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CHAPTER IV.: OF THE WAGES OF LABOUR. - Thomas Robert Malthus, Principles of Political Economy 
Principles of Political Economy (London: W. Pickering, 1836).
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OF THE WAGES OF LABOUR.
On the Definition of the Wages of Labour, and their Dependance upon Supply and Demand.
The wages of labour are the remuneration to the labourer for his exertions.
They may be divided into nominal and real.
The nominal wages of labour consist of money; for it is in money that the labourer is generally paid in civilized countries.
The real wages of labour consist of the necessaries, conveniences, and luxuries of life, which the money wages of the labourer enable him to purchase.
It has been shown in the fifth section of the second chapter of this work, that the average wages of a given number of common agricultural labourers, or what has been called standard wages, are always of the same value, that is, they are always obtained in each country, and at all times, at the same elementary cost. But it is well known that the quantity of money, of corn, or of the necessaries and conveniences of life, which is awarded to the labourer, is subject to great variations, all dependant upon the demand and supply of these objects compared with the demand and supply of labour.
If the society can purchase a given quantity of money by commodities which require a smaller sacrifice of labour, profits, &c. to obtain them than is necessary to purchase or obtain the labour for which that money has before been usually exchanged, the money price of labour will rise. If either from the scarcity of money, or the plenty of labour,* a greater sacrifice must be made to obtain the given quantity of money, the money price of labour will fall. And whatever may be the state of the effectual demand for labour, it is obvious that the money price of labour must, on an average, be so proportioned to the price of the funds for its maintenance, as to effectuate the desired supply. It is as the condition of the supply, that the prices of the necessaries of life have so important an influence on the price of labour. A certain portion of these necessaries is required to enable the labourer to maintain a stationary population, a greater portion to maintain an increasing one; and consequently, whatever may be the prices of the necessaries of life, the money wages of the labourer must be such as to enable him to purchase these portions, or the supply cannot take place in the quantity required.
The corn wages of labour are still more strikingly determined by the state of the demand and supply than money wages, on account of the variations in the quantity of corn being much greater in short periods than in the quantity of money. The great variations in the prices of corn in different seasons, while the money price of labour remains the same, are universally observed and acknowledged; but the variations of a more permanent kind in corn wages are sometimes not much less considerable. When the last land taken into cultivation in any country is fertile, and yet worked with some skill, there will be a large produce to divide between profits and wages, and it will depend upon the abundance of this produce and the manner in which it is divided, but chiefly on the former, whether the average corn wages are high or low. In the United States of America, for instance, the plenty and fertility of the land are such as to enable the farmers to pay to their labourers as much as 18 or 20 quarters of wheat in the year, above double the quantity usually paid in the greatest part of Europe, and yet to retain good profits. But it is known that the labouring classes of a country can more than keep up their numbers when paid only 8 or 9 quarters in the year. The question therefore whether the labourer shall be paid, on an average, 8 or 18 quarters, or any intermediate quantity, must depend upon the demand and supply of corn compared with the demand and supply of labour; and it is obvious that the labourer could not, for many years together, receive the larger quantity in any country where corn was not essentially of low value, that is obtained with a small quantity of labour.
If instead of corn wages, or wages estimated in the prime necessary of life, we consider wages as consisting of the general necessaries and conveniences in which the money earnings of the labouring classes are usually spent, then if we suppose the agricultural labourer to be paid in the first instance in corn, his wages in necessaries and conveniences will depend partly upon the quantity of corn which he earns, and partly upon the value of that corn in exchange for the other necessaries of which he stands in need, such as clothing, housing, firing, soap, candles, leather, &c.; the one depending on the varying supply of corn to labour, and the other on the varying supply of corn to the other commodities wanted. Usually wages estimated in general necessaries and conveniences are more steady than corn wages; because most of the articles besides corn, of which they are composed, are less affected by the seasons, and consequently more regular in their supply than corn; but if these articles are compared directly with labour instead of corn, the quantity of them which shall be given to the labourer will still depend not only upon the varying powers of labour in their production, but upon that ordinary state of the demand for them compared with the supply which, in any given condition of the productive powers of labour, determines the proportion of such necessaries which is awarded to the labourer.
Adam Smith is practically quite correct, when he says, that, “the money price of labour is necessarily regulated by two circumstances; the demand for labour; and the price of the necessaries and conveniences of life.”* But it is of great importance to a thorough understanding of the subject, to keep constantly under our view the causes which determine the relative prices of labour and commodities, and to see clearly and distinctly the constant and predominant action of the principle of supply and demand on both.
