STORE-KEEPING.
31. The first chapter having consisted of little more than definition of
terms, I purpose, in this, to expand and illustrate the given
definitions.
The view which has here been taken of the nature of wealth, namely, that
it consists in an intrinsic value developed by a vital power, is
directly opposed to two nearly universal conceptions of wealth. In the
assertion that value is primarily intrinsic, it opposes the idea that
anything which is an object of desire to numbers, and is limited in
quantity, so as to have rated worth in exchange, may be called, or
virtually become, wealth. And in the assertion that value is,
secondarily, dependent upon power in the possessor, it opposes the idea
that the worth of things depends on the demand for them, instead of on
the use of them. Before going farther, we will make these two positions
clearer.
32. I. First. All wealth is intrinsic, and is not constituted by the
judgment of men. This is easily seen in the case of things affecting the
body; we know, that no force of fantasy will make stones nourishing, or
poison innocent; but it is less apparent in things affecting the mind.
We are easily--perhaps willingly--misled by the appearance of beneficial
results obtained by industries addressed wholly to the gratification of
fanciful desire; and apt to suppose that whatever is widely coveted,
dearly bought, and pleasurable in possession, must be included in our
definition of wealth. It is the more difficult to quit ourselves of this
error because many things which are true wealth in moderate use, become
false wealth in immoderate; and many things are mixed of good and
evil,--as mostly, books, and works of art,--out of which one person Will
get the good, and another the evil; so that it seems as if there were
no fixed good or evil in the things themselves, but only in the view
taken, and use made of them.
But that is not so. The evil and good are fixed; in essence, and in
proportion. And in things in which evil depends upon excess, the point
of excess, though indefinable, is fixed; and the power of the thing is
on the hither side for good, and on the farther side for evil. And in
all cases this power is inherent, not dependent on opinion or choice.
Our thoughts of things neither make, nor mar their eternal force;
nor--which is the most serious point for future consideration--can they
prevent the effect of it (within certain limits) upon ourselves.
33. Therefore, the object of any special analysis of wealth will be not
so much to enumerate what is serviceable, as to distinguish what is
destructive; and to show that it is inevitably destructive; that to
receive pleasure from an evil thing is not to escape from, or alter the
evil of it, but to be _altered by_ it; that is, to suffer from it to the
utmost, having our own nature, in that degree, made evil also. And it
may be shown farther, that, through whatever length of time or
subtleties of connexion the harm is accomplished, (being also less or
more according to the fineness and worth of the humanity on which it is
wrought), still, nothing _but_ harm ever comes of a bad thing.
34. So that, in sum, the term wealth is never to be attached to the
_accidental object of a morbid_ desire, but only to the _constant object
of a legitimate one_.[14] By the fury of ignorance, and fitfulness of
caprice, large interests may be continually attached to things
unserviceable or hurtful; if their nature could be altered by our
passions, the science of Political Economy would remain, what it has
been hitherto among us, the weighing of clouds, and the portioning out
of shadows. But of ignorance there is no science; and of caprice no law.
Their disturbing forces interfere with the operations of faithful
Economy, but have nothing in common with them: she, the calm arbiter of
national destiny, regards only essential power for good in all that she
accumulates, and alike disdains the wanderings[15] of imagination, and
the thirsts of disease.
35. II. Secondly. The assertion that wealth is not _only_ intrinsic, but
dependent, in order to become effectual, on a given degree of vital
power in its possessor, is opposed to another popular view of
wealth;--namely, that though it may always be constituted by caprice, it
is, when so constituted, a substantial thing, of which given quantities
may be counted as existing here, or there, and exchangeable at rated
prices.
In this view there are three errors. The first and chief is the
overlooking the fact that all exchangeableness of commodity, or
effective demand for it, depends on the sum of capacity for its use
existing, here or elsewhere. The book we cannot read, or picture we take
no delight in, may indeed be called part of our wealth, in so far as we
have power of exchanging either for something we like better. But our
power of effecting such exchange, and yet more, of effecting it to
advantage, depends absolutely on the number of accessible persons who
can understand the book, or enjoy the painting, and who will dispute the
possession of them. Thus the actual worth of either, even to us, depends
no more on their essential goodness than on the capacity existing
somewhere for the perception of it; and it is vain in any completed
system of production to think of obtaining one without the other. So
that, though the true political economist knows that co-existence of
capacity for use with temporary possession cannot be always secured, the
final fact, on which he bases all action and administration, is that, in
the whole nation, or group of nations, he has to deal with, for every
atom of intrinsic value produced he must with exactest chemistry produce
its twin atom of acceptant digestion, or understanding capacity; or, in
the degree of his failure, he has no wealth. Nature's challenge to us
is, in earnest, as the Assyrians mock; "I will give thee two thousand
horses, if thou be able on thy part to set riders upon them." Bavieca's
paces are brave, if the Cid backs him; but woe to us, if we take the
dust of capacity, wearing the armour of it, for capacity itself, for so
all procession, however goodly in the show of it, is to the tomb.
36. The second error in this popular view of wealth is, that in giving
the name of wealth to things which we cannot use, we in reality confuse
wealth with money. The land we have no skill to cultivate, the book
which is sealed to us, or dress which is superfluous, may indeed be
exchangeable, but as such are nothing more than a cumbrous form of
bank-note, of doubtful or slow convertibility. As long as we retain
possession of them, we merely keep our bank-notes in the shape of gravel
or clay, of book-leaves, or of embroidered tissue. Circumstances may,
perhaps, render such forms the safest, or a certain complacency may
attach to the exhibition of them; into both these advantages we shall
inquire afterwards; I wish the reader only to observe here, that
exchangeable property which we cannot use is, to us personally, merely
one of the forms of money, not of wealth.
