explained, becomes 
 no longer distinguishable from land, and its return 
 merges in rent. 
 
 The proprietors of canal, bank, and joint-stock 
 company shares, as well as all of what are called 
 sleeping partners, from their not being personally 
 engaged in business, are pure capitalists ; their in* 
 come being solely derived from the net profit or 
 interest of their capital. 
 
POLITICAL ECONOMY. 205 
 
 Mortgagees, pensioners, proprietors of govern- 
 ment stock, and other owners of fixed money in- 
 comes, form a class apart from any of the three 
 which we have been considering. They are sim- 
 ply creditors, and can scarcely be called capitalists 
 in any accurate classification of the owners of 
 wealth. Their property is not capital until it be 
 realized : it is merely a debt secured by law upon 
 the land, capital, or labour in the ownership of 
 other parties. 
 
 In whatever proportions the several classes of 
 labourers, capitalists, and land-owners contribute 
 their quota to the production of wealth, in that 
 proportion have they clearly an equitable title to 
 share it. But by whom and by what rule is it to 
 be determined in what proportion any of the par- 
 ties concerned have contributed towards the pro- 
 duction of any portion of wealth ? No after-anal- 
 ysis, however laboured, could pretend to discover, 
 with any accuracy, the relative amount of these 
 various contributions. No tribunal that could be 
 established would decide the point so as to satisfy 
 all the parties of the correctness of its verdict. 
 There exists no test, no common measure of the 
 relative value of labour, land, and capital, independ* 
 ent of the estimation of their owners. This can 
 be ascertained only at the time the contributions 
 are made or arranged, and by no other judges than 
 the interested parties themselves, and by no other 
 means than their voluntary settlement of terms with 
 one another ; in short, only by previous bargain or 
 contract inter se. 
 
 In one word, the principle of free exchange can 
 alone bring about a fair adjustment of their rel- 
 
206 POLITICAL ECONOMY* 
 
 ative claims on their joint produce. Take, for il- 
 lustration, the simplest case : Suppose A. a labour- 
 er, to have raised a hundred bushels of wheat by 
 cultivating the land of B., C. having advanced him 
 on loan the necessary implements, and D. the food 
 on which he subsisted while at work. What pos- 
 sible guide can there be to the determination of the 
 equitable share of A., B., C., and D. respectively in 
 the value of the wheat, except the terms which 
 they shall freely have agreed upon with each oth- 
 er at the commencement of the undertaking ? And 
 if this be true in the simplest cases, it is equally 
 true of the more complicated ; which it would be 
 still more impracticable for any foreign party to 
 adjudicate. 
 
 Custom will, indeed, establish a sort of standard 
 by which these questions may be determined, in 
 the absence of previous agreement : as, if a mas- 
 ter hire a labourer without specifying the wages 
 he intends giving, those ordinarily given for labour 
 of that class by the custom of the country will be 
 understood by both parties ;. and custom will, in the 
 same manner, determine the fair rent of land of a 
 certain quality, and the fair interest of money. 
 But the custom itself consists only of the average 
 of the free and voluntary agreement of parties 
 similarly circumstanced through the neighbour, 
 hood. Any attempt to tie down such agreements 
 generally, as by a law, establishing either a mini* 
 mum or a maximum of wages, interest, or rent, de- 
 stroys the only criterion of their just amount, and 
 substitutes a blind and arbitrary power, without 
 any possible clew to guide it to a correct decision. 
 
 While the principle of free exchange of property 
 
POLITICAL ECONOMY. 207 
 
 and services can alone be depended on for securing 
 an equitable distribution of wealth among the sev- 
 eral classes who contribute to its production, such 
 free exchange is equally indispensable to the en- 
 couragement of all in the work of production, and, 
 consequently, to the increase of the aggregate pro- 
 duce to be distributed. 
 
 If, for example, the owner of land were in any 
 way restricted from freely disposing of his land to 
 his greatest advantage as by letting it out to farm 
 to the highest bidder, or in portions of such size as 
 he finds most profitable -he would have the less 
 inducement to employ it, or allow it to be employ- 
 ed, in production. He might, by such restrictions, 
 be induced to prefer keeping it in a state compar- 
 atively unproductive and unserviceable to society. 
 If he continued to cultivate it, he would be less 
 likely to make any sacrifice for its improvement, 
 by expending a portion of his rents in drainage, 
 buildings, planting, or other endeavours to increase 
 its productiveness. The same consequences would 
 follow if, on the other hand, he were restrained by 
 a tax or penalty from laying out any part of his 
 domain in park or pleasure-ground, according to 
 his taste. He would be less likely to purchase or 
 reside upon an estate ; and its general productive- 
 ness would probably, in the long run, be diminished 
 rather than increased by such restriction. 
 
 Again, in whatever degree the capitalist may be 
 interfered with in the free disposal of his property 
 to his greatest advantage (as is practically done, to 
 a great extent, throughout most European states, 
 by vexatious and embarrassing regulations, muni- 
 cipal and general, respecting the produ&tiQn, or re. 
 
208 POLITICAL ECONOMY. 
 
 moval from place to place, of particular commodi- 
 ties, and as has been proposed in England by those 
 who would have the law dictate to farmers what 
 number of labourers they should employ, and how 
 they should cultivate their farms), in that degree 
 will he be less desirous of accumulating capital, 
 less eager to discover and avail himself of openings 
 for its profitable employment, and less capable of 
 making a profit upon it ; he will be less productive 
 and less economical, and, consequently, a less use- 
 ful member of society. 
 
 And the labourer, in his turn, unless left free to 
 make the best bargain he can with his employer, 
 and to carry his labour to the best market, wher- 
 ever it may be ; if interfered with by regulations 
 confining him to particular occupations or particu- 
 lar places in which to exercise his industry, will 
 never fully put forth his energies ; but, in propor- 
 tion to the restraint he suffers, will assume more 
 or less of the sulky, idle, careless, and revengeful 
 character of the slave ; will feel himself injured and 
 ill-treated ; at all events, wanting one of the essen- 
 tial conditions of industry freedom of choice in 
 its direction will be less productive, as well as 
 less happy. Attempts to regulate wages, whether 
 by fixing maxima or minima, or to regulate em- 
 ployment by dividing society into cables, each con- 
 fined to an exclusive occupation, as well as the an- 
 cient municipal regulations with regard to appren- 
 ticeships, servitude, &c., appear to have always 
 produced the effect of damping the exertions of the 
 labourers, and diminishing their productiveness.* 
 
 * The author refers here to certain absurd and oppressive 
 regulations which formerly prevailed in Europe in regard to th 
 
POLITICAL ECONOMY. 209 
 
 Interference of any kind, in short, in the spon- 
 taneous direction of industry, and the free employ, 
 ment by their owners (subject, of course, to moral 
 law) of the great agents in production, labour, land, 
 and capital, has the certain effect of benumbing 
 their powers and lessening the sum of production, 
 and, consequently, the shares of the producing par- 
 ties, as well as of needlessly, and, therefore, unjust- 
 ly curtailing their freedom of action. 
 
 The only interference allowable is that which 
 can be shown to be indispensable for the great ob- 
 ject of securing the persons and property of every 
 class, and of giving a wise direction to their pro- 
 ductive energies. The law need, and ought to do 
 no more. This comprehends the sum and sub- 
 stance of all the duties of a government with re- 
 spect to wealth. Subject, therefore, to this condi- 
 tion, and to this only, perfect liberty in the volun- 
 tary exchange of the property and services of indi- 
 viduals is the only means of giving full play to the 
 development of their productiveness, and of in- 
 creasing, to their utmost extent, the amount of 
 their several shares. Such liberty is, on this 
 ground, the absolute right of every member of so- 
 ciety. 
 
 wages and distribution of labour. By one law, the precise 
 amount which was to be paid the labourer per day, as well as 
 his diet and clothing, were prescribed. By another, justices of 
 peace were empowered to fix the price of labour every Easter and 
 Michaelmas by proclamation. By a third, the removal of ser- 
 vants or artisans from one place to another was prohibited. So 
 the number of persons who could pursue a particular trade in 
 any town was fixed, and no one could offer his services as a 
 journeyman, much less as a master, unless he had served a reg- 
 ular apprenticeship, and been licensed by the guild or trade cor- 
 poration. These restrictions will be noticed more particularly 
 hereafter, when we come to the subject of Trades' Unions. Ed. 
 S2 
 
210 POLITICAL ECONOMY. 
 
 The limitation introduced includes, of course, all 
 such appropriations of private property, and such 
 directions of private action by the government, as 
 are necessary for securing the persons and prop- 
 erty of all, as well as those measures which seem 
 necessary to protect and encourge native labour 
 and capital in their unequal competition with those 
 of a foreign land. Of this nature are the taxes 
 imposed by law for the support of government, the 
 land and other property taken from individuals in 
 laying out roads and canals, and the duties imposed 
 by a government for protecting the industry of its 
 own citizens. The extent to which these powers 
 ought to be exercised will be the subject of dis- 
 cussion in a future volume. 
 
 CHAPTER X. 
 
 PRODUCTIVE INTERESTS. 
 
 Agriculture. Manufactures. Commerce. Progress, Subdi- 
 visions, and Utility of each. Their community of Interest, 
 and equal Importance. Preference awarded to Agriculture, 
 owing to the unnatural existing relations of Population and 
 Subsistence. 
 
 THE various branches of industry into which 
 the business of production resolves itself in a civ- 
 ilized and highly advanced community, are nearly 
 infinite in number. They are ordinarily classed, 
 however, for more easy consideration, into three 
 great departments, or, as they are called, " inter' 
 ests" viz., the agricultural, the manufacturing, and 
 the commercial or trading interest. 
 
POLITICAL ECONOMY. 211 
 
 1. The Agricultural interest includes all whose 
 land, capital, or labour is employed in the growth 
 of food and the raw materials of manufacture. 
 The history of agriculture is a subject of great in- 
 terest, for which, however, we must refer our read- 
 ers to the works especially devoted to this subject. 
 Of all arts, it is perhaps that in which the least 
 improvement has been made in the course of the 
 historical ages, notwithstanding its pre-eminent 
 utility. Still its progress has been considerable, 
 especially within the last half century, during which 
 time, owing to the adoption of turnip-husbandry, 
 the rotation of crops, the substitution of green 
 rops for fallows, and the great extension of sheep, 
 farming, the produce of superior soils has been 
 more than doubled, and large crops raised off 
 thousands of acres of poor land which previously 
 would bear nothing to repay their cultivation. 
 
 A field is here still open for improvements, to 
 which no probable limit can toe assigned. The 
 science of agricultural chymistry is yet in its in- 
 fancy. Its farther progress will, no doubt, enable 
 us greatly to multiply the produce of a limited 
 tract, and, perhaps, to bring the most barren sur- 
 faces into profitable cultivation. Even now, a de- 
 ficiency of manure is almost the only check to the 
 productiveness of any soils, and yet one of the 
 most copious sources of supply of the most valuable 
 of all manures the sewerage of great towns 
 is almost wholly neglected. By taking the neces- 
 sary steps for securing and applying this, a great 
 start might probably be given to the agriculture of 
 densely-peopled countries.* 
 
 * See Mr. J. Martin's Plan for Purifying the Air and Water 
 erf the Metropolis, London, 1833 
 
212 POLITICAL ECONOMY. 
 
 2. It is the business of Manufacturers to work 
 up for use the raw materials raised at home by the 
 preceding class, or imported from abroad ; giving 
 them the shape of clothing, houses, household fur- 
 niture, machinery, tools, and a variety of conve- 
 niences and ornaments. They comprehend numer- 
 ous branches ; such as the iron, the woollen, the 
 cotton, the silk, the leather, the stocking, the glove, 
 the hat, the carpet, the lace, and the soap trades, 
 the house and ship builders, cabinet-makers, gold 
 and silver smiths, watch-makers, brass ornament 
 makers, cutlers, printers and publishers, engineers, 
 &c. ; and each of these separate trades is subdivided 
 into many distinct avocations. There are many 
 to whom the term manufacturers is not ordinarily 
 applied, who would yet be reckoned as such in any 
 
 feneral classification of the entire body of pro- 
 ucers : such are tailors, shoemakers, carpenters, 
 joiners, smiths, plasterers, bakers, maltsters, cur- 
 riers, &c., with the entire class of artisans em- 
 ployed in these several trades.* 
 
 The economical history of manufactures is a 
 subject of very considerable interest to the student 
 of political economy, but would, if fully gone into, 
 occupy a much larger space than can be afforded 
 to it in this little volume. 
 
 The division of labour which takes place in a 
 
 * The term manufacture is usually applied only to establish- 
 ments on a large scale ; and those who produce the same article 
 on a small scale are called makers rather than manufacturers : 
 but in a scientific treatise, and when employed to designate a 
 class of operations in contradistinction to agriculture, the term 
 must be extended, so as to embrace all those occupations by 
 which the raw productions of the earth are worked up into ob- 
 jects of use or ornament, whether by the labour of one individ- 
 ual or of many. 
 
POLITICAL ECONOMY. 213 
 
 very rude state of society must, even in the infan- 
 cy of every nation, have effected a certain separa- 
 tion between the classes who occupy themselves in 
 tilling the soil and gathering its crops, and those 
 who are engaged in working up these crops or the 
 other raw products of the earth, and fitting them 
 for general use, in the form of tools, raiment, orna- 
 ments, houses, furniture, &c* 
 
 A farther subdivision of this class of industrious 
 occupations among different trades or crafts, each 
 giving employment to distinct ranks of artificers, 
 seems likewise to have taken place at a very early 
 period in the history of art. The goldsmiths, the 
 jewellers, the workers in iron, in brass, in wood, in 
 stone, in pottery, in woollen, and in linen ; the shoe- 
 makers, the tailors, the carpenters, the plasterers, 
 and the masons, are spoken of in the Jewish Scrip- 
 tures and other early records, and appear to have 
 followed exclusively their several avocations from 
 the first dawn of civilization. A common profes- 
 sional education, a common interest in the advance- 
 ment of their art, and a desire, by combination and 
 monopoly, to exclude competition and obtain a high- 
 er return for their labour, seem, in most countries, 
 to have occasioned the union of the artisans follow- 
 ing any one of these several trades into a frater- 
 nity, sometimes sanctioned by charters, like the 
 guilds of the European states. Some of these 
 fraternities unquestionably attained a very high 
 excellence in their particular departments of in- 
 dustry. The association of freemasons, to whose 
 migratory labours it is generally supposed that we 
 are indebted for nearly all the rich and beautiful 
 ecclesiastical and domestic edifices which were 
 
214 POLITICAL ECONOMY. 
 
 reared through Europe during the eleventh and 
 five succeeding centuries, evinced a purity of taste 
 and fertility of conception in architectural design, 
 as well as a power of execution, which the builders 
 of modern times have vainly attempted to rival. 
 Nothing can exceed the workmanship of the ar- 
 morers, or of the goldsmiths and jewellers, of the 
 fifteenth century ; and carving in both wood and 
 stone was carried, about the same time, nearly to 
 equal perfection. The gorgeous silks and velvets 
 of the same period probably could not be imitated 
 by any artisans in the present day ; and tapes- 
 tries and other productions of the loom were then 
 wrought with an excellence which has never been 
 surpassed. The art of staining glass may be men- 
 tioned as another in which modern artists are de- 
 cidedly inferior to those which preceded them some 
 centuries back. 
 
 On the whole, however, manufacturing industry 
 has of late years accomplished an extraordinary 
 advance in its productive capacities, and in its inu 
 portance as compared with agriculture. In former 
 ages, every village probably had, as now, its inferior 
 handicraftsmen its smith, mason, carpenter, tai- 
 lor, and shoemaker ; while the more important 
 branches of industry were carried on in towns, in 
 which the manufacturers of valuable goods cluster- 
 ed together, for the purpose of mutual protection 
 against the tyranny of the great and little robbers 
 of those unsettled times, or along such streams as 
 afforded the necessary aid of water-power. But, 
 though the articles of clothing and ornament which 
 ministered to the luxuries of the wealthy were fab- 
 ricated by artisans of this description, the more 
 
POLITICAL ECONOMY. 
 
 215 
 
 homely wants of the humbler classes were still 
 chiefly supplied by the exercise of their own rude 
 industry. The coarse clothing of the greater pro- 
 portion of the people, woollens as well as linens, 
 were, till within a very recent period, both spun 
 and wove, or knitted at home by the wives and 
 children of the agricultural labourers. Many ob- 
 jects of ornament and convenience were made in 
 the same simple manner by the farmer and his 
 family. It is chiefly within the last fifty years, and 
 since the introduction of the steam-engine, power- 
 loom, and cotton-gin, that manufacturing industry 
 has so developed itself as to work a great and stri- 
 king change in the habits, the manners, the rela- 
 tions, and the employments of our population. 
 The number of persons at present engaged in the 
 various branches of manufacture in Great Britain 
 nearly equals that of the persons employed in agri- 
 culture.* In that country they are, for the most 
 
 * ANALYSIS OF OCCUPATIONS IN GREAT BRITAIN, 
 
 (From MarshalVs Statistics of the British Empire.) 
 
 DESCRIPTION. 
 
 Number of Families. 
 
 Persons. 
 
 1821. 1 183i. 
 
 1831. 
 
 1. Agricultural occupiers . 
 2. Agricultural labourers . 
 3. Mining labourers ... 
 4. Millers, bakers, butchers 
 5. Artificers, builders, &c. 
 6 Manufacturers . 
 
 250,000 
 728,956 
 110,000 
 160,000 
 200,000 
 340,000 
 150,000 
 310,239 
 319,300 
 
 80,000 
 100,000 
 192,888 
 
 250,000 
 800,000 
 120,000 
 180,000 
 230,000 
 400,000 
 180,000 
 359,000 
 277,017 
 
 90.000 
 110,000 
 316,487 
 
 1,500,000 
 4,800,000 
 600,000 
 900,000 
 650,000 
 2,400,000 
 1,080,000 
 2,100,000 
 831,000 
 
 460,000 
 110,000 
 1,116,398 
 
 7. Tailors, shoemakers, hatters 
 
 9. Seamen and soldiers . . . 
 10. Clerical, legal, and medical 
 classes 
 
 11. Disabled paupers .... 
 12. Proprietors and annuitants 
 Totals 
 
 2,941,383 
 
 3,303,504 
 
 16,537,398 
 
216 POLITICAL ECONOMY. 
 
 part, concentrated in large and populous towns, 
 many of which have grown up with astonishing ra- 
 pidity upon those points where coal and iron mines, 
 water-carriage, or other facilities are found for the 
 fabrication of any peculiar commodity. The ex- 
 istence of this portion of society is closely connect- 
 ed with the very variable condition of manufactures j 
 and when war, impolitic restrictions on commerce, 
 changes of taste and fashion, improvements in ma- 
 chinery, or any of the other casualties to which 
 such trades are exposed, occasion a stagnation in 
 the demand for their labour, large bodies of men 
 are liable to be thrown out of work, and placed, 
 for a time, in a state of suffering and idleness, 
 which, in the absence of wise precautionary ar* 
 rangements, cannot but threaten great danger to 
 the public peace. On the other hand, the agricul- 
 tural part of the population, while in many respects 
 greatly benefited by manufactures, has also suffer- 
 ed from the failure of those occupations which were 
 formerly subsidiary to their principal one, and 
 which afforded them the means of profitably em- 
 ploying every idle hour, and nearly every member 
 of their families, male or female, young or old. 
 The loss of the minor domestic manufactures, for* 
 
 From this table it appears that the agricultural and mining: 
 classes compose about 7-17ths of the whole population ; the 
 manufacturing class 5-17ths; the commercial class 2-17ths; 
 the professional class, including the army and navy r and the non- 
 producing class of proprietors and paupers, making up, in nearly 
 equal moieties, the remaining 3-17ths. The decennial censuses 
 that have been taken since the commencement of the present 
 century show the great change that has taken place in the em- 
 ployment of the people. In 1801, nearly one half the entire pop- 
 ulation of England was engaged in agriculture. In 1831 the 
 proportion had fallen to about one third. 
 
POLITICAL ECONOMY. 217 
 
 rly carried on by the agricultural labourer, forms 
 an offset to the benefit he derives from the increased 
 demand which has been created for his products by 
 the growth of manufactures, and from the dimin- 
 ished price at which he can now purchase many 
 of the necessaries and comforts of life* These 
 evils, to which the vast, and, we believe, on the 
 whole, beneficial progress made by our ^manufac- 
 turing system has unquestionably exposed us, it 
 remains for the government, and for private indi- 
 viduals and societies to mitigate, so far as is prac- 
 ticable. This is to be done in part by such ar- 
 rangements as are fitted to encourage and facili* 
 tate the free migration of labour and the free ex* 
 change of its produce, but yet more by strenuous 
 and well-directed efforts to improve the intellectual 
 and moral condition of the labourers.* 
 
 3. The Commercial class consists of persons 
 whose business it is to facilitate the operations 
 both of the agriculturists and manufacturers, by 
 supplying them with what articles they require, 
 and taking of them what they have to dispose of. 
 They are the agents in all the manifold exchanges 
 that are going on between the different classes of 
 
 * The picture drawn by Dr. Kay (in a valuable tract of his) 
 of the moral and physical condition of the working classes em- 
 ployed 'ija the cotton manufacture in Manchester, together with 
 the facts brought to light by the Committees of the House of 
 Commons on the employment of children in factories, add some 
 frightful features to the character of the English manufacturing 
 system ; so frightful that they might lead us to regret that it 
 was ever introduced, if we were not certain that these horrors 
 are by no means the necessary result of the system, but chiefly 
 of the difficulties brought on by unwise legislation, and, above 
 all, by the sad neglect in that country, for many years, of proper 
 efforts for the. religious instruction and general welfare of the 
 labouring classes, 
 
 T 
 
218 POLITICAL ECONOMY. 
 
 producers and consumers ; conveying goods of all 
 kinds from place to place, so as to equalize the 
 supply with the demand ; purchasing whatever is 
 to be sold, and selling whatever is required to be 
 bought. Commerce divides itself, first, into the 
 foreign, and internal or home trade ; and the latter, 
 into the wholesale and retail trades. These again 
 branch out into almost numberless subdivisions, 
 characterized by the nature of the article dealt in, 
 or the particular line of business carried on. 
 