In all those cases which Adam Smith has so happily explained and illustrated, where an apparent irregularity takes place in the wages of different kinds of labour, it will be found, universally, that the causes to which he justly attributes them, are causes of a nature to influence the supply of labour in the particular departments in question, and to determine such wages by the demand compared with the supply of the kind of labour required. The five principal circumstances, which, according to him, make up for a small pecuniary gain in some employments, and counterbalance a great one in others, namely; 1. The agreeableness or disagreeableness of the employments themselves. 2. The easiness and cheapness, or the difficulty and expense of learning them. 3. The constancy or inconstancy of employment in them. 4. The small or great trust which must be reposed in those who exercise them; and 5. The probability or improbability of success in them,* are all obviously of this description; and in many of the cases stated, it would not be easy to account for their effects on the price of the different kinds of labour, upon any other principle. One hardly sees, for instance, why the cost of producing a poacher should be less than that of a common labourer, or the cost of producing a coal-heaver much greater; yet they are paid very differently. It is not easier to resolve the effects on wages of the small or great trust which must be reposed in a workman, or, the probability or improbability of success in his trade, into the quantity of labour, profits, &c. which has been employed to bring him into the market. Adam Smith satisfactorily shews, that the whole body of lawyers is not remunerated sufficiently to pay the expenses which the education of the whole body has cost;† and it is obvious that particular skill, both in trades and professions, is paid high, with but little reference to the labour employed in acquiring it, which, owing to superior talent, is often less than that which is frequently applied to the acquisition of inferior proficiency. But all these cases are accounted for in the easiest and most natural manner, upon the principle of supply and demand. Superior artists are paid high on account of the scanty supply of such skill, whether occasioned by unusual labour or uncommon genius, or both. Lawyers, as a body, are not well remunerated, because the prevalence of other motives, besides mere gain, crowds the profession with candidates, and the supply is not regulated by the cost of the education; and in all those instances, where disadvantages or difficulties of any kind accompany particular employments, it is obvious that they must be paid comparatively high, because if the additional remuneration were not sufficient to balance such disadvantages, the supply of labour in these departments would be deficient, as, cæteris paribus, every person would choose to engage in the most agreeable, the least difficult, and the least uncertain occupations. The deficiency so occasioned, whenever it occurs, will naturally raise the price of labour; and the advance of price, after some little oscillation, will rest at the point where it is just sufficient to occasion a supply suited to the effectual demand.
Adam Smith has in general referred to the principle of supply and demand in cases of this kind, but he has occasionally forgotten it:—“If one species of labour,” he says, “requires an uncommon degree of dexterity and ingenuity, the esteem which men have for such talents will give a value to their produce, superior to what would be due to the time employed about it.”* And in another place, speaking of China, he remarks, “That if in such a country, (that is, a country with stationary resources,) wages had ever been more than sufficient to maintain the labourer, and enable him to bring up a family; the competition of the labourers and the interest of the masters, would soon reduce them to the lowest rate which is consistent with common humanity.”† The reader will be aware, from what has been already said, that in the first case here noticed, it is not simply the esteem for the dexterity and ingenuity referred to, or a disinterested wish to reward such skill, which raises the price of the commodity, but their scarcity, and the consequent scarcity of the articles produced by them, compared with the demand. And in the latter case, it is not common humanity which interferes to prevent the price of labour from falling still lower. If humanity could have successfully interfered, it ought to have interfered long before, and prevented any premature mortality from being occasioned by bad or insufficient food. But unfortunately, common humanity cannot alter the funds for the maintenance of labour. While these are stationary, and the habits of the lower classes prompt them to supply a stationary population cheaply, the wages of labour will be scanty; but still they cannot fall below what is necessary, under the actual habits of the people, to keep up a stationary population; because, by the supposition, the funds for the maintenance of labour are stationary, not increasing or declining; and consequently the principle of demand and supply would always interfere to prevent such wages as would either occasion an increase or diminution of people.
Of the Causes which principally affect the Habits of the Labouring Classes.
The natural price of labour has been defined by Mr. Ricardo to be “that price which is necessary to enable the labourers one with another to subsist, and to perpetuate their race, without either increase or diminution.”* This price I should really be disposed to call a most unnatural price; because in a natural state of things, that is, without unnatural impediments to the progress of accumulation, such a price could not permanently occur in any country, till the cultivation of the soil, or the power of importation had been pushed as far as possible. But if this price be really rare, and, in an ordinary state of things, at a great distance in point of time, it must evidently lead to great errors to consider the market-prices of labour as only temporary deviations above and below that fixed price, to which they will very soon return.
The natural or necessary price of labour in any country I should define to be that price which, in the actual circumstances of the society, is necessary to occasion an average supply of labourers, sufficient to meet the effectual demand.* And the market price I should define to be, the actual price in the market, which from temporary causes is sometimes above, and sometimes below, what is necessary to supply this demand.
