WEALTH AS IT AFFECTS THE POOR.
In the seventh chapter of book III. Mr. Malthus criticises an essay of
Adam Smith, on “Increasing Wealth as it Affects the Condition of the
Poor.” The professed object of Adam Smith’s enquiry is the nature and
causes of the wealth of nations. “There is another, however, perhaps
still more interesting (says our author) which he occasionally mixes
with it, the causes which affect the happiness and comfort of the lower
orders of society, which in every nation forms the most numerous class.
I am sufficiently aware of the near connection of these two subjects,
and that, generally speaking, the causes which contribute to increase
the wealth of a state tend also to increase the happiness of the lower
classes of the people. But perhaps Dr. Smith has considered these two
inquiries as still more nearly connected than they really are; at least
he has not stopped to take notice of those instances, when the wealth of
a society may increase, according to his definition of wealth, without
having a proportional tendency to increase the comforts of the labouring
part of it.”
Malthus observes that the comforts of the labouring poor must
necessarily depend upon the funds destined for the maintenance of
labour, and will generally be in proportion to the rapidity of their
increase. The demand for labour, which such increase occasions, will of
course raise the value of labour; and till the additional number of
hands required are reared, the increased funds will be distributed to
the same number of persons as before, and therefore every labourer will
live more at his ease. But Adam Smith was wrong when he represented
every increase of the revenue or stock of a society, as a proportional
increase of these funds. Such surplus stock or revenue will indeed
always be considered by the individual possessing it, as an additional
fund from which he may maintain more labour; but with regard to the
whole country, it will not be an effectual fund for the maintenance of
an additional number of labourers, unless part of it be convertible into
an additional quantity of provisions; and it will not be so convertible
when the increase has arisen merely from the produce of labour, and not
from the produce of land. A distinction may in this case occur between
the number of hands which the stock of a society could employ and the
number which its territory can maintain.
“Supposing a nation for a course of years to add what it saved from its
yearly revenue to its manufacturing capital solely, and not to its
capital employed on land, it is evident that it might grow richer
without a power of supporting a greater number of labourers, and
therefore without any increase in the real funds for the maintenance of
labour. There would, notwithstanding, be a demand for labour, from the
extent of manufacturing capital. This demand would of course raise the
price of labour; but if the yearly stock of provisions in the country
were not increasing this rise would soon turn out merely nominal, as the
price of provisions must necessarily rise with it.”
The question is how far wealth increasing in this way has a tendency to
better the condition of the labouring poor. “It is a self-evident
proposition, that any general advance in the price of labour, the stock
of provisions remaining the same, can only be a nominal advance, as it
must shortly be followed by a proportional rise in provisions. The
increase in the price of labour which we have supposed, would have no
permanent effect therefore in giving to the labouring poor a greater
command over the necessaries of life. In this respect they would be
nearly in the same state as before. In some other respects they would be
in a worse state. A greater portion of them would be employed in
manufactures, and a smaller portion in agriculture. (The present
condition of England in 1882.) And this exchange of profession will be
allowed, I think, by all to be very unfavourable to health, an essential
ingredient to happiness, and to be further disadvantageous on account of
the greater uncertainty of manufacturing labour, arising from the
capricious tastes of man, the accidents of war, and other causes which
occasionally produce very severe distress among the lower classes of
society.”
Mr. Malthus then feelingly alludes to the miserable condition of the
poor young operatives in Manchester in his day, and to the destruction
of the comforts of the family so often caused by the women becoming so
frequently mere _hands_ in mills and quite unacquainted with any
household work. “The females are wholly uninstructed in sewing,
knitting, and other domestic affairs, requisite to make them notable and
frugal wives and mothers. This is a very great misfortune to them and to
the public, as is sadly proved by a comparison of the families of
labourers in husbandry, and those in manufactures in general. In the
former we meet with neatness, cleanliness, and comfort: in the latter
with filth, rags, and poverty, although their wages may be nearly double
those of the husbandman. In addition to these evils we all know how
subject particular manufactures are to fail, from the caprice of taste,
or the accident of war. The weavers of Spitalfield were plunged into the
most severe distress by the fashion of muslins instead of silks; and
numbers of the workmen of Sheffield and Birmingham were for a time
thrown out of employment, from the adoption of shoe strings and covered
buttons, instead of buckles and metal buttons. Under such circumstances,
unless the increase of the riches of a country from manufactures gives
the lower classes of the society, on an average, a decidedly greater
command over the necessaries and conveniences of life, it will not
appear that their condition is improved.”