 There are several other classes, which do not 
 seem to be easily referrible to any of the three 
 principal heads ; as the persons engaged in mining 
 and quarrying, in the fisheries, &c. 
 
 All these multiform subdivisions of employment 
 are wholly spontaneous, the offspring of no pre- 
 concerted arrangements of the statesman or the 
 legislator, but springing from that ever-active and 
 inquisitive spirit of enterprise and ardour for gain, 
 by which individuals are urged to seize every open- 
 ing for the employment of their ability or capital 
 that promises remuneration. The result is incal- 
 culably beneficial to society, by reducing the cost 
 and improving the quality of all that it consumes. 
 If any saving can possibly be made in the cost of 
 producing any article by a subdivision of the ne- 
 cessary operations, it is immediately effected by 
 the agency of this searching spirit ; and the com- 
 petition of producers is sure very shortly to secure 
 all the benefit of the saving to the public at large, 
 in a proportionately reduced price of the article. 
 
 The vast utility, for example, of the wholesale 
 and retail dealers, who adjust the supply of com. 
 
POLITICAL ECONOMY. 219 
 
 modities of all kinds with the utmost precision to 
 the demand, is obvious on the slightest considera- 
 tion. Acting under the influence of self-interest, 
 and with a view principally to his own profit, each, 
 knowing the probable wants of his peculiar mar- 
 ket, is strongly interested in selling as much as he 
 possibly can, and yet equally interested in causing 
 nothing to be wasted through its remaining un- 
 sold. Each striving to carry away the custom of 
 his rivals, by tempting the public with newer, bet- 
 ter, more varied, or more alluring articles at the 
 lowest price, they effect collectively the distribu- 
 tion of the whole wealth of society in the most 
 economical and most convenient manner possible. 
 And yet, because they make a profit on what they 
 sell, that is, get paid for their labour and the time 
 during which their capital lies locked up in goods, 
 and the risk it runs of damage, and for their shop 
 and warehouse rents ; because they charge a prof- 
 it on their sales sufficient to cover these necessary 
 expenses (and that it is barely sufficient for this 
 end their mutual competition secures), they are 
 described by Mr. Owen and his followers as suck- 
 ing the marrow of the poor labourers, and inter- 
 fering hurtfully between the producer and consu- 
 mer, to raise the cost of all things to the latter. Mr. 
 Owen has of late put his theory to the test of 
 practice, by endeavouring to dispense with these 
 intermediate parties, and to bring producers and 
 consumers into contact with each other. By this 
 time, therefore, it is perhaps tolerably clear to 
 such of his disciples as retain the power of dis- 
 crimination, which system is the more economical 
 of the two, ; that which, if pursued to its necessary 
 
220 POLITICAL ECONOMY. 
 
 consequences, would force every labourer to pro- 
 duce for himself almost everything he needs, and 
 send us back to the caves and woods of our acorn- 
 eating ancestors, or that which has carried us for- 
 ward from those wilds and caves to the high pitch 
 of civilization and refinement which, by the bless- 
 ing of Heaven, has been attained. With respect 
 to Mr. Owen's clumsy contrivance of labour-notes 
 and a labour exchange, by which the barbarizing 
 tendency of his principle is meant to be concealed,, 
 it is evidently but a bank connected with a large 
 wholesale warehouse ; in which the arbitrary val- 
 uation of a salaried clerk regulates the terms of 
 each sale and purchase, instead of the unerring 
 principles of competition among the sellers and 
 self-interest in the buyers. The scheme of labour- 
 notes, moreover, is founded on the erroneous notion 
 that labour is the just and true measure of value* 
 But can any plan be more likely to discourage in* 
 genuity, industry, and the acquisition of skill, thai* 
 one which determines the reward of each man's 
 labour, not by the intensity of his application or 
 the amount of its produce, but by its duration ; 
 thus giving to a slow, careless, and indolent labour- 
 er the same pay as to an active, ingenious, and en- 
 ergetic one ? 
 
 The whole system of society, as at present constu 
 tuted, is ONE GREAT LABOUR EXCHANGE, 
 in which the services of individuals are bartered 
 by voluntary and mutual agreement. The prog- 
 ress of knowledge has suggested a variety of sub* 
 divisions, not only of the labour by which com. 
 modities are produced, but likewise of the labour 
 required for exchanging them. An attempt to gel 
 
POLITICAL ECONOMY. 221 
 
 rid of these intermediate parties to the exchanges 
 of labour would put a stop to by far the greater 
 proportion of exchanges, which could not, by possi- 
 bility, be conducted between the principals, and thus 
 it would render their labour itself valueless. Could 
 the coal-miner of Newcastle directly exchange the 
 produce of his labour with the corn-grower of 
 Lincolnshire, the cheese-maker of Gloucestershire, 
 or the cloth-weaver of Yorkshire ? And if there 
 must be intermediate parties to carry on these and 
 similar exchanges, experience and reason prove 
 that they will be conducted more cheaply and ef- 
 fectually by the competition of private speculators, 
 than by any organized contrivance for this purpose 
 that the ingenuity of man could frame. The idea 
 of these visionaries is, that the profit made by the 
 intermediate parties would be saved to the princi- 
 pals. But, in order to a profit, there must be a 
 capital. If the producers of commodities are 
 possessed of capital, they will get as high a profit 
 on its employment in the business of production 
 as the other parties get in the business of ex- 
 change. If they have no capital, they can cer- 
 tainly divide no profit, under any possible contri- 
 vance. 
 
 The vast utility of the class of retail dealers, who 
 are the immediate distributors of the principal ar- 
 ticles of consumption, must be apparent to every 
 one. Not less useful and important to society, in 
 its peculiar functions, is the class of wholesale deal- 
 ers or merchants ; who are the primary agents in 
 the exchanges that take place between producers 
 who live at a distance from each other, in different 
 districts, countries, or perhaps climates, and the 
 T2 
 
222 POLITICAL ECONOMY, 
 
 general carriers of goods from place to place 
 throughout the world. 
 
 The advantages of commerce, that is, of an inter- 
 change, between the inhabitants of different places? 
 of the goods which their peculiar circumstances of 
 skill, position, soil, minerals, or climate enable them 
 to produce with the greatest facility, need hardly^ 
 in this age and country, be dwelt upon. It is the 
 division of labour on a large scale, and applied to 
 districts instead of individuals. Nature has sug- 
 gested this territorial division of labour even more 
 obviously than the personal. One district, for ex- 
 ample, possesses rich alluvial plains, fitted for grow- 
 ing grain ; the soil of another is more favourable 
 for grazing cattle ; that of a third for pasturing 
 sheep ; a fourth offers a bleak and bare surface? 
 but is fertile in mineral wealth in coal, perhaps* 
 and iron ; a fifth is covered with timber, and a 
 sixth is washed by a sea abounding in fish. It 
 must be impossible for the inhabitants of these sev* 
 eral districts to have any continued intercourse 
 without perceiving the great mutual advantages 
 they have it in their power to secure, by applying 
 themselves exclusively to the production of those 
 commodities for which nature has adapted their 
 district, and exchanging them with each other. 
 Whether the several places between which such 
 commerce is carried on happen to be connected 
 under the same government or not, ought evidently 
 to make no difference in the amount of mutual ben- 
 efit each derives from the intercourse. The ex- 
 change, in reality, takes place between individuals, 
 although the subjects of different states, and would 
 not be undertaken by each party if it were not ben- 
 eficial to both. 
 
POLITICAL ECONOMY. 223 
 
 A strange notion seems to have prevailed till to- 
 wards the middle of last century, even among those 
 who were practically conversant with commerce, 
 namely, that the commercial gains of one nation 
 were always made at the expense of that with 
 which she traded I Since foreign commerce is as 
 freely and voluntarily undertaken by individuals 
 as that between inhabitants of the same state, and 
 for no conceivable purpose on either side but indi- 
 vidual gain, it is evident that it would not be car- 
 ried on at all, unless, in its immediate results, it 
 were beneficial to both parties, and, through them, 
 to both nations. If any of the commodities dealt 
 in are of a pernicious character, then, of course, the 
 trade becomes injurious, in its ultimate effects, to 
 the nation consuming them. But this arises not 
 from any inequality in the nature of the exchange ; 
 it is rather to be attributed to the vitiated tastes 
 and habits of the people, which lead them to prefer 
 pernicious to useful gratification. Thus the opium 
 trade in China has been considered by the parties, 
 and with reason, to be reciprocally profitable in a 
 pecuniary point of view, though in its ultimate ef- 
 fects, owing to the prevalence of depraved tastes, 
 it has been most deadly. 
 
 The profit, however, of the merchants on either 
 side constitutes evidently but a very small propor- 
 tion of the entire benefit derived by the exchanging 
 countries. If France sends to the United States 
 silk to the value of a million in exchange for an 
 equivalent in cotton, the merchants on either side 
 may perhaps clear a profit of $50,000 by the trans- 
 action. But, in addition to this, twice as much is 
 probably expended in the employment of the ship- 
 
224 POLITICAL ECONOMY. 
 
 ping and internal carrying-trade of each country ; 
 a considerable sum is likewise put into the treasury 
 of each ; and last, but by no means least, the in- 
 habitants of either country who consume silk or 
 cotton goods are supplied with these commodities 
 at perhaps two thirds the cost at which they could 
 have procured them of equal quality at home, if, 
 indeed, they could have procured them at all. 
 Many things, now considered of first necessity, are 
 not to be obtained without foreign commerce. 
 Tea, the favourite daily meal of perhaps every 
 family in the land, is grown in China alone, and 
 no attempts to raise it in other countries have 
 been successful. Cotton is the produce of a warm 
 climate ; and, if left to their own resources, many 
 countries could not obtain an ounce of that mate- 
 rial, which forms so cheap, healthy, and comfortable 
 an article of clothing for the great body of their 
 population, male and female, as well, perhaps, as 
 one of their principal staples of export. Sugar, 
 another absolute necessary of life to the present 
 generation, many nations might possibly grow at 
 home, but of a very inferior quality, and at much 
 greater cost. Cochineal, indigo, and the various 
 other substances used in dying are not the prod- 
 uce of Britain, and but few of them of the United 
 States. The quantity of indigo annually consumed 
 in the United States is about ten times greater than 
 that annually raised in the same country. Near- 
 ly every drug or balsam employed in medicine 
 is of foreign growth, and could not be obtained 
 by any efforts at home. Oranges, so delicious to 
 the sick and palatable to all, are purchased from 
 abroad by our flour and cloths, and could jaot be 
 
POLITICAL ECONOMY. 225 
 
 procured except by this mutual exchange. " Roast 
 beef," says a British writer, " the Englishman's 
 f are would to God that every one of my coun- 
 trymen could command its daily enjoyment ! is 
 indeed a native -production ; but its companion, 
 plum-pudding, exclusively an English dish, derives 
 its name and its excellence from the produce of 
 foreign climates. The raisins are brought from 
 Smyrna, the currants from the Ionian Islands."* 
 
 These familiar illustrations have heen selected 
 to bring the fact clearly before the reader, that all 
 classes and conditions of men derive enjoyment 
 or benefit from the mutual exchange of the prod, 
 ucts of different countries and climates. If for- 
 eign trade introduced only such things as are en- 
 joyed by the opulent and luxurious ; if it only en- 
 abled our- modern Sybarites to clothe themselves 
 in silks instead of linens, and drink French wines 
 instead of pure water, it would not be deserving of 
 the high place it ought to hold in our esteem, as 
 the means of adding to the comfort and enjoyment 
 of mankind. But the few commodities we have 
 mentioned aboye constitute only a small part of 
 those imported from abroad, which are used by the 
 great mass of the people, and contribute to their 
 subsistence, or give additional value to their indus- 
 try and skill. Without foreign commerce we 
 should be destitute of a very large proportion of 
 the necessaries and comforts, as well as luxuries, 
 which we now possess ; while the price of the few 
 that might remain to us would, in most instances, 
 be very greatly increased. Nor are the benefits 
 we derive from an extended intercourse with the 
 * " Political Economy," by T. Hodgskin. 
 
226 POLITICAL ECONOMY. 
 
 other branches of the human family monopolized 
 by ourselves. The persons who receive our hard- 
 ware, flour, fish, and cotton, in exchange for their 
 sugar, silks, drugs, cutlery, &., could not obtain 
 these necessary and valuable articles so cheaply 
 by any other means. " It is as pleasant," says the 
 English writer just quoted, " to the inhabitants of 
 Portugal, of Turkey, and of Spain, to procure, by 
 the cultivation of their own vines, fig-trees, and 
 olives, the instruments and clothing manufactured 
 in this country, of a superior quality, by help of 
 our fertile mineral wealth and mechanical ingenuity, 
 as it is for us to obtain, by making these articles, 
 the refreshing produce of a brighter sun than ever 
 shines over Britain."* 
 
 "But the influence of foreign commerce," it has 
 been well observed, " in multiplying and cheapen- 
 ing conveniences and enjoyments, vast as it most 
 
 * Hodgskin's Political Economy, p. 160. Dr. Chalmers, in 
 his recent work on Political Economy, among many other para- 
 doxes, has attempted to prove that it is " a delusion" to suppose 
 that foreign trade adds anything to the wealth of a nation, or is 
 productive of any advantage " beyond a slight increase of en- 
 joyment, the substitution of one luxury for another." The 
 wine-trade he has discovered only produces wine, the sugar- 
 trade sugar, the tea-trade tea, and so on. It is evident the same 
 argument would apply to our internal trade and commerce, and 
 to the division of labour itself. The shoemaker only produces 
 shoes, the clothier cloth, the cutler cutlery, &c. But, just as 
 " trifles make the sum of human things," so, in the aggregate, all 
 the several branches of trade, foreign and internal, produce all 
 that there is in the country of wealth, comfort, taste, splendour, 
 civilization ; all that distinguishes us from a horde of barbarians, 
 clothed in skins, and tolerably provided with coarse food. More- 
 over, the extension of commerce reacts upon agriculture, and 
 tends greatly to increase the production of food likewise. Dr. 
 Chalmers himself admits that this was the case in former ages, 
 and his reasons for considering the effect to have ceased are 
 very inconclusive. 
 
POLITICAL ECONOMY. 227 
 
 certainly is, is perhaps inferior to its indirect in- 
 fluence, that is, to its influence on industry, by in- 
 spiring new tastes, and stimulating enterprise and 
 invention, by bringing each people into competition 
 and friendly intercourse with foreigners, and ma- 
 king them acquainted with their arts and institu- 
 tions ?" Adam Smith and Robertson have both 
 ably traced the economic change which took place 
 throughout Europe at the termination of the mid- 
 dle ages, in virtue of the new tastes. and habits in- 
 spired in the owners and cultivators of the soil by 
 the presentation to their notice of those articles of 
 splendour and luxury which manufacturers had 
 produced and commerce brought to their doors. 
 The same effect continues in the present day. It 
 is a constant principle of human nature that our 
 wants increase with the means of gratifying them. 
 And well is it that we are so constituted. Were 
 man the sober and easily contented being that 
 moralists have sometimes, with false views of hu- 
 man welfare, attempted to make him did a mere 
 shelter from the weather, and -a sufficiency of 
 wholesome food and coarse clothing satisfy his 
 wishes, 
 
 " Content to dwell in decencies for ever," 
 his species would probably have remained for ever 
 in a condition little superior to that of the cattle 
 they have domesticated. Art, science, < literature, 
 all the pleasures of refinement, taste, and intellect- 
 ual occupation, would have been unknown : more 
 than this, the ingenuity by which the gifts of na- 
 ture and the enjoyments of mere animal existence 
 are multiplied and heightened, would never have 
 been called into action ; and the prospect which? 
 
228 POLITICAL ECONOMY. 
 
 in spite of local and temporary checks, seems to 
 us continually brightening, of a progressive and in- 
 definite amelioration in the circumstances of man- 
 kind, would have been closed at once. But it is 
 not so. Every augmentation in the number and 
 variety of the means of human gratification has the 
 certain effect of increasing the number of human 
 wants and desires, and of stimulating industry and 
 ingenuity to satisfy them by increased labour or 
 skill. The improvement of our manufactures, and 
 the increase of our foreign and internal trade, have 
 not only a stimulating influence on our own agri- 
 culture, thus adding to our supplies of home-grown 
 food, but, by offering novel gratifications to the in- 
 habitants of other countries, more fertile or genial 
 in climate than our own, they excite them to great- 
 er industry in the creation of those agricultural 
 products of which we stand in need. 
 
 These several productive classes, x or "interests," 
 which it is sometimes the fashion to oppose and con- 
 trast with each other, are far from being separated 
 by any broad line of demarcation. They are, on 
 the contrary, closely entwined and enlaced togeth- 
 er, forming the warp and woof in the web of soci- 
 ety. Their interests, consequently, are identical ; 
 and any attempt to advance that of one at the ex- 
 pense of the others, must be equally prejudicial to 
 all. In fact, the business of each branch is to sup- 
 ply the wants of the others, so that any falling off 
 in the means of one must cause a proportionate de- 
 cline in the occupation and resources of the others. 
 The agriculturists raise raw produce for the manu- 
 facturers and merchants, while the latter fabricate 
 and import articles of necessity, convenience, and 
 
POLITICAL ECONOMY. 229 
 
 ornament for the use of the former. Whatever, 
 consequently, contributes to promote or depress the 
 industry and enterprise of one class, must have a 
 beneficial or injurious influence upon the others. 
 " Land and trade," to borrow the just and forcible 
 expressions of Sir Josiah Child, " are TWINS, and 
 have always, and ever will, wax and wane together. 
 It cannot be ill with trade but land will fall, nor ill 
 with land but trade will feel it." Hence the inju- 
 rious consequences that result from every attempt 
 to exalt and advance one species of industry, by giv- 
 ing it factitious advantages at the expense of the 
 rest. 
 
 It has been a question much disputed whether 
 any one of these branches of industry should hold a 
 higher rank in the general estimation than another. 
 Many writers have contended for the pre-eminence 
 of agriculture over manufactures and commerce. 
 M. Quesnay and the French economists were fol- 
 lowed in this, to some extent, by Dr. Smith. But 
 the reason assigned by them for this preference, 
 namely, that in agriculture labour is most produc- 
 tive, as being exclusively assisted by the powers of 
 Nature, is an evident fallacy. The manufacturer 
 and the merchant avail themselves of the useful 
 qualities of the mineral, vegetable, and animal king- 
 doms to the same extent as the cultivator ; and Na- 
 ture affords her aid as bountifully and as gratuitous- 
 ly to the one as to the other. 
 
 Though these authors have failed in giving a sat- 
 isfactory reason for the rank they would assign to 
 agriculture above the other useful arts, it is not, 
 however, the less true, that a marked preference has 
 been awarded, in all times and countries, to this 
 U 
 
230 POLITICAL ECONOMY* 
 
 branch of industry ; and it is difficult to believe 
 that so prevalent a feeling can have its origin in 
 fallacy. A little reflection will enable us to ac- 
 count for it. The true source of the peculiar ven- 
 eration in which agriculture has been always held, 
 lies partly in its benignant influence on the health 
 and spirits of those who pursue it, and yet more in 
 the consciousness that it is to this art man is indebt- 
 ed for the staff of life, FOOD ; while the rest serve 
 only to minister to his convenience and luxury, or 
 to his less urgent necessities. However important 
 to his comfort may be the greater number of objects 
 which commerce and manufactures place at his dis- 
 posal, every one must feel that he is yet more deep- 
 ly indebted to that art which furnishes him with the 
 main support of his existence, without which he 
 could not survive the day. He feels that he could, 
 spare most of the products of the former arts, but 
 not of the latter. Even if we must consider this a 
 prejudice, it is at least a natural, and may well be a 
 general one. But it is not a prejudice. So long 
 as there are thousands of our fellow-creatures in any 
 part of the world starving for want of necessaries', 
 the art which occupies itself in supplying them will, 
 in the estimation of every friend to humanity, bear 
 the palm over those which are engaged in providing 
 superfluities ! While there is FAMINE on the earth, 
 every man of human feelings will desire to encour- 
 age the manufacture of corn in preference to that 
 of cottons, silks, or muslins ; to stimulate the pro- 
 duction of bread, even though at the expense of toys 
 and trinkets. 
 
 But why should there be any lack of the neces- 
 saries of life ? How is it that we boast of the mul- 
 tiplied inventions and improvements of civilization 
 
POLITICAL ECONOMY. 231 
 
 as having armed man with an immense increase of 
 productive power, if it be true that they have not 
 yet enabled him to procure a sufficiency of neces- 
 saries for the bare support of his existence ? In a 
 condition of barbarism, with nothing to depend on 
 but his natural resources, his existence is necessa- 
 rily precarious ; hunger and misery his occasional, 
 perhaps frequent, visitors. But every step that he 
 makes in knowledge and art, in the improvement of 
 his faculties and the enlargement of his resources, 
 ought to remove him farther and farther from the 
 reach of want. And it would be strange, indeed, 
 if, after ages spent in successive victories over mat- 
 ter, and in accumulating the means of yet farther 
 conquests ; after he has not only compelled whole 
 races of the inferior animals to his service, but 
 taught the very elements, each and all, to do his 
 bidding, with superior docility and far greater pow. 
 er ; when invention after invention, one more per- 
 fect than the other, have multiplied his powers of 
 production in every branch of industry to a consid- 
 erable, and, in some, to an almost incalculable ex- 
 tent, it would be indeed strange, if, in spite of all 
 this, man were still unable to escape the grasp of 
 want ; still incapable of procuring a full sufficiency 
 even of the coarsest necessaries on which to main- 
 tain life. 
 
 We are thus brought to one of the most interest- 
 ing questions of political economy. Several of the 
 discussions to which it leads must be reserved for a 
 future volume. The remaining chapter of this vol- 
 ume will be occupied with some reflections on the 
 condition of labourers in the United States, and on 
 measures which have been proposed for their ben- 
 efit. 
 
SUPPLEMENTARY CHAPTER.* 
 
 THE CONDITION OF LABOURING MEN IN THE 
 UNITED STATES. 
 