The condition of the labouring classes of society must evidently depend, partly upon the rate at which the funds for the maintenance of labour and the demand for labour are increasing; and partly, on the habits of the people in respect to their food, clothing, and lodging.
If the habits of the people were to remain fixed, the power of marrying early, and of supporting a large family, would depend upon the rate at which the funds for the maintenance of labour and the demand for labour were increasing. And if these funds were to remain fixed, the comforts of the lower classes of society would depend upon their habits, or the amount of those necessaries and conveniences, without which they would not consent to keep up their numbers to the required point.
It rarely happens, however, that either of them remains fixed for any great length of time together. The rate at which the funds for the maintenance of labour increase is, we well know, liable, under varying circumstances, to great variation; and the habits of a people though not so liable, or so necessarily subject to change, can scarcely ever be considered as permanent. In general, their tendency is to change together. When the funds for the maintenance of labour are rapidly increasing, and the labourer commands a large portion of necessaries, it is to be expected that if he has the opportunity of exchanging his superfluous food for conveniences and comforts, he will acquire a taste for these conveniences, and his habits will be formed accordingly. On the other hand, it generally happens that, when the funds for the maintenance of labour become nearly stationary, such habits, if they ever have existed, are found to give way; and, before the population comes to a stop, the standard of comfort is essentially lowered.
Still, however, partly from physical, and partly from moral causes, the standard of comfort differs essentially in different countries, under the same rate of increase in their funds for the maintenance of labour. Adam Smith, in speaking of the inferior food of the people of Scotland, compared with their neighbours of the same rank in England, observes, “This difference in the mode of their subsistence is not the cause, but the effect, of the difference in their wages, though, by a strange misapprehension, I have frequently heard it represented as the cause.”* It must be allowed, however, that this correction of a common opinion is only partially just. The effect, in this case as in many others, certainly becomes in its turn a cause; and there is no doubt, that if the continuance of low wages for some time, should produce among the labourers of any country habits of marrying with the prospect only of a mere subsistence, such habits, by supplying the quantity of labour required at a low rate, would become a constantly operating cause of low wages.
It would be very desirable to ascertain what are the principal causes which determine the different modes of subsistence among the lower classes of people of different countries; but the question involves so many considerations, that a satisfactory solution of it is hardly to be expected. Much must certainly depend upon the physical causes of climate and soil; but still more perhaps on moral causes, the formation and action of which are owing to a variety of circumstances.
From high real wages, or the power of commanding a large portion of the necessaries of life, two very different results may follow; one, that of a rapid increase of population, in which case the high wages are chiefly spent in the maintenance of large and frequent families; and the other, that of a decided improvement in the modes of subsistence, and the conveniences and comforts enjoyed, without a proportionate acceleration in the rate of increase.
In looking to these different results, the causes of them will evidently appear to be the different habits existing among the people of different countries, and at different times. In an inquiry into the causes of these different habits, we shall generally be able to trace those which, in old countries,* produce the first result, to all the circumstances which contribute to depress the lower classes of the people, which make them unable or unwilling to reason from the past to the future, and ready to acquiesce, for the sake of present gratification, in a very low standard of comfort and respectability; and those which produce the second result, to all the circumstances which tend to elevate the character of the lower classes of society, which make them act as beings who “look before and after,” and who consequently cannot acquiesce patiently in the thought of depriving themselves and their children of the means of being respectable, virtuous, and happy.
Among the circumstances which contribute to the character first described, the most efficient will be found to be despotism, oppression, and ignorance: among those which contribute to the latter character, civil and political liberty, and education.
Of all the causes which tend to generate prudential habits among the lower classes of society, the most essential is unquestionably civil liberty. No people can be much accustomed to form plans for the future, who do not feel assured that their industrious exertions, while fair and honourable, will be allowed to have free scope; and that the property which they either possess, or may acquire, will be secured to them by a known code of just laws impartially administered. But it has been found by experience, that civil liberty cannot be permanently secured without political liberty. Consequently, political liberty becomes almost equally essential; and in addition to its being necessary in this point of view, its obvious tendency to teach the lower classes of society to respect themselves by obliging the higher classes to respect them, must contribute greatly to aid all the good effects of civil liberty.
With regard to education, it might certainly be made general under a bad form of government, and might be very deficient under one in other respects good; but it must be allowed, that the chances, both with regard to its quality and its prevalence, are greatly in favour of the latter. Education alone could do little against insecurity of property; but it would powerfully assist all the favourable consequences to be expected from civil and political liberty, which could not indeed be considered as complete without it.
