Question of the proper definition of the wealth of a state — Reason given by the French economists for considering all manufacturers as unproductive labourers, not the true reason — The labour of artificers and manufacturers sufficiently productive to individuals, though not to the state — A remarkable passage in Dr Price’s two volumes of Observations — Error of Dr Price in attributing the happiness and rapid population of America, chiefly, to its peculiar state of civilization — No advantage can be expected from shutting our eyes to the difficulties in the way to the improvement of society.
A question seems naturally to arise here whether the exchangeable value of the annual produce of the land and labour be the proper definition of the wealth of a country, or whether the gross produce of the land, according to the French economists, may not be a more accurate definition. Certain it is that every increase of wealth, according to the definition of the economists, will be an increase of the funds for the maintenance of labour, and consequently will always tend to ameliorate the condition of the labouring poor, though an increase of wealth, according to Dr Adam Smith’s definition, will by no means invariably have the same tendency. And yet it may not follow from this consideration that Dr Adam Smith’s definition is not just. It seems in many respects improper to exclude the clothing and lodging of a whole people from any part of their revenue. Much of it may, indeed, be of very trivial and unimportant value in comparison with the food of the country, yet still it may be fairly considered as a part of its revenue; and, therefore, the only point in which I should differ from Dr Adam Smith is where he seems to consider every increase of the revenue or stock of a society as an increase of the funds for the maintenance of labour, and consequently as tending always to ameliorate the condition of the poor.
The fine silks and cottons, the laces, and other ornamental luxuries of a rich country, may contribute very considerably to augment the exchangeable value of its annual produce; yet they contribute but in a very small degree to augment the mass of happiness in the society, and it appears to me that it is with some view to the real utility of the produce that we ought to estimate the productiveness or unproductiveness of different sorts of labour. The French economists consider all labour employed in manufactures as unproductive. Comparing it with the labour employed upon land, I should be perfectly disposed to agree with them, but not exactly for the reasons which they give. They say that labour employed upon land is productive because the produce, over and above completely paying the labourer and the farmer, affords a clear rent to the landlord, and that the labour employed upon a piece of lace is unproductive because it merely replaces the provisions that the workman had consumed, and the stock of his employer, without affording any clear rent whatever. But supposing the value of the wrought lace to be such as that, besides paying in the most complete manner the workman and his employer, it could afford a clear rent to a third person, it appears to me that, in comparison with the labour employed upon land, it would be still as unproductive as ever. Though, according to the reasoning used by the French economists, the man employed in the manufacture of lace would, in this case, seem to be a productive labourer. Yet according to their definition of the wealth of a state, he ought not to be considered in that light. He will have added nothing to the gross produce of the land: he has consumed a portion of this gross produce, and has left a bit of lace in return; and though he may sell this bit of lace for three times the quantity of provisions that he consumed whilst he was making it, and thus be a very productive labourer with regard to himself, yet he cannot be considered as having added by his labour to any essential part of the riches of the state. The clear rent, therefore, that a certain produce can afford, after paying the expenses of procuring it, does not appear to be the sole criterion, by which to judge of the productiveness or unproductiveness to a state of any particular species of labour.
Suppose that two hundred thousand men, who are now employed in producing manufactures that only tend to gratify the vanity of a few rich people, were to be employed upon some barren and uncultivated lands, and to produce only half the quantity of food that they themselves consumed; they would be still more productive labourers with regard to the state than they were before, though their labour, so far from affording a rent to a third person, would but half replace the provisions used in obtaining the produce. In their former employment they consumed a certain portion of the food of the country and left in return some silks and laces. In their latter employment they consumed the same quantity of food and left in return provision for a hundred thousand men. There can be little doubt which of the two legacies would be the most really beneficial to the country, and it will, I think, be allowed that the wealth which supported the two hundred thousand men while they were producing silks and laces would have been more usefully employed in supporting them while they were producing the additional quantity of food.
