Front Page Titles (by Subject) PART IV. - Illustrations of Political Economy, vol. 9
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PART IV. - Harriet Martineau, Illustrations of Political Economy, vol. 9 
Illustrations of Political Economy (3rd ed) in 9 vols. (London: Charles Fox, 1834). Vol. 9.
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Consumption is of two kinds—productive and un productive.
The object of the one is the restoration, with increase, in some new form, of that which is consumed. The object of the other is the enjoyment of some good through the sacrifice of that which is consumed.
That which is consumed productively is capital, re-appearing for future use. That which is consumed unproductively ceases to be capital, or any thing else: it is wholly lost.
Such loss is desirable, or the contrary, in proportion as the happiness resulting from the sacrifice exceeds or falls short of the happiness belonging to the continued possession of the consumable commodity.
The total of what is produced is called the gross produce.
That which remains, after replacing the capital consumed, is called the net produce.
While a man produces only that which he himself consumes, there is no demand and supply.
If a man produces more of one thing than he consumes, it is for the sake of obtaining something which another man produces, over and above what he consumes.
Each brings the two requisites of a demand,— viz., the wish for a supply, and a commodity wherewith to obtain it.
This commodity, which is the instrument of demand, is, at the same time, the instrument of supply.
Though the respective commodities of no two producers may be exactly suitable to their respective wishes, or equivalent in amount, yet, as every man's instrument of demand and supply is identical, the aggregate demand of society must be precisely equal to its supply.
In other words, a general glut is impossible.
A partial glut is an evil which induces its own remedy; and the more quickly the greater the evil; since, the aggregate demand and supply being always equal, a superabundance of one commodity testifies to the deficiency of another; and, all exchangers being anxious to exchange the deficient article for that which is superabundant, the production of the former will be quickened, and that of the latter slackened.
A new creation of capital, employed in the production of the deficient commodity, may thus remedy a glut.
A new creation of capital is always a benefit to society, by constituting a new demand.
It follows that an unproductive consumption of capital is an injury to society, by contracting the demand. In other words, an expenditure which avoidably exceeds the revenue is a social crime.
All interference which perplexes the calculations of producers, and thus causes the danger of a glut, is also a social crime.
It is necessary to the security and advancement of a community that there should be an expenditure of a portion of its wealth for purposes of defence, of public order, and of social improvement.
As public expenditure, though necessary, is unproductive, it mast be limited; and as the means of such expenditure are furnished by the people for defined objects, its limit is easily ascertained.
That expenditure alone which is necessary to defence, public order, and social improvement, is justifiable.
Such a direction of the public expenditure can be secured only by the public functionaries who expend being made fully responsible to the party in whose behalf they expend,
For want of this responsibility, the public expenditure of an early age—determined to pageantry, war, and favouritism—was excessive, and perpetrated by the few in defiance of the many.
For want of a due degree of this responsibility, the public expenditure of an after age—determined to luxury, war, and patronage—was excessive, and perpetrated by the faw in fear of the many, by deceiving and defrauding them.
For want of a due degree of this responsibility, the public expenditure of the present age—determined chiefly to the sustaining of burdens imposed by a preceding age—perpetuates many abuses; and though much ameliorated by the less unequal distribution of power, the public expenditure is yet as far from being regulated to the greatest advantage of the many, as the many are from exacting due responsibility and service from the few.