37. The third error in the popular view is the confusion of Guardianship
with Possession; the real state of men of property being, too commonly,
that of curators, not possessors, of wealth.
A man's power over his property is at the widest range of it, fivefold;
it is power of Use, for himself, Administration, to others, Ostentation,
Destruction, or Bequest: and possession is in use only, which for each
man is sternly limited; so that such things, and so much of them as he
can use, are, indeed, well for him, or Wealth; and more of them, or any
other things, are ill for him, or Illth.[16] Plunged to the lips in
Orinoco, he shall drink to his thirst measure; more, at his peril: with
a thousand oxen on his lands, he shall eat to his hunger measure; more,
at his peril. He cannot live in two houses at once; a few bales of silk
or wool will suffice for the fabric of all the clothes he can ever wear,
and a few books will probably hold all the furniture good for his brain.
Beyond these, in the best of us but narrow, capacities, we have but the
power of administering, or _mal_-administering, wealth: (that is to say,
distributing, lending, or increasing it);--of exhibiting it (as in
magnificence of retinue or furniture),--of destroying, or, finally, of
bequeathing it. And with multitudes of rich men, administration
degenerates into curatorship; they merely hold their property in charge,
as Trustees, for the benefit of some person or persons to whom it is to
be delivered upon their death; and the position, explained in clear
terms, would hardly seem a covetable one. What would be the probable
feelings of a youth, on his entrance into life, to whom the career hoped
for him was proposed in terms such as these: "You must work
unremittingly, and with your utmost intelligence, during all your
available years, you will thus accumulate wealth to a large amount; but
you must touch none of it, beyond what is needful for your support.
Whatever sums you gain, beyond those required for your decent and
moderate maintenance, and whatever beautiful things you may obtain
possession of, shall be properly taken care of by servants, for whose
maintenance you will be charged, and whom you will have the trouble of
superintending, and on your deathbed you shall have the power of
determining to whom the accumulated property shall belong, or to what
purposes be applied."
38. The labour of life, under such conditions, would probably be neither
zealous nor cheerful; yet the only difference between this position and
that of the ordinary capitalist is the power which the latter supposes
himself to possess, and which is attributed to him by others, of
spending his money at any moment. This pleasure, taken _in the
imagination of power to part with that with which we have no intention
of parting_, is one of the most curious, though commonest forms of the
Eidolon, or Phantasm of Wealth. But the political economist has nothing
to do with this idealism, and looks only to the practical issue of
it--namely, that the holder of wealth, in such temper, may be regarded
simply as a mechanical means of collection; or as a money-chest with a
slit in it, not only receptant but suctional, set in the public
thoroughfare;--chest of which only Death has the key, and evil Chance
the distribution of the contents. In his function of Lender (which,
however, is one of administration, not use, as far as he is himself
concerned), the capitalist takes, indeed, a more interesting aspect; but
even in that function, his relations with the state are apt to
degenerate into a mechanism for the convenient contraction of debt;--a
function the more mischievous, because a nation invariably appeases its
conscience with respect to an unjustifiable expense, by meeting it with
borrowed funds, expresses its repentance of a foolish piece of business,
by letting its tradesmen wait for their money, and always leaves its
descendants to pay for the work which will be of the least advantage to
them.[17]
39. Quit of these three sources of misconception, the reader will have
little farther difficulty in apprehending the real nature of Effectual
value. He may, however, at first not without surprise, perceive the
consequences involved in his acceptance of the definition. For if the
actual existence of wealth be dependent on the power of its possessor,
it follows that the sum of wealth held by the nation, instead of being
constant, or calculable, varies hourly, nay, momentarily, with the
number and character of its holders! and that in changing hands, it
changes in quantity. And farther, since the worth of the currency is
proportioned to the sum of material wealth which it represents, if the
sum of the wealth changes, the worth of the currency changes. And thus
both the sum of the property, and power of the currency, of the state,
vary momentarily as the character and number of the holders. And not
only so, but different rates and kinds of variation are caused by the
character of the holders of different kinds of wealth. The transitions
of value caused by the character of the holders of land differ in mode
from those caused by character in holders of works of art; and these
again from those caused by character in holders of machinery or other
working capital. But we cannot examine these special phenomena of any
kind of wealth until we have a clear idea of the way in which true
currency expresses them; and of the resulting modes in which the cost
and price of any article are related to its value. To obtain this we
must approach the subject in its first elements.
40. Let us suppose a national store of wealth, composed of material
things either useful, or believed to be so, taken charge of by the
Government,[18] and that every workman, having produced any article
involving labour in its production, and for which he has no immediate
use, brings it to add to this store, receiving from the Government, in
exchange, an order either for the return of the thing itself, or of its
equivalent in other things, such as he may choose out of the store, at
any time when he needs them. The question of equivalence itself (how
much wine a man is to receive in return for so much corn, or how much
coal in return for so much iron) is a quite separate one, which we will
examine presently. For the time, let it be assumed that this equivalence
has been determined, and that the Government order, in exchange for a
fixed weight of any article (called, suppose _a_), is either for the
return of that weight of the article itself, or of another fixed weight
of the article _b_, or another of the article _c_, and so on.
Now, supposing that the labourer speedily and continually presents these
general orders, or, in common language, "spends the money," he has
neither changed the circumstances of the nation, nor his own, except in
so far as he may have produced useful and consumed useless articles, or
_vice versa_. But if he does not use, or uses in part only, the orders
he receives, and lays aside some portion of them; and thus every day
bringing his contribution to the national store, lays by some
per-centage of the orders received in exchange for it, he increases the
national wealth daily by as much as he does not use of the received
order, and to the same amount accumulates a monetary claim on the
Government. It is, of course, always in his power, as it is his legal
right, to bring forward this accumulation of claim, and at once to
consume, destroy, or distribute, the sum of his wealth. Supposing he
never does so, but dies, leaving his claim to others, he has enriched
the State during his life by the quantity of wealth over which that
claim extends, or has, in other words, rendered so much additional life
possible in the State, of which additional life he bequeaths the
immediate possibility to those whom he invests with his claim. Supposing
him to cancel the claim, he would distribute this possibility of life
among the nation at large.