 I. THEIR CLAIMS. 
 
 THE condition of those classes of society usual- 
 ly, but in this country very inaptly, denominated the 
 Working Classes, presents a subject for profound 
 and anxious consideration. No one whose sympa- 
 thies are with man rather than with his accidents, 
 who is more concerned about the amount of hap- 
 piness enjoyed by his fellow-creatures than about 
 their rank, can look with indifference on that which 
 involves emphatically " the greatest happiness of 
 the greatest number." For the Christian to do so 
 would be flagrant inconsistency. It is the glory of 
 his religion that its mission is " to the poor." Its 
 promises and encouragements belong especially to 
 those who have not " received their consolation" 
 in this world. While it never ceases to plead with 
 others in their behalf, it at the same time inculcates 
 principles which will enable them most certainly to 
 maintain and advance their own interests. 
 
 The people of this country, however,'are urged 
 to attend 1,o this subject by something which is apt 
 to be more powerful than charity. It is regard to 
 their own safety. With us, laws are but emana- 
 tions of public opinion, and public opinion is little 
 more than the avowed will, for the time being, and, 
 
 * The substance of this chapter was contributed two or three 
 years since to one of our leading periodicals in the form of a re^ 
 
 U2 
 
234 POLITICAL ECONOMY. 
 
 however elicited, of a numerical majority. Now, 
 though we abhor the doctrine that the multitude 
 are essentially depraved and sottish, it by no meana 
 follows that we are bound to regard them as infal- 
 lible, or as beyond the reach of corruption. He 
 must be blind to the light of all history who does 
 not perceive that the people are usually what their 
 social, political, and religious institutions make 
 them. If their training is in an atmosphere of 
 impurity ; if they are looked upon by politicians 
 as mere puppets, to be moved and manoeuvred for 
 private ends ; if, instead of being purified and exalt, 
 ed by religious faith, they are taught to regard its 
 restraints with indifference or contempt, the result 
 is not doubtful. The retribution which they will 
 wreak on their betrayers and on themselves will be 
 as awful as just. It is, to our minds, the darkest, 
 and among the most incomprehensible of the omens 
 that threaten our land, that the more opulent and fa- 
 voured of our people evince so little solicitude on 
 this point. The multitude are invested with a con- 
 trol over life, liberty, and property, which is limit- 
 ed by nothing but their own pleasure, or by paper 
 barriers which they can prostrate at will ; and yet, 
 in order to accomplish some unworthy purpose, pol- 
 iticians are ready (and even count it evidence of 
 skill) to inflame their passions almost to madness, 
 and to engender or encourage the most vulgar and 
 virulent prejudices. On the other hand, not a few, 
 even in this land of democracy, filled with compla- 
 cent satisfaction at the view of their possessions, 
 rarely condescend to bestow a thought on the great 
 body of the people, appearing to think, with the an- 
 cient Fablier, that " it is fit that noble chevaliers 
 
POLITICAL ECONOMY. 235 
 
 should enjoy all ease and taste all pleasure, while 
 the labourer toils in order that they may be nour- 
 ished in abundance they, and their horses and 
 their dogs." 
 
 II. UNEQUAL DISTRIBUTION OF PROPERTY. 
 
 We do not propose to examine this subject, at 
 present, in all its bearings. There is one question 
 about which republics have always been agitated, 
 and which, to most of them, has proved the too pro- 
 lific source of dissension and ruin ; we mean the 
 distribution of property. Without instituting prop- 
 erty, and securing to each one, as far as possible, 
 the fruits of his industry and foresight, society can 
 make little progress ; and yet, in giving that inter- 
 est, provisions are made which are not only liable 
 to abuse, but which, in the course of ages, become, 
 almost invariably, the instruments of oppression. 
 This is equally the case whether such provisions 
 emanate from the whole people, or only from the 
 class called proprietors or capitalists. In the laU 
 ter case, forgetting that their own welfare is bound 
 up with that of the industrious classes, legislators 
 are apt to exonerate themselves from public bur- 
 dens at the expense of the labourer ; and not only 
 so, but to appropriate the revenue thus collected 
 in such a manner as still farther to depress indus- 
 try. Witness England, which taxes enormously 
 almost every article of subsistence used by the la- 
 bouring population, and every tenement occupied 
 by a tradesman ; while the palace of the nobleman, 
 his carriages, wine, servants, probates, &c., pay 
 comparatively nothing ;* collecting millions annu- 
 
 * Sir Henry Parnell estimates that the higher classes do not 
 
236 POLITICAL ECONOMY* 
 
 ally in the form of poor-rates, and then dispensing 
 them so as to discourage industry, paralyze inde- 
 pendence, and, in effect, pay a bounty on pauper- 
 ism. 
 
 On the other hand, let the tenure and distribu- 
 tion of property be regulated by a whole people, 
 and the door is thrown open for a different, but 
 scarcely less grievous kind of oppression. Burke 
 has well said, that " in a republican government 
 which has a democratic basis, the rich require an 
 additional security above what is necessary to them 
 
 pay mote than six millions out of fifty. Mr. Bulwer, in his 
 " England," &c. (p. 187, vol. i.), says : " By indisputable calcu- 
 lation, it can be shown that every working man is now taxed to 
 the amount of one third of his weekly wages ; supposing the 
 operative is to obtain twelve shillings a week, he is taxed, there- 
 fore, to the amount of four shillings per week ; and at the end of 
 six years (the supposed duration of Parliament), he will conse- 
 quently have contributed to the revenue, from his poor energies, 
 the almost incredible sum of 621 3s." By a calculation in the 
 Metropolitan for July, 1833, it is shown that a citizen of London, 
 having an income of 200/. a year, out of which he must support 
 himself, wife, three children, and a servant-maid, would have to 
 pay above 80/. of it to government. The following are speci- 
 mens of the manner in which the house tax is assessed : 
 
 . 
 
 A shop in Regent-street, 21 feet by 75, own- ) , nn , - fi? 1Q . 
 
 ed and occupied by a tradesman . ., f " 
 The palace of the Duke of Buckingham, prin- "\ 
 
 cipal front 916 feet, Corinthian columns, ( o o 42 in 
 
 saloon paved with marble, towers, obelisks, f 
 
 parks, &c. ...... ) 
 
 Blenheim, owned by the Duke of Marlborough, ) o nn AO in 
 
 with a park of 2700 acres, &c., &c. . J 
 
 In like manner, the window-tax is so adjusted, that the rich, 
 by multiplying the windows on their estates, can obtain them 
 at about one third the rate of tax paid by the middle and poorer 
 classes. When the number is over 180, the charge is but one 
 and sixpence apiece. Under that number, it is at an average of 
 5*. apiece. 
 
POLITICAL ECONOMY. 237 
 
 in monarchies. They are subject to envy ; and, 
 through envy, to oppression." Such additional 
 security, however, is hardly to be expected from 
 those who feel this envy, and who may hope, by 
 contracting the gains of others, to get profit to 
 themselves. Hence the fact, that in the history of 
 republics, property, in order to protect itself, has 
 been so often compelled to appeal from the laws 
 to bribery and corruption. Regulations lessening 
 its sacredness, limiting the extent to which it might 
 accumulate, restricting expenses, partitioning lands, 
 bestowing largesses, have ministered successively 
 to an all-grasping and unscrupulous cupidity, until, 
 at last, all other sentiments have been absorbed in 
 a general scramble for spoils. Witness Rome in 
 her downward career, when direct and studied ap- 
 peals were made to the poor against the rich, and 
 the possessions of the latter were held up as fit ob- 
 jects for pillage. " From that time," says the his- 
 torian, " the good old customs and regulations fell 
 gradually into disuse. The people would no long- 
 er obey ; all things were obtained by gold ; no 
 crime in war seemed disgraceful if profit was con- 
 nected with it. Those who were poor and with- 
 out patrons had more to fear from th$ courts of 
 justice than opulent criminals ; and assassinations 
 and deaths by poison became common."* Thus 
 does " even-handed justice commend the ingredi- 
 .ents of our poisoned chalice to our own lips." 
 The poor begin by preying upon the rich, and end 
 by being their victims. 
 
 The desire for property, coupled, as it too often 
 
 * Von Miiller, Univ. Hist., book vi., sec. 19. 
 
238 POLITICAL ECONOMY. 
 
 is, with a feeble sense of justice, prompts men to 
 try, in the language of Franklin, " to get something 
 for nothing ;" to grasp gains without paying the 
 prescribed equivalent of labour and frugality. 
 This single principle will explain much of the in. 
 vidious and unequal legislation in regard to prop- 
 erty which has characterized every age and coun- 
 try. Under -one government it leads to guilds, 
 corporations, and trading companies, which are 
 often but little better than stupendous monopolies, 
 engrossing for a favoured few all the profits of a 
 lucrative trade or an important craft. In another, 
 the same passion stimulates the people to perpetual 
 changes in the tenure of property ; sets aside vest- 
 ed rights ; pulls down one branch of industry to 
 build up another ; passes laws under pretence of 
 benefiting the poor, but, in reality, to advance the 
 rich. In each case the result is about the same. 
 The few are enriched at the expense of the many, 
 and by similar means. The demagogue knows 
 that " thrift follows fawning" quite as well as the 
 courtier. Both have at hand the plea of the " pub- 
 lic good," and both take occasion to smile at the 
 eager simplicity with which, for the thousandth 
 time, the bait is swallowed. It must, however, be 
 admitted, that the recipient of a royal charter has 
 some advantages over the self-styled champion of 
 "equal rights." The one is likely to enjoy long 
 and securely his ill-gotten gains ; the other often 
 discovers, when too late, that his success has been 
 his destruction. " He has but taught bloody in- 
 structions, which, being taught, return to plague 
 the inventor." The fate of Licinius, among the 
 first to suffer from the law forbidding the accumq, 
 
POLITICAL ECONOMY. 239 
 
 lation of large estates, which he had himself pro- 
 cured to be enacted, should teach these modern 
 patriots that it is vastly easier to raise an evil 
 spirit than to lay it again ; and that there is a 
 marvellous difference between being a martyr to 
 one's principles, or rising by them to place and 
 power. 
 
 How to prevent the evils growing out of these 
 extreme systems of legislation has long been a 
 question. Moses, by Divine direction, prescribed 
 the remission of debts and the reversion of landed 
 estates at certain fixed periods ; measures which, 
 though they had doubtless other and higher ends, 
 contributed also to equalize property, but in a 
 manner too violent for any except a temporary 
 and peculiar dispensation. Other lawgivers, such 
 as Solon and Servius Tullius, endowed the rich 
 with privileges, but imposed on them more than 
 corresponding burdens. The consequence, how- 
 ever, was, that society was broken up into castes 
 more or less hereditary ; which, by creating a per- 
 manent distinction between rich and poor, obstruct- 
 ed that free and healthy movement of mind, and that 
 cordial co-operation among all classes so necessa- 
 ry to the utmost improvement of a people. In our 
 own country, everything like hereditary distinction 
 or privilege has been abolished. Property can be 
 perpetuated in no family except by enterprise and 
 virtue ; while there is nothing in theory, and but 
 little in the practical operation of our laws, to pre- 
 vent the humblest citizen from reaching the high- 
 est eminence of wealth or power. There is here 
 no class of rich or poor. Through improvidence 
 and vice, the children of the opulent are perpetu- 
 
240 POLITICAL ECONOMY. 
 
 ally descending from their elevation, to learn, in 
 the school of poverty, the necessity of diligence 
 and prudence ; while, at the same time, the indi- 
 gent and unfriended rise to occupy their places. 
 In such a state of things, industry and thrift cease 
 to be derogatory ; they become associated in the 
 minds of the people with merit ; and, strangely .as 
 it may sound in foreign ears, there are parts of this 
 country where an idler, however affluent, could 
 with difficulty maintain his place in society. 
 
 Yet, even with such institutions, we shall not be 
 able to escape the taint of imperfection which 
 cleaves to everything human. Evils which in older 
 countries have been the result of unequal and he- 
 reditary privileges, may here be the consequence 
 of the action of the popular will. One instance of 
 this we have in the system of taxation which is 
 prevalent among us, and which is, in some respects, 
 scarcely less exceptionable than that which prevails 
 in Great Britain. There is among the mass of the 
 people such an aversion to what is termed direct 
 taxation that is, to assessments levied directly by 
 the government and so much difficulty has been 
 experienced both in imposing and in collecting 
 them, that our rulers have been but too ready to 
 resort to the less obnoxious system of indirect tax- 
 ation ; a system by which revenue is derived, not 
 from property, but from consumption, and that, too, 
 the consumption of necessaries rather than of lux- 
 uries. Thus, as in England, the elegant indul- 
 gences of the rich are subjected to only a nominal 
 tax, while the provisions used by a labouring man 
 are increased in cost nearly one third by taxation 
 and monopoly : so in this country. Imported coal 
 
POLITICAL ECONOMY. 241 
 
 pays a duty of six cents per bushel, candles of from 
 five to six cents per pound, iron from ten to twenty 
 dollars per ton, salt ten cents per bushel, and flour 
 fifty cents on the 100 pounds ; while coffee, tea, 
 dried fruits, and spices are admitted free, and wine 
 and silks at the very lowest duties. 
 
 This, however, is far from being the sorest evil 
 under which we suffer. Of the disadvantages in- 
 cident to a popular government, perhaps the most 
 serious is that untiring spirit of change which is 
 apt to possess the people, and which involves in 
 uncertainty all investments of capital, and almost 
 every description of industry. Never satisfied 
 with our materials of happiness, disappointed in 
 each new acquisition, and bent, therefore, on farther 
 experiments, there is danger lest at last despair take 
 the place of hope, and we rush, like those who have 
 gone before us, from the extreme of licentiousness 
 to that of despotism. From this, the danger of all 
 democratic governments, the people of this country 
 are not free. We have compassed, it is thought, 
 the most distinguished blessings by departing from 
 the institutions of the Old World ; and the too hasty 
 conclusion is, that the farther we carry this depart- 
 ure, the nearer we shall approach the perfection of 
 the social state. And this feeling is sedulously 
 cherished by many who would call themselves 
 statesmen. Whoever pants for office finds his 
 account here in evoking the spirit of discontent. 
 Things, he assures us, must not remain as they are, 
 or the country is ruined. Golden visions are held 
 up before all who will go for the putting down of a 
 party or the repeal of a measure. Some policy to 
 which the country has barely had time to conform 
 X 
 
242 POLITICAL ECONOMY. 
 
 itself, which has given a new direction to millions 
 of capital, and to vast amounts of talent and enter- 
 prise, and from which we are just about to reap 
 abundant returns, all must be prostrated, that some 
 new reformer may mount into power. 
 
 Lower down, but not less active in the work of 
 agitation, is another class of politicians, for whom 
 it seems to have been reserved to disclose to our ar- 
 tisans and labouring population the astounding fact 
 that they are already ground down by oppression. 
 They can talk of nothing but the social and politi- 
 cal degradation of their brother- workmen, the enor- 
 mous profits of the capitalist, and the growing 
 aristocracy of wealth ; while they insist upon a 
 new principle of division, by which the labourer is 
 to share in the gains of trade, without sharing ei- 
 ther in its hazards or its losses.* With such men, 
 
 * That this is no exaggeration of the doctrines now industri- 
 ously spread among the labouring population of our country as 
 well as of England, will be obvious to all who have observed the 
 proceedings and publications of Trades' Unions. As an exam* 
 pie, take the following from the Preamble to the Constitution 
 of the Trades' Union of the city and county of Philadelphia. 
 " It is an incontrovertible truth, that those who do not labour to 
 produce are supported by those who do, and it is therefore obvious 
 that those who are thus supported, will and do, through the 
 impulse of self-interest, endeavour by every possible means to 
 decrease the just demands of the manufacturer arid producer." 
 It should be understood, that by " producer," and " those who 
 labour to produce," is meant those only who are engaged in 
 manual labour ; so that merchants, tradesmen, bankers, magis- 
 trates, lawyers, physicians, dec., as well as mere " capitalists," 
 are " supported" by the labouring class, and are " endeavour- 
 ing, by every possible means, to decrease the just demands of 
 the producer !" It is constantly affirmed, and, we doubt not, 
 believed by these men, that they " are the producers of all 
 wealth ;" that " the capital of those who employ them would be 
 a dead weight without their labour ;" and that to them, there- 
 fore, belong the principal share of what are now the profits of 
 
POLITICAL ECONOMY. 243 
 
 equal rights mean, not an equal title to the protec- 
 tion of law ; not equality of privilege, but equality 
 of condition. It is said that the champions of 
 equality in France, when they undertook to carry 
 out their principles in the reconstruction of the 
 government, commenced by causing the kingdom 
 to be resurveyed, and divided into square depart- 
 ments of exactly the same size. It was not to be 
 reconciled with their notions of equality that there 
 should be one province or one commune geomet- 
 rically larger than another. So with these philos- 
 ophers. A foot rule and a little arithmetic would, 
 in their estimation, suffice to adjust the most con- 
 flicting claims, and the nicest problems in Political 
 Economy. 
 
 III. INEQUALITY UNAVOIDABLE. 
 
 But if these men really hope to banish inequali- 
 ty from civil society, they would do well to begin 
 by eradicating it from the constitution of Nature 
 and the dealings of Providence. So long as the 
 natural endowments of man are unequal, so long 
 it will need more than the skill of a Marat or a 
 Robespierre to equalize their condition. Society 
 may resolve itself into its original elements. It 
 may forego all the blessings of civilization. It 
 may bring back the boasted simplicity and free- 
 dom of patriarchal times : and what then ? Why, 
 we should find ourselves as far as ever from any 
 practical equality. The wiliest and strongest 
 the best hunter and the bravest warrior would 
 soon lord it over the rest. One portion, from hap. 
 
 the employer. It does not seem to occur to them, that without 
 thejr employers' capital there would be DO demand for labour. 
 
244 POLITICAL ECONOMY. 
 
 py talents or happy circumstances, would rise to 
 the top, another sink like dregs to the bottom. The 
 history of every savage tribe proclaims that cor- 
 poreal or mental superiority always confers an as- 
 cendancy on its possessor ; and that, despite the 
 theories of a pseudo-philosophy, the most untutored 
 mind will own and respect it. 
 
 It may be, however, that, in order to retain the 
 blessings of civilization without its inconveniences 
 (if inconveniences they may be called), these re- 
 formers would merge the individual in the mass, 
 and renew the experiment so often exploded of a 
 community of goods. And what has been the his- 
 tory of these associations ? We have had them, 
 in every gradation and of every phase, from the 
 republic of Lycurgus to the Nouveau Christian- 
 isme of the Count de St. Simon. We have had 
 them springing from, and pervaded by, every spe- 
 cies of enthusiasm : political, philosophical, and 
 religious. We have had them administered by 
 the wisest men, and according to the most artifi- 
 cial rules ; where all communication with the rest 
 of the world has been proscribed, and children 
 have been taught, from their earliest infancy, to- 
 sacrifice the feelings of nature to the claims of the 
 community. What has been the result? They 
 have been able to exist at all only within small 
 limits, and then only by weakening or sundering 
 family ties ; by renouncing the use of money, and 
 the pursuits of commerce and letters ; and by 
 causing the individual to lose sight of his own high 
 welfare in sustaining and extending the communi- 
 ty.* Their boasted equality, as far as we can dis- 
 
 * In this remark we except, of course, the community of 
 
POLITICAL ECONOMY. 245 
 
 cover, has been an equality of servitude, where 
 some John of Leyden or Owen of Lanark has 
 wielded an undisputed, and, too often, a sordid su- 
 premacy. Look, for example, at the Reductions 
 of Paraguay, where the Jesuits professed to have 
 realized the fair idea of a Christian commonwealth, 
 and of which the Abbe Raynal says, c'est la seule 
 societe sur la terre ou les hommes aientjoui de cette 
 egalite, que est le second des liens ; car la liberte 
 est le premier. Historians inform us, that this 
 equality was little better than a dead level of ser- 
 vitude, which kept the inhabitants without progress 
 in the lowest state of civilization ; that the society 
 evidently aimed at the establishment of an inde- 
 pendent empire, which might ultimately extend its 
 dominion over all the southern continent of Amer- 
 ica ; and that, to this end, they cut off all inter- 
 course between their subjects and surrounding na- 
 tions, permitting them to have no conversation 
 with any foreign trader or functionary, nor even to 
 be in the same apartment with them without the 
 presence of a Jesuit. Look at the Anabaptists of 
 Munster, who in the sixteenth century filled all 
 Europe with alarm by their fanatical opinions con- 
 cerning property and religion. By dint of visions 
 and prophecies, this people were induced to consti- 
 tute their leader King of Sion, to clothe him with 
 supreme power, and offer him the most abject hom- 
 age ; and they then " launched, by his direction, into 
 
 goods mentioned Acts iv., 32. That appears to have been a 
 voluntary arrangement, entered into from considerations purely 
 religious, by a small and proscribed body ; not intended to in- 
 terfere with their duties as citizens ; confined to Jerusalem ; 
 never enjoined even upon the Christians of that church, and 
 continued by them for only a short time. 
 X2 
 
246 POLITICAL ECONOMY. 
 
 every excess of which the passions of men are ca. 
 pable, when restrained neither by the authority of 
 laws nor the sense of decency."* Even in Sparta, 
 where this principle of common property was only 
 partially introduced, and where we have the most 
 wonderful example ever yet seen of the triumph 
 of political institutions over the instinct of the hu- 
 man heart, to what did its boasted equality amount ? 
 Let the condition of the Helots answer ; and the 
 fact that, in the course of time, all the landed prop- 
 erty in the republic was engrossed by a few indi. 
 viduals, of whom two fifths were women. The 
 genius of this memorable and too often lauded con- 
 stitution has been well, though somewhat paradox- 
 ically, described by Montesquieu : " Lycurgus, by 
 blending theft with the spirit of justice, the hardest 
 servitude with excess of liberty, the most rigid 
 sentiments with the greatest moderation, gave sta- 
 bility to his city. He seemed to deprive her of all 
 her resources, such as arts ? commerce, money, 
 walls : ambition prevailed among the citizens 
 without improving their fortune : they had natu- 
 ral sentiments without the tie of a son, husband, or 
 father ; and chastity was stripped even of modesty 
 and shame." 
 
