APPENDIX.

1

We except from this remark those having reference to taxation, which we have made the subject of a separate work, of which the 3rd edition was published in 1863.

1

We have excluded this sketch from the present edition. It is given in an enlarged form, in the Introduction to the Wealth of Nations, by the author of this work.

1

See his able “Essay on Political Economy,” in the “Encyclopædia Metropolitana.”

1

We have since been able to realise this idea, having published in 1845 an 8vo. volume “On the Principles and Practical Influence of Taxation and the Funding System,” of which a new and greatly improved edition appeared in 1863.

1

Traité D’Economie Politique, Discours Preliminaire.

1

Esclave d’une idée dominante, l’auteur de l’Essai sur la Population s’y abandonne sans réserve; en combattant des exaggérations, il se livre à des exaggérations contraires; à des verités utiles, se mêle des apercus qui ne sont que spécieux; et pour vouloir en tirer des applications absolues, il en fausse les consequences.—Degerando Bienfaisance Publique, i. Introd, p. 23.

1

La population de la Bohème a triplé en 70 ans. Elle s’est elevée de 1,361,000 âmes à 4,040,000 dans l’intervalle de 1762 à 1835; et jamais ses habitans n’ont joui d’une plus grande aisance.—(Degerando Bienfaisance Publique, i. 204). A similar progress, though not always in quite so striking a degree, has been made during the same period in most Continental states, and in Great Britain and the United States. And Ireland would have been no apparent exception to the principle, but for peculiar and accidental circumstances to which it is not necessary to advert.

2

See the chapter on Population in this work.

1

Economy, from ο{#ῖ}κος, a house, or family, and ν{#ί}μος, a law—the government of a family. Hence, Political Economy may be said to be to the State what domestic economy is to a family.

1

“Principles of Political Economy,” p. 28.

1

This point has been forcibly stated by M. Destutt Tracy. “Non-seulement,” says he, “nous ne créons jamais rien, mais il nous est même impossible de concevoir ce que c’est que créer ou anéantir, si nous entendons rigoureusement par ces mots, faire quelque chose de rien, ou reduire quelque chose à rien; car nous n’avons jamais vu un être quelconque sortir du néant ni y rentrer. De-là cet axiome admis par toute l’antiquité,—rien ne vient de rien, et ne peut redevenir rien. Que faisons-nous donc par notre travail, par notre action sur tous les êtres qui nous entourent? Jamais rien, qu’operer dans ces êtres des changemens de forme ou de lieu qui les approprient à notre usage, qui les rendent utiles à la satisfaction de nos besoins. Voilà ce que nous devons entendre par produire; c’est donner aux choses une utilité qu’elles n’avoient pas. Quel que soit notre travail, s’il n’en résulte point d’utilité, il est infructueux; s’il en résulte, il est productif.”—Traité d’Economie Politique, p. 82.

2

The writer of an article in “The Quarterly Review,” (No. 60, Art. I.,) contends, that the earth is a source of wealth, because it supplies us with the matter of commodities. But this, it is obvious, is the old error of the economists reproduced in a somewhat modified shape. It would, in truth, be quite as correct to say that the earth is a source of pictures and statues, because it supplies the materials made use of by painters and statuaries, as to say that it is a source of wealth, because it supplies the matter of commodities.

1

“Wealth of Nations,” p. 14. The edition, in one vol., by J. R. McC., is uniformly quoted.

1

This progress has been pointed out by Varro:—“Gradum fuisse naturalem, cùm homines viverunt ex iis rebus quæ inviolata ultrò ferret terra. Ex hâc vitâ in secundam descendisse pastoritiam, cùm, propter utilitatem, ex animalibus quæ possent sylvestria, deprehenderent, ac concluderent, et mansuescerent. In queis primùm, non sine causâ, putant oves assumptas, et propter utilitatem et propter placiditatem. Tertio denique gradu, à vitâ pastorali ad agriculturam descenderunt; in quâ ex duobus gradibus superioribus retinuerunt multa, et quò descenderunt ibi processerunt longè, dum ad nos perveniret.”—De Re Rusticâ, lib. ii. cap. 1.

2

“Of the Nutrition and Procreation of a Commonwealth.”

1

“Of Civil Government,” book ii. §§ 40, 41, 42, and 43. This is a very remarkable passage. It contains a more distinct and comprehensive statement of the fundamental doctrine, that labour is the constituent principle of value, than is to be found in any other writer previous to Smith, or than is to be found even in the “Wealth of Nations.” But Locke does not seem to have been sufficiently aware of the real value of the principle he had elucidated, and has not deduced from it any important practical conclusion. On the contrary, in his tract on “Raising the Value of Money,” published in 1691, he lays it down broadly, that all taxes, however imposed, ultimately fall on the land; whereas it is plain he ought, consistently with the above principle, to have shown, that they would fall, not exclusively on the produce of land, but generally on the produce of industry, or on all species of commodities.

2

Bishop Berkeley entertained very just opinions respecting the source of wealth. In his “Querist,” published in 1735, he asks,—“Whether it were not wrong to suppose land itself to be wealth? And whether the industry of the people is not first to be considered, as that which constitutes wealth, which makes even land and silver to be wealth, neither of which would have any value, but as means and motives to industry? Whether, in the wastes of America, a man might not possess twenty miles square of land, and yet want his dinner, or a coat to his back?”—Querist, Numbers 38 and 39.

Say appears to think (“Discours Préliminaire,” p. 37) that Galiani was the first who showed, in his treatise “Della Moneta,” published in 1750, that labour is the only source of wealth. But the passages now laid before the reader prove the erroneousness of this opinion. Galiani has entered into no analysis or argument to prove the correctness of his statement; and as it appears from other parts of his work that he was well acquainted with Locke’s “Tracts on Money,” a suspicion naturally arises that he had seen the “Essay on Civil Government,” and that he was really indebted to it for a knowledge of this principle. This suspicion derives strength from the circumstance of Galiani being still less aware than Locke of the value of the discovery.—See Trattato della Moneta, p. 39, ediz. 1780.

1

“Principes d’Economie Politique,” p. 6.

1

Art. Political Economy, Encyclopædia Metropolitana.

1

Ut varias usus meditando extunderet artes.—Virg. Georg. I. 133.

1

Cat. apud Sallust. in Bello Catil.

2

Barrow’s First and Second Sermon on Industry.