According as the habits of the people had been determined by such unfavourable or favourable circumstances, high wages, or a rapid increase of the funds for the maintenance of labour, would be attended with the first or second of the results before described; or at least by such results as would approach to the one or the other, according to the different degrees in which all the causes which influence habits of improvidence or prudence had been efficient.
Ireland, during the course of the last century, may be produced perhaps as the most marked instance of the first result. On the introduction of the potatoe into that country, the lower classes of society were in such a state of oppression and ignorance, were so little respected by others, and had consequently so little respect for themselves, that as long as they could get food, and that of the cheapest kind, they were content to marry under the prospect of every other privation. The abundant funds for the support of labour occasioned by the cultivation of the potatoe in a favourable soil, which often gave the labourer the command of a quantity of subsistence quite unusual in the other parts of Europe, were spent almost exclusively in the maintenance of large and frequent families; and the result was, a most rapid increase of population, with little or no melioration in the general condition and modes of subsistence of the labouring poor.
An instance somewhat approaching to the second result may be found in England, in the first half of the last century. It is well known, that during this period the price of corn fell considerably, while the price of labour is stated to have risen. During the last forty years of the 17th century, and the first twenty of the 18th, the average price of corn was such as, compared with the wages of labour, would only enable the labourer to purchase, with a day’s earnings, about two-thirds of a peck of wheat. From 1720 to 1750 the price of wheat had so fallen, while wages had risen, that instead of two thirds the labourer could purchase the whole of a peck of wheat with a day’s labour.*
This great increase of command over the first necessary of life did not, however, produce a proportionate increase of population. It found the people of this country living under a good government, and enjoying all the advantages of civil and political liberty in an unusual degree. The lower classes of people had been in the habit of being respected, both by the laws and the higher orders of their fellow citizens, and had learned in consequence to respect themselves. The result was, that their increased corn wages, instead of occasioning an increase of population exclusively, were so expended as to occasion a decided elevation in the standard of their comforts and conveniences.
During the same period, the funds for the maintenance of labour in Scotland do not appear to have increased so fast as those of England; but since the middle of the last century, the former country has perhaps made a more rapid progress than the latter; and the consequence has been, that from the same causes, these increased resources have not produced, exclusively, an increase of population, but a great alteration for the better in the food, dress, and houses of the lower classes of society, in that country.
The general change from bread of a very inferior quality to the best wheaten bread, seems to have been peculiar to the southern and midland counties of England, and may perhaps have been aided by adventitious circumstances.
The improving cultivation of the country after 1720, together with the state of the foreign markets, as opened by the bounty, appears to have diminished, in some districts, the usual difference in the prices of the different kinds of grain. Though barley was largely grown and largely exported, it did not fall in price so much as wheat. On an average of the twenty years ending with 1705, compared with an average of twenty years ending with 1745, the quarter of wheat fell from £1. 16s. 3d. to £1. 9s. 10d. but malt during the same period remained at the same price, or, if any thing, rather rose;* and as barley is supposed to be not a cheaper food than wheat, unless it can be purchased at ⅔ of the price,† such a relative difference would have a strong tendency to promote the change.
From the small quantity of rye exported, compared with wheat and barley, it may be inferred that it did not find a ready vent in foreign markets; and this circumstance, together with the improving state of the land, diminished its cultivation and use.
With regard to oats, the prohibitory laws and the bounty were not so favourable to them as to the other grains, and more were imported than exported. This would naturally tend to check their cultivation in the districts which were capable of growing the sort of grain most certain of a market; while the Act of Charles II. respecting the buying up of corn to sell again, threw greater obstacles in the way of the distribution of oats than of any other grain.
By this Act, wheat might be bought up and stored for future sale when the price did not exceed 48s.; barley, when the price did not exceed 28s.; and oats, when the price did not exceed 13s. 4d. The limited prices of wheat and barley were considerably above their ordinary and average rates at that period, and therefore did not often interfere with their proper distribution; but the ordinary price of oats was supposed to be about 12s. the quarter, and consequently the limit of 13s. 4d. would be very frequently exceeded,* and obstacles would be continually thrown in the way of their transport from the districts of their growth to the districts where they might be wanted. But if, from the causes here described, the labouring classes of the South of England were partly induced, and partly obliged, to adopt wheat as their main food, instead of the cheaper kinds of grain, the rise of wages would at once be accounted for, consistently with the fall in the price of wheat; an event which, under an apparently slack demand for labour at the time, has been considered as so improbable by some writers, that the accuracy of the accounts has been doubted. It is evidently, however, possible, either on the supposition of a voluntary determination on the part of the labouring classes to adopt a superior description of food, or a sort of obligation to do it, on account of the introduction of a new system of cultivation adapted to a more improved soil: and, in either case, the effects observable from 1720 to 1750 would appear; namely, an increased power of commanding corn, without a proportionate increase of population. It is probable that both causes contributed their share to the change in question. When once the fashion of eating wheaten bread had become general in some countries, it would be likely to spread into others, even at the expense of comforts of a different description; and in all cases where particular modes of subsistence, from whatever causes arising, have been for any time established, though such modes always remain susceptible of change, the change must be a work of time and difficulty. A country, which for many years had principally supported its peasantry on one sort of grain, must alter its whole system of agriculture before it can produce another sort in sufficient abundance; and the obstinacy with which habits are adhered to by all classes of people, as in some countries it would prevent high wages from improving the quality of the food, so in others it would prevent low wages from suddenly deteriorating it; and such high or low wages would be felt almost exclusively in the great stimulus or the great check which they would give to population.