41. We hitherto consider the Government itself as simply a conservative
power, taking charge of the wealth entrusted to it.
But a Government may be more or less than a conservative power. It may
be either an improving, or destructive one.
If it be an improving power, using all the wealth entrusted to it to the
best advantage, the nation is enriched in root and branch at once, and
the Government is enabled, for every order presented, to return a
quantity of wealth greater than the order was written for, according to
the fructification obtained in the interim. This ability may be either
concealed, in which case the currency does not completely represent the
wealth of the country, or it may be manifested by the continual payment
of the excess of value on each order, in which case there is
(irrespectively, observe, of collateral results afterwards to be
examined) a perpetual rise in the worth of the currency, that is to say,
a fall in the price of all articles represented by it.
42. But if the Government be destructive, or a consuming power, it
becomes unable to return the value received on the presentation of the
order.
This inability may either be concealed by meeting demands to the full,
until it issue in bankruptcy, or in some form of national debt;--or it
may be concealed during oscillatory movements between destructiveness
and productiveness, which result on the whole in stability;--or it may
be manifested by the consistent return of less than value received on
each presented order, in which case there is a consistent fall in the
worth of the currency, or rise in the price of the things represented by
it.
43. Now, if for this conception of a central Government, we substitute
that of a body of persons occupied in industrial pursuits, of whom each
adds in his private capacity to the common store, we at once obtain an
approximation to the actual condition of a civilized mercantile
community, from which approximation we might easily proceed into still
completer analysis. I purpose, however, to arrive at every result by the
gradual expansion of the simpler conception; but I wish the reader to
observe, in the meantime, that both the social conditions thus supposed
(and I will by anticipation say also, all possible social conditions),
agree in two great points; namely, in the primal importance of the
supposed national store or stock, and in its destructibility or
improveability by the holders of it.
44. I. Observe that in both conditions, that of central
Government-holding, and diffused private-holding, the quantity of stock
is of the same national moment. In the one case, indeed, its amount may
be known by examination of the persons to whom it is confided; in the
other it cannot be known but by exposing the private affairs of every
individual. But, known or unknown, its significance is the same under
each condition. The riches of the nation consist in the abundance, and
their wealth depends on the nature, of this store.
45. II. In the second place, both conditions, (and all other possible
ones) agree in the destructibility or improveability of the store by its
holders. Whether in private hands, or under Government charge, the
national store may be daily consumed, or daily enlarged, by its
possessors; and while the currency remains apparently unaltered, the
property it represents may diminish or increase.
46. The first question, then, which we have to put under our simple
conception of central Government, namely, "What store has it?" is one of
equal importance, whatever may be the constitution of the State; while
the second question--namely, "Who are the holders of the store?"
involves the discussion of the constitution of the State itself.
The first inquiry resolves itself into three heads:
1. What is the nature of the store?
2. What is its quantity in relation to the population?
3. What is its quantity in relation to the currency?
The second inquiry into two:
1. Who are the Holders of the store, and in what proportions?
2. Who are the Claimants of the store, (that is to say, the holders of
the currency,) and in what proportions?
We will examine the range of the first three questions in the present
paper; of the two following, in the sequel.
47. I. QUESTION FIRST. What is the nature of the store? Has the nation
hitherto worked for and gathered the right thing or the wrong? On that
issue rest the possibilities of its life.
For example, let us imagine a society, of no great extent, occupied in
procuring and laying up store of corn, wine, wool, silk, and other such
preservable materials of food and clothing; and that it has a currency
representing them. Imagine farther, that on days of festivity, the
society, discovering itself to derive satisfaction from pyrotechnics,
gradually turns its attention more and more to the manufacture of
gunpowder; so that an increasing number of labourers, giving what time
they can spare to this branch of industry, bring increasing quantities
of combustibles into the store, and use the general orders received in
exchange to obtain such wine, wool, or corn, as they may have need of.
The currency remains the same, and represents precisely the same amount
of material in the store, and of labour spent in producing it. But the
corn and wine gradually vanish, and in their place, as gradually, appear
sulphur and saltpetre, till at last the labourers who have consumed corn
and supplied nitre, presenting on a festal morning some of their
currency to obtain materials for the feast, discover that no amount of
currency will command anything Festive, except Fire. The supply of
rockets is unlimited, but that of food, limited, in a quite final
manner; and the whole currency in the hands of the society represents an
infinite power of detonation, but none of existence.
48. This statement, caricatured as it may seem, is only exaggerated in
assuming the persistence of the folly to extremity, unchecked, as in
reality it would be, by the gradual rise in price of food. But it falls
short of the actual facts of human life in expression of the depth and
intensity of the folly itself. For a great part (the reader would not
believe how great until he saw the statistics in detail) of the most
earnest and ingenious industry of the world is spent in producing
munitions of war; gathering, that is to say the materials, not of
festive, but of consuming fire; filling its stores with all power of the
instruments of pain, and all affluence of the ministries of death. It
was no true _Trionfo della Morte_[19] which men have seen and feared
(sometimes scarcely feared) so long; wherein he brought them rest from
their labours. We see, and share, another and higher form of his triumph
now. Task-master, instead of Releaser, he rules the dust of the arena no
less than of the tomb; and, content once in the grave whither man went,
to make his works to cease and his devices to vanish,--now, in the busy
city and on the serviceable sea, makes his work to increase, and his
devices to multiply.