Mr. Malthus continues: “It will be said, perhaps, that the advance in
the price of provisions will immediately turn some additional capital
into the channel of agriculture, and thus occasion a much greater
produce. But from experience it appears that this is an effect which
sometimes follows very slowly, particularly if heavy taxes that affect
agricultural industry, and an advance in the price of labour, had
preceded the advance in the price of provisions. It may also be said,
that the additional capital of the nation would enable it to import
provisions sufficient for the maintenance of those whom its stock could
employ. A small country with a large navy, and great accommodation for
inland carriage, may indeed import and distribute an effectual quantity
of provisions; but in large landed nations, if they may be so-called, an
importation adequate at all times to the demand is scarcely possible.”
In 1881 the inhabitants of the British Islands had to import food
consisting of live and dead meat, butter, eggs, flour, and wheat, &c.,
at an expense of no less than one hundred and thirty-two millions
sterling, inclusive of sugar, one of the requisites of nutrition, or at
the cost of one hundred and eight millions sterling without sugar. And
yet the price of butter was about 1s. 6d. the pound and meat about 9d. a
pound in London, whilst milk sold for 5d. the quart. Thus we see how
true the words of the great writer on population were, even writing
before the days of steam and electric telegraphs, improvements in the
way of obtaining food supplies that might easily have made food as cheap
here as in New Zealand, had it not been for the excessive birth-rate
that has been going on for the whole of this century in the United
Kingdom.
Mr. Malthus points out that a nation which from its extent and
population must necessarily support the greater part of its population
on the produce of its own soil, but which yet, in average years, draws a
small portion of its corn from abroad, is in a more precarious position
with regard to the constancy of its supplies, than such states as draw
almost the whole of their provisions from other countries. A nation
possessed of a large territory is unavoidably subject to this
uncertainty of its means of subsistence, when the commercial part of its
population is either equal to, or has increased beyond the surplus
produce of its cultivators. “No reserve being in these cases left in
exportation, the full effect of every deficiency from unfavorable
seasons must necessarily be felt; and, although the riches of such a
country may enable it for a certain period to continue raising the
nominal rate of wages, so as to give the lower classes of the society a
power of purchasing imported corn at a high price; yet, a sudden demand
can very seldom be fully answered, the competition in the market will
invariably raise the price of provisions in full proportion to the
advance in the price of labor; the lower classes will be but little
relieved, and the dearth will operate severely throughout all the ranks
of society.
“According to the natural order of things, years of scarcity must
occasionally recur in all landed nations. They ought always therefore to
enter into our consideration; and the prosperity of any country may
justly be considered as precarious, in which the funds for the
maintenance of labour are liable to great and sudden fluctuations from
every unfavourable variation in the seasons.
“But putting for the present, years of scarcity out of the question.
When the commercial population of any country increases so much beyond
the surplus produce of the cultivators, that the demand for imported
corn is not easily supplied, and the price rises in proportion to the
rate of wages, no further increase of riches will have any tendency to
give the laborer a greater command over the necessaries of life. In the
progress of wealth this will naturally take place, either from the
largeness of the supply wanted, the increased distance from which it is
brought, and consequently, the increased expense of importation; the
greater consumption of it in the countries in which it is usually
purchased, or, what must unavoidably happen, the necessity of a greater
distance of inland carriage in these countries. Such a nation, by
increasing industry in the improvement of machinery, may still go on
increasing the yearly quantity of its manufactured produce; but its
funds for the maintenance of labor, and consequently its population,
will be perfectly stationary. This point is the natural limit to the
population of all commercial states. In countries at a great distance
from this limit, an effect approaching to what has been here described
will take place, whenever the march of commerce and manufactures is more
rapid than that of agriculture.”
Malthus takes China as an example, that every increase in the stock or
revenue of a nation cannot be considered as an increase of the real
funds for the maintenance of labor, and therefore cannot have the same
good effect upon the condition of the poor. China, as Adam Smith
remarked, has probably long been as rich as the nature of her laws and
institutions will admit; although, with other laws and institutions, and
on the supposition of unshackled foreign commerce, she might still be
richer, yet, the question is, would such an increase of wealth be an
increase of the real funds for the maintenance of labor, and
consequently tend to place the lower classes in China in a state of
greater plenty?