Of the Causes which principally influence the Demand for Labour, and the Increase of the Population.
There is another cause, besides a change in the habits of the people, which prevents the population of a country from keeping pace with the apparent command of the labourer over the means of subsistence. It sometimes happens that corn wages are comparatively high without a proportionate demand for labour. This is the most likely to take place when the price of raw produce has fallen without a fall in the price of labour, so as to disable the cultivators from employing the same quantity of labour as before. If the fall be considerable, and not made up in value by increase of quantity, so many labourers will be thrown out of work that wages, after a period of great distress, will generally be lowered in proportion. But if the fall be gradual, and partly made up in exchangeable value by increase of quantity, the money wages of labour will not necessarily sink; and the result will be merely a slack demand for labour, not sufficient perhaps to throw the actual labourers out of work, but such as to prevent or diminish task-work, to check the employment of women and children, and to give but little encouragement to the rising generation of labourers. In this case the quantity of the necessaries of life actually earned by the labourer and his family, may be really less than when, owing to a rise of prices, the daily pay of the labourer will command a smaller quantity of corn. The command of the labouring classes over the necessaries of life, though apparently greater, is really less in the former than in the latter case, and, upon all general principles, ought to produce less effect on the increase of population.
This disagreement between apparent wages and the progress of population will be further aggravated in those countries where poor laws are established, and it has become customary to pay a portion of the labourers’ wages out of the parish rates. If, when corn rises, the farmers and landholders of a parish keep the wages of labour down, and make a regular allowance for children, it is obvious that there is no longer any necessary connexion between the apparent corn wages of day labour and the real means which the labouring classes possess of maintaining a family. When once the people are reconciled to such a system, the progress of population might be rapid, at a time when the real wages of labour, independently of parish assistance, were only sufficient to support a wife and one child, or even a single man without either wife or child, because there might still be both encouragement to marriage, and the means of supporting children.*
When the population of a country increases faster than usual for any time together, the labouring classes must have the command of a greater quantity of food than they had before possessed, or at least than they had before applied to the maintenance of their families. This may be obtained in various ways—by higher corn wages, by saving in conveniences, by adopting a cheaper kind of food, by more task-work and the more general employment of the women and children, or by parish allowances. But the actual application of the greater quantity of food seems to be necessary to the increase of population; and wherever such increase has taken place, some of these causes, by which a greater quantity of food is procured, will always be in action, and may generally be traced.
The high wages, both in corn and money, of the United States, occasioned by the rapid accumulation of capital, and the power of selling produce, obtained by a comparatively small quantity of labour, at European prices, are unquestionably the cause of the very rapid progress of the American population. A very great demand for labour has, in this case, accompanied a low comparative value of produce, a union not necessary nor frequent, but, when it does occur, calculated to occasion the most rapid increase of population.
The peculiar increase of the population of Ireland, compared with other European countries, has obviously been owing to the adoption of a cheaper food, which might be produced in large quantities, and which, aided by the Cotter system of cultivation, has allowed the increase of people greatly to exceed the demand for labour.
The great increase of population of late years in England and Scotland has been owing to the power of the labouring classes to obtain a greater quantity of food, partly by temporary high wages in manufactures, partly by the increased use of potatoes, partly by increased task-work and the increased employment of women and children, partly by increased parish allowances to families, and partly by the increased relative cheapness of manufactures and foreign commodities.
In general perhaps more of these causes will be called into action by a rise of prices which sometimes lowers the command of a day’s labour over the necessaries of life, than by a fall of prices which raises it.
What is essentially necessary to a rapid increase of population is a great and continued demand for labour; and this is proportioned to the rate of increase in the quantity and value of those funds, whether arising from capital or revenue, which are actually employed in the maintenance of labour.