49. To this doubled loss, or negative power of labour, spent in
producing means of destruction, we have to add, in our estimate of the
consequences of human folly, whatever more insidious waste of toil there
is in production of unnecessary luxury. Such and such an occupation (it
is said) supports so many labourers, because so many obtain wages in
following it; but it is never considered that unless there be a
supporting power in the product of the occupation, the wages given to
one man are merely withdrawn from another. We cannot say of any trade
that it maintains such and such a number of persons, unless we know how
and where the money, now spent in the purchase of its produce, would
have been spent, if that produce had not been manufactured. The
purchasing funds truly support a number of people in making This; but
(probably) leave unsupported an equal number who are making, or could
have made That. The manufacturers of small watches thrive at Geneva;--it
is well;--but where would the money spent on small watches have gone,
had there been no small watches to buy?
50. If the so frequently uttered aphorism of mercantile economy--"labour
is limited by capital," were true, this question would be a definite
one. But it is untrue; and that widely. Out of a given quantity of funds
for wages, more or less labour is to be had, according to the quantity
of will with which we can inspire the workman; and the true limit of
labour is only in the limit of this moral stimulus of the will, and of
the bodily power. In an ultimate, but entirely unpractical sense, labour
is limited by capital, as it is by matter--that is to say, where there
is no material, there can be no work,--but in the practical sense,
labour is limited only by the great original capital of head, heart, and
hand. Even in the most artificial relations of commerce, labour is to
capital as fire to fuel: out of so much fuel, you _can_ have only so
much fire; but out of so much fuel, you _shall_ have so much fire,--not
in proportion to the mass of combustible, but to the force of wind that
fans and water that quenches; and the appliance of both. And labour is
furthered, as conflagration is, not so much by added fuel, as by
admitted air.[20]
51. For which reasons, I had to insert, in Sec. 49, the qualifying
"probably;" for it can never be said positively that the purchase-money,
or wages fund of any trade is withdrawn from some other trade. The
object itself may be the stimulus of the production of the money which
buys it; that is to say, the work by which the purchaser obtained the
means of buying it, would not have been done by him unless he had wanted
that particular thing. And the production of any article not
intrinsically (nor in the process of manufacture) injurious, is useful,
if the desire of it causes productive labour in other directions.
52. In the national store, therefore, the presence of things
intrinsically valueless does not imply an entirely correlative absence
of things valuable. We cannot be certain that all the labour spent on
vanity has been diverted from reality, and that for every bad thing
produced, a precious thing has been lost. In great measure, the vain
things represent the results of roused indolence; they have been carved,
as toys, in extra time; and, if they had not been made, nothing else
would have been made. Even to munitions of war this principle applies;
they partly represent the work of men who, if they had not made spears,
would never have made pruning hooks, and who are incapable of any
activities but those of contest.
53. Thus then, finally, the nature of the store has to be considered
under two main lights; the one, that of its immediate and actual
utility; the other, that of the past national character which it
signifies by its production, and future character which it must develop
by its use. And the issue of this investigation will be to show us that.
Economy does not depend merely on principles of "demand and supply," but
primarily on what is demanded, and what is supplied; which I will beg of
you to observe, and take to heart.
* * * * *
54. II. QUESTION SECOND.--What is the quantity of the store, in relation
to the population?
It follows from what has been already stated that the accurate form in
which this question has to be put is--"What quantity of each article
composing the store exists in proportion to the real need for it by the
population?" But we shall for the time assume, in order to keep all our
terms at the simplest, that the store is wholly composed of useful
articles, and accurately proportioned to the several needs for them.
Now it cannot be assumed, because the store is large in proportion to
the number of the people, that the people must be in comfort; nor
because it is small, that they must be in distress. An active and
economical race always produces more than it requires, and lives (if it
is permitted to do so) in competence on the produce of its daily labour.
The quantity of its store, great or small, is therefore in many respects
indifferent to it, and cannot be inferred from its aspect. Similarly an
inactive and wasteful population, which cannot live by its daily labour,
but is dependent, partly or wholly, on consumption of its store, may be
(by various difficulties, hereafter to be examined, in realizing or
getting at such store) retained in a state of abject distress, though
its possessions may be immense. But the results always involved in the
magnitude of store are, the commercial power of the nation, its
security, and its mental character. Its commercial power, in that
according to the quantity of its store, may be the extent of its
dealings; its security, in that according to the quantity of its store
are its means of sudden exertion or sustained endurance; and its
character, in that certain conditions of civilization cannot be attained
without permanent and continually accumulating store, of great intrinsic
value, and of peculiar nature.[21]
55. Now, seeing that these three advantages arise from largeness of
store in proportion to population, the question arises immediately,
"Given the store--is the nation enriched by diminution of its numbers?
Are a successful national speculation, and a pestilence, economically
the same thing?"
This is in part a sophistical question; such as it would be to ask
whether a man was richer when struck by disease which must limit his
life within a predicable period, than he was when in health. He is
enabled to enlarge his current expenses, and has for all purposes a
larger sum at his immediate disposal (for, given the fortune, the
shorter the life, the larger the annuity); yet no man considers himself
richer because he is condemned by his physician.
56. The logical reply is that, since Wealth is by definition only the
means of life, a nation cannot be enriched by its own mortality. Or in
shorter words, the life is more than the meat; and existence itself,
more wealth than the means of existence. Whence, of two nations who have
equal store, the more numerous is to be considered the richer, provided
the type of the inhabitant be as high (for, though the relative bulk of
their store be less, its relative efficiency, or the amount of effectual
wealth, must be greater). But if the type of the population be
deteriorated by increase of its numbers, we have evidence of poverty in
its worst influence; and then, to determine whether the nation in its
total may still be justifiably esteemed rich, we must set or weigh, the
number of the poor against that of the rich.