1

Il problema dell’ Economia politica si è accrescere al possibile l’annua riproduzione col minor possibile travaglio, ossia data la quantità di riproduzione ottenerla col minimo travaglio; data la quantità del travaglio ottenere la massima riproduzione; accrescere quanto più si può il travaglio e cavarne il massimo effetto di riproduzione.—(Verri, “Medit. Sulla Econ. Politica,” lib. 21).

1

Odyss., lib. ix., v. 106.

2

Dr. Whately, late Archbishop of Dublin, following in the wake of Dr. Doig (Letters on the Savage State, 12mo, 1792), denies that mankind could by any efforts of their own have raised themselves from this depressed state: “If man,” says he, “when first created, was left, like the brutes, to the unaided exercise of those natural powers of body and mind which are common to the European and to the New Hollander, how comes it that the European is not now in the condition of the New Hollander?” (Lectures on Political Economy, 4th ed., p. 78.) This question involves a petitio principii not very creditable to a logician like Dr. Whately. Had he shown that the capacities of the Australian and European are and always have been equal, there might have been some force in his conclusion; but he has been wise enough not to attempt that in which he was sure to fail. The most comprehensive experience proves that the Europeans are endowed with a capacity of improvement of which the Australians, Negroes, Red Indians, and others, are all but wholly destitute. This difference of capacity is the only and sufficient cause of the difference in their progress and condition.

1

Ferguson’s “Principles of Moral and Political Science,” vol. i. p. 56.

1

Ferguson’s “Principles of Moral and Political Science,” vol. i. p. 250.

1

Goguet, “De l’Origine des Loix,” &c., lib. i. art. 2.

2

“De Officiis,” lib. ii. cap. 21.

1

Thornton’s “Account of the Turkish Empire, vol. ii. p. 63. “The Turks,’ ” says Denon, “bâtissent le moins qu’ils peuvent; ils ne réparent jamais rien: un mur menace ruine, ils l’étayent; il s’éboule, ce sont quelques chambres de moins dans la maison; ils s’arrangent à côté des décombres: l’édifice tombe enfin, ils en abandonnent le sol, où, s’ils sont obligés d’en déblayer l’emplacement, ils n’emportent le plâtras que le moins loin qu’ils peuvent.”—Tom. i. p. 193.

2

Macdonald Kinneir’s “Asia Minor, Armenia,” &c., p. 223.

1

“Tour in Sicily and Malta,” p. 351.

1

“Ce n’est que là où les proprietés sont assurés, où l’emploi des capitaux est abandonné au choix de ceux qui les possèdent; ce n’est que là dis-je, que les particuliers seront oncouragés à se soumettre aux privations les plus dures pour compenser par leurs épargnes les retards que la profusion du gouvernement peut apporter aux progrès de la richesse nationale. Si l’Angleterre, malgré ses guerres ruineuses, est parvenue à un haut degré d’opulence; si, malgré les contributions énormes dont le peuple y est chargé, son capital est pourtant accru dans le silence par l’économie des particuliers, il ne faut attribuer ces effets qu’à la liberté des personnes et à la sureté des proprietés qui y régnent, plus que dans aucun autre pays de l’Europe, la Suisse exceptée.”—Storch,Cours d’Economie Politique, tom. i. p. 260.

1

Semurn’s “Records of the Creation,” 4th ed. vol. ii. p. 51.

2

Instit. lib. ii. tit. i. § 12.

1

Speaking of theft, Beccaria calls it, “Il delitto di quella infelice parte di uomini, a cui il diritto di proprietà (terribile, e forse non necessario diritto,) non ha lasciato, che una nuda esistenza.”—Dei Delitti e delle Pene, § 22.

1

Bentham, “Traité de Législation,” tom. ii. p. 37.

1

“Wealth of Nations,” p. 4.

1

“Wealth of Nations,” p. 5.

1

Miscellaneous Works, iii. 363, 8vo. edition.

1

Barrow’s Second Sermon on Industry.

1

For a further illustration of this principle, see Babbage’s Economy of Manufactures, p. 172.

1

Senior on Political Economy.

2

Xenophon accounts as follows for the superior excellence of the dishes served up at the table of the Persian monarchs:—“For as other arts are wrought up in great cities to a greater degree of perfection, in the same manner are the meats that come from the king dressed in greater perfection. For in little cities the same people make both the frame of a couch, a door, a plough, and a table; and frequently the same person is a builder too, and very well satisfied he is, if he meet with customers enough to maintain him. It is impossible, therefore, for a man that makes a great many different things to do them all well. But in great cities, because there are multitudes that want every particular thing, one art alone is sufficient for the maintenance of every one. And frequently, not an entire one neither; but one man makes shoes for men, another for women. Sometimes it happens, that one gets a maintenance by sewing shoes together, another by cutting them out; one by cutting cloths only; and another, without doing any of these things, is maintained by fitting together the pieces so cut out. He, therefore, that deals in a business that lies within a little compass, must of necessity do it the best. The case is the same with respect to the business of a table; for he that has the same man to cover and adorn the frame of a couch, to set out the table, to knead the dough, to dress the several different meats, must necessarily, in my opinion, fare in each particular as it happens. But where it is business enough for one man to boil meat, for another to roast it; for one to boil fish, and for another to broil it; where it is business enough for one man to make bread, and that not of every sort neither, but that it is enough for him to furnish one sort good, each man, in my opinion, must, of necessity, work up the things that are thus made to a very great perfection. He, therefore, by this kind of management, greatly exceeded all other people in this sort of courtship, by presents of meat.”—(Cyropædia, by Ashley, p. 378. This is a very remarkable passage, and shows that the division of labour was then well understood in Greece, and extensively practised.

1

Tom. iv. p. 9.

1

Locke has the following striking observations on the use of iron:—“Of what consequence the discovery of one natural body, and its properties, may be to human life, the whole great continent of America is a convincing instance; whose ignorance in useful arts, and want of the greatest part of the conveniencies of life, in a country that abounded with all sorts of natural plenty, I think may be attributed to their ignorance of what was to be found in a very ordinary, despicable stone, I mean the mineral of iron. And whatever we think of our parts, or improvements, in this part of the world, where knowledge and plenty seem to vie with each other; yet, to any one that will seriously reflect upon it, I suppose it will appear past doubt, that, were the use of iron lost among us, we should in a few ages be unavoidably reduced to the wants and ignorance of the ancient savage Americans, whose natural endowments and provisions came no way short of those of the most flourishing and polite nations; so that he who first made use of that one contemptible mineral, may be truly styled the father of arts and author of plenty.”—Essay on the Understanding, book iv. cap. 12.