It has been generally considered, that the demand for labour is proportioned only to the circulating, not the fixed capital of a country. But in reality the demand for labour is not proportioned to the increase of capital in any shape; nor even, as I once thought, to the increase of the exchangeable value of the whole annual produce. It is proportioned only, as above stated, to the rate of increase in the quantity and value of those funds which are actually employed in the maintenance of labour.
These funds consist principally in the necessaries of life, or in the means of commanding the food, clothing, lodging, and firing of the labouring classes of society. Now it is quite evident that if the capital of a society were directed in the most judicious and skilful manner to the production of these necessaries, and that the neat surplus above what was required for the maintenance of the persons so employed, and of their employers, were spent in the maintenance of menial servants, soldiers, and sailors, all the demand for labour that the resources of such a country called out in the most effective manner would admit of, might exist, with little of that great mass of capital, which in most improved countries is employed in producing luxuries and superior conveniences.* But if this be so, it is obvious that capital, and even the exchangeable value of the whole produce may increase without any increase in the demand for labour. If the circulating capital applied to the production of luxuries and conveniences employed only those persons who would otherwise be maintained as unproductive labourers by the surplus of necessaries, not only no addition is thereby made to the demand for labour, but if the persons before engaged in personal services were dismissed faster than they could be employed in the production of luxuries and superior conveniences a diminished demand for labour might take place under an increasing circulating capital. And if a large portion of the exchangeable value of the whole produce of a country cannot be resolved into necessaries, it is clear that the whole produce may increase in exchangeable value without a greater value of the necessaries of life being actually employed in the maintenance of labour.
But though it is unquestionably true that without the capital employed in luxuries and superior conveniences the same demand for labour might exist; yet practically, if the neat revenue of a country could only be employed in the maintenance of menial servants and soldiers, there is every reason to think that the stimulus to production in modern states would be very greatly diminished, and that the cultivation of the soil would be carried on with the same kind of indolence and slackness as in the feudal times.
On the other hand, if the whole of the surplus produce beyond what was required for the support of those who were employed in the production of necessaries could be spent in no other way than in the production and purchase of material luxuries and conveniences, if no menial servants could be kept to take care of houses, furniture, carriages, horses, &c. it is quite clear that the demand for material luxuries and conveniences would very soon abate, and the owners of land and capital would have very slender motives to employ them in the most productive manner.
It is clearly then the operation of both stimulants, under the most favourable proportions, which is likely to give the most effective encouragement even to the production of necessaries. And though it is quite certain that an increase in the value of the funds for the maintenance of labour is not strictly proportioned to the increase in the exchangeable value of the whole produce estimated in labour; yet, in ordinary times, and when no great changes are taking place in the proportion of personal services to productive labour, an increase of such exchangeable value is generally followed by an increased demand for labour, since its ordinary and natural effect is to increase the value of the funds destined for the maintenance of labour.
Whenever the introduction of fixed capital has for a time the effect of diminishing the demand for labour, it will generally be found that the value of the whole annual produce is at the same time diminished: but in general the use of fixed capital is favourable to the abundance of circulating capital; and if the market for the products can be proportionally extended, the whole value of the capital and revenue of a state is greatly increased by it, as well as the value of the funds for the maintenance of labour, and a great demand for labour created.
The increase in the whole value of cotton products, since the introduction of the improved machinery, is known to be prodigious; and it cannot for a moment be doubted that both the circulating capital and the demand for labour in the cotton business have very greatly increased during the last fifty years. This is indeed sufficiently proved by the greatly increased population of Manchester, Glasgow, and the other towns where the cotton manufactures have most flourished.
A similar increase of value, though not to the same extent, has taken place in our hardware, woollen, and other manufactures, and has been accompanied by an increasing demand for labour, notwithstanding the increasing use of fixed capital.
Even in our agriculture, if the fixed capital of horses, which from the quantity of produce they consume, is the most disadvantageous description of fixed capital, were disused, it is probable, that a great part of the land which now bears corn would be thrown out of cultivation. Land of a poor quality would never yield sufficient to pay the labour of cultivating with the spade, of bringing manure to distant fields in barrows, and of carrying the products of the earth to distant markets by the same sort of conveyance. Under these circumstances, as there would be a diminution in the quantity of corn produced, there would be a diminution in the whole value of the produce; and the value of the funds for the maintenance of labour being impaired, the demand for labour would be diminished in proportion.*
On the other hand, if, by the gradual introduction of a greater quantity of fixed capital, we could cultivate and dress our soil and carry the produce to market at a much less expense, we might increase our produce very greatly by the cultivation of all our waste lands and the improvement of all the land already in cultivation; and if the substitution of this fixed capital were to take place in the only way in which we can suppose it practically to take place, that is, gradually, there is no reason to doubt that the value of raw produce would keep up nearly to its former level; and its greatly increased quantity, combined with the greater proportion of the people which might be employed in manufactures and commerce, while it would occasion a very great increase in the exchangeable value of the general produce, would increase at the same time the value of the funds destined for the maintenance of labour, and thus cause a great demand for labour and a great addition to the population.