Malthus contends that if trade and foreign commerce were held in great
honour in China, it is evident that, from the great number of laborers,
and the cheapness of labor, she might work up manufactures for foreign
sale to an immense amount. It is equally evident, that from the great
bulk of provisions, and the amazing extent of her inland territory, she
could not in return import such a quantity as would be any sensible
addition to the annual stock of subsistence in the country. “Her immense
amount of manufactures therefore, she would exchange chiefly for
luxuries collected from all parts of the world. At present it appears
that no labor whatever is spared in the production of food. The country
is rather over-peopled in proportion to what its stock can employ, and
labor is therefore so abundant that no pains are taken to abridge it.
The consequence of this is probably the greatest production of food that
the soil can possibly afford; for it will be generally observed, that
processes for abridging agricultural labor, though they may enable a
farmer to bring a certain quantity of grain cheaper to market, tend
rather to diminish, than increase the whole produce. An immense capital
could not be employed in China in preparing manufactures for foreign
trade, without taking off so many laborers from agriculture, as to alter
this state of things, and in some degree, to diminish the produce of the
country. The demand for manufacturing laborers would naturally raise the
price of labor; but, as the quantity of subsistence would not be
increased, the price of provisions would keep pace with it, or even more
than keep pace with it, if the quantity of provisions were really
decreasing. The country would, however, be evidently advancing in
wealth. The exchangeable value of the annual produce of its land and
labor would be annually augmented; yet the real funds for the
maintenance of labor would be stationary, or even declining; and
consequently, the increasing wealth of the nation would tend rather to
depress than to raise the condition of the poor. With regard to the
command over the necessaries of life, they would be in the same, or
rather worse state than before, and a great part of them would have
exchanged the healthy labor of agriculture, for the unhealthy
occupations of manufacturing industry.”
The observations of the greatest living Chancellor of the Exchequer, Mr.
W. E. Gladstone, of late years, have frequently pointed out to us how
very unfair a proportion of the increasing wealth of this country has
been absorbed by the possessors of capital, as compared with that by the
recipients of wages. It may indeed be said, in the words of Mr. J. S.
Mill, that owing to the way in which population has increased in this
century in this country, _pari passu_ with the increase of the wealth of
the nation, it is doubtful whether all the improvements in manufactures
and in instruments for abbreviating manual toil have taken one hour’s
work from the shoulders of the working classes.
“The condition of the poor in China,” says Malthus, “is indeed very
miserable at present, but this is not owing to their want of foreign
commerce, but to their extreme tendency to marriage and increase; and if
this tendency were to continue the same, the only way in which the
introduction of a greater number of manufacturers could possibly make
the lower classes of people richer, would be by increasing the mortality
among them, which is certainly not a very desirable mode of growing
rich.” This argument of our author might convince both the fair traders
and the free traders of this day, that neither free trade, nor
protection, are panaceas against starvation among the poorest classes,
and make them learn the lesson that a small-family system alone can
solve the fundamental question of man’s destiny—how to make the
proportion of mouths to food most favorable.
The argument perhaps appears clearer when applied to China, because it
is generally allowed that its wealth has been long stationary, and its
soil cultivated nearly to the utmost. With regard to any other country
it might always be a matter of dispute, at which of the two periods
compared wealth was increasing the fastest, for Adam Smith, and others
of his followers think that the condition of the poor depends on the
rapidity of the increase of wealth at any particular epoch. Malthus to
this replies that: “It is evident that two nations might increase
exactly with the same rapidity in the exchangeable value of the annual
products of their land and labor; yet, if one had applied itself chiefly
to agriculture, and the other chiefly to commerce, the funds for the
maintenance of labor, and consequently the effect of the increase of
wealth in each nation, would be extremely different. In that which had
applied itself chiefly to agriculture, the poor would live in greater
plenty, and population would rapidly increase. In that which had applied
itself chiefly to commerce the poor would be comparatively but little
benefited, and consequently, population would either be stationary, or
increase very slowly.”
“The condition,” says Malthus, “of the laboring poor, supposing their
habits to remain the same, cannot be very essentially improved, but by
giving them a greater command over the means of subsistence. But any
advantage of this kind must from its nature be temporary, and is
therefore really of less value to them than any permanent change in
their habits. But manufactures, by inspiring a taste for comforts, tend
to promote a favorable change in these habits, and in this way perhaps
counterbalance all their disadvantages. The laboring classes of society,
in nations merely agricultural, are generally on the whole poorer than
in manufacturing nations, though less subject to those occasional
variations which among manufacturers often produce the most severe
distress.”
