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Chapter 27 of 41 · The Principles of Political Economy, with some Inquiries respecting their Application (5th edition, 1864) by John Ramsay McCulloch

SECT. II.—: CIRCUMSTANCES WHICH DETERMINE THE NATURAL OR NECESSARY RATE OF WAGES.

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Though there are, strictly speaking, no limits to a rise of wages, there are limits, however difficult it may be to specify them, to the extent to which they may be reduced. The cost of producing labour, like that of every thing else, must be paid by the purchasers. The race of labourers would become extinct were they not supplied with the food and other articles sufficient, at least, for their support and that of their families. This is the lowest limit to which the rate of wages can be permanently reduced; and for this reason it has been called the natural or necessary rate of wages. The market, or actual rate of wages, may sink to the level of this rate; but it cannot continue permanently below it. It is not, as already seen, on the money received by the labourer, but on the food and other articles which that money will buy, that Edition: current; Page: [325] his ability to maintain himself, and rear children, must depend. Hence the natural or necessary rate of wages is determined by the cost of the food, clothes, fuel, &c., required for the use and accommodation of labourers.1 And though a rise in the market or current rate of wages be seldom exactly coincident with a rise in the price of necessaries, they can never, except when the market rate of wages greatly exceeds the natural or necessary rate, be far separated.

In considering how variations in the rate of wages affect the labourers, it should be stated whether they are rated by the day, week, or other portion of time, or by the piece. In this country they are partly rated in the one way, and partly in the other. And though, from household servants being mostly paid by time, the generality of persons are most familiar with wages so rated, it may be doubted whether the sums paid on their account greatly exceed those paid to labourers by the job or piece. This distinction has been too little attended to; and it may appear immaterial to a careless observer whether work-people are hired in the one way or the other. But a little consideration will suffice to show that this is far from being the case, and that it is indispensable, in reasoning upon such matters, that the distinction in question should be kept steadily in view.

This, however, is not the only distinction to be attended to in these discussions. It is further indispensable, if we would form accurate conclusions respecting the influence of a rise or fall of wages on work-people, to ascertain whether they (however hired) live in the houses of their employers, or in Edition: current; Page: [326] lodgings on their own account. It is evident that an increase of the price of the articles consumed by domestic servants does not fall directly on them, but on their masters. Such increase may, no doubt, if it be carried beyond certain limits, make fewer servants be employed; but, except in so far as it may operate in this way, it is wholly borne by those with whom they live. Hence the importance of distinguishing in these investigations between such servants, and labourers who live in cottages or lodgings of their own. The class of domestic servants in England and other advanced countries is very large indeed. And it is apparent, from what has now been stated, that a corresponding share of the taxes laid upon the tea, sugar, beer, and other articles consumed by the lower classes, is neither assessed upon nor paid by them, and in most cases hardly even affects them indirectly.

The opinion of those who contend that the rate of wages does not depend on the cost of the articles consumed by the labourers, but on their number compared with the demand for their services, has obviously originated in such persons confounding the principles which determine the market rate of wages at given periods, with those which determine their natural or necessary rate. No proposition can be better established than that the rate of wages, at any given moment, is determined by the proportion between capital and population. But in every inquiry of this nature, we should refer not only to particular points of time, but also to periods of some considerable duration, and if we do this, it will be immediately seen that the customary rate of wages does not depend wholly on this proportion. It must be such as will suffice to maintain and bring up labourers, that is, if we may so speak, to pay the cost of their production. From whatever point of the economical compass we may set out, this is the principle to which we must always come at last. This cost determines the natural or necessary rate of wages, just as it determines the natural or necessary price of commodities. However Edition: current; Page: [327] low the demand for labour, still if the price of the articles necessary for the maintenance of the labourer be increased, the natural or necessary rate of wages must, in the end, be increased also. Let it be supposed that owing to a scarcity, the price of bread is doubled. In such a case it is plain, inasmuch as the same number of people would be seeking for employment after the rise as before—and as a rise in the price of bread, occasioned by a scarcity, could not increase the demand for labour—that wages would not be increased. The poor would, in consequence, be forced to economise; and the rise of price, how injurious soever in other respects, would be in so far advantageous, that it would immediately lessen consumption, and distribute the pressure equally over the year. But suppose that the rise, instead of being occasioned by the accidental occurrence of a scarcity, has been occasioned by an increased difficulty of production, and that it will be permanent, the question is,—will wages continue at their former elevation, or will they rise? Now, in this case it is all out certain that they will rise; but this rise will be effected very differently in the cases of labourers hired by time and by the piece. It is plain that the rise of prices will change the situation of both classes for the worse. Among those hired by the day, week, or other portion of time, and supplying themselves with subsistence, if there be any who, previously to the rise, had only enough to live upon, they will be reduced to a state bordering on destitution, and may, perhaps, have to fall back upon the poor rates. Under such circumstances, an increase of mortality will most likely take place among them; while the greater difficulty of providing subsistence will contribute to check matrimonial connections and the increase of population. For, to use the words of Paley, “the same consideration, namely, a view to their accustomed mode of life, which is so apparent in the superior order of the people, has no less influence upon those ranks which compose the mass of the community. The kind and quality of food and liquor, the species of habitation, Edition: current; Page: [328] furniture and clothing, to which the common people of each country are habituated, must be attainable with ease and certainty before marriages will be sufficient to keep up the population to its just extent.”1 By these means the number of labourers, and the ratio of their increase, or both, will in all probability be diminished; and this diminution will operate to raise wages. Happily, too, there are in most countries but few labourers who are unable to meet a fall of wages, either in whole or in part, by increased frugality and a more judicious outlay of their means. So that what with a slower increase of the more necessitous portion, and greater economy and foresight among the others, wages will be ultimately brought to their natural rate, that is, as Adam Smith has defined it, to such a rate as may enable them to obtain “not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without.”

