Industrial revolution

Industrial Revolution in England – Arnold Toynbee -1884

Lectures on The Industrial Revolution in England by Arnold Toynbee 1884

I Introductory

The subject of these lectures is the industrial and Agrarian Revolution at the end of the eighteenth and beginning of the nineteenth centuries. The course is divided into three parts. The first deals with Adam Smith and the England of his time. It will describe England on the eve of the Industrial Revolution, and the system of regulation and protection of industry as it existed in 1760. It will give also an outline of Adam Smith’s book, its aims and character, and especially his theory of free trade. The second part will group itself round the work of Malthus, who dealt not so much with the causes of wealth as with the causes of poverty, with the distribution of wealth rather than with its production. It will describe England in the midst of the industrial Revolution, and will inquire into the problem of pauperism and the subjects connected with it. The third part will he associated with the name of Ricardo, and will deal with England at the time of the Peace. It will discuss the doctrine of rent and wages together with certain theories of economic progress, and will cover the questions of currency, so much agitated at that period, and the history of the commercial and financial changes which followed the Peace.

I have chosen the subject because it was in this period that
modern Political Economy took its rise. It has been a weakness of
the science, as pursued in England, that it has been too much
dissociated from History. Adam Smith and Malthus, indeed, had
historical minds; but the form of modern text-books is due to
Ricardo, whose mind was entirely unhistorical. Yet there is a
double advantage in combining the two studies. In the first place
Political Economy is better understood by this means. Abstract
propositions are seen in a new light when studied in relation to
the facts which were before the writer at the time when he
formulated them. So regarded they are at once more vivid and less
likely to mislead. Ricardo becomes painfully interesting when he
read the history of his time. And, in the second place, History
also is better understood when studied in connection with
Political Economy; for the latter not only teaches us in reading
History to look out for the right kind of facts, but enables us
to explain many phenomena like those attending the introduction
of enclosures and machinery, or the effects of different systems
of currency, which without its assistance would remain
unintelligible. The careful deductive reasoning, too, which
Political Economy teaches is of great importance to the
historian, and the habits of mind acquired from it are even more
valuable than the knowledge of principles which it gives,
especially to students of facts, who might otherwise be
overwhelmed by the mass of their materials.

Of late years, however, there has been a steady sustained
attack upon the abstract Deductive Method of Political Economy
pursued by Ricardo and Mill, and an attempt to set up historical
investigation in its place as the only true method of economic
inquiry. This attack rests on a misconception of the function of
the Deductive Method. The best exposition of the place of
Abstract Political Economy is to be found in Bagehot’s Economic
Studies. Bagehot points out that this abstract science holds good
only upon certain assumptions, but though the assumptions are
often not entirely correct, the results may yet be approximately
true. Thus the economists, firstly, regard only one part of man’s
nature, and treat him simply as a money-making animal; secondly,
they disregard the influence of custom, and only take account of
competition. Certain laws are laid down under these assumptions;
as, for instance, that the rate of wages always tends to an
equality, the permanent difference obtaining in various
employments being only sufficient to balance the favourable or
unfavourable circumstances attending each of them-a law which is
only true after a certain stage of civilisation and in so far as
the acquisition of wealth is the sole object of men. Such
hypothetical laws, though leading only to rough conclusions, are
yet useful in giving us a point of view from which to observe and
indicate the existence of strong over-mastering tendencies.
Advocates of the Historical Method, like Mr Cliffe Leslie,
therefore, go too far when they condemn the Deductive Method as
radically false. There is no real opposition between the two. The
apparent opposition is due to a wrong use of deduction; to a
neglect on the part of those employing it to examine closely
their assumptions and to bring their conclusions to the test of
fact; to arguments based on premises which are not only not
verified but absolutely untrue (as in the wage-fund theory); and
generally to the failure to combine induction with deduction. But
this misuse of the method does not imply any radical faultiness
in it. The right method in any particular case must be largely
determined by the nature of the problem. Neither is it fair to
make abstract Political Economy responsible for the confusion in
many minds between its laws and the precepts which are based on
them. It is a pure science, and its end is knowledge. But the
Political Economy of the press and the platform is a practical
science, that is, a body of rules and maxims to guide conduct.
Journalists and members of Parliament confound the laws of the
pure science with the maxims of the practical science. It was
thus that Mr Gladstone in the Land Act controversy of 1881 was
constantly accused of violating the laws of Political Economy. It
was impossible for Mr Gladstone to do any such thing. The laws of
Political Economy can no more be violated than those of physical
science. What the journalists meant was that he had departed from
a great economic precept – that which recommends freedom of contract.

The Historical Method pursues a different line of
investigation. It examines the actual causes of economic
development and considers the influence of institutions, such as
the medieval guilds, our present land-laws, or the political
constitution of any given country, in determining the
distribution of wealth. Without the aid of the Historical Method
it would be impossible, for instance, to understand why one-half
of the land in the United Kingdom is owned by 2512 persons.
And not only does it investigate the stages of economic
development in a given country, but it compares them with those
which have obtained in other countries and times, and seeks by
such comparison to discover laws of universal application. Take,
as an instance of the discoveries of this Comparative Political
Economy, the tendency which Sir H. Maine and M. de Laveleye have
pointed out to pass from collective to individual ownership of
land. This is a law which is true of nearly all civilised
countries. We must be careful, however, not to generalise too
hastily in these matters. A clever pamphlet lately published in
Dublin appeals to another generalisation of Sir H. Maine –
‘Maine’s Law,’ as it is denominated – in condemnation of recent
legislation. ‘Sir H. Maine,’ says the writer, ‘in his Ancient Law
has remarked that the movement of all progressive societies has
hitherto been a movement from status to contract. The demand of
this agitation is that Ireland should be legislatively declared a
retrograde society, and that the social movement should be from
contract back again to status.’ ‘is it expedient,’ asks another,
‘to reform our laws so as to assimilate them to those in use
among nations of an inferior social development?’ A deeper study
of existing civilisation in England, and of other civilisations,
past and present, would have shown that the step was not a
retrograde one – that whilst the sphere of contract has been
widening, it has been also narrowing, and that such a condition
of things as we see in Ireland has never existed anywhere else
without deep social misery, outrage, and disturbance. Custom or
law or public opinion, or all three, have intervened in the past,
and will intervene in the future. It is true that there is a
movement from status to contract; yet if we look closely, we find
that the State has over and over again had to interfere to
restrict the power of individuals in which this movement results.
The real course of development has been first from status to
contract, then from contract to a new kind of status determined
by the law or, in other words, from unregulated to regulated
contract. The Historical Method is also of value because it makes
us see where economic laws and precepts are relative. The old
economists were wont to speak as if these laws and precepts were
universal. Free trade, for instance, is a sound policy, no doubt,
for England, and for all nations at a certain stage of
development; but it is open to any one to say that free trade is
only good under certain conditions. No English economist, it is
true, has dared to say this. Mr Jevons, to take an example, would
admit restrictions only for considerations of the most paramount
importance.6 But it is an unjustifiable prejudgment of the
question to lay down that this policy must be wise at all times
and places. I do not mean to assert, however, that there are not
some laws which are universally true, such as the law of diminishing returns.

This discussion about method may seem barren, but it is not
really so. Take such a question as the functions of the State. Mr
Senior spent much time in attempting to discover an universal
formula which should define their proper limit all the world
over. Such an attempt must be abandoned. The proper limits of
Government interference are relative to the nature of each
particular state and the stage of its civilisation. It is a
matter of great importance at the present day for us to discover
what these limits are in our own case, for administration bids
fair to claim a large share of our attention in the future. It
would be well if, in studying the past, we could always bear in
mind the problems of the present, and go to that past to seek
large views of what is of lasting importance to the human race.
It is an old complaint that histories leave out of sight those
vital questions which are connected with the condition of the
people. The French Revolution has indeed profoundly modified our
views of history, but much still remains to be done in that
direction. If I could persuade some of those present to study
Economic History, to follow out the impulse originally given by
Malthus to the study of the history of the mass of the people, I
should be indeed glad. Party historians go to the past for party
purposes; they seek to read into the past the controversies of
the present. You must pursue facts for their own sake, but
penetrated with a vivid sense of the problems of your own time.
This is not a principle of perversion, but a principle of
selection. You must have some principle of selection, and you
could not have a better one than to pay special attention to the
history of the social problems which are agitating the world now,
for you may be sure that they are problems not of temporary but of lasting importance.

II. England in 1760


Previously to 1760 the old industrial system obtained in
England; none of the great mechanical inventions had been
introduced; the agrarian changes were still in the future. It is
this industrial England which we have to contrast with the
industrial England of to-day. For determining the population of
the time we have no accurate materials. There are no official
returns before 1801. A census had been proposed in 1753, but
rejected as ‘subversive of the last remains of English liberty.’
In this absence of trustworthy data all sorts of wild estimates
were formed. During the American War a great controversy raged on
this subject. Dr Price, an advocate of the Sinking Fund,
maintained that population had in the interval between 1690 and
1777 declined from 6,596,075 to 4,763,670. On the other hand, Mr
Howlett, Vicar of Dunmow, in Essex, estimated the population in
1780 at 8,691,000, and Arthur Young, in 1770, at 8,500,000 on the
lowest estimate. These, however, are the extremes in either
direction. The computations now most generally accepted are those
made by Mr Finlaison (Actuary to the National Debt Office), and
published in the Preface to the Census Returns of 1831. These are
based on an examination of the registers of baptisms and burials
of the eighteenth century. But the data are deficient in three
respects: because the number of people existing at the date when
the computation begins is a matter of conjecture; because in some
parishes there were no registers; and because the registration,
being voluntary, was incomplete. Mr Finlaison, however, is stated
to have subjected his materials to ‘every test suggested by the
present comparatively advanced state of physical and statistical science.’

Now according to Mr Finlaison, the population of England and
Wales was, in 1700, 5,134,516, in 1750, 6,039,684, an increase of
not quite a million, or between 17 and 18 per cent. In the first
half of the century. in 1801 the population of England and Wales
was 9,187,176, showing an increase of three millions, or more
than 52 per cent. In the second half the difference in the rate
of increase is significant of the great contrast presented by the
two periods. In the former, England, though rapidly increasing in
wealth owing to her extended commercial relations, yet retained
her old industrial organisation; the latter is the age of
transition to the modern industrial system, and to improved methods of agriculture.

The next point to consider is the distribution of population.
A great difference will be found here between the state of things
at the beginning of the eighteenth century, or in Adam Smith’s
time, and that prevailing now. Every one remembers Macaulay’s
famous description in the beginning of his history of the
desolate condition of the northern counties. His picture is borne
out by Defoe, who, in his Tour through the Whole Island (1725),
remarks: ‘The country south of Trent is by far the largest, as
well as the richest and most populous,’ though the great cities
were rivalled by those of the north. if we consider as the
counties north of Trent Northumberland, Durham, Yorkshire,
Cumberland, Westmoreland, Lancashire, Cheshire, Derbyshire,
Nottinghamshire, and Staffordshire (about one-third of the total
area of England), we shall find on examination that in 1700 they
contained about one-fourth of the population,10 and in 1750 less
than one-third, while in 1881, they contained more than
two-fifths; or, taking only the six northern counties, we find
that in 1700 their population was under one-fifth of that of all
England, in 1750 it was about one-fifth, in 1881 it was all but one-third.

In 1700 the most thickly peopled counties (excluding the
metropolitan counties of Middlesex and Surrey) were
Gloucestershire, Somerset, and Wilts, the manufacturing districts
of the west; Worcestershire and Northamptonshire, the seats of
the Midland manufactures; and the agriculture counties of Herts
and Bucks – all of them being south of the Trent. Between 1700
and 1750 the greatest increase of population took place in the following counties:

Lancashire increased from 166,200 to 297,400, or 78 per cent.
Warwickshire ” 96,000 ” 140,000, ” 45 ”
The West Riding ” 236,700 ” 361,500, ” 52 ” of Yorkshire
Durham ” 95,000 ” 135,000, ” 41 ”
Staffordshire ” 117,200 ” 160,000, ” 36 ”
Gloucestershire ” 155,200 ” 207,800, ” 34 ”

Cornwall, Kent, Berks, Herts, Worcestershire, Salop, Cheshire,
Northumberland, Cumberland, and Westmoreland each increased upwards of 20 per cent.

The change in the distribution of population between the
beginning of the eighteenth century and Adam Smith’s time, and
again between his time and our own, may be further illustrated by
the following table. The twelve most densely populated counties and their density to the square mile were:

CE 1700 -1750 -1881

  1. Middlesex 2221- Middlesex 2283- Middlesex 10,387
  2. Surrey 207 Surrey 276 Surrey 1,919
  3. Gloucester 123 Warwick 159 Lancashire 1,813
  4. Northampton 121 Gloucester 157 Durham 891
  5. Somerset 119 Lancashire 156 Stafford 862
  6. Worcester 119 Worcester 148 Warwick 825
  7. Herts 115 Herts 141 West Riding 815
  8. Wilts 113 Stafford 140 Kent 600
  9. Bucks 110 Durham 138 Cheshire 582
  10. Rutland 110 Somerset 137 Worcester 515
  11. Warwick 109 West Riding 135 Nottingham 475
  12. Oxford 107 Berks 131 Gloucester 455

The most suggestive fact in the period between 1700 and 1750 is the great increase in the Lancashire and the West Riding, the
seats of the cotton and coarse woollen manufactures. Staffordshire and Warwickshire, with their potteries and hardware, had also largely grown. So had the two northern counties of Durham and Northumberland, with their coalfields. The West of England woollen districts of Somerset, and Wilts, on the other hand, though they had grown also, showed nothing like so great an increase. The population of the eastern counties Norfolk, Suffolk, and Essex, had increased very little; though Norwich was still a large manufacturing town, and there were many smaller towns engaged in the woollen trade scattered throughout Norfolk and Suffolk. Among the few agricultural counties which showed a decided increase during this period was Kent, the best farmed county in England at that time.

If we turn to the principal towns we shall find in many of them an extraordinary growth between the end of the seventeenth century and the time of Adam Smith. While the population of Norwich had only increased, according to the best authority, by about one-third, and that of Worcester by one-half, the population of Sheffield had increased seven-fold, that of Liverpool ten-fold, of Manchester five-fold, of Birmingham seven-fold, of Bristol more than three-fold. The latter was still the second city in the kingdom. Newcastle (including Gateshead and North and South Shields) numbered 40,000 people.

The following are the estimates of population for 1685, 1760, and 1881 in twelve great provincial towns:-

1685a c. 1760 1881g

Liverpool 4,000 40,000c
30-35,000d 552,425 34,000e

Manchester 6,000 30,000c 393,676 40-45,000d

Birmingham 4,000 28,000b 400,757 30,000d

Leeds 2,000 — 309,126

Sheffield 4,000 30,000c 284,410 20,000d

Bristol 29,000 100,000d 206,503

Nottingham 8,000 17,000f 111,631

Norwich 28,000 40,000c 87,845 60,000d

Hull — 20,000c 161,519 24,000d

York 10,000 — 59,596

Exeter 10,000 — 47,098

Worcester 8,000 11-12,000c 40,422

Another point to be considered is the relation of rural to urban population. According to Gregory King, writing in 1696, London contained 530,000 inhabitants, other cities and market-towns, 870,000, while villages and hamlets numbered 4,100,000. Arthur Young, seventy years later, calculated that London contained one-sixth of the whole population, and remarked that, ‘in flourishing countries,’ as England, ‘the half of a nation is found in towns.’ Both estimates are very unreliable, apart from the fact that both, and especially that of Arthur Young, overestimate the total number of the population, but the contrast between them justly indicates the tendency of towns even then to grow out of proportion to the rural districts. That disproportion has, of course, become even more marked since Arthur Young’s day. In 1881 the total urban population was 17,285,026, or 66.6 per cent, while the rural was 8,683,026, or 33.3 per cent.

The only estimates of occupations with which I am acquainted
are again those of Gregory King in 1696, and Arthur Young in
1769. They are too vague, and too inconsistent with one another,
to be relied on, but I give them for what they are worth.
According to the former, freeholders and their families numbered
940,000, farmers and their families, 750,000, labouring people
and out servants, 1,275,000, cottagers and paupers, 1,300,000;
making a total agricultural population of 4,265,000, against only
240,000 artisans and handicraftsmen. Arthur Young estimates the
number of different classes as follows:-

Farmers (whether freeholders or leaseholders),
their servants and labourers…………… 2,800,000
Manufacturers of all kinds…………….. 3,000,000
Landlords and their dependents, fishermen
and miners…………………………….. 800,000
Persons engaged in commerce……………… 200,000
Non-industrious poor……………………. 500,000
Clergy and lawyers……………………… 200,000
Civil servants, army and navy……………. 500,000

Total………………………………. 8,500,000

But the number set down to manufactures here is probably as much too high. In proportion to the total population, as the total itself is in excess of the fact.

III England in 1760


In describing the agriculture of the time the first point of
importance is the proportion of cultivated land to waste. Gregory
King, who rather overestimated the total acreage of England and
Wales, put the arable land at 11,000,000 acres, pasture and
meadow at 10,000,000, houses, gardens, orchards, etc., at
1,000,000, being a total of 22,000,000 acres of cultivated land,
or nearly three-fifths of the whole country. A land-agent in 1727
believed one-half of the country to be waste. Arthur Young,
writing fifty years later, puts the cultivated area at a much
higher figure. Estimating the total acreage of England alone at
54,000,000 acres, he considered that 52,000,000 of these were in
arable and pasture, in equal proportions.

One or other of the two first-mentioned estimates is certainly nearer the truth than the last. The exact proportion
is, however, impossible to determine.

There is no respect in which the agricultural England of
today differs more from that of the period which we are
considering, than in the greatly reduced amount of common land,
The enclosure of commons had been going on for centuries before
1760, but with nothing like the rapidity with which it has been
going on since, it is known that 554,974 acres were enclosed
between 1710 and 1760, while nearly 7,000,000 were enclosed
between 1760 and 1845.4 At the beginning of the latter period a
large proportion of this land, since enclosed, was under the
primitive tillage of the common-fields. Throughout considerable
districts the agrarian system of the middle ages still existed in
full force. Some parishes had no common or waste lands belonging
to them, but where common lands were cultivated, one and the same
plan was generally pursued. The arable land of each village was
divided into three great stripes subdivided by ‘baulks’ three
yards wide. Every farmer would own at least one piece of land in
each field, and all were bound to follow the customary tillage.
One strip was left fallow every year; on the other two were grown
wheat and barley; sometimes oats, pease, or tares were
substituted for the latter. The meadows were also held in common.
Up to hay harvest, indeed, every man had his own plot, but, while
in the arable land the plots rarely changed hands, in the meadows
the different shares were apportioned by lot every year, After
hay-harvest the fences in the meadow land were thrown down, and
all householders had common rights of grazing on it. Similarly
the stubbles were grazed, but here the right was rarely open to
all. Every farmer had the right of pasture on the waste.
Though these common fields contained the best soil in the
kingdom, they exhibited the most wretched cultivation. ‘Never,’
says Arthur Young, ‘were more miserable crops seen than all the
spring ones in the common fields; absolutely beneath contempt.
The causes of this deficient tillage were three in number: (1)
The same course of crops was necessary. No proper rotation was
feasible; the only possible alternation being to vary the
proportions of different white-straw crops. – There were no
turnips or artificial grasses, and consequently no sheep-farming
on a large scale. Such sheep as there were were miserably small;
the whole carcase weighed only 28 lbs., and the fleeces 3 1/2
lbs. each, as against 9 lbs. on sheep in enclosed fields. (2)
Much time was lost by labourers and cattle ‘in travelling to many
dispersed pieces of land from one end of a parish to another.’
(3) Perpetual quarrels arose about rights of pasture in the
meadows and stubbles, and respecting boundaries; in some fields
there were no ‘baulks’ to divide the plots, and men would plough
by night to steal a furrow from their neighbours.

For these reasons the connections between the practice of
enclosing and improved agriculture was very close. The early
enclosures, made under the Statutes of Merton (1235), and
Westminster (1285), were taken by the lords of the manor from the
waste. But in these uses the lord had first to prove that
sufficient pasturage had been left for the commoners; and if
rights of common existed independent of the possession of land,
no enclosure was permitted. These early enclosures went on
steadily, but the enclosures which first attract notice towards
the end of the fifteenth century were of a different kind. They
were often made on cultivated land, and, if Nasse is correct,
they took the form not only of permanent conversions from arable
into pasture, but of temporary conversions of arable into
pasture, followed by reconversion from pasture into arable. The
result was a great increase of produce. The lord having separated
his plots from those of his neighbours, and having consolidated
them, could pursue any system of tillage which seemed good to
him. The alternate and convertible husbandry, mentioned above,
was introduced; the manure of the cattle enriched the arable
land, and ‘the grass crops on the land ploughed up and manured
were much stronger and of a better quality than those on the
constant pasture.’ Under the old system the manure was spread on
the ground pasture, while in the enclosures it was used for the
benefit of land broken up for tillage. The great enclosures of
the sixteenth century took place in Suffolk, Essex, Kent, and
Northamptonshire, which were in consequence the most wealthy
counties. They were frequent also in Oxford, Berks, Warwickshire,
Bedfordshire, Bucks, and Leicestershire, and with similar
results. In Arthur Young’s time Norfolk, Suffolk, Essex, and Kent
were the best cultivated parts of England.

Taking a general view of the state of agriculture in 1760, we
find that improvements were confined to a few parts of the
country. The first enclosure Bill (1710) was to legalise the
enclosure of a parish in Hampshire. I have looked through twelve
of these Bills of the reign of George I, and I find that they
applied to parishes in Derbyshire, Lancashire, Yorkshire,
Staffordshire, Somersetshire, Gloucestershire, Wilts,
Warwickshire, and Norfolk. But though enclosures were thus widely
distributed, certain counties continued to bear a much higher
reputation than others, and in some improvements were confined to
one or two parishes, and not spread over a wide district. The
best cultivated counties were those which had long been enclosed.
Kent, which was spoken of by William Stafford in 1581 as a county
where much of the land was enclosed, is described by Arthur Young
as having ‘long been reckoned the best cultivated in England.’…
‘It must astonish strangers,’ he says, ‘to East Kent and Thanet,
to find such numbers of common farmers that have more drilled
crops than broadcast ones, and to see them so familiar with
drill-ploughs and horse-hoes. The drill culture carried on in so
complete a manner is the great peculiarity of this country….
Hops are extremely well cultivated.’ Is in, another passage he
says that Kent and Hertfordshire ‘have the reputation of a very
accurate cultivation.’ The Marquis of Rockingham brought a
Hertfordshire farmer to teach his tenants in the West Riding to
hoe turnips. The husbandry both of that district and of the East
Riding was very backward. The courses of crops, and the general
management of the arable land were very faulty; very few of the
farmers hoed turnips, and those who did executed the work in so
slovenly a way that neither the crop nor the land was the least
the better for it; beans were never hoed at all. The husbandry of
Northumberland, on the other hand, was much superior to that of
Durham and Yorkshire. Turnips were hoed, manure was better
managed, and potatoes were cultivated on a large scale. Essex,
held up by Tusser in the reign of Elizabeth as an example of the
advantages of enclosures, and described by Young in 1807 as
having ‘for ages been an enclosed country,’ is mentioned as early
as 1694 as a county where ‘some have their fallow after turnips,
which feed their sheep in winter,’ – the first mention of turnips as a field crop.

But the greatest progress in the first half of the eighteenth
century seems to have taken place in Norfolk. Every one has heard
of Townshend growing turnips at Raynham, after his quarrel with
Walpole; and Young, writing in 1812, after speaking of the period
1700-1760 as one of stagnation, owing to low prices (‘it is
absolutely vain to expect improvements in agriculture unless
prices are more disposed to rise than to remain long without
variations that give encouragement to the farmer’), admits that
the improvements made in Norfolk during that time were an
exception, in his Eastern Tour (1770), he had spoken of the
husbandry ‘which has rendered the name of this county so famous
in the arming world”. and given seven reasons for the
improvements. These were: (1) Enclosing without assistance of
Parliament. Parliamentary enclosure ‘through the knavery of
commissioners and attorneys,’ was very expensive. ‘Undoubtedly
many of the finest loams on the richest marls would at this day
have been sheep-walks had there been any right of commonage on
them.’ (2) Marling, for there was plenty of marl under the sand
everywhere; (3) An excellent rotation of crops-the famous Norfolk
four years’ course of turnips, barley, clover (or clover and
rye-grass), and wheat; (4) The culture of turnips well hand-hoed;
(5) The culture of clover and rye-grass; (6) The granting of long
leases; (7) The division of the county chiefly into large farms.
‘Great farms,’ he says, ‘have been the soul of the Norfolk
culture, though in the eastern part of the county there were little occupiers of 100 a year.