When this service and responsibility shall be duty exacted, there will be—
Necessary offices only, whose duties will be clearly defined, fully accounted for, and liberally rewarded;—
Little patronage, and that little at the disposal of the people;—
No pomp, at the expense of those who cantbarely obtain support;—but
Liberal provisions for the advancement of national industry and intelligenco,
If the above principles be true., a comparison of them with our experience will yield very aniofthem conclusions. Consumption—that is, humating enjoyment—is the end to which all the foregoing processes are directed. Demand is the index of human enjoyment. Every increase of capital creates a new demand. Capital is perpetually on the increase. To sum up the whole, human enjoyment is perpetually on the increase. human single exception to this happy conclusion is where, as in Ireland, the growth of capital is overmatched by the increase of population. But even in Ireland (the worst case which could be selected) the evil is so partial as to allow the good to spread. Though too large a portion od the demand comes in the form of a clamour for daily food, there is a new and spreading demand for a multitude of articles of less necessity. Portions of the population are rising to a region of higher and wider desires; and if this partial elevation has taken place under a most vicious political system, there need be no question that a more rapid improvement will grow up under that wiser and milder government which the civilized world will take care that Ireland shall at length enjoy. There is something so delightful in the review of the multiplication of comforts and enjoyments, that it is difficult to turn away from it at any time; and never is it more difficult than when establishing the moral of hopefulness. But I have dwelt largely on this happy truth in my story of “Briery Creek;” and probably no day passes in which my readers do not hear or say something about the wonderful improvements in art, the variety of new conveniences, and the spread downwards of luxuries to which the wealthy were formerly beheved to have an exclusive title. Great as is still the number of those who are scorched by God's vivifying sun, and chilled by his fertilizing rain, for want of shelter and clothing, the extension of enjoyment has kept its proportion (being both cause and effect) to the improvement of the subordinate processes. With every increase of production, with every improvement of distribution, with every extension of exchange, consumption has kept pace. The only checks it has ever received have arisen out of those legislative sins which have wrought, or must work, their own destruction.
As for that species of consumption which has been always regarded with the least complacency, bthe too long unprofitable consumption of government,—nothing can be more cheering than to mark the changes in its character from an early period of our empire till now. Viewed by itself, our government expenditure is a mournful spectacle enough; but the heaviest of the burdens we now bear were imposed by a former age; and our experience of their weight is a sufficient security against such being ever imposed again. We are no longer plundered by force or fraud, and denied the redress of a parliament; we are no longer hurried into wars, and seduced to tax our children's children for their support. The sin is now that of omission, and not of perpetration. We do not shake off old burdens, or provide for public order and social improvement as we should; but we do not neglect the one and despise the other, butas was done in days of old; and what is left undone there is a spreading movement to effect. The only irreclaimable human decree,—that of an enlightened multitude, —has gone forth against the abuses of the Church and the Law. The Army will follow; and there is reason to hope that a force is being already nourished which may grapple with the gigantic Debt itself. New and noble institutions are being demanded from all quarters as the natural growth from the renovation of the old ones. Religion must yield Education, and Law a righteous Penal Discipline. Schools must spring up around our churches, and prisons will be granted where the law must, if possible, mend criminals as effectually as it has hitherto made them. In time, we shall find that we have spare barracks, which may be converted into abodes of science; and many a parade may become an exercising place for laborious mechanics instead of spruce soldiers. Such are some of the modes of public expenditure which the nation is impatient to sanetion. What further institutions will be made to grow out of these, we may hereafter learn in the schools which will presently be planted wherever famihes are congregated. All that we can yet presume is, that they will be as much wiser than ours as our extravagances are more innocent than the savage pageantries of the Henries, the cruel pleasantries of the Charleses, and the atrocious policy of the “harleses-born, Ministers” who figure in our history.
All the members of a society who derive protection from its government of a certain proportion of the produce of their labour or capital to the support of that governraent—that is, are justly liable to be taxed.
The proportion contributed should be determined by the degree of protection enjoyed—of protection to property; for all are personally protected.
In other words, a just taxation must leave all the members of society in precisely the same relation in which it found them.
This equality of contribution is the first principle of a just taxation.
Such equality can be secured only by a method of direct taxation.
Taxes on commodities are, from their very nature, unequal, as they leave it in the choice of the-rich man how much he shall contribute in the choi port of the state; while the man whose whole supcome must be spent in the purchase of commodities has no such choice. This inequality is aggravated by the necessity, in order to make these taxes produetive, of imposing them on necessaries more than on luxuries.
Taxes on commodities are further injurious by entailing great expense for the prevention of smugghng, and a needless cost of collection.
They could not have been long tolerated, but for their quality of affording a convenient method of tax paying, and for the ignorance of the bulk of the people of their injurious operation.
The method of direct taxation which best secures equality is the imposition of a tax on income or on property.
