The Online Library of Liberty

A project of Liberty Fund, Inc.

• Commerce Defended, &c. &c.
• Introduction.
• Chapter I.: On the Security Or Insecurity of the British Commerce.
• Chap. II.: On Land, As a Source of Wealth.
• Chap. III.: Of the Definition of the Terms Wealth and Prosperity.
• Chap. IV.: Of Manufactures.
• Chap. V.: Commerce.
• Chap. VI.: Consumption.
• Chap. VII.: Of the National Debt.
• General Reflections.

CHAP. IV.

Of Manufactures.

It is at this point that our controversy with Messrs. Spence and Cobbett properly begins. They assert that manufactures are no source of wealth.* We say that they are. It is the reader's part to compare our reasons. Mr. Spence, who seems to supply the arguments of the party, says that manufactures are productive of no wealth, because the manufacturer in the preparation of any commodity consumes a quantity of corn equal to the value which he has added to the raw materials of which the article is composed. It is to be observed, before we proceed farther, that this is the only reason which they adduce in favour of this fundamental part of their hypothesis. In this one assertion is contained the sum and substance of the evidence which they exhibit against manufactures. If this assertion is unequal to the conclusion which it is brought to support, the wonderful discoveries of the Economisies are on a tottering basis. I have called this fundamental proposition an assertion, because it is assumed entirely without proof, and what is more, I am afraid, in opposition to proof. When the manufacturer prepares a commodity, the prepared com-modify is worth more than the food which the workmen consumed in preparing it. Do you ask my reasons? Carry it, I say, to market; you will that it will fetch more; because it must not only repay the wages of the labour, but the profit of the stock which has been employed in its preparation. Set the goods on one side, and an equal quantity of raw materials and food with what has been consumed in their preparation on the other, and every body will give yon more for the goods. The country is therefore the richer by having the goods.

Let us hear what Mr. Spence has to say in objection to this reasoning. An examination of his plea will still more clearly exhibit to us the erroneousness of his position. The superiority of price which the manufactured commodity obtains in the market, adds nothing he says to the wealth of the country; because whatever the manufacturer obtains above the value of the raw produce is taken from the landholder, the original owner of that produce. ‘An example,’ he adds,* ‘will demonstrate this: If a coach-maker were to employ so many men for half a year in the building of a coach, as that for their subsistence during that time, he had advanced fifty quarters of corn, and if we suppose he sold this coach to a land proprietor for sixty quarters of corn, it is evident, that the coach-maker would be ten quarters of corn richer than if he had sold it for fifty quarters, its original cost. But it is equally clear, that the land proprietor would be ten quarters of corn poorer, than if he had bought his coach at its prime cost. A transfer, then not a creation of wealth, has taken place, whatever one gains the other loses, and the national wealth is just the same.’

There is a great appearance of ingenuity and force in this reasoning; and on the greater part of mankind it is well calculated to impose. I am rather surprized, however, that a man of Mr. Spence's acuteness did not perceive that it is in reality a mere vulgar sophism. But when hypothesis has taken firm hold of a man, his acuteness is unluckily confined to one function.

Mr. Spence has here confounded two things which are remarkably different. He mistakes the salecf a coach for the manufacture of a coach. It is surely bad reasoning however to conclude that because the sale of a coach is not productive of wealth, therefore the manufacture of a coach is not productive. The sale of the coach produces nothing; the manufacture of it however produces the coach. It is very true that when a landholder has sixty quarters of corn and the coach-manufacturer a coach, if the coach is transferred to the landowner and the corn to the coach-maker, the country is not the richer. But it is certainly not less true that if the coach-maker has in the month of October fifty quarters of corn, which in the month of March he has transformed into a coach worth sixty quarters, the country is the richer in consequence of the manufacture of the coach, to the amount of ten bushels of corn.

Important, however, as is the addition which it thus clearly appears is made to national wealth by means of manufacturing industry, we should still have a very imperfect idea of its wonderful powers, should we confine ourselves to this observation. In a state of agriculture but moderately improved, the labourers employed in it may be regarded as raising a produce not less than five times what they themselves can consume. Were there no manufacturers, the whole of this surplus produce would be absolutely useless. Where could it find a purchaser? It is the manufacturers who convert this surplus produce into the various articles useful or agreeable to man, and who thus add the whole value it obtains to four parts at least in five of the produce of the soil.*

There is but one supposition, as far as I am able to perceive, by which this argument can be eluded. If our antagonists suppose a state of society in which the population has become so great that it requires the utmost efforts of the whole employed upon the land to produce food for the society; in that case they may insist that the whole produce of the soil is employed and obtains a value without the aid of manufacturers. In this state of things, however, it is unfortunate that the argument of Mr. Spence will prove not manufactures only, but land to be unproductive. The cultivators of the soil, during the time in which they raise a certain produce, have here consumed a quantity of produce of an equal value. But this is the very reason which he adduces to prove that manufactures are not a source of wealth. Manufactures then never cease to produce wealth, except in one case, in which land itself ceases to produce it; so that when manufactures cease to produce wealth, every thing ceases to produce it; wealth cannot be produced at all.—So much for Mr. Spence's reasoning against manufactures.