 We do not suppose, however, that there are 
 many politicians who seriously contemplate taking 
 to pieces the institutions of property in order to 
 reconstruct them on the basis of a metaphysical 
 equality. What such men too frequently seek is 
 not equality, at least for themselves. They seek 
 rather some convulsion which shall heave them 
 above the surrounding mass ; and, well aware that 
 * See Robertson's Charles V. 
 
POLITICAL ECONOMY. 247 
 
 there are in every community elements of discord 
 and discontent, and that it needs but malignity and 
 assurance to stir them up, their province is to agi- 
 tate. With such spirits it would seem idle to rea- 
 son except through their fears ; and for them there 
 is abundant occasion for fear. History ought not 
 to have recorded the fate of their prototypes in 
 vain. They have to consult that great Teacher 
 but a moment, and they will find that agitation is 
 a game at which more than one can play ; and 
 that the first to stake is not always the last to win. 
 We should like to know how many great anar- 
 chists have died peaceably in their beds, or have 
 kept masters of the field to the end. There are 
 always hardier and more desperate spirits to catch 
 the latest pressure of the times ; to purchase pop- 
 ular favour by outstripping all who have gone be- 
 fore them, in the impudence of their pretensions 
 and the atrocity of their measures. Girondists, 
 Brissotines, Jacobins, Terrorists these are al- 
 ways ready to chase each other from the stage, 
 like spectres in a dream, until, drunk with carnage 
 and tired of revolution, the people welcome the re- 
 pose of despotism. 
 
 But if professed agitators are beyond the reach 
 of appeals higher than these, it is not so, we trust, 
 with the multitude they flatter, nor with the hon- 
 est but too visionary statesmen who, unable as yet 
 to find their beau ideal of a well- governed state, al- 
 ways hope something from change. Can they for- 
 get that professions of exclusive regard for the 
 people are the old and standing pretexts of those 
 who would rule or ruin 1 " Ye shall be as gods" 
 was the promise of the arch-deceiver when he 
 
248 POLITICAL ECONOMY. 
 
 would thwart the purposes of Heaven by betraying 
 a world. And what now, in every nine out of ten 
 cases, are patriotic promises and protestations but 
 the cloak under which the demagogue prosecutes 
 his private purposes 1 What are the people to 
 gain by perpetual changes in the distribution of 
 property, and in the relations between capital and 
 industry ? Does not law derive its chief value from 
 being known and established ? Does not all expe- 
 rience prove, that where change is ever going on, it 
 is at the instigation of an interested few ; that the 
 body of the people are allowed to understand little 
 either of its progress or objects ? " Your dema- 
 gogues," said Demosthenes, in his Oration against 
 Timocrates, " your demagogues, citizen judges, 
 would make new laws, solely for their own conve- 
 nience, almost every month : if you do not punish 
 them, the people at large will soon be enslaved by 
 these wild beasts." If such was the case in a re- 
 public, the citizens of which were sworn never to 
 acquiesce in any division of property destructive 
 of private rights, and where it was a maxim " that 
 we ought to maintain the laws of our country, and 
 respect them as certain secondary divinities ;"* 
 what may we not apprehend where reform is the 
 great watchword, the catholicon to be applied, 
 without measure or discrimination, to all political 
 maladies whatever ?f The inevitable effect must 
 
 * Stobseus, Serm. xxxviii., p. 229. 
 
 t Bacon, who lived in the age of reformation in religion, and 
 was himself a great reformer in philosophy, yet says of " new 
 experiments in the political body :" *' It is improper to try them, 
 unless the necessity be urgent or the utility evident. Great 
 care must be taken that the desire of reformation may occasion 
 the change, and not the desire of the change plead for the refor- 
 
POLITICAL ECONOMY. 249 
 
 be to lessen the security of property, discourage 
 enterprise, and keep out capital. On this point, 
 let the sage of radicalism himself be heard : " It is 
 the security of property," says Bentham, " that has 
 overcome the natural aversion of man from labour, 
 that has given him the empire of the earth, that 
 has given aim a fixed and permanent residence, 
 that has implanted in his breast the love of country 
 and of posterity. To enjoy immediately to en- 
 joy without labour is the natural inclination of 
 every man. This inclination must be restrained ; 
 for its obvious tendency is to arm all those wJio 
 have nothing against those who have something.* 
 
 mation. Again, let all novelty, though it cannot, perhaps, be re- 
 jected, yet be held suspected. And lastly, as the Scripture di- 
 rects, let us stand upon the old paths, and see and ask for the 
 good way, and walk therein." See Essays, XI. So also Aris- 
 totle : " Slight imperfections," says the Stagirite, " therefore, 
 whether in the laws themselves, or in those who administer and 
 execute the laws, ought always to be overlooked, because they 
 cannot be corrected without occasioning a much greater mis- 
 chief, and tending to weaken that reverence which the safety of 
 all governments requires that the citizens at large should enter- 
 tain, cultivate, and cherish for the hereditary institutions of their 
 country. The comparison drawn from the improvement of the 
 arts does not apply to the amendment of laws. To change or 
 improve an art, and to alter or amend a law, are things as dis- 
 similar in their operation as different in their tendency; for 
 laws operate as practical principles of moral action ; and, like 
 all the rules of morality, derive their force and efficacy, as even 
 the name imports, from the customary repetition of habitual 
 acts ; and the slow operation of the laws therefore tends to 
 subvert that authority on which the persuasive energy of all 
 laws is founded ; to abridge, weaken, and destroy the power of 
 law itself." Aristot., Pol., b. ii. 
 
 * In the last report of the Directors of the Connecticut State 
 Prison, the chaplain states that " thieves and robbers, the most 
 hardened and dangerous, frequently attempt to justify their do- 
 ings on the ground that one man has no right to hold more prop- 
 erty than another ; and when they steal and rob, they mean to 
 take from the rich only, and thus equalize what, before, was 
 unjustly unequal" 
 
250 POLITICAL ECONOMY. 
 
 The law which restrains this inclination, and which 
 secures to every individual the quiet enjoyment of 
 his industry, is the most splendid achievement of 
 legislative wisdom the noblest triumph of which 
 humanity has to boast." 
 
 The truth is deeply impressed, we would hope, 
 on the minds of the American people. They all 
 either possess, or hope to acquire property ; and 
 they can hardly fail to see, that whatever tends to 
 lessen its security, must in the end operate to their 
 own injury. There is one circumstance, however, 
 which may well awaken alarm : it is the assiduity 
 with which the press and rival politicians appeal to 
 the vulgar jealousies of the poor, and the eagerness 
 with which they seize every opportunity of fasten* 
 ing on their opponents the stigma of being rich. 
 No terms seem fraught with more political reproach 
 than those which indicate that their object is the 
 proprietor of large estates. Once property might 
 have rendered its possessor an object of jealousy, 
 because it conferred exclusive political privileges. 
 But, now that the right of suffrage has been ex- 
 tended to all, wealth seems to be growing odious. 
 We are far from being advocates of great or per- 
 nianent inequalities in the distribution of property. 
 They are prejudicial alike to the indigent and the 
 affluent ; exposing the one to the temptations of 
 want and dependance, and the other to that haugta 
 ty spirit which goeth before a fall. But such ine, 
 qualities ought to be redressed, not by bringing down 
 the rich, but by lifting up the poor. Let the poor 
 be endowed with an intelligence and moral worth 
 which will enable them to work their own way. If 
 the rich are disposed to be exacting or oppressive^ 
 
POLITICAL ECONOMY. 251 
 
 correct the evil, not by surrendering their posses* 
 sions to plunder under colour of law, but by inspi- 
 ring them with a larger justice and humanity, and 
 especially by teaching them (what they are too 
 ready to forget) that their own interests are indis- 
 solubly united with those of the labouring classes. 
 
 IV. COMBINATIONS OF LABOURING MEN. 
 
 There is another fact which may well inspire 
 solicitude* It is the existence, throughout our 
 cities and larger towns, of combinations, profess- 
 ing to aim at the correction of grievances sustained 
 by the labouring population, and proposing to effect 
 this, not so much by legislation, as through a sys* 
 tern of joint and wide-spread agitation. Capital 
 and labour are, among farmers, substantially in 
 the same hands ; and it is felt that both alike need 
 encouragement and protection* In the country, 
 too, men are likely to find their proper level, and* 
 aware of this, as well as of the difficulty of arran* 
 ging and maintaining an active confederacy among 
 a sparse population, they rarely make the attempt 
 except on great emergencies. In populous places 
 it is otherwise. The division of employments is 
 here carried to such an extent, that, while one class 
 supply only capital, another contribute only labour. 
 These classes come together too often as com- 
 petitors. They come, too, from opposite extremes 
 of the social scale, and under circumstances calcu- 
 lated to inflame, in the minds of the less favoured, 
 a painful sense of inferiority. When to this we 
 add the real grievances to which the poor are sub- 
 jected by the arrogance of the rich, by their re- 
 missness in discharging their obligations, and their 
 
252 POLITICAL ECONOMY. 
 
 abuse of the power which results from their situa* 
 tion, we cannot wonder that a great city should 
 become the focus of discontent. Besides occasion 
 for confederacies, it furnishes, in the density and 
 clannish character of its population, and in the 
 presence of factious and desperate men, who make 
 a trade of agitation, tempting facilities for orga- 
 nizing them. 
 
 These facilities have not been neglected. Asso- 
 ciations^ called Trades' Unions, have been formed 
 in every considerable town in the United States ; 
 and they threaten, in connexion with other causes^ 
 to bring on that struggle which has been so often 
 seen in other countries, and which, to the impartial 
 observer, must seem alike unnatural and ruinous 
 the struggle between labour and capital. Indica- 
 tions of it are apparent in the " strikes" which mul- 
 tiplied so rapidly a few years since, and in the 
 scenes of violence with which they were generally 
 attended. That these attempts to control the mar- 
 ket of labour must, however well organized, ulti- 
 mately prove fruitless* is evident, one would think, 
 at this time, when men who, in 1834, resolved 
 that wages should never be reduced below the rate 
 then paid,* are glad to obtain employment on al- 
 most any terms. It may be thought, too, that con- 
 vulsions in trade, like those through which we have 
 just passed, must dissolve these societies, or leave 
 nothing to be apprehended from their future efforts. 
 They who suppose so, however, know little of the 
 virulence of that disease which preys on the body 
 politic, and which has so often proved the immedi- 
 
 * At the General Convention of Trades' Unions held in the 
 city of New-York. 
 
POLITICAL ECONOMY. 253 
 
 calile vulnus. The dissatisfaction of the ignorant 
 poor, and the machinations of those whose busi- 
 ness it is to foster it, are never more rife, though 
 less observed, than at such seasons. The orga- 
 nization, too, of which we are speaking, is pre- 
 served, and its doctrines are disseminated with in- 
 defatigable industry and through a multitude of 
 channels. It will be well if the effect of these 
 and other causes is not seen in a growing aliena- 
 tion between the two great classes that compose 
 the population of our cities and manufacturing 
 towns. Of all things, such an alienation is most 
 to be deprecated. To counteract the tendency 
 to it which is now but too evident, there must be 
 a higher tone of intellectual and moral instruction 
 among all classes of our people. Those who have 
 property, and would preserve it, must put forth spe- 
 cial efforts to redress the real grievances of work- 
 men, and to convince them that, between their 
 rights and interest and those of their employers, 
 there is not only no actual variance, but the utmost 
 harmony and identity. 
 
 In undertaking to examine the nature and claims 
 of Trades' Unions, and of other similar combina- 
 tions, we would guard against misapprehension. 
 We have been drawn to this task by no desire to 
 prejudge the controversy in which they are en- 
 gaged. So far as we had at the outset any predi- 
 lections, they were favourable. Perceiving that 
 the number of mechanics and labouring men was 
 rapidly increasing in our country ; that they were 
 exposed to many trying temptations ; that on their 
 virtue and intelligence depended the well-being of 
 our towns, and that they imbodied a large share 
 Y 
 
254 POLITICAL ECONOMY. 
 
 of the active talent and political influence of the 
 time, we had conceived a lively interest in their 
 welfare. We had been especially anxious to see 
 societies for mutual improvement formed among 
 them ; and when we heard that, in England, socie- 
 ties had long existed in the several trades which 
 were in the course of being transplanted to Amer- 
 ica, we hoped that they might prove powerful in- 
 struments for this purpose. That we might judge 
 fairly of their structure and tendency, we went for 
 information, not to the publications of their adver- 
 saries, but to documents which they had put forth 
 in their own name ; to the proceedings of their 
 Unions and Conventions, and the files of their 
 newspapers. Having derived our facts from such 
 unquestionable sources, the conclusions to which 
 we may arrive can be erroneous only through 
 some fallacy in our reasoning. Should such fal- 
 lacy escape us, we may trust that it will not escape 
 our readers. 
 
 It may be proper to say a word here of the his- 
 tory of these associations. 
 
 " The most ancient examples," says Mr. Wade, 
 in his History of the Middle and Working Classes, 
 " of the Unions of workmen, were the trading 
 guilds or fraternities, remains of which still exist 
 in many of the principal towns of England and on 
 the Continent. Traces of these societies may be 
 found under the Roman emperors, and during the 
 times of the Anglo-Saxons, when they formed a 
 separate and favoured portion of the community, 
 possessing exclusive grants and immunities. Com- 
 binations, in the modern sense, of workmen against 
 their employers, could have no place in these asso- 
 
POLITICAL ECONOMY. 255 
 
 ciations ; each constituted a distinct incorporation 
 of all those engaged in the same mystery or occu- 
 pation ; they were governed by by-laws, which 
 regulated the taking of apprentices, the admission 
 of new members, the prices of their manufactories, 
 &c. : in short, they performed all those functions 
 in common that are now performed separately by 
 masters and journeymen ; and the only combina- 
 tion that existed was that formed by the union of 
 both against the community. The monopoly thus 
 established against the public was the cause of 
 their downfall, and at an early period made them 
 an object of legislative enactment. In the 1st Stat. 
 9 Edw. III., it is declared that the franchises of 
 guilds are * prejudicial to the king, prelates, and 
 great men, and oppressive to the commons.' By 
 the gradual abridgment of their privileges they 
 lost their municipal government : stranger work- 
 men were introduced into the trades, who did not 
 acknowledge the authority of masters and ward- 
 ens ; and, finally, the fraternities resolved into the 
 great and independent divisions of masters and 
 journeymen ; the former finding the capital, the 
 latter the labour for their co-operative industry. 
 From this transition may be derived the first origin 
 of Trades' Unions for the express purpose of keep- 
 ing up the rate of wages." 
 
 The earliest notice which we have of workmen 
 combining in England is in the year 1548, when 
 an act of Parliament (2d and 3d Edw. VI., c. 15) 
 states in its preamble that " artificers, handicrafts- 
 men, and labourers have made confederacies and 
 promises, and have sworn mutual oaths, not only 
 that they should not intermeddle with one anoth- 
 
256 POLITICAL ECONOMY. 
 
 er's work, and perform and finish that another hath 
 begun ; but also to constitute and appoint how 
 much work they shall do in a day, and what hours 
 and times they shall work, contrary to the laws 
 and statutes of this realm, and to the great hurt and 
 empoverishment of his majesty's subjects." Sub- 
 sequently these combinations undertook to dictate, 
 not only where workmen should engage, and how 
 long they should work daily, but also what wages 
 should be paid ; and from the year above men- 
 tioned down to 1824, laws were frequently passed 
 to protect employers against them. These laws, 
 however, proved, as in such cases they usually do, 
 nearly powerless, prosecutions under them serving 
 to exasperate rather than to deter ; and in 1824 they 
 were all repealed, and an act substituted to pre- 
 vent the use of violence by such combinations, and 
 protect independent workmen. From the evidence 
 taken before a committee of the House of Com. 
 mons in 1824, it appears that all the trades in Lon- 
 don were at that time in some degree organized ; 
 and that through the kingdom, especially in the 
 manufacturing districts, associations were in ac- 
 tive operation. By their agency in Manchester, 
 not less than 15,000 people were in 1818 induced 
 to refuse work for the space of several months ; 
 and " the district," says Mr. Wade, " has at no pe- 
 riod, for several years, been without the excite- 
 ment and confusion of tumults caused by these as 
 sociations." 
 
 The most recent and striking example of their 
 power was presented at the potteries in Stafford., 
 shire (England). More than 30,000 operatives, 
 constituting the entire force of those establish- 
 
POLITICAL ECONOMY. 257 
 
 ttients, were in 1837 nearly six months without any 
 employment, owing to the Unions. The introduc- 
 tion of these clubs in 1833 marked the beginning 
 of controversies between the masters and work- 
 men, which continued till August, 1836, when, by a 
 decree of the Union, several manufactories, em- 
 ploying in all about 3000 hands, were suddenly 
 cleared. Upon this, the whole body of employers, 
 who, in anticipation of such a movement, had pre- 
 viously formed themselves into a Chamber of Com- 
 merce, resolved, that since the men, at the instiga- 
 tion of the Union, must have a partial turn-out, 
 they would insist upon its becoming general* In 
 consequence, every proprietor closed his works ; 
 the whole population were left without work, and 
 it was not till the January following that the diffi- 
 culty was adjusted and the men restored to their 
 places. 
 
 These associations are formed and confederated 
 in the following manner. As many of the jour- 
 neymen of the same craft in a town as are willing, 
 form a society. From each of these societies or 
 lodges delegates are convened at some central 
 point, who form a General Union of Trades ; and 
 again, by delegations from these Unions, a General 
 Convention, representing all the trades in the Uni- 
 ted States, is formed and meets annually. By the 
 monthly contributions of each member, a fund is 
 created to pay the expenses of these delegates, aid 
 necessitous members, especially during strikes, and 
 meet other charges. When in any district the 
 controversy of workmen with their employers ap- 
 proaches a crisis, a Board of Management is crea. 
 Y2 
 
258 POLITICAL ECONOMY. 
 
 ted, to conduct negotiations, prescribe terms, and 
 dictate the extent and duration of strikes. 
 
 V. TENDENCY OF COMBINATIONS. 
 
 What would a reflecting man expect of such 
 combinations ? Associated action is powerful ; and 
 when it enlists great numbers, so situated that they 
 combine easily and intimately, its power may be 
 all but overwhelming. And to this, provided the 
 power be used rightfully, it is not our purpose to 
 object. The world owes, to the union and associ- 
 ation of good men for worthy objects, some of its 
 best and noblest inheritances ; and since the very 
 essence of civilization lies in co-operative effort, 
 and the motive and means for applying such effort 
 are constantly multiplying with the progress of 
 freedom and intelligence, it is idle to think of ar* 
 resting the tendency to it which characterizes our 
 age. In every department of human affairs be it 
 financial, literary, or philanthropic it will, for good 
 or for evil, have its course. But it must be watch* 
 ed. Criteria must be fixed by which we can dis- 
 tinguish its safe and beneficent movements, and 
 guard it against perversion. Few scourges have 
 been more dreadful than those wielded at times by 
 well-disciplined and extended confederacies. Is 
 there, then, in these leagues called Trades' Unions, 
 anything calculated to awaken suspicion, or to fur* 
 nish just ground for alarm 1 
 
 We hold that the power lodged with associations 
 is safe from great and dangerous abuse only when 
 their objects are clearly avowed and their proceed, 
 ings substantially public ; when their composition 
 is so far promiscuous as to secure them from a 
 
POLITICAL ECONOMY. 259 
 
 clannish spirit and an anti- social policy ; and when 
 the influence on which they rely is of a purely 
 moral nature, appealing to something higher than 
 fear. Allow them the use of violence, or even of 
 intimidation, and they will soon usurp the place of 
 law, and erect themselves into the most intolerable 
 of all tyrannies. Suffer them to imbody but the 
 members of one profession or class, and those but 
 of one sex, and they will evince an exclusiveness 
 and identity of feeling, and be liable to ebullitions 
 of passion, which will render them always trou- 
 blesome, and, in seasons of great danger or excite- 
 ment, doubly so.* And, finally, permit them to 
 proceed in secret, and for purposes not fully known 
 or explained, and the temptation to convert them 
 into instruments of oppression for political or re- 
 ligious ends will be nearly irresistible. 
 
 What, then, is the character of Trades' Unions 
 in these respects ? In regard to the objects which 
 they propose to accomplish, such as redress of 
 grievances, vindication of rights, security against 
 aggression, &c., it must be evident that these are 
 .quite too indefinite ; such phrases admitting of 
 any construction that convenience may require, and 
 having been often used as pretexts for sedition* 
 So with respect to their proceedings, without a 
 knowledge of which the public can never be secure 
 
 * " Leagues thus formed and strengthened may overawe or 
 overset the power of any state ; and the danger is greater in pro- 
 portion as, from the propinquity of habitation and intercourse of em~ 
 ployment, the passions and counsels of a party can be circulated 
 with ease and rapidity. It is by these means and in such situ* 
 ations that the minds of men are so affected and prepared, that 
 the most dreadful uproars often arise from the slightest provoca- 
 tions. When the train is laid, a spark will produce the explo- 
 sion." Paley's Mo. ,& Pol. Phil,, b. vi., c. ji. 
 
260 POLITICAL ECONOMY. 
 
 against machinations and disturbances. Whenever 
 the members are about to engage in a contest with 
 their employers, the Board, which is clothed with 
 the power of dictating its form, extent, and contin- 
 uance, sits, in almost all cases, with closed doors, 
 its members being unknown. For example, in the 
 late difficulty in the potteries of Staffordshire, when 
 from 15 to 20,000 families were deprived of the 
 ordinary means of support, the Board of Man- 
 agement, which, by one of its rules, " had a controll- 
 ing influence over all the lodges in matters of im- 
 portance," and, through the lodges, over each indi- 
 vidual member, such member being required, on 
 admission, to pledge himself that, " so long as the 
 society should continue, he would in all things ad- 
 here to its rules, and never act contrary to its 
 spirit and constitution ;" this Board, we say, com- 
 posed of over sixty members, which dictated turn- 
 outs, proscribed intercourse between workmen and 
 their employers, levied fines and taxes, and dis- 
 missed recusant members, was so completely in- 
 visible, that " scarcely a member of the Union ei- 
 ther knew, or pretended to know, more than some 
 one or two of its members. " Such a fact speaks vol- 
 umes in regard to the true character and tendency 
 of these associations, and can hardly be lost on a 
 people so jealous as we are of our liberties. Se- 
 cret confederacies, it must be evident, are often 
 fraught with more real danger than open sedition, 
 inasmuch as they are more likely to draw to their 
 support well- disposed but inconsiderate persons. 
 