But the piece-work labourers have another resource in addition to those now mentioned. If A be hired to execute a given work, by which, when using ordinary diligence, he makes 3s. or 3s. 6d. a day, he may, perhaps, be able, by using greater diligence, to make 4s. or 4s. 6d. a day; and may in this way be fully able to meet the increased burden he is called upon to sustain. It is obvious, too, that every fall of wages, however brought about, unless it be so great as to prostrate all their energies, will not merely stimulate the piece-work labourers to redouble their exertions, but will make them exert themselves to discover new and more easy methods of accomplishing their tasks, and occasion fresh displays of industry and ingenuity.

Consistently with what is now stated, those who examine the registers of births, marriages, and deaths, in large and populous cities, will find that there is invariably a diminution Edition: current; Page: [329] of the former, and an increase of the latter, whenever the price of corn, or of the principal necessaries, sustains any very material advance. “It will be observed,” says Milne, in his “Treatise on Annuities,” in reference to the prices of wheat in England, “that any material reduction in the price of wheat is almost always accompanied by an increase both of the marriages and births, and by a decrease in the number of burials; consequently, by an increase in the excess of the births above the deaths. Also, that any material rise in the price is generally attended by a corresponding decrease in the marriages and births, and by an increase in the burials; therefore by a decrease in the excess of the births above the deaths. Thus it appears, that an increase in the quantity of food, or in the facility with which the labouring classes can obtain it, accelerates the progress of the population, both by augmenting the number of births and diminishing the rate of mortality; and that a scarcity of food retards the increase of the people, by producing in both ways opposite effects.” And in proof of the correctness of this statement, Milne gives, among others to the same effect, the following account of the number of births and deaths within the London bills of mortality in 1798, 1800, and 1802:—

Births. Deaths. Price of Wheat.
1Milne on Annuities, vol. ii. p. 402.
1798 19,581 20,755 £2 10 3 per qr.
1802 21,308 20,260 3 7 5 per qr.
Medium of these two years, 20,445 20,508 2 18 10 per qr.
1800 18,275 25,670 5 13 7 per qr.
Differences, 2,170 5,162 2 14 9 per qr.
Decrease. Increase. Increase.1

The reports of the Registrar-General abound in similar instances; and they are found wherever authentic accounts of births, deaths, and prices, have been kept for a few years together.

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And yet it has been alleged, in contradiction of what has previously been stated, that there is no such connexion between wages and the price of necessaries as has been supposed; and that, so far from their varying in the same way, wages are generally found to be lowest in years of scarcity, or when the price of corn is highest. But it is not difficult to explain the causes of this apparent anomaly. The truth is, that the number of labourers, which is in no case immediately reduced, is, in most cases, immediately increased by a rise of prices. In dear years, an increased number of females, and of such poor children of both sexes as are fit to work, are obliged to quit their homes to engage in some sort of employment; while the labourers who work by the piece, endeavour, by increasing the quantity of their work, to obtain the means of purchasing a greater quantity of food. Inasmuch, therefore, as the immediate effect of a rise of prices is to increase the supply of labour, it is natural that it should lower wages. But it is the greatest imaginable error to suppose that, because this is the immediate, it is also the lasting effect of such rise! It is obvious, indeed, that the fall of wages, and the greater exertions which the rise of prices forces the labourers to make, must tend, as well by lessening their supplies of food as by adding to the severity of their labour, to decrease marriages and increase mortality; and thus, by diminishing their numbers, will hasten that rise of wages that is sure to take place in the end, if prices continue high.

In endeavouring to show that the market rate of wages cannot be permanently reduced below their natural or necessary rate, it is not meant to represent the latter as fixed and unvarying. If, indeed, a specified quantity of certain articles were absolutely necessary to enable labourers to subsist and continue their race, such quantity could not be diminished. But such is not the case. By the natural or necessary rate of wages, is meant only, such a supply of food and other accommodations as the custom of the country requires for the decent support of ordinary labourers. And such being the case, it is Edition: current; Page: [331] plain there can be no exact standard of natural or necessary wages. It is impossible to say what articles are required for subsistence, inasmuch as they in great measure depend on the physical circumstances under which every people is placed, and on custom and habit. The differences of climate, for example, by giving rise to different physical wants in the inhabitants of different countries, occasion corresponding variations in the necessary rate of wages. In cold climates, where people must be warmly clad, and cottages built of solid materials and heated with fires, labourers could not subsist on the wages that suffice to supply all the wants of those who inhabit more genial climates, where clothing, lodging, and fire are of inferior importance. Humboldt mentions, that there is a difference of nearly a third part in the cost of maintaining individuals and consequently in necessary wages, between the hot and temperate districts of Mexico; and there is a still greater discrepancy in the rates of necessary wages in distant quarters. The food, too, of the labourers in different countries differs very widely. In some it is both expensive and abundant, compared to what it is in others. In England, for example, they principally subsist on bread and to a considerable extent on butchers’ meat, in Ireland on potatoes, and in China and Hindostan on rice. In many parts of France and Spain, an allowance of wine is considered indispensable to existence; and in England, the labouring class entertain nearly the same opinion with respect to beer; whereas the Chinese and Hindoos drink nothing but water. In Ireland the peasantry live, for the most part, in mud cabins, no better than the wigwams of the American Indians, without, in many instances, either a window or a chimney; while in England the cottages of the peasantry have glass windows and chimneys, are pretty well furnished, and, though defective in various respects, are, for the most part, as much distinguished for their neatness, cleanliness, and comfort, as those of the Irish for their filth and misery. In consequence of these different habits, there is in these countries an extreme difference, not Edition: current; Page: [332] in the rate of necessary wages merely, but in their actual or market rate—so much so, that while the average market price of a day’s labour in England may be taken at from 2s. to 2s. 6d., it cannot be taken at more than 9d. or 10d. in Ireland, and 4d. in Hindostan! The customs of the people of the same countries, and the standard by which the natural rate of wages is determined at different periods, have been equally fluctuating and various. The habits of the English and Scotch labourers of the present day differ as widely from those of their ancestors in the reigns of Elizabeth, James I., and Charles I., as they do from those of the labourers of France and Spain. The standard of necessary wages has been raised; there has been a greater prevalence of moral restraint; the proportion of capital to population has been increased; and the poor have happily learned to form more elevated opinions respecting the amount and species of the necessaries and conveniences required for their subsistence.