To effect which piece of scale-work, it is of course necessary to
determine, first, who are poor and who are rich; nor this only, but also
how poor and how rich they are. Which will prove a curious
thermometrical investigation; for we shall have to do for gold and for
silver, what we have done for quicksilver;--determine, namely, their
freezing-point, their zero, their temperate and fever-heat points;
finally, their vaporescent point, at which riches, sometimes
explosively, as lately in America, "make to themselves wings:"--and
correspondently, the number of degrees _below_ zero at which poverty,
ceasing to brace with any wholesome cold, burns to the bone.[22]
57. For the performance of these operations, in the strictest sense
scientific, we will first look to the existing so-called "science" of
Political Economy; we will ask it to define for us the comparatively and
superlatively rich, and the comparatively and superlatively poor; and on
its own terms--if any terms it can pronounce--examine, in our prosperous
England, how many rich and how many poor people there are; and whether
the quantity and intensity of the poverty is indeed so overbalanced by
the quantity and intensity of wealth, that we may permit ourselves a
luxurious blindness to it, and call ourselves, complacently, a rich
country. And if we find no clear definition in the existing science, we
will endeavour for ourselves to fix the true degrees of the scale, and
to apply them.[23]
* * * * *
58. QUESTION THIRD. What is the quantity of the store in relation to the
Currency?
We have seen that the real worth of the currency, so far as dependent on
its relation to the magnitude of the store, may vary, within certain
limits, without affecting its worth in exchange. The diminution or
increase of the represented wealth may be unperceived, and the currency
may be taken either for more or less than it is truly worth. Usually it
is taken for much more; and its power in exchange, or credit-power, is
thus increased up to a given strain upon its relation to existing
wealth. This credit-power is of chief importance in the thoughts,
because most sharply present to the experience, of a mercantile
community: but the conditions of its stability[24] and all other
relations of the currency to the material store are entirely simple in
principle, if not in action. Far other than simple are the relations of
the currency to the available labour which it also represents. For this
relation is involved not only with that of the magnitude of the store to
the number, but with that of the magnitude of the store to the mind, of
the population. Its proportion to their number, and the resulting worth
of currency, are calculable; but its proportion to their will for labour
is not. The worth of the piece of money which claims a given quantity of
the store is, in exchange, less or greater according to the facility of
obtaining the same quantity of the same thing without having recourse to
the store. In other words it depends on the immediate Cost and Price of
the thing. We must now, therefore, complete the definition of these
terms.
59. All cost and price are counted in Labour. We must know first,
therefore, what is to be counted _as_ Labour.
I have already defined labour to be the Contest of the life of man with
an opposite. Literally, it is the quantity of "Lapse," loss, or failure
of human life, caused by any effort. It is usually confused with effort
itself, or the application of power (opera); but there is much effort
which is merely a mode of recreation, or of pleasure. The most beautiful
actions of the human body, and the highest results of the human
intelligence, are conditions, or achievements, of quite
unlaborious,--nay, of recreative,--effort. But labour is the _suffering_
in effort. It is the negative quantity, or quantity of de-feat, which
has to be counted against every Feat, and of de-fect which has to be
counted against every Fact, or Deed of men. In brief, it is "that
quantity of our toil which we die in."
We might, therefore, _a priori_, conjecture (as we shall ultimately
find), that it cannot be bought, nor sold. Everything else is bought and
sold for Labour, but labour itself cannot be bought nor sold for
anything, being priceless.[25] The idea that it is a commodity to be
bought or sold, is the alpha and omega of Politico-Economic fallacy.
60. This being the nature of labour, the "Cost" of anything is the
quantity of labour necessary to obtain it;--the quantity for which, or
at which, it "stands" (constant). It is literally the "Constancy" of the
thing;--you shall win it--move it--come at it, for no less than this.
Cost is measured and measurable (using the accurate Latin terms) only in
"labour," not in "opera."[26] It does not matter how much _work_ a thing
needs to produce it; it matters only how much _distress_. Generally the
more the power it requires, the less the distress; so that the noblest
works of man cost less than the meanest.
True labour, or spending of life, is either of the body, in fatigue or
pain; of the temper or heart (as in perseverance of search for
things,--patience in waiting for them,--fortitude or degradation in
suffering for them, and the like), or of the intellect. All these kinds
of labour are supposed to be included in the general term, and the
quantity of labour is then expressed by the time it lasts. So that a
unit of labour is "an hour's work" or a day's work, as we may
determine.[27]
61. Cost, like value, is both intrinsic and effectual. Intrinsic cost is
that of getting the thing in the right way; effectual cost is that of
getting the thing in the way we set about it. But intrinsic cost cannot
be made a subject of analytical investigation, being only partially
discoverable, and that by long experience. Effectual cost is all that
the political Economist can deal with; that is to say, the cost of the
thing under existing circumstances, and by known processes.
Cost, being dependent much on application of method, varies with the
quantity of the thing wanted, and with the number of persons who work
for it. It is easy to get a little of some things, but difficult to get
much; it is impossible to get some things with few hands, but easy to
get them with many.
62. The cost and value of things, however difficult to determine
accurately, are thus both dependent on ascertainable physical
circumstances.[28]
But their _price_ is dependent on the human will.
Such and such a thing is demonstrably good for so much. And it may
demonstrably be had for so much.
But it remains questionable, and in all manner of ways questionable,
whether I choose to give so much.[29]
This choice is always a relative one. It is a choice to give a price for
this, rather than for that;--a resolution to have the thing, if getting
it does not involve the loss of a better thing. Price depends,
therefore, not only on the cost of the commodity itself, but on its
relation to the cost of every other attainable thing.
Farther. The _power_ of choice is also a relative one. It depends not
merely on our own estimate of the thing, but on everybody else's
estimate; therefore on the number and force of the will of the
concurrent buyers, and on the existing quantity of the thing in
proportion to that number and force.