1

Ulloa, “Voyage de l’Amérique” tom. i. p. 336. Ed. Amst. 1752.

1

“Wealth of Nations,” p. 152.

1

This is understated. It is plain, inasmuch as all parties must live on their profits, that those who gain double may accumulate more than twice as fast as the others.

1

Ferguson’s “Essay on Civil Society,” p. 360.

2

“Esprit des Loix,” liv. xxi. chap. 19.

1

We are here only laying down the leading principles on the subject. In the chapter on the “Circumstances which determine the Rate of Profit,” we shall endeavour to investigate the influence of fluctuations in the value of money, of loans to government, &c., on profits. The doctrine advanced in the text is meant only to apply in cases where these disturbing causes are not in operation.

1

“Wealth of Nations,” p. 151.

1

Young’s “Tour in the North of England,” vol. iv. p. 376. See also “Analysis of the Statistical Account of Scotland,” part i. p. 258, &c., for proofs of the same principle.

1

“Economie Politique,” p. 78.

1

“Wealth of Nations,” p. 122.

1

For an account of the rise, progress, and present state of the cotton manufacture, see Commercial Dictionary, art. Cotton, and the authorities there referred to.

1

“Lords’ Report,” p. 192.

1

Goguet, “De l’Origine des Loix,” &c. tom. i. p. 269.

1

The Count di Verri was one of the first who showed clearly what money is, and what it is not.—See “Meditazioni sulla Economia Politica,” § 2.

2

It is supposed by many, though most probably without any good foundation, that we are now on the eve of a heavy fall in the value of gold and silver.—See post.

1

See Chapter on Profits.

1

For an account of the measures necessary to ensure the ready conversion of paper into the precious metals, see Chapter on the interference of Government.

1

Ferguson’s “Principles of Moral and Political Science,” vol. 2, p. 424.

1

A railway is now being made from Smyrna to Aidin; but it was planned and is constructed by foreigners and foreign capital.

1

“Wealth of Nations,” p. 200.

1

We do not mean, by anything now stated, nor did we ever mean, by anything we have stated on other occasions, to maintain that absenteeism may not be, in some respects, injurious. It would be easy, indeed, to show that England and Scotland have been largely benefited by the residence of the great landed proprietors on their estates. None can doubt that they have been highly instrumental in introducing the manners, and in diffusing a taste for the conveniencies and enjoyments of a more refined society; and that the improved communications between different places, the expensive and commodious farm-buildings, and the plantations with which the country is sheltered and ornamented, are to be, in a great degree, ascribed to their residence. Considering, however, the circumstances under which most Irish landlords acquired their estates, the difference between their religious tenets and those of their tenants, the peculiar tenures under which the latter hold their lands, and the political condition of the country, it may be doubted whether their residence would have been of any considerable advantage. But, whatever conclusion may be come to upon this point, cannot affect what has been stated in the text. The question at issue refers merely to the spending of revenue, and has nothing to do with the improvement of estates; and notwithstanding all the clamour that has been raised on the subject, we have yet to learn that absenteeism is, in this respect, in any degree injurious.

1

Third Edition, pp. 201-209.

1

“Discourses on Trade, principally directed to the cases of Interest, Coinage, Clipping, and Increase of Money.” 4to., London, 1691.

In this extraordinary tract the soundest principles in regard to money, commerce, &c. are laid down and expounded in a brief, clear, and convincing manner. But having given offence to some powerful parties, an effort was made to effect its suppression, and for a lengthened period it was supposed to be entirely lost. Happily, however, this was not the case. A copy having cast up at the sale of the library of the Rev. Rogers Ruding, author of the work on the “Coinage,” a few impressions were taken from it, and it has since been included in a collection of early English tracts on commerce, reprinted in 1856 for the Political Economy Club. (“Literature of Political Economy,” p. 42.)

2

“Essay on the Causes of the Decline of the Foreign Trade, &c.” 4to., 1744. This work has been frequently, but incorrectly, ascribed to Sir Matthew Decker.

1

Pope, “Windsor Forest,” line 397.

1

“Wealth of Nations,” p. 162.

1

“Wealth of Nations,” p. 160.

1

“New Discourse of Trade.” Glasg. ed. p. 15.

1

Vol. iv. p. 362.

1

“Preliminary Discourse to Census of 1831,” p. 35.

2

“Report of 1827 on Friendly Societies,” p. 38.

1

“Essay on Civil Society,” p. 303.

1

For some farther illustrations of this last-mentioned topic, see Miller’s “Historical View of the English Government,” vol. iv. pp. 102-137.

1

“Nouveaux Principes,” tom. ii. p. 318.

1

“Principles of Political Economy,” p. 382.

1

“Discourse about Trade,” p. 129. Ed. 1690.

1

Sismondi “Nouveaux Principes,” tom. ii. p. 325.

1

See Note A, at the end of the Volume.[See also Appendix note.]

1

Dignan, “Essai sur l’ Economie Politique,” p. 134.

1

“Sketch of the Advance and Decline of Nations,” p. 82. Say was the first who showed, in a full and satisfactory manner, that effective demand depends upon production (see his chapter de Débouchés); and that gluts are the result of the misapplication, and not of the increase, of productive power. But the same principle had been noticed by many previous writers; by Dean Tucker, in his “Queries on the Naturalization Bill,” p. 13, published in 1752; by Mengotti, in his “Dissertazione sul Colbertismo, p. 31, published in 1792; and still more distinctly in the tract above quoted, published in 1795.

1

See Note on Money in the edition of the “Wealth of Nations” by the Author of this work.

1

By a singular contradiction, at the very moment that the Roman laws authorized the exposure of infants, and vested fathers with the power to decide whether they should bring up their children, the censors were instructed to impose a tax (æs uxorium) on bachelors; and different laws were passed, bestowing various privileges upon those who reared the greatest number of children. The famous Lex Papia Poppæa, (so called from the consuls M. Papius Mutilus and Q. Poppæus Secundus, by whom it was introduced,) enacted during the reign of Augustus, exempted such Roman citizens as had three children from all public charges and contributions.—Terasson, “Histoire de la Jurisprudence Romaine,” p. 58.

1

“Esprit de Loix,” liv. xiii. cap. 10.