Throughout the whole of the South of England, however, there
had been a certain amount of progress. Hoeing turnips, according
to Young, was common in many parts of the south of the kingdom,
although the extensive use of turnips – i.e. all their uses for
fattening cattle as well as feeding lean sheep – ‘is known but
little of, except in Norfolk, Suffolk, and Essex.’ Clover
husbandry, on the other hand, was ‘universal from the North of
England to the further end of Glamorganshire.’ Clover, the ‘great
clover,’ had been introduced into England by Sir Richard Weston
about 1645, as had probably been turnips also. Potatoes at the
beginning of the century were only garden crops. Hemp and flax
were frequently grown, as were also hops, which had been
introduced in the beginning of the sixteenth century.
If we turn from the cultivation of the soil to the management
and breeding of live stock, we shall find that no great progress
had been made in this branch during the years 1700-1760. Davenant
in 1700 estimated the net carcase of black cattle at 370 lb., and
of a sheep at 28 lb. A century later Eden calculated that
‘bullocks now killed in London weigh, at an average, 800 lb.,
sheep 80 lb., and lambs about 50 lb. each”. and Young in 1786 put
the weight of bullocks and sheep at 840 lb. and 100 lb.
respectively. But this improvement seems to have come about after
1760. It was not until 1760-85 that Bakewell perfected the new
breed of sheep – the Leicesters – and improved the breed of
long-horned cattle, and that the brothers Culley obtained the
short-horn, or Durham cattle, from the breed in the valley of the
Tees. Some improvements in the breed of sheep, however, had
already been made. ‘The wool of Warwickshire, Northamptonshire,
Lincolnshire, and Rutland, with some parts of Huntingdon,
Bedford, Buckinghamshire, Cambridgeshire, and Norfolk has been
accounted the longest and finest combing wool. But of late years’
(this was written in 1739) ‘there have been improvements made in
the breed of sheep by changing or rams and sowing of turnips and
grass seeds, and now there is some large fine combing wool to be
found in most counties in England, which is fine, long, and soft,
fit to make all sorts of fine stuff and hose of.’ Still
improvements in feeding sheep were by no means universally
adopted for half a century later. Agricultural implements, too,
were still very primitive, wooden ploughs being commonly in use,
while the small, narrow-wheeled waggon of the North held 40 or 50 bushels with difficulty.

Arthur Young constantly attributes much of the bad
agriculture to the low rentals prevalent. ‘Of so little
encouragement to them,’ he writes of the farmers of Cleveland,
‘is the lowness of their rents, that many large tracts of land
that yielded good crops of corn within thirty years are now
overrun with whins, brakes, and other trumpery…. If I be
demanded how such ill courses are to be stopped, I answer, Raise
their rents. First with moderation, and if that does not bring
forth industry, double them.’ At the same time Young strongly
advocated long leases. But it must be remembered that besides
tenant farmers there were still a large number of freeholders and
still more copyholders either for life or by inheritance.
On the whole, though the evidence on some points is somewhat
contradictory, the progress of agriculture between 1700 and 1760
may be said to have been slow. Writing in 1770 Arthur Young
ascribes to the last ten years ‘more experiments, more
discoveries, and more general good sense displayed in the walk of
agriculture than in an hundred preceding ones.’ Though
drill-husbandry was practised by Jethro Tull, ‘a gentleman of
Berkshire,’ as early as 1701, and his book was published in 1731,
‘he seems to have had few followers in England for more than
thirty years,’ and Young in 1770 speaks of ‘the new husbandry’ as
having sunk with Tull, and ‘not again put in motion till within a
few years.’ On the other hand, we have as early as 1687 Petty’s
notice of ‘the draining of fens, watering of dry grounds, and
improving of forests and commons.’ Macpherson in the year 1729
speaks of the great sums lately expended in the enclosing and
improving of lands; and Laurence in 1727 asserts that ‘it is an
undoubted truth that the Art of Husbandry is of late years
greatly improved, and accordingly many estates have already
admitted their utmost improvement, but,’ he adds, ‘much the
greater number still remains of such as are so far from being
brought to that perfection that they have felt few or none of the
effects of modern arts and experiments.’

Still, in spite of the ignorance and stupidity of the farmers and their use of wretched implements, the average produce of wheat was large. In 1770 it was twenty-five bushels to the acre, when in France it was only eighteen. At the beginning of the century some of our colonies imported wheat from the mother country. The average export of grain from 1697 to 1765 was nearly 500,000 quarters, while the imports came to a very small figure. The exports were sent to Russia, Holland, and America.

IV England in 1760

Manufactures and Trade

Among the manufactures of the time the woollen business was
by far the most important. ‘All our measures,’ wrote Bishop
Berkeley in 1737, ‘should tend towards the immediate
encouragement of our woollen manufactures, which must be looked
upon as the basis of our wealth.’ In 1701 our woollen exports
were worth £2,000,000, or ‘above a fourth part of the whole
export trade.’ In 1770 they were worth £4,000,000, or between a
third and a fourth of the whole. The territorial distribution of
the manufacture was much the same as now. This industry had
probably existed in England from an early date. It is mentioned
in a law of 1224. In 1331 John Kennedy brought the art of weaving
woollen cloth from Flanders into England, and received the
protection of the king, who at the same time invited over fullers
and dyers. There is extant a petition of the worsted weavers and
merchants of Norwich to Edward III in 1348. The coarse cloths of
Kendal and the fine cloths of Somerset, Dorset, Bristol, and
Gloucester are mentioned in the statutes of the same century. In
1391 we hear of Guildford cloths, and in 1467 of the woollen
manufacture in Devonshire-at-Lifton, Tavistock, and Rowburgh. In
1402 the manufacture was settled to a great extent in and near
London, but it gradually shifted, owing to the high price of
labour and provisions, to Surrey, Kent, Essex, Berkshire, and
Oxfordshire, and afterwards still further, into the counties of
Dorset, Wilts, Somerset, Gloucester, and Worcester, and even as far as Yorkshire.

There were three chief districts in which the woollen trade
was carried on about 1760. One of these owed its manufacture to
the wars in the Netherlands. In consequence of Alva’s
persecutions (1567-8) many Flemings settled in Norwich (which had
been desolate since Ket’s rebellion in 1549), Colchester.
Sandwich, Canterbury, Maidstone, and Southampton, The two former
towns seem to have benefited most from the skill of these
settlers so far as the woollen manufacture was concerned. It was
at this time, according to Macpherson, that Norwich ‘learned the
making of those fine and slight stuffs which have ever since gone
by its name,’ such as crapes, bombayines, and camblets; while the
baiye-makers settled at Colchester and its neighbourhood. The
stuffs thus introduced into England were known as the ‘new
drapery’, and included baiye, serges, and other slight woollen
goods as distinguished from the ‘old drapery,’ a term applied to
broad cloth, kersies, etc.

The chief seats of the West of England manufacture were
Bradford in Wilts, the centre of the manufacture of super-fine
cloth; Devizes, famous for its serges; Warminster and Frome, with
their fine cloth; Trowbridge; Stroud, the centre of the
dyed-cloth manufactures; and Taunton, which in Defoe’s time
possessed 1100 looms. The district reached from Cirencester in
the north to Sherborne in the south, and from Witney in the east
to Bristol in the west, being about fifty miles in length where
longest, and twenty in breadth where narrowest – ‘a rich enclosed
country,’ as Defoe says, ‘full of rivers and towns, and
infinitely populous, insomuch that some of the market towns are
equal to cities in bigness, and superior to many of them in
numbers of people.’ It was a ‘prodigy of a trade,’ and the ‘fine
Spanish medley cloths’ which this district produced were worn by
‘all the persons of fashion in England.’ It was no doubt the
presence of streams and the Cotswold wool which formed the
attractions of the district. A branch of the industry extended
into Devon, where the merchants of Exeter bought in a rough state
the serges made in the country round, to dye and finish them for
home consumption or export.

The third chief seat of the manufacture was the West Riding
of Yorkshire, where the worsted trade centred round Halifax,
which, according to Camden, began to manufacture about 1537; and
where Leeds and its neighbourhood manufactured a coarse cloth of
English wool. In 1574 the manufacturers of the West Riding made
56,000 pieces of broad cloth and 72,000 of narrow. It will be
seen from this short survey that, however greatly the production
of these different districts may have changed in proportion since
1760, the several branches of the trade are even now distributed
very much as they were then, the West Riding being the
headquarters of the worsted and coarse cloth trade, while Norwich
still keeps the crape industry, and the West manufactures fine cloth.

The increased demand for English wool consequent upon the
extension of this industry led to large enclosures of land,
especially in Northamptonshire, Rutlandshire, Leicestershire, and
Warwickshire, which counties supplied most of the combing wools
used for worsted stuffs and stockings; but parts of Huntingdon,
Bedford, Bucks, Cambridgeshire, Romney Marsh, and Norfolk
competed with them, and by 1739 most counties produced the fine
combing wool. Defoe mentions the sale of wool from Lincolnshire,
‘where the longest staple is found, the sheep of those parts
being of the largest breed”. and in Arthur Young’s time
Lincolnshire and Leicestershire wools were still used at Norwich.
The Cotswold and Isle of Wight sheep yielded clothing or short
wools, ‘but they were inferior to the best Spanish wools,’ and
could not ‘enter into the composition without spoiling and
degrading in some degree the fabric of the cloth.’ Consequently
in the West of England, occupied as it was with the production of
the finest cloths, Spanish wool was largely used, though shortly
before Young’s time it was discovered that ‘Norfolk sheep yielded
a wool about their necks equal to the best from Spain.’
Next in importance was the iron trade, which was largely
carried on, though by this time a decaying industry, in the Weald
of Sussex, where in 1740 there were ten furnaces, producing
annually 1400 tons. The trade had reached its chief extent in the
seventeenth century, but in 1724 was still the principal
manufacturing interest of the county. The balustrades which
surround St. Paul’s were cast at Lamberhurst, and their weight,
including the seven gates, is above 200 tons. They cost £11,000.
Gloucestershire, Shropshire, and Yorkshire had each six furnaces.
In the latter county, which boasted an annual produce of 1400
tons, the most famous works were at Rotherham. There were also
great ironworks at Newcastle.

In 1755 an ironmaster named Anthony Bacon had got a lease for
ninety-nine years of a district eight miles in length, by five in
breadth, at Merthyr-Tydvil, upon which he erected iron and coal
works. In 1709 the Coalbrookdale works in Shropshire were
founded, and in 1760 Carron iron was first manufactured in
Scotland. Altogether, there were about 1737 fifty-nine furnaces
in eighteen different counties, producing 17,350 tons annually.
It has been computed that we imported 20,000 tons. In 1881 we
exported 3,820,315 tons of iron and steel, valued at £27,590,908,
and imported to the value of £3,705,332.

The cotton trade was still so insignificant as to be
mentioned only once, and that incidentally by Adam Smith. It was
confined to Lancashire, where its headquarters were Manchester
and Bolton. In 1760 not more than 40,000 persons were engaged in
it, and the annual value of the manufactures was estimated at
£600,000. The exports, however, were steadily growing; in 1701
they amounted to £23,253, in 1751 to £45,986, in 1764 to
£200,354. Burke about this time spoke of ‘that infinite variety
of admirable manufactures that grow and extend every year among
the spirited, inventive, and enterprising traders of Manchester.’
But even in 1764 our exports of cotton were still only
one-twentieth of the value of the wool exports.

The hardware trade then as now was located chiefly in
Sheffield and Birmingham, the latter town employing over 50,000
people in that industry. The business, however, was not so much
concentrated as now, and there were small workshops scattered
about the kingdom. ‘Polished steel,’ for instance, was
manufactured at Woodstock, locks in South Staffordshire, pins at
Warrington, Bristol, and Gloucester, where they were ‘the staple
of the city.’ The hosiery trade, too, was as yet only in process
of concentration. By 1800 the manufacture of silk hosiery had
centred in Derby, that of woollen hosiery in Leicester, though
Nottingham had not yet absorbed the cotton hosiery. But at the
beginning of the century there were still many looms round
London, and in other parts of the South of England. In 1750
London had 1000 frames, Surrey 350, Nottingham 1500, Leicester
1000, Derby 200, other places in the Midlands, 7300; other
English and Scotch towns, 1850; Ireland, 800; Total, 14,000. Most
of the silk was woven in Spitalfields, but first spun in the
North at Stockport, Knutsford, Congleton, and Derby. In 1770
there was a silk-mill at Sheffield on the model of Derby, and a
manufactory of waste silk at Kendal. Coventry had already, in
Defoe’s time, attracted the ribbon business. In 1721 the silk
manufacture was said to be worth £700,000 a yew more than at the Revolution.

Linen was an ancient manufacture in England, and had been introduced into Dundee at the beginning of the seventeenth century. In 1746 the British Linen Company was incorporated to supply Africa and the American plantations with linen made at home, and Adam Smith considered it a growing manufacture. It was, of course, the chief manufacture of Ireland, where it had been further developed by French Protestants, who settled there at the end of the seventeenth century.

The mechanical arts were still in a very backward state. In
spite of the fact that the woollen trade was the staple industry
of the country, the division of labour in it was in Adam Smith’s
time ‘nearly the same as it was a century before, and the
machinery employed not very different.’ According to the same
author there had been only three inventions of importance since
Edward IV’s reign: the exchange of the rock and spindle for the
spinning-wheel; the use of machines for facilitating the proper
arrangement of the warp and woof before being put into the loom;
and the employment of fulling mills for thickening cloth instead
of treading it in water. In this enumeration, however, he forgot
to mention the fly-shuttle, invented in 1738 by Kay, a native of
Bury, in Lancashire, the first of the great inventions which
revolutionised the woollen industry. Its utility consisted in its
enabling a weaver to do his work in half the time, and making it
possible for one man instead of two to weave the widest cloth.
‘The machines used in the cotton manufacture,’ says Baines,
‘were, up to the year 1760, nearly as simple as those of India;
though the loom was more strongly and perfectly constructed, and
cards for combing the cotton had been adapted from the woollen
manufacture. None but the strong cottons, such as fustians and
dimities, were as yet made in England, and for these the demand
must always have been limited.’ In 1758 John Wyatt invented
spinning by rollers, but the discovery never proved profitable.
In 1760 the manufacturers of Lancashire began to use the
fly-shuttle. Calico printing was already largely developed.
The reason why division of labour was carried out to so small
an extent, an invention so rare and so little regarded, is given
by Adam Smith himself. Division of labour, as he points out, is
limited by the extent of the market, and, owing chiefly to bad
means of communication, the market for English manufactures was
still a very narrow one. Yet England, however slow the
development of her manufactures, advanced nevertheless more
rapidly in this respect than other nations. One great secret of
her progress lay in the facilities for water-carriage afforded by
her rivers, for all communication by land was still in the most
neglected condition. A second cause was the absence of internal
customs barriers, such as existed in France, and in Prussia until
Stein’s time. The home trade of England was absolutely free.
Arthur Young gives abundant evidence of the execrable state
of the roads. It took a week or more for a coach to go from
London to Edinburgh. On ‘that infernal’ road between Preston and
Wigan the ruts were four feet deep, and he saw three carts break
down in a mile of road. At Warrington the turnpike was ‘most
infamously bad,’ and apparently ‘made with a view to immediate
destruction.’ ‘Very shabby,’ ‘execrable,’ ‘vile,’ ‘most execrably
vile,’ are Young’s ordinary comments on the highways. But the
water routes for traffic largely made up for the deficiencies of the land routes.

Attempts to improve water communication began with deepening
the river beds. In 16S5 there was a project for rendering the
Avon navigable from its junction with the Severn at Tewkesbury
through Gloucestershire, Worcestershire, and Warwickshire, but it
was abandoned owing to the civil war. From 1660 to 1755 various
Acts were passed for deepening the beds of rivers. In 1720 there
was an Act for making the Mersey and Irwell navigable between
Liverpool and Manchester. About the same time the navigation of
the Aire and Calder was opened out. In 1755 the first canal was
made, eleven miles in length, near Liverpool. Three years later
the Duke of Bridgewater had another constructed from his coal
mines at Worsley to Manchester, seven miles distant. Between 1761
and 1766 a still longer one of twenty-nine miles was completed
from Manchester through Chester to the Mersey above Liverpool.
From this time onwards the canal system spread with great rapidity.

When we turn to investigate the industrial organisation of
the time, we &nd that the class of capitalist employers was as
yet but in its infancy. A large part of our goods were still
produced on the domestic system. Manufactures were little
concentrated in towns, and only partially separated from
agriculture. The ‘manufacturer, was, literally, the man who
worked with his own hands in his own cottage. Nearly the whole
cloth trade of the West Riding, for instance, was organised on
this system at the beginning of the century.

An important feature in the industrial organisation of the
time was the existence of a number of small master-manufacturers,
who were entirely independent, having capital and land of their
own, for they combined the culture of small freehold
pasture-farms with their handicraft. Defoe has left an
interesting picture of their life. The land near Halifax, he
says, was ‘divided into small Enclosures from two Acres to six or
seven each, seldom more, every three or four Pieces of Land had
an House belonging to them;… hardly an House standing out of a
Speaking distance from another;… we could see at every House a
Tenter, and on almost every Tenter a piece of Cloth or Kersie or
Shaloon…. Every clothier keeps one horse, at least, to carry
his Manufactures to the Market; and every one, generally, keeps a
Cow or two or more for his Family. By this means the small Pieces
of enclosed Land about each house are occupied, for they scarce
sow Corn enough to feed their Poultry…. The houses are full of
lusty Fellows, some at the Dye-vat, some at the looms, others
dressing the Cloths; the women and children carding or spinning;
being all employed from the youngest to the oldest…. Not a
Beggar to be seen nor an idle person.’

This system, however, was no longer universal in Arthur
Young’s time. That writer found at Sheffield a silk-mill
employing 152 hands, including women and children; at Darlington
‘one master-manufacturer employed above fifty looms’; at Boyton
there were 150 hands in one factory. So, too, in the West of
England cloth-trade the germs of the capitalist system were
visible. The rich merchant gave out work to labourers in the
surrounding villages, who were his employes, and were not
independent. In the Nottingham hosiery trade there were, in 1750,
fifty manufacturers, known as ‘putters out,’ who employed 1200
frames; in Leicestershire 1800 frames were so employed. In the
hand-made nail business of Staffordshire and Worcestershire, the
merchant had warehouses in different parts of the district, and
give out nail-rod iron to the nail-master, sufficient for a
week’s work for him and his family. In Lancashire we can trace,
step by step, the growth of the capitalist employer. At first we
see, as in Yorkshire, the weaver furnishing himself with warp and
weft, which he worked up in his own house and brought himself to
market. By degrees he found it difficult to get yarn from the
spinners; so the merchants at Manchester gave him out linen warp
and raw cotton, and the weaver became dependent on them. Finally,
the merchant would get together thirty or forty looms in a town.
This was the nearest approach to the capitalist system before the great mechanical inventions.

Coming to the system of exchange, we find it based on several
different principles, which existed side by side, but which were
all, as we should think, very simple and primitive. Each trade
had its centre in a provincial town. Leeds, for instance, had its
market twice a week, first on the bridge over the Aire,
afterwards in the High Street, where, at a later time, two halls
were built. Every clothier had his stall, to which he would bring
his cloth (seldom more than one piece at a time, owing to the
frequency of the markets). At six or seven o’clock a bell rang,
and the market began; the merchants and factors came in and made
their bargains with the clothiers, and in little more than an
hour the whole business was over. By nine the benches were
cleared and the hall empty. There was a similar hall at Halifax
for the worsted trade. But a large portion of the inland traffic
was carried on at fairs, which were still almost as important as
in the Middle Ages. The most famous of all was the great fair of
Sturbridge, which lasted from the middle of August to the middle
of September. Hither came representatives of all the great
trades. The merchants of Lancashire brought their goods on a
thousand pack-horses; the Eastern counties sent their worsteds,
and Birmingham its hardware. An immense quantity of wool was
sold, orders being taken by the wholesale dealers of London. In
fact, a large part of the home trade found its way to this
market. There were also the four great annual fairs, which
retained the ancient title of ‘marts,’ at Lynn, Boston, Gainsborough, and Beverley.

The link between these fairs and the chief industrial centres
was furnished by travelling merchants. Some would go from Leeds
with droves of pack-horses to all the fairs and market-towns
throughout England. In the market-towns they sold to the shops;
elsewhere they would deal directly with the consumer, like the
Manchester merchants, who sent their pack-horses the round of the
farmhouses, buying wool or other commodities in exchange for
their finished goods. Sometimes the London merchants would come
to the manufacturers, paying their guineas down at once, and
taking away the purchases themselves. So too in the Birmingham
lock trade, chapmen would go round with pack-horses to buy from
manufacturers; in the brass trade likewise the manufacturer
stayed at home, and the merchant came round with cash in his
saddle-bags, and put the brasswork which he purchased into them,
though in some cases he would order it to be sent by carrier.
Ready cash was essential, for banking was very little
developed. The Bank of England existed, but before 1759 issued no
notes of less value than £20. By a law of 1709 no other bank of
more than six partners was allowed; and in 1750, according to
Burke, there were not more than ‘twelve bankers’ shops out of
London.’ The Clearing-House was not established till 1775.
Hampered as the inland trade was by imperfect communications,
extraordinary efforts were made to promote exchange. It is
striking to find waste silk from London made into silk-yarn at
Kendal and sent back again, or cattle brought from Scotland to
Norfolk to be fed. Many districts, however, still remained
completely excluded, so that foreign products never reached them
at all. Even at the beginning of this century the Yorkshire
yeoman, as described by Southey was ignorant of sugar, potatoes,
and cotton; the Cumberland dalesman, as he appears in
Wordsworth’s Guide to the Lakes, lived entirely on the produce of
his farm. It was this domestic system which the great socialist
writers Sismondi and Lassalle had in their minds when they
inveighed against the modern organisation of industry. Those who
lived under it, they pointed out, though poor, were on the whole
prosperous; over-production was absolutely impossible. Yet at the
time of which I am speaking, many of the evils which modern
Socialists lament were already visible, especially in those
industries which produced for the foreign market. Already there
were complaints of the competition of men who pushed themselves
into the market to take advantage of high prices; already we hear
of fluctuations of trade and irregularity of employment. The old
simple conditions of production and exchange were on the eve of
disappearance before the all-corroding force of foreign trade.
The home trade was still indeed much greater in proportion
than now; but the exports had grown from about £7,000,000 at the
beginning of the century to £14,500,000 in 1760. During that
interval great changes had taken place in the channels of foreign
commerce. In 1700 Holland was our great market, taking more than
one-third of all our exports, but in 1760 the proportion was
reduced to about one-seventh. Portugal, which in 1703 took
one-seventh, now took only about one-twelfth. The trade with
France was quite insignificant. On the other hand, the Colonies
were now our chief markets, and a third of our exports went
there. In 1770 America took three-fourths of all the manufactures
of Manchester. In 1767 the exports to Jamaica were nearly as
great as they had been to all the English plantations together in
1704. The shipping trade had doubled, and the ships themselves
were larger. In 1732 ships 750 tons were considered remarkable;
in 1770 there were many in Liverpool of 900 tons; but in this as
in other branches of business progress was still slow, partial,
local, thus presenting a striking contrast to the rapid and general advance of the next half-century.

V. England in 1760

The Decay of the Yeomanry

It is a reflection that must have occurred to every one that
the popular philosophy of the day, while in the region of
speculation it has undermined ancient beliefs, has exerted in the
practical world a distinctly conservative influence. The
conception of slow development, according to definite laws,
undoubtedly tends to strengthen the position of those who offer
resistance to radical changes. It may, however, well be doubted
whether the theory of evolution is really such a support as it
seems to be to those who would uphold the existing framework of
society. It is certainly remarkable that the most recent
legislation has been at once revolutionary in its character and
justified by appeals to historical experience. I do not forget
that the most distinguished exponent of the doctrine of evolution
as applied to politics has developed a theory of government
opposed to recent legislative reforms, but that theory is an a
priori one. Those, on the other hand, who have applied the
historical method to political economy and the science of
society, have shown an unmistakable disposition to lay bare the
injustice to which the humbler classes of the community have been
exposed, and to defend methods and institutions adopted for their
protection which have never received scientific defence before.
The fact is, that the more we examine the actual course of
affairs, the more we are amazed at the unnecessary suffering that
has been inflicted upon the people. No generalities about natural
law or inevitable development can blind us to the fact, that the
progress in which we believe has been won at the expense of much
injustice and wrong, which was not inevitable. Perhaps this is
most conspicuous in our land system, and we shall find with
regard to it, as with regard to some other matters, that the more
we accept the method of historical inquiry, the more
revolutionary shall we tend to become in practice, For while the
modern historical school of economists appear to be only
exploring the monuments of the past, they are really shaking the
foundations of many of our institutions in the present. The
historical method is often deemed conservative, because it traces
the gradual and stately growth of our venerable institutions; but
it may exercise a precisely opposite influence by showing the
gross injustice which was blindly perpetrated during this growth.
The historical method is supposed to prove that economic changes
have been the inevitable outcome of natural laws. It just as
often proves them to have been brought about by the self-seeking action of dominant classes.

It is a singular thing that no historian has attempted an
adequate explanation of the disappearance of the small
freeholders who, down to the close of the seventeenth century,
formed with their families one-sixth of the population of
England, and whose stubborn determination enabled Cromwell and
Fairfax to bring the Civil War to a successful close. This
neglect is the more remarkable, as economists have so
emphatically dwelt upon the extraordinary difference between the
distribution of landed property in England and in countries like
Germany and France. The modern reformer is content to explain the
facts by the existence in England of a law of primogeniture and a
system of strict settlement, but the explanation is obviously a
superficial one. To show why in England the small landed
proprietors have vanished, whilst in Germany and France they have
increased and thriven, it is necessary to carry our inquiries far
back into the history of law, politics, and commerce. The result
of a closer examination of the question is a little startling,
for we find that the present distribution of landed property in
England is in the main due to the existence of the system of
political government which has made us a free people. And on the
other hand, the distribution of landed property in France and
Germany, which writer after writer points to as the great bulwark
against revolution, is in the main due to a form of government
that destroyed political liberty and placed the people in subjection to the throne.