There are two chapters in Malthus’s second volume devoted to the
consideration of the Agricultural and Commercial Systems about which so
much was written by his contemporaries. Mr. Malthus says in Chapter
VIII. that there are none of the definitions of the wealth of a state
that are not liable to some objections. If the gross produce of the land
be taken as indicating wealth, it is clear that this may increase very
rapidly whilst the nation is very poor, and, wealth again may increase
without tending to increase the funds for the maintenance of labor and
population. “Whichever of these definitions is adopted, the position of
the economists will remain true, that the surplus produce of the
cultivators is the great fund which ultimately pays all not employed in
the land. Throughout the whole world the number of manufacturers, of
proprietors, and of persons engaged in the various civil and military
professions must be exactly proportional to the surplus produce, and
cannot in the nature of things increase beyond it. If the earth had been
so niggardly of her produce as to oblige all her inhabitants to labor
for it, no manufacturer or idle persons could ever have existed. But her
first intercourse with man was a voluntary present, not very large
indeed, but sufficient as a fund for his subsistence, till by the proper
exercise of his faculties he could produce a greater. In proportion as
the labor and ingenuity of man increased, again, the land has increased
this surplus produce; leisure has been given to a greater number of
persons to employ themselves in all the inventions which embellish
civilised life; and, although in its turn, the desire to profit by these
inventions has greatly contributed to stimulate the cultivators to
increase their surplus produce; yet the order of precedence is clearly
the surplus produce, because the funds for the subsistence of the
manufacturer must be advanced to him before he can complete his work.”
“In the history of the world,” says Malthus, “the nations whose wealth
has been derived principally from manufactures and commerce, have been
perfectly ephemeral beings, compared with those whose wealth has been
agriculture. It is in the nature of things that a state which subsists
upon a revenue furnished by other countries, must be infinitely more
exposed to all the accidents of time and chance, than one which produces
its own. No error is more frequent than that of mistaking effects for
causes. We are so blinded by the shrewdness of commerce and
manufactures, as to believe that they are almost the sole cause of the
wealth, power, and prosperity of England; but perhaps they may be more
justly considered as the consequence, than the cause of the wealth.
According to the definition of the economists, which considers only the
produce of land, England is the richest country in Europe, in proportion
to her size. Her system of agriculture is beyond comparison better, and
consequently, her surplus produce is more considerable. France is very
greatly superior to England in extent of territory and population; but
when the surplus produce, or disposable revenue of the two nations are
compared, the superiority of France almost vanishes. According to the
returns lately made of the population of England and Wales, it appears
that the number of persons employed in agriculture is considerably less
than a fifth part of the whole.”
This was written by Malthus in 1806, and it is curious to contrast the
state of matters which now exists in the United Kingdom. In 1881 she
consumed 1,740,000 tons of meat, and only produced 1,090,000 of these
herself. She also consumed 607 millions of bushels of grain, and
produced only 322 millions of these, so that, although her agricultural
skill has greatly increased since the days of Malthus, she imports
nearly half of her grain and one-third of her meat supplies.
Malthus was of opinion that the National Debt of England was chiefly
injurious because it absorbed the redundancy of commercial capital and
kept up the rate of interest, thus preventing capital from overflowing
upon the soil. He thought that thus a large mortgage had been
established on the lands of England, the interest of which was drawn
from the payment of productive labor, and dedicated to the support of
idle consumers. “It must be allowed, therefore, upon the whole, that our
commerce has not done so much for our agriculture, as our agriculture
has done for our commerce; and that the improved system of cultivation
which has taken place, in spite of considerable discouragements, creates
yearly a surplus produce which enables the country, with but little
assistance, to support so vast a body of people engaged in pursuits
unconnected with the land.”
About the middle of the eighteenth century, England, says our author,
was genuinely, and in the strict sense of the economists, an
agricultural nation. With London containing a population of more than
four millions, and our other immense cities, this description of England
is now quite out of place.
About the middle of the last century, says Malthus, we were genuinely,
and in the strict sense of the economists, an agricultural nation. “We
have now, however, slipped out of the agricultural system into a state
in which the commercial system clearly predominates, and there is but
too much reason to fear that even our consumers and manufacturers will
ultimately feel the disadvantage of the change. When a country in
average years grows more wheat than it consumes, and is in the habit of
exporting a part of it, those great variations of price which from the
competition of commercial wealth, often produce lasting effects, cannot
occur to the same extent. The wages of labour can never rise very much
above the common price in other commercial countries; and under such
circumstances England would have nothing to fear from the fullest and
most open competition.”