The natural or necessary rate of wages is not, therefore, fixed and unvarying; and though it be true that the market rate of wages can never sink for considerable periods below its contemporary necessary rate, it is no less true that the latter has a tendency to rise when the market rate rises, and to fall when it falls. The reason is, that the supply of labourers is neither speedily increased when wages rise, nor speedily diminished when they fall. When wages rise, a period of eighteen or twenty years must elapse before the influence of the increased stimulus given by the rise to the principle of population can be felt in the labour market. During all this period, therefore, work-people have an increased command over necessaries and conveniencies; their habits are improved; and as they learn to form higher notions of what is required for their support, they exercise a greater degree of moral restraint, so that the necessary rate of wages is augmented. But, on the other hand, when wages decline, either through a diminution of the capital appropriated to their payment, or of a disproportionate increase of population, Edition: current; Page: [333] no corresponding diminution takes place in the number of labourers, unless they have previously been subsisting on the smallest quantity of the cheapest species of food required to support mere animal existence. If the labourers have not been placed so very near the extreme limit of subsistence their numbers will not be immediately reduced when wages fall by an increase of mortality; but they will be gradually, reduced, partly, as has been already shown, in that way, and partly by a diminished number of marriages and births; and in most countries, unless the fall were both sudden and extensive, it would require some years to make the effects of increased mortality, in diminishing the supply of labour in the market, sensibly felt; while the force of habit, and the ignorance of the people with respect to the circumstances which determine wages, would prevent any effectual check being given to the formation of matrimonial connexions, and to the rate at which fresh labourers had previously been coming into market, until the misery occasioned by the restricted demand on the one hand, and the undiminished supply on the other, had been generally and widely felt.

It is this circumstance—the impossibility which usually obtains of speedily adjusting the supply of labour proportionally to variations in the rate of wages—that gives to these variations their peculiar and extraordinary influence over the well-being of the labouring classes. Were the supply of labour suddenly increased when wages rise, the rise would be of little or no advantage to the labourers. It would increase their number, but it would not enable them to mount in the scale of society, or to acquire a greater command over necessaries and conveniencies; and, on the other hand, were the supply of labourers suddenly diminished when wages fall, the fall would merely lessen their number, without having any tendency to degrade the habits or to lower the condition of those that survived. But, in the vast majority of instances, before a rise of wages can be countervailed by the increased number of labourers it may be supposed to Edition: current; Page: [334] bring into the market, time is afforded for the formation of new and improved tastes and habits. After the labourers have once acquired these tastes, population advances in a slower ratio, as compared with capital, than formerly; and the labourers are disposed rather to defer the period of marriage, than, by entering on it prematurely, to depress their own condition and that of their children. But if the number of labourers cannot be suddenly increased when wages rise, neither can it be suddenly diminished when they fall; their fall has, therefore, a precisely opposite effect, and is, in most cases, as injurious to the labourer as their rise is beneficial. In whatever way wages may be restored to their former level after they have fallen, whether it be by a decrease in the number of marriages, or an increase in the number of deaths, or both, it is never suddenly effected. It must, generally speaking, require a considerable time before it can be brought about; and, in consequence, an extreme risk arises, lest the tastes and habits of the labourers, and their opinions respecting what is necessary for their comfortable subsistence, should be lowered in the interim. When wages are considerably reduced, the poor are obliged to economise, or to submit to live on a smaller quantity of necessaries and conveniences, and those, too, of an inferior species; and the danger is, that the coarse and scanty fare which has thus been, in the first instance, forced on them by necessity, should in time become congenial from habit. Should this, unfortunately, be the case, the condition of the poor would be permanently depressed. There would be nothing left that could raise wages to their former level—for, the labourers would no longer have a motive to exercise an increased degree of moral restraint; and unless they did this, they would have but little chance of again emerging from their depressed condition. Under the circumstances supposed, the cost of raising and supporting labourers would be reduced; and it is by this cost that the natural or necessary rate of wages, to which the market rate is generally proportioned, Edition: current; Page: [335] is always regulated. This lowering of the opinions of the labouring class with respect to the mode in which they should live, is perhaps the most serious of all the evils that can befall them. Let them once become contented with a lower species of food, and an inferior standard of comfort, and they may bid a long adieu to any thing better. And every reduction in the rate of wages, which is not of a very transient description, will most likely have this effect, if its debasing influence be not countervailed by an increased prevalence of moral restraint, and a diminished increase of population, or by the opening of new markets, or the discovery of new and improved processes by which the cost of necessaries and conveniences may be reduced. Should any such reduction take place, the condition of the labourers may not be injuriously affected by the fall of wages; but if nothing of this kind occur, the labourers can only regain their former command over necessaries and conveniences by the exercise of additional economy and forethought.

The example of such individuals, or bodies of individuals, as submit quietly to have their wages reduced, and who are content if they get only mere necessaries, should never be held up for public imitation. On the contrary, every thing should be done to make such apathy be esteemed discreditable. The best interests of society require that the rate of wages should be kept at a high elevation—that a taste for comforts and enjoyments should be widely diffused, and, if possible, interwoven with national habits and prejudices. Very low wages, by rendering it impossible for increased exertions to obtain any considerable increase of advantages, tend to hinder them from being made, and are a powerful cause of that idleness and apathy that contents itself with what can barely continue animal existence.

Under such circumstances it is fortunate that in all moderately intelligent and reasonably well-governed communities, the efforts of the bulk of the people to preserve their place in society are usually sufficient or more for that purpose. In Edition: current; Page: [336] such countries the labourers are always in the enjoyment of various conveniencies and luxuries, and when wages fall or the prices of necessaries increase, they generally contrive, partly by lessening their consumption of the least necessary articles, and partly by becoming more provident and industrious, to hinder the fall from having any permanently injurious influence over their condition, and frequently, indeed, advance themselves to a higher place in society.