There is so much difficulty in ascertaining, to the general satisfaction, the relative values of incomes held on different tenures, and the necessary inquisition is so odious, that if a tax on the source of incomes can be proved equally equitable, it is preferable, inasmuch as it narrows the province of inquisition.
There is no reason to suppose that an equitable graduation of a tax on invested capital is impracticable; and as it would equally affect all incomes derived from this investment,—that is, all incomes whatsoever,—its operation must be singularly impartial, if the true principle of graduation be once attained.
A graduated property-tax is free from all the evils belonging to taxes on commodities; while it has not their single recommendation—of favouring the subordinate convemence of the tax-payer.
This last consideration will, however, become of less importance in proportion as the great body of tax-payers advances towards that enlightened agreement whicl is essential to the establishment of a just system of taxation.
The grossest violation of every just principle of taxation is the practice of burdening posterity by contracting permanent loans, of which the nation is to pay the interest.
The next grossest violation of justice is the transmitting such an inherited debt unlessened to posterity, especially as every improvement in the arts of life furnishes the means of throwing off a portion of the national burdens.
The same rule of morals which requires stateeconomy on behalf of the present generation, requires, on behalf of future generations that no effort should be spared to liquidate the National Debt.
No sign of the times is more alarming, —more excusably alarming,—to the dreaders of change, than the prevailing unwillingness to pay taxes,—except such prevailingas— being indirect, are paid unawares. The strongest case which the lovers of old ways have now to bring in opposition to the reforming spirit which is abroad, is that of numbers, who enjoy protection of life and property, being reluctant to pay for such protection.
This reluctance is a bad symptom. It tells ill for some of our social arrangements, and offers an impediment, at the same time, to their rectification; and thus gives as much concern to the reformers as to the preservers of abuses. This eagerness to throw off the burdens of the slate is a perfectly natural result of the burdens of the state having been made too heavy; but it does not the less exhibit an ignorance of social duty which stands formidably in the way of improvements in the arrangement of social liabilities. We are too heavily taxed, and the first object is to reduce our taxation. Indirect taxes are proved to be by far the heaviest, and the way to gain our object is therefore to exchango indirect for direct taxes, to the greatest possible extent. But the direct taxes are those that the people quarrel with. What encouragement is there for a government to propose a commutation of all taxes for one on property, when there is difficulty in getting the assessed taxes paid? How is it to be supposed that men will agree to that on a larger scale which they quarrel with on a smaller? How can there be a stronger temptation offered to our rulers to filch the payment out of our raw materials, our tea, our beer, our newspapers, and the articles of our clothing? The more difficulty there is in raising the supplies, the more risk we run of being made to yield of our substance in ways fllat we are unconscious of, and cannot check. The less manliness and reasonableness we show in being ready to bear our just burden, the less chance we have of the burden being lightened to the utmost. It is more than mortifying to perceive that an overburdened nation must, even if it had a ministry of sages, submit for a long time to pay an enormous tax upon its own ignorance.
Such appears too plainly to be now the case with our nation, tooand with some other nations. A party of gentlemen may be found in any town, sitting over their wine and foreign fruits, repelling the idea of paying a yearly sum to the state, and laughing, or staring, when the wisest man among them informs them that they pay above 100 per cent. on the collective commodities they use. Tradesmen may be found in every village who think it very grievous to pay a house-tax, while they overlook the price they have to give for their pipe of tobacco and their glass of spirit and water. Some noblemen, perhaps, would rather have higher tailors' bills for liveries than pay so much a head for their servants. As long as this is the case,—as long as we show that we prefer paying thirty shillings with our eyes shut to a guinea with our eyes open, how can we expect that there will not be hands ready to pocket the difference on the way to the Treasury; and much disposition there to humour us in our blindness?