Evidence in support of this conclusion is not difficult to
adduce. The first fact which arouses our interest is that at the
conclusion of the seventeenth century it was estimated by Gregory
King that there were 180,000 freeholders in England, and that,
less than a hundred years later, the pamphleteers of the time,
and even careful writers like Arthur Young, speak of the small
freeholders as practically gone. The bare statement of this
contrast is in itself most impressive. A person ignorant of our
history during the intervening period might surmise that a great
exterminatory war had taken place, or a violent social revolution
which had caused a transfer of the property of one class to
another. But though the surmise in this particular form would be
incorrect, we are nevertheless justified in saying that a
revolution of incalculable importance had taken place, – a
revolution, though so silent, of as great importance as the
political revolution of 1831. ‘The able and substantial
freeholders,’ described by Whitelock, ‘the freeholders and
freeholders’ sons, well armed within with the satisfaction of
their own good consciences, and without by iron arms, who stood
firmly and charged desperately,’ – this devoted class, who had
broken the power of the king and the squires in the Civil Wars,
were themselves, within a hundred years from that time, being
broken, dispersed, and driven off the land. Numerous and
prosperous in the fifteenth century, they had suffered something
by the enclosures of the sixteenth; but though complaints are
from time to time made in the seventeenth of the laying together
of farms, there is no evidence to show that their number
underwent any great diminution during that time. In the picture
of country life which we find in the literature of the first
years of the eighteenth century, the small freeholder is still a
prominent figure. Sir Roger de Coverley, in riding to Quarter
Sessions, points to the two yeomen who are riding in front of
him, and Defoe, in his admirable Tour through England, first
published a few years later, describes with satisfaction the
number and prosperity of the Grey-coats of Kent (as they were
called from their home-spun garments), whose political power
forced the gentlemen to treat them with circumspection and
deference. ‘Of the freeholders of England,’ says Chamberlayne, in
the State of Great Britain, first published towards the close of
the seventeenth century, ‘there are more in number and richer
than in any country of the like extent in Europe. £40 or £50 a
year is very ordinary, £100 or £200 in some counties is not rare;
sometimes in Kent, and in the Weald of Sussex, £500 or £600 per
annum, and £3000 or £4000 stock.’ The evidence is conclusive that
up to the Revolution of 1688 the freeholders were in most parts
of the country an important feature in social life.

If, however, we ask whether they had possessed, as a class,
any political initiative, we must answer in the negative. In the
lists of the Eastern Counties’ Association, formed in the Civil
War (the eastern counties were the districts, perhaps, where the
freeholders were strongest), we find no name which has not
appended to it the title of gentleman or esquire. The small
landed proprietor, though courageous and independent in personal
character, was ignorant, and incapable himself of taking the
lead. There was little to stimulate his mind in his country life;
in agriculture he pursued the same methods as his forefathers,
was full of prejudices, and difficult to move. The majority of
this class had never travelled beyond their native village or
homestead and the neighbouring market-town. In some districts
those freeholders were also artisans, especially in the eastern
counties, which were still the richest part of the country, and
the most subject to foreign influence. But, on the whole, if we
may judge from the accounts of rather later times, the yeomen,
though thriving in good seasons, often lived very hard lives, and
remained stationary in their habits and ways of thinking from
generation to generation. They were capable in the Civil War,
under good leadership, of proving themselves the most powerful
body in the kingdom; but after constitutional government had been
secured, and the great landowners were independent of their
support, they sank into political insignificance. The Revolution
of 1688, which brought to a conclusion the constitutional
struggle of the seventeenth century, was accomplished without
their aid, and paved the way for their extinction. A revolution
in agricultural life was the price paid for political liberty.
At first, however, the absorption of the small freeholders
went on slowly. The process of disappearance has been continuous
from about 1700 to the present day, but it is not true to say, as
Karl Marx does, that the yeomanry had disappeared by the middle
of the eighteenth century. It was not till the very period which
we are considering, that is to say about 1760, that the process
of extinction became rapid. There is conclusive evidence that
many were still to be found about 1770. There were at that time still 9000 freeholders in Kent.

Even as late as 1807, estates in Essex, if divided, were
bought by farmers at high prices, and there was some prospect of
landed property coming back to the conditions of a century
before, ‘when our inferior gentry resided upon their estates in
the country’; and about the same date there were in Oxfordshire
‘many proprietors of a middling size, and many small proprietors,
particularly in the open fields.’ They were especially strong in
Cumberland, the West Riding, and parts of the East Riding. In the
Vale of Pickering in 1788 nearly the whole district belonged to
them, and no great landowner had been able to get a footing. But
in 1788 this was already an exceptional case, and in other
writers of that period we find a general lament at the
disappearance of the yeoman. Arthur Young ‘sincerely regrets the
loss of that set of men who are called yeomen… who really kept
up the independence of the nation,’ and is ‘loth to see their
lands now in the hands of monopolising lords;’ and in 1787 he
admits that they had practically disappeared from most parts of
the country. And with the yeomen went the small squires, victims of the same causes.

These causes, as I stated above, are to be sought less in
economical than in social and political facts. The chief of them
was our peculiar form of government. After the Revolution the
landed gentry were practically supreme. Not only national but
local administration was entirely in their hands, and, as a
natural consequence, land, being the foundation of social and
political influence, was eagerly sought after. We may contrast
France and Prussia, where the landowners had no political power
as such, and where, in consequence, small properties remained
unassailed. The second fact is the enormous development of the
mercantile and moneyed interest. The merchants could only obtain
political power and social position by becoming landowners. It is
true that Swift says that ‘the power which used to follow land
had gone over to money,’ and that the great Turkey merchants,
like Addison’s Sir Andrew Freeport, occupied a good position; but
few mere merchants were in Parliament, and Dr Johnson made the
significant remark that ‘an English merchant is a new species of
gentleman.’ To make himself a gentleman, therefore, the merchant
who had accumulated his wealth in the cities, which, as we have
seen, were growing rapidly during the first half of the
eighteenth century with an expanding commerce, bought land as a
matter of course. Hence the mercantile origin of much of our
nobility. James Lowther, created Earl of Lonsdale in 1784, was
great-grandson of a Turkey merchant; the ancestor of the Barings
was a clothier in Devonshire; Anthony Petty, father of Sir W.
Petty, and the ancestor on the female side of the
Petty-Fitzmaurices, was a clothier at Romsey, in Hampshire; Sir
Josiah Child’s son became Earl of Tilney. The landowners in the
West of England, ‘who now,’ in Defoe’s words, ‘carry their heads
so high,’ made their fortunes in the clothing trade. And not only
did a new race of landowners thus spring up, but the old families
enriched themselves, and so were enabled to buy more land by
intermarriage with the commercial magnates. The Fitzmaurices, for
instance, inherited the wealth of the Pettys: Child’s daughter
married the Marquis of Worcester, and, by a second marriage, Lord
Grenville of Potheridge; Lord Conway and Walpole married
daughters of John Shorter, merchant of London. ‘I think I
remember,’ said Sir R. Temple between 1675 and 1700, ‘the first
noble families that married into the City for money.’ ‘Trade,’
said Defoe, ‘is so far here from being inconsistent with a
gentleman, that, in short, trade in England makes gentlemen; for,
after a generation or two, the tradesmen’s children, or at least
their grandchildren, come to be as good gentlemen, statesmen,
parliament-men, privy-councillors, judges, bishops, and noblemen,
as those of the highest birth, and the most ancient families.’
Contrast this fusion of classes with the French society of the
last century, with its impoverished nobility, living often on the
seignorial rights and rent-charges of their alienated estates,
but hardly ever intermarrying with the commercial classes; or
that of Prussia, where the two classes remained entirely
separate, and could not even purchase one another’s land.
I have established two facts: the special reason for desiring
land after the Revolution as a condition of political power and
social prestige, and the means of buying land on the part of the
wealthy merchants or of the nobility and greater gentry enriched
by matrimonial alliances with the great commercial class. Now
here is a piece of evidence to show that it was the accepted
policy of the large landowners to buy out the yeoman. The land
agent, whom I have so often quoted, lays down as a maxim for the
model steward that he ‘should not forget to make the best inquiry
into the disposition of the freeholders, within or near any of
his lord’s manors, to sell their lands, that he may use his best
endeavours to purchase them at as reasonable a price as may be
for his lord’s advantage and convenience.’

On the other hand, as a result of the supremacy of the great
landowners in Parliament, their own estates were artificially
protected. The system of strict settlements, introduced by Sir
Orlando Bridgman in 1666, though not so important as it is often
made out to be, prevented much land from coming into the market,
though it did not prevent merchants from buying when they wished.
The custom of primogeniture checked the division of estates by
leading to the disuse of inheritance by gavelkind, and similar
customs. In Cumberland primogeniture was introduced among the
freeholders in the sixteenth century. In Kent there was, in 1740,
nearly as much gavelkind as before the disgavelling Acts began,
but thirty years later it was being superseded by primogeniture.
It was during these thirty years that the process of
concentration in that county first assumed formidable
proportions. In Pickering, on the other hand, where the law of
equal division still held its own, small landowners al so, as we
have seen, survived after their extinction in most parts of England.

A third result of landlord supremacy was the manner in which
the common-field system was broken up. Allusion has already been
made to enclosures, and enclosures meant a break-up of the old
system of agriculture and a redistribution of the land. This is a
problem which involves delicate questions of justice. In Prussia,
the change was effected by impartial legislation; in England, the
work was done by the strong at the expense of the weak. The
change from common to individual ownership, which was
economically advantageous, was carried out in an iniquitous
manner, and thereby became socially harmful. Great injury was
thus done to the poor and ignorant freeholders who lost their
rights in the common lands. In Pickering, in one instance, the
lessee of the tithes applied for an enclosure of the waste. The
small freeholders did their best to oppose him, but, having
little money to carry on the suit, they were overruled, and the
lessee, who had bought the support of the landless ‘house-owners’
of the parish, took the land from the freeholders and shared the
spoil with the cottagers. It was always easy for the steward to
harass the small owners till he forced them to sell, like
Addison’s Touchy, whose income had been reduced by lawsuits from
80 to 30, though in this case it is true he had only himself to
blame. The enclosure of waste land, too, did great damage to the
small freeholders, who, without the right of grazing, naturally
found it so much the more difficult to pay their way.

Though the economical causes of the disappearance of the
yeomen were comparatively unimportant, they served to accelerate
the change. Small arable farms would not pay, and must, in any
case, have been thrown together. The little farmers, according to
Arthur Young, worked harder and were to all intents and purposes
as low in the comforts of life as the day-labourers. But their
wretchedness was entirely owing to their occupying arable instead
of grass lands. And apart from this, undoubtedly, the new class
of large farmers were superior, in some respects, to the too
unprogressive yeomen, – ‘quite a different sort of men… In
point of knowledge and ideas,’ with whose improved methods of
agriculture the yeomen found it difficult to compete. A further
economic cause which tended to depress many of the yeomen was the
gradual destruction of domestic industries, which injured them as
it injures the German peasant at the present day, in Cumberland
the yeomen began to disappear when the spinning-wheel was
silenced. The decay of the home manufacture of cloth seems to
have considerably affected the Grey-coats of Kent. And finally,
as the small towns and villages decayed, owing to the
consolidation of farms and of industry, the small freeholders
lost their market, for the badness of the roads made it difficult
for them to send their produce far. Hence the small freeholders
survived longest where they owned dairy-farms, as in Cumberland
and the West Riding, and where domestic industry flourished, and
they had a market for their products in their own neighbourhood.
When once the ranks of the yeomanry had been appreciably
thinned, the process of extinction went on with ever-growing
rapidity. The survivors became isolated. They would have no one
of their own station to whom they could marry their daughters,
and would become more and more willing to sell their lands,
however strong the passion of possession might be in some places.
The more enterprising, too, would move off to the towns to make
their fortunes there, just as at the present day the French
peasants are attracted to the more interesting and exciting life
of the town. Thus Sir Robert Peel’s grandfather was originally a
yeoman farming his own estate, but being of an inventive turn of
mind he took to cotton manufacturing and printing. This was
particularly the case with the small squires, who grew
comparatively poorer and poorer, and found it increasingly
difficult to keep pace with the rise in the standard of comfort.
Already, at the end of the seventeenth century, the complaint had
been raised that the landowners were beginning to live in the
county towns. Afterwards, the more wealthy came up to London; Sir
Roger de Coverley had a house in Soho Square. The small country
gentleman felt the contrast between him and his richer neighbours
more and more; and as he had none of the political power
attaching to land-for the great landowners had the whole
administration in their hands-there was every inducement for him
to sell and invest his money in a more profitable manner.
To summarise the movement: it is probable that the yeomen
would in any case have partly disappeared, owing to the
inevitable working of economic causes. But these alone would not
have led to their disappearance on so large a scale. It was the
political conditions of the age, the overwhelming importance of
land, which made it impossible for the yeoman to keep his grip upon the soil.

VI. England in 1760

The Condition of the Wage-Earners

The condition of the agricultural labourer had very much
improved since the beginning of the century. In the seventeenth
century his average daily wage had been 10 1/4d., while the
average price of corn had been 38s. 2d. During the first sixty
years of the eighteenth century his average wages were 1s., the
price of corn 32s. Thus, while the price of corn had, thanks to a
succession of good seasons, fallen 16 per cent, wages had risen
to about an equal extent, and the labourer was thus doubly
benefited. Adam Smith attributes this advance in prosperity to
‘an increase in the demand for labour, arising from the great and
almost universal prosperity of the country”. but at the same time
he allows that wealth had only advanced gradually, and with no
great rapidity. The real solution is to be found in the slow rate
of increase in the numbers of the people. Wealth had indeed grown
slowly, but its growth had nevertheless been more rapid than that of population.

The improvement in the condition of the labourer was thus due
to an increase in real and not only in nominal wages. It is true
that certain articles, such as soap, salt, candles, leather,
fermented liquors, had, chiefly owing to the taxes laid on them,
become a good deal dearer, and were consumed in very small
quantities; but the enhanced prices of these things were more
than counterbalanced by the greater cheapness of grain, potatoes,
turnips, carrots, cabbages, apples, onions, linen and woollen
cloth, instruments made of the coarser metals, and household
furniture. Wheaten bread had largely superseded rye and barley
bread, which were ‘looked upon with a sort of horror.’ wheat
being as cheap as rye and barley had been in former times. Every
poor family drank tea once a day at least – a ‘pernicious
commodity,’ a ‘vile superfluity,’ in Arthur Young’s eyes. Their
consumption of meat was ‘pretty considerable’; that of cheese was
‘immense.’ In 1737 the day-labourers of England, ‘by their large
wages and cheapness of all necessaries,’ enjoyed better
dwellings, diet, and apparel in England, than the husbandmen or
farmers did in other countries.’ The middle of the eighteenth
century was indeed about his best time, though a decline soon set
in. By 1771 his condition had already been somewhat affected by
the dear years immediately preceding, when prices had risen much
faster than wages, although the change had as yet, according to
Young, merely cut off his superfluous expenditure. By the end of
the century men had begun to look back with regret upon this
epoch in the history of the agricultural labourer as one of a
vanished prosperity. At no time since the passing of the 43d of
Elizabeth, wrote Eden in 1796, ‘could the labouring classes
acquire such a portion of the necessaries and conveniences of
life by a day’s work, as they could before the late unparalleled
advance in the price of the necessaries of life.’

Nor were high wages and cheap food their only advantages.
Their cottages were often rent-free, being built upon the waste.
Each cottage had its piece of ground attached, though the piece
was often a very small one, for the Act of Elizabeth, providing
that every cottage should have four acres of land, was doubtless
unobserved, and was repealed in 1775. Their common rights,
besides providing fuel, enabled them to keep cows and pigs and
poultry on the waste, and sheep on the fallows and stubbles. But
these rights were already being steadily curtailed, and there was
‘an open war against cottages.’ consequent on the tendency to
consolidate holdings into large sheepfarms. It was becoming
customary, too, for unmarried labourers to be boarded in the farmers’ houses.

On the whole, the agricultural labourer, at any rate in the
south of England, was much better off in the middle of the
eighteenth century than his descendants were in the middle of the
nineteenth. At the later date wages were actually lower in
Suffolk, Essex, and perhaps parts of Wilts, than they were at the
former; in Berks they were exactly the same; in Norfolk, Bucks,
Gloucestershire, and South Wilts, there had been a very trifling
rise; with the exception of Sussex and Oxfordshire, there was no
county south of the Trent in which they had risen more than
one-fourth. Meanwhile rent and most necessaries, except bread,
had increased enormously in cost, while most of the labourer’s
old privileges were lost, so that his real wages had actually
diminished. But in the manufacturing districts of the north his
condition had improved. While nominal wages in the south had
risen on the average 14 per cent., here they had risen on the
average 66 per cent. In some districts the rise had been as great
as 200 per cent. In Arthur Young’s time the agricultural wages of
Lancashire were 4s. 6d. – the lowest rate in England; in 1821
they had risen to 14s. It may be roughly said that the relative
positions of the labourer north and south of the Trent had been
exactly reversed in the course of a century.

In Arthur Young’s time the highest wages were to be found in
Lincolnshire, the East Riding, and, following close upon these,
the metropolitan and eastern counties. At first sight the high
rate of wages in the first two counties seems to contradict the
general law about their relative condition in north and south.
But on investigation we find it to be due to exceptional
circumstances. Arguing on the deductive method, we should
conjecture a large demand for or a small supply of labour; and,
in fact, we find both these influences in operation. The
population had actually diminished, in Lincolnshire from 64 to 58
to the square mile, in the East Riding, from 80 to 71; this was
partly due to the enclosures and the conversion of arable to
pasture, partly to the increase of manufactures in the West
Riding. Thus the labourers had been drawn off to the latter at
the same time that they were being driven out of the agricultural
districts. And for the remaining labourers there was a great
demand in public works, such as turnpike-roads and agricultural improvements on a large scale.

But there were many local variations of wages which are far
less easy to bring under the ordinary rules of Political Economy,
There was often the greatest inequality in the same county. In
Lincolnshire, for instance, wages varied from 12s. 3d. to 7s.,
and even 6s. It was at this very time that Adam Smith, arguing
deductively from his primary axiom that men follow their
pecuniary interest, enunciated the law that wages tend to an
equality in the same neighbourhood and the same occupation. Why
then these variations? Adam Smith himself partly supplies the
answer. His law pretends to exactness only ‘when society is left
to the natural course of things.’ Now this was impossible when
natural tendencies were diverted by legal restrictions on the
movement of labour, such as the law of settlement, which resulted
in confining every labourer to his own parish. But we must not
seek the cause of these irregularities of wages merely in legal
restrictions. Apart from disturbing influences such as this, men
do not always act in accordance with their pecuniary interest;
there are other influences at work affecting their conduct. One
of the strongest of these is attachment to locality. It was this
influence which partly frustrated the recent efforts of the
Labourers’ Union to remove the surplus labour of the east and
south to the north. Again, there are apathy and ignorance,
factors of immense importance in determining the action of the
uneducated majority of men. In 1872 there were labourers in Devon
who had never heard of Lancashire, where they might have been
earning double their own wages. Human beings, as Adam Smith says,
are ‘of all baggage the most difficult to be transported,’ though
their comparative mobility depends upon the degree of their
education, the state of communications, and the industrial
conditions of any particular time. The English labourer to-day is
far more easy to move than he was a hundred years ago. In a
stirring new country like America there is much more mobility of labour than in England.

Turning from the agricultural wage-earners to those engaged
in manufactures, we find their condition at this period on the
whole much inferior to what it is now, in spite of the widening
gulf between capitalist and labourer, the status of the artisan
has distinctly improved since Adam Smith’s time. His nominal
wages have doubled or trebled. A carpenter then earned 2s. 6d. a
day; he now earns 5s. 6d. A cotton weaver then earned 5s. a week,
he now earns 20s., and so on. But it is difficult to compare the
condition of the artisan as a whole at the two periods, because
so many entirely new classes of workmen have come into existence
during the past century; for instance, the engineers, whose Union
now includes 50,000 men earning from 25s. to 40s. a week. And if
wages have on the whole very greatly increased, there were, on
the other hand, some obvious advantages which the artisan
possessed in those days, but has since lost. For the
manufacturing population still lived to a very great extent in
the country. The artisan often had his small piece of land, which
supplied him with wholesome food and healthy recreation. His
wages and employment too were more regular. He was not subject to
the uncertainties and knew nothing of the fearful sufferings
which his descendants were to endure from commercial
fluctuations, especially before the introduction of free trade.
For the whole inner life of industry was, as we have seen,
entirely different from what it now is. The relation between the
workmen and their employers was much closer, so that in many
industries they were not two classes but one. As among the
agriculturists the farmer and labourer lived much the same
life-for the capitalist farmers as a class were not yet in
existence-and ate at the same board, so in manufacturing
industries the journeyman was often on his way to become a
master. The distribution of wealth was, indeed, in all respects
more equal. Landed property, though gradually being concentrated,
was still in a far larger number of hands, and even the great
landlords possessed nothing like their present riches. They had
no vast mineral wealth, or rapidly developing town property. A
great number of the trading industries, too, were still in the
hands of small capitalists. Great trades, like the iron trade,
requiring large capital, had hardly come into existence.

VII. The Mercantile System and Adam Smith

The contrast between the industrial England of 1760 and the
industrial England of to-day is not only one of external
conditions. Side by side with the revolution which the
intervening century has effected in the methods and organisation
of production, there has taken place a change no less radical in
men’s economic principles, and in the attitude of the State to
individual enterprise. England in 1760 was still to a great
extent under the medieval system of minute and manifold
industrial regulations. That system was indeed decaying, but it
had not yet been superseded by the modern principle of industrial
freedom. To understand the origin of the medieval system we must
go back to a time when the State was still conceived of as a
religious institution with ends that embraced the whole of human
life. In an age when it was deemed the duty of the State to watch
over the individual citizen in all his relations, and provide not
only for his protection from force and fraud, but for his eternal
welfare, it was but natural that it should attempt to insure a
legal rate of interest, fair wages, honest wares. Things of vital
importance to man’s life were not to be left to chance or
self-interest to settle. For no philosophy had as yet identified
God and Nature: no optimistic theory of the world had reconciled
public and private interest. And at the same time, the smallness
of the world and the community, and the comparative simplicity of
the social system made the attempt to regulate the industrial
relations of men less absurd than it would appear to us in the present day.

This theory of the State, and the policy of regulation and
restriction which sprang from it, still largely affected English
industry at the time when Adam Smith wrote. There was, indeed,
great freedom of internal trade; there were no provincial
customs-barriers as in contemporary France and Prussia. Adam
Smith singled out this fact as one of the main causes of English
prosperity, and to Colbert and Stein, and other admirers of the
English system, such freedom appeared as an ideal to be
constantly striven after. But though internal trade was free for
the passage of commodities, yet there still existed a network of
restrictions on the mobility of labour and capital. By the law of
apprenticeship no person could follow any trade till he had
served his seven years. The operation of the law was limited, it
is true, to trades already established in the fifth year of
Elizabeth, and obtained only in market-towns and cities. But
wherever there was a municipal corporation, the restrictions
which they imposed made it generally impossible for a man to work
unless he was a freeman of the town, and this he could as a rule
become only by serving his apprenticeship. Moreover, the
corporations supervised the prices and qualities of wares. In the
halls, where the smaller manufacturers sold their goods, all
articles exposed for sale were inspected. The medieval idea still
obtained that the State should guarantee the genuineness of
wares: it was not left to the consumer to discover their quality.
And in the Middle Ages, no doubt, when men used the same things
from year to year, a proper supervision did secure good work. But
with the expansion of trade it ceased to be effective. Sir Josiah
Child already recognised that changes of fashion must prove fatal
to it, and that a nation which intended to have the trade of the
world must make articles of every quality. Yet the belief in the
necessity of regulation was slow in dying out, and fresh Acts to
secure it were passed as late as George II’s reign.

It is not clear how far the restrictions on the mobility of
capital and Labour were operative. No doubt they succeeded to a
large extent; but when Adam Smith wrote his bitter criticism of
the corporations, he was probably thinking of the particular
instance of Glasgow, where Watt was not allowed to set up trade.
There were, however, even at that time, many free towns, Like
Birmingham and Manchester, which flourished greatly from the fact
of their freedom. And even in the chartered towns, if Eden is to
be trusted, the restrictions were far less stringent than we
should gather from Adam Smith. ‘I am persuaded,’ he says, ‘that a
shoemaker, who had not served an apprenticeship, might exercise
his industry at Bristol or Liverpool, with as little hazard of
being molested by the corporation of either place, as of being
disturbed by the borough-reve of Manchester or the head-constable
at Birmingham.’ Then after quoting and criticising Adam Smith, he
adds: ‘I confess, I very much doubt whether there is a single
corporation in England, the exercise of whose rights does at
present operate in this manner…. In this instance, as in many
others, the insensible progress of society has reduced chartered
rights to a state of inactivity.’ We may probably conclude that
nonfreemen were often unmolested, but that, when trade was bad, they were liable to be expelled.