There is no occasion therefore to fear that the introduction of fixed capital, as it is likely to take place in practice, will diminish the effective demand for labour; indeed it is to this source that we are to look for the main cause of its future increase. At the same time, it is certainly true, as will be more fully stated in a subsequent part of this work, that if the substitution of fixed capital were to take place much faster than an adequate market could be found for the more abundant supplies derived from it and for the new products of the labour that had been thrown out of employment, a slack demand for labour and distress among the labouring classes of society would be universally felt. But in this case, the whole produce would fall in value, owing to a temporary excess of supply compared with the demand.
In the formation of the value of the whole funds specifically destined for the maintenance of labour, (the rate of the increase of which regulates the demand for labour,) a part depends upon the value of a given portion of such funds, and a part upon their amount in kind, or in other words, a part depends upon their price, and a part upon their quantity. That part which depends merely upon price is in its nature less durable and less effective than that which depends upon quantity. An increase of price with little or no increase of quantity, has obvious limits, and must be followed very soon in most cases by a nearly proportionate increase of money wages; while the command of these increased money wages over the necessaries of life going on diminishing, the population must come to a stop, and no further rise of prices can occasion an effective demand for labour.
On the other hand, if the quantity of produce be increased so fast that the value of the whole diminishes from excessive supply, it may not command so much labour this year as it did in the last, and for a time there will be a very slack demand for workmen.
These are the two extremes, the one arising from increased value without increased quantity; and the other from increased quantity without increased value.
It is obvious that the object which it is most desirable to attain is the union of the two. There is somewhere a happy mean, where, under the actual resources of a country, both the increase of wealth and the demand for labour may be a maximum. A taste for conveniences and comforts not only tends to create a more steady demand for labour, than a taste for personal services; but by cheapening manufactures and the products of foreign commerce, including many of the necessaries of the labouring classes, it actually enlarges the limits of the effectual demand for labour, and renders it for a longer time effective.
An increase in the quantity of the funds for the maintenance of labour, with steady prices, or even slightly falling, may occasion a considerable demand for labour; but in the actual state of things, and in the way in which the precious metals are actually distributed, some increase of prices generally accompanies the most effective demand for produce and population. It is this increase both of quantity and price which most surely increases the value of the funds for the maintenance of labour, creates the greatest demand for labourers, excites the greatest quantity of industry, and generally occasions the greatest increase of population.
A Review of the Corn Wages of Labour from the Reign of Edward III.
Some writers of great ability have been of opinion that rising prices, occasioned by an influx of bullion, are very unfavourable to the labouring classes of society; and certainly there are some periods of our history which seem strongly to countenance this opinion: but I am inclined to think, that if these periods, and the circumstances connected with them, be examined with more attention, the conclusion which has been drawn from them will not appear so certain as has been generally imagined. It will be found that, in the instances in question, other causes were in operation to which the effect referred to might more justly be attributed.
The period of our history more particularly noticed is the 16th century, from the end of the reign of Henry VII. to the end of the reign of Elizabeth. During this period it is an unquestionable fact that the corn wages of labour fell in an extraordinary degree, and towards the latter end of the century they would not command much above one-third of the quantity of wheat which they did at the beginning of it.
Sir F. M. Eden has noticed the price of wheat in nineteen out of the twenty-four years of Henry VII.’s reign, and in some of the years two or three times.* Reducing the several notices in the same year first to an average, and then taking the average of the nineteen prices, it comes to 6s. 3¼d. the quarter, rather less than 9½d. the bushel, and 2⅜d. the peck.
By a statute passed in 1495 to regulate wages, the price of common day labour seems to have been 4d. or 4½d. without diet. All labourers and artificers, not specifically mentioned, are put down at 4d.; but in another part of the statute, even a woman labourer (I suppose in hay time) is set down at 4½d. and a carter at 5d.*
At the price of wheat just stated, if the wages of the labourer were 4d. he would be able to purchase, by a day’s labour, a peck and three quarters of wheat, within half a farthing; if his wages were 4½d. he would be able to purchase half a bushel, within a farthing.
The notices of the price of day labour in the subsequent years are extremely scanty. There are none in the reigns of Henry VIII., Edward, and Mary. The first that occurs is in 1575, and the price mentioned is 8d.† Taking an average of the five preceding years in which the prices of wheat are noticed, including 1575, having previously averaged the several prices in the same year, as before, it appears that the price of the quarter of wheat was 1l. 2s. 2d. which is 2s. 9½d. the bushel, and 8¼d. the peck. At this price, a day’s labour would purchase a peck of corn, within a farthing, or of a peck.