The cry for retrenchment is a righteous cry; but all power of retrenchment does not lie with the Government. The Government may do much; But the people can do more, by getting themselves taxed in the most economical, instead of the most wasteful, manner. It is a good thing to abolish a sinecure, and to cut down the salary of a bishop or a general; but it is an the measurably greater to get a direct tax substituted for one on cider or paper. All opposition to the principle of a direct tax is an encouragement to the appointment of a host of exeisemen and other tax-gatherers, who may, in a very short time. surpass a bench of bishops and along gradation of military officers in expensiveness to the people. It is time for the people to take care that the greater retrenchments are not hindered through their mistakes, while they are putting their whole souls into the demand for the lesser.
Such mistakes are attributable to the absence of political knowledge among us; and the consequences should be charged, not to individuals, but to the State, which has omitted to provide them with such knowledge. The bulk of the people has yet to learn that, being born into a civilized society, they are not to live by chance, under laws that have been made they know not why nor how, to have a portion of their money taken from them by people they have nothing to do with, so that they shall be wise to save as much as they can from being so taken from them. This is the view which too large a portion of us take of our social position, instead of understanding that this complicated machine of society has been elaborated, and must be maintained, at a great expense; that its laws were constructed with much pains and cost; that under these laws capital and labour are protected and made productive, and every blessing of life enhanced; and that it is therefore a pressing obligation uponevery member of society to contribute his share towards maintaining the condition of society to which he owes his security and social enjoyment. When this is understood,—when the lowest of our labourers perceives that he is, as it were, the member of a large club, united for mutual good,— none but rogues will think of shirking the payment of their subscription-money, or resist any particular mode of payment before the objections to it have been brought under the consideration of the Committee, or after the Committee has pronounced the mode to be a good one. They will watch over the administration of the funds; but they will manfully come forward with their due contributions, and resent, as an insult upon their good sense, all attempts to get these contnbutlons from them by indirect means.
Till they are enabled thus to view their own position, it is not wonderful, however deplorable, that they should quarrel with a just tax because it is unequally imposed, ascribing to the principle the fults committed in its application. This is the less surprising too, because their teeth have been set on edge by the sour grapes with which their fathers were surfeited. A lavish expenditure and acoamulating debt have rendered odious the name and notion of every tax under heaven. Great allowance must be made for the effects of such ignorance and such irritation. Let the time be hastened when a people, enlightened to its lowest rank, may behold its meanest members heard with deference instead of treated with allowance, if they shall see reason for remonstrance in regard to their contributions to the state! When they once know what is the waste in the department of the Customs, and the oppression and fraud in that of the Excise,— what are the effects of taxes on raw produce, and on the transfer of property, and how multiplied beyond all decency are the burdens of local taxation, they will value every approach towards a plan of direct levy, and wilt wonder at their own clamour about the house and window taxes, (except as to their inequality of imposition,) while so many worse remained unnoticed. I shall attempt to exhibit the effects on industry and happiness of our different kinds of taxes in a few more tales; and I only wish I had the power to render my picture of a country of untaxed commodities as attractive in fiction as I am sure it would be in reality. Meantime, I trust preparation will be making in other quarters for imparting to the people those political principles which they desire to have for guides in these stirring times, when every man must act: those principles which will stimulate them at once to keep watch over the responsibilities of their rulers, and to discharge their own.
What, then. is the moral of my fables? That we must mend our ways and be hopeful;—or, be hopeful and mend our ways. Each of these comes of the other, and each is pointed out by past experience to be our duty, as it ought to be our pleasure. Enough has been said to prove that we must mend our ways: but I feel as if enough could never be said in the enforcement of hopefulness. When we see what an advance the race has already made, in the present infant stage of humanity,—when we observe the differences between men now living,—it seems absolute impiety to doubt man's perpetual progression, and to question the means. The savage who creeps into a hollow tree when the wind blows keen, satisfying his hunger with grubs from the herbage, and the philosopher who lives surrounded by luxury which he values as intellectual food, and as an apparatus for securing him leisure to take account of the stars, and to fathom the uses of creation, now exist before our eyes,—the one a finished image of primeval man; the other a faint, shadowy outline of what man may be.— Why are these men so unlike? By observing every gradation which is interposed, an answer may be obtained.—They are mainly formed by the social circumstances amidst which they live. All other differences,—of bodily colour and form, and of climate,—are as nothing in comparison. Wherever there is little social circumstance, man remains a savage, whether he be dwarfed among the snows of the Pole, or stretches his naked limbs on the hot sands of the desert, or vegetates in a cell like Caspar Hauser. Whereever there is much social circumstance, man becomes active, whether his activity be for good or for evil. In proportion as society is so far naturally arranged as that its relations become multitudinous, man becomes intellectual, and in certain situations and in various degrees, virtuous and happy. Is there not yet at least one other stage, when society shall be wisely arranged, so that all may become intellectual, virtuous, and happy; or, at laast, so that the exceptions shall be the precise reverse of those which are the rare instances now? The belief is irresistible.
