Importance of capital to the profitable employment of
labour--Contrast between the prodigal and the prudent man:
the Dukes of Buckingham and Bridgewater--Making good for
trade--Unprofitable consumption--War against capital in the
middle ages--Evils of corporate privileges--Condition of the
people under Henry VIII.
If we have succeeded in making our meaning clear, by stating a general
truth, not in an abstract form, but as brought out by various instances
of the modes in which it is exhibited, we shall have led the reader to
the conclusion that accumulation, or capital, is absolutely essential to
the profitable employment of labour; and that the greater the
accumulation the greater the extent of that profitable employment. This
truth, however, has been denied altogether by some speculative
writers;--and, what is more important, has been practically denied by
the conduct of nations and individuals in the earlier state of
society,--and is still denied by existing prejudices, derived from the
current maxims of former days of ignorance and half-knowledge. With the
speculative writers we have little to do. When Rousseau, for instance,
advises governments not to secure property to its possessors, but to
deprive them of all means of accumulating, it is sufficient to know that
the same writer advocated the savage state, in which there should be no
property, in preference to the social, which is founded on
appropriation. Knowing this, and being convinced that the savage state,
even with imperfect appropriation, is one of extreme wretchedness, we
may safely leave such opinions to work their own cure. For it is not
likely that any individual, however disposed to think that accumulation
is an evil, would desire, by destroying accumulation, to pass into the
condition, described by John Tanner, of a constant encounter with hunger
in its most terrific forms: and seeing, therefore, the fallacy of such
an opinion, he will also see that, if he partially destroys
accumulation, he equally impedes production, and equally destroys his
share in the productive power of capital and labour working together for
a common good in the social state.
But, without going the length of wishing to destroy capital, there are
many who think that accumulation is a positive evil, and that
consumption is a positive benefit; and, therefore, that economy is an
evil, and waste a benefit. The course of a prodigal man is by many still
viewed with considerable admiration. He sits up all night in frantic
riot--he consumes whatever can stimulate his satiated appetite--he is
waited upon by a crowd of unproductive and equally riotous retainers--he
breaks and destroys everything around him with an unsparing hand--he
rides his horses to death in the most extravagant attempts to wrestle
with time and space; and when he has spent all his substance in these
excesses, and dies an outcast and a beggar, he is said to have been a
hearty fellow, and to have "made good for trade." When, on the contrary,
a man of fortune economizes his revenue--lives like a virtuous and
reasonable being, whose first duty is the cultivation of his
understanding--eats and drinks with regard to his health--keeps no more
retainers than are sufficient for his proper comfort and decency--breaks
and destroys nothing--has respect to the inferior animals, as well from
motives of prudence as of mercy--and dies without a mortgage on his
lands; _he_ is said to have been a stingy fellow who did not know how to
"circulate his money." To "circulate money," to "make good for trade,"
in the once common meaning of the terms, is for _one_ to consume
unprofitably what, if economized, would have stimulated production in a
way that would have enabled _hundreds_, instead of one, to consume
profitably. Let us offer two historical examples of these two opposite
modes of making good for trade, and circulating money. The Duke of
Buckingham, "having been possessed of about 50,000_l._ a year, died in
1687, in a remote inn in Yorkshire, reduced to the utmost misery."[12]
After a life of the most wanton riot, which exhausted all his princely
resources, he was left at the last hour, under circumstances which are
well described in the following lines by Pope:--
"In the worst inn's worst room, with mat half hung,
The floors of plaster, and the walls of dung,
On once a flock bed, but repair'd with straw,
With tape-tied curtains never meant to draw,
The George and Garter dangling from that bed
Where tawdry yellow strove with dirty red;
Great Villiers lies....
No wit to flatter left of all his store,
No fool to laugh at, which he valued more,
There, victor of his health, of fortune, friends,
And fame, this lord of useless thousands ends."
Contrast the course of this unhappy man with that of the Duke of
Bridgewater, who devoted his property to really "making good for trade,"
by constructing the great canals which connect Manchester with the coal
countries and with Liverpool. The Duke of Buckingham lived in a round of
sensual folly: the Duke of Bridgewater limited his personal expenditure
to 400_l._ a-year, and devoted all the remaining portion of his revenues
to the construction of a magnificent work of the highest public utility.
The one supported a train of cooks and valets and horse-jockeys: the
other called into action the labour of thousands, and employed in the
direction of that labour the skill of Brindley, one of the greatest
engineers that any country has produced. The one died without a penny,
loaded with debt, leaving no trace behind him but the ruin which his
waste had produced: the other bequeathed almost the largest property in
Europe to his descendants, and opened a channel for industry which
afforded, and still affords, employment to thousands.
[Illustration: Brindley.]