2

“Wealth of Nations,” p. 36.

1

“Essay on Population,” vol. i. p. 3. 5th ed.

1

“Essay on Population,” vol. ii. p. 214.

1

See Sussmilch’s table in Malthus on Population, 5th ed., vol. ii. p. 170.

1

The readiness with which the lower classes send their children to foundling hospitals seems a sufficient proof of this.

2

“Records of the Creation,” vol. ii. p. 160. 4th ed.

1

“Records of the Creation,” vol. ii. p. 152. 4th ed.

2

Cragius “de Republicâ Lacedæmoniorum,” lib. iii. cap. 2.

1

Aristotle’s “Ethics and Politics,” by Dr. Gillies, vol. ii. p. 287. 3d ed.

2

“Travels of Anacharsis,” vol. iii. p. 277. Eng. ed.

3

Gouroff “Essai sur l’Histoire des Enfans Trouvés,” p. 19.

4

“Les Romains ne mirent point des bornes à l’empire des pères sur leurs enfans; quelque âge qu’ils eussent, et à quelque dignité qu’ils fussent élevés, ils étoient toujours soumis à la correction de leurs pères. Ceux-ci avoient droit de les frapper, de les envoyer enchainés cultiver la terre, de les déshériter, de les vendre comme des esclaves, et même de leur donner la mort.”—Terasson.Histoire de la Jurisprudence Romaine, p. 54.

1

“Senecæ Controvers,” lib. v. cap. 33.

1

“Considérations sur les Enfans Trouvés,” p. 66.

2

Beck’s “Medical Jurisprudence,” p. 193. Lond. ed.

1

“Guardian,” No. 105.

1

A “Treatise on the Principles and Practical Influence of Taxation and the Funding System,” 8vo., 3rd edit., London, 1863.

1

For some illustrations of what is now stated, see the Chapter on the “Influence of Speculation on Prices.”

1

Blackstone, book ii. c. 1.

1

See the supplementary dissertation on the disposal of property by will, in the edition of “The Wealth of Nations,” (1863), by the author of this work. A very interesting account is given of the history and injurious operation of the French law of succession in the speech of the Baron De Veauce, in the Legislative Body, reported in the “Moniteur” of the 22d January 1864. It is there stated, that of 7,846,000 proprietors in France in 1851, no fewer than 3,000,000 were exempted from personal taxes on the ground of indigence; and that there were among them 600,000 persons, the taxes on whom did not exceed 5 cents, or one halfpenny per individual. Since the period referred to, the number of proprietors, and the proportion of those that are indigent, have each increased.

1

We have discussed the various questions incident to the devising of property by will, including those respecting primogeniture, entails, compulsory distribution, foundations, &c., in a treatise on “The Succession to Property vacant by Death,” published in 1848, and in the edition of “The Wealth of Nations,” published in 1863; and we beg to refer the reader to them for more ample information with respect to those topics which we have here been merely able to glance at.

1

Speech of Lord Mansfield in an insurance case.

1

“Fremant omnes, licet! dicam quod sentio: bibliothecas, meherculè, omnium philosophorum unus mihi videtur. Duodecim Tabularum libellus; si quis legum fontes et capita viderit, et authoritatis pondere et utilitatis ubertate superare.”—De Oratore, lib. i.

1

Terasson, “Histoire de la Jurisprudence Romaine,” p. 117.

1

But if, after judgment has been given, the debtor fails to make payment of the debt, he may be imprisoned for contempt of court.

1

See the able and conclusive evidence of Lord Overstone, before the Committee on Banking in 1857, 8vo., passim; and the article Money, in the 8th edition of the Encyclopædia Britannica.

1

The conditions essential to an invariable measure of exchangeable value were first clearly pointed out in the “Dissertation on the Nature, Measures, and Causes of Value,” p. 17.

1

The acute and ingenious author of the “Templars’ Dialogues” (“London Magazine,” May 1824, p. 551,) has stated, that “It is possible for A continually to increase in value—in real value observe—and yet command a continually decreasing quantity of B.” This statement has been disputed by the author of the “Critical Dissertation on the Nature, Measures, and Causes of Value;” but without any just ground, for nothing can be more perfectly correct. A and B have been produced by certain quantities of labour; but more labour is now required to produce A, and a still greater proportional quantity to produce B: under these circumstances, A must obviously have increased in real value, for it has cost its producers a greater sacrifice of toil and trouble; but as the cost of A has not increased so much as that of B, it will now exchange for, or purchase a less quantity of the latter. Had the author of the “Dissertation” perceived this distinction, he would, most probably, have spared not a few of his remarks on the statements advanced by Ricardo, as well as by the author of the “Dialogues.”—Dissertation on the Nature, &c. p. 41.

1

“Principles of Economy and Taxation,” p. 9.

1

“Cours d’Economie Politique,” tom. iii. p. 7.

1

“Cours d’Economie Politique,” vol. iii. p. 24.

2

“Richesse des Nations,” vol. v. pp. 152-184.

3

“Considérations Générales sur l’Evaluation des Monnoies Grecques et Romaines,” pp. 113-124.

1

Varro “de Re Rusticâ,” lib. i. § 2.

1

Pliny (“Hist. Nat.” lib. viii. cap. 57.) and Valerius Maximus (lib vii. cap. 6.) relate that, during the siege of Casilinum by Hannibal, the scarcity of provisions became so extreme, that a rat was sold for 200 denarii! They add, that the seller had the worst of the bargain, having died of hunger, while the rat was the means of preserving the life of the buyer. “Avaro enim,” says Valerius, “fame consumpto, manubiis sordium suarum frui non licuit; æqui animi vir, ad salutarem impensam faciendam; carè quidem, verùm necessariè, comparato cibo vixit.”

1

The necessity of speculation in the ordinary affairs of life has been well illustrated by Seneca: “Huic respondebimus, nunquam expectare nos certissimam rerum comprehensionem: quoniam in arduo est veri exploratio; sed eâ ire quà ducit veri similitudo. Omne hâc viâ procedit officium. Sic serimus, sic navigamus, sic militamus, sic uxores ducimus, sic liberos tollimus; quanquam omnium horum incertus sit eventus. Ad ea accedimus, de quibus benè sperandum esse credimus. Quis enim pollicetur serenti proventum, naviganti portum, militanti victoriam, marito pudicam uxorem, patri pios liberos? Sequimur quà ratio, non quà veritas trahit. Expecta, ut nisi benè cessurâ non facias, et nisi compertà veritate nihil moveris, relicto omni actu, vita consistit. Dum verisimilia me in hoc aut illud impellant, non verebor beneficium, dare ei, quem verisimile erit gratum esse.”—De Benefic., lib. iv. cap. 33.