It may, indeed, be said, in relation to the influences now referred to, that we exaggerate their beneficial effect. We are told that, though the more intelligent labourers may see, when they have to face privations, what is the line of conduct most for the advantage of their order, yet, that being only a small minority, they cannot but know that all which they could do would be of no moment in bringing about a general result; that if they be industrious and frugal many more will be idle and dissipated, and trust only to the workhouse; that “others will swamp the market with their children, though they live childless;”1 that it is to no purpose to insist on people generally abstaining from matrimonial connexions that they may, at some future period, limit the supply of labour, and raise wages; that the wish to realize such remote and doubtful results is too visionary ever to become a principle of popular action, or, in fact, to have the slightest influence; that, though it were otherwise, no sensible effect could be produced without the co-operation of immense numbers; and that it is needless to add that combination for such a purpose is quite chimerical.

But, though plausible, these statements proceed on an entire misapprehension of the circumstances; for this happily is a case in which co-operation is as unnecessary as it would be impracticable. Every man who acts prudently and discreetly is sure to improve his own condition, irrespective altogether of the behaviour of others. He knows he is labouring for himself; Edition: current; Page: [337] and that he will reap all the advantage of whatever frugality, diligence, and foresight he may manifest in his calling or his behaviour. And there can be no question that this knowledge powerfully influences, or rather determines, the conduct of the great majority of all intelligent communities. “Men will not marry to sink their place or condition in society, or to forego those indulgences which their own habits, or what they observe among their equals, have rendered necessary to their satisfaction.”1 This principle is universally applicable. It makes marriages be deferred to a much later period in old settled countries than in colonies, and it prompts all classes to exert themselves to ward off the depressing influence of taxes on necessaries, scarcities, political convulsions, and so forth, by the exercise of additional foresight, economy, and enterprise. The teaching of adverse circumstances may be quite as advantageous in politics as in morals. And what was at first supposed to threaten a decrease of wealth and enjoyments is frequently found to occasion an increase of both.

The previous statements are sufficient to show the paramount importance, with a view to the well-being of the community, of the increase of population being subordinate to that of capital. But, how desirable soever, legislation can do but little to bring about this result. When government has secured the property and the rights of individuals, and has given that freedom to industry which is so essential, it has done nearly all it can to promote the increase of capital. If it interfere in industrial undertakings, its proceedings will be productive only of injury. The reliance of individuals on their own efforts, and their desire to advance themselves, are the only principles on which any dependence can be safely placed; and it has been fully shown, in the previous parts of this work, that, except in a few peculiar cases, all interference Edition: current; Page: [338] with these fundamental principles, either by government undertaking to carry on certain branches of industry, or to assist those engaged in them, must necessarily, in so far as the influence of its measures extends, weaken the industry, enterprise, and forethought of its subjects; occasioning, at one and the same time, a waste of capital and a diminution of its produce.

It is needless, therefore, to expect any advantageous results from the efforts of government directly to increase capital. It may, however, exercise a considerable indirect influence. Notwithstanding what has been done of late years to give greater scope to enterprise, by opening new channels of trade, and by relieving industry from oppressive burdens, there is still room for additional efforts of the same kind; and it may be hoped that they will be made. But supposing them to be made, and that they are completely successful, it is problematical whether the results will be of a very decided character, and whether they will have any very material influence over wages, by increasing the proportion of the national capital to the labouring classes.

But if there be but slender grounds for anticipating an improvement in the condition of the labourers, from measures having an increase of capital for their object, it may be inquired whether their improvement may not be expected from a change in their habits, and, consequently, in the progress of population?

Much has been expected in bringing about these results from the establishment of a comprehensive and well-devised system of national education. Were it brought universally, as it should be, within reach of the poor, and made a means of explaining those principles on which their well-being really depends, a good deal, though less, we fear, than is commonly supposed, would most probably be done to strengthen forethought and check improvidence. If you point out the quicksands and pitfalls that encumber a path, a greater or less number of those who pass along it will try to avoid them. Edition: current; Page: [339] The duty of postponing marriage till the parties be in such a position that they may reasonably expect to be able to discharge the duties which they owe to their children, should be clearly set forth; and it should be shown that a man’s situation is in all cases mainly dependent on his own conduct; that industry and economy may always be practised, and can never be without their reward; that the most prosperous state of things is of little service to the lazy or dissolute; whereas the laborious, provident, and frugal workman is able to avail himself of every advantageous circumstance, and to maintain a successful struggle with difficulties that would overwhelm every one else. The establishment of a system of education that should impress these doctrines on the minds of the young would, at all events, seem to be the duty of government, and is perhaps as necessary, with a view to its security, as to the welfare of the majority of its subjects.1

Wages are frequently, as already stated, paid by the piece or job—that is, by the quantity of work done. Domestic servants are usually hired in the other mode or by time; but large amounts of manufacturing, agricultural, and other labour are performed by the piece, and wherever it can be adopted, it is the preferable mode of hiring workpeople. Their strength, skill, and assiduity are widely different. When they are hired by time it is often impracticable, and is always a difficult, troublesome, and invidious task to arrange them in classes, and adjust the wages of each according to their real deserts. And supposing them to be so adjusted, the labourer is without any sufficient motive to exert himself. The custom of most trades establishes, indeed, certain rough standards, by which the work of individuals is estimated; and those who wish to secure their continued employment, or their advancement to the grade of overseers, bailiffs, &c., endeavour to distinguish themselves by the regularity of their attendance, Edition: current; Page: [340] their efficient work, and so forth. But such persons can only hope, do what they will, to recommend themselves to others by whom their efforts may be overlooked or not properly appreciated. This, however, is never the case with piece-work labourers. They work for themselves, reap the entire advantage of increased exertion and industry, and are in great measure their own masters. Piece-work has the immense advantage of exactly apportioning the reward to the amount of labour that has been performed. It prompts workmen to put forth all their energies, and makes their own immediate interest, and not their duty to their employers, the mainspring of their exertions. Those that are laborious and skilful are no longer under-paid, as compared with those that are slothful and unskilled. The system admits of no partiality on the part of the masters, and of no pretence or shirking on the part of the employed. It is thoroughly honest and equitable. Wages under it may be low or high; but whatever may be their amount, those who execute twice the work that is executed by others, receive double wages, and so in proportion.