 It is also worthy of remark, that Trades' Unions 
 are composed of persons belonging to but one 
 class that of journeymen. To say nothing here 
 
POLITICAL ECONOMY. 261 
 
 of the incendiary spirit which is apt to reign in the 
 counsels of men thus isolated from the rest of so- 
 ciety, and united by sympathy, proximity of situa- 
 tion, and similarity of condition ; nor of the facil- 
 ities which exist among them for combination, and 
 the narrow views, even of their own interest, which 
 they are apt to acquire by exclusive communion 
 among themselves ; there is to this feature of their 
 constitution another, and, in this country, still more 
 serious objection. It tends to arrest among jour- 
 neymen the spirit of improvement, and to fix them 
 in a condition of permanent inferiority. One of 
 the great advantages of a state of society like that 
 which exists in this country is, that as every man 
 may, so does almost every man expect to, improve 
 his condition. Until recently, no journeyman was 
 satisfied with the prospect of remaining a journey- 
 man through life. He was looking forward to the 
 time when he should become an employer; and he 
 felt urged, therefore, not only to industry and good 
 conduct, but to an active interest in maintaining the 
 rights of employers. But let him become an active 
 member of these Unions ; let him anticipate some 
 influence and fame as the reward of his services, 
 and from that moment he feels as if he had cast in 
 his lot for life with journeymen. He gets, by de- 
 grees, to regard employers as a hostile class ; fosters 
 feelings and avows doctrines which shut him out 
 from their sympathy, and renders it constantly more 
 difficult to leave the party he has espoused, and join 
 another he has so often and so loudly condemned. 
 If we desired to alter the whole genius of American 
 society ; to resolve it into classes separated by bar. 
 yiers almost impassable, and to condemn the largest 
 
POLITICAL ECONOMY. 
 
 portion to lasting inferiority, we should certainly 
 recommend some such expedient as Trades' Unions. 
 They appear to us to be perfectly calculated to in- 
 spire the poor, not indeed with contentment, but 
 with a spirit which is much more likely to keep 
 them down, and to deprive them, not only of the 
 sympathy and good- will of the rich, but of all high 
 and generous ambition. On this point we fully con- 
 cur in the sentiment put forth, though with different 
 views, in the address of the President of the General 
 Trades' Union of the city of New- York : " It has 
 been avowed with great truth, that all governments 
 become cruel and aristocratical in their character 
 and bearing in proportion as one part of the com- 
 munity is elevated and the other depressed. And 
 we regard it to be equally true, that, in proportion as 
 the line of distinction between the employer and 
 employed is widened, the condition of the latter in- 
 evitably verges towards a state of vassalage, while 
 that of the former as certainly approximates to- 
 wards supremacy." p. 10. 
 
 There is another fact entitled to some notice. 
 These Unions profess to have been formed in or- 
 der to promote, among other things, the intellectual 
 improvement of their members. We could wish 
 that, in pursuing that object, they had not so entire- 
 ly overlooked another and yet more important one. 
 However desirable it may be to ameliorate the out- 
 ward condition of men and to enlighten their under- 
 standings, it must be admitted to be inconceivably 
 more desirable to raise the tone of their deportment 
 and moral sentiments. In increasing their physical 
 and intellectual resources merely, we may but in- 
 crease their misery, and the mischief which they 
 
POLITICAL ECONOMY. 263 
 
 will inflict on their families or the public. No body 
 of men is more dangerous than one raised in influ- 
 ence above the mass of those engaged in similar 
 pursuits, and constantly busied in inspiring jealousy 
 and promoting agitation. That such is the case 
 with these Unions we do not affirm. But it is wor- 
 thy of notice, that their leaders are generally from 
 abroad, and that their doctrines respecting labour 
 and capital are often propagated in close connex- 
 ion with tenets held by Mr. Owen respecting Poli- 
 tics and Religion. Now we know something of 
 the style and spirit of the literature which thrives 
 amid such tenets. The Halls of Science estab- 
 lished under the auspices of Mr. Owen push their 
 researches into the realms of atheism and sedition. 
 They have little taste for anything farther. So 
 with Trades 5 Unions. They convene their mem- 
 bers to hear of " equal rights," " rapacious capital- 
 ists," " grinding employers." But we are inform- 
 ed of no libraries that they have established \ of no 
 lectures that they have instituted ; nor, indeed, of 
 any measures for the diffusion of useful knowledge, 
 which were not already prevalent and of easy ac- 
 cess. 
 
 But, if working men are aggrieved, some one may 
 say, why not allow them the means of redress? 
 How can they hope to rise without union and con- 
 cert ? To such questions we reply, that, in order to 
 rise indeed, they ought to aim, first of all, at the ex- 
 altation each of his own individual character. To 
 give real and permanent advancement to a class, 
 while the individuals who compose it are degenera- 
 ting, must be a vain attempt. And we reply yet 
 farther, that it ought hardly to be assumed, and that, 
 
264 POLITICAL ECONOMY. 
 
 too, as it generally is, without examination, that in 
 this young republic, to which men are thronging, 
 from all quarters of the world, as to a land of prom- 
 ise and freedom, and in which every individual can 
 cause himself to be felt through the ballot-box that 
 in such a country labouring men are already the vie- 
 tims of a grinding oppression. Least of all should 
 this be assumed at the bidding of men who have but 
 just escaped from legal disabilities in their native 
 lands, and who, admitted here, not only to an asy- 
 lum, but to every political privilege, hasten to evince 
 their gratitude by abusing our institutions, and en- 
 deavouring to subvert the very power that welcomes 
 and protects them. We propose, however, to in- 
 quire for a moment what these grievances are, and 
 also how far Trades' Unions are likely to afford a 
 remedy. 
 
 VI. WAGES. 
 
 The great grievance complained of by these 
 Unions the one, indeed, into which, in their esti- 
 timation, all the rest may be resolved, is inadequacy 
 of wages. Though they have in some instances 
 demanded only a reduction in the hours of daily la- 
 bour, their claim has generally embraced, besides 
 such reduction, an advance of pay, and has thus 
 contemplated, in effect, two advances in wages. 
 The spirit in which this, their main object, is pur- 
 sued, may be inferred from the following resolu- 
 tion, adopted in the General Convention of Trades' 
 Unions held August, 1834 : 
 
 " Resolved, that we recommend to the several 
 Trades' Unions in the United States to oppose res- 
 olutely every attempt to reduce their wages, and to 
 hold fast any additions they may receive." 
 
POLITICAL ECONOMY. 265 
 
 It thus appears that the rate of wages paid 
 through the country in August, 1834, was to be 
 adopted by the Union as a minimum, below which 
 no reduction should take place ; while an advance 
 was to be the object of their strenuous and unceas- 
 ing exertions. To give effect to such exertions in 
 the last resort, the great instrument relied on, as 
 our readers must be aware, is a strike, i. e., a gen- 
 eral and protracted refusal to labour. The Union 
 having fixed on certain terms as the workmen's ul- 
 timatum, give notice to the employer, and apprize 
 him that his men will leave him unless these terms 
 are complied with. In case he declines, measures 
 are immediately taken to secure the co-operation 
 of journeymen who do not belong to the Union ; 
 the strike ensues ; an extraordinary tax is levied on 
 the members of other trades, and on those of the 
 same trade in other places ; and the proceeds, after 
 paying the expenses of management, &c., are ap- 
 plied to the relief of the unemployed. In this way 
 the strike is sometimes maintained for months to- 
 gether, and is at length terminated by a compro- 
 mise between the parties, or by the submission of 
 one of them. 
 
 That the wages of labouring men ought to be 
 high as high, indeed, as the general welfare will 
 allow must in this country be conceded by every 
 one. To attempt to raise them higher, and advance 
 the labourer at the expense of other classes, would 
 not only be unjust, but would surely terminate in in- 
 juring him. It becomes important, then, to ascer- 
 tain what are high wages 1 
 
 It is evident that this question cannot be answer. 
 ed by a mere reference to the money rate of wages ; 
 Z 
 
266 POLITICAL ECONOMY. 
 
 to their rate, that is, when computed in dollars and 
 cents ; and this for the obvious reason that a given 
 number of dollars and cents is at one time worth more 
 than it is at another, because it will give us a great- 
 er command over the comforts and necessaries of 
 life. It is to this that we are to look for the true 
 measure of wages. Money is valuable only as it- 
 enables us to procure the purchaseable means of 
 gratification ; and if these decline in price, it is ev- 
 ident that the amount in money paid for our labour 
 might be reduced in the same proportion, and yet 
 our means of enjoyment remain unchanged. When 
 we inquire, then, whether wages are high, we mere- 
 ly inquire whether they enable the labourer to pro- 
 cure a liberal supply of the requisite enjoyments. 
 He might, in fact, be improving in his relative con- 
 dition, notwithstanding a fall in his wages, provided 
 there was a yet greater fall in the commodities 
 which he has to purchase ; while, on the other 
 hand, no rise of wages would benefit him, if the ex. 
 pense of subsistence were at the same time advan- 
 cing in an equal or a yet greater proportion. 
 
 Now it is well worthy of remark, that the direct 
 tendency of the operations of Trades' Unions is to 
 advance the expense of living, materially, to the la- 
 bourer. In raising the wages of workmen in the 
 different trades, they must advance the price of the 
 articles which those workmen manufacture, and 
 thus levy an indirect tax upon all who consume 
 them, of which class they themselves form the lar- 
 gest proportion. Through the agency of these 
 Unions, the carpenter, it is true, may secure in- 
 creased compensation for his labour ; but, then, in- 
 stead of being suffered to retain it, it will be well if 
 
POLITICAL ECONOMY. 267 
 
 he be not required to disburse all of it, and even 
 more, to his landlord, tailor, hatter, and shoemaker, 
 in the shape of additions to their prices. That 
 which he has to sell may by such means be made 
 to bring a higher price ; but so in like manner, and 
 for the same reason, will that which he has to buy. 
 There never was a greater error than to suppose 
 that wages can be regulated in one trade irrespec- 
 tive of the rate which they bear in others. 
 
 Whether wages in the United States are high, 
 may be ascertained, in part, by comparing the 
 means of subsistence and enjoyment which our 
 mechanics can command with those possessed by 
 the same class in other countries ; but more com- 
 pletely by comparing them with the wants of man 
 as an intellectual, social, moral, and progressive 
 being. By the former of these methods we shall 
 at once discover that the condition of American 
 workmen is such as to render them the envy and 
 admiration of their brethren in every other land. 
 By the latter we shall find that scarcely anything 
 is required for happiness, improvement, or useful, 
 ness, which is not attainable by the labouring pop- 
 ulation of the United States. How easily do they 
 procure the shelter of a comfortable roof, and an 
 abundant supply of wholesome food and raiment ? 
 How moderate a share of prudence and industry 
 is yet sufficient to authorize the labouring man to 
 charge himself with the care of a rising family, 
 and thus to secure a happiness and a measure of 
 moral improvement to be found only amid the 
 duties and charities of domestic life ? Who among 
 them has not leisure (if lie is disposed to improve 
 it) for the cultivation of his mind, by reading and 
 
268 POLITICAL ECONOMY. 
 
 reflection, and by intercourse with others. Be- 
 sides providing for his daily wants, who may not 
 store away something against the time of sickness 
 and old age, and gather a little capital with which 
 to couple his skill and energies ? And then, has 
 he not, in common with the most affluent, freedom 
 of conscience, the unshackled privilege of forming 
 and uttering his own opinions, the equal protection 
 of the laws, and the solemn restraints, and high 
 incitements, and holy hopes of the Christian's 
 faith 1 Could the factious and discontented be in- 
 duced to reflect dispassionately on their condition, 
 they could not but feel, that if with such advanta- 
 ges they are not happy and enlightened, and virtu, 
 ous too, the fault must be their own. They would 
 see reason to fear, that if with the wages which 
 they receive now they are restless and dissatis- 
 fied, yet higher wages would only tempt them to 
 idleness and prodigality. It is a melancholy truth, 
 that in every country the best paid workmen are 
 usually the most thriftless and irregular. We do 
 not mention this fact as an argument against the 
 advance of wages, but as a proof that the highest 
 welfare of the labouring classes depends, after all, 
 upon themselves ; and that, without virtuous prin- 
 ciples and habits, no increase of compensation can 
 either enrich or elevate them. We see multitudes 
 among us who, from the humblest beginnings and 
 with low wages, have yet risen, by dint of honesty 
 and perseverance, to wealth and distinction. We 
 see multitudes also who, with every advantage of 
 high wages and powerful friends, have yet sunk, 
 for the want of these qualities, to the lowest deg- 
 radation ; and we conclude that, in this country 
 
POLITICAL ECONOMY. 269 
 
 at least, labouring men want nothing so much as 
 to be true to themselves. 
 
 It must be admitted, we think, that the wages 
 Usually paid in the United States put the labourer 
 in possession of those advantages which are most 
 to be desired in a world like ours. There may be 
 places where, owing to the rapid growth of the 
 population, and the consequent demand for tene- 
 ments and subsistence, the expense of living has 
 increased in a greater ratio than wages. But. gen- 
 erally, the price of labour in this country is as high 
 now as it was forty years since ; and if we com- 
 pare the average money rate of wages for the last,/ 
 fifty years with the average prices of food, cloth, 
 ing, &c., we shall see reason to infer that the rela- 
 tive condition of the labouring population has im- 
 proved. While the orators of the Union would 
 persuade the workman that the encroachments of 
 capital are constantly advancing, and that he is 
 fast sinking to a condition of " white slavery," 
 worse than that occupied by the bondmen of the 
 cotton-field or the sugar-plantation, facts prove 
 that he is participating in the progress of the age ; 
 and that those changes in the right of suffrage 
 which have enlarged his political influence, are but 
 an index to the increased facilities which he enjoys 
 for improving his social and moral condition. 
 
 Still, these facilities admit of yet farther increase. 
 The great question, then, remains, are Trades' 
 Unions calculated to secure such increase ? Are 
 they so constituted as to promise any real and per- 
 manent advancement to those who unite with them, 
 and that without injury to others 1 We say with- 
 out injury to others, because the first requisite, in 
 Z 2 
 
270 POLITICAL ECONOMY. 
 
 every effort to advance the interests of a class, 
 must be that it does not infringe violently on the 
 rights or interests of other classes. We are thus 
 brought to consider the bearing which these asso- 
 ciations are likely to have, first, on the welfare of 
 those not members ; and, secondly, on the welfare, 
 and particularly on the rate of wages, of those 
 who are members. 
 
 VII. EFFECTS OF COMBINATIONS ON THOSE NOT 
 MEMBERS. 
 
 On the first point, we propose to show that a 
 degree of injustice is involved in the very concep^ 
 tion of Trades' Unions, and that they can be main* 
 tained in no way without interfering with the 
 rights of other and important classes of the com. 
 munity. 
 
 1. In the first place, the rights of employers are 
 invaded by these associations. They are not per- 
 mitted to negotiate with their workmen on terms 
 of equality. They can do it, in times of excite- 
 ment, only through the medium of an irresponsible 
 but by no means impartial body : a body, indeed, 
 whose interests and whose prejudices are entirely 
 at variance with their rights. Measures are aL 
 ways taken, at such times, to prevent the employer 
 from supplying the places of those who, under the 
 protection of the Union, demand an advance of 
 wages ; and he is thus reduced to the necessity ei- 
 ther of closing his works, or of yielding to demands 
 which he feels to be oppressive. 
 
 The employers' rights are still farther invaded 
 by the measures of these Unions, because they 
 tend to disturb the proportion which ought to sub* 
 
POLITICAL ECONOMY. 271 
 
 sist between the cost of producing articles and the 
 price of selling them. By raising the wages of V 
 the labourer, we raise, of course, the prime cost of 
 the article which he is employed in making ; and 
 by resolving, as was done in the Trades' Conven- 
 tion of 1834, that these advanced wages shall be 
 continued, we resolve to charge the employer for 
 ever with this increased cost. But how can we 
 ensure him that the prices at which he can dispose 
 of these articles shall not, in the mean time, de- 
 .dine? Perhaps he can, at present, secure but a 
 moderate profit ; and yet he is to be compelled by 
 the Union not only to advance the wages of his 
 workmen, but to do it the very moment the value 
 in market of the articles which he produces may 
 be depreciating ; and the institution which would 
 apply such compulsion claims to be the great and 
 almost exclusive champion of equal rights / Let 
 us suppose that the Legislature of the State of 
 New- York should enact that no journeyman shall 
 receive more than one dollar per day for his la. 
 bour, nor be employed less than twelve hours. 
 Are the hardy operatives of the shop and the mill 
 prepared to submit to such a decree? Who does 
 not know that they would swell the cry of resist, 
 ance from one end of the land to another, and that 
 legislators who should presume thus to intermeddle 
 between journeymen and their employers, and to 
 stand in the way of the largest liberty and pros- 
 perity of the working classes, would have to bid a 
 long farewell to all hope of popular favour ! But 
 if the Legislature has clearly no right to prohibit 
 workmen from receiving more than a certain sum, 
 what right can the Union have to prohibit masters 
 
272 POLITICAL ECONOMY* 
 
 from paying less than a certain sum ? Who gave 
 to the Union, more than to the Legislature, the 
 prerogative of fixing a tariff of wages, and decree, 
 ing when and how it shall be altered ] There is 
 between these two cases no difference, except that 
 the one has been attempted only by the legisla- 
 tures of dark ages,* the other is attempted by the 
 Unions of the 19th century. The one was rank 
 injustice towards the labourer, the other is injus- 
 tice no less rank towards the employer. It is, in 
 truth, the very same principle, abandoned by the 
 enlightened capitalist to be taken up by the unin- 
 structed and misguided workman. May we not 
 hope, that, in the progress of society, he too will 
 be brought to see its injustice in regard to others, 
 as well as its flagrant impolicy in respect to him- 
 self? 
 
 2. Trades' Unions, in their zeal to promote the 
 interests of mechanics, encroach also on the rights 
 of the agricultural class. In advancing the wages 
 of the operative mechanic, they enhance the cost 
 to the husbandman of his tools, shoes, hats, &c. ; 
 while they do nothing by advancing his own wages 
 to enable him to meet this enhanced cost. The 
 remuneration which he receives for his labour is 
 already lower in proportion than that paid to any 
 description of journeymen, and the measures pro- 
 posed by Trades' Unions must, if carried out, have 
 the effect of imposing upon him yet more grievous 
 disadvantages. It should always be considered 
 
 * A statute of 1496 in England, prescribes the wages which 
 should be paid to labourers of various kinds, and provides that 
 if any unemployed person refused to serve at the above wages, he 
 might be imprisoned till he found sureties to serve according to 
 the statute. 
 
POLITICAL ECONOMY. 273 
 
 that farm-labourers, scattered as they are over a 
 country, have no facilities for combination, and 
 can have no hope, therefore, by concert and co-op- 
 eration, to force an advance of wages. 
 
 3. The measures taken by Trades' Unions com- 
 promise still more seriously the rights of non-asso- 
 ciated workmen. Whatever right the members of 
 such associations possess to fix a price upon their 
 labour, and to do it, too, by combination, ought 
 surely to be enjoyed by an individual labourer act- 
 ing only for himself. If he chooses to work at 
 rates lower than those which they have prescribed, 
 he does it in the exercise of a liberty of which they 
 have furnished a striking example. It may be true 
 that the wages which he accepts are very low ; 
 but of that, may he not judge for himself ? It may 
 be true, too, that, by accepting such wages, he in- 
 directly injures others ; but will that authorize the 
 Union to compel him, by refusing them, to injure 
 himself, perchance to starve his family ? Here is 
 the radical error and vice of these combinations. 
 They demand for themselves what they will not 
 concede to others. " From early morn to dewy 
 eve" they clamour for the right of making their 
 own terms with employers ; they dilate upon the 
 wrongs which are heaped by these employers on 
 them the weaker party; when they are them- 
 selves busy in bringing the whole power of a se- 
 cret and irresponsible confederacy to bear upon 
 the poor workman, merely because he demands a 
 similar right for himself. An association which, 
 more than any other, cries out against oppression, 
 and that, too, the oppression of the poor, is en- 
 gaged at every strike in perpetrating, towards the 
 
274 POLITICAL ECONOMY. 
 
 most meritorious of the poor, an oppression of the 
 most unrelenting character. To prevent indus- 
 trious men, charged with families, and needing for 
 their support all the fruits of incessant labour, from 
 filling places made vacant by turn-outs, every ex- 
 pedient which ingenuity and malice can invent is 
 appealed to. If possible, such men are cajoled by 
 fair words ; if these fail, they are threatened ; and 
 if that does not succeed, they are then over- 
 whelmed with all the violence of a vulgar and re- 
 lentless persecution. However inoffensive, they 
 are assailed on their way to work. They are 
 beaten maimed, perhaps incurably oil of vitriol 
 is thrown in their eyes in some instances they 
 are made blind for life in others killed.* All 
 
 * The following extracts will show what a spirit pervades 
 these associations both in Great Britain and the 'United States. 
 Says Mr. George Rogle, when on oath before the British Par- 
 liament : " I have had several turn-outs. 1 will relate the cir- 
 cumstances of the last, which took place on the 16th of Octo- 
 ber, 1830, and continued till the 17th of January, 1831. The 
 whole of our spinners, whose average (weekly) wages were 
 21. 13s. 5d., turned out at the instigation, as they told us, of the 
 delegates of the Union. They said they had no fault to find 
 with their wages, their work, or their masters, but the Union 
 obliged them to turn out. The same week three delegates 
 from the Spinners' Union waited upon us at our mill, and dic- 
 tated certain advances in wages and other regulations, to which, 
 if we would not adhere, they said that neither our own spinners 
 nor any other should work for us again. Of course we de- 
 clined, believing our wages to be ample, and our regulations 
 such as were necessary for the proper conducting the establish- 
 ment. The consequences were, they set watches on every 
 avenue to the mill, night and day, to prevent any fresh hands 
 coming into the mill, an object which they effectually attained 
 by intimidating some, and promising support to others (whom I 
 got into the mill in a caravan) if they would leave their work." 
 Mr. Graham, another witness, adds : 4< They will abuse any- 
 body that comes in the most shocking manner, even to taking 
 their lives if it were .necessary. Within a week before I left 
 
POLITICAL ECONOMY. 275 
 
 this has been done, over and over again, as an ap- 
 propriate and necessary step in that series of 
 
 Glasgow, they beat a person, and he came back to the work 
 frightened and alarmed, and he was obliged to go out. Some 
 years ago there were several people almost destroyed by vitriol 
 being thrown upon them by combined men." 
 