Hence the price of anything depends on four variables.
(1.) Its cost.
(2.) Its attainable quantity at that cost.
(3.) The number and power of the persons who want it.
(4.) The estimate they have formed of its desirableness.
Its value only affects its price so far as it is contemplated in this
estimate; perhaps, therefore, not at all.
63. Now, in order to show the manner in which price is expressed in
terms of a currency, we must assume these four quantities to be known,
and the "estimate of desirableness," commonly called the Demand, to be
certain. We will take the number of persons at the lowest. Let A and B
be two labourers who "demand," that is to say, have resolved to labour
for, two articles, _a_ and _b_. Their demand for these articles (if the
reader likes better, he may say their need) is to be conceived as
absolute, their existence depending on the getting these two things.
Suppose, for instance, that they are bread and fuel, in a cold country,
and let a represent the least quantity of bread, and _b_ the least
quantity of fuel, which will support a man's life for a day. Let _a_ be
producible by an hour's labour, but _b_ only by two hours' labour.
Then the _cost of a_ is one hour, and of _b_ two (cost, by our
definition, being expressible in terms of time). If, therefore, each man
worked both for his corn and fuel, each would have to work three hours a
day. But they divide the labour for its greater ease.[30] Then if A
works three hours, he produces 3 _a_, which is one a more than both the
men want. And if B works three hours, he produces only 1-1/2 _b_, or
half of _b_ less than both want. But if A work three hours and B six, A
has 3 _a_, and B has 3 _b_, a maintenance in the right proportion for
both for a day and half; so that each might take half a day's rest. But
as B has worked double time, the whole of this day's rest belongs in
equity to him. Therefore the just exchange should be, A giving two _a_
for one _b_, has one _a_ and one _b_;--maintenance for a day. B giving
one _b_ for two _a_, has two _a_ and two _b_; maintenance for two days.
But B cannot rest on the second day, or A would be left without the
article which B produces. Nor is there any means of making the exchange
just, unless a third labourer is called in. Then one workman, A,
produces _a_, and two, B and C, produce _b_:--A, working three hours,
has three _a_;--B, three hours, 1-1/2 _b_;--C, three hours, 1-1/2 _b_. B
and C each give half of _b_ for _a_, and all have their equal daily
maintenance for equal daily work.
To carry the example a single step farther, let three articles, _a_,
_b_, and _c_ be needed.
Let _a_ need one hour's work, _b_ two, and _c_ four; then the day's work
must be seven hours, and one man in a day's work can make 7 _a_, or
3-1/2 _b_, or 1-3/4 _c_.
Therefore one A works for _a_, producing 7 _a_; two B's work for _b_,
producing 7 _b_; four C's work for _c_, producing 7 _c_.
A has six _a_ to spare, and gives two _a_ for one _b_, and four _a_ for
one _c_. Each B has 2-1/2 _b_ to spare, and gives 1/2 _b_ for one _a_,
and two _b_ for one _c_.
Each C has 3/4 of _c_ to spare, and gives 1/2 _c_ for one _b_, and 1/4
of _c_ for one _a_.
And all have their day's maintenance.
Generally, therefore, it follows that if the demand is constant,[31] the
relative prices of things are as their costs, or as the quantities of
labour involved in production.
64. Then, in order to express their prices in terms of a currency, we
have only to put the currency into the form of orders for a certain
quantity of any given article (with us it is in the form of orders for
gold), and all quantities of other articles are priced by the relation
they bear to the article which the currency claims.
But the worth of the currency itself is not in the slightest degree
founded more on the worth of the article which it either claims or
consists in (as gold) than on the worth of every other article for which
the gold is exchangeable. It is just as accurate to say, "so many pounds
are worth an acre of land," as "an acre of land is worth so many
pounds." The worth of gold, of land, of houses, and of food, and of all
other things, depends at any moment on the existing quantities and
relative demands for all and each; and a change in the worth of, or
demand for, any one, involves an instantaneously correspondent change in
the worth of, and demand for, all the rest;--a change as inevitable and
as accurately balanced (though often in its process as untraceable) as
the change in volume of the outflowing river from some vast lake, caused
by change in the volume of the inflowing streams, though no eye can
trace, nor instrument detect, motion, either on its surface, or in the
depth.
65. Thus, then, the real working power or worth of the currency is
founded on the entire sum of the relative estimates formed by the
population of its possessions; a change in this estimate in any
direction (and therefore every change in the national character),
instantly alters the value of money, in its second great function of
commanding labour. But we must always carefully and sternly distinguish
between this worth of currency, dependent on the conceived or
appreciated value of what it represents, and the worth of it, dependent
on the _existence_ of what it represents. A currency is _true, or
false_, in proportion to the security with which it gives claim to the
possession of land, house, horse, or picture; but a currency is _strong
or weak_,[32] worth much, or worth little, in proportion to the degree
of estimate in which the nation holds the house, horse, or picture which
is claimed. Thus the power of the English currency has been, till of
late, largely based on the national estimate of horses and of wine: so
that a man might always give any price to furnish choicely his stable,
or his cellar; and receive public approval therefor: but if he gave the
same sum to furnish his library, he was called mad or a biblio-maniac.
And although he might lose his fortune by his horses, and his health or
life by his cellar, and rarely lost either by his books, he was yet
never called a Hippo-maniac nor an Oino-maniac; but only Biblio-maniac,
because the current worth of money was understood to be legitimately
founded on cattle and wine, but not on literature. The prices lately
given at sales for pictures and MSS. indicate some tendency to change in
the national character in this respect, so that the worth of the
currency may even come in time to rest, in an acknowledged manner,
somewhat on the state and keeping of the Bedford missal, as well as on
the health of Caractacus or Blink Bonny; and old pictures be considered
property, no less than old port. They might have been so before now, but
that it is more difficult to choose the one than the other.