The stimulus which this plan of hiring gives to exertion is so very powerful, that in some cases it has been thought necessary, in the view of preventing the labourers from overworking themselves, to limit the sums which they could earn in a given time. But this ultra zeal is not manifested, except in the case of parties engaged for short periods only, or when they first begin to work under this system. Regular task-work labourers, though distinguished by their industry and perseverance, do not overwork themselves. They are also much more at liberty than those engaged for certain terms. They are, in truth, at once contractors and labourers. And provided they execute their work within the term stipulated (if such stipulation be made) they may choose their own time for working, and begin and leave off when they please.

Piece-work is also by far the most likely, if it be not the only means, by which the mere labourer can expect to advance himself to a higher station. A man undertakes to cut down Edition: current; Page: [341] corn at so much an acre, to make roads and drains at so much a rood, to weave cloth at so much a yard, in short to execute a certain amount of work for a certain price. Sometimes he restricts his undertaking to what he thinks he can execute himself, with, perhaps, the assistance of his family. But whether he do this, or employ others (sometimes in the way of sub-contractors) to assist him, it is his object to finish his task as expeditiously as possible, and to employ his profits as a means of extending his business. In this way he gradually rises in the scale of society, till, having ceased to work with his own hands, he becomes a contractor on a large scale, or engages in some other occupation. And it is plain that the training and experience he has had, and the habits he has formed, must make him at once a vigilant and a discerning master. The foundations of thousands of middling, and of very many large fortunes, have been laid in the way now stated. It is, in truth, the broadest, easiest, and safest of the various channels by which diligent, sagacious, and frugal individuals emerge from poverty and attain to respectability and opulence. Those who thus rise to distinction may be emphatically said to be the architects of their own fortunes. They owe nothing to interest, to favour, or to any unworthy means. They stood originally on the same level with their fellow workmen, and they owe their elevation to the judicious exercise of talents common to them all.

There cannot, therefore, be any reasonable doubt that the introduction of the practice of piece-work, or of hiring by the job, has been, and that its further extension would be, a great advantage to all classes, but especially to the labourers. It appears to be the best, if not the only plan, by which a man’s earnings are made to depend upon, and are exactly proportioned to his labour, skill, and ingenuity; while it has the further advantage of enabling prudent and enterprising individuals to advance themselves, by comparatively easy steps, to a superior condition, and in the end to merge the character of labourer in that of employer.

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Much has of late been said in regard to the advantages that labourers have been supposed to derive from engaging in co-operative associations. This, however, being a subject that could not be conveniently discussed in treating of wages, we shall devote to it the following chapter.

The number of hours during which labourers are employed in the day is usually fixed by custom; and in countries where the term is left to be agreed upon by the parties concerned, the hours of labour may be taken, cœteris paribus, as a pretty fair test of the condition of the lower classes—short hours being indicative of high, and long hours of low wages. Whenever the demand for labour is brisk and increasing, the hours of work are gradually lessened; and whenever, on the contrary, the demand for labour is slack and diminishing, they are gradually lengthened; work-people endeavouring, under these circumstances, to avert the fall of wages that would otherwise take place, by undertaking to extend the term of their employment, or, which is the same thing, to give a greater quantity of work for the same amount of wages. Occasionally, however, governments have not left the hours of work to be settled by the free competition of the parties interested, but have interfered to fix a maximum limit, beyond which it should not be lawful for the individuals engaged in certain branches of industry to be employed in them. And in so far as this rule applies to children and women, the former of whom are naturally, and the latter have been rendered, through custom and the institutions of society, unable to protect themselves, it appears, when not carried to an extreme, to be alike expedient and proper. But it is otherwise when government interferes in behalf of the labourer who is sui juris. And where women and young persons are extensively employed, as in the cotton and other factories, a restriction on their labour may be, and in practice occasionally is, equivalent to a restriction on the entire body of labourers. Edition: current; Page: [343] Under these circumstances, a compromise of some sort or other had better be effected; such, for example, as that carried out by the Acts 3 & 4 Will. IV. c. 103, and 7 & 8 Vict. c. 15, which, amongst other things, limited the labour of young persons under eighteen years of age, and of women, to twelve hours a-day. This arrangement seems, on the whole, to have satisfied the claims of humanity on the one hand, and to have been consistent, on the other, with the interests of the manufacturers, and the circumstances under which the labourers are placed. But we doubt whether so much can be truly said in favour of the provision of the Act 10 & 11 Vict. c. 29, limiting the working hours of women and of young persons under eighteen years of age, to ten hours a-day. Had it been practicable to confine the operation of the act to the parties now specified, we should have hesitated before we questioned its policy. But such is not, and could not be the case; and in truth it has limited the labour of all, or of almost all, the workpeople engaged in a great variety of factories, about as effectually as if a restriction had been laid on the power by which their machinery is set in motion. And we must, therefore, regard the measure not as applying to a class, but as really reducing most sorts of factory labour to ten hours a-day.

In remarking upon this important subject, it is needless to inquire whether eight, ten, or twelve hours be the more proper period during which labourers should be employed. If, however, the longer be introduced by the custom of the country, in preference to the shorter period, it is a proof that there is, if not an excess, at all events an extremely copious supply of labour; and that the labourers are, in consequence, obliged to submit to the drudgery of lengthened service.