The truth is, that to give even tolerable plausibility to the theory of the Economises we must allow that nothing is useful or valuable to man but the bare necessaries of life, or rather the raw produce of the soil. If any thing else is valuable to him, whatever creates that value must add to his riches. The reasonings of the Economistes indeed proceed upon a most contracted and imperfect view of the operations and nature of man. How limited would be his enjoyments were he confined to the raw produce of the soil! How much are those enjoyments, how much is his wellbeing, promoted by the various productions of art which he has found the means of providing! The simple, bat at the same time the great and wonderful contrivance by which has been produced the profusion of accommodations with which the civilized life of man abounds, is the division of labour. Wherever a society can be supposed to consist of one class of labourers only, the cultivators of the soil, it must be poor and wretched. Even if each individual, or each family, may be supposed so far to vary their labour as to provide themselves with some species of coarse garment, or some rude hut to shelter them from the weather, the affairs of the society must still be miserable. Let us next consider the simplest division of labour which we can well imagine. Let us suppose that the society becomes divided into husbandmen, and into the manufacturers merely of their agricultural tools, of their garments and houses. How much more completely would the community almost immediately, or at least as soon as the manufacturers acquired any dexterity in their trades, be provided with the accommodations which we have just enumerated? Their riches would be augmented. The labour of the same men would now yield a much larger produce. It is to the manufacturers however, it is to that division of labour which set them apart as a distinct class, that this superiority of produce, that this augmentation of riches, is entirely owing.

‘The greatest improvement,’ says Dr. Smith, ‘in the productive powers of labour, and the greater part of the skill, dexterity, and judgment, with which it is any where directed or applied, seem to have been the effects of the division of labor. ****. It is the great multiplication of the productions of all the different arts, in consequence of the division of labour, which occasions in a well governed society that universal opulence, which extends itself to the lowest ranks of the people,’ The effects indeed of the division of labour, are surprising and almost miraculous. But as the division of labour commenced with the first formation of a class of manufacturers, and as it is in manufactures that the division of labour has been carried to the greatest height, the business of agriculture being much less susceptible of this improvement, the whole or the greater part of the opulence, which is diffused in society by the division of labour, is to be ascribed to manufactures. The same is the case with machinery. How much the production of commodities is accelerated and increased by the invention and improvement of machines, requires no illustration. It is chiefly in manufactures, that this great advantage too has been reaped. In agriculture, the use of machinery is much more limited.

Every view of the subject affords an argument against the intricate but flimsy reasonings of the Economistes. In the infancy of manufactures, when the distaff alone, and other simple and tedious instruments are known, let us suppose that a piece of cloth is prepared. Mr. Spence informs us, that nothing is added to the wealth of the society, by the preparation of this piece of cloth, because a quantity of corn equal to it in value, has during the preparation been consumed by the manufacturers. Let us suppose, however, that, suddenly, spinning and other machines are invented, by which the same labourers, are enabled to prepare six similar piece*, in the same time, and while they are consuming the same quantity of corn. If their manufacture in the former case replaced the corn which they consumed; in this case it replaces it six times. Will Mr. Spence deny that in such instances manufactures are productive of wealth? But how many more than six times have the productive powers of labour in the arts and manufactures been multiplied since the first division and distribution of occupations?

Without any further accumulation of arguments, I may take it I believe for granted, that the insufficiency of Mr. Spence's reasonings, to prove that manufactures are not a source of wealth, sufficiently appears. Let us now therefore proceed to another of his topics.

[*]‘Whether,’ says Mr. Spence, (p. 19, Brit. Indep, of Commerce) ‘the manufacturer receives the price of his manufacture in food or in money, if the whole be fairly analyzed, and every thing traced to its source, it will in every case be found, in the most refined, as in the most barbarous, state of society, that agriculture is the great source, manufactures no source at all, of national wealth.’ This indeed is the hinge on which the main part of his doctrine turns. It is the foundation, for example, of his opinions concerning consumption; and he introduces his inquiry into that subject in the following terms; ‘As it has been shewn’ (see pp. 29, 30, of his pamphlet) ‘that the whole revenue of a country, (deducting an insignificant portion sometimes derived from foreign commerce) is derived from its land.’ This reservation, in favour of commerce of export, he expressly denies to manufactures for home consumption. ‘When a lace manufacturer,’ (Ibid. p. 43) ‘has been so long employed in the manufacturing a pound of flax into lace, that his subsistence during that period has cost £30, this sum is the real worth of the lace, and if it be sold at home, whether for £30 or £60, the nation is no richer for this manufacture.’

[*]See p. 16.

[*]It is to be borne in mind that the whole of the question discussed in this chapter respecting the utility of manufactures, regards manufactures for home consumption; and, for the sake of distinctness, the idea of foreign commerce is altogether excluded. Mr. Spence has judiciously adopted this plan; and his example was here highly worthy of imitation. To koow the value of manufactures it was right in the first place to consider their operation in a country supposed to have no connection with any other.