66. Now, observe, all these sources of variation in the power of the
currency exist, wholly irrespective of the influences of vice,
indolence, and improvidence. We have hitherto supposed, throughout the
analysis, every professing labourer to labour honestly, heartily, and in
harmony with his fellows. We have now to bring farther into the
calculation the effects of relative industry, honour, and forethought;
and thus to follow out the bearings of our second inquiry: Who are the
holders of the Store and Currency, and in what proportions?
This, however, we must reserve for our next paper--noticing here only
that, however distinct the several branches of the subject are,
radically, they are so interwoven in their issues that we cannot rightly
treat any one, till we have taken cognizance of all. Thus the need of
the currency in proportion to number of population is materially
influenced by the probable number of the holders in proportion to the
non-holders; and this again, by the number of holders of goods, or
wealth, in proportion to the non-holders of goods. For as, by
definition, the currency is a claim to goods which are not possessed,
its quantity indicates the number of claimants in proportion to the
number of holders; and the force and complexity of claim. For if the
claims be not complex, currency as a means of exchange may be very small
in quantity. A sells some corn to B, receiving a promise from B to pay
in cattle, which A then hands over to C, to get some wine. C in due time
claims the cattle from B; and B takes back his promise. These exchanges
have, or might have been, all effected with a single coin or promise;
and the proportion of the currency to the store would in such
circumstances indicate only the circulating vitality of it--that is to
say, the quantity and convenient divisibility of that part of the store
which the _habits_ of the nation keep in circulation. If a cattle
breeder is content to live with his household chiefly on meat and milk,
and does not want rich furniture, or jewels, or books--if a wine and
corn grower maintains himself and his men chiefly on grapes and
bread;--if the wives and daughters of families weave and spin the
clothing of the household, and the nation, as a whole, remains content
with the produce of its own soil and the work of its own hands, it has
little occasion for circulating media. It pledges and promises little
and seldom; exchanges only so far as exchange is necessary for life. The
store belongs to the people in whose hands it is found, and money is
little needed either as an expression of right, or practical means of
division and exchange.
67. But in proportion as the habits of the nation become complex and
fantastic (and they may be both, without therefore being civilized), its
circulating medium must increase in proportion to its store. If every
one wants a little of everything,--if food must be of many kinds, and
dress of many fashions,--if multitudes live by work which, ministering
to fancy, has its pay measured by fancy, so that large prices will be
given by one person for what is valueless to another,--if there are
great inequalities of knowledge, causing great inequalities of
estimate,--and, finally, and worst of all, if the currency itself, from
its largeness, and the power which the possession of it implies, becomes
the sole object of desire with large numbers of the nation, so that the
holding of it is disputed among them as the main object of life:--in
each and all of these cases, the currency necessarily enlarges in
proportion to the store; and as a means of exchange and division, as a
bond of right, and as an object of passion, has a more and more
important and malignant power over the nation's dealings, character, and
life.
Against which power, when, as a bond of Right, it becomes too
conspicuous and too burdensome, the popular voice is apt to be raised in
a violent and irrational manner, leading to revolution instead of
remedy. Whereas all possibility of Economy depends on the clear
assertion and maintenance of this bond of right, however burdensome. The
first necessity of all economical government is to secure the
unquestioned and unquestionable working of the great law of
Property--that a man who works for a thing shall be allowed to get it,
keep it, and consume it, in peace; and that he who does not eat his cake
to-day, shall be seen, without grudging, to have his cake to-morrow.
This, I say, is the first point to be secured by social law; without
this, no political advance, nay, no political existence, is in any sort
possible. Whatever evil, luxury, iniquity, may seem to result from it,
this is nevertheless the first of all Equities; and to the enforcement
of this, by law and by police-truncheon, the nation must always
primarily set its mind--that the cupboard door may have a firm lock to
it, and no man's dinner be carried off by the mob, on its way home from
the baker's. Which, thus fearlessly asserting, we shall endeavour in
next paper to consider how far it may be practicable for the mob itself,
also, in due breadth of dish, to have dinners to carry home.
FOOTNOTES:
[14] Remember carefully this statement, that Wealth consists only in the
things which the nature of humanity has rendered in all ages, and must
render in all ages to come, (that is what I meant by "constant") the
objects of legitimate desire. And see Appendix II.
[15] The _Wanderings_, observe, not the Right goings, of Imagination.
She is very far from despising these.
[16] _See_ Appendix III.
[17] I would beg the reader's very close attention to these 37th and
38th paragraphs. It would be well if a dogged conviction could be
enforced on nations, as on individuals, that, with few exceptions, what
they cannot at present pay for, they should not at present have.
[18] _See_ Appendix IV.
[19] I little thought, what _Trionfo della Morte_ would be, for this
very cause, and in literal fulfilment of the closing words of the 47th
paragraph, over the fields and houses of Europe, and over its fairest
city--within seven years from the day I wrote it.
[20] The meaning of which is, that you may spend a great deal of money,
and get very little work for it, and that little bad; but having good
"air" or "spirit," to put life into it, with very little money, you may
get a great deal of work, and all good; which, observe, is an
arithmetical, not at all a poetical or visionary circumstance.
[21] More especially, works of great art.
[22] The meaning of that, in plain English, is, that we must find out
how far poverty and riches are good or bad for people, and what is the
difference between being miserably poor--so as, perhaps, to be driven to
crime, or to pass life in suffering--and being blessedly poor, in the
sense meant in the Sermon on the Mount. For I suppose the people who
believe that sermon, do not think (if they ever honestly ask themselves
what they do think), either that Luke vi. 24. is a merely poetical
exclamation, or that the Beatitude of Poverty has yet been attained in
St. Martin's Lane and other back streets of London.