A capital employed upon land may be unproductive to the individual that employs it and yet be highly productive to the society. A capital employed in trade, on the contrary, may be highly productive to the individual, and yet be almost totally unproductive to the society: and this is the reason why I should call manufacturing labour unproductive, in comparison of that which is employed in agriculture, and not for the reason given by the French economists. It is, indeed, almost impossible to see the great fortunes that are made in trade, and the liberality with which so many merchants live, and yet agree in the statement of the economists, that manufacturers can only grow rich by depriving themselves of the funds destined for their support. In many branches of trade the profits are so great as would allow of a clear rent to a third person; but as there is no third person in the case, and as all the profits centre in the master manufacturer, or merchant, he seems to have a fair chance of growing rich, without much privation; and we consequently see large fortunes acquired in trade by persons who have not been remarked for their parsimony.
Daily experience proves that the labour employed in trade and manufactures is sufficiently productive to individuals, but it certainly is not productive in the same degree to the state. Every accession to the food of a country tends to the immediate benefit of the whole society; but the fortunes made in trade tend but in a remote and uncertain manner to the same end, and in some respects have even a contrary tendency. The home trade of consumption is by far the most important trade of every nation. China is the richest country in the world, without any other. Putting then, for a moment, foreign trade out of the question, the man who, by an ingenious manufacture, obtains a double portion out of the old stock of provisions, will certainly not to be so useful to the state as the man who, by his labour, adds a single share to the former stock. The consumable commodities of silks, laces, trinkets, and expensive furniture, are undoubtedly a part of the revenue of the society; but they are the revenue only of the rich, and not of the society in general. An increase in this part of the revenue of a state, cannot, therefore, be considered of the same importance as an increase of food, which forms the principal revenue of the great mass of the people.
Foreign commerce adds to the wealth of a state, according to Dr Adam Smith’s definition, though not according to the definition of the economists. Its principal use, and the reason, probably, that it has in general been held in such high estimation is that it adds greatly to the external power of a nation or to its power of commanding the labour of other countries; but it will be found, upon a near examination, to contribute but little to the increase of the internal funds for the maintenance of labour, and consequently but little to the happiness of the greatest part of society. In the natural progress of a state towards riches, manufactures, and foreign commerce would follow, in their order, the high cultivation of the soil. In Europe, this natural order of things has been inverted, and the soil has been cultivated from the redundancy of manufacturing capital, instead of manufactures rising from the redundancy of capital employed upon land. The superior encouragement that has been given to the industry of the towns, and the consequent higher price that is paid for the labour of artificers than for the labour of those employed in husbandry, are probably the reasons why so much soil in Europe remains uncultivated. Had a different policy been pursued throughout Europe, it might undoubtedly have been much more populous than at present, and yet not be more incumbered by its population.
I cannot quit this curious subject of the difficulty arising from population, a subject that appears to me to deserve a minute investigation and able discussion much beyond my power to give it, without taking notice of an extraordinary passage in Dr Price’s two volumes of Observations. Having given some tables on the probabilities of life, in towns and in the country, he says (Vol. II, p. 243):
From this comparison, it appears with how much truth great cities have been called the graves of mankind. It must also convince all who consider it, that according to the observation, at the end of the fourth essay, in the former volume, it is by no means strictly proper to consider our diseases as the original intention of nature. They are, without doubt, in general our own creation. Were there a country where the inhabitants led lives entirely natural and virtuous, few of them would die without measuring out the whole period of present existence allotted to them; pain and distemper would be unknown among them, and death would come upon them like a sleep, in consequence of no other cause than gradual and unavoidable decay.
I own that I felt myself obliged to draw a very opposite conclusion from the facts advanced in Dr Price’s two volumes. I had for some time been aware that population and food increased in different ratios, and a vague opinion had been floating in my mind that they could only be kept equal by some species of misery or vice, but the perusal of Dr Price’s two volumes of Observations, after that opinion had been conceived, raised it at once to conviction. With so many facts in his view to prove the extraordinary rapidity with which population increases when unchecked, and with such a body of evidence before him to elucidate even the manner by which the general laws of nature repress a redundant population, it is perfectly inconceivable to me how he could write the passage that I have quoted. He was a strenuous advocate for early marriages, as the best preservative against vicious manners. He had no fanciful conceptions about the extinction of the passion between the sexes, like Mr Godwin, nor did he ever think of eluding the difficulty in the ways hinted at by Mr Condorcet. He frequently talks of giving the prolifick powers of nature room to exert themselves. Yet with these ideas, that his understanding could escape from the obvious and necessary inference that an unchecked population would increase, beyond comparison, faster than the earth, by the best directed exertions of man, could produce food for its support, appears to me as astonishing as if he had resisted the conclusion of one of the plainest propositions of Euclid.