Now, such being the case, the question is, will their condition be really improved by the legislature interfering to reduce the hours of labour? To this question an answer must, we apprehend, be given in the negative. A Edition: current; Page: [344] deduction of a fourth, a fifth, or a sixth part from the hours of labour would no doubt be a signal boon to the labouring classes, provided no corresponding deduction were made from their wages; but, if the latter should be the case, the shortening of the hours may be not a little injurious to them. It is difficult, however, to perceive how the hours of work—of those labourers, at least, who are engaged by time and not by the piece—should be lessened by a legislative enactment, without, at the same time, and by the same act, reducing wages. It is true that, in the event of the trade and capital of the country rapidly increasing, wages might not be perceptibly affected by reducing the period of employment from 12 to 10, or even 8 hours. But if such should be the case, the increased demand for labour would, without the interference of government, have enabled the working classes, had they thought fit, to shorten the hours of labour. But in the event of a law having this object in view, not being accompanied or followed by any decided increase of trade or capital, the results would be different. In such case, capitalists would, most probably, endeavour to carry on their employments by relays of workpeople, that is, by getting one set to succeed another; and if that should be impracticable, and they should be obliged by the influence of the law to pay the wages of 12 or 11 hours’ work for only 10 hours, they will, it is plain, be placed in a most unfavourable position compared with their foreign rivals engaged in the same businesses, and compared, also, with their fellow-subjects at home, whose businesses are not subject to the limitation. These, however, it is needless to say, are circumstances of grave import, and such as may endanger the loss of the branch of industry in which the limitation is enforced; and, though it should continue to be carried on, there can be little doubt that the capital vested in it will, in the end, be adjusted so that the workpeople shall only be paid in proportion to the time during which they are engaged. It is idle, indeed, to suppose it should be otherwise. Parliament Edition: current; Page: [345] can do many things, but it cannot take a fifth or sixth part from the time during which day labourers are employed, and secure for them their former wages. This is as impossible as it is to make degraded coins exchange for the same quantities of produce as those of the standard weight and purity.

With labourers employed by the piece or job, the results of the limitation will be different. They will endeavour, by increased exertion, to accomplish in ten hours the same amount of work which had previously occupied them for twelve hours; and where this can be done, the consequence to the masters and to the public will be comparatively immaterial. And such is said to be the practical effect of the measure in weaving factories, and generally in those departments which are principally or wholly carried on by piece work. But it may well be doubted whether, even under these circumstances, the restriction of the hours of labour be advantageous; and whether the greater exertion for ten hours be not more severe upon the labourer, than a less degree of exertion extended over eleven or twelve hours.

But, admitting the truth of these statements, still it may be contended that, on the whole, the interests of the community will be promoted by the labouring class having a little more time at their disposal, though it should be purchased by a sacrifice of wages or of labour. This, however, is a matter for the consideration of the parties. Where labourers may employ themselves for longer or shorter hours, some will prefer the one and some the other; and the fair presumption is, that they will, in so doing, form a more correct estimate of what is most conducive to their interests, than can be formed by any one else.

It is not by shortening by acts of parliament the hours of labour, nor by any measures of that description, that the condition of the lower classes can be really improved. Nothing, as already seen, can do this, unless the proportion of capital to population be increased; and this result is not very likely to Edition: current; Page: [346] be facilitated by interfering with and abridging the labour by which capital is produced! The great length of the hours of labour is, we willingly admit, an evil much to be deplored. It is a proof and a consequence of the excess of labourers as compared with capital; and till the former be diminished, or the latter increased, it is not possible to shorten the hours of work, and to maintain wages at their old level. Those who really desire to bring about this desirable result should exert themselves, by giving new vigour to industry, and opening new markets, on the one hand, and by furthering emigration, and restraining the increase of population on the other, to enlarge the amount of capital and the field for employment, as compared with the number of labourers. This is the only mode in which wages can be really increased, the hours of work reduced, and the condition of the workpeople permanently improved. All measures not founded on these principles, and contributing to these results, how benevolent soever the motives in which they have originated, and how much soever their real operation may be concealed, merely aggravate existing evils. They do not touch the sources of the disease, and only tend, by disguising and perverting its symptoms, to make the public believe that it is being cured, when, in fact, this very treatment may be giving it new strength and virulence.

It has been contended by Dr. Franklin, and by many very intelligent persons, of whose benevolence no doubt can be entertained, and to whose opinions on most subjects great deference is due, that high wages, instead of encouraging industry, and improving the habits of the labourers, usually become a fruitful source of idleness and dissipation, and are, in fact, injurious alike to themselves and their masters. Nothing, however, can be more entirely incorrect than these representations—more completely opposed both to principle and experience. It is true, indeed, that we meet, in every country and situation of life, with individuals careless of the future, and intent only on present enjoyment; but these Edition: current; Page: [347] always form a small and mostly even an inconsiderable minority of each particular class. Whatever may be the case with a few persons, the principle of accumulation always predominates in numerous bodies over the passion for expense. Where wages are so low as to render it impossible for any ordinary increase of exertion to add materially to their amount, the labourers are apt either to sink into idleness or to become factious and discontented. As soon, however, as labour is rendered more productive, as an increase of industry brings a visible increase of comforts and enjoyments along with it, indolence uniformly gives place to exertion; a taste for improved accommodations is diffused; increased exertions are made to obtain them; and, in the end, the workpeople consider it discreditable to be without them, and are less disposed to be factious.