[23] Large plans!--Eight years are gone, and nothing done yet. But I
keep my purpose of making one day this balance, or want of balance,
visible, in those so seldom used scales of Justice.
[24] These are nearly all briefly represented by the image used for the
force of money by Dante, of mast and sail:--
Quali dal vento le gonfiate vele
Caggiono avvolte, poi che l'alber fiacca
Tal cadde a terra la fiera crudele.
The image may be followed out, like all of Dante's, into as close detail
as the reader chooses. Thus the stress of the sail must be proportioned
to the strength of the mast, and it is only in unforeseen danger that a
skilful seaman ever carries all the canvas his spars will bear, states
of mercantile languor are like the flap of the sail in a calm; of
mercantile precaution, like taking in reefs; and mercantile ruin is
instant on the breaking of the mast.
[I mean by credit-power, the general impression on the national mind
that a sovereign, or any other coin, is worth so much bread and
cheese--so much wine--so much horse and carriage--or so much fine art:
it may be really worth, when tried, less or more than is thought: the
thought of it is the credit-power.]
[25] The object of Political Economy is not to buy, nor to sell labour,
but to spare it. Every attempt to buy or sell it is, in the outcome,
ineffectual; so far as successful, it is not sale, but Betrayal; and the
purchase-money is a part of that thirty pieces which bought, first the
greatest of labours, and afterwards the burial-field of the Stranger;
for this purchase-money, being in its very smallness or vileness the
exactly measured opposite of the "vilis annona amicorum," makes all men
strangers to each other.
[26] Cicero's distinction, "sordidi quaestus, quorum operae, non quorum
artes emuntur," admirable in principle, is inaccurate in expression,
because Cicero did not practically know how much operative dexterity is
necessary in all the higher arts; but the cost of this dexterity is
incalculable. Be it great or small, the "cost" of the mere perfectness
of touch in a hammer-stroke of Donatello's, or a pencil-touch of
Correggio's, is inestimable by any ordinary arithmetic.
[Old notes, these, more embarrassing I now perceive, than elucidatory;
but right, and worth retaining.]
[27] Only observe, as some labour is more destructive of life than other
labour, the hour or day of the more destructive toil is supposed to
include proportionate rest. Though men do not, or cannot, usually take
such rest, except in death.
[28] There is, therefore, observe, no such thing as cheapness (in the
common use of that term), without some error or injustice. A thing is
said to be cheap, not because it is common, but because it is supposed
to be sold under its worth. Everything has its proper and true worth at
any given time, in relation to everything else; and at that worth should
be bought and sold. If sold under it, it is cheap to the buyer by
exactly so much as the seller loses, and no more. Putrid meat, at
twopence a pound, is not "cheaper" than wholesome meat at sevenpence a
pound; it is probably much dearer; but if, by watching your opportunity,
you can get the wholesome meat for sixpence a pound, it is cheaper to
you by a penny, which you have gained, and the seller has lost. The
present rage for cheapness is either, therefore, simply and literally a
rage for badness of all commodities, or it is an attempt to find persons
whose necessities will force them to let you have more than you should
for your money. It is quite easy to produce such persons, and in large
numbers; for the more distress there is in a nation, the more cheapness
of this sort you can obtain, and your boasted cheapness is thus merely a
measure of the extent of your national distress.
There is, indeed, a condition of apparent cheapness, which we have some
right to be triumphant in; namely, the real reduction in cost of
articles by right application of labour. But in this case the article is
only cheap with reference to its _former_ price; the so-called cheapness
is only our expression for the sensation of contrast between its former
and existing prices. So soon as the new methods of producing the article
are established, it ceases to be esteemed either cheap or dear, at the
new price, as at the old one, and is felt to be cheap only when accident
enables it to be purchased beneath this new value. And it is no
advantage to produce the article more easily, except as it enables you
to multiply your population. Cheapness of this kind is merely the
discovery that more men can be maintained on the same ground; and the
question how many you will maintain in proportion to your additional
means, remains exactly in the same terms that it did before.
A form of immediate cheapness results, however, in many cases, without
distress, from the labour of a population where food is redundant, or
where the labour by which the food is produced leaves much idle time on
their hands, which may be applied to the production of "cheap" articles.
All such phenomena indicate to the political economist places where the
labour is unbalanced. In the first case, the just balance is to be
effected by taking labourers from the spot where pressure exists, and
sending them to that where food is redundant. In the second, the
cheapness is a local accident, advantageous to the local purchaser,
disadvantageous to the local producer. It is one of the first duties of
commerce to extend the market, and thus give the local producer his full
advantage.
Cheapness caused by natural accidents of harvest, weather, &c., is
always counterbalanced, in due time, by natural scarcity, similarly
caused. It is the part of wise government, and healthy commerce, so to
provide in times and places of plenty for times and places of dearth, as
that there shall never be waste, nor famine.
Cheapness caused by gluts of the market is merely a disease of clumsy
and wanton commerce.
[29] Price has been already defined (p. 9) to be the quantity of labour
which the possessor of a thing is willing to take for it. It is best to
consider the price to be that fixed by the possessor, because the
possessor has absolute power of refusing sale, while the purchaser has
no absolute power of compelling it; but the effectual or market price is
that at which their estimates coincide.
[30] This "greater ease" ought to be allowed for by a diminution in the
times of the divided work; but as the proportion of times would remain
the same, I do not introduce this unnecessary complexity into the
calculation.
[31] Compare _Unto this Last_, p. 115, _et seq._
[32] [That is to say, the love of money is founded first on the
intenseness of desire for given things; a youth will rob the till,
now-a-days, for pantomime tickets and cigars; the "strength" of the
currency being irresistible to him, in consequence of his desire for
those luxuries.]