Another relic of Medievalism was the regulation of wages by
Justices of the Peace, a practice enjoined by the Act of
Elizabeth already referred to. Adam Smith speaks of it as part of
a general system of oppression of the poor by the rich. Whatever
may have been the case in some instances this was not generally
true. The country gentry were, on the whole, anxious to do
justice to the working classes. Combinations of labourers were
forbidden by law, because it was thought to be the wrong way of
obtaining the object in view, not from any desire to keep down
wages. The Justices often ordained a rise in wages, and the
workmen themselves were strongly in favour of this method of
fixing them. The employers on their part also often approved of
it. In fact we have an exactly similar system at the present day
in boards of arbitration. The Justice was an arbitrator,
appointed by law; and it is a mistaken assumption that such
authoritative regulation may not have been good in its day.
The principle of regulation was applied much more thoroughly
to our externaL than to our internal trade. The former was
entirely carried on by great chartered companies, whether they
were on a joint-stock footing, Like the East India Company, or
were ‘regulated’ like the Turkey Company, in which every man
traded on his own capital. Here, again, Adam Smith carried too
far his revolt against the restrictive system, which Led him to
denounce corporate trading as vicious in principle. ‘The
directors of such companies,’ he says, ‘being the managers rather
of other people’s money than of their own, it cannot well be
expected that they should watch over it with the same anxious
vigilance with which the partners in a private co-partnery
frequently watch over their own…. Negligence and profusion must
always prevail, more or less, in the management of the affairs of
such a company.’ This is an instance of pure a Priori reasoning,
but Smith’s main argument is derived from the history of
Joint-Stock Companies. He sought to show that, as a matter of
fact, unless they had had a monopoly, they had failed; that is,
he proceeded inductively, and wound up with an empirical law: ‘it
seems contrary to all experience that a Joint-Stock Company
should be able to carry on successfully any branch of foreign
trade, when private adventurers can come into any sort of open
and fair competition with them.’ But he was too honest not to
admit exceptions to his rule, as in the instance of banking,
which he explained by the fact that it could be reduced to routine.

Smith’s empirical law is, as we all now know, far from being
universally true, though it was a reasonable induction enough at
the time when it was made. Since then a large number of
Joint-Stock Companies have succeeded, as for instance in the iron
trade. Nor is it difficult to see the reason of this change. The
habit of combination is stronger than it was, and we have
discovered how to interest paid servants by giving them a share
in the results of the enterprises they direct. Experience has
shown also that a big company can buy the best brains. In the
recent depression of trade the ironworks of Dowlais, which are
managed on the Joint-stock system, alone remained successful amid
many surrounding failures, and that because they had the ablest man in the district as manager.

In Adam Smith’s time, however, the existence of Joint-Stock
Companies was due not to any notion of their economical
superiority, but to the tendency to place restrictions upon
individual enterprise, based upon that belief in the antagonism
of public and private interests which was characteristic of the
time. The same idea of opposition obtained equally in
international relations. The prosperity of one country was
thought to be incompatible with that of another. If one profited
by trade, it seemed to do so at the expense of its neighbours.
This theory was the foundation of the mercantile system. It had
its origin in the spirit of Nationalism – the idea of
self-sustained and complete national life – which came in with the Renaissance and the Reformation.

But how came this Nationalism to he connected with a belief
in the special importance of gold and silver, which is generally
regarded as the essence of the mercantile system? The object of
that system was national greatness, but national greatness
depends on national riches generally, not on one particular kind
of riches only, such as coin. The explanation must be sought in
the fact that, owing to the simultaneous development of trade and
the money system, gold and silver became peculiarly essential to
the machinery of commerce. With the growth of standing armies,
moreover, State finance acquired a new importance, and the object
of State finance was to secure a ready supply of the precious
metals. Thus the theory sprang up that gold and silver were the
most solid and durable parts of the moveable wealth of a nation,
and that, as they had more value in use than any other
commodities, every state should do all in its power to acquire a
great store of them. At first the Government tried to attain this
object by accumulating a hoard; but this policy soon proved too
wasteful and difficult. It then turned its attention to
increasing the quantity of bullion in the hands of the people,
for it came to see that if there was plenty of bullion in the
country it could always draw upon it in case of need. The export
of gold and silver was accordingly forbidden; but if hoarding had
proved impracticable, this new method of securing the desired end
was soon found to be useless, as the prohibition could be easily
evaded. In the last resort, therefore, it was sought to insure a
continuous influx of the precious metals through the ordinary
channels of trade. If we bought less than we sold, it was argued,
the balance of trade must be paid in coin. To accomplish this end
every encouragement was given to the importation of raw materials
and the necessaries of life, but the purchase of foreign
manufactures was, for the most part, prohibited, and individuals
were entreated not to buy imported luxuries. The result was
retaliation abroad, and a deadlock in the commercial machine.
Wars of tariff were common; for instance, we prohibited the
importation of gold-lace from Flanders, and the Flemings in
return excluded our wool. The system, however, resisted the
teaching of experience, despite the fact that in abolishing the
prohibition of the export of gold and silver, the Government
acknowledged the true principle of free trade put forward by the
East Indian Company. The latter contended that the law forbidding
the export of bullion was not only useless, since it was easily
stultified by smuggling, but even, if enforced, was hurtful,
since the Orientals would only sell their valuable goods for
silver. The success of this contention marks the transition from
the Mercantile System proper to modern Protection. The advocates
of that system had shifted their ground, and instead of seeking
merely to prohibit the export of the precious metals, they
established a general protection of native industries.
Their measures were not all alike bad. The Navigation Acts,
for instance, were defended by Adam Smith, and Mill has indorsed
his defence, on the ground that national defence is more important than national opulence.

The most famous of these Acts was the law of 1651, by which
no goods of the growth or manufacture of Asia, Africa, or America
were to be imported into England, Ireland, or the Plantations,
except in ships belonging to English subjects, and manned by a
crew three-fourths of whom were English; while no goods of any
country in Europe were to be imported except in English ships, or
ships belonging to the country from which the goods came. The
argument used by the promoters of the law was that by excluding
the Dutch from the carrying trade to this country we should throw
it into the hands of English shipowners, and there would he an
increase of English ships. It was admitted, indeed, that this
would be giving a monopoly to English shipowners and English
sailors, and that therefore freights would be dearer, and a check
given to the growth of commerce. It was further admitted that
owing to their higher charges English ships might be driven out
of neutral ports; but the contention was, that we should secure
to ourselves the whole of the carrying trade between America and
the West Indies and England, and that this would amply compensate
for our expulsion from other branches of commerce.

These anticipations were on the whole fulfilled. The price of
freights was raised, because English ships cost more to build and
man than Dutch ships, and thus the total amount of our trade was
diminished. We were driven out of neutral ports, and lost the
Russian and the Baltic trades, because the English shipowners, to
whom we had given a monopoly, raised their charge. But on the
other hand, we monopolised the trade to ports coming within the
scope of the Act, the main object of which was ‘the preservation
of our plantation trade entire.’ Our shipping received a great
stimulus, and our maritime supremacy grew with it. At the time
when the Navigation Act was passed our colonial trade was
insignificant; New York and Jersey were Dutch; Georgia, the
Carolinas, Pennsylvania, Nova Scotia were not yet planted;
Virginia, Maryland, New England were in their infancy. At the end
of the century the Barbados alone employed 400 vessels; while
with the growth of the colonies the English power at sea had
increased, until it rivalled the Dutch. In the next century the
continuous development of the American and East Indian trades
gave us a position of unquestionable maritime superiority.
There is another argument in favour of Protection, at any
rate in its early days. Its stimulus helped to overcome the
apathy and dulness of a purely agricultural population, and draw
a part of the people into trade. But here, as everywhere,
Protection involves this great disadvantage, that, once given, it
is difficult to withdraw, and thus in the end more harm is done
than good. English industries would not have advanced so rapidly
without Protection, but the system, once established, led to
perpetual wrangling on the part of rival industries, and
sacrificed India and the colonies to our great manufacturers. And
our national dislike to Protection deepens into repugnance when
we examine the details of the system. Looking at its results
during the period from 1688 to 1776, when it was in full force,
we are forced to acknowledge that Adam Smith’s invectives against
the merchants, violent as they were, were not stronger than the facts demanded.

But the maintenance of Protection cannot be entirely set down
to the merchants. Though the trading classes acquired much
influence at the Revolution, the landed gentry were still supreme
in Parliament; and the question arises, why they should have lent
themselves to a policy which in many cases, as in the prohibition
of the export of wool, was distinctly opposed to the interests of
agriculture. Adam Smith’s explanation is very simple. The country
gentleman, who was naturally ‘least subject of all people to the
wretched spirit of monopoly,’ was imposed upon by the ‘clamours
and sophistry of merchants and manufacturers,’ and ‘the sneaking
arts of underling tradesmen,’ who persuaded him into a simple but
honest conviction that their interest and not his was the
interest of the public. Now this is true, but it is not the whole
truth. The landowners, no doubt, thought it their duty to protect
trade, and, not understanding its details, they implicitly
followed the teaching of the merchants. But, besides this, there
was the close connection, already referred to, between them and
the commercial classes. Their younger sons often went into trade;
they themselves, in many cases, married merchants’ daughters. Nor
did they give their support gratuitously. they wanted Protection
for themselves, and if they acquiesced in the prohibition of the
wool export, they persuaded the merchants to allow them in return
a bounty of 5s. a quarter on the export of corn.

One of the worst features of the system was the struggle of
rival interests at home. A great instance of this was the war
between the woollen and cotton trades, in which the former,
supported by the landed interest, for a long time had the upper
hand, so that an excise duty was placed on printed calicoes, and
in 1721 they were forbidden altogether. It was not till 1774 that
they were allowed again, and the excise duty was not repealed
till 1831. To take another instance: it was proposed in
Parliament in 1750 to allow the importation of pig and bar iron
from the colonies. The tanners at once petitioned against it, on
the ground that if American iron was imported, less iron would be
smelted in England, fewer trees would be cut down, and therefore
their own industry would suffer; and the owners of woodland
tracts supported the tanners, lest the value of their timber
should be affected. These are typical examples of the way in
which, under a protective system, politics are complicated and
degraded by the intermixture of commercial interests. And the
freer a government is, and the more exposed to pressure on the
part of its subjects, the worse will be the result. As an
American observer has lately said, Protection may be well enough
under a despotism, but in a republic it can never be successful.
We find still stronger illustration of the evils of
Protection in our policy towards Ireland and the colonies. After
the Cromwellian settlement, there had been an export of Irish
cattle into England; ‘but for the pacifying of our landed
gentlemen,’ after the Restoration the import of Irish live stock,
meat and dairy produce was prohibited from 1660 to 1685. As
cattle-farming then became unprofitable, the Irish turned their
lands into sheepwalks, and not only exported wool, but started
woollen manufactures at home. Immediately a law was passed (1699)
confining the export of Irish wool to the English market; and
this was followed by the imposition of prohibitive duties on
their woollen manufactures. The English manufacturers argued that
as Ireland was protected by England, and its prosperity was due
to English capital, the Irish ought to reconcile themselves to
restrictions on their trade, in the interests of Englishmen.
Besides, the joint interests of both kingdoms would be best
considered if England and Ireland respectively monopolised the
woollen and linen industries, and the two nations thus became
dependent on one another. If we turn to the colonies, we find
them regarded simply as markets and farms of the mother country.
The same argument was used: that they owed everything to England,
and therefore it was no tyranny to exploit them in her interests.
They were, therefore, not allowed to export or import in any but
British vessels; they might not export such commodities as
Englishmen wanted to any part of Europe other than Great Britain;
while those of their raw materials in which our landowners feared
competition were excluded from the English markets. All imports
into the colonies from other parts of Europe, except Great
Britain, were forbidden, in order that our manufacturers might
monopolise the American market. Moreover, every attempt was made
to prevent them from starting any manufactures at home. At the
end of the seventeenth century some Americans had set on foot a
woollen industry’. In 1719 it was suppressed; all iron
manufactures-even nail-making-were forbidden; a flourishing hat
manufacture had sprung up, but at the petition of English
hatters, these competitors were not allowed to export to England,
or even from one colony to another. Adam Smith might well say,
that ‘to found a great empire, for the sole purpose of raising up
a people of customers, may at first sight appear a project fit
only for a nation of shopkeepers.’ Nothing contributed more than
this commercial system to the Declaration of independence, and it
is significant that the same year which saw its promulgation saw
also the publication of the Wealth of Nations.

Many people on first reading the Wealth of Nations are
disappointed. They come to it expecting lucid arguments, the
clear exposition of universal laws; they find much tedious and
confused reasoning and a mass of facts of only temporary
interest. But these very defects contributed to its immediate
success. It was because Adam Smith examined in detail the actual
conditions of the age, and wrote a handbook for the statesman,
and not merely, as Turgot did, a systematised treatise for the
philosopher, that he appealed so strongly to the practical men of
his time, who, with Pitt, praised his ‘extensive knowledge of
detail,’ as well as ‘the depth of his philosophical research.’ It
was the combination of the two which gave him his power. He was
the first great writer on the subject; with him political economy
passed from the exchange and the market-place to the professor’s
study; but he was only groping his way, and we cannot expect to
meet with neat arrangement and scientific precision of treatment
in his book. His language is tentative, he sometimes makes
distinctions which he forgets elsewhere, as was inevitable before
the language of economics had been fixed by endless verbal
discussions. He had none of Ricardo’s power of abstract
reasoning. His gift lay in the extent and quickness of his
observation, and in his wonderful felicity of illustration. We
study him because in him, as in Plato, we come into contact with
a great original mind, which teaches us how to think and work.
Original people always are confused because they are feeling their way.

If we look for the fundamental ideas of Adam Smith, those
which distinguish him most clearly from earlier writers, we are
first struck by his cosmopolitanism. He was the precursor of
Cobden in his belief that commerce is not of one nation, but that
all the nations of the world should be considered as one great
community. We may see how widely he had departed from the old
national system of economy, by contrasting the mere title of his
book, The Wealth of Nations, with that of Mun’s treatise,
England’s Treasure in Foreign Trade. This cosmopolitanism
necessitated a detailed refutation of the mercantile system. He
had to prove that gold and silver were not more important than
other forms of wealth; and that if we wanted to buy them, we
could always do so, if we had other consumable goods to offer in
exchange. But it might be objected: ‘What if a nation refuses to
take your other goods, and wants your gold?’ Adam Smith replied:
‘in that case, gold will leave your country and go abroad; as a
consequence, prices will fall at home, foreigners will be
attracted by the low prices to buy in your markets, and thus the
gold will return.’ I can give you an actual example from recent
history to prove the truth of his deduction. During the potato
famine of 1847, we had to import enormous quantities of grain
from America, and as a consequence had to send there £16,000,000
worth of bullion. Immediately prices rose in America and fell in
England, English merchants discontinued buying in America, while
American merchants bought largely in England, so that in the
following year all the gold came back again.

Equally prominent in Adam Smith is his individualism, his
complete and unhesitating trust in individual self-interest. He
was the first to appeal to self-interest as a great bond of
society. As a keen observer, he could point to certain facts,
which seemed to bear out his creed. If we once grant the
principle of the division of labour, then it follows that one man
can live only by finding out what other men want; it is on this
fact, for instance, that the food supply of London depends. This
is the basis of the doctrine of laisser faire. It implies
competition, which would result, so Adam Smith believed, in men’s
wants being supplied at a minimum of cost. In upholding
competition he was radically opposed to the older writers, who
thought it a hateful thing; but his conclusion was quite true.
Again it implies the best possible distribution of industry; for
under a system of free competition, every man will carry on his
trade in the locality most suitable for it.

But the principle of laisser faire breaks down in certain
points not recognised by Adam Smith. It fails, for instance, in
assuming that it is the interest of the producer to supply the
wants of the consumer in the best possible manner, that it is the
interest of the producer to manufacture honest wares. It is quite
true that this is his interest, where the trade is an
old-established one and has a reputation to maintain, or where
the consumer is intelligent enough to discover whether a
commodity is genuine or not. But these conditions exist only to a
small extent in modern commerce. The trade of the present day is
principally carried on with borrowed capital; and it may be a
clever man’s interest to sell as large a quantity of goods as
possible in a few years and then throw up his business. Thus the
interests of producer and consumer conflict, and it has been
found necessary to pass Adulteration Acts, which recognise the
non-identity of interest of seller and buyer. It was argued,
indeed, in Parliament, when these acts were proposed, that
consumers ought to take care of themselves, but the consumers are
far too ignorant to do so, especially the poor who are the great
consumers of the articles protected against adulteration. Adam
Smith, moreover, could not foresee that internal free trade might
result in natural monopolies. A conspicuous feature of our times
is the concentration of certain industries in the hands of a few
great capitalists, especially in America, where such rings
actually dictate the prices of the market. Eighty-five per cent.
of the Pennsylvania coal-mines, for instance, are in the hands of
six or seven companies who act in combination. The easiest remedy
for such monopolies would be international free trade; with
international competition few could be maintained. Finally, in
the distribution of wealth there must necessarily be a permanent
antagonism of interests. Adam Smith himself saw this, when he
said that the rate of wages depended on contracts between two
parties whose interests were not identical. This being granted,
we see that in distribution the ‘harmony’ of the individual and
the public good is a figment. At the present day each class of
workmen cares only for the wages of its own members. Hence the
complete breakdown of the laisser faire system in the question of
wages. We have been driven to attempt the establishment of Boards
of Conciliation all over the country, thus virtually surrendering
the principle. Nor is it true that self-interest tends to supply
all our wants; some of our best institutions, such as hospitals,
owe their existence to altruistic sentiment. These antagonisms
were to come out more strongly than ever after Adam Smith’s time.
There were dark patches even in his age, but we now approach a
darker period-a period as disastrous and as terrible as any
through which a nation ever passed; disastrous and terrible,
because, side by side with a great increase of wealth was seen an
enormous increase of pauperism; and production on a vast scale,
the result of free competition, led to a rapid alienation of
classes and to the degradation of a large body of producers.

VIII. The Chief Features of the Revolution

The essence of the industrial Revolution is the substitution
of competition for the medieval regulations which had previously
controlled the production and distribution of wealth. On this
account it. IS not only one of the most important facts of
English history, but Europe owes to it the growth of two great
systems of thought – Economic Science, and its antithesis,
Socialism. The development of Economic Science in England has
four chief landmarks, each connected with the name of one of the
four great English economists. The first is the publication of
Adam Smith’s Wealth of Nations in 1776, in which he investigated
the causes of wealth and aimed at the substitution of industrial
freedom for a system of restriction. The production of wealth,
not the welfare of man, was what Adam Smith had primarily before
his mind’s eye; in his own words, ‘the great object of the
Political Economy of every country is to increase the riches and
power of that country.’ His great book appeared on the eve of the
industrial Revolution. A second stage in the growth of the
science is marked by Malthus’s Essay on Population, published in
1798, which may be considered the product of that revolution,
then already in full swing. Adam Smith had concentrated all his
attention on a large production; Malthus directed his inquiries,
not to the causes of wealth but to the causes of poverty, and
found them in his theory of population. A third stage is marked
by Ricardo’s Principles of Political Economy and Taxation, which
appeared in 1817, and in which Ricardo sought to ascertain the
laws of the distribution of wealth. Adam Smith had shown how
wealth could be produced under a system of industrial freedom,
Ricardo showed how wealth is distributed under such a system, a
problem which could not have occurred to any one before his time.
The fourth stage is marked by John Stuart Mill’s Principles of
Political Economy, published in 1848. Mill himself asserted that
‘the chief merit of his treatise’ was the distinction drawn
between the laws of production and those of distribution, and the
problem he tried to solve was, how wealth ought to be
distributed. A great advance was made by Mill’s attempt to show
what was and what was not inevitable under a system of free
competition. In it we see the influence which the rival system of
Socialism was already beginning to exercise upon the economists.
The whole spirit of Mill’s book is quite different from that of
any economic works which had up to his time been written in
England. Though a re-statement of Ricardo’s system, it contained
the admission that the distribution of wealth is the result of
‘particular social arrangements,’ and it recognised that
competition alone is not a satisfactory basis of society.

Competition, heralded by Adam Smith, and taken for granted by
Ricardo and Mill, is still the dominant idea of our time; though
since the publication of the Origin of Species, we hear more of
it under the name of the ‘struggle for existence.’ I wish here to
notice the fallacies involved in the current arguments on this
subject. In the first place it is assumed that all competition is
a competition for existence. This is not true. There is a great
difference between a struggle for mere existence and a struggle
for a particular kind of existence. For instance, twelve men are
struggling for employment in a trade where there is only room for
eight; four are driven out of that trade, but they are not
trampled out of existence. A good deal of competition merely
decides what kind of work a man is to do; though of course when a
man can only do one kind of work, it may easily become a struggle
for bare life. It is next assumed that this struggle for
existence is a law of nature, and that therefore all human
interference with it is wrong. To that I answer that the whole
meaning of civilisation is interference with this brute struggle.
We intend to modify the violence of the fight, and to prevent the
weak being trampled under foot.

Competition, no doubt, has its uses. Without competition no
progress would be possible, for progress comes chiefly from
without; it is external pressure which forces men to exert
themselves. Socialists, however, maintain that this advantage is
gained at the expense of an enormous waste of human life and
labour, which might be avoided by regulation. But here we must
distinguish between competition in production and competition in
distribution, a difference recognised in modern legislation,
which has widened the sphere of contract in the one direction,
while it has narrowed it in the other. For the struggle of men to
outvie one another in production is beneficial to the community;
their struggle over the division of the joint produce is not. The
stronger side will dictate its own terms; and as a matter of
fact, in the early days of competition the capitalists used all
their power to oppress the labourers, and drove down wages to
starvation point. This kind of competition has to be checked;
there is no historical instance of its having lasted long without
being modified either by combination or legislation, or both. In
England both remedies are in operation, the former through Trades
Unions, the latter through factory legislation. In the past other
remedies were applied. It is this desire to prevent the evils of
competition that affords the true explanation of the fixing of
wages by Justices of the Peace, which seemed to Ricardo a remnant
of the old system of tyranny in the interests of the strong.
Competition, we have now learnt, is neither good nor evil in
itself; it is a force which has to be studied and controlled; it
may be compared to a stream whose strength and direction have to
be observed, that embankments may be thrown up within which it
may do its work harmlessly and beneficially. But at the period we
are considering it came to be believed in as a gospel, and, the
idea of necessity being superadded, economic laws deduced from
the assumption of universal unrestricted competition were
converted into practical precepts, from which it was regarded as
little short of immoral to depart.

Coming to the facts of the Industrial Revolution, the first
thing that strikes us is the far greater rapidity which marks the
growth of population. Before 1751 the largest decennial increase,
so far as we can calculate from our imperfect materials, was 3
per cent. For each of the next three decennial periods the
increase was 6 per cent.; then between 1781 and 1791 it was 9 per
cent.; between 1791 and 1801, 11 per cent.; between 1801 and
1811, 14 per cent.; between 1811 and 182l, 18 per cent. This is
the highest figure ever reached in England, for since 1815 a vast
emigration has been always tending to moderate it; between 1815
and 1880 over eight millions (including Irish) have left our
shores. But for this our normal rate of increase would be 16 or
18 instead of 12 per cent. In every decade.

Next we notice the relative and positive decline in the
agricultural population. In 1811 it constituted 35 per cent. of
the whole population of Great Britain; in 1821, 33 per cent.; in
1831, 28 per cent. And at the same time its actual numbers have
decreased. In 1831 there were 1,243,057 adult males employed in
agriculture in Great Britain; in 1841 there were 1,207,989. In
1851 the whole number of persons engaged in agriculture in
England was 2,084,153; in 1861 it was 2,010,454, and in 1871 it
was 1,657,138. Contemporaneously with this change, the centre of
density of population has shifted from the Midlands to the North;
there are at the present day 458 persons to the square mile in
the counties north of the Trent, as against 312 south of the
Trent. And we have lastly to remark the change in the relative
population of England and Ireland. Of the total population of the
three kingdoms, Ireland had in 1821 32 per cent., in 1881 only 14.6 per cent.

An agrarian revolution plays as large part in the great
industrial change of the end of the eighteenth century as does
the revolution in manufacturing industries, to which attention is
more usually directed. Our next inquiry must therefore be: What
were the agricultural changes which led to this noticeable
decrease in the rural population? The three most effective causes
were: the destruction of the common-field system of cultivation;
the enclosure, on a large scale, of common and waste lands; and
the consolidation of small ‘farms into large. We have already
seen that while between 1710 and 1760 some 300,000 acres were
enclosed, between 1760 and 1843 nearly 7,000,000 underwent the
same process. Closely connected with the enclosure system was the
substitution of large for small farms. In the first half of the
century Laurence, though approving of consolidation from an
economic point of view, had thought that the odium attaching to
an evicting landlord would operate as a strong check upon it. But
these scruples had now disappeared. Eden in 1795 notices how
constantly the change was effected, often accompanied by the
conversion of arable to pasture; and relates how in a certain
Dorsetshire village he found two farms where twenty years ago
there had been thirty. The process went on uninterruptedly into
the present century. Cobbett, writing in 1826, says: ‘In the
parish of Burghclere one single farmer holds, under Lord
Carnarvon, as one farm, the lands that those now living remember
to have formed fourteen farms, bringing up in a respectable way
fourteen families.’ The consolidation of farms reduced the number
of farmers, while the enclosures drove the labourers off the
land, as it became impossible for them to exist without their
rights of pasturage for sheep and geese on common lands.
Severely, however, as these changes bore upon the rural
population, they wrought, without doubt, distinct improvement
from an agricultural point of view. They meant the substitution
of scientific for unscientific culture. ‘It has been found,’ says
Laurence, ‘by long experience, that common or open fields are
great hindrances to the public good, and to the honest
improvement which every one might make of his own.’ Enclosures
brought an extension of arable cultivation and the tillage of
inferior soils; and in small farms of 40 to 100 acres, where the
land was exhausted by repeated corn crops, the farm buildings of
clay and mud walls and three-fourths of the estate often
saturated with water, consolidation into farms of 100 to 500
acres meant rotation of crops, leases of nineteen years, and good
farm buildings. The period was one of great agricultural advance;
the breed of cattle was improved, rotation of crops was generally
introduced, the steam-plough was invented, agricultural societies
were instituted. In one respect alone the change was injurious.
In consequence of the high prices of corn which prevailed during
the French war, some of the finest permanent pastures were broken
up. Still, in spite of this, it was said in 1813 that during the
previous ten years agricultural produce had increased by
one-fourth, and this was an increase upon a great increase in the
preceding generation.