When a mob amused themselves by breaking windows, as was once a common
recreation on an illumination night, by way of showing the amount of
popular intelligence, some were apt to say they have "made good for
trade." Is it not evident that the capital which was represented by the
unbroken windows was really so much destroyed of the national riches
when the windows were broken?--for if the windows had remained unbroken,
the capital would have remained to stimulate the production of some new
object of utility. The glaziers, indeed, replaced the windows; but there
having been a destruction of windows, there must have been a necessary
retrenchment in some other outlay, that would have afforded benefit to
the consumer. Doubtless, when the glazier is called into activity by a
mob breaking windows, some other trade suffers; for the man who has to
pay for the broken windows must retrench somewhere, and, if he has less
to lay out, some other person has less to lay out. The glass-maker,
probably, makes more glass at the moment; but he does so to exchange
with the capital that would otherwise have gone to the maker of clothes
or of furniture: and, there being an absolute destruction of the funds
for the maintenance of labour, by an unnecessary destruction of what
former labour has produced, trade generally is injured to the extent of
the destruction. Some now say that a fire makes good for trade. The only
difference of evil between the fire which destroys a house, and the mob
which breaks the windows, is, that the fire absorbs capital for the
maintenance of trade, or labour, in the proportion of a hundred to one
when compared with the mob. Some say that war makes good for trade. The
only difference of pecuniary evil (the moral evils admit of no
comparison) between the fire and the war is, that the war absorbs
capital for the maintenance of trade, or labour, in the proportion of a
million to a hundred when compared with the fire. If the incessant
energy of production were constantly repressed by mobs, and fires, and
wars, the end would be that consumption would altogether exceed
production; and that then the producers and the consumers would both be
starved into wiser courses, and perceive that nothing makes good for
trade but profitable industry and judicious expenditure. Prodigality
devotes itself too much to the satisfaction of present wants: avarice
postpones too much the present wants to the possible wants of the
future. Real economy is the happy measure between the two extremes; and
that only "makes good for trade," because, while it carries on a steady
demand for industry, it accumulates a portion of the production of a
country to stimulate new production. That judicious expenditure consists
in
"The sense to value riches, with the art
T' enjoy them."
The fashion of "making good for trade" by unprofitable consumption is a
relic of the barbarous ages. In the twelfth century a count of France
commanded his vassals to plough up the soil round his castle, and he
sowed the ground with coins of gold, to the amount of fifteen hundred
guineas, that he might have all men talk of his magnificence. Piqued at
the lordly prodigality of his neighbour, another noble ordered thirty
of his most valuable horses to be tied to a stake and burnt alive, that
he might exhibit a more striking instance of contempt for accumulation.
In the latter part of the fourteenth century, a Scotch noble, Colin
Campbell, on receiving a visit from the O'Neiles of Ireland,
ostentatiously burnt down his house at Inverary upon their departure;
and an Earl of Athol pursued the same course in 1528, after having
entertained the papal legate, upon the pretence that it was "the
constant habitude of the high-landers to set on fire in the morning the
place which had lodged them the night before." When the feudal lords had
so little respect for their own property, it was not likely that they
would have much regard for the accumulation of others. The Jews, who
were the great capitalists of the middle ages, and who really merit the
gratitude of Europeans for their avarice, as that almost alone enabled
any accumulation to go forward, and any production to increase, were, as
it is well known, persecuted in every direction by the crown, by the
nobles, by the people. When a solitary farmer or abbot attempted to
accumulate corn, which accumulation could alone prevent the dreadful
famines invariably resulting from having no stock that might be
available upon a bad harvest, the people burnt the ricks of the
provident men, by way of lessening the evils of scarcity. The
consequence was, that no person thought of accumulating at all, and that
the price of wheat often rose, just before the harvest, from five
shillings a quarter to five pounds.
We are accustomed to read and talk of "merry England," but we sometimes
fail to think how much real suffering lay beneath the surface of the
merriment. Herrick, one of our charming old lyric poets, has sung the
glories of the hock-cart--the cart that bore the full sheaves to the
empty barn:--
"The harvest swains and wenches bound
For joy, to see the hock-cart crown'd;
About the cart hear how the rout
Of rural younglings raise the shout,
Pressing before, some coming after,
Those with a shout, and these with laughter.
Some bless the cart, some kiss the sheaves,
Some prank them up with oaken leaves;
Some cross the fill-horse, some with great
Devotion stroke the home-borne wheat."
Assuredly there was joy and there was devotion; for the laden cart made
the difference between plenty and starvation. Before that harvest-home
came there had been many an aching heart in the village hovels, for
there was no store to equalize prices, and no communication to make the
abundance of one district--much less of one country--mitigate the
scarcity of another. It was not a question of the rise or the fall of a
penny or two in the price of a loaf of bread; it was a question of bread
or no bread.
[Illustration: The Hock-Cart.]