This is a diminution of nearly a half in the corn wages of labour; but at the end of the century, the diminution was still greater.
The next notice of the price of labour, with the exception of the regulations of the justices in some of the more northern counties, which can hardly be taken as a fair criterion for the south, is in 1601, when it is mentioned as 10d. Taking an average from the Windsor table of five years, which includes, however, one excessively dear year, and subtracting to reduce it to Winchester measure, it appears that the price of the quarter was 2l. 2s. 0d. which is 5s. 3d. the bushel, and 1s. 3½d., the peck. A day’s labour would at this price purchase less than ⅔ of a peck.*
This is unquestionably a prodigious fall in the corn wages of labour. But it is of great importance to inquire whether the rate from which they fell was not as extraordinary as the rate to which they sunk; and here I think we shall find that the wages the most difficult to be accounted for are the high corn wages of the 15th, rather than the low corn wages of the 16th century.
If we revert to the middle of the 14th century, at the time when the first general statute was passed to regulate wages, the condition of the labourer will appear to be very inferior to what it was during the greatest part of the 15th century. This fact may be established on unexceptionable evidence. Statutes or regulations to fix the price of labour, though they do not always succeed in their immediate object, (which is generally the unjust one, of preventing it from rising,) may be considered as undeniable testimonies of what the prices of labour had been not long previous to the time of their passing. No legislature in the most ignorant age could ever be so rash as arbitrarily to fix the prices of labour without reference to some past experience. Consequently, though the prices in such statutes cannot be depended upon with regard to the future, they appear to be quite conclusive with regard to the past. In the present case, indeed, it is expressly observed, that servants should be contented with such liveries and wages as they received in the 20th year of the king’s reign, and two or three years before.*
From this statute, which was enacted in 1350, the 25th of the King, for the most unjust and impolitic purpose of preventing the price of labour from rising after the great pestilence, we may infer that the price of day labour had been about 1½d. or 2d. Common agricultural labour, indeed, is not specifically mentioned; but the servants of artificers are appointed to take 1½d., common carpenters 2d., and a reaper, the first week in August, also 2d., all without diet; from which we may conclude that the wages of common day labour must have been as often 1½d. as 2d.†
Sir F. M. Eden has collected notices of the prices of wheat in sixteen out of the twenty-five years of Edward III. previous to the time of the passing of the statute. Taking an average as before, the price of wheat appears to have been about 5s. 4d. the quarter, which is 8d. the bushel, and 2d. the peck.
At this price of wheat, if the labourer earned 1½d. a day, he could only purchase by a day’s labour ¾ of a peck of wheat; if he earned 2d. he could purchase just a peck. In the former case, he would earn less than half of the corn earned by the labourer of Henry VII.; and in the latter case, very little more than half.
But in the subsequent period of Edward III.’s reign, the labourer appears to have been much worse off. The statute of labourers was renewed, and, it is said, enforced very rigidly, notwithstanding a considerable rise in the price of corn.‡ On an average of the thirteen years out of twenty-six, in which the prices of wheat are noticed, the quarter is about 11s. 9d. which is about 1s. 5½ the bushel, and 4¼d. the peck.
At this price, if the money wages of labour had not risen, the condition of the labourer would have been very miserable. He would not have been able to purchase so much as half-a-peck of wheat by a day’s labour, about a fourth part of what he could subsequently command in the reign of Henry VII. It is scarcely possible, however, to conceive that the money wages of labour should not have risen in some degree, notwithstanding the statute and its renewal; but even if they rose one half, they would not have nearly kept pace with the price of corn, which more than doubled; and during the last twenty-five years of the reign of Edward III. the earnings of the labourer in corn were probably quite as low as during the last twenty-five years of Elizabeth.
In the reigns of Richard II. and Henry IV. the price of wheat seems to have fallen nearly to what it was in the first half of the reign of Edward III. From 1377 to 1398 inclusive, it was about 5s. 7d. the quarter; and from 1399 to 1411, about 6s. 1d.* It is difficult to ascertain how much the money wages of labour had advanced; but if they had risen so as to enable the labourer to support himself, through the last twenty-six years of the reign of Edward III. and had not sunk again, in consequence of the subsequent fall, which is probable, the labourer, during these reigns, must have been well paid.
During the reign of Henry V. and the first part of Henry VI. to the passing of the statutes in 1444, the price of the quarter of wheat was about 8s. 8d.† This would be 1s. 1d. the bushel, and 3¼d. the peck. For the greater part of these thirty-two years, the wages of