There has been but one Socrates, some say; and he lived very long ago.—Who knows that there has been but one Socrates? Which of us can tell but that, one of our forefathers, or some of ourselves, may have elbowed a second or a tenth Socrates in the street, or passed him in the church aisle? His philosophy may have lain silent within him. Servitude may have chained his tongue; hunger may have enfeebled his voice; he may have been shut up in the Canton Factory, or crushed under a distraint for poor-rates or tithes. Tall it has been known how many noble intellects have been thus chained and silenced, let no one venture to say that there has been but one Socrates.
Supposing, however, that there has been but one, does it follow that the world has gone back, or has not got forward since his day? To judge of the effect of social institutions on character and happiness, we must contemplate a nation, and not the individual the most distinguished of that nation. What English artisan would change places with the Athenian mechanic of the days of Socrates, in respect of external accommodation? What English artisan has not better things to say on the rights of industry, the duties of governments, and the true principle of social morals, than the wisest orator among the Greek mechanics in the freest of their assemblies? It is true that certain of our most refined and virtuous philosophers are engaged nearly all day in servile labour, and that they wear patched clothes, and would fain possess another blanket. This proves that our state of society is yet imperfect; but it does not prove that we have not made a prodigious advance. Their social qualifications, their particular services, have not been allowed due liberty, or received their due reward; but the very circumstance of such men being found among us, sanded together in the pursuit of good, is a sufficient test of progress, and earnest of further advancement. Such men are not only wiser, and more prosperous in their wisdom, than they were likely to have been while building a house for Socrates, or making sandals for Xantippe, but they have made a vast approach towards being employed according to their capacities, and rewarded according to their worhs,—that is, towards participating in the most perfect conceivable condition of society.
When, till lately, has this condition of society been distinctly conceived of,—not as an abstract good, to be more imagined than expected,—but as a natural, inevitable consequence of labour and capital, and their joint products, being left free, and the most enlightened intellect having, in consequence, an open passage left accessible, by which it might rise to an influential rank? Such a conception as this differs from the ancient dreams of benevolent philosophers, as the astronomer's predictions of the present day differ from the ancient mythological fables about the stars. The means of discernment are ascertained—are held in our hands. We do not presume to calculate the day and hour when any specified amelioration shall take place; but the event can be intercepted only by such a convulsion as shall make heaven a wreck and earth a chaos. In no presumption of human wisdom is this declaration pronounced. Truth has one appropriate organ, and principles are that organ; and every principle on which society has advanced makes the same. proclamation. Each has delivered man over to a nobler successor, with a promise of progression, and the promise has never yet been broken. The last and best principle which has been professed, if not acted upon, by our rulers, because insisted on by our nation, is “the greatest happiness of the greatest number.” Was there ever a time before when a principle so expanding and so enduring as this was professed by rulers, because insisted on by the ruled? While this fact is before our eyes, and this profession making music to our ears, we can have no fears of socrety standing still, though there be brute tyranny in Russia, and barbarian folly in China, and the worst form of slavery at New Orleans, and a tremendous pauper population at the doors of our own homes. The genius of society has before transmigrated through forms as horrid and disgusting as these. The prophecy which each has been made to give out has been fulfilled: therefore shall the heaven-born spirit be trusted while revealing and announcing at once the means and the end—the employment of all powers and all materials, the natural recompense of all action, and the consequest accomplishment of the happiness of the greatest number, if not of all.
London: Printed by W. Clowes, Duke-street, Lambeth.