 The New- York Journal of Commerce of February 26, 1836, 
 has the following: "On the 23d instant, the riggers and ship- 
 labourers turned out in large numbers, and went about the 
 wharves in a body, compelling such of their profession as they 
 found at work to quit the business in which they were engaged. 
 Almost simultaneously, a squad of day-labourers of another de- 
 scription, chiefly foreigners, went through the burned district, 
 compelling their fellow-labourers about the premises to quit 
 work, because they were receiving $1 a day instead of $1 25, 
 which the&^ imported dictators had determined was the rightful 
 sum." 
 
 In the New- York American of about the same date we find the 
 following : " A seafaring man, from exposure to severe weather, 
 was. on his arrival in port, sent to the city hospital, where his 
 general health was restored, but both feet were lost. Being 
 cured, he could no longer, by the rule of the hospital, be kept 
 there ; yet to send him forth such a cripple was to consign him 
 to starvation. Some of the governors, therefore, caused artifi- 
 cial feet to be made for him at a cost of 70 dollars, and then, as 
 he said he had been accustomed on shipboard to handle the 
 sail-needle, obtained employment for him with a sailmaker, and 
 placed him in special charge of the foreman of the loft, with 
 the request that he might be suffered to earn whatever he could. 
 The cripple, happy and grateful, went to his new trade, arid for 
 two days was unmolested, as was his employers ; and it was 
 ascertained that by such work he could earn enough to keep 
 him above want. On the third day, a deputation from the 
 Trades' Union went to the sailloft forbade the employment of 
 that helpless sailor forbade him, in like manner, to work and 
 he was obliged to relinquish the place. The governors of the 
 hospital received him back within their walls, or he would have 
 been left without a meal or a place to lay his head." 
 
 We add one more case. " In March, 1836, a number of 
 journeymen granite cutters, not members of the Union, were 
 obliged to combine in order to protect themselves against its 
 machinations. In their manifesto they declare that the Unions 
 had formally proscribed all journeymen who refused to join or 
 co-operate with it ; had undertaken to prevent such journeymen 
 from obtaining employment in any town in the United States 
 
276 POLITICAL ECONOMY. 
 
 measures which was to end in a triumph over the 
 employer. We are aware that it is often said that 
 these outrages are not to be charged upon the Soci- 
 ety ; that they are the unadvised acts of individuals 
 misled by passion, and perhaps not connected with 
 the Union. But who will point us to a protracted 
 strike which was unattended with such outrages ? 
 or who will say that it is not to protracted strikes 
 that the Union, when engaged in a controversy 
 with employers, always makes its ultimate appeal I 
 Indeed, who does not see that these acts of vio- 
 lence are the natural result of doctrines and sug- 
 gestions so incendiary as are those industriously 
 put forth by the orators and presses of the associ- 
 tions ? What better could be expected from men 
 who are incessantly taught that they are cheated 
 and trodden on ; that their employers riot on the 
 hire which has been kept back by fraud from them ; 
 and that, unless they rise in their strength, and 
 quickly too, they must be irredeemably enslaved T. 
 4. The policy of Trades' Unions is at war with 
 the rights of young men about to enter the trades 
 as apprentices. Early in life it devolves on every 
 young man to make choice of his profession ; and 
 it is a choice not only important, but, on many ac- 
 
 where Trades' Unions were established; had, to use their own 
 phrase, nullified two yards, because their proprietors had re- 
 fused to discharge a foreman at the bidding of the Union ; had 
 threatened death, tar and feathers, battery, and every species of 
 personal indignity, to those who might presume to labour in 
 those yards ; and, to intimidate strange journeymen, had de- 
 clared that, unless they acquiesced, they would for ever be ob- 
 jects of persecution ; had seduced apprentices from the nullified 
 yards, and forced them as journeymen upon others ; and that 
 such proceedings had caused contracts to the amount of 
 $250,000 to be removed to other states." 
 
POLITICAL ECONOMY, 277 
 
 counts, eventful. In this country, it has been thus 
 far the peculiar privilege of our youth that they 
 have had the " world before them where to choose." 
 They have been subjected to no galling restrictions, 
 like those which prevail in other lands,* and which 
 
 * " When you consider that no man can be a master printer 
 in France without a license, and that only eighty licenses were 
 granted in Paris, it is by no means wonderful that the journey- 
 men, forbidden by law to set up for themselves, and prevented 
 by the power-presses from getting work from others, should be 
 deeply dissatisfied. 
 
 " In England it is exceedingly difficult for a mechanic to get 
 what is called a settlement in any town except that in which he 
 was born or where he served his apprenticeship. The resort of 
 mechanics from place to place is permitted only on conditions 
 with which many of them are unable to comply. The conse- 
 quence is, they are obliged to stay where they were born, where, 
 perhaps, there are already more hands than can find work ; and, 
 from the decline of the place, even the established artisans want 
 employment. 
 
 " In other countries, singular institutions exist, imposing op- 
 pressive burdens on the mechanical class. I refer now more 
 particularly to the corporations, guilds, or crafts, as they are 
 called ; that is, the companies formed by the members of a par- 
 ticular trade. These exist with great privileges in every part of 
 Europe ; in Germany, there are some features in the institution, 
 as it seems to me, peculiarly oppressive. No one is allowed to 
 set up as a master-workman in any trade unless he is admitted 
 as a freeman or member of the craft ; and such is the stationary 
 condition of most parts of Germany, that I understand that no 
 person is admitted as a master-workman in any trade, except to 
 supply the place of some one deceased or retired from business. 
 When such a vacancy occurs, all those desirous of being per- 
 mitted to fill it present a piece of work, executed as well as 
 they are able to do it, which is called their master-piece, be- 
 ing offered to obtain the place of a master-workman. Nomi- 
 nally the best workman gets the best place ; but you will easily 
 conceive that, in reality, some kind of favouritism must gener- 
 ally decide it. Thus is every man obliged to submit to all the 
 chances of a popular election whether he shall be allowed to 
 work for his bread, and that, too, in a country where the people 
 are not permitted to have any agency in choosing their rulers. 
 But the restraints on journeymen in that country are still 
 more oppressive. As soon as the years of apprenticeship have 
 A A 
 
278 POLITICAL ECONOMY. 
 
 debar the young adventurer from various privileged 
 crafts, and confine him, moreover, to one place of 
 abode. As they have been left free to make them- 
 selves masters of any preferred trade, so they are 
 at liberty to prosecute it, in whatever way and at 
 whatever place they may desire. And to this fact 
 we ought, doubtless, to attribute much of the un- 
 paralleled enterprise and prosperity of our country. 
 Mr. Gallatin, than whom, perhaps, no one now liv- 
 ing is more capable of forming, on this point, a cor- 
 . rect opinion, uses this language : " No cause has, 
 >/ perhaps, more promoted in every respect the gen- 
 eral improvement of the United , States, than the 
 absence of those systems of internal restriction and 
 monopoly which continue to disfigure the state of 
 society in other countries. No laws exist here di- 
 rectly or indirectly confining men to a particular 
 occupation or place, excluding any citizen from any 
 branch he may at any time think proper to pur- 
 sue. Industry is in every respect free and unfet- 
 tered ; every species of trade, commerce, and pro- 
 fessions and manufacture being equally open to all, 
 without requiring any regular apprenticeship, ad- 
 mission, or license. Hence the improvement of 
 America has led not only to the improvement of 
 her agriculture, and to the rapid formation and set- 
 tlement of new states in the wilderness, but her 
 
 expired, the young mechanic is obliged, in the phrase of the 
 country, to WANDER for three years. For this purpose he is 
 furnished, by the master of the craft in which he has served his 
 apprenticeship, with a duly authenticated wandering book, with 
 which he goes forth to seek employment ; and three years must 
 be spent in this way before he can be anywhere admitted as a 
 master." Essay on the importance to practical men of Scien. 
 tific Knowledge, &c., by Edward Everett, 1831. 
 
POLITICAL ECONOMY. 279 
 
 citizens have extended her commerce to every part 
 of the globe, and carry on with complete success 
 even those branches for which a monopoly had 
 heretofore been considered essentially necessary." 
 Now we object to Trades' Unions that they 
 tend to destroy this freedom, which is the birth, 
 right of our people, and the great spring of their 
 prosperity ; and to substitute for it a system of re- 
 strictions more odious than any known in the rot- 
 ten boroughs of England or the trading guilds of 
 Germany. Journeymen perceive that, if their num- 
 ber were reduced, or if their masters, instead of 
 employing a large proportion of apprentices, could 
 be compelled to employ only journeymen, or a much 
 larger proportion of them, the inevitable effect 
 would be to increase the demand for their services, 
 and by this means to raise their wages. Hence 
 the Unions propose to limit the number, some- 
 times of journeymen, buV more commonly, of ap- 
 prentices ; and to allow no apprentice to become a 
 journeyman till he shall have passed through a pro- 
 tracted term of service. We are aware that the 
 American Unions have not in all cases avowed 
 this policy, and that many of the more reflecting 
 members condemn it. We should be amazed, in- 
 deed, if they were prepared deliberately to trans- 
 plant to this free and generous soil the remnants 
 of a barbarism which can hardly be maintained in 
 any government of Europe. Yet, averse as they 
 may feel to it, they will be constrained, like their 
 predecessors on the other side of the Atlantic, to 
 give it place. " I was not aware," says a factory 
 commissioner in Scotland, " until I was engaged in 
 the investigation at Glasgow, that the operatives 
 
280 POLITICAL ECONOMY. 
 
 there have so completely organized their associa- 
 tion as not only to prescribe the wages to be paid 
 to the members of the association, but to all other 
 persons, from whatever quarter they may come ; 
 that, farther, no male worker, not entered with them, 
 is allowed to work at all without their consent and 
 the concurrence of the association ; and never 
 without making a payment to them at the begin- 
 ning, and continuing a weekly payment at the same 
 rent as their own afterward : that females, however 
 able, are not allowed to become spinners, or to be 
 engaged as such ; and that it is hardly in the power 
 of a piecer, that is, of an assistant to a spinner, to 
 learn the business of a spinner unless he is related 
 to a spinner who will bring him forward ; that, in 
 short, the object of the Glasgow Association is to 
 make their company A CLOSE CORPORATION, access- 
 ible only to those whom they choose to admit, and 
 not only to prevent all others from becoming spin- 
 ners by their regulations, but, by a system of intimi- 
 dation, which they successfully carry into execution, 
 absolutely by physical force." That the same sys- 
 tem has been pursued to a considerable extent by 
 many of the associations in this country, is evident 
 to every one acquainted with their proceedings, and 
 must be apparent, indeed, from the facts which we 
 have already stated. It cannot be necessary for 
 us to insist that it involves an. infraction of the 
 rights of young men, and an injury to the commu- 
 nity even more flagrant than those occasioned by 
 the ancient restrictions still maintained in Europe. 
 The latter originated at a period when the trades 
 needed some peculiar privileges to enable them to 
 command the services of a sufficient number of 
 
POLITICAL ECONOMY. 281 
 
 workmen, and to make the requisite improvements. 
 They are clearly defined by law, and cannot be 
 stretched to suit the pleasure of any association ; 
 least of all, to suit the pleasure of an irresponsible 
 combination. The former, on the contrary, are 
 unnecessary ; and they are so entirely vague, and 
 applied by men so far beyond control, that there 
 is not only room for, but constant invitation to 
 abuse. When such attempts to fetter industry are 
 made by an organized association in this age and 
 in this land made, too, by men whose warcry is 
 liberty, and who are always denouncing the op- 
 pression and hoary corruptions of the Old World 
 one cannot but recall the language of a great states, 
 man when speaking of a kindred topic : " Seldom," 
 says he, " have two ages the same fashion in their 
 pretexts, and the same modes of mischief. Wick- 
 edness is a little more inventive. While you are 
 discussing the fashion, the fashion has gone by. 
 The very same vice assumes a, new body. The 
 spirit transmigrates ; and, far from losing its prin- 
 ciple of life by the change of its appearance, it is 
 renovated in its new organs with the fresh vigour 
 of a juvenile activity. It walks abroad, it continues 
 its ravages, while you are gibbeting the carcass 
 or demolishing the tomb. You are terrifying your- 
 selves with ghosts and apparitions, while your 
 house is the haunt of robbers. It is thus with all 
 those who, attending only to the shell and husk of 
 history, think they are waging war with intoler- 
 ance, pride, and cruelty ; while, under colour of ab- 
 horring the ill principles of antiquated parties, they 
 are authorizing and feeding the same odious vice 
 in different factions, and perhaps in worse." 
 A A 2 
 
\\ 
 
 282 POLITICAL ECONOMY. 
 
 We have thus far spoken of the injustice in, 
 volved in the very conception of Trades' Unions, 
 and the still greater injustice perpetrated by them 
 in their course of operations. And, of itself, this 
 would seem sufficient to seal their condemnation. 
 However efficient these associations might be in 
 advancing the working classes, it is a fatal objec- 
 tion that they can do so only by inflicting injury 
 on the community at large. How much more ob- 
 noxious, then, must they be to condemnation, if we 
 succeed in proving, as we propose to do, that they 
 must fail even in this, their most cherished end ; 
 and that, instead of promoting the pecuniary inter- 
 ests of working men, they must ultimately and se- 
 riously interfere with those interests. This con- 
 stitutes our second objection to Trades' Unions ; 
 that they are working their own discomfiture by 
 contributing to reduce, rather than increase, the ap- 
 propriate influence of the industrious classes. 
 
 VIII. EFFECTS OF COMBINATIONS ON MEMBERS. 
 
 They do this by disregarding a great and funda- 
 mental law of economics ; by arraying, indeed, 
 the whole force of that law against the pecuniary 
 welfare of the labouring man. Men are strong 
 just in proportion as they understand and respect 
 the inviolable and resistless laws of Nature, which 
 are nothing less than laws of God. While they 
 enlist such laws in their behalf, they are mighty. 
 When they undertake to thwart and resist them, 
 ultimate defeat is certain. Now the great law 
 which must regulate the wages of all labour is 
 found in the proportion between supply and demand ; 
 or, in other words, between the number of labourers 
 
POLITICAL ECONOMY. 283 
 
 and the quantity of employment. If there be many 
 labourers and little employment, as in some older 
 countries, wages will be low, because workmen, in 
 their competition for employment, will underbid 
 each other. If, on the other hand, there be much 
 employment and but few labourers, wages must, 
 for a corresponding reason, be high ; since em- 
 ployers will compete for hands, and, consequently, 
 overbid each other. If the number of labourers 
 should be sufficient to meet the demand, wages in 
 such case would be high or low, according to the 
 productiveness of the employment, or, in other 
 words, according to the amount of profit yielded by 
 it to the employer. If the number of labourers be- 
 come a little too great for the demand, wages must 
 be depressed, and that depression, being attended 
 by a kind of panic, will generally be too sudden 
 and great ; whereas, if the quantity of employment 
 be a little too great, there will, for a similar rea- 
 son, be too great and sudden a rise. 
 
 But little reflection is necessary to show that 
 this law must govern the rate of wages, in spite 
 alike of masters and men. Nothing can prevent 
 them from fluctuating but a combination of mas- 
 ters and men against the community, for the pur- 
 pose of regulating both the supply and the demand. 
 It is by no means in the power of the employers, 
 as the labourer may suppose, to prevent an occa- 
 sional fall in wages, any more than it is in the 
 power of a grocer to prevent the commodities in 
 which he deals from sometimes falling. A grocer, 
 doubtless, would like at all times to obtain for such 
 commodities the very highest price which was ever 
 paid for them. But he well knows that this is im- 
 
284 POLITICAL ECONOMY. 
 
 possible : when the market is overstocked, and 
 every dealer is anxious to sell, nothing, it is evi- 
 dent, can prevent a decline in prices but a combi- 
 nation among merchants throughout the country ; 
 and such a combination would be justly regarded 
 by the public as little better than robbery. Hence 
 the merchant consoles himself, even though he sells 
 at a loss, by the reflection that the same law which 
 induces this loss, will presently yield him, in an- 
 other quarter, a corresponding gain. Who would 
 not resist, as equally inexpedient and unjust, any 
 attempt to fix at an unalterable rate the price of 
 tea, sugar, or flour ? And who does not see that 
 the same principle must hold in regard to the price 
 .of labour ? Suppose there is employment for but 
 eighty hands when a hundred are in quest of it ; 
 inust tw.enty of these hundred be left unemployed, to 
 starve, that the remaining eighty may receive full 
 wages ? Thus we are brought to the conclusion, 
 that if wages are too low, they can be raised per- 
 fn.anently only by diminishing, on the one hand, the 
 supply of labour, or by raising, on the other hand, 
 the demand for it. Now we object to combina- 
 tions and turn-outs that they are not calculated to 
 do either ; nay, that in most cases they do, with 
 respect to each, precisely the reverse ; and thus 
 tend in two ways to aggravate the difficulties un- 
 der which journeymen mechanics are said to la- 
 bour . Instead of lessening the supply of labour, 
 they increase it; and, instead of increasing the de- 
 mand for it, they lessen that demand. This is an 
 important point. 
 
 I. Combinations and strikes tend to increase the 
 supply of labour, and by that means to dimmish 
 
POLITICAL ECONOMY. 285 
 
 wages. For a brief season these strikes may be 
 successful, and may occasion an advance in wages. 
 Employers are unwilling to contend. It is against 
 fearful odds in respect to numbers, while it tends 
 to interrupt their business and occasion severe 
 losses ; and they submit, therefore, in the hope 
 that relief may soon present itself. Now what 
 must be the effect of the advance in wages which 
 is thus gained by the workman ? Previously higher 
 than wages in other countries, or in other pursuits 
 in our own country, this advance makes them a 
 still more tempting mark. The consequence is, 
 that more foreign mechanics are attracted to our 
 shores to compete with domestic labour ; more 
 young men are induced to abandon their farms, 
 and throng our towns and cities in order to learn 
 trades. And, farther, since these Unions operate 
 with the greatest power and success along the sea- 
 board, workmen linger there, waiting a rise of 
 wages, and carrying out a contest with masters, 
 when their own welfare and that of the country is < 
 loudly inviting them to the West. Thus the very 
 success in which the Union glories, soon raises 
 round its members a large crowd of competitors, 
 and prepares the way for a humiliating reverse. 
 
 Such reverse can be averted in but one way, 
 and that is, by converting each trade into a close 
 corporation ; putting up at its entrance barriers 
 over which no one shall be allowed to pass except 
 with the consent of its members. But this can 
 never be accomplished in America. It is too re- 
 pugnant to the spirit of the people. Indeed, the 
 very foreigners who come here to establish Trades' 
 Unions, and enlighten us in regard to our liberties 
 
286 POLITICAL ECONOMY. 
 
 and rights, would be the first to denounce such an 
 attempt ; while the great law which must always 
 cause supply to follow demand, would be sure to 
 defeat it. Still the attempt may, and, doubtless, will 
 be made ; serving for a while to throw embarrass- 
 ments in the way of the young and enterprising, 
 but recoiling at last on its misguided authors. 
 
 II. The only circumstance which could coun- 
 teract this tendency in Trades' Unions to occa- 
 sion a decline of wages, would be found in the fact 
 that they increase the demand for labour, and that 
 they do this in a greater degree than they increase 
 the supply. Should it appear that such is, indeed, 
 their influence, then may they repair the evil which 
 they must otherwise occasion, and even leave the 
 country better by their establishment. But what, 
 in this respect, is the fact ? We affirm that the 
 whole tendency of strikes and Trades' Unions is 
 to lessen the demand for labour, even while they 
 add to the supply. 
 
 They do this in four ways : 
 
 1st. They lessen the ability of the community to 
 buy the products of labour. The demand for any 
 one of these products must depend, of course, on 
 the number of individuals who desire it, and who 
 possess, at the same time, the ability to purchase 
 it. This number is diminished by turn-outs and 
 combinations in three respects. 
 
 (a) A feeling of indignation is awakened, which 
 determines many persons to dispense with an ar- 
 ticle altogether rather than submit to expedients 
 for enhancing its price, which they dislike. 
 
 (b) Again : since raising the wages of those 
 who are employed in producing an article usually 
 
POLITICAL ECONOMY. 287 
 
 raises its price, it must have the effect of placing 
 that article beyond the reach of multitudes who 
 previously felt able to procure it, or, in other words, 
 lessens the demand for it. On the other hand, a 
 fall in the price of any desired article multiplies 
 purchases, and may thus be the means of advancing, 
 for a season, the wages of those who produce it. i 
 (c) But a much more important consideration 
 is, that strikes, by throwing labourers out of em- 
 ployment, and by converting them, for a time, into 
 mere consumers, contribute much to lessen the 
 whole amount of wealth in the community, and, of 
 course, to lessen its ability to buy the products of 
 labour. If one hundred men, whose services are 
 each worth a dollar per day, turn out, and continue 
 unemployed for thirty days, it is obvious that the 
 community suffers a clear loss of $3000, which falls 
 in part on the labourer, in part on the employer, 
 and in part on the public generally. In truth, the 
 total loss must amount, as we shall perceive here- 
 after, to much more than this sum ; and it evidently 
 goes to diminish, by its whole amount, the ability 
 of those who have been accustomed to buy the 
 products of labour to buy farther. If the example 
 of these men were to be followed by all labourers, 
 so that the whole community did nothing to repro- 
 duce, but became mere consumers, it is obvious 
 that all property would in the end be destroyed, 
 and there would be no capital either to employ 
 labour or to purchase its products. And the ef- 
 fect which would thus ensue on the cessation of all 
 labour, must inevitably ensue in part wherever there 
 is a suspension of labour. It tends, by impoverish- 
 ing a people, to lessen the number of buyers, and, of 
 
288 POLITICAL ECONOMY. 
 
 course, to diminish the demand for productive in- 
 dustry. 
 