1

“Wealth of Nations,” p. 234.

1

The admirable paragraph which follows is from the “Commercio di Grani” of the Count di Verri:—“La terra che abitiamo riproduce ogni anno una quantità corrispondente alla universale consumazione; il commercio supplisce col superfluo di una terra al bisogno dell’altra e colla legge di continuità si equilibrano, dopo alcune oscillazioni, periodicamente bisogno ed abbondanza. Quei che suggeriscono i vincoli risguardono gli uomini sulla terra come ridotti a gettar il dado a chi debba morir di fame; risguardiamoli con occhio tranquillo e riceveremo idee più consolanti e vere, conosendoci fratelli di una vasta famiglia sparsa sul globo, spinti a darci vicendevolmente soccorso, e provveduti largamente dal gran motore della vegetazione a quanto fà d’ uopo per sostenere i bisogni della vita. I soli vincoli artificiali, immaginati dalla timida ignoranza o dall’astuta ambizione, hanno ridotti gli stati ai timori della fame ed a soffrirla.—P. 33, ed. 1818.

2

The famous philosopher Thales, of Miletus, who flourished about 550 years before the Christian era, is reported to have engaged in at least one successful speculation. “His poverty,” says Aristotle, “was thought to upbraid his studies as serving no gainful, and therefore no useful purpose. But Thales, by his skill in meteorology, contrived to wipe off the reproach; for as his science enabled him to foresee that next season there would be an extraordinary crop of olives, he hired in the winter all the oil-presses in Chios and Miletus, employing his little fortune in giving earnest to their respective proprietors. When the gathering season approached, and the olives were seen loading the branches, all men wished to provide oil-presses at the same time, and suddenly; but Thales, being master of the whole number, let them separately at a high price; and thereby accumulating vast wealth, proved that philosophers might be rich if they pleased, but that riches were not the object of their pursuit.”—Gillies’ Aristotle, vol. ii. p. 54.

1

Several well-informed merchants embarked in this speculation, and suffered by it. The falling off in the imports of cotton from America, in 1824, seems to have been the source of the delusion. It was supposed that this falling off was not accidental, but that it was a consequence of the price of cotton having been for a series of years so low as to be inadequate to defray the expenses of its cultivation. The result showed that this calculation was most erroneous, the imports, in 1825, from the United States, having exceeded those in any previous year. And besides, in entering on the speculation, no attention was paid to Egypt and Italy, countries from which only about 1,400,000 lbs. of cotton were obtained in 1824, but from which 23,800,000 lbs. were obtained in 1825! This unlooked-for importation was of itself almost enough to overturn the combinations of the speculators; and, coupled with the increased importation from the United States and other countries, actually occasioned a heavy glut.

1

Mawe’s “Travels in Brazil,” p. 453-458.

1

The reader will find a great deal of valuable information, with respect to most of the points touched upon in this and the previous chapter, in Messrs. Tooke and Newmarch’s work on “Prices.”

1

The reason for this limitation will be subsequently explained.

1

These examples are substantially the same with those given by Mr. James Mill—“Elements of Political Economy,” 2d edit. p. 103.

1

Sir William Petty seems to have been one of the earliest writers who has distinctly stated, that the value of commodities depends on the quantities of labour required for their production. “If,” says he, “a man bring to London an ounce of silver out of the earth in Peru, in the same time that he can produce a bushel of corn, the one is the natural price of the other: now if, by reason of new and more easie mines, a man can get two ounces of silver as easily as formerly he did one, then corn will be as cheap at ten shillings the bushel as it was before at five shillings, cæteris paribus.”—Treatise of Taxes and Contributions, ed. 1679, p. 31. At page 24 he says, “Let a hundred men work ten years upon corn, and the same number of men the same time upon silver; I say that the neat proceed of the silver is the price of the whole neat proceed of the corn, and like parts of the one the price of like parts of the other:” and at page 67 he says, “Corn will be twice as dear when there are two hundred husbandmen to do the same work which a hundred could perform.” These passages are interesting, as exhibiting the germs of the theory which Ricardo did so much to perfect.

1

“Assize Sermon,” 29th July 1795.

1

“Wealth of Nations,” p. 49.

1

“Essay on the Causes of the Decline of Foreign Trade,” ed. 1756, p. 24.

1

“Wealth of Nations,” p. 47.

1

“L’ouvrier mineur en Saxe reçoit 10 sols par jour de salaire, tandis que l’ouvrier employé au même genre de travail dans la province de Choco au Perou reçoit en argent six à sept fois plus. Mais ce dernier paie aussi six à sept plus cher le pain dont il se nourrit, parceque le farine des Etats-Unis y est transportee à dos de mulet à une longue distance des côtes, par des routes monteuses et difficiles. Ce que le maître doit fournir à l’ouvrier c’est la subsistance, et l’argent donné ne peut jamais être que la représentation de cette subsistance.”—Garnier,Richesse des Nations, tom. v. p. 351.

1

“Moral and Political Philosophy,” book vi. cap. 11.

1

Newman’s “Lectures on Political Economy,” p. 110.

1

Paley’s “Moral and Political Philosophy,” book vi. cap. 11.

1

For some further remarks on National Education, see post.

1

“Wealth of Nations,” p. 37.

1

“Thoughts and Details on Scarcity,” p. 42.

1

Forbonnais, “Recherches sur les Finances,” i. 109.

1

“2d Sermon on Industry.”

1

Mr. Senior has attempted (art. Political Economy, “Encyc. Metropolitana”) to show the error of this conclusion. But his statements and reasonings on this subject seem to be in no ordinary degree fallacious. It is singular, indeed, that so clear-sighted a writer should have supported a doctrine so erroneous.

1

Page 37.

1

Mr. Howlett has some forcible observations on this point in his Tract on the Poor Laws, p. 6.

1

“De Brevitate Vitæ,” cap. 18.

1

“Inquiry into the Causes of the Depreciation of Agricultural Labour,” p. 32.