Passing to manufactures, we find here the all-prominent fact
to be the substitution of the factory for the domestic system,
the consequence of the mechanical discoveries of the time. Four
great inventions altered the character of the cotton manufacture;
the spinning-jenny, patented by Hargreaves in 1770; the
waterframe, invented by Arkwright the year before; Crompton’s
mule introduced in 1779, and the self-acting mule, first invented
by Kelly in 1792, but not brought into use till Roberts improved
it in 1825. None of these by themselves would have revolutionised
the industry. But in 1769-the year in which Napoleon and
Wellington were born-James Watt took out his patent for the
steam-engine. Sixteen years later it was applied to the cotton
manufacture. In 1785 Boulton and Watt made an engine for a
cotton-mill at Papplewick in Notts, and in the same year
Arkwright’s patent expired. These two facts taken together mark
the introduction of the factory system. But the most famous
invention of all, and the most fatal to domestic industry, the
power-loom, though also patented by Cartwright in 1785, did not
come into use for several years, and till the power-loom was
introduced the workman was hardly injured. At first, in fact,
machinery raised the wages of spinners and weavers owing to the
great prosperity it brought to the trade. In fifteen years the
cotton trade trebled itself; from 1788 to 1803 has been called
its ‘golden age”. for, before the power-loom but after the
introduction of the mule and other mechanical improvements by
which for the first time yarn sufficiently fine for muslin and a
variety of other fabrics was spun, the demand became such that
‘old barns, cart-houses, out-buildings of all descriptions were
repaired, windows broke through the old blank walls, and all
fitted up for loom-shops; new weavers’ cottages with loom-shops
arose in every direction, every family bringing home weekly from
40 to 12O shillings per week.’ At a later date, the condition of
the workman was very different. Meanwhile, the iron industry had
been equally revolutionised by the invention of smelting by
pit-coal brought into use between 1740 and 1750, and by the
application in 1788 of the steam-engine to blast furnaces. In the
eight years which followed this later date, the amount of iron
manufactured nearly doubled itself.

A further growth of the factory system took place independent
of machinery, and owed its origin to the expansion of trade, an
expansion which was itself due to the great advance made at this
time in the means of communication. The canal system was being
rapidly developed throughout the country. In 1777 the Grand Trunk
canal, 96 miles in length, connecting the Trent and Mersey, was
finished; Hull and Liverpool were connected by one canal while
another connected them both with Bristol; and in 1792, the Grand
Junction canal, 90 miles in length, made a water-way from London
through Oxford to the chief midland towns. Some years afterwards,
the roads were greatly improved under Telford and Macadam;
between 1818 and 1829 more than a thousand additional miles of
turnpike road were constructed; and the next year, 1830, saw the
opening of the first railroad. These improved means of
communication caused an extraordinary increase in commerce, and
to secure a sufficient supply of goods it became the interest of
the merchants to collect weavers around them in great numbers, to
get looms together in a workshop, and to give out the warp
themselves to the workpeople. To these latter this system meant a
change from independence to dependence; at the beginning of the
century the report of a committee asserts that the essential
difference between the domestic and the factory system is, that
in the latter the work is done ‘by persons who have no property
in the goods they manufacture.’ Another direct consequence of
this expansion of trade was the regular recurrence of periods of
over-production and of depression, a phenomenon quite unknown
under the old system, and due to this new form of production on a
large scale for a distant market.

These altered conditions in the production of wealth
necessarily involved an equal revolution in its distribution. In
agriculture the prominent fact is an enormous rise in rents. Up
to 1795, though they had risen in some places, in others they had
been stationary since the Revolution. But between 1790 and 1833,
according to Porter, they at least doubled. In Scotland, the
rental of land, which in 1795 had amounted to £2,000,000, had
risen in 1815 to £5,27 8,685. A farm in Essex, which before 1793
had been rented at 10s. an acre, was let in 1812 at 50s., though,
six years after, this had fallen again to 35s. In Berks and
Wilts, farms which in 1790 were let at 14s., were let in 1810 at
70s., and in 1820 at 50s. Much of this rise, doubtless, was due
to money invested in improvements-the first Lord Leicester is
said to have expended £400,000 on his property-but it was far
more largely the effect of the enclosure system, of the
consolidation of farms, and of the high price of corn during the
French war. Whatever may have been its causes, however, it
represented a great social revolution, a change in the balance of
political power and in the relative position of classes. The
farmers shared in the prosperity of the landlords; for many of
them held their farms under beneficial leases, and made large
profits by them. In consequence, their character completely
changed; they ceased to work and live with their labourers, and
became a distinct class. The high prices of the war time
thoroughly demoralised them, for their wealth then increased so
fast, that they were at a loss what to do with it. Cobbett has
described the change in their habits, the new food and furniture,
the luxury and drinking, which were the consequences of more
money coming into their hands than they knew how to spend.
Meanwhile, the effect of all these agrarian changes upon the
condition of the labourer was an exactly opposite and most
disastrous one. He felt all the burden of high prices, while his
wages were steadily falling, and he had lost his common-rights.
It is from this period, viz., the beginning of the present
century, that the alienation between farmer and labourer may be dated.

Exactly analogous phenomena appeared in the manufacturing
world. The new class of great capitalist employers made enormous
fortunes, they took little or no part personally in the work of
their factories, their hundreds of workmen were individually
unknown to them; and as a consequence, the old relations between
masters and men disappeared, and a ‘cash nexus’ was substituted
for the human tie. The workmen on their side resorted to
combination, and Trades-Unions began a fight which looked as if
it were between mortal enemies rather than joint producers.
The misery which came upon large sections of the working
people at this epoch was often, though not always, due to a fall
in wages, for, as I said above, in some industries they rose. But
they suffered likewise from the conditions of labour under the
factory system, from the rise of prices, especially from the high
price of bread before the repeal of the corn-laws, and from those
sudden fluctuations of trade, which, ever since production has
been on a large scale, have exposed them to recurrent periods of
bitter distress. The effects of the industrial Revolution prove
that free competition may produce wealth without producing
well-being. We all know the horrors that ensued in England before
it was restrained by legislation and combination.

IX. The Growth of Pauperism

Malthus tells us that his book was suggested by Godwin’s Inquiry, but it was really prompted by the rapid growth of pauperism which Malthus saw around him, and the book proved the main influence which determined the reform of the English Poor Laws. The problem of pauperism came upon men in its most terrible form between 1795 and 1834. The following statistics will illustrate its growth:

Year Population Poor-rate Per head of Population

1760 7,000,000 £1,250,000 or 3s. 7d.
1784 8,000,000 2,000,000 or 5s. 0d.
1803 9,216,000 4,077,000 or 8s. 11d.
1818 11,876,000 7,870,000 or 13s. 3d.

This was the highest rate ever reached. But really to understand the nature of the problem we must examine the previous history of pauperism, its causes in different periods, and the main influences which determined its increase.

Prejudices have arisen against Political Economy because it
seemed to tell men to follow their self-interest and to repress
their instincts of benevolence. Individual self-interest makes no
provision for the poor, and to do so other motives and ideas must
take its place; hence the idea that Political Economy taught that
no such provision should be made. Some of the old economists did
actually say that people should be allowed to die in the street.
Yet Malthus, with all his hatred of the Poor Law, thought that
‘the evil was now so deeply seated, and relief given by the Poor
Laws so widely extended, that no man of humanity could venture to
propose their immediate abolition.’ The assumed cruelty of
political economy arises from a mistaken conception of its
province, and from that confusion of ideas to which I have before
alluded, which turned economic laws into practical precepts, and
refused to allow for the action of other motives by their side.
What we now see to be required is not the repression of the
instincts of benevolence, but their organisation. To make
benevolence scientific is the great problem of the present age.
Men formerly thought that the simple direct action of the
benevolent instincts by means of self-denying gifts was enough to
remedy the misery they deplored; now we see that not only thought
but historical study is also necessary. Both to understand the
nature of pauperism and to discover its effectual remedies, we
must investigate its earlier history. But in doing this we should
take to heart two warnings: first, not to interpret medieval
statutes by modern ideas; and secondly, not to assume that the
causes of pauperism have always been the same.

The history of the Poor Laws divides itself into three
epochs; from 1349 to 1601, from 1601 to 1782, and from 1782 to
1834. Now, what was the nature of pauperism in medieval society,
and what were then the means of relieving it? Certain
characteristics are permanent in all society, and thus in
medieval life as elsewhere there was a class of impotent poor,
who were neither able to support themselves nor had relatives to
support them. This was the only form of pauperism in the early
beginnings of medieval society, and it was provided for as
follows. The community was then broken up into groups – the
manor, the guild, the family, the Church with its hospitals, and
each group was responsible for the maintenance of all its
members; by these means all classes of poor were relieved. In the
towns the craft and religious guilds provided for their own
members; large estates in land were given to the guilds, which
‘down to the Reformation formed an organised administration of
relief’ (‘the religious guilds were organised for the relief of
distress as well as for conjoint and mutual prayer’;) – while
outside the guilds there were the churches, the hospitals, and
the monasteries. The ‘settled poor’ in towns were relieved by the
guilds, in the country by the lords of the manor and the
beneficed clergy. ‘Every manor had its constitution,’ says
Professor Stubbs, and, referring to manumission, he adds, ‘the
native lost the privilege of maintenance which he could claim of
his lord.’ Among what were called ‘the vagrant poor’ there were
the professional beggars, who were scarcely then considered what
we should now call paupers, and ‘the valiant labourers’ wandering
only in search of work. Who then were the paupers? In the towns
there were the craftsmen, who could not procure admission into a
guild. In the country there was the small class of landless
labourers nominally free. It is a great law of social development
that the movement from slavery to freedom is also a movement from
security to insecurity of maintenance. There is a close
connection between the growth of freedom and the growth of
pauperism; it is scarcely too much to say that the latter is the
price we pay for the former. The first Statute that is in any
sense a Poor Law was enacted at a time when the emancipation of
the serfs was proceeding rapidly. This is the Statute of
Labourers, made in 1349; it has nothing to do with the
maintenance of the poor’. Its object was to repress their vagrancy.

This Statute has been variously interpreted. According to
some, it was simply an attempt of the landowners to force the
labourers to take the old wages of the times before the Plague.
Others object, with Brentano, to this interpretation, and believe
that it was not an instance of class legislation, but merely
expressed the medieval idea that prices should be determined by
what was thought reasonable and not by competition; for this same
Statute regulates the prices of provisions and almost everything
which was sold at the time. Probably Brentano is in the main
right. It is true that the landowners did legislate with the
knowledge that the Statute would be to their own advantage; but
the law is none the less in harmony with all the ideas of the
age. The Statute affected the labourer in two directions: it
fixed his wages, and it prevented him from migrating. It was
followed by the Statute of 1388, which is sometimes called the
beginning of the English Poor Law. We here find the first
distinction between the impotent and the able-bodied poor. This
law decreed that if their neighbours would not provide for the
poor, they were to seek maintenance elsewhere in the hundred; no
one is considered responsible for them; it is assumed that the
people of the parish will support them. Here too we catch the
first glimpse of a law of settlement in the provision that no
labourer or pauper shall wander out of his hundred unless he
carry a letter-patent with him.

No exact date can be assigned to the growth of able-bodied
pauperism. It was the result of gradual social changes, and of
the inability to understand them. Medieval legislators could not
grasp the necessity for the mobility of labour, nor could they
see that compulsory provision for the poor was essential, though
the Statute of l388 shows that the bond between lord and
dependent was snapped, and security for their maintenance in this
way already at an end. The Church and private charity were deemed
sufficient; though it is true that laws were passed to prevent
the alienation of funds destined for the poor. And with regard to
the mobility of labour, we must remember that the vagrancy of the
times did not imply the distress of the labourers, but their
prosperity. The scarcity of labour allowed of high wages, and the
vagrant labourer of the time seems never to have been satisfied,
but always wandering in search of still higher wages. The
stability of medieval society depended on the fixity of all its
parts, as that of modern society is founded on their mobility.
The Statutes afford evidence that high wages and the destruction
of old ties did in fact lead to disorder, robbery and violence;
and by and by we find the condition of the labourer reversed; in
the next period he is a vagrant, because he cannot find work.
In the sixteenth century pauperism was becoming a really
serious matter. If we ask, What were its causes then, and what
the remedies proposed, we shall find that at the beginning of the
century a great agrarian revolution was going on, during which
pauperism largely increased. Farms were consolidated, and arable
converted into pasture; in consequence, where two hundred men had
lived there were now only two or three herdsmen. There was no
employment for the dispossessed farmers, who became simple
vagabonds, ‘valiant beggars,’ until later they were absorbed into
the towns by the increase of trade. A main cause of the agrarian
changes was the dissolution of monasteries, though it was one
that acted only indirectly, by the monastic properties passing
into the hands of new men who did not hesitate to evict without
scruple. About the same time the prices of provisions rose
through the influx of the precious metals and the debasement of
the coinage. And while the prices of corn in 1541-82 rose 240 per
cent as compared with the past one hundred and forty years, wages
rose only 160 per cent. In this fact we discover a second great
cause of the pauperism of the time; just as at the end of the
eighteenth century we find wages the last to rise, and the
labouring man the greatest sufferer from increased prices. As
regards the growth of pauperism in towns, the main cause may be
found in the confiscation of the estates of the guilds by the
Protector Somerset. These guilds had been practically friendly
societies, and depended for their funds upon their landed properties.

And how did statesmen then deal with these phenomena? The
legislation of the age about ‘vagabonds’ is written in blood. The
only remedy suggested was to punish the vagrant by cruel
tortures-by whipping and branding. Even death was resorted to
after a second or third offence; and though these penalties
proved very ineffectual, the system was not abandoned till the
law of 43 Elizabeth recognised that punishment had failed as a
remedy. The other class of paupers, the impotent poor, had been
directed by a Statute of Richard II to beg within a certain
limited area; in the reigns of Edward VI and Elizabeth the
necessity of compulsory provision for this class of poor slowly
dawned upon men’s minds. At first the churchwardens were ordered
to summon meetings for the purpose of collecting alms, and
overseers were appointed who ‘shall gently ask and demand’ of
every man and woman what they of their charity will give weekly
towards the relief of the poor. Mayors, head-officers, and
churchwardens were to collect money in boxes ‘every Sunday and
holyday.’ The parsons, vicar and curate, were to reason with
those who would not give, and if they were not successful, the
obstinate person was to be sent to the bishop, who was to ‘induce
and persuade him’; or by the provisions of a later law, he was to
be assessed at Quarter Sessions (1562). Such was the first
recognition of the principle of compulsory support, of the fact
that there are men in the community whom no one will relieve.
There appears upon the scene for the first time the isolated
individual, a figure unknown to medieval society, but who
constitutes so striking a phenomenon in the modern world. And
hence springs up a new relation between the State and the
individual. Since the latter is no longer a member of a compact
group, the State itself has to enter into direct connection with
him. Thus, by the growth at once of freedom and of poverty, the
whole status of the working classes had been changed, and the
problem of modern legislation came to be this: to discover how we
can have a working class of free men, who shall yet find it easy
to obtain sustenance; in other words, how to combine political and material freedom.

All the principles of our modern Poor Laws are found in the
next Statute we have to notice, the great law of the 43rd year of
Elizabeth, which drew the sharp distinction, ever since
preserved, between the able-bodied and the impotent poor. The
latter were to be relieved by a compulsory rate collected by the
overseers, the former were to be set to work upon materials
provided out of the rates; children and orphans were to be
apprenticed. From this date 1601, there were no fundamental
changes in the law till the end of the eighteenth century. The
law of settlement, however, which sprang directly out of the Act
of Elizabeth, was added; it was the first attempt to prevent the
migration of labourers by other means than punishment. It began
with the Statute of 1662, which allowed a pauper to obtain relief
only from that parish where he had his settlement, and defined
settlement as forty days’ residence without interruption; but
after this Statute there were constant changes in the law,
leading to endless complications; and more litigation took place
on this question of settlement than on any other point of the
Poor Law. It was not till 1795 that the hardship of former
enactments was mitigated by an Act under which no new settler
could be removed until he became actually chargeable to the parish.

Two other modifications of the Act of Elizabeth require to be
noticed. In 1691 the administration of relief was partially taken
out of the hands of the overseers and given to the Justices of
the Peace, the alleged reason being that the overseers had abused
their power. Henceforth they were not allowed to relieve except
by order of a Justice of the Peace, and this provision was
construed into a power conferred upon the Justices to give relief
independently of any application on the part of the overseers,
and led, in fact, to Justices ordering relief at their own
discretion. The other important change in the Poor Law was the
introduction of the workhouse test in 1722. It is clear that
pauperism had grown since the reign of Charles II. There are many
pamphlets of the period full of suggestions as to a remedy, but
the only successful idea was this of the workhouse test. Parishes
were now empowered to unite and build a workhouse, and refuse
relief to all who would not enter it; but the clauses for
building workhouses remained inoperative, as very few parishes would adopt them.

The question remains to be asked: Why was pauperism still
slowly increasing in the course of the seventeenth and eighteenth
centuries in spite of a rise in wages, and, during the first half
of the eighteenth century, a low price of corn? Enclosures and
the consolidation of farms, though as yet these had been on a
comparatively small scale, were partly responsible for it, as
they were in an earlier century. Already, in 1727, it was said
that some owners were much too eager to evict farmers and
cottagers, and were punished by an increase of rates consequent
on the evicted tenants sinking into pauperism. By Eden’s time the
practice of eviction had become general, and the connection
between eviction and pauperism is an indisputable fact, though it
has been overlooked by most writers. Eden’s evidence again shows
that pauperism was greatest where enclosures had taken place. At
Winslow, for instance, enclosed in 1744 and 1766, ‘the rise of
the rates was chiefly ascribed to the enclosure of the common
fields, which, it was said, had lessened the number of farms, and
from the conversion of arable into pasture had much reduced the
demand for labourers.’ Again, at Kilworth-Beauchamp in
Leicestershire, ‘the fields being now in pasturage, the farmers
had little occasion for labourers, and the poor being thereby
thrown out of employment had, of course, to be supported by the
parish.’ Here too the evil was aggravated by the fate of the
ejected farmers, who sank into the condition of labourers, and
swelled the numbers of the unemployed. ‘Living in a state of
servile dependence on the large farmers, and having no prospect
to which their hopes could reasonably look forward, their
industry was checked, economy was deprived of its greatest
stimulation, and their only thought was to enjoy the present
moment.’ Again, at Blandford, where the same consolidation of
farms had been going on, Eden remarks that ‘its effects, it is
said, oblige small industrious farmers to turn labourers or
servants, who, seeing no opening towards advancement, become
regardless of futurity, spend their little wages as they receive
them without reserving a pension for their old age; and, if
incapacitated from working by a sickness which lasts a very short
time, inevitably fall upon the parish.’

Besides the enclosure of the common-fields, and the
consolidation of farms, the enclosure of the commons and wastes
likewise contributed to the growth of pauperism. Arthur Young and
Eden thought that commons were a cause of idleness; the labourers
wasted their time in gathering sticks or grubbing furze; their
pigs and cows involved perpetual disputes with their neighbours,
and were a constant temptation to trespass. No doubt this was
true where the common was large enough to support the poor
without other occupation. But on the other hand, where the
labourer was regularly employed, a small common was a great extra
resource to him. Arthur Young himself mentions a case at
Snettisham in Norfolk, where, when the waste was enclosed, the
common rights had been preserved, and as a result of this,
combined with the increased labour due to the enclosure, the
poor-rates fell from 1 s. 6d. to 1 s. or 9d., while population
grew from five to six hundred. He goes on to say that enclosures
had generally been carried out with an utter disregard for the
rights of the poor. According to Thornton, the formation of parks
contributed to the general result, but I know of no evidence on
this head. A further cause of pauperism, when we come to the end
of the century, was the great rise in prices as compared with
that in wages. In 1782 the price of corn was 53s. 9 1/4d., which
was considerably higher than the average of the preceding fifty
years; but in 1795 it had risen to 81s. 6d., and in the next year
it was even more. The corn average from 1795 to 1805 was 81s. 2
1/2d., and from 1805 to 1815 97s. 6d. In 1800 and 1801 it reached
the maximum of 127s. and 128s. 6d., which brought us nearer to a
famine than we had been since the fourteenth century. Many other
articles had risen too. The taxes necessitated by the debt
contracted during the American war raised the prices of soap,
leather, candles, etc., by one-fifth; butter and cheese rose 1
1/2d. a pound, meat 1 d. And meanwhile, ‘what advance during the
last ten or twelve years,’ asks a writer in 1788, ‘has been made
in the wages of labourers? Very little indeed; in their daily
labour nothing at all, either in husbandry or manufactures.’ Only
by piece-work could they obtain more in nominal wages. Lastly, in
the towns there had come the introduction of machinery, the final
establishment of the cash-nexus, and the beginning of great
fluctUations in trade. In the old days the employer maintained
his men when out of work, now he repudiated the responsibility;
and the decline in the position of the artisan could be
attributed by contemporary writers to ‘the iniquitous oppressive
practices of those who have the direction of them.’

Such seem to have been the causes of the growth of pauperism
and of the degradation of the labourer; the single effective
remedy attempted was the workhouse test, and this was abandoned
in 1782. But might not landlords and farmers have done something
more to check the downward course? Were there no possible
remedies? One cannot help thinking the problem might have been
solved by common justice in the matter of enclosures. Those who
were most in favour of enclosing for the sake of agricultural
improvements, like Eden and Young, yet held that, in place of his
common field and pasture rights, the labourer should have had an
acre, or two acres, or half an acre, as the case might be,
attached to his cottage. By such compensation much misery would
have been prevented. A more difficult question is, whether
anything could have been done directly to relieve the stress of
high prices? Burke contended that nothing could be done, that
there was no necessary connection between wages and prices; and
he would have left the evil to natural remedies. And, as a matter
of fact, in the North where there was no artificial interference
with wages, the development of mining and manufactures saved the labourer.

In the Midlands and South, where this needful stimulus was
absent, the case was different; some increase in the labourer’s
means of subsistence was absolutely necessary here, in order that
he might exist. It would have been dangerous to let things alone;
and the true way to meet the difficulty would have been for the
farmers to have raised wages – a course of action which they have
at times adopted. But an absence alike of intelligence and
generosity, and the vicious working of the Poor Laws in the
midland and southern counties, prevented this. The farmers
refused to recognise the claims alike of humanity and
self-interest, so the justices and country gentlemen took the
matter into their own hands, while the labourers threw themselves
upon the Poor Law, and demanded that the parish should do what
the farmers refused to do, and should supplement insufficient
wages by an allowance. This was the principle which radically
vitiated the old Poor Law. The farmers supported the system; they
wished every man to have an allowance according to his family,
and declared that ‘high wages and free labour would overwhelm
them.’ A change had also come over the minds of the landowners as
to their relation to the people. In addition to unthinking and
ignorant benevolence, we can trace the growth of a sentiment
which admitted an unconditional right on the part of the poor to
an indefinite share in the national wealth; but the right was
granted in such a way as to keep them in dependence and diminish
their self-respect. Though it was increased by the panic of the
French revolution, this idea of bribing the people into
passiveness was not absolutely, new. It had prompted Gilbert’s
Act in 1782, which abolished the workhouse test, and provided
work for those who were willing near their homes. It was this
Tory Socialism, this principle of protection of the poor by the
rich, which gave birth to the frequent use of the term ‘labouring
poor,’ so common in the Statutes and in Adam Smith, an expression
which Burke attacked as a detestable canting phrase.

The war with Napoleon gave a new impulse to this pauperising
policy. Pitt and the country gentlemen wanted strong armies to
fight the French, and reversed the old policy as regards checks
upon population. Hitherto they had exercised control over the
numbers of the labourers by refusing to build cottages; in 1771,
‘an open war against cottages’ had been carried on, and landlords
often pulled down cottages, says Arthur Young, ‘that they may
never become the nests, as they are called, of beggar brats.’ But
now by giving extra allowance to large families, they put a
premium on early marriages, and labourers were paid according to
the number of their children. Further extension of the allowance
system came from actual panic at home. Farmers and landowners
were intimidated by the labourers: the landowners had themselves
according to Malthus at once inflamed the minds of their
labourers and preached to them submission. Rick-burning was
frequent; at Swallowfield, in Wiltshire, the justices, ‘under the
influence of the panic struck by the fires, so far yielded to the
importunity of the farmers as to adopt the allowance-system
during the winter months.’ In 1795 some Berkshire justices ‘and
other discreet persons’ issued a proclamation, which came to be
considered as a guide to all the magistrates of the South of
England. They declared it to be their unanimous opinion that the
state of the poor required further assistance than had been
generally given them; and with this view they held it inexpedient
to regulate wages according to the statutes of Elizabeth and
James; they would earnestly recommend farmers and others to
increase the pay of their labourers in proportion to the present
price of provisions; but if the farmers refused, they would make
an allowance to every poor family in proportion to its numbers.
They stated what they thought necessary for a man and his wife
and children, which was to be produced ‘either by his own and his
family’s labour on an allowance from the poor-rates.’ These were
the beginnings of the allowance system, which under its many
forms ended in thoroughly demoralising the people; it had not
been long in operation before we hear the labourers described as
lazy, mutinous, and imperious to the overseers. When grants in
aid of wages were deemed insufficient, the men would go to a
magistrate to complain, the magistrate would appeal to the
humanity of the overseer, the men would add threats, and the
overseer would give in. In the parish of Bancliffe ‘ a man was
employed to look after the paupers, but they threatened to drown
him, and he was obliged to withdraw.’ The whole character of the
people was lowered by the admission that they had a right to relief independent of work.