During those dark periods the crown carried on the war against capital
with an industry that could not be exceeded by that of the nobles or the
people. Before the great charter the Commons complained that King Henry
seized upon whatever was suited to his royal pleasure--horses,
implements, food, anything that presented itself in the shape of
accumulated labour. In the reign of Henry III. a statute was passed to
remedy excessive distresses; from which it appeared that it was no
unfrequent practice for the king's officers to take the opportunity of
seizing the farmer's oxen at the moment when they were employed in
ploughing, or, as the statute says, "winning the earth,"--taking them
off, and starving them to death, or only restoring them with new and
enormous exactions for their keep. Previous to the Charter of the Forest
no man could dig a marl-pit on his own ground, lest the king's horses
should fall into it when he was hunting. As late as the time of James I.
we find, from a speech of the great Lord Bacon, that it was a pretty
constant practice of the king's purveyors to extort large sums of money
by threatening to cut down favourite trees which grew near a
mansion-house or in avenues. Despotism, in all ages, has depopulated the
finest countries, by rendering capital insecure, and therefore
unproductive; insomuch that Montesquieu lays it down as a maxim, that
lands are not cultivated in proportion to their fertility, but in
proportion to their freedom. In the fifteenth century, in England, we
find sums of money voted for the restoration of decayed towns and
villages. Just laws would have restored them much more quickly and
effectually. The state of agriculture was so low that the most absurd
enactments were made to compel farmers to till and sow their own lands,
and calling upon every man to plant at least forty beans. All the laws
for the regulation of labourers, at the same period, assumed that they
should be _compelled_ to work, and not wander about the country,--just
in the same way that farmers should be compelled to sow and till. It is
perfectly clear that the towns would not have been depopulated, and gone
to decay, if the accumulation of capital had not been obstructed by
insecurity and wasted by ignorance, and that the same insecurity and the
same waste rendered it necessary to assume that the farmer would not
till and sow, and the labourer would not labour, without compulsion. The
natural stimulus to industry was wanting, and therefore there was no
industry, or only unprofitable industry. The towns decayed, the country
was uncultivated--production languished--the people were all poor and
wretched; and the government dreamt that acts of parliament and royal
ordinances could rebuild the houses and cultivate the land, when the
means of building and cultivation, namely, the capital of the country,
was exhausted by injustice producing insecurity.
But if the king, the nobles, and the people of the middle ages conspired
together, or acted at least as if they conspired, to prevent the
accumulation of capital, the few capitalists themselves, by their
monstrous regulations, which still throw some dark shadows over our own
days, prevented that freedom of industry without which capital could not
accumulate. Undoubtedly the commercial privileges of corporations
originally offered some barriers against the injustice of the crown and
of the nobility; but the good was always accompanied with an evil, which
rendered it to a certain extent valueless. Where these privileges gave
security, they were a good; where they destroyed freedom, they were an
injury. Instead of encouraging the intercourse between one trade and
another, they encircled every trade with the most absurd monopolies and
exclusive privileges. Instead of rendering commerce free between one
district and another, they, even in the same country, encompassed
commerce with the most harassing restrictions, which separated county
from county, and town from town, as if seas ran between them. If a man
of Coventry came to London with his wares, he was encountered at every
step with the privileges of companies; if the man of London sought to
trade at Coventry, he was obstructed by the same corporate rights,
preventing either the Londoner or the Coventry man trading with
advantage. The revenues of every city were derived from forfeitures
upon trades, almost all established upon the principle that, if one
trade became too industrious or too clever, it would be the ruin of
another trade. Every trade was fenced round with secrets; and the
commonest trade, as we know from the language of an apprentice's
indenture, was called an "art and mystery." All these follies went upon
the presumption that "one man's gain is another man's loss," instead of
vanishing before the truth, that, in proportion as the industry of all
men is free, so will it be productive; and that production on all sides
ensures a state of things in which every exchanger is a gainer, and no
one a loser.
It is not to be wondered at that, while such opinions existed, the union
of capital and labour should have been very imperfect; and that, while
the capitalists oppressed the labourers, in the same way that they
oppressed each other, the labourers should have thought it not
unreasonable to plunder the capitalists. It is stated by Harrison, an
old writer of credit,[13] that during the single reign of Henry VIII.
seventy-two thousand thieves were hanged in England. No fact can exhibit
in a stronger light the universal misery that must have existed in those
days. The whole kingdom did not contain half a million grown-up males,
so that, considering that the reign of Henry VIII. extended over two
generations, about one man in ten must have been, to use the words of
the same historian, "devoured and eaten up by the gallows." In the same
reign the first statute against Egyptians (gipsies) was passed. These
people went from place to place in great companies--spoke a cant
language, which Harrison calls Pedler's French--and were subdivided into
fifty-two different classes of thieves. The same race of people
prevailed throughout Europe. Cervantes, the author of 'Don Quixote,'
says of the Egyptians or Bohemians, that they seem to have been born for
no other purpose than that of pillaging. While this universal plunder
went forward, it is evident that the insecurity of property must have
been so great that there could have been little accumulation, and
therefore little production. Capital was destroyed on every side; and
because profitable labour had become so scarce by the destruction of
capital, one-half of the community sought to possess themselves of the
few goods of the other half, not as exchangers but as robbers. As the
robbers diminished the capital, the diminution of capital increased the
number of robbers; and if the unconquerable energy of human industry had
not gone on producing, slowly and painfully indeed, but still producing,
the country would have soon fallen back to the state in which it was a
thousand years before, when wolves abounded more than men. One great
cause of all this plunder and misery was the oppression of the
labourers.
[12] Ruffhead's Pope.
[13] Preface to the Chronicles of Holinshed.
[Illustration: Adam Smith.]