 2d. Combinations and strikes lessen tlie demand 
 for labour, by lessening the number and ability of 
 employers. 
 
 (a) The number of employers in any trade, i. e., 
 the number of persons who invest capital and tal- 
 ent in it, will be proportioned to the ease, certainty, 
 and extent with which profits can be gained. Now 
 all three of these are diminished by strikes. Busi- 
 ness can be conducted with little ease or certainty 
 when we are liable every week to have a contest 
 with our workmen : a contest in which our opera- 
 tions are suspended, our feelings harassed, and, per- 
 haps, most important interests sacrificed. Hence 
 those already in business are often led by these 
 controversies to embrace the first opportunity of 
 escaping from it ; and others who are looking 
 round for a safe and agreeable investment, are 
 careful to shun one which is liable, to such con- 
 vulsions. We have heard of several cases in 
 which large amounts of capital have been with- 
 drawn from Great Britain merely on account of 
 the losses and vexations occasioned by Trades' 
 Unions ;* and we doubt if any employer ever 
 
 * " The practical examples which I could cite of detriment 
 to operatives from unreasonable or unjust pretensions, are nu- 
 merous. A considerable number of lace-frames were removed 
 from Nottinghamshire to the western counties in consequence 
 of the combinations of workmen. In the 4th Parliamentary 
 Report respecting Artisans and Machinery, it is related that 
 one of the partners of an extensive cotton factory at Glasgow, 
 fettered and annoyed by the constant interference of his work- 
 people, removed to the State of New- York, where he re-estab- 
 lished his machinery, and thus afforded to a rival community at 
 once a pattern of our best machinery, and an example of the best 
 
POLITICAL ECONOMY. 289 
 
 passed through the difficulties incident to a pro- 
 tracted strike without conceiving a thorough dis- 
 gust for the place and for his business. Does this 
 augur well for the workman? In diminishing the 
 number of employers, does he not diminish the de- 
 mand for his own labour 1 Suppose the branch in 
 which he is skilled should become the abhorrence 
 of all capitalists, so that no one could be induced 
 to invest in it. Would it not be fatal to him ? How 
 but injurious can it be, then, to render it odious to 
 many or to a few of them ? We should suppose 
 that prudent men, who looked beyond the gratifi- 
 cation of silly passion to a permanent improvement 
 of their condition, would desire to commend their 
 business and themselves to the good-will of every 
 capitalist throughout the land. 
 
 If we consider strikes as they operate on the 
 extent of profit, we shall find that the effect is the 
 same. They tend, and may be said to aim, to re- 
 duce the profits of the employer; to transfer a 
 portion of them from his pockets to those of the 
 workman. Now we do not contend that employ, 
 ers receive, in no case, too large a proportion of 
 the proceeds of a business; that. they in no case 
 prosper at the expense of the employed. But we 
 do say that it is by no means the interest of the 
 Workman to reduce greatly the master's profits. 
 There never was a greater error than to imagine 
 that large profits are incompatible with high wages, 
 and that we can maintain the latter only by de- 
 pressing the former. The reverse is rather true ; 
 
 mode of using it. The croppers of the West Riding of Yorkshire, 
 and the hecklers or flax-dressers, can ' unfold a tale of wo' on this 
 very subject." Wade's History of the Working Classes, p. 282. 
 
 BB 
 
290 POLITICAL ECONOMY. 
 
 for, let it be considered, what must be the natural 
 effect of high profits 1 Evidently it must be to at- 
 tract other capitalists into the business, thus to mul- 
 tiply employers, and, by exciting a competition 
 among them in their demand for labour, to raise 
 wages. On the other hand, depress profits, and 
 you drive many from the business, while you deter 
 others from entering it. Facts demonstrate the 
 truth, as argument does the reasonableness, of this 
 doctrine. In no country has the employer and the 
 capitalist received larger returns than in this, and 
 in none has the labourer received higher wages. 
 As, on one hand, capital increases in a country in 
 proportion to the profits received from trade, man- 
 ufactures, &c., so, on the other, whenever it in- 
 creases faster than the population, the demand for 
 labour will constantly rise faster than the supply, 
 and the rate of wages, reckoned by the comforts 
 over which they give the workmen command, will 
 gradually, though perhaps slowly, increase. Such 
 has been the case in this country, as Mr. Carey has 
 shown at length in his work on Wages. Though 
 there may be causes in particular places or coun- 
 tries, such as excessive competition, a sudden rise 
 in rents or taxation, to counteract the operation of 
 this law, yet its truth stands unshaken, and has re- 
 ceived among us the amplest confirmation. 
 
 (b) Thus, then, do strikes contribute to lessen 
 the demand for labour, and, by consequence, the 
 rate of wages, inasmuch as they lessen the num- 
 ber of employers and the amount of capital invest- 
 ed in a trade. They tend yet farther to the same 
 result by lessening the ability of employers. By 
 every strike the whole community suffers loss. 
 
POLITICAL ECONOMY. 291 
 
 Not an individual escapes. The workman is the 
 greatest loser in proportion to his means. The 
 employer is vastly the greater loser in amount. 
 He loses interest on the capital which he has in- 
 vested in machinery, materials, &c., for a period 
 equal to the continuance of the strike. He loses 
 by the injury which this. machinery and material 
 suffers from lying unemployed. He loses yet 
 farther by having his plans frustrated, his con- 
 tracts rendered void, and, perhaps, his credit shaken 
 or ruined. It is not to be denied that strikes do 
 give to workmen a great and fearful power over 
 the welfare and prosperity of employers. But it 
 is a power which they no sooner wield than it re- 
 coils with redoubled and fatal violence upon them- 
 selves. Workmen sometimes exult in the fact that 
 they can ruin their masters. But would it not be 
 wise for them to consider whether, in striking that 
 blow, they do not strike also at the foundation of 
 their own prosperity ? Suppose the work of ruin 
 should advance until all employers were prostrated, 
 and all capital destroyed or driven from their branch 
 of business. Would it be a victory to triumph 
 over ? Would not the very same note that sound- 
 ed that victory, sound yet louder the knell of their 
 own best hopes 1 Where would the men be, if 
 there were no employers to hire and pay them ? 
 And if the ruin of all the employers would inevi- 
 tably be the ruin of all the men, then surely the 
 ruin of some of the employers can hardly redound 
 to the advantage of any of the men. 
 
 It should never be forgotten, that the rate of 
 wages must always depend on the ability of the 
 community in which the labourer lives, first to 
 
292 POLITICAL ECONOMY. 
 
 produce, and then to buy, the fruits of his indus- 
 try ; and that, since strikes tend directly to lessen 
 such ability, they must, in the end, lessen the de- 
 mand for labour, and, of course, its wages. There 
 is another way, also, in which this same tendency 
 must manifest itself. Much of the industry of this 
 country is employed in competing with foreign in- 
 dustry, i. e., in producing articles like those which 
 foreign nations pour in upon us ; and, of course, this 
 industry can be sustained only so long as it furnish- 
 es the native commodity at a rate cheaper than that 
 which must be paid for an imported one of the same 
 quality. But any material advance in the wages 
 paid to workmen would render this impossible; 
 employers would find it necessary to abandon such 
 branches of business, and the workman would be 
 left without occupation, 
 
 3d. There is another way in which strikes and 
 combinations tend to depress wages, and that is, by 
 the introduction of machinery. We are far from 
 believing that machinery has any permanent ten- 
 dency to injure the labouring classes or to diminish 
 the demand for labour. On the contrary, we be- 
 lieve, and all experience proves, that by cheapen- 
 ing the products of labour, and thus increasing the 
 demand for them, such improvements ultimately 
 put in requisition more hands than they suppress. 
 Still it must be admitted, that the immediate effect 
 of substituting automatic for manual labour is to 
 throw a number of men out of employment ; and, by 
 overstocking the market of labour, to occasion a tem- 
 porary depression in wages. And it is this imme- 
 diate effect of machinery which labourers so much 
 dread. Having neglected, in many cases, to make 
 
POLITICAL ECONOMY. 293 
 
 provision for the future, they can ill afford to wait 
 for remote, and, as they think, impossible advan- 
 tages ; and hence the deep dislike and alarm with 
 which they contemplate any proposed invention. 
 Now the point to which we would ask the partic- 
 ular attention of the Trades' Union is, that by 
 combination and strikes they inevitably multiply 
 such inventions. Proprietors who have been once 
 subjected to the dictation of their men, will be 
 found most anxious to replace those men by agents 
 that can neither strike, nor tire, nor murmur ; by 
 agents, too, that move with a precision and a pow- 
 er unattainable by man. If such agents have not 
 yet been devised, science will be laid under con- 
 tributions to furnish them, and money will be paid 
 freely, and even lavishly, to quicken the flagging 
 steps of invention. It is a fact, which ought to be 
 imprinted on the minds of these men, that some of 
 the noblest triumphs of modern art have had their 
 origin in the oppressive and disorderly combina- 
 tions of workmen ; and that scarcely one memo- 
 rable strike has taken place in Great Britain with- 
 in the last twenty years, that did not give rise to 
 the introduction of new and important labour-sa- 
 ving machinery.* 
 
 * " During my late residence among the factories, several 
 facts illustrative of the injuries inflicted on their own body by 
 the Unions pressed themselves on my consideration. The fine 
 spinners in Manchester, who have long enjoyed the highest 
 wages of almost any class of workmen in the world, and are 
 still, as we have shown, liberally paid, were the first who began 
 to exercise control over their masters, and to convert their 
 trade into an exclusive corporation in the rotten-borough style.f 
 
 I " I recollect a turn-out in 1802, which lasted from fourteen to fifteen 
 weeks ; that was for wages ; and at that time a good mule-spinner could 
 obtain 60s. ($14 to 15), and the turn-out was among them, as it alwaya 
 
294 POLITICAL ECONOMY. 
 
 4th. We have thus pointed out several ways in 
 which these associations would ultimately operate 
 
 The masters finding, after many struggles renewed from time 
 to time, that a reduction of wages commensurate with the fall 
 in the price of goods could not be effected, had recourse to an 
 expedient which the workmen could not decently oppose, be- 
 cause its direct tendency was to raise, or, at least, to uphold the 
 wages of each spinner, although it diminished the numbers ne- 
 cessary for the same quantity of work. This expedient con- 
 sisted in enlarging the spinning-frames, so that one spinner 
 comes to manage a pair of mules containing from 1500 to 2000 
 spindles, and to supersede the labour of one or two companion 
 spinners. I am well assured that, but for the extravagant pre- 
 tensions of the ruling committee, this catastrophe would not 
 have befallen the operatives for many a day to come, for two 
 reasons ; because, first, the extension of the mule is a very 
 costly affair ; and, secondly, it requires the line of spindles to 
 be placed parallel to the length of the apartments instead of 
 their breadth the position generally designed, and the one best 
 suited for throwing light on the yarns." 
 
 So in the factories for spinning coarse yarn for calicoes, fus- 
 tians, and other heavy goods. " During a disastrous strike at 
 Hyde, Stayley-bridge, and the adjoining factory townships, sev- 
 eral of the capitalists, afraid, of their business being driven to 
 France, Belgium, or the United States, had recourse to the cel- 
 ebrated machinists, Messrs. Sharp and Co., of Manchester, re- 
 questing them to direct the inventive talents of their partner, 
 Mr. Roberts, to the construction of a self-acting mule. The 
 problem did not puzzle him long ; for, to the delight of the mill- 
 owners, who ceased not to stimulate his exertions by frequent 
 visitations, he produced, in the course of a few months, a ma- 
 chine apparently instinct with the thought, feeling, and tact of 
 an experienced workman. The news of this iron man, as the 
 operatives fitly called it, spread dismay through the Union ; and, 
 long before it left its cradle, so to speak, it strangled the Hydra 
 of misrule." 
 
 " Another illustration of this truth occurs in modern calico- 
 printing. In the spirit of Egyptian taskmasters, the operative 
 printers dictated to the manufacturer the number and quality of 
 the apprentices to be admitted into the trade, the hours of their 
 own labour, and the wages to be paid them. At length capital- 
 ists sought deliverance from this bondage in the resources of 
 science; and the four and five colour machines, which now 
 
 has been ; those who get moderate wages never turn out." Aaron Lees, 
 Esq., in First Factory Comm. Keport, D. 2, p. 91. 
 
POLITICAL ECONOMY. 295 
 
 to reduce wages, even if they were left to them- 
 selves. But this can hardly be hoped. There is 
 another result still more disastrous, to which they 
 clearly tend, and which already begins to manifest 
 itself. This is, the formation of hostile combina- 
 tions among the masters. None can reprobate 
 more heartily than we do confederacies among 
 those whose wealth gives them a commanding in- 
 fluence over the welfare and subsistence of the 
 working classes. But if they are in danger of 
 being the victims of a confederacy, it is not sur- 
 prising that they should seek to enlist in their de- 
 fence an instrument which is likely to prove so fa- 
 tal when directed against them. In England this 
 means of protection has not always been resorted 
 to, because proprietors are engaged in so active 
 and keen a competition among themselves as to 
 render concert and co-operation almost impossible. 
 But in this country, where competition is less close, 
 and is conducted on more generous principles; 
 where the workman, too, has so little just cause 
 for complaint, and is able to exercise so powerful 
 an influence, there is every motive which interest 
 or sympathy can supply to produce union among 
 the employers. It will be produced. Already 
 
 render calico-printing an unerring and expeditious process, are 
 the results. " 
 
 " One day I observed placards posted throughout Manchester, 
 announcing that a considerable number of yarn-dressers for 
 power-loom weaving were wanted at a well-established factory, 
 and I was led to conclude that some of the best-paid artisans 
 had become refractory. A short time after, on entering the en- 
 gineering workshops of Mr. Lillie, I descried the corollary of 
 the strike in the form of a new apparatus, preparing for the 
 purpose of making free labourers to dress warp as well as the 
 monopolists, and with threefold expedition." Dr. Ure's Phi- 
 losophy of Manufactures, p. 365, et seq. 
 
296 POLITICAL ECONOMY. 
 
 the first steps are taken. In some trades and 
 places, the rallying- point has been established; 
 and it is for the Unions to say whether there 
 shall not be a gathering of all master mechanics, 
 who would enjoy the privilege of controlling their 
 own concerns, and escape the tyranny of a dark 
 and irresponsible junto. Should such a contest, 
 so organized, ensue, we need hardly say what 
 must be its issue : a contest in which men with 
 capital, talent, and influence, upheld by the sup- 
 port and sympathy of all other classes of their 
 fellow-citizens cheered on, too, we might add, by 
 the friends of liberty and good order throughout 
 the world, are arrayed against those who have no 
 capital, who are without sympathy even in their 
 own families,* and who have no power but the 
 reckless power of a mob. There may be violence 
 and wasting destruction. The torch of the incen- 
 diary may be applied to the shop, and even to the 
 dwelling of the master. It may become unsafe for 
 him to go forth by night, or even by day. Still 
 the issue is none the less certain. Workmen cannot 
 long subsist without food. Outrages such as we 
 have referred to cannot be perpetrated often, and 
 yet escape the arm of the law. In a country where 
 four fifths of the people belong to the agricultural 
 class, and find themselves injured by the proceed, 
 ings of Trades' Unions where cities, too, are not 
 yet so vast and so corrupt as to place all law at 
 defiance, combined workmen have little to expect 
 in the way either of victory or of immunity. De- 
 feat, punishment, and abject submission must be the 
 
 * It is difficult, we believe, to find advocates of Trades' Unions 
 among the wives of the members. 
 
POLITICAL ECONOMY. 297 
 
 result of a protracted and organized contest. Nor 
 will that be all. The men, by that contest, will have 
 taught their employers the fell power of a combina- 
 tion. They will have extinguished their kindly feel, 
 ings, and transformed them from friends into foes. 
 The public, weary at last of the din of the conflict, 
 may turn away, and leave both parties to seek mu- 
 tual redress and retaliation in one unending series 
 of wrongs. Is this a consummation to be wished ? 
 Is it well that different orders of our people should 
 thus be arrayed in deadly feud ; a feud which must 
 make the poor poorer, and teach the rich to riot 
 and glory in oppression ? Of all states of society, 
 we can imagine none more lamentable or fatal. 
 Let it once arise and continue, and servile classes 
 must be formed, servile wars ensue, castes, privi- 
 leged and unprivileged, be established ; and this, 
 the chosen land of freedom, become the land of 
 bondage and degradation. We do not contend 
 that all these evils are to be the consequence of the 
 present struggle between workmen and their em- 
 ployers. But we do say that such a struggle can- 
 not perpetuate itself, and be extended till it comes 
 to embroil men of all classes and pursuits, without 
 ending in a catastrophe too dreadful to think of. 
 
 It may be said, however, that all these evils 
 might be avoided if Trades' Unions could embrace 
 both masters and men, and thus arrange, by mu- 
 tual agreement, the rate of wages. In this way all 
 collision of interests might be prevented, and both 
 parties participate in due proportion of the profits 
 of business. And such, we appprehend, is the 
 hope and expectation of the more reflecting and 
 conscientious members of the Union, who have 
 joined it, not from factious motives, but from the 
 
298 POLITICAL ECONOMY. 
 
 honest desire of advancing their own order. But 
 even to such a plan there are insuperable objec- 
 tions. All history testifies that such combinations 
 will, in the end, prove to be combinations of one 
 class against the rest of the community ; plans to 
 advance the interests of a part at the expense of 
 the whole. The experiment was tried for ages in 
 Europe. Boroughs, corporations, and guilds were 
 all so many unions of masters and journeymen in 
 order to regulate the hours of labour, the number 
 of workmen, and the rate of wages ; and the con- 
 sequence was, that they "felt power and forgot 
 right ;" exacted prices from the purchaser, and 
 placed restrictions in the way of industry which 
 proved intolerable. The rise of Birmingham, 
 Manchester, Leeds, and other great trading towns, 
 is to be traced directly to the oppressive power 
 wielded by neighbouring boroughs ; a power which, 
 in effect, levied contributions on all the rest of the 
 community, and suffered no man to engage in trade 
 except as it suited their pleasure. Nor are such 
 combinations objectionable merely on account of 
 the injustice done to those not comprehended in 
 them. In the course of time they call down retri- 
 bution on themselves. By enhancing the cost of 
 articles to the consumer, they impel him to dis- 
 pense with them if it be possible, and thus they 
 tend directly to diminish the value of the labour 
 which is employed in producing them. Take the 
 following case, in which the whole power of the 
 British Parliament was invoked to sustain such a 
 combination, and invoked in vain : " The mechan- 
 ics, connected with the mystery of drapers, incor- 
 porated in the town of Shrewsbury, complained 
 
POLITICAL ECONOMY. 299 
 
 that artificers, neither belonging to their company 
 nor brought up to their trade, ' had of late, with 
 great disorder, upon a mere covetous desire and 
 mind, intromitted with and occupied the said trade, 
 having no knowledge, skill, or experience of the 
 same, and do buy, commonly and daily, such Welsh 
 cloths and flannels as is defective, and not truly 
 made, to the impeachment and hinderance of 600 
 people of the art or science of sheermen or frizers 
 within the said town, whereby as well they as 
 their poor wives and families are wholly maintain, 
 ed.' The Legislature listened to this representation, 
 and expelled the rival artisans. (8 Eliz., c. 7.) 
 Six years after, the act was repealed, with an 
 avowal that ' it is now likely to be the very greatest 
 cause of the impoverishing and undoing of the poor 
 artificers and others, at whose suit the said act was 
 procured ; for that there be now, since the passing 
 of the said act, much fewer persons to set them to 
 work than before.' (14 Eliz., c. 12.)" 
 
 We have thus spoken of the influence which 
 Trades' Unions are likely to exert in lowering the 
 wages of workmen, involving them in contests with 
 their employers, and preparing the way for their 
 permanent depression. There is another evil re- 
 sulting from them which merits solemn consider- 
 ation. It is the moral debasement to which they 
 lead. They congregate workmen, night after 
 night, in tumultuous assemblies, where their pas- 
 sions are inflamed- and their principles poisoned. 
 Possessed with the notion that the working class- 
 es are oppressed that their sufferings are not the 
 consequence of their own errors or misconduct, but 
 of the injustice of others these clubs make it the 
 
300 POLITICAL ECONOMY. 
 
 interest and the duty of every member to strength, 
 en such impression in his own mind, and to com. 
 municate it to others. Hence come discontent and 
 insubordination. From discontent and insubordi- 
 nation come strikes ; and strikes take men from 
 their proper pursuits, to spend whole days in the 
 streets or at the alehouse. Thus habits of indus- 
 try are weakened or destroyed ; and the mechanic, 
 accustomed, meanwhile, to draw subsistence from 
 the treasury of the Union, loses that lofty spirit of 
 independence, and that provident concern for the 
 future, which are the best security against both op- 
 pression and want. Tippling and gambling, of 
 course, are called in to fill up the vacant hours ; 
 and it is a fact, that men pass through but one or 
 two strikes before they become careless in regard 
 to their families, neglectful of their business, and 
 dissipated in their habits. On this point the ten- 
 dencies are so evident, and the facts so numerous 
 and incontestible, that we need not enlarge. 
 