“The liberal reward of labour,” says Adam Smith, “as it encourages the propagation, so it increases the industry of the common people. The wages of labour are the encouragement of industry, which, like every other human quality, improves in proportion to the encouragement it receives. A plentiful subsistence increases the bodily strength of the labourer; and the comfortable hope of bettering his condition, and of ending his days, perhaps, in ease and plenty, animates him to exert that strength to the utmost. Where wages are high, accordingly, we shall always find the workmen more active, diligent, and expeditious, than where they are low—in England, for example, than in Scotland—in the neighbourhood of great towns, than in remote country places. Some workmen, indeed, when they can earn in four days what will maintain them through the week, will lie idle the other three. This, however, is by no means the case with the greater part. Workmen, on the contrary, when they are liberally paid by the piece, are very apt to overwork themselves, and to ruin their health and constitution in a few years. A carpenter in London, and in some other places, is not supposed to last in his utmost vigour above eight years. Something of the same kind happens in many other trades, Edition: current; Page: [348] in which the workmen are paid by the piece; as they generally are in manufactures, and even in country labour, wherever wages are higher than ordinary. Almost every class of artificers is subject to some peculiar infirmity, occasioned by excessive application to their peculiar species of work. Ramazzini, an eminent Italian physician, has written a particular book concerning such diseases. We do not reckon our soldiers the most industrious set of people amongst us: yet when soldiers have been employed in some particular sorts of work, and liberally paid by the piece, their officers have, frequently, been obliged to stipulate with the undertaker, that they should not be allowed to earn above a certain sum every day, according to the rate at which they were paid. Till this stipulation was made, mutual emulation, and the desire of greater gain, frequently prompted them to overwork themselves, and to hurt their health by excessive labour. Excessive application during four days of the week is frequently the real cause of the idleness of the other three so much and so loudly complained of. Great labour, either of mind or body, continued for several days together, is, in most men, naturally followed by a great desire of relaxation, which, if not restrained by force, or by some necessity, is almost irresistible. It is the call of nature, which requires to be relieved by some indulgence, sometimes of ease only, but sometimes, too, of dissipation and diversion. If it is not complied with, the consequences are often dangerous and sometimes fatal, such as almost always, sooner or later, bring on the peculiar infirmity of the trade. If masters would always listen to the dictates of reason and humanity, they have frequently occasion rather to moderate than to animate the application of many of their workmen. It will be found, I believe, in every sort of trade, that the man who works so moderately as to be able to work constantly, not only preserves his health the longest, but in the course of the year executes the greatest quantity of work.”1

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We may add, that as labourers have the same common sense, and are actuated by the same principles, passions, and feelings as other men, it seems a contradiction to pretend that, if they be able to earn, by an ordinary degree of labour, more than is sufficient for their support, they only, of all the various ranks and orders of the community, will spend the surplus in riot and debauchery. There is, no doubt, in many places much intemperance; and, besides its other mischievous consequences, the poor spend a great deal of money on gin, that would be better spent in providing improved accommodations for themselves and their families. But it is an error to suppose, that the mere desire to indulge a vitiated appetite is the only, or even the principal cause, that sends so many people to gin shops. Ardent spirit is really, as Burke has stated, in very many cases, a medicine both for the mind and the body,1 and is, in truth, abused only by the dregs of the populace—by those who, if they could not intoxicate themselves with gin, would most likely resort to opium, or some other stupifying drug. It would indeed be easy, were this a proper place for such investigations, to show that, notwithstanding its prevalence, gin-drinking, as compared with the population, is less diffused now than formerly, and that the bulk of the labouring poor have become more sober and temperate. A taste for reading and political discussion is now furnishing amusement and excitement for the working-classes, to a much greater extent than in bygone times. We can, however, merely indicate the fact; it would be premature to attempt, with our limited experience, to estimate the influence of so important a change over their interests, and those of the other classes of society.

But, laying aside general reasoning, the state of industry in countries where wages are low, compared with its state in those where they are high, proves all that we have said in favour of the liberal reward of labour. Have the low wages of the Edition: current; Page: [350] Irish, Poles, and Hindoos, made them industrious? or the high wages of the English, Americans, and Hollanders made them lazy, riotous, and profligate? Just the contrary. The former are as proverbially indolent as the latter are laborious and enterprising. This is not a point about which there can be any doubt. The experience of all ages and nations proves that high wages are at once the most powerful stimulus to exertion, and the best means of attaching the people to the institutions under which they live. It was said of old “nihil lætius est populo Romano saturo;” and the same may be said of the English, the French, and indeed of every people. Dans aucune historie, on ne rencontre un seul trait qui prouve que l’aisance du peuple par le travail a nui à son obeissance.1 It is not when wages are high and provisions abundant, but when wages are low, the harvest less productive than usual, and food deficient, that the manufacturing and thickly-peopled districts are disturbed by popular clamour and commotions. It is, indeed, quite visionary to suppose that security and tranquillity should ever exist in any considerable degree, in countries where wages are very much depressed, and the mass of the people sunk in poverty and destitution. Those who have little or no property of their own, and little or no prospect of acquiring any, will never entertain any very sincere respect for that of others; nor can any country be so ripe for revolution as that where the mass of the people may hope to gain something, while they feel they can lose nothing, by subverting the existing institutions. Nothing, therefore, can be so signally disastrous as a permanent depression in the rate of wages. It is destructive alike of the industry of the people, and of that security which is indispensable to the advancement of society.

These statements sufficiently show that it is as much for the interest of government, with a view to their own security, as it is their duty, with a view to the happiness Edition: current; Page: [351] of their subjects, to make every exertion to improve the condition of the labouring classes, by adopting such measures as may be most favourable to the increase of capital as compared with population, and as may contribute most, by elevating the tastes and opinions of the people, to raise the standard of wages. It will be found, too, on taking an enlarged view of the subject, that the well-being of the capitalists will be best promoted by their adopting a similar course. At first sight, indeed, it does appear as if their interests were opposed to those of the labourers; but such is not the case. The interests of both are at bottom identical; and it has been already seen that all the wealth of the country, applicable to the payment of wages, is uniformly, in all ordinary cases, divided among the labourers. It is true that, when wages are increased, a less portion of the produce of industry remains to the capitalists, and that profits are in so far reduced or prevented from rising; but it does not therefore follow that the capitalists would be in a preferable situation were wages to fall and profits to rise. The rate of profit, how important soever, is not the only thing to which they have to look: security and tranquillity are still more indispensable than high profits to the successful prosecution of industrial undertakings. And these are never found in countries where wages are low, and the mass of the people immersed in poverty and destitution. In such countries, the poor are deterred by nothing save the fear of the law from engaging in all sorts of dangerous projects; and are always ready to listen to those who tell them that their unhappy condition is a consequence of misgovernment, and of the misconduct of their employers. Under such unfortunate circumstances, industry and enterprise are paralysed; and the condition of the capitalists is, if anything, worse than that of the labourers.