X. Malthus and the Law of Population

It was during this state of things, with population rapidly
increasing, that Malthus wrote. Yet he was not thinking directly
of the Poor Law, but of Godwin, who, under the influence of
Rousseau, had in his Inquirer ascribed all human ills to human
government and institutions, and drawn bright pictures of what
might be in a reformed society. Malthus denied their possibility.
Under no system, he contended, could such happiness be insured;
human misery was not the result of human injustice and of bad
institutions, but of an inexorable law of nature, viz., that
population tends to outstrip the means of subsistence. This law
would in a few generations counteract the effects of the best
institutions that human wisdom could conceive. It is remarkable
that though in his first edition he gave a conclusive answer to
Godwin, Malthus afterwards made an admission which deducted a
good deal from the force of his argument. To the ‘positive check’
of misery and vice, he added the ‘preventive check’ of moral
restraint, namely, abstinence from marriage. To this Godwin made
the obvious reply that such a qualification virtually conceded
the perfectibility of society. But Malthus still thought his
argument conclusive as against Godwin’s Communism. If private
property was abolished, he said, all inducements to moral
restraint would be taken away. His prophecy has, however, since
his time, been refuted by the experience of the communistic
societies in America, which proves that the absence of private
property is not incompatible with moral restraint.
Is Malthus’s law really true? We see that it rests on two
premisses. The first is, that the potential rate of increase of
the human race is such that population, if unchecked, would
double itself in twenty-five years; and Malthus assumes that this
rate is constant in every race and at all times. His second
premiss is the law of diminishing returns, i.e. that after a
certain stage of cultivation a given piece of land will, despite
any agricultural improvements, yield a less proportionate return
to human labour; and this law is true. Malthus did not deny that
food might, for a time, increase faster than population; but land
could not be increased, and if the area which supplied a people
were restricted, the total quantity of food which it produced per
head must be at length diminished, though this result might be
long deferred. Malthus himself regarded both his conclusions as
equally self-evident. ‘The first of these propositions,’ he says,
‘i considered as proved the moment the American increase was
related; and the second proposition as soon as it was
enunciated.’ Why then did he write so long a book? ‘The chief
object of my work,’ he goes on to say, ‘was to inquire what
effects these laws, which I considered as established in the
first six pages, had produced, and were likely to produce, on
society; – a subject not very readily exhausted.’ The greater
part of his essay is an historical examination of the growth of
population and the checks on it which have obtained in different
ages and countries; and he applies his conclusion to the
administration of the Poor Laws in England.

Now there are grave doubts as to the universal truth of his
first premiss. Some of his earlier opponents, as Doubleday, laid
down the proposition that fecundity varies inversely to
nutriment. Thus baldly stated their assertion is not true; but it
is au observed fact, as Adam Smith noticed long ago, that the
luxurious classes have few children, while a ‘half-starved
Highland woman’ may have a family of twenty. Mr Herbert Spencer
again has asserted that fecundity varies inversely to nervous
organisation, and this statement has been accepted by Carey and
Bagehot. But it is not so much the increase of brain power as the
worry and exhaustion of modern life which tends to bring about
this result. Some statistics quoted by Mr Amasa Walker tend to
prove this. He has shown that in Massachusetts, while there are
about 980,000 persons of native birth as against only 260,000
immigrants, the number of births in the two classes is almost
exactly the same, the number of marriages double as many in the
latter, as in the former, and longevity less and mortality
greater among the Americans. Mr Cliffe-Leslie attributes this
fact to a decline in fecundity on the part of American citizens.
The whole question, however, is veiled in great obscurity, and is
rather for physiologists and biologists to decide; but there do
seem to be causes at work which preclude us from assuming with
Malthus that the rate of increase is invariable.

Another American writer, Mr Henry George, has recently argued
that Malthus was wrong and Godwin right, that poverty is due to
human injustice, to an unequal distribution of wealth, the result
of private property in land, and not to Malthus’s law of the
increase of population or to the law of diminishing returns, both
of which he altogether rejects. With regard to the latter he
urges with truth that in certain communities, for instance
California, where the law of diminishing returns evidently does
not come into operation, the same phenomenon of pauperism
appears. Now against Mr George it can be proved by facts that
there are cases where his contention is not true. It is
noticeable that he makes no reference to France, Norway, and
Switzerland-all countries of peasant proprietors, and where
consequently the land is not monopolised by a few. But it is
certain that in all these countries, at any rate in the present
state of agricultural knowledge and skill, the law of diminishing
returns does obtain; and it is useless to argue that in these
cases it is the injustice of man, and not the niggardliness of
nature, that is the cause of poverty, and necessitates baneful
checks on population. Still I admit that Mr George’s argument is
partially true-a large portion of pauperism and misery is really
attributable to bad government and injustice; but this does not
touch the main issue, or disprove the law of diminishing returns.
To return to Malthus’s first proposition. The phrase that
‘population tends to outstrip the means of subsistence’ is vague
and ambiguous. It may mean that population, if unchecked, would
outstrip the means of subsistence; or it may mean that population
does increase faster than the means of subsistence. It is quite
clear that, in its second sense, it is not true of England at the
present day. The average quantity of food consumed per head is
yearly greater; and capital increases more than twice as fast as
population. But the earlier writers on population invariably use
the phrase in the latter sense, and apply it to the England of
their time. At the present day it can only be true in this latter
sense of a very few countries. It has been said to be true in the
case of India, but even there the assertion can only apply to
certain districts. Mr George, however, is not content to refute
Malthus’s proposition in this sense; he denies it altogether,
denies the statement in the sense that population, if unchecked,
would outstrip the means of subsistence, and lays down as a
general law that there need be no fear of over-population if
wealth were justly distributed. The experience of countries like
Norway and Switzerland, however, where over-population does
exist, although the distribution of wealth is tolerably even,
shows that this doctrine is not universally true. Another
criticism of Mr George’s, however, is certainly good, as far as
it goes. Malthus’s proposition was supposed to be strengthened by
Darwin’s theory, and Darwin himself says that it was the study of
Malthus’s book which suggested it to him; but Mr George rightly
objects to the analogy between man and animals and plants. It is
true that animals, in their struggle for existence, have a
strictly limited amount of subsistence, but man can, by his
ingenuity and energy, enormously increase his supply. The
objection is valid, though it can hardly be said to touch the main issue.

I have spoken of the rapid growth of population in the period
we are studying. We have to consider how Malthus accounted for
it, and how far his explanation is satisfactory, as well as what
practical conclusions he came to. In the rural districts he
thought the excessive increase was the consequence of the bad
administration of the Poor Laws, and of the premium which they
put on early marriages. This was true, but not the whole truth;
there are other points to be taken into account. In the old days
the younger labourers boarded in the farmhouses, and were of
course single men; no man could marry till there was a cottage
vacant, and it was the policy of the landlords in the ‘close
villages’ to destroy cottages, in order to lessen the rates. But
now the farmers had risen in social position and refused to board
the labourers in their houses. The ejected labourers, encouraged
by the allowance system, married recklessly, and though some
emigrated into the towns, a great evil arose. The rural
population kept increasing while the cottage accommodation as
steadily diminished, and terrible overcrowding was the result.
Owing to the recklessness and demoralisation of the labourer the
lack of cottages no longer operated as any check on population.
The change in the social habits of the farmers had thus a
considerable effect on the increase of rural population and
tended to aggravate the effects of the allowance system.
In the towns the greatest stimulus came from the extension of
trade due to the introduction of machinery. The artisan’s horizon
became indistinct; there was no visible limit to subsistence. In
a country like Norway, with a stationary society built up of
small local units, the labourer knows exactly what openings for
employment there are in his community; and it is well known that
the Norwegian peasant hesitates about marriage till he is sure of
a position which will enable him to support a family. But in a
great town, among ‘the unavoidable variations of manufacturing
labour,’ all these definite limits were removed. The artisan
could always hope that the growth of industry would afford
employment for any number of children-an expectation which the
enormously rapid growth of the woollen and cotton manufactures
justified to a large extent. And the great demand for children’s
labour in towns increased a man’s income in proportion to the
number of his family, just as the allowance system did in the country.

What remedies did Malthus propose? The first was the
abolition of the Poor Law. and he was not singular in this
opinion. Many eminent writers of the time believed it to be
intrinsically bad. He suggested that at a given date it should be
announced that no child born after the lapse of a year should be
entitled to relief; the improvident were to be left to ‘the
punishment of nature’ and ‘the uncertain support of private
charity.’ Others saw that such treatment would be too hard; that
a Poor Law of some sort was necessary, and that the problem was
how to secure to the respectable poor the means of support
without demoralising them. His second remedy was moral
restraint-abstention from marriage till a man had means to
support a family, accompanied by perfectly moral conduct during the period of celibacy.

Let us now see what have been the actual remedies. The chief
is the reform of the Poor Laws in 1834, perhaps the most
beneficent Act of Parliament which has been passed since the
Reform Bill. Its principles were (a) the application of the
workhouse test and the gradual abolition of outdoor relief to
able-bodied labourers; (b) the formation of unions of parishes to
promote economy and efficiency, these unions to be governed by
Boards of Guardians elected by the ratepayers, thus putting an
end to the mischievous reign of the Justices of the Peace; (c) a
central Board of Poor Law Commissioners, with very large powers
to deal with the Boards of Guardians and control their action;
(d) a new bastardy law; (e) a mitigation of the laws of
settlement. The effect of the new law was very remarkable. As an
example, take the case of Sussex. Before 1834 there were in that
county over 6000 able-bodied paupers; two years later there were
124. A similar change took place in almost all the rural
districts, and the riots and rick-burning which had been so rife
began to grow less frequent. Equally remarkable was the effect
upon the rates. In 1818 they were nearly £8,000,000 in England
and Wales; in 1837 they had sunk to a little over £4,000,000, and
are now only £7,500,000 in spite of the enormous growth of
population. The number of paupers, which in 1849 was 930,000, has
dwindled in 1881 to 800,000, though the population has meanwhile
increased by more than 8,000,000. Notwithstanding this
improvement the Poor Laws are by no means perfect, and great reforms are still needed.

Next in importance as an actual remedy we must place
emigration. Malthus despised it. He thought that ‘from the
natural unwillingness of people to desert their native country,
and the difficulty of clearing and cultivating fresh soil, it
never is or can, that, even if effectual for the time, the be
adequately adopted’; relief it afforded would only be temporary,
‘and the disorders would return with increased virulence.’ He
could not of course foresee the enormous development which would
be given to it by steam navigation, and the close connection
established thereby between England and America. Since 1815 eight
and a quarter millions of people have emigrated from the United
Kingdom; since 1847 three and a half millions have gone from
England and Wales alone; and this large emigration has of course
materially lightened the labour market. Nor could Malthus any
more foresee the great importation of food which would take place
in later times. In his day England was insulated by war and the
corn laws; now, we import one-half of our food, and pay for it with our manufactures.

As to moral restraint, it is very doubtful, whether it has
been largely operative. According to Professor Jevons, writing
fifteen years ago, it has been so only to a very small extent. Up
to 1860 the number of marriages was rather on the increase; but
if among the masses, owing to cheap food, marriages have become
more frequent, restraint has on the other hand certainly grown
among the middle classes and the best of the artisan class.
I wish to speak of one more remedy, which Malthus himself
repudiated, namely, that of artificial checks on the number of
children. It has been said that such questions should only be
discussed ‘under the decent veil of a dead language.’ Reticence
on them is necessary to wholesomeness of mind; but we ought
nevertheless to face the problem, for it is a vital one. These
preventive checks on births excite our strong moral repugnance.
Men may call such repugnance prejudice, but it is perfectly
logical, because it is a protest against the gratification of a
strong instinct while the duties attaching to it are avoided.
Still our moral repugnance should not prevent our considering the
question. Let us examine results. What evidence is there as to
the effects of a system of artificial checks? We know that at
least one European nation, the French, has to some extent adopted
them. Now we find that in the purely rural Department of the
Eure, where the population, owing presumably to the widespread
adoption of artificial checks, is on the decline, although the
district is the best cultivated in France and enjoys considerable
material prosperity, the general happiness promised is not found.
This Department comes first in statistics of crime; one-third of
these crimes are indecent outrages; another third are paltry
thefts; and infanticide also is rife. Though this is very
incomplete evidence, it shows at least that you may adopt these
measures without obtaining the promised results. The idea that a
stationary and materially prosperous population will necessarily
be free from vice is unreasonable enough in itself, and there is
the evidence of experience against it. Indeed, one strong
objection to any such system is to be found in the fact that a
stationary population is not a healthy condition of things in
regard to national life; it means the removal of a great stimulus
to progress. One incentive to invention, in particular, is
removed in France by attempts to adapt population to the existing
means of subsistence; for in this respect it is certainly true
that the struggle for existence is essential to progress. Such
practices, moreover, prove injurious to the children themselves.
The French peasant toils ceaselessly to leave each of his
children a comfortable maintenance. It would be better for them
to be brought up decently, and then left to struggle for their
own maintenance. Much of the genius and inventive power in
English towns has come from the rural districts with men
belonging to large families, who started in life impressed with
the idea that they must win their own way. It is wrong to
consider this question from the point of view of wealth alone; we
cannot overrate the importance of family life as the source of
all that is best in national life. Often the necessity of
supporting and educating a large family is a training and
refining influence in the lives of the parents, and the one thing
that makes the ordinary man conscious of his duties, and turns
him into a good citizen. In the last resort we may say that such
practices are unnecessary in England at the present day. A man in
the superior artisan or middle classes has only to consider when
he will have sufficient means to rear an average number of
children; that is, he need only regulate the time of his
marriage. Postponement of marriage, and the willing emigration of
some of his children when grown up, does, in his case, meet the
difficulty. He need not consider whether there is room in the
world for more, for there is room; and, in the interests of
civilisation, it is not desirable that a nation with a great
history and great qualities should not advance in numbers. For
the labouring masses, on the other hand, with whom prudential
motives have no weight, the only true remedy is to carry out such
great measures of social reform as the improvement of their
dwellings, better education and better amusements, and thus lift
them into the position now held by the artisan, where moral
restraints are operative. Above all, it must be remembered that
this is not a purely economic problem, nor is it to be solved by
mechanical contrivances. To reach the true solution we must
tenaciously hold to a high ideal of spiritual life. What the
mechanical contrivances might perchance give us is not what we
desire for our country. The true remedies, on the other hand,
imply a growth towards that purer and higher condition of society for which alone we care to strive.

XI. The Wage-Fund Theory

Besides originating the theory of population which bears his
name, Malthus was the founder of that doctrine of wages which,
under the name of the wage-fund theory, was accepted for fifty
years in England. To ascertain what the theory is we may take
Mill’s statement of it, as given in his review of Thornton On
Labour in 1869. ‘There is supposed to be,’ he says, ‘at any given
instant, a sum of wealth which is unconditionally devoted to the
payment of wages of labour. This sum is not regarded as
unalterable, for it is augmented by saving, and increases with
the progress of wealth; but it is reasoned upon as at any given
moment a predetermined amount. More than that amount it is
assumed that the wages-receiving class cannot possibly divide
among them; that amount, and no less, they cannot possibly fail
to obtain. So that the sum to be divided being fixed, the wages
of each depend solely on the divisor, the number of
participants.’ This theory was implicitly believed from Malthus’s
time to about 1870; we see it accepted, for instance, in Miss
Martineau’s Tales. And from the theory several conclusions were
deduced which, owing to their practical importance, it is well to
put in the forefront of our inquiry as to its truth. It is these
conclusions which have made the theory itself and the science to
which it belongs an offence to the whole working class. It was
said in the first place that according to the wage-fund theory,
Trades-Unions could not at any given time effect a general rise
in wages. It was, indeed, sometimes admitted that in a particular
trade the workmen could obtain a rise by combination, but this
could only be, it was alleged, at the expense of workmen in other
trades. If, for instance, the men in the building trade got
higher wages through their Union, those in the iron foundries or
in some other industry must suffer to an equivalent extent. In
the next place it was argued that combinations of workmen could
not in the long-run increase the fund out of which wages were
paid. Capital might be increased by saving, and, if this saving
Was more rapid than the increase in the number of labourers,
wages would rise, but it was denied that Unions could have any
effect in forcing such an increase of saving. And hence it
followed that the only real remedy for low wages was a limitation
of the number of the labourers. The rate of wages, it was said,
depended entirely on the efficacy of checks to population.
The error lay in the premisses. The old economists, it may be
observed, very seldom examined their premisses. For this theory
assumes – (1) that either the capital of a particular individual
available for the payment of wages is fixed, or, at any rate, the
total capital of the community so available is fixed; and (2)
that wages are always paid out of capital. Now it is plainly not
true that a particular employer makes up his mind to spend a
fixed quantity of money on labour; the amount spent varies with a
number of circumstances affecting the prospect of profit on the
part of the capitalist, such, for instance, as the price of
labour. Take the instance of a strike of agricultural labourers
in Ireland, given by Mr Trench to Nassau Senior. He was employing
one hundred men at 10d. a day, thus spending on wages £25 a week.
The men struck for higher pay – a minimum of 1s. 2d., and the
more capable men to have more. Trench offered to give the wages
asked for, but greatly reduced his total expenditure, as it would
not pay to employ so many men at the higher rate. Thus only
seventeen were employed; the other eighty-three objected, and it
ended in all going back to work at the old rate. The fact is,
that no individual has a fixed wage-fund, which it is not in his
power either to diminish or increase. Just as he may reduce the
total amount which he spends on labour, rather than pay a rate of
wages which seems incompatible with an adequate profit, so he may
increase that total amount, in order to augment the wages of his
labourers, by diminishing the sum he spends upon himself or by
employing capital which is lying idle, if he thinks that even
with the higher rate of wages he can secure a sufficiently
remunerative return upon his investment. Thus the workman may,
according to circumstances, get higher or lower wages than the
current rate, without any alteration in the quantity of
employment given. When wages in Dorset and Wilts were 7s., the
labourers, if they had had sufficient intelligence and power of
combination, might have forced the farmers to pay them 8s. or
9s., for the latter were making very high profits. As a matter of
fact, where the workmen have been strong, and the profits made by
the employers large, the former have often forced the employers to give higher wages.

Neither is it true that there is in the hands of the
community as a whole, at any given time, a fixed quantity of
capital for supplying the wants of the labourers, so much food,
boots, hats, clothes, etc., which neither employers nor workmen
can increase. It used to be said that a rise in money wages would
simply mean that the price of all the commodities purchased by
the labourers would rise proportionately, owing to the increase
of demand, and that their real wages, i.e. the number of things
they could purchase with their money, would be no greater than
before. But, as a matter of fact, the supply can be increased as
fast as the demand. It is true that between two harvests the
available quantity of corn is fixed, but that of most other
commodities can be increased at a short notice. For commodities
are not stored up for consumption in great masses, but are being
continually produced as the demand for them arises.

So far I have been speaking of the theory as applied to wages
at a particular time. Now, what did it further imply of wages in
the long-run? According to Ricardo’s law, which has been adopted
by Lassalle and the Socialists, wages depend on the ratio between
population and capital. Capital may be gradually increased by
saving, and population may be gradually diminished; but Ricardo
thought that the condition of the labourer was surely on the
decline, because population was advancing faster than capital.
While admitting occasionally that there had been changes in the
standard of comfort, he yet disregarded these in his general
theory, and assumed that the standard was fixed; that an increase
of wages would lead to an increase of population, and that wages
would thus fall again to their old rate, or even lower. The
amount of corn consumed by the labourer would not diminish, but
that of all other commodities would decline. Later economists
have qualified this statement of the supposed law. Mill showed
that the standard of comfort was not fixed, but might vary
indefinitely. This being the case, the labourer might sink even
lower than Ricardo supposed possible, for population might
increase till the labourer had not only less of everything else,
but was forced down to a lower staple of life than corn, for
instance, potatoes. And this has, as a matter of fact, taken
place in some countries. But, on the other hand, the standard
might rise, as it has risen in England; and Mill thought that it
would rise yet more. At first this was his only hope for the
working classes. At a later period he trusted that the labourer,
by means of co-operation, might become more and more
self-employing, and so obtain both profits and wages.

It is interesting to inquire how this wage-fund theory grew
up. Why was it held that employers could not give higher real
wages? Its origin is easy to understand. When Malthus wrote his
essay on population, there had been a series of bad harvests, and
in those days but small supplies of corn could be obtained from
abroad. Thus year after year there seemed to be a fixed quantity
of food in the country and increasing numbers requiring food.
Population was growing faster than subsistence, and increased
money wages could not increase the quantity of food that was to
be had. Thus in 1800, when corn was l27s. the quarter, it was
clear that the rich could not help the poor by giving them higher
wages, for this would simply have raised the price of the fixed
quantity of corn. Malthus assumed that the amount of food was
practically fixed; therefore, unless population diminished, as
years went on, wages would fall, because worse soils would be
cultivated and there would be increased difficulty in obtaining
food. But the period he had before his eyes was quite
exceptional; after the peace, good harvests came and plenty of
corn; food grew cheaper, though population advanced at the same
rate. So that the theory in this shape was true only of the
twenty years from 1795 to 1815. But, when it had once been said
that wages depended on the proportion between population and
food, it was easy to substitute capital for food and say that
they depended on the proportion between population and capital,
food and capital being wrongly identified. Then when the
identification was forgotten, it was supposed that there is at
any given moment a fixed quantity of wage-capital-food, boots,
hats, furniture, clothes, etc. – destined for the payment of
wages, which neither employers nor workmen can diminish or
increase, and thus the rate of wages came to be regarded as
regulated by a natural law, independent of the will of either party.

We have already seen that this theory is false; we have now
to substitute for it some truer theory, and explain thereby the
actual phenomena of the labour market, such, for instance, as the
fact that wages at Chicago or New York are twice as high as they
are in England, while the prices of the necessaries of life are
lower. Though modern economists have pointed out the fallacies of
the old wage-fund theory, no economist has yet succeeded in
giving us a complete theory of wages in its place. I believe
indeed that so complicated a set of conditions as are involved
cannot be explained by any one formula, and that the attempt to
do so leads to fallacies. Yet I am also aware that the public
seem to feel themselves aggrieved that economists will not now
provide them with another convenient set phrase in place of the
wage-fund theory, and are inclined to doubt the validity of their
explanations in consequence. Now, wages in a given country depend
on two things: the total amount of produce in the country, and
the manner in which that produce is divided. To work out the
former problem we must investigate all the causes which affect
the whole amount of wealth produced, the natural resources of the
country, its political institutions, the skill, intelligence, and
inventive genius of its inhabitants. The division of the produce,
on the other hand, is determined mainly by the proportion between
the number of labourers seeking employment and the quantity of
capital seeking investment; or, to put the case in a somewhat
different way, instead of saying that wages are paid out of
stored-up capital, we now say that they are the labourer’s share
of the produce. What the labourer’s share will be depends first
on the quantity of produce he can turn out, and secondly, on the
nature of the bargain which he is able to make with his employer.
We are now in a position to explain the question put above, why
wages in America are double what they are in England. An American
ironmaster, if asked to give a reason for the high wages he pays,
would say that the land determines the rate of wages in America,
because under the Free Homestead Law, any man can get a piece of
land for a nominal sum, and no puddler will work for less than he
can get by working on this land. Now, in the Western States the
soil is very fertile, and though the average yield is lower than
in Wiltshire, the return in proportion to the labour expended is
greater. Moreover, labour being scarce, the workman has to be
humoured; he is in a favourable position in making his bargain
with the employer, and obtains a large share of the produce. Thus
agricultural wages are very high, and this explains also the
cause of high wages in the American iron-trade and other American
industries. In consequence of these high wages the manufacturer
is obliged to make large use of machinery, and much of our
English machinery, e.g. that of the Leicester boot and shoe
trade, has been invented in America. Now, better machinery makes
labour more efficient and the produce per head of the labourers
greater. Further, according to the testimony of capitalists, the
workmen work harder in America than in England, because they work
with hope; they have before them the prospect of rising in the
world by their accumulations. Thus it is that the produce of
American manufactures is great, and allows of the labourer
obtaining a large share. High wages in America are therefore
explained by the quantity of produce the labourer turns out being
great and by the action of competition being in his favour.
There are, however, other causes influencing the rate of
wages in America which are less favourable to the workmen.
Protection, for instance, diminishes real wages by enhancing the
cost of many articles in common use, such as cutlery. It is owing
to Protection also that capitalists are able to obtain
exceptionally high profits at the expense of the workmen. By
combining and forming rings they can govern the market, and not
only control prices but dictate the rate of wages. Six or seven
years ago, the whole output of Pennsylvanian anthracite was in
the hands of a few companies. Hence it was that, in the Labour
War of 1877, the workmen declared that, while they did not mind
wages being fixed by competition, they would not endure their
being fixed by rings, and that such rings would produce a
revolution. And the monopoly of these companies was only broken
through by a great migration of workmen to the West. The
experience of America in this instance is of interest in showing
how, as industry advances, trade tends to get concentrated into
fewer hands; hence the danger of monopolies. It has even been
asserted that Free Trade must lead to great natural monopolies.
This may be true of a country like America which has internal but
not external free trade, but only of such a country; for foreign
competition would prevent a knot of capitalists from ever obtaining full control of the market.