1

A committee of the National Assembly, appointed to inquire into the state of the poor of France, described our poor laws as la plaie politique la plus dé vorante de l’Angleterre—an expression that has been often quoted on this side the Channel. There are, however, pretty good grounds for thinking that the condition of all classes in France would have been decidedly improved had she been subjected to the operation of a similar code. Very large sums have been expended by government, and by individuals in that country, in efforts to relieve the distresses of the poor; but as the burden of their support was removed from those who could, by their interference, have prevented the misapplication of the funds, and the undue increase of the poor, the efforts in question have been of very little use. In despite of the repeated enactment of laws of the most extreme severity, mendicity has been at all times the scourge and disgrace of France. It is stated, in a valuable communication addressed by one of the ministers of Orleans to Mr. Howlett, immediately before the Revolution, that no season of “uncommon scarcity occurs but vast numbers of entire families, especially in the country, perish for want, being literally starved and frozen to death!”—(Howlett’s “Tract,” p. 18.) At the Revolution, the property of the hospitals, and other establishments for the support of the poor, was confiscated; and the seductive, but dangerous and inapplicable principle laid down, that the care and support of the poor was the duty of government, and not of municipalities. Practically, indeed, owing to the confusion of the times, this declaration had no effect. When, however, order was again restored, the attention of the government was forcibly drawn to the wretched condition of the poor, who had for some years been wholly neglected. In consequence, dépôts de mendicité, and bureaux de bienfaisance, were established, and the prefects being at present authorised, in the event of the funds derived from charitable contributions being inadequate for their support, to levy in aid thereof, octrois municipaux, or duties on some of the principal articles conveyed into the towns where they are established. This is plainly a species of poor’s rate; but it is a most objectionable one, inasmuch as it does not lay the burden upon those who alone have power to prevent the multiplication of the poor. But this new system has only been introduced into the more considerable towns; so that, in the country, pauperism and mendicity are still prevalent, licences to beg being frequently granted even by the public authorities. It is affirmed by the Baron Dupin, (“Secours Publics,” p. 460,) that “in the country, in the dead season, want and misery abound, and there are no means of relief.” Whenever, therefore, there is a deficient crop, famine and disease prevail to a frightful extent. Farther information as to the state of the French poor will be found in the work just quoted of M. Dupin, entitled, “Histoire de l’Administration des Secours Publics;” in the “Visiteur de Pauvre” of M. Degerando; and in the comprehensive and elaborate work of the latter, “Sur la Bienfaisance Publique.”

1

Taciti “Annal.” lib. ii. cap. 38.

1

It was stated in the debates in the House of Commons on the corn laws, in 1846, that Mr. Canning had, more than once, expressed his conviction that the poor laws had preserved this country from revolution. And though this may, perhaps, be ascribing too great an influence to them, there can be no manner of doubt that they have, on various occasions, preserved it from being a theatre of outrage, crime, and disorder.

1

Public attention was, we believe, first directed to this view of the subject by Mr. Black, the late learned and able editor of the “Morning Chronicle.”

1

“State of the Poor,” vol. i. p. 285.

1

“Britannia Languens, or a Discourse of Trade,” &c., p. 155. Lond. 1680. Alcock’s “Observations on the Effects of the Poor Laws,” pp. 19, 20. Lond. 1752. Burn’s “History of the Poor Laws,” p. 211. Lond. 1764. Arthur Young’s work, quoted in the text. Brown’s “Agricultural Survey of the West Riding of Yorkshire,” p. 13. Lond. 1793, &c. Debates in the House of Commons, 28th April 1773.

1

“Farmer’s Letters to the People of England,” 3d ed. vol. i. pp. 300-302.

1

Sir F. M. Eden, on the “State of the Poor,” vol. i. p. 403.

1

The sums paid for the relief and maintenance of the poor of England and Wales, during the years ending the 25th March 1839, 1840, and 1841, were respectively 4,421,714l., 4,576,965l., and 4,760,928l., and during 1844, 1845, and 1846, they were 4,976,003l., 5,039,703l., and 4,954,204l. In 1847, the expenditure amounted to 5,298,787l.; and in 1863 to 6,527,036l.

1

The agitation in Ireland for a repeal of the Union is one of the most striking examples in modern history of the influence of the continued iteration of unfounded assertions, and of the merest quackery, in deluding and misleading a people. Those who set on foot the clamour for repeal were much too clear-sighted to imagine it could succeed; and it is doubtful, perhaps, whether they really wished that it should. They knew, however, that by pandering to the prejudices of a susceptible and confiding people, and assuring them that they were nowise to blame for their low and depressed condition, which, they affirmed, was wholly a consequence of their ruinous connexion with England, they would make themselves be regarded as patriots par excellence: and that, having in this way acquired great popular influence, they might make it subservient to any purpose of personal aggrandisement, and even levy heavy contributions on their unsuspecting dupes! It is not easy to say whether this fraudulent juggle was most disgraceful to its contrivers or to the successive governments by which it was tolerated, and sometimes all but abetted. It did more than anything else to perpetuate prejudices and to retard the improvement of Ireland.

1

Sumner’s “Records of the Creation,” vol. ii. p. 298.

1

“Wealth of Nations,” p. 23.

1

Dr. Anderson was born at Hermandston, in Midlothian, in 1740. He was long engaged in the business of farming in the neighbourhood of Aberdeen. In 1777 he published a pamphlet, entitled, “An Inquiry into the Corn Laws,” in which (pp. 45-50) he has explained the theory of rent with a sagacity and discrimination that have never been surpassed. Having left Aberdeenshire, Anderson resided for some time in the neighbourhood of Edinburgh, where he projected and edited the “Bee,” a respectable weekly publication. In 1797 he removed to the vicinity of London, where he edited “Recreations in Agriculture, Natural History, Arts,” &c. In this work (vol. v. pp. 401-405) he gave a new and able exposition of the nature, origin, and progress of rent. But, notwithstanding these repeated publications, it does not appear that his profound and important disquisitions attracted any attention. And so completely were they forgotten, that when Mr. Malthus and Sir Edward West published their tracts on rent, in 1815, they were universally supposed to be the real authors of the theory! There is, perhaps, no good reason to doubt their originality; but it may well be doubted whether they explained the theory as satisfactorily as it had been explained about forty years before. Anderson died in 1808.

1

“Observations on the Means of exciting a Spirit of Industry,” p. 376, published in 1777, the same year as the tract on the Corn Laws, already referred to.