 We have dwelt at such length upon the char- 
 acter of Trades' Unions, because they appear to 
 us to represent some of the most striking tenden- 
 cies, and to imbody some of the most dangerous 
 heresies of the age. They exhibit, on a small 
 scale, the disposition so widely prevalent in this 
 country, to substitute the power of associations or 
 parties for the authority of law, and to gain un- 
 righteous advantages by means of disciplined and 
 confederated numbers. They exhibit, too, the 
 alarming disposition which prevails among us, to 
 excite and foster jealousies between those who 
 ought to be perfectly united, and who, according 
 to the theory of our government, are all working 
 
POLITICAL ECONOMY. 301 
 
 men and all gentlemen. Their whole strength they 
 derive from the notion that there is an essential 
 opposition between the rights of capitalists and la- 
 bourers ; that the one class can be sustained and 
 advanced only by crippling the other. This error, 
 in which they take their rise, they contribute fear- 
 fully to strengthen and extend. We would hold it 
 up, therefore, to the consideration of the philan- 
 thropist and patriot. If they would see the spirit 
 of misrule and licentiousness exorcised, they must 
 labour more strenuously to let in light upon its dark 
 retreats. They must themselves strive, and incite 
 others to strive, that the knowledge of correct 
 principles and the influence of Christian morality 
 be spread among all the people. The zeal for 
 monopolies has been shaken among the mercantile 
 class, because they have gradually acquired more 
 just and enlarged views of their own interests. 
 Could such views be more thoroughly dissemina- 
 ted among the labouring classes, they too would 
 discover that they need no protection from orga- 
 nized Unions ; and that they best consult their own 
 prosperity, when they most respect the rights and 
 prosperity of others. But, above all, should re- 
 doubled efforts be made to spread among our coun- 
 trymen the influence of pure and undefiled religion. 
 Without this, we are lost : we may be lost soon. 
 Even now there is much in this young and favour- 
 ed land to awaken melancholy forebodings. Load- 
 ed with blessings, which make us the envy and ad- 
 miration of labouring men throughout the world, 
 we are yet discontented and factious. Clamorous 
 in the praise of our peculiar institutions, we yet 
 seem to understand but poorly their true nature or 
 C c 
 
302 POLITICAL ECONOMY. 
 
 value, or the dangers to which they are exposed. 
 Dependant for all our order and future welfare on 
 the due administration of law, we are yet constant- 
 ly taking or submitting to measures which tend to 
 prostrate the influence of courts and to overthrow 
 the authority of magistrates. Allegiance to party 
 is getting to be rewarded, we had almost said hon- * 
 oured, before allegiance to country ; while inde- 
 pendence of individual opinion and feeling is crush- 
 ed under the ruthless car of popular passion and 
 prejudice. Is there nothing in such a state of 
 things to excite alarm ? Is it not time, more than 
 time, that all who love their country should com- 
 bine to stay the progress of dangerous errors, to 
 allay the violence of faction, to promote kind feel- 
 ings among the various classes of our people, and 
 to build about our lovely heritage the sacred de- 
 fences of piety and truth ! 
 
SUMMARY OF PRINCIPLES. 
 
 CHAPTER I. 
 
 DEFINITION AND LIMITATION OF THE SCIENCE. 
 
 1. Political Economy shows how the happiness 
 of a nation can be best promoted by the production 
 and distribution of wealth. 
 
 2. It is limited, 
 
 1st, By its object, which is happiness, only so 
 far as that happiness depends on, or is influ- 
 enced by wealth. 
 
 3d, By its evidence, which is probable or mor- 
 al, not certain or demonstrative. 
 
 CHAPTER II. 
 
 RELATION OF WEALTH, LABOUR, AND HAPPINESS. 
 
 1. Wealth comprehends whatever has exchange- 
 able value, or, in other words, " all the purchase- 
 able means of human enjoyment." 
 
 2. Exchangeable value is given to different ob- 
 jects according, 
 
 1. To prevailing taste. 
 
 2. To proportion between demand and supply. 
 
 3. To amount of labour expended on their 
 production. 
 
304 SUMMARY OP PRINCIPLES. 
 
 3. Usually nothing has exchangeable value un- 
 less labour has been applied to it. 
 
 4. Labour is exertion for the sake of gain, which 
 creates new or adds to pre-existing values. 
 
 5. Labour conduces to happiness not only 
 through the values which it creates, but also by 
 affording occupation. 
 
 6. The severity of particular kinds of labour is 
 qualified in some cases by the peculiar taste of the 
 individual ; in all by habit, and by increased com- 
 pensation, or by the little knowledge and mental 
 effort required. 
 
 7. Labour, in order to conduce both to happi- 
 ness and production, must be, 
 
 1. Free in respect to direction and quantity. 
 
 2. Remunerated. Remuneration should be 
 sufficient to supply food, clothing, comforts, 
 and instruction to the labourer and his fam- 
 ily ; and also to afford a fund for sickness, 
 want of employment, and old age. 
 
 8. The happiness produced by a nation's wealth 
 is to be measured, not by the aggregate amount of 
 such wealth, but by the number of persons whom 
 it subsists in comfort. 
 
 9. To subsist in comfort requires, not luxuries, 
 but a supply for our physical, intellectual, and mor- 
 al wants. 
 
 10. Therefore the great object of Economical 
 Policy should be to secure such a supply for the 
 greatest possible number of people. 
 
SUMMARY OF PRINCIPLES. 305 
 
 CHAPTER III. 
 
 THE CONDITIONS OR ELEMENTS OF PRODUCTION. 
 
 These are : * 
 
 1. Labour, which has been discussed. 
 
 2. Private property, as opposed to community of 
 goods. This is founded, 
 
 1. In right; every man being entitled to ex- 
 clusive possession and control of the fruits 
 of his own industry. 
 
 2. Inexpediency; since men, if free to appro- 
 priate to themselves the results of their la- 
 bour, will be free also to select the occupa- 
 tion in which he can produce most, and will, 
 at the same time, be disposed to do more 
 work, and to do it better than if the pro- 
 ceeds were to go to the community. 
 
 3. Land, including all natural powers and agents 
 which can be employed in production. 
 
 4. Capital, i. e., the results of previous labour 
 saved by abstinence from immediate gratification, 
 and employed (whether as tools, machines, mate- 
 rials, subsistence for labourers, or money) in re- 
 production. 
 
 CHAPTER IV. 
 
 MEANS OF INCREASING THE PRODUCTIVENESS OF 
 LABOUR. 
 
 The general means treated of in this chapter is 
 CO-OPERATION, which may be resolved into, 
 Cc 2 
 
306 SUMMARY OF PRINCIPLES. 
 
 1. DIVISION OF LABOUR. This is indispensable 
 to any except the most scanty production. 
 
 (a) It augments production : 
 
 1. By leading to increased skill and manual 
 dexterity in workmen. 
 
 2. By saving time and economizing power. 
 
 3. By occasioning the invention of tools, ma- 
 chines, and new processes. 
 
 These advantages hold with respect to intellect- 
 ual as well as to manual labour. 
 
 (b) It arranges itself spontaneously under the 
 guidance of individual self-interest, &c., and 
 operates without jar or disturbance, as we see 
 in the supply of a great city with food. 
 
 2. EXCHANGE. This is inseparable from divi- 
 sion of labour. It takes the form of, 
 
 (a) Barter, i. e., exchange of commodity against 
 commodity. 
 
 (b) Currency, i. e., exchange through a common 
 medium called money. 
 
 (c) Credit. Utility of credit exemplified in Scot- 
 land and Bank of England. 
 
 For money, no substance is so good as the pre- 
 cious metals, because, 
 
 1. They best serve as a common measure of 
 value, being liable to the least fluctuation. 
 
 2. They are best fitted as a circulating me- 
 dium, since they are 
 
 (a) universally esteemed : 
 
 (b) do not lose much value by use or time 
 
 (c) contain much value in small bulk : 
 
 (d) admit of convenient subdivision : 
 
 (e) can be stamped. 
 
StJMMARY OF PRINCIPLES. 307 
 
 CHAPTER V. 
 
 COMPENSATION OF LABOUR, OR WAGES. 
 
 1. By wages we mean that portion of the joint 
 produce of capital and labour which falls to the la- 
 bourer's share. 
 
 Scholium. In this chapter we mean real, not 
 money wages ; i. e., wages estimated by their pow- 
 er of purchasing subsistence, not by their nominal 
 amount. 
 
 2. As labour becomes more productive through 
 subdivision of employments, machinery, and facil- 
 itation of exchanges, wages ought to rise. 
 
 3. Such would be the case if labour and ex. 
 changes were not unnecessarily embarrassed by 
 law, by combinations, or by ignorance. 
 
 4. Under the most equitable system, however, 
 the wages in different employments would be une- 
 qual. They must and ought to be proportioned, 
 
 I. To the productiveness of the labour, which 
 will depend, 
 
 1. On the labourer's ability, natural or ac- 
 quired. 
 
 2. On his moral worth or honesty, <fec. 
 
 II. To the time and expense previously re- 
 quired to prepare and educate the labourer. 
 
 HI. To the scarcity of such ability; which 
 scarcity tends continually to decrease from 
 spread of "knowledge, competition, &c. 
 
 5. When wages are permanently insufficient for 
 the comfortable support of the labourer, it must be 
 owing to his vice, ignorance, and improvidence, 
 
308 SUMMARY OF PRINCIPLES. ' 
 
 which depreciate the value of his services, or to 
 defects in the laws and usages which regulate his 
 compensation. The first can be obviated only by 
 raising the character of the labourer ; the second 
 partly by legislation, but more by the efforts of en- 
 lightened and philanthropic public sentiment. 
 
 CHAPTER VI. 
 
 LAND AND THE CONNEXION BETWEEN ITS PRODUC- 
 TIVENESS AND THE TENURE BY WHICH IT IS HELD. 
 
 1. By land, Political Economists understand 
 whatever natural powers (whether of soil, miner- 
 als, or water) are attached to the earth's surface. 
 
 2. These powers become productive only when 
 combined with labour ; with labour they can be 
 combined to no great extent till they are appro- 
 priated. Hence, 
 
 3. Property in land is the first and most essen- 
 tial condition of all production. 
 
 4. This property is held by various tenures ; 
 &nd, according to the tenures, other things being 
 equal, will be the productiveness. 
 
 I. In Asia, the proceeds of the soil are divided 
 between the occupant-labourer (or ryot), 
 the tax-gatherer (or zemindar), and the sov- 
 ereign. The two former have each an he- 
 reditary and transferable interest in the 
 i produce. The sovereign, being absolute, 
 
 generally exacts as much as he can, with- 
 out destroying the labourer. 
 In theory, the ryot may be considered as the 
 
SUMMARY OP PRINCIPLES. 309 
 
 owner of land : in practice, it belongs to the sover- 
 eign. 
 
 II. In Europe, the power of the sovereign has 
 been limited, and the title to land during 
 the middle ages vested principally in lords 
 and barons. It was cultivated by serfs or 
 slaves, of whom some were saleable like 
 cattle, and might be severed from the land ; 
 others were attached to the soil, and could 
 only be alienated with it. They had the 
 produce of a small parcel of land for their 
 own subsistence, but were obliged to la- 
 bour, most of the time, on land, all the pro- 
 duce of which went to the proprietor. 
 
 At present, this system exists only in the north- 
 eastern parts of Europe. Elsewhere it has been 
 succeeded by free labour, and by a tendency to the 
 system of free ownership which exists in the Uni- 
 ted States. 
 
 The disadvantages are, 
 
 1. Idleness, carelessness, want of skill, and want 
 of honesty on the part of the labourer. 
 
 2. Idleness, prodigality, and tyranny on the part 
 of the master. 
 
 III. In the south and west of Europe, at an 
 early period, serf ship was replaced by the 
 plan of sharing the produce between the 
 labourer and the cultivator. The latter 
 (called metayer) is a voluntary tenant, find- 
 ing labour to co-operate with the owner's 
 seed, tools, stock, and land. 
 
 The disadvantages of this system are, 
 
 1. Mutual jealousy. 
 
 2. Oppression on the part of the proprietor. 
 
810 SUMMARY OF PRINCIPLES. 
 
 3. Waste of stock, &c., by the tenant. 
 
 4. Want of capital. 
 
 IV. In Great Britain, Holland, &c., land is 
 generally cultivated by tenants who occupy 
 it for a considerable term of years at a 
 stipulated money-rent. These tenants have 
 been protected against the rapacity of land- 
 lords by law, and have been aided by the 
 gradual fall in the value of money. 
 
 The advantages of the system consist in the in. 
 ducement held out to the proprietor to be liberal : 
 to the occupant to be industrious, frugal, and en- 
 terprising. 
 
 The disadvantages, in the want of motive to the 
 tenant to make permanent improvements in culti- 
 vation, and to rely upon himself. 
 
 V. In the United States, land is generally oc- 
 cupied and tilled by the owner. Thus cap- 
 ital and labour, being in the same hands, 
 co-operate without jealousy. The spirit of 
 enterprise and self-reliance is cultivated, 
 and the utmost motive is held out to in- 
 dustry, economy, and intellectual improve- 
 ment. 
 
 The same system prevails in the British prov- 
 inces and in South America. That it does not 
 produce in them the same results, must be attrib- 
 uted to the inferior character of the cultivators, and 
 to the interference of unwise laws restraining in- 
 dustry. 
 
SUMMARY OF PRINCIPLES. 311 
 
 CHAPTER VII. 
 
 CAPITAL. 
 
 1. Labour would be powerless unless aided by 
 the accumulated results of previous labour. 
 
 2. These results are of three kinds : 
 
 I. Such as are affixed to land. 
 
 II. Such as are incorporated with human abil- 
 ity, and thus become personal endowments. 
 
 III. Material and moveable products ; of which 
 a part is reserved for gratification, and an- 
 other part is employed in reproduction. ; 
 The latter only is termed Capital. 
 
 3. Capital, then, is that portion of the moveable 
 stock of a nation which is intended to aid in re- 
 production. 
 
 4. Of this a part may be employed in reproduc- 
 tion by him who originally produced it. A large 
 part, however, must be sold or loaned to others. 
 
 5. If sold, the proprietor is, of course, entitled to 
 an equivalent ; if loaned, to hire or remuneration ; 
 if employed by himself, to revenue. The capital 
 being useful, he is entitled to be paid for such use, 
 whether in his own hands or in another's. 
 
 6. The great use of capital is to employ labour. 
 Hence it has a right to share with labour the pro- 
 ceeds of their joint agency. 
 
 7. The sum thus received for the use of capital 
 is called, generally, profit. When loaned to an- 
 other, however, it takes the name of interest. 
 
 8. The right to interest and profit is founded, 
 I. In right ; as we have seen. 
 
312 SUMMARY OF PRINCIPLES. 
 
 II. In expediency ; since no one would save, 
 or, if he did, would allow his savings to take 
 a productive form, unless he could be re- 
 munerated. 
 
 9. This interest or profit is paid, 
 
 I. For the use of the capital, or, in other 
 words, as a compensation for abstaining 
 from its immediate consumption. 
 
 II. For the general risk of losing it. 
 
 III. For particular risks growing out of the 
 character of the business, borrower, &c. 
 
 IV. For the time during which it is in use. 
 
 10. Circulating capital is that which is con- 
 sumed and renewed within the year. All other is 
 Jixed. 
 
 11. The disposition to spend, by lessening cap. 
 ital, diminishes production ; the disposition to save, 
 by increasing it, tends, on the same principle, to 
 augment production. Hence the advantage to a 
 nation of high profits and a high rate of interest. 
 
 12. The passion for saving may be carried too 
 far. 
 
 CHAPTER VIII. 
 
 VALITB. 
 
 1. By value here, we mean value in exchange, 
 or purchasing power. 
 
 2. This is relative, not real or absolute. 
 
 3. When the supply is abundant, and the article 
 in demand, its value will be proportioned to the la- 
 bour of production. 
 
SUMMARY OP PRINCIPLES. 313 
 
 4. When the supply is limited, value will de- 
 pend on the ratio between supply and demand. 
 
 5. There can be no permanent supply unless the 
 market value equals the costs of production* These 
 costs include, 
 
 I. Wages of all the labour employed, whether 
 in making, transporting, preserving, or vend, 
 ing the article. 
 
 II. Capital consumed, with profit on the same 
 for the whole time. 
 
 III. Revenue for superior fertility of soil, ad- 
 vantages of position, secret processes, &c. 
 
 This last revenue is sometimes termed monopo- 
 ly, because the right to receive it is not equally ac- 
 cessible to all. 
 
 This right, however, is founded, 
 
 I. In equity ; unless it be the result of fraud 
 or force. 
 
 II. In expediency ; since it encourages fore- 
 sight, invention, and personal improvement. 
 
 6. Since value depends on the ratio of supply 
 and demand, consider, 
 
 I. That DEMAND varies. 
 
 (a) If for necessaries and comforts, with 
 
 1. The number of people. 
 
 2. Their tastes and habits. 
 
 3. Their means of purchase. 
 This demand is, on the whole, steady. 
 
 (b) If for luxuries and superfluities, with the 
 fashion. Hence this demand is very un- 
 steady. 
 
 II. That SUPPLY varies with, 
 
 1. Seasons. 
 
 2. Vicissitudes of war, peace, &c. 
 
314 SUMMARY OF PRINCIPLES:^ 
 
 3. Amount of knowledge enlisted. 
 
 4. Current rate of wages and profits. 
 
 5. Monopoly charges. 
 
 6. Taxation. 
 
 7. The constant tendency is to equilibrium be- 
 tween demand and supply. 
 
 8. In regard to the effect of different investments 
 of capital on value, consider, 
 
 I. That money in hand is unproductive. 
 
 II. That, invested in private securities, such 
 as mortgages, bills, bank or railroad shares, 
 it is available, but subject to risks, and not 
 constant in value. 
 
 III. That, invested in productive business, it 
 should yield a gross profit sufficient to pay 
 for both use and risk, for all labour of the 
 proprietor and others, for use of buildings 
 and all expenses. 
 
 IV. That, invested in personal knowledge, 
 professional skill, &c., it is subject to risk 
 from sickness, death, want of employment, 
 &c. 
 
 V. That, invested in land, it is more safe, but 
 less available. 
 
 VI. That, invested in the cultivation of land 
 owned by another, it must yield a revenue 
 sufficient to replace what is consumed, with 
 interest, and afford a fair profit on the re- 
 mainder. 
 
 VII. That, invested in manufacturing, mining, 
 or shipping, it must yield enough to replace 
 what is consumed, pay interest on the resi- 
 due, remunerate for personal services, &c. 
 
 9. When the supply of goods so far exceeds the 
 
SUMMARY OF PRINCIPLES. 315 
 
 demand that their price falls below the costs of 
 production, there is said to be a glut. 
 
 10. Gluts are general or partial. A general 
 glut is usually owing, in the first instance, to a sud- 
 den rise in the value of money. It is aggravated 
 by the necessity many producers are under of con- 
 tinuing v and even enlarging their operations, though 
 they sell at a loss. 
 
 It is alleviated by the withdrawal of other pro- 
 ducers from the business, by the new demand for 
 goods occasioned by cheapness, and by inventions 
 which cheapen the production permanently. 
 
 CHAPTER IX. 
 
 DISTRIBUTION OF WEALTH. 
 
 1. The two principal means of increasing the 
 aggregate wealth of a country are Education and 
 Freedom. 
 
 2. The same means tend also to increase the 
 portion of each individual who contributes to pro- 
 duction. 
 
 3. The portions which fall to different individu- 
 als may be equitable, and yet not equal ; since, ow- 
 ing to diversity of talent, industry, &c., one will 
 necessarily contribute much more to production 
 than another. 
 
 4. Even accidental advantages, such as that of 
 soil, position, &c., entitle their proprietor to cor- 
 responding gains, since, 
 
 1. It is impossible to distinguish what is ac- 
 cidental from what is the result of effort. 
 
316 SUMMARY OF PRINCIPLES. 
 
 2. Because no one else can prefer so good a 
 claim to these gains. 
 
 5. The right of disposing of one's property by 
 will is involved in the very idea of ownership. It 
 also encourages industry and economy. 
 
 6. In some countries, as France, the law abridg- 
 es this natural right too much ; in others, as Scot- 
 land", it does not limit it sufficiently. Entails and 
 mortmain are impolitic, since, on one hand, they 
 perpetuate property independently of the industry 
 and care of the owner, and, on the other, deprive 
 him too far of control over it. 
 
 7. The property of intestates is given by law to 
 their nearest kin, on the presumption that such 
 would have been their own will. 
 
 8. Labourers, land-owners, and capitalists are 
 usually enumerated as the parties among whom 
 wealth distributes. These can hardly be distin- 
 guished, least of all in the United States. The la- 
 bourer is usually, to some extent, a capitalist, and 
 vice versa. 
 
 9. The proportion which each receives can be 
 fixed justly only by free contract. 
 
 10. Law ought to interfere only to protect per. 
 sons and property, and to encourage production. 
 
 CHAPTER X. 
 
 PRODUCTIVE INTERESTS. 
 
 1. These are Agriculture, Manufactures, and 
 Commerce. 
 
 2. (a) Agriculture is the employment of all whose 
 
SUMMARY OP PRINCIPLES. 317 
 
 land, capital, or labour is applied to the production 
 of food or raw materials. 
 
 (b) Improvement has, until lately, been slow, 
 and ought to be accelerated. 
 
 3. (a) Manufactures include all who apply labour 
 or capital to working up raw materials for use. 
 
 (b) They call for greater division of labour 
 than agriculture. 
 
 (c) In Europe, free and chartered associa- 
 tions, called guilds, trades, &c., contributed to per- 
 fect the arts, but not to multiply their products. 
 
 (d) The modern system of manufactures, 
 i. e., of carrying on production in large establish, 
 ments, and with the aid of inanimate forces, has 
 contributed to multiply products, perhaps less to 
 perfect them. 
 
 (e) This system has, in England, with many 
 benefits, brought some evils : 
 
 1. To factory operatives. 
 
 2. To agricultural labourers. 
 
 4. Commerce includes all who contribute by la- 
 bour or capital to the free and rapid interchange 
 of products. g 
 
 (a) In proportion as they add to the value of 
 products to the consumer, by saving him trouble 
 and time, and securing him against scarcity, they 
 are entitled to remuneration in the shape of wages, 
 profits, or both. 
 
 (b) Foreign and domestic trade are alike use- 
 ful, by multiplying enjoyments, and by inciting to 
 industry, invention, and economy. Under certain 
 limitations, both ought to be free. 
 
 6. These three productive interests are mutual- 
 DD2 
 
 
318 
 
 SUMMARY OF PRINCIPLES. 
 
 ly useful and dependant, and should therefore co. 
 operate. 
 
 If agriculture has been most esteemed, it is not 
 because in it labour is most productive, but be- 
 cause one of its chief products, food, is pre-emi- 
 nently necessary and useful. 
 
 THE