Hence, while it is hardly possible for the employers of labour artificially to reduce the rate of wages, it is farther obvious that such reduction, could it be effected, would Edition: current; Page: [352] rarely, if ever, be for their advantage: for unless wages were at an extraordinarily high elevation, it would necessarily be followed by a diminution of that security which is so essential to their interests. The conduct of those who pretend to wish for the improvement of the poor, and who, at the same time, complain of high wages, is, in fact, contradictory; and must be ascribed to hypocrisy, or folly, or both. An increase of wages, if not the only, is at all events the most effectual and ready means by which the condition of the poor can be really improved; and high wages, by indisposing the poor to agitation, are the best defence and safeguard of the estates and property of the rich.

But, supposing the conduct of government and of the wealthier classes, as regards the poor, to be all that could be wished for, still, as has been already seen, it usually has but little influence over the condition of individuals. Whatever may be the character of the administration and of the public institutions, every man is always, in great measure, responsible for his own situation. And this is most especially true of the labouring classes, the great majority of whom can owe nothing to patronage or favour. Industry, frugality, and forethought are their only friends; but, happily, they are all-powerful; and how unpromising soever their situation, those who avail themselves of their willing assistance, are never disappointed, but secure in the end their own comfort, and that of their families. Those, on the contrary, who neglect their aid, though otherwise placed under the most favourable circumstances, inevitably sink into a state of misery. The contrast between a well-cultivated field, and one that is neglected and over-run with thorns and brambles, is not greater than the contrast between the condition of the diligent and slothful, the careful and the wasteful labourers. The cottages of the former are clean, neat, and comfortable, their children well clothed and well instructed, whereas the cottages of the latter are slatternly and uncomfortable, being often little better than pig-styes, and their children in rags Edition: current; Page: [353] and ignorant. No increase of wages can be of any permanent advantage to the one class, while the smallest increase conduces to the well-being of the other. Vigilando, agendo, bene consulendo, prospere, omnia cedunt. But, on the other hand, ubi socordiæ te atque ignaviæ tradideris, nequicquam Deos implores; irati infestique sunt. “If,” says Barrow “wit or wisdom be the head, if honesty be the heart, industry is the right hand of every vocation; without which the shrewdest insight and the best intention can execute nothing.”1

In making these statements, we have not been actuated by any desire to apologize for, or palliate the faults or errors of governments. But, how well soever they may be governed, those who are deficient in industry and forethought can never be well off. The eternal law of Providence has decreed, that the hand of the diligent shall alone make rich. Wherever indolent habits prevail, wherever the poor grasp at immediate gratifications, without regard to the consequences—wherever they rely on others, rather than on themselves, and depend more on the wretched resource of agitation than on labour and frugality—they will unavoidably sink into the abyss of poverty, and become objects, not of pity, but of contempt.

A controversy has been carried on with respect to the cheapness and efficiency of free and slave labour, upon which it may be proper to offer a few remarks. In so far, indeed, as regards the labour of freemen and slaves, supposing them to be indiscriminately engaged in the same employments, and that both are natives of, or belong to the countries in which they are employed, and are equally well fitted for the labour carried on in them, there is little room for controversy. In such cases, the widest experience has proved that the labour of freemen is cheapest; the apathy, idleness, and carelessness of slaves being, in all cases, more Edition: current; Page: [354] than sufficient to countervail the lower rates at which their services may sometimes be procured. This, however, is not the point of view under which the inquiry with respect to free and slave labour is commonly regarded in this country. Here we generally consider it with reference to the West Indies, or some other intertropical region; the question being—whether the products peculiar to such regions, and more especially sugar, may be more cheaply raised by free or by slave labour? Now, in this case, we apprehend that slave labour will be found to be the cheaper of the two—at least if the question be restricted to the growth of sugar. We doubt, indeed, whether any considerable quantity of sugar could be raised in the intertropical regions of the western hemisphere without the aid of slaves, or of compulsory labour of one sort or other. The inhabitants of these countries have few wants. Many articles indispensable in cold or temperate climates, would be there an encumbrance. The curis acuens mortalia corda, so powerful among the nations of Europe, is but feebly felt by the blacks. Their necessities and desires are of a very limited description; and are generally, indeed, fully supplied by the produce of a small patch of land, requiring but little labour in its cultivation. Hence it would be contradictory to suppose that they should voluntarily employ themselves in the hard labour necessary to produce sugar. Consistently with what is now stated, we find that Hayti or St. Domingo, the most fruitful of the West Indian islands, though it furnished when a colony of France immense supplies of sugar, no longer exports a single ton! And what ground have we for supposing that the result would be different in Brazil or Cuba, were the blacks emancipated, and were they able easily (which is not the case in Jamaica and most of our islands) to obtain patches of land? The possession of the latter is requisite, to enable them to exist without engaging in laborious service; and in the event of their not being able to obtain land, they may be forced to employ themselves in the culture of sugar—though, as it is against Edition: current; Page: [355] their inclination, they will withdraw from their work on the first opportunity, and will, while employed, indulge as much as possible in idleness. It therefore appears that the question with respect to the cheapness and efficiency of free and slave labour is one that depends, in great measure, on circumstances—that is, on the locality where, and the parties by whom, it is to be carried on, and whether the labour be of that description in which freemen would be disposed voluntarily to engage. It is impossible to bring whites into competition with blacks, in field labour in tropical countries, the constitution of the former not being suited to such an employment in hot climates; and as there are no good grounds for thinking that really free blacks will ever, of their own accord, undertake the drudgery of sugar-planting, it would seem that slave labour is not the cheapest only that can be so employed, but that it is really all but indispensable to the prosecution of the business. We do not state this as any vindication of slavery, but as being the only legitimate solution of the question at issue. We are, indeed, strongly impressed with the conviction that, in the end, the culture of the sugar-cane, on a large scale, will have to be abandoned in all those parts of the New World in which slavery, or compulsory labour, is suppressed.

The Principles of Political Economy, with some Inquiries respecting their Application (5th edition, 1864)

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