Dr Price, speaking of the different stages of the civilized state, says, ‘The first, or simple stages of civilization, are those which favour most the increase and the happiness of mankind.’ He then instances the American colonies, as being at that time in the first and happiest of the states that he had described, and as affording a very striking proof of the effects of the different stages of civilization on population. But he does not seem to be aware that the happiness of the Americans depended much less upon their peculiar degree of civilization than upon the peculiarity of their situation, as new colonies, upon their having a great plenty of fertile uncultivated land. In parts of Norway, Denmark, or Sweden, or in this country, two or three hundred years ago, he might have found perhaps nearly the same degree of civilization, but by no means the same happiness or the same increase of population. He quotes himself a statute of Henry the Eighth, complaining of the decay of tillage, and the enhanced price of provisions, ‘whereby a marvellous number of people were rendered incapable of maintaining themselves and families.’ The superior degree of civil liberty which prevailed in America contributed, without doubt, its share to promote the industry, happiness, and population of these states, but even civil liberty, all powerful as it is, will not create fresh land. The Americans may be said, perhaps, to enjoy a greater degree of civil liberty, now they are an independent people, than while they were in subjection in England, but we may be perfectly sure that population will not long continue to increase with the same rapidity as it did then.
A person who contemplated the happy state of the lower classes of people in America twenty years ago would naturally wish to retain them for ever in that state, and might think, perhaps, that by preventing the introduction of manufactures and luxury he might effect his purpose, but he might as reasonably expect to prevent a wife or mistress from growing old by never exposing her to the sun or air. The situation of new colonies, well governed, is a bloom of youth that no efforts can arrest. There are, indeed, many modes of treatment in the political, as well as animal, body, that contribute to accelerate or retard the approaches of age, but there can be no chance of success, in any mode that could be devised, for keeping either of them in perpetual youth. By encouraging the industry of the towns more than the industry of the country, Europe may be said, perhaps, to have brought on a premature old age. A different policy in this respect would infuse fresh life and vigour into every state. While from the law of primogeniture, and other European customs, land bears a monopoly price, a capital can never be employed in it with much advantage to the individual; and, therefore, it is not probable that the soil should be properly cultivated. And, though in every civilized state a class of proprietors and a class of labourers must exist, yet one permanent advantage would always result from a nearer equalization of property. The greater the number of proprietors, the smaller must be the number of labourers: a greater part of society would be in the happy state of possessing property: and a smaller part in the unhappy state of possessing no other property than their labour. But the best directed exertions, though they may alleviate, can never remove the pressure of want, and it will be difficult for any person who contemplates the genuine situation of man on earth, and the general laws of nature, to suppose it possible that any, the most enlightened, efforts could place mankind in a state where ‘few would die without measuring out the whole period of present existence allotted to them; where pain and distemper would be unknown among them; and death would come upon them like a sleep, in consequence of no other cause than gradual and unavoidable decay.’
It is, undoubtedly, a most disheartening reflection that the great obstacle in the way to any extraordinary improvement in society is of a nature that we can never hope to overcome. The perpetual tendency in the race of man to increase beyond the means of subsistence is one of the general laws of animated nature which we can have no reason to expect will change. Yet, discouraging as the contemplation of this difficulty must be to those whose exertions are laudably directed to the improvement of the human species, it is evident that no possible good can arise from any endeavours to slur it over or keep it in the background. On the contrary, the most baleful mischiefs may be expected from the unmanly conduct of not daring to face truth because it is unpleasing. Independently of what relates to this great obstacle, sufficient yet remains to be done for mankind to animate us to the most unremitted exertion. But if we proceed without a thorough knowledge and accurate comprehension of the nature, extent, and magnitude of the difficulties we have to encounter, or if we unwisely direct our efforts towards an object in which we cannot hope for success, we shall not only exhaust our strength in fruitless exertions and remain at as great a distance as ever from the summit of our wishes, but we shall be perpetually crushed by the recoil of this rock of Sisyphus.
Last updated Monday, December 22, 2014 at 10:53