Our author thinks (chap. ix. book iii.) that if we were to lower the
price of labour by encouraging the import of foreign corn, we should
probably aggravate our evils. The decline in our agriculture would be
certain. The British grower could not, in his own markets, stand the
competition of foreign growers, in average years. Arable lands of a
moderate quality would hardly pay the expenses of cultivation. Rich
soils alone would yield a rent. Round our towns the appearance would be
the same as usual; but in the interior of the country much of the land
would be neglected, and almost universally, where it was practicable,
pasture would take the place of tillage. This state of things would
continue till the equilibrium was restored, either by the fall of
British rent and wages, or an advance in foreign corn, or, what is more
probable, by the union of both causes. But a period would have elapsed
of considerable relative encouragement to manufactures, and relative
discouragement to agriculture. A certain portion of capital would be
taken from the land, and when the equilibrium was at length restored,
the nation would probably be found dependent upon foreign supplies for a
great portion of its subsistence: and unless some particular cause were
to occasion a foreign demand greater than the home demand, its
independence, in this respect, would not be recovered. In the natural
course of things, a country which depends for a considerable part of its
supply of corn upon its poorer neighbours may expect to see this supply
gradually diminish, as those countries increase in riches and
population, and have less surplus produce to spare.
This last remark of Malthus has been verified of late years in Europe,
for countries from which we used some few years back to receive a
considerable amount of our supplies of meat and grain, have now become
competitors with us for supplies of these articles from the United
States and Australasia. And for other countries his further remark holds
true, that the political relations of such a country may expose it,
during a war, to have that part of its supply of provisions which it
derives from foreign states suddenly stopped or greatly diminished; an
event which could not take place without producing the most calamitous
effects. “A nation,” he continues, “in which agricultural wealth
predominates, though it may not produce at home such a surplus of
luxuries and conveniences as the commercial nation, and may therefore be
exposed possibly to some want of these commodities, has, on the other
hand, a surplus of that article which is essential to the well-being of
the whole state, and is therefore secure from want in what is of the
greatest importance. And if we cannot be so sure of the supply of what
we derive from others, as of what we produce at home, it seems to be an
advantageous policy in a nation whose territory will allow of it, to
secure a surplus of that commodity, a deficiency of which would strike
most deeply at its happiness and prosperity.”
Malthus held that there is no branch of trade more profitable to a
country, even in a commercial point of view, than the sale of rude
produce. And here he seems to have disagreed with Adam Smith’s views.
That illustrious writer on Wealth observes that a trading and
manufacturing country exports what can subsist and accommodate but very
few, and imports the subsistence and accommodation of a great number.
The other exports the subsistence and accommodation of a great number,
and imports that of a very few only. The inhabitants in the one must
enjoy, said Adam Smith, a much greater quantity of subsistence than what
their own land, in the actual state of cultivation, could afford. The
inhabitants of the other must always enjoy a much smaller quantity.
Malthus demurs to much of this argument of Adam Smith. For, says he,
“though the manufacturing nation may export a commodity which, in its
actual shape, can only subsist and accommodate a very few, yet it must
be recollected that in order to prepare this commodity for exportation,
a considerable part of the revenue of the country has been employed in
subsisting and accommodating a great number of workmen. And with regard
to the subsistence and accommodation which the other nation exports,
whether it be of a great or a small number, it is certainly no more than
sufficient to replace the subsistence that has been consumed in the
manufacturing nation, together with the profits of the master
manufacturer and merchant, which probably, are not so great as the
profits of the farmer and the merchant in the agricultural nation; and,
though it may be true that the inhabitants of the manufacturing nation
enjoy a greater quantity of subsistence than what their own lands in the
actual state of their cultivation could afford, yet an inference in
favour of the manufacturing system by no means follows, because the
adoption of the one or the other system will make the greatest
difference in their actual state of cultivation. If, during the course
of a century, two landed nations were to pursue these two different
systems, that is, if one of them were regularly to export manufacture
and import subsistence, and the other to export subsistence and import
manufacture, there would be no comparison at the end of the period
between the state of cultivation in the two countries; and no doubt
could rationally be entertained that the country which exported its raw
produce would be able to subsist and accommodate a much larger
population than the other.”
It is a matter, says our author, of very little comparative importance,
whether we are fully supplied with broadcloth, linens, and muslins, or
even with tea, sugar, and coffee, and no rational politician therefore
would think of proposing a bounty on such commodities. “But it is
certainly a matter of the very highest importance, whether we are fully
supplied with food; and if a bounty would produce such a supply, the
most liberal economist might be justified in proposing it, considering
food as a commodity distinct from all others, and pre-eminently
valuable.”
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