I have shown why wages are higher in America than in England.
We may go on to inquire why they are higher in England than in
any other part of Europe. The great reason is that the total
amount of wealth produced in this country is larger, and that
from a variety of causes, material and moral. The chief material
causes are our unrivalled stores of coal and iron, and perhaps,
above all, our geographical position. On the moral side, our
political institutions, being favourable to liberty, have
developed individual energy and industry in a degree unknown in
any other country. On the other hand, it has been said that the
exclusion of the labourer from the land in England must have
tended to lower wages. And no doubt the adoption of a system of
large farms has driven the labourers into the towns, and made the
competition for employment there very keen. But, to set against
this, the efficiency of English manufacturing labour is largely
due to this very fact, that it is not able to shift on to the
land. While in America the whole staff of a cotton factory may be
changed in three years, in England the artisan ‘sticks to his
trade,’ and brings up his children to it; and thus castes are
formed with inherited aptitudes, which render labour more
efficient, and its produce greater. I believe the higher wages
obtained in England, in comparison with the Continent, are mainly
due to greater efficiency of labour – that this is the chief
cause why the total produce is greater. But if we go further, and
ask what determines the division of the produce, the answer must
be: mainly competition. To return to the comparison with America,
the reason why the English labourer gets lower wages than the
American is the great competition for employment in the overstocked labour-market of this country.

I must notice an objection to the theory of wages as stated
above. Wages, I have explained, are the labourers’ share of the
produce, and are paid out of it. But, it may be said, while our
new Law Courts, or an ironclad, are being built – operations
which take a long time before there is any completed result – how
can it be correctly held that the labourer is paid out of the
produce? It is of course perfectly true that he is maintained
during such labours only by the produce of others; and that
unless some great capitalist had either accumulated capital, or
borrowed it, the labourer could not be paid. But this has nothing
to do with the rate of wages. That is determined by the amount of
the produce and is independent of the method of payment. What the
capitalist does is merely to pay in advance the labourer’s share, as a matter of convenience.

We will next inquire what are the limits to a rise of wages
in any particular trade? The answer depends on two thing. First,
is the capitalist getting more than the ordinary rate of profits?
If he is not, he will resist a rise on the ground that he ‘cannot
afford’ to pay more wages. This is what an arbitrator, for
instance, might say if he examined the books, and he would mean
by it that, if the employer had to raise his wages, he would have
to be content with lower profits than he could make in other
trades. As a matter of fact, however, capitalists often do make
exceptionally high profits, and it is in such cases that
Trades-Unions have been very successful in forcing them to share
these exceptional profits with their men. Secondly, though the
employer be getting only ordinary profits, his workmen may still
be strong enough to force him to give higher wages, but he will
only do so permanently if he can compensate himself by raising
the price of his commodity. Thus the second limit to a rise in
wages in a particular trade is the amount which the consumer can
be forced to pay for its products. Workmen have often made
mistakes by not taking this into account, and have checked the
demand for the articles which they produced, and so brought about
a loss both to their masters and themselves. In a particular
trade then the limit to a rise in wages is reached when any
further rise will drive the employer out of the trade, or when
the increased price of the commodity will check the demand. When
dealing with the general trade of a country, however, we can
neglect prices altogether, since there can be no such thing as a
general rise in prices while the value of the precious metal is
stationary. Could, then, the whole body of the workmen throughout
the kingdom, by good organisation, compel employers to accept
lower profits? If there was a general strike, would it be the
interest of the employers to give way? It is impossible to answer
such a question beforehand. It would be a sheer trial of strength
between the two parties, the outcome of which cannot be
predicted, for nothing of the kind has ever actually taken place.
And though there is now a nearer approximation than ever before
to the supposed conditions, there has as yet been nothing like a general organisation of workmen.

Assuming, however, that the workmen succeeded in such a
strike, we can then ask what would be the effect of a general
rise of wages in the long-run? One of several results might
ensue. The remuneration of employers having declined, their
numbers might diminish, and the demand for labour would then
diminish also and wages fall. Or again the decline in the rate of
interest might check the accumulation of capital, thus again
diminishing the demand for labour. Or, on the other hand, the
rise in wages might be permanent, the remuneration of employers
still proving sufficient, and the accumulation of capital
remaining unchecked. Or lastly, higher wages might lead to
greater efficiency of labour, and in this case profits would not
fall. It is impossible to decide on a priori grounds which of these results would actually take place.

Returning to our period, we may apply these principles to
explain the fall in wages between 1790 and 1820. During this
period, while rent was doubled, interest also was nearly doubled
(this by the way disproves Mr George’s theory on that point), and
yet wages fell. We may take Mr Porter’s estimate. ‘In some few
cases there had been an advance of wages, but this occurred only
to skilled artisans, and even with them the rise was wholly
incommensurate with the increased cost of all the necessaries of
life. The mere labourer… did not participate in this partial
compensation for high prices, but was… at the same or nearly
the same wages as had been given before the war.’ In 1790 the
weekly wage skilled artisans and farm labourers respectively
would buy 82 and 169 pints of corn: in 1800 they would buy 53 and
83. According to Mr Barton, a contemporary writer, wages between
1760 and 1820, ‘estimated in money, had risen 100 per cent.;
estimated in commodities, they had fallen 33 per cent.’ What were
the causes of this fall? Let us first take the case of the
artisans and manufacturing labourers. One cause in their case was
a series of bad harvests. To explain how this wOUld affect wages
in manufactures we must fall back on the deductive method, and
assume certain conditions from which to draw our conclusions. Let
us suppose two villages side by side, one agricultural, the other
manufacturing, in the former of which the land is owned by
landowners, and tilled by labour employed by farmers. Suppose the
manufacturing village to be fed by its neighbours in exchange for
cutlery. Then, if there is a bad harvest in the agricultural
village, every labourer in the manufacturing village will have to
spend more on corn. The owners of land will gain enormously; the
farmers will be enriched in so far as they can retain the
increased prices for themselves, which they will do, if holding
on leases. But every one else will be poorer, for there has been
a loss of wealth. In order to get his corn, the labourer will
have to give more of his share of the produce; and hence the
demand for all other goods, which are produced for the labourers’
consumption, will diminish. Nothing affects the labourer so much
as good or bad harvests, and it is because of its tendency to
neutralise the consequences of deficient crops at home, that the
labourer has gained so much by Free Trade. When we have a bad
harvest here, we get plenty of corn from America, and the
labourer pays nearly the same price for his loaf, and has as much
money as before left to spend on other commodities. Still, even
at the present day, some depression of trade is generally
associated with bad harvests. And though Free Trade lessens the
force of their incidence on a particular locality, it widens the
area affected by them-a bad harvest in Brazil may prejudice trade in England.

The next point to be taken into consideration is the huge
taxation which fell upon the workmen at this time; even as late
as 1834 half the labourers’ wages went in taxes. There was also
increase in the National Debt. During the war we had nominally
borrowed £600,000,000, although owing to the way in which the
loans were raised, the actual sum which came into the national
exchequer was only £350,000,000. All this capital was withdrawn
from productive industry, and the demand for labour was
diminished to that extent. Lastly, the labourer was often
actually paid in bad coin, quantities of which were bought by the
manufacturers for the purpose; and he was robbed by the truck
system, through which the employer became a retail trader, with
power to over-price his goods to an indefinite extent.
Some of these causes affected the agricultural and manufacturing labourers alike; they suffered, of course, equally
from bad harvests. But we have seen in former lectures that there
were agrarian and social changes during this period, which told
upon the agricultural labourer exclusively. The enclosures took
away his common-rights, and where the land, before enclosure, had
been already in cultivation, they diminished the demand for his
labour, besides depriving him of the hope of becoming himself a
farmer, and, to mention a seemingly small but really serious
loss, cutting off his supply of milk, which had been provided by
the ‘little people’ who kept cows on the commons. He was further
affected by the enormous rise in cottage rents. Mr Drummond, a
Surrey magistrate, told the Commission on Labourers’ Wages in
1824, that he remembered cottages with good gardens letting for
30s. before the war, while at the time when he was speaking the same were fetching 5, 7, or 10.

This rise was due to causes we have before had in review, to
the growth of population, the expulsion of servants from the
farmhouses, and the demolition of cottages in close villages.
When the labourers, to meet the deficiency, built cottages for
themselves on the wastes, the farmers pulled them down, and, if
the labourers rebuilt them, refused to employ them, with the
result that such labourers became thieves and poachers. Again,
during this period, it was not uncommon for the farmers
absolutely to determine what wages should be paid, and the men in
their ignorance were entirely dependent on them. Here are two
facts to prove their subservience. In one instance, two pauper
families who had cost their parish no less than 20 a year each,
were given instead an acre of land rent free, and the rates were
relieved to that amount; but though successful, the experiment
was discontinued, ‘lest the labourer should become independent of
the farmer.’ And this is the statement of an Essex farmer in
1793: ‘I was the more desirous to give them an increase of pay,
as it was unasked for by the men, who were content with less than
they had a right to expect.’ The agricultural labourer at this
time was in an entirely helpless condition in bargaining with his
employer. Nor were the farmers the only class who profited by his
deterioration; for the high rents of the time were often paid out
of the pocket of the labourer. The period was one of costly wars,
bad seasons, and industrial changes. The misfortunes of the
labouring classes were partly inevitable, but they were also
largely the result of human injustice, of the selfish and
grasping use made of a power which exceptional circumstances had
placed in the hands of landowners, farmers, and capitalists.

XII. Ricardo and the Growth of Rent

In Political Economy, as in other sciences, a careful study
of method is an absolute necessity. And this subject of method
will come into special prominence in the present lecture, because
we have now to consider the writings of a man of extraordinary
intellect and force, who, beyond any other thinker, has left the
impress of his mind on economic method. Yet even he would have
been saved from several fallacies, if he had paid more careful
attention to the necessary limitations of the method which he
employed. It may be truly said that David Ricardo has produced a
greater effect even than Adam Smith on the actual practice of men
as well as on the theoretical consideration of social problems.
His book has been at once the great prop of the middle classes,
and their most terrible menace; the latter, because from it have
directly sprung two great text-books of Socialism, Das Kapital of
Karl Marx, and the Progress and Poverty of Mr Henry George. And
yet for thirty or forty years Ricardo’s writings did more than
those of any other author to justify in the eyes of men the existing state of society.

Ricardo’s life has little in it of external interest. He made
his fortune on the Stock Exchange by means of his great financial
abilities, and then retired and devoted himself to literature.
During the few years that he sat in Parliament, he worked (we
have it on Huskisson’s testimony) a great change in the opinions
of legislators, even in those of the country squires-a remarkable
fact, since his speeches are highly abstract, and contain few
allusions to current politics, reading in fact like chapters from
his book. We may notice one direct effect of his speeches: they
were the most powerful influence in determining the resumption of
cash payments. In his private life he associated much with Bentham and James Mill.

James Mill, like Bentham and Austin, was a staunch adherent
of the deductive method, and it was partly through Mill’s
influence that Ricardo adopted it. Mill was his greatest friend;
it was he who persuaded him both to go into Parliament, and to
publish his great book. Ricardo’s political opinions in fact
merely reflect those of James Mill, and the other philosophical
Radicals of the time, though in Political Economy he was their
teacher. Ricardo reigned without dispute in English Economics
from 1817 to 1848, and though his supremacy has since then been
often challenged, it is by no means entirely overthrown. His
influence was such that his method became the accepted method of
economists; and to understand how great the influence of method
may be, you should turn from his writings and those of his
followers to Adam Smith, or to Sir Henry Maine, where you come in
contact with another cast of mind, and will find yourselves in a
completely different mental atmosphere. Now what is this
deductive method which Ricardo employed? It consists in reasoning
from one or two extremely simple propositions down to a series of
new laws. He always employed this method, taking as his great
postulate that all men will on all matters follow their own
interests. The defect of the assumption lies in its too great
simplicity as a theory of human nature. Men do not always know
their own interest. Bagehot points out that the 10 householders,
who were enfranchised by the first Reform Bill, were after 1832
the most heavily taxed class in the community, though the remedy
was in their own hands; because they were ignorant and apathetic.
And even when men know their interests, they will not always
follow them; other influences intervene, custom, prejudice, even
fear. Cairnes frankly admits these defects in Ricardo’s method;
but it took economists some thirty or forty years to learn the
necessity of testing their conclusions by facts and observations.
Since 1848 their attitude has improved; it is now seen that we
must insist upon the verification of our premisses, and examine
our deductions by the light of history.

Ricardo has deduced from very simple data a famous law of
industrial progress. In an advancing community, he says, rent
must rise, profits fall, and wages remain about the same. We
shall find from actual facts that this law has been often true,
and is capable of legitimate application, though Mr Cliffe-Leslie
would repudiate it altogether; but it cannot be accepted as a
universal law. The historical method, on the other hand, is
impotent of itself to give us a law of progress, because so many
of the facts on which it relies are, in Economics, concealed from
us. By the historical method we mean the actual observation of
the course of economic history, and the deduction from it of laws
of economic progress; and this method, while most useful in
checking the results of deduction is, by itself, full of danger
from its tendency to set up imperfect generalisations. Sir H.
Maine and M. Laveleye, for instance, have taken an historical
survey of land-tenure, and drawn from it the conclusion that the
movement of property in land is always from collective to
individual ownership; and Mr Ingram, again, alluding to this law,
accepts it as true that there is a natural tendency towards
private property in land. He can build his argument on the
universal practice from Java to the Shetlands, and it would seem
a legitimate conclusion that the tendency will be constant. Yet
there is at the present day a distinct movement towards replacing
private by collective ownership, due to the gradual change in the
opinions of men as to the basis on which property in land should
rest. Mill, in 1848, argued that where the cultivator was not
also the owner, there was no justification for private ownership;
later in his life, he advocated the confiscation of the unearned
increment in land. If we ask, ‘Was he right?’ the answer must be:
Every single institution of society is brought to the test of
utility and general national well-being; hence, private property
in land, if it fails under this test, will not continue. So too
with the rate of interest: older economists have insisted on the
necessity of a certain rate, in order to encourage the
accumulation of capital; but we may fairly ask whether the rate
of remuneration for the use of capital is not too high-whether we
could not obtain sufficient capital on easier terms? These
considerations show that, in predicting the actual course of
industrial progress, we must not be content to say that because
there has been a movement in a certain direction in the past-for
example, one from status to contract-it will therefore continue
in the future. We must always apply the test, Does it fit in with
the urgent present requirements of human nature?
Ricardo’s influence on legislation, to which I have already
alluded, was twofold; it bore directly upon the special subject
of currency and finance; and, what is more remarkable, it
affected legislation in general. As regards finance, his
pamphlets are the real justification of our monetary system, and
are still read by all who would master the principles of
currency. With respect to other legislation, he and his friends
have the great credit of having helped to remove not merely
restrictions on trade in general, but those in particular which
bore hardest on the labourer. When Joseph Hume, in 1824, proposed
the repeal of the Combination Laws, he said he had been moved
thereto by Ricardo. But though Ricardo advocated the removal of
restrictions which injured the labourer, he deprecated all
restrictions in his favour; he ridiculed the Truck Acts, and
supported the opposition of the manufacturers to the Factory Acts
– an opposition which, be it remembered, though prompted by mere
class interest, was also supported in the name and on the then
accepted principles of economic science.

In this way Ricardo became the prop, as I have called him, of
the middle classes. Throughout his treatise there ran the idea of
natural law, which seemed to carry with it a sort of
justification of the existing constitution of society as
inevitable. Hence his doctrines have proved the readiest weapons
wherewith to combat legislative interference or any proposals to
modify existing institutions. Hence, too, his actual conclusions,
although gloomy and depressing, were accepted without question by
most of his contemporaries. Another school, however, has grown
up, accepting his conclusions as true under existing social
conditions, but seeing through the fallacy of his ‘natural law.’
These are the Socialists, through whom Ricardo has become a
terror to the middle classes. The Socialists believe that, by
altering the social conditions which he assumed to be
unalterable, Ricardo’s conclusions can be escaped. Karl Marx and
Lassalle have adopted Ricardo’s law of wages; but they have
argued that, since by this law wages, under our present social
institutions, can never be more than sufficient for the bare
subsistence of the labourer, we are bound to reconsider the whole
foundation of society. Marx also simply accepts Ricardo’s theory
of value. The value of products, said Ricardo, is determined by
the quantity of the labour expended on them; and Marx uses this
statement to deduce the theorem that the whole value of the
produce rightly belongs to labour, and that by having to share
the produce with capital the labourer is robbed.
Mr Henry George, again, the latest Socialist writer, is
purely and entirely a disciple of Ricardo. The whole aim of his
treatise, Progress and Poverty, is to prove that rent must rise
as society advances and wealth increases. It is not the labourer,
Ricardo reasoned, who will be the richer for this progress, nor
the capitalist, but the owner of land. Mr George’s theory of
progress is the same. Putting aside his attempt to show a
connection between the laws of interest and wages, which he
contends will rise and fall together, there is little difference
between his conclusions and Ricardo’s. Others before Mr George
had clearly enough seen this bearing of the law of rent. Roesler,
the German economist, says: ‘Political Economy would only be a
theory of human degradation and impoverishment, if the law of
rent worked without modification.’

Now let us see what are the assumptions on which Ricardo
grounded his law about the course of rent, wages, and profits in
a progressive community. The pressure of population, he argued,
makes men resort to inferior soils; hence the cost of
agricultural produce increases, and therefore rent rises. But why
will profits fall? Because they depend upon the cost of labour,
and the main element in determining this is the cost of the
commodities consumed by the workmen. Ricardo assumes that the
standard of comfort is fixed. If, therefore, the cost of a
quartern loaf increases, and the labourer is to obtain the same
number of them, his wages must rise, and profits therefore must
fall. Lastly, why should wages remain stationary? Because,
assuming that the labourer’s standard of comfort is fixed, a rise
of wages or a fall in prices will only lead to a proportionate
increase of population. The history of the theory of rent is very
interesting, but it is out of our road, so I can only lightly
touch upon it. Adam Smith had no clear or consistent theory at
all on the subject, and no distinct views as to the relation
between rent and price. The modern doctrine is first found in a
pamphlet by a practical farmer named James Anderson, published in
1777, the year after the appearance of The Wealth of Nations; but
it attracted little attention till it was simultaneously
re-stated by Sir Edward West, and by Malthus in his pamphlet on
the Corn Laws. Had the theory, however, been left in the shape in
which they stated it, it would have had little influence. It was
Ricardo, who, pUzzled by the question of rent, snatched at the
theory, and gave it currency by embodying it in his whole
doctrine of value and of economic development.
Ricardo’s two great positive conclusions are: first, that the
main cause of rent is the necessity of cultivating inferior soil
as civilisation advances; and secondly, that rent is not the
cause but the result of price. The theory has been disputed and
criticised, but nearly all the objections have come from persons
who have not understood it. We may say conclusively that, as a
theory of the causes of rent, apart from that general doctrine of
industrial development of which in Ricardo it forms a part, the
theory is true. The one formidable objection which can be urged
against it is that the rise in rents in modern times has been due
not so much to the necessity of resorting to inferior soils, as
to improvements in agriculture; but when Professor Thorold Rogers
attacks the theory on this ground, he merely proves that Ricardo
has overlooked some important causes which have led to an
increase of rents since the Middle Ages.

What, then, are we justified in stating to be the ultimate
causes of rent? First, the fertility of the soil and the skill of
the cultivator, by which he is able to raise a larger produce
than is necessary for his own subsistence; this makes rent
physically possible. Next, the fact that land is limited in
quantity and quality; that is, that the supply of the land most
desirable from its situation and fertility is less than the
demand: this allows of rent being exacted. The early colonists in
America paid no rent, because there was an abundance of land open
to every one; but twenty years later, rent was paid because
population had grown. Let us see exactly what happens in such a
case. A town is founded on the sea-coast; as it grows, the people
in that town have to get some of their food from a distance.
Assume that the cost of raising that corn and bringing it to the
town is 20s., and that the cost of raising it close to the town
is 15s. for every five bushels (we will suppose that in the
latter instance the cost of carriage is nil); then, as both
quantities will be sold at the same price, the surplus 5s. In the
latter case will go for rent. Thus we find that rent has arisen
because corn is brought into the market at different costs. In
twenty years more, rents will have risen still further, because
soils still more inferior in fertility or situation will have
been brought into cultivation. But the rise of rent is not
directly due to the cultivation of inferior soils; the direct
cause is the increase of population which has made that cultivation necessary.

Going back to the question raised by Professor Rogers, as to
the effect of agricultural improvements on rent, we may notice
that the controversy on this question was first fought out
between Ricardo and Malthus. Ricardo thought that improvements
would lead to a fall in rents; Malthus maintained the opposite,
and he was right. Take an acre of land close to the town, such as
we were considering above, with an original produce of five
bushels of wheat, but which, under improved cultivation, yields
forty bushels. If the price of wheat remains the same, and all
the land under cultivation has been improved to an equivalent
extent, the rent will now be 5s. multiplied by eight. Yet there
are a few historical instances where agricultural improvements
have been followed by a fall in rents. For instance, during the
Thirty Years’ War the Swiss supplied Western Germany with corn,
and introduced improvements into their agriculture, in order to
meet the pressure of the demand. After the peace of Westphalia
the demand fell off; the Swiss found they were producing more
than they could sell; prices fell, and, as a consequence, rents fell also.

Professor Rogers has further objected to Ricardo’s theory that it does not explain the historical origin of rent. The term ‘rent’ is ambiguous; it has been used for the payment of knight-service, for the performances of religious offices, for serfs’ labour and the sum of money for which it was commuted. In Ricardo’s mouth it meant only the money rent paid by a capitalist farmer, expecting the usual rates of profits; but it is quite true that these modern competition rents did not arise till about the time of James I.

The last point in the theory of rent is the relation between
rent and price. Before Ricardo’s time most practical men thought
that rent was a cause of price. Ricardo answered, There is land
cultivated in England which pays no rent, or at least there is
capital employed in agriculture which pays none; therefore there
is in the market corn which has paid no rent, and it is the cost
of raising this corn, which is grown on the poorest land, that
determines the price of all the corn in the same market. Probably
he was right in his statement that there is land in England which
pays no rent; but even if all land and all farmers’ capital paid
rent, it would not affect the argument, which says that rent is
not the cause but the result of price. We may conclude that at
the present day rent is determined by two things: the demand of
the population, and the quantity and quality of land available.
These determine it by fixing the price of corn.

Now let us turn to facts, to see how our theories work. We
will take the rise in rents between 1790 and 1830, and ask how it
came about. The main causes were – (1) improvements in
agriculture, the chief of which were the destruction of the
commonfield system, rendering possible the rotation of crops, the
consolidation of farms with the farmhouse in the centre of the
holding, and the introduction of machinery and manures; (2) the
great growth of population, stimulated by mechanical inventions;
(3) a series of bad harvests, which raised the price of corn to
an unparalleled height; (4) the limitation of supply, the
population having to be fed with the produce of England itself,
since, during the first part of the period all supplies from
abroad were cut off by war, and later, higher and higher
protective duties were imposed, culminating in the famous corn
bill of 1815. After 1815, however, a fall in rents – not a very
great one-took place, a process which greatly puzzled people at
the time. It was the consequence of a sudden coincidence of
agricultural improvements and good harvests; there was for a time
an over production of corn, and wheat fell in price from 90s. to
35s. This fact is the explanation of Ricardo’s mistaken idea that
agricultural improvements tend to reduce rents. Having no
historical turn of mind, such as Malthus had, he did not
recognise that this effect of agricultural improvements was quite
accidental. This case, indeed, and the instance of Switzerland
given above, with the similar events in Germany about 1820, are
the only historical examples of such an effect. For a time there
was great agricultural distress; the farmers could not get their
rents reduced in proportion to the fall in prices, and many, in
spite of the enormous profits they had before made under
beneficial leases, were ruined; the farming class never wholly
recovered till the repeal of the Corn Laws. But the fall was
temporary and exceptional. Taking the period as a whole its
striking feature is the rise of rents, and this rise was due to
the causes stated: increased demand on the part of an increased
population, and limitation of quantity, with improved quality, of the land available.