1

A noble marquis is the owner of a farm in Ayrshire, consisting of about 10,000 English acres, which is let for about 70l. a year! There is a house upon the farm, and some further capital has been laid out upon it. Perhaps, taking these circumstances into account, it may be truly said that this vast tract fetches no rent properly so called. Several similar instances might be mentioned.

1

An American, the author of a great many crude and indigested economical works.

1

“Inquiry into the Nature and Progress of Rent,” p. 37.

1

P. 194.

2

“Principles of Political Economy,” 3d edit. p.60.

1

Preface to Rigby’s “Translation of Chateauvieux on the Agriculture of Italy.”

2

Kennedy and Grainger “On the Tenancy of Land.” Introd. p. 8.

1

“Wealth of Nations.” Supplementary Note on the Corn Laws.

2

The question, whether manufactures should, in certain cases, be restrained, in the view of providing for the interests and security of the public, depends on other considerations.—See Part I., cap. 6.

1

“Decline and Fall, I., p. 70, edit., 1838.”

1

“Encyclopædia of Agriculture,” p. 699.

1

For an account of the principles and practical working of the métayer system, see “Young’s Travels in France,” &c., second edition, i. 404, and ii. 216; and the articles on France, Italy, Tuscany, &c., in the “Geographical Dictionary.”

1

Part I. cap. 2, § 3.

1

“Northern Tour,” iv. 377.

1

“Wealth of Nations,” p. 374.

1

“Travels in France,” vol. i. p. 415.

2

“Wealth of Nations,” edit. 1838, p. 567.

1

Loudon’s “Encyclopædia of Agriculture,” p. 719.

1

“Thoughts and Details on Scarcity.” p. 21.

1

This supposes, of course, either that no improvements are made, or that their influence has been taken into account.

1

Malthus’s “Principles of Political Economy,” &c., p. 317.

1

In 1579, at the Union of Utrecht, the interest of the public debt of the province of Holland amounted to only 117,000 florins; but so rapidly did it increase, that in 1655, during the administration of the famous John de Witt, the States were compelled to reduce the interest from 5 to 4 per cent., and yet, notwithstanding this reduction, it amounted in 1678 to 7,107,000 florins!—See Metelerkamp, “Statistique de la Hollande,” p. 203.

2

“Richesse de la Hollande,” tom. ii., p. 179. This work is full of valuable information. The author (M. de Luzac) mentions that the Hollanders had in 1778, about 1500 millions of livres (62 millions sterling) in the public funds of France and England. See also, as to the taxation of Holland, a “Memoir on the Means of Amending and Redressing the Commerce of the Republic,” drawn up from information communicated by the best-informed merchants, and published by order of the Stadtholder, William IV., Prince of Orange, in 1751. This “Memoir” was translated into English, and published in London in the same year. It has since been reprinted by Lord Overstone.

1

Those who made advances on loan would get back less than they really lent when money fell in value, and would, therefore, be permanently injured.

1

By the same extent is meant, that if the standard be reduced any given amount, as 10 per cent., the sums due the public creditor should be reduced in the same proportion, and conversely.

1

Cic. Frag. lib. ii. de Repub.

1

“Considerations on the State of the Currency,” 2d ed. p. 12.

1

The prejudice against taking interest seems to have principally originated in a mistaken view of some enactments in the Mosaical law, (see Michaelis on the “Laws of Moses,” vol. ii. pp. 327-353, Eng. edit.) and in a statement of Aristotle to the effect, that as money does not produce money, no return could equitably be claimed by the lender! The famous reformer Calvin has the merit of being one of the first who saw and exposed the futility of such notions. “Pecunia non parit pecuniam. Quid mare, quid domus, ex cujus locatione pensionem percipio? An ex tectis et parietibus argentum propriè nascitur? Sed et terra producit, et mari advehitur quod pecuniam deindè producat, et habitationis commoditas cum certâ pecuniâ parari commutarive solet. Quod si igitur plus ex negotiatione lucri percipi possit, quàm ex fundi cujusvis proventu. An feretur qui fundum sterilem fortassè colono locaverit ex quo mercedem vel proventum recipiat sibi, qui ex pecuniâ fructum aliquem perceperit, non feretur? et qui pecuniâ fundum acquirit, annon pecunia illa generat alteram annuam pecuniam? Undè vero mercatoris lucrum? Ex ipsius, inquies, diligentiâ atque industriâ. Quis dubitet pecuniam vacuam inutilem omnino esse? neque à me mutuam rogat, vacuam apud se habere à me acceptam cogitat. Non ergo ex pecuniâ illâ lucrum accedit, sed ex proventu. Illæ igitur rationes subtiles quidem sunt et speciem quandam habent, sed ubi propiùs expendentur, seipsa concidunt. Nunc igitur concludo, judicandum de usuris esse, non ex particulari aliquo Scripturæ loco, sed tantùm ex æquitatis regulâ.”—Calvini Epistolæ, quoted by Stewart in the notes to his “Preliminary Dissertation” to the “Encyclopædia Britannica.”

1

“Discourses on Trade,” p. 15.

1

“Second Treatise concerning Government,” cap. 5.

1

“Richesse des Nations,” tom. v. p. 509. The indolence of the Mexicans has been ascribed partly to the facility of obtaining supplies of food by the cultivation of the banana, and partly to the mildness of the climate, which renders clothing and lodging of inferior importance. Humboldt mentions it as a prevalent opinion, that nothing short of the extirpation of the banana will ever render them industrious; and the state of sloth and debasement into which the Mexicans are now sunk would seem to countenance this opinion.—See “Geographical Dictionary.” art. Mexico.

1

“Œuvres,” vol. iv. p. 76.

1

“Philosophical Works,” vol. iii. p. 310.

1

“Wealth of Nations,” p. 145.

1

Works, vol. ii., p. 80, ed. 1819.

1

The doctrine now laid down has been set in a clear point of view, in an able and ingenious work, entitled, “Théorie du Luxe,” published in 1771. “Celui qui veut avoir le bijou le plus frivole, ou le meuble le plus utile, ne peut acquérir l’un ou l’autre que par son travail, ou en payant le travail d’un ouvrier. S’il travaille lui-même la chose, soit utile soit frivole, qu’il veut avoir, il doit être précédemment pourvû de sa subsistance et des autres besoins: s’il emprunte la main d’un autre, il doit pourvoir de son côté à la subsistance et au reste des besoins de cet autre, ou lui donner un équivalent au prorata du tems que la chose exige. Dans les deux cas, il n’y a d’employes que du tems et des soins qui ne sont point sous traits au nécessaire. Les deux habitans sont entretenus; les charges de l’état sont acquittées; le produit de ce travail, soit dans un genre soit dans l’autre, augmente également la masse des richesses nationales. Les superfluités ont un prix comme les choses utiles.

“Supposons les superfluités défendues ou ignorées; et supposons, ce qui est aujourd’hui bien éloigné de la réalité, que chacun ait la liberté de tirer de la terre ses besoins: alors l’homme actif, qui par le produit de son travail seroit en état de se procurer des superfluités, et qui n’est pas tenté de autre chose, ne sachant que faire du fruit de ses peines, ne tra aille plus tant. Celui qui se seroit addonné à fabriquer les superfluités, cultive pour obtenir sa subsistance, et ne va pas au-delà. Voilà donc deux habitans seulement entretenus, comme dans l’hypothèse contraire. L’état a de moins une place dans l’agriculture, et la valeur des superfluités qui auroient été fabriquées.

Il en est de même des satisfactions que l’on tire des choses non matérielles; telles que la danse, la musique, &c. Supprimez ces plaisirs, les hommes qui y sont employés cultivent la terre; ceux qui les employoient cultivent moins. Il n’y a ni plus d’hommes ni plus de produits, et la société a moins d’arts et de jouissances.”—P. 64.

1

Boswell’s “Life of Johnson,” Pickering’s ed. vol. iii. p. 44.

1

“Esprit des Loix,” liv. vii. cap. 4.

Note A. Page 153.

Mr. Barton, in an ingenious pamphlet, published in 1817, entitled, “Observations on the Circumstances which influence the Condition of the Labouring Classes,” has contended, in opposition to the principles laid down in this work, that the introduction of machinery most commonly occasions a decline in the demand for labour. Mr. Barton has illustrated his argument by the following statement, which we shall take the liberty briefly to examine:

“As the doctrine, that the progress of population is measured by the increase of wealth, does not appear to be true in fact, so, on the other hand, it seems to me not consistent with sound reasoning. It does not seem that every accession of capital necessarily sets in motion an additional quantity of labour. Let us suppose a case: a manufacturer possesses a capital of £1000, which he employs in maintaining twenty weavers, paying them £50 per annum each. His capital is suddenly increased to £2000. With double means he does not, however, hire double the number of workmen, but lays out £1,500 in erecting machinery, by the help of which five men are enabled to perform the same quantity of work that twenty did before. Are there not, then, fifteen men discharged in consequence of the manufacturer having increased his capital?

But does not the construction and repair of the machinery employ a number of hands? Undoubtedly. As in this case a sum of £1,500 was expended, it may be supposed to have given employment to thirty men for a year at £50 each; if calculated to last fifteen years (and machinery seldom wears out sooner,) then thirty workmen might always supply fifteen manufacturers with these machines: therefore, each manufacturer may be said constantly to employ two. Imagine, also, that one man is employed in the necessary repairs; we have then five weavers and three machine-makers where there were before twenty weavers.

Edition: current; Page: [516]

But the increased revenue of the manufacturer will enable him to maintain more domestic servants. Let us see, then, how many. His yearly revenue, being supposed equal to 10 per cent. on his capital, was before £100, now £200: supposing, then, that his servants are paid at the same rate as his workmen, he is able to hire just two more. We have, then, with a capital of £2,000, and a revenue of £200 per annum,

5	weavers,
3	machine-makers,
2	domestic servants.
10	persons in all employed.

With half the capital, and half the income, just double the number of hands were set in motion.”—Pp. 15, 16.

But plausible as this statement may at first sight appear, it will not, we apprehend, be very difficult to show, that the conclusions at which Mr. Barton has arrived, are not fairly deduced from the premises he has laid down, and that in the case supposed, there would not be a diminution, but an increase of the demand for labour.

In the first place, supposing, with Mr. Barton, profits to be 10 per cent., the goods produced by the capital which the manufacturer laid out upon the twenty weavers must have sold for £1,100, viz. £1,000 to replace the capital, and £100 as profits.

In the second of the supposed cases, the manufacturer employs a capital of £1,500 in the construction of a machine: now, as this machine is fitted to last fifteen years, the goods produced by it must sell (exclusive of the wages of the men employed to attend to it) for £197; for a part of this annuity (£47) being accumulated for fifteen years, at the rate of 10 per cent., will replace the capital of £1,500 at the expiration of that period, while the other part (£150) will pay the profits of the proprietor; and, adding to the annuity of £197 the wages of the five weavers, and of the person employed to repair the machine, at the rate of £50 a-year each, and profits on them at 10 per cent., the total cost of the goods will be—

Profits on machine, and sum to replace it	£197	0	0
Wages of six men, at £50	300	0	0
Profits on wages	30	0	0
Prices at which the goods are now sold	£527	0	0

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But, previously to the introduction of the machine, the same quantity of goods cost £1,100: the consumers will consequently have the difference, or £573 to lay out on other things; the production of which will afford immediate employment for between eleven and twelve men. But this is not all. According to the principle explained at p. 209, a portion of this saving—perhaps £250 of the £593—will, in future, be employed as a capital in carrying on industrious undertakings; and in this way a fresh fund will be provided that will furnish wages, or the means of subsistence, for a number of individuals, (most probably five,) at the end of the first year, more than would otherwise have been employed; and supposing, as we ought, that this sum goes on increasing at the rate of 10, or even that it increases only at the rate of 5 per cent. compound interest, it would very soon afford the means of employing a vast number of individuals.

There is also another fund, of the existence of which Mr. Barton appears to have been as completely unaware as of the latter. It has been seen that of the £197 produced directly by the machine, £150 only are profits; the surplus £47 being the annuity which is to replace the capital of the machine when it is worn out; but as this annuity is to be accumulated at the rate of 10 per cent., it will afford employment, in the first year, for one individual; in the second for two; in the third for more than three; in the fifth for nearly six; and in the fifteenth year for upwards of eight-and-twenty individuals!

It will be observed, too, that in the second case supposed by Mr. Barton, there is £200 not employed at all; and which, if employed, would afford wages for four individuals. Instead, therefore, of a single labourer being turned out of employment, in the case supposed, or in any similar case, it admits of demonstration, that the demand for labour would be much more than doubled.