I have hitherto been considering the theory of agricultural
rents; I now pass to a subject of perhaps greater present
importance – ground-rents in towns. If the rise in the rent of
agricultural lands has been great, the rise in that of urban
properties has been still more striking. A house in Lombard
Street, the property of the Drapers’ Company, was in 1668 let for
25; in 1887 the site alone was let for 2600. How do we account
for this? It is the effect of the growth of great towns and of
the improvements which enable greater wealth to be produced in
them, owing to the development of the arts, and to the extension
of banking and credit. Are town rents then a cause of the rise in
prices? Certainly not. Rent may be an element in price, but the
actual amount of rent paid depends upon these two things: the
demand of the population for commodities, which determines price,
and the value of a particular site for purposes of business.
These considerations bring us to the question now sometimes
raised: is rent a thing which the State can abolish? Is it a
human institution, or the result of physical causes beyond our
control? If we abolish agricultural rent, the result would simply
be, as Ricardo says, that the rent would go into the pockets of
the farmers, and some of them would live like gentlemen. Rent
itself is the result of physical causes, but it is within our
power to say who shall receive the rent. This seems a fact of
immense importance, but the extent of its significance depends
largely on the future course of rent in England; and so we are
bound to inquire whether Ricardo was right in assuming that rents
must necessarily rise in a progressing state. Many think the
contrary, and that we are now on the eve of a certain and
permanent fall in agricultural rents; and if rents continue
steadily to fall, the question will become one of increasing
insignificance. As means of communication improve, we add more
and more to the supply of land available for satisfying the wants
of a particular place; and as the supply increases, which it is
likely to do to an increasing extent, the price of land must
fall. Social causes have also influenced rents in England, and
social changes are probably imminent, which will at once reduce
the value of land for other than agricultural purposes, and
increase the amount of it devoted to agriculture. Such changes
would likewise tend to diminish rent. We may say therefore that,
since there are these indications of a permanent fall in rents,
so great a revolution as the transference of rent from the hands
of private owners to the nation would not be justified by the
amount which the nation would acquire. The loss and damage of
such a revolution would not be adequately repaid.
But will rent in towns fall? Here it is impossible to
predict. For instance, we cannot say whether London will continue
to grow as rapidly as it has done heretofore. Now it is the
monetary centre of the world; owing to the greater use of
telegraphy, it is possible that it may not retain this
pre-eminence. The decay of the provincial towns was largely due
to the growth of great estates, which enabled their proprietors
to live and spend in London; but if changes come to break up
these large properties, London will cease to be the centre of
fashion, or at any rate to have such a large fashionable
population. Politics, moreover, are certainly tending to centre
less in London. And further inventions in the means of locomotion
and the greater use of electricity may result in causing a greater diffusion of population.

XIII. Two Theories of Economic Progress

Since Mill, in 1848, wrote his chapter on the future of the
working classes, the question of the distribution of wealth has
become of still greater importance. We cannot look round on the
political phenomena of to-day without seeing that this question
is at the root of them. We see the perplexity in which men stand,
and the divisions springing up in our great political parties,
because of the uncertainty of politicians how to grapple with it.
Political power is now widely diffused; and whatever may be the
evils of democracy, this good has come of it, that it has forced
men to open their eyes to the misery of the masses, and to
inquire more zealously as to the possibility of a better
distribution of wealth. Economists have to answer the question
whether it is possible for the mass of the working classes to
raise themselves under the present conditions of competition and
private property. Ricardo and Henry George have both answered,
No; and the former has formulated a law of economic development,
according to which, as we have seen, rent must rise, profits and
interest fall, and wages remain stationary, or perhaps fall. Now
is there any relation of cause and effect between this rise in
rent and fall in wages? Ricardo thought not. According to his
theory, profits and wages are fixed independently of rent; a rise
in rent and a fall in wages might be due to the same cause, but
the one was not the result of the other, and the rise in rent
would not be at the expense of the labourers. Yet practical
opinion goes in the opposite direction. From the evidence of
farmers and land-agents we see that it is widely believed that
the high rents exacted from farmers have been partly taken out of
the pockets of the labourers. ‘If there is a fall in the price of
corn, agricultural wages will fall, unless there is a
corresponding fall in rent,’ was said before a Parliamentary
Commission in 1834. Ten years ago the connection was admitted in
Ireland; and the Land Act of 1870 was founded on the belief that
rack-rents were not really the surplus left when capital and
labour had received their fair returns, and that the only limit
to the rise of rents was the bare necessities of the peasantry.
In England it has been assumed that wages and profits have fixed
lines of their own independent of rent, but this is not
universally true; where the farmers have suffered from high
rents, they in their turn have ground down the labourers. Thus
even in England rent has been exacted from the labourer; and this
is not an opinion but a fact, testified by the evidence of
agents, clergy, and farmers themselves. What appears accurate to
say about the matter is, that high rents have in some cases been one cause of low wages.

This direct effect of rent on wages under certain conditions
is quite distinct from the ‘brazen law of wages‘ which Lassalle
took from Ricardo. It is impossible, according to Ricardo, for
labourers to improve their position under existing industrial
conditions, for if wages rise, population will advance also, and
wages return to their own level; there cannot therefore be any
permanent rise in them. Ricardo, indeed, did not deny that the
standard of comfort varied in different countries, and in the
same country at different times; but these admissions he only
made parenthetically, he did not seem to think they seriously
touched the question of population, and they did not affect his
main conclusions. For instance, he argues that a tax on corn will
fall entirely on profits, since the labourer is already receiving
the lowest possible wages. This statement may be true with regard
to the very lowest class of labourers, but it certainly does not
apply to artisans, nor to a large proportion of English working
men at the present time. With them, at any rate, it is not true
that they are already receiving the lowest possible wage, nor
that there is an invincible bar to their progress. Let us turn to
the test of facts and see if wages have risen since 1846. Henry
George says that free trade has done nothing for the labourer’.
Mill, in 1848, predicted the same. Professor Cairnes came to a
very similar conclusion; writing in 1874 he said, that ‘the large
addition to the wealth of the country has gone neither to profit
nor to wages, nor yet to the public at large, but to swell… the
rent-roll of the owner of the soil.’ Yet it is a fact that though
the cost of living has undoubtedly increased, wages have risen in
a higher ratio. Take the instance of a carpenter as a fair
average specimen of the artisan class. The necessaries of a
carpenter’s family in 1839 cost 24s. 10d. per week; in 1875 they
cost 29s. But meanwhile the money wages of a carpenter had risen
from 24s. to 35s. Thus there had been not only a nominal but a
real rise in his wages. Turning to the labourer, his cost of
living was about 15s. In 1839, it was a little under 15s. In
1875. The articles he consumes have decreased in cost, while in
the case of the artisan they have increased, because the labourer
spends a much larger proportion of his wages on bread. The
labourer’s wages meanwhile have risen from 8s. to 12s. or 14s.;
in 1839 he could not properly support himself on his wages alone.
These facts seem conclusive, but certainty is difficult from the
very varying estimates of consumption and money wages. For strong
proof of a rise in agricultural wages we may take a particular instance.

On an estate in Forfar the yearly wages of a first ploughman were by the wages-book, in

1840… £28 2 0 1870… 42 5 0
1850… 28 15 0 1880… 48 9 0
1860… 39 7 0

According to his own admission the standard of comfort of the first ploughman employed on this estate in 1810 had risen, for he complained, in a letter describing his position, of his increased expenditure, increased not because things were dearer, but
because he now needed more of them.

We may take as further evidence the statistics of the savings
of the working classes; it is impossible to get more than an
approximate estimate of them, but they probably amount to about
£130,000,000. To these we may add the savings actually invested
in houses. In Birmingham there are 13,000 houses owned by
artisans. All this is small compared with the whole capital of
the country, which, in 1875, was estimated at £8,500,000,000 at
least, with an annual increase of £235,000,000 – this latter sum
far exceeding the total savings of the working classes. The
comparison will make us take a sober view of their improvement;
yet the facts make it clear that the working classes can raise
their position, though not in the same ratio as the middle
classes. Mr Mulhall also estimates that there is less inequality
between the two classes now than forty years ago. He calculates
that the average wealth of a rich family has decreased from
£28,820 to £25,803, or 11 per cent.; that of a middle-class
family has decreased from 1439 to 1005, or 30 per cent.; while
that of a working-class family has increased from 44 to 86, or
nearly 100 per cent. But without pinning our faith to any
particular estimate, we can see clearly enough that the facts
disprove Ricardo’s proposition that no improvement is possible;
and there are not wanting some who think that the whole tendency
of modern society is towards an increasing equality of condition.
Was Ricardo any more correct in saying that interest and
profits (between which he never clearly distinguished) must fall?
As a matter of fact, for the last century and a half interest in
England has been almost stationary, except during the great war.
In Walpole’s time it was three per cent.; during the war it
doubled, but after the peace it dropped to four per cent., and
has remained pretty steady at that rate ever since. Ricardo
thought that the cost of the labourer’s subsistence would
necessarily increase, owing to the necessity of cultivating more
land, and as he would thus require a greater share of the gross
produce, less wealth would be left for the capitalist. He
overlooked the fact that the rate of interest depends not merely
on the cost of labour, but on the field of employment as well. As
civilisation advances, new inventions and new enterprises create
a fresh demand for capital: some £700,000,000 have been invested
in English railways alone. No doubt, if the field for English
capital were confined to England, the rate of interest might
fall; but Ricardo forgot the possibility of capital emigrating on
a large scale. Thus Ricardo’s teaching on this point is deficient
both in abstract theory and as tested by facts. What we really
find to have taken place is, that though rent has risen, there is
good reason to suppose that in the future it may fall; that
interest has not fallen much; and that the standard of comfort
and the rate of wages, both of artisans and labourers-of the
former most decidedly, and to a certain extent also of the latter, has risen.

I wish next to examine Mr George’s theory of economic progress. Mr George is a disciple of Ricardo, both in his method and his conclusions; he has as great a contempt for facts and verification as Ricardo himself. By this method he succeeds in formulating a law, according to which, in the progress of civilisation, interest and wages will fall together, and rents will rise. Not only is the labourer in a hopeless condition, but the capitalist is equally doomed to a stationary or declining fortune. ‘Rent,’ he says, ‘depends upon the margin of cultivation, rising as it falls, and falling as it rises. Interest and wages depend on the margin of cultivation, falling as it falls, and rising as it rises.’ The returns which the capitalist obtains for his capital and the labourer for his work depend on the returns from the worst land cultivated; that is, on the quality of land accessible to capital and labour without payment of rent.

Now Mr George’s observations are derived from America, and
what he has done is to generalise a theory, which is true of some
parts of America, but not of old countries. His book seems
conclusive enough at first sight. There is little flaw in the
reasoning, if we grant the premisses; but there are great flaws
in the results when tested by facts. Do interest and wages always
rise and fall together? As an historical fact they do not.
Between 1715 and 1760, while rents (according to Professor
Rogers) rose but slowly (Arthur Young denies that they rose at
all), interest fell, and wages rose. Between 1790 and 1815 rent
doubled, interest doubled, wages fell. Between 1846 and 1882
rents have risen, interest has been stationary, wages have risen.
Thus in all these three periods the facts contradict Mr George’s
theory. Rent indeed has generally risen, but neither profits nor
wages have steadily fallen, nor have their variations borne any
constant relation to one another. Coming to Mr George’s main
position, that rent constantly tends to absorb the whole increase
of national wealth, how does this look in the light of fact? Does
all the increase of wealth, for instance, in the Lancashire
cotton manufactures, go simply to raise rents? Evidently not.
Wages have risen owing to improvements in machinery’. and in most
cases profits have also risen. We can prove by statistics that in
England the capitalists’ wealth has increased faster than that of
the landowners”. for in the assessments to the income-tax there
has been a greater increase under Schedule D, which comprises the
profits of capitalists and the earnings of professional men, than
under Schedule A, which comprises revenues from land. At the same
time, Mr George has made out a strong case against private
property in land in great towns; but here he has only restated
more forcibly what Adam Smith and Mill advocated, when they
recommended taxes on ground rents as the least objectionable of
all taxes. Under existing conditions the working people in great
towns may be said to be taxed in the worst of ways by the bad
condition of their houses. An individual or a corporation lets a
block of buildings for a term of years; the lessee sublets it,
and the sub-lessee again for the third time. Each class is here
oppressing the one beneath it, and the lowest unit suffers most.
This is why the problem of the distribution of wealth is sure, in
the near future, to take the form of the question, how to house
the labourers of our towns.

XIV. The Future of the Working Classes

I have thus far tried to show that the material condition of the workman is capable of improvement under present social conditions. I wish now to explain the causes which have contributed to its actual improvement since 1846. The most prominent of these causes has been Free Trade. In the first place, Free Trade has enormously increased the aggregate wealth of the country, and therefore increased the demand for labour; this is an indisputable fact. Secondly, it has created greater steadiness in trade,-a point which is often overlooked in discussions of the subject. Since 1846 workmen have been more regularly employed than in the preceding half-century. Free trade in wheat has, moreover, given us a more steady price of bread, a point of paramount importance to the labouring man; and this steadiness is continually becoming greater. From 1850 to 1860 the variation between the highest and lowest prices of wheat was 36s., between 1860 and 1870 it was 24s., and in the last decade it has been only 15s. And since the sum which the workman has spent on bread has become more and more constant, the amount which he has had left to spend on manufactured produce has also varied less, and its price in consequence has been steadier. But why then, it may be asked, the late great depression of trade since 1877? I believe the answer is, because other countries, to which we sell our goods, have been suffering from bad harvests, and have had less capacity for buying. The weavers in Lancashire have had to work less time and at lower wages because far-off nations have not been able to purchase cotton goods, and the depression in one industry has spread to other branches of trade.

The greater steadiness of wages which has been caused by Free Trade is seen even in trades where there has been no great rise. But besides the amount of the workman’s wages per day we must take into consideration the number of days in the year and hours in the day, during which he works. He now finds employment on many more days (before 1846 artisans often worked only one or two days in the week), but each working day has fewer hours; so that his pay is at once steadier and more easily earned. And hence even where his daily wages have remained nearly the same, with more constant employment and with bread both cheap and fixed in price, his general position has improved.

What other agencies besides Free Trade have been at work to
bring about this improvement? Factory legislation has raised the
condition of women and children by imposing a limit on the hours
of work, and especially the sanitary environment of the labourer;
the factory laws seek to regulate the whole life of the workshop.
Trades-Unions, again, have done much to avert social and
industrial disorder, and have taught workmen, by organisation and
self-help, to rely upon themselves. Herein lies the difference
between the English and the Continental workman; the former,
because he has been free from voluntary associations, does not
look to the State or to revolutionary measures to better his
position. For proof of this, it is enough to compare the
parliamentary programme of the last Trades-Unions Congress with
the proceedings of the international at Geneva. English
Trades-Unions resort to a constitutional agitation which involves
no danger to the State; indeed, as I have said, their action
averts violent industrial dislocations. And beyond this,
Trades-Unions have achieved some positive successes for the cause
of labour. By means of their accumulated funds workmen have been
able to hold out for better prices for their labour, and the
Unions have further acted as provident societies by means of
which their members can lay up sums against sickness or old age.
The mischief and wastefulness of strikes is generally enough
insisted on, but it is not as often remembered that the largest
Unions have sanctioned the fewest strikes; the Amalgamated
Engineers, who have 46,000 members, and branches in Canada and
India, expended only six per cent. of their income on strikes
from 1867 to 1877. The leaders of such a great Union are skilful,
well-informed men, who know it to be in their interest to avoid strikes.

Lastly, we must not forget to mention the great Co-operative
Societies, which in their modern shape date from the Rochdale
Pioneers’ Store, founded in 1844, under the inspiration of Robert
Owen’s teaching, though the details of his plan were therein
abandoned. These, like Trades-Unions, have taught the power and
merit of voluntary association and self-help. At present,
however, they are only big shops for the sale of retail goods,
through which the workman gets rid of the retail dealer, and
shares himself in the profits of the business, by receiving at
the end of each quarter a dividend on his purchases. Such stores,
however useful in cheapening goods, and at the same time
encouraging thrift, do not represent the ultimate object of
co-operation. That object is to make the workman his own
employer. Hitherto the movement has not been successful in
establishing productive societies; the two great difficulties in
the way being apparently the inability of a committee of workmen
to manage a business well, and their unwillingness to pay
sufficiently high wages for superintendence. The chief obstacles
are thus moral, and to be found in the character of the workmen,
and their want of education; but as their character and education
improve, there is no reason why these difficulties should not vanish.

Such are the chief agencies to which we trace the improvement in the position of the labourer during the last forty years. At the beginning of this period Mill insisted on one thing as of paramount importance, namely restriction upon the increase of population, and without this he believed all improvement to be impossible. Yet we find that during this period the rate of increase has not slackened. It is nearly as great now as between 1831 and 1841. It was greater during the last decade than it had been since 1841. On the other hand, there has undoubtedly been an enormous emigration which has lightened the supply of labour. Three millions and a half of people have emigrated from Great Britain since 1846.

The question which now most deeply concerns us is, Will the
same causes operate in the future? Will Free Trade continue to be
beneficial? Will our wealth continue to increase and our trade to
expand? On this point a decided prediction is of course
impossible. Competition in neutral markets is becoming keener and
keener, and we may be driven out of some of them, and thus the
national aggregate of wealth be lessened. But, on the other hand,
we have reason to believe that increased supplies of corn from
America and Australia will give an enormous impetus to trade. As
in the past so in the future corn is the commodity of most
importance to the labourer; and if the supply of corn becomes
more constant, trade will be steadier and wages will probably
rise. Besides, cheap corn means that all over the world the
purchasing power of consumers is increased, and this again will
stimulate trade. So that in this respect the labourers’ outlook
is a hopeful one. As to emigration also, there is no reason to
suppose that there will be any check on this relief to the
labourer for the next fifty years at least. Again, there is every
prospect of co-operation and even productive co-operation making
great progress in the future, though I do not think that the
latter is likely for some time to be an important factor in
improving the status of the workmen. The moral obstacles to
cooperative production which I mentioned will disappear but
slowly. In certain directions, however, it is likely to develop;
I mean in the direction of manufacturing for the great Wholesale
Co-operative Societies, because here the market is secured.
Trades-Unions too are likely to expand.

Turning to the moral condition of the workpeople, we find an
improvement greater even than their material progress. When we
see or read of what goes on in the streets of our great towns, we
think badly enough of their morality; but those who have had most
experience in manufacturing districts are of opinion that the
moral advance, as manifested, for example, in temperance, in
orderly behaviour, in personal appearance, in dress, has been
very great. For the improvement in the inner life of workshops as
early as 1834, take the evidence of Francis Place, a friend of
James Mill, before a Committee of the House of Commons in that
year. He told the Committee that, when he was a boy, he used to
hear songs, such as he could not repeat, sung in respectable
shops by respectable people; it was so no longer, and he was at a
loss how to account for the change. Similar statements are made
by workmen at the present day. Conversation, they say, is bad at
times, but opinion is setting more and more against immoral talk.
The number of subjects which interest workpeople is much greater
than before, and the discussion of the newspaper is supplanting
the old foul language of the workshop. We have here an indirect
effect of the extension of the suffrage. Add to this the
statistics of drunkenness. In 1855 there were nearly 20,000
persons convicted for drunkenness, in 1880 there were not many more than 11,000.

Again, the relations between workmen and employers are
certainly much better. The old life, as described by Owen and
Cobbett, of an apprentice in the workshop, or a boarded labourer
in the farmhouse, is at first sight most attractive; and the
facts told to the Commission of 1806 seem to realise the ideal
life of industry. The relations between masters and workmen were
then extremely close, but this close relationship had its bad
side. There was often great brutality and gross vice. The workman
was at his employer’s mercy. In Norfolk the farmer used to
horsewhip his labouring men, and his wife the women. There
existed a state of feudal dependence, which, like all feudalism,
had its dark and light sides. The close relationship was
distinctly the result of the small system of industry, and hence
it was shattered by the power-loom and the steam-engine. When
huge factories were established there could no longer be a close
tie between the master and his men; the workman hated his
employer, and the employer looked on his workmen simply as hands.
From 1800 to 1843 their mutual relations, as was admitted by both
parties, were as bad as they could be. There could be no union,
said employers, between classes whose interests were different,
and farmers, contrary to ancient usage, ruthlessly turned off
their men when work was slack. The ‘cash nexus’ had come in, to
protest against which Carlyle wrote his Past and Present; but
Carlyle was wrong in supposing that the old conditions of labour
could be re-established. Feudalism, though it lingers in a few
country places, has virtually disappeared alike in agriculture
and in trade. The employer cannot offer and the workman cannot
accept the old relations of protection and dependence: for, owing
to the modern necessity of the constant movement of labour from
place to place and from one employment to another, it has become
impossible to form lasting relations, and the essence of the old
system lay in the permanency of the workmen’s engagements.
Trades-Unions too have done much to sever what was left of the
old ties. Workmen are now obliged, in self-defence, to act in
bodies. In every workshop there are men who are attached to their
masters, and who on occasion of a strike do not care to come out,
but are yet compelled to do so in the common interest. Before
this obligation was recognised by public opinion, the effect of
Unions was, no doubt, to embitter the relations between masters
and men. This was especially the case between 1840 and 1860.
Since the latter date, however, Trades-Unions have distinctly
improved the relations between the two classes. Employers are
beginning to recognise the necessity of them, and the advantages
of being able to treat with a whole body of workmen through their
most intelligent members. Boards of Conciliation, in which
workmen and employers sit side by side, would be impossible
without Unions to enforce obedience to their decisions. In the
north of England, at the present moment, it is the non-unionists
who are rejecting arbitration. And the reason why such Boards
have succeeded is, because the employers have of their own accord
abandoned all ideas of the feudal relation. They used to say that
it would degrade them to sit at the same board with their
workmen; but it is noticeable that directly the political
independence of the latter was recognised, as soon as he
possessed the franchise, these objections began to disappear. The
new union of employers and workmen which is springing up in this
way, is based on the independence of both as citizens of a free
state. The employers meet their workmen also in political
committees, on School Boards and similar bodies, and the two
classes are learning to respect one another. Thus this new union
bids fair to be stronger than the old one.

Still the question remains, Can this political independence
of the workman be combined with secure material independence?
Until this is done he will be always at the mercy of his
employer, who may practically stultify his political power by
influencing his vote, as Mr George asserts is done in New
England. Among the many solutions of this problem proposed in our
own country two deserve especial prominence. The first is that of
the English Positivists. Comte, although he had but a glimpse of
the English Trades-Unions, understood the meaning of them far
better than Mill. Inspired by him, Mr Frederic Harrison and his
friends deny the possibility of solving the labour question by
co-operative production or any such schemes. They rely on a
gradual change in the moral nature of capitalists; not that they
expect the old system of feudal protection to return, but they
hope that the ‘captains of industry’ of the future will rise to
another conception of their position, will recognise the
independence of the workman, and at the same time be willing to
hand over to him an increased share of their joint produce. This
belief may seem ridiculous, and we must expect for a long time
yet to see capitalists still striving to obtain the highest
possible profits. But observe, that the passion for wealth is
certainly in some senses new. It grew up very rapidly at the
beginning of the present century; it was not so strong in the
last century, when men were much more content to lead a quiet
easy life of leisure. The change has really influenced the
relations between men; but in the future it is quite possible
that the scramble for wealth may grow less intense, and a change
in the opposite direction take place. The Comtists are right when
they say that men’s moral ideas are not fixed. The attitude of
public opinion towards slavery was completely changed in twenty
or thirty years. Still I am obliged to believe that such a moral
revolution as the Comtists hope for is not possible within a reasonable space of time.

I should have more hope of industrial Partnership as elaborately described by Mr Sedley Taylor. This also implies a certain change in the moral nature of the employers, but one not so great as the alternative system would require. It has been adopted in over a hundred Continental workshops, though the experiment of Messrs Briggs in England ended in failure. There is hope of its being more successful in the future, because by promoting the energy of the workmen and diminishing waste, it coincides with the interest of the employer. I think that in some industries it will extend, but that it will not be generally adopted.

There remains the ordinary Communist solution. This has taken various forms; the simplest being a voluntary association of individuals based on the principle of common property, and in which every person works for the community according to fixed rules. There are many successful instances of this, on a small scale, in the United States, but we cannot suppose such a solution to be possible for society as a whole. It has only been tried with picked materials, whereas our object is rather to improve the great mass of the population. The Communism of recent European theorists, of whom the best known is Lassalle, presents a somewhat different aspect. It aims at the appropriation of all instruments of production by the State, which is to take charge of the whole national industry and direct it. But the practical difficulty of such a scheme is obviously overwhelming. The objections to a Communistic solution do not apply to Socialism in a more modified shape. Historically speaking, Socialism has already shown itself in England in the extension of State interference. It has produced the Factory Laws, and it is now beginning to advance further and interfere directly in the division of produce between the workmen and their employers. The Employers’ Liability Act recognises that workmen, even when  associated in Trades-Unions, cannot without other aid secure full justice, and in the name of justice it has distinctly handed over to the workmen a certain portion of the employers’ wealth. The extension of relative interference however, though it is to be expected in one or two directions, is not likely to be of much further importance. With regard to taxation, on the other hand, Socialist principles will probably attain a wide-reaching application, and here we shall see great changes.

The readjustment of taxation would enable the State to supply for the people many things which they cannot supply for themselves. Without assuming the charge of every kind of production, the State might take into its hands such businesses of vital importance as railways, or the supply of gas and water. And should not the State attempt in the future to grapple with such questions as the housing of the labourers? Municipalities might be empowered to buy ground and let it for building purposes below the full competition market value. I think that such a scheme is practicable without demoralising the people, and it would attack a problem which has hitherto baffled every form of private enterprise; for all the Societies put together, which have been formed in London with this object since 1842, have succeeded in housing only 60,000 persons. And this brings up the whole question of public expenditure for the people. A new form of association, which has become common of late years, is that of a certain number of private individuals combining to provide for some want of the public, such as Coffee Taverns, or Artisans’ Dwellings, or cheap music. Such Societies are founded primarily with philanthropic objects, but they also aim at a fair interest on their capital. Might not municipalities seek in a similar way to provide for the poor? In discussing all such schemes, however, we must remember that the real problem is not how to produce some improvement in the condition of the working man – for that has to a certain extent been attained already – but how to secure his complete material independence.

Arnold Joseph Toynbee [14 April 1889 – 22 October 1975]

Ref. used

a. Macaulay’s History of England
b. Defoe’s Tour (1725)
c. Arthur Young (1769)
d. Macpherson’s Annals of Commerce (1769)
e. Levi’s History of British Commerce
f. Eden’s State of the Poor (1797)
g. The Returns for 1881 are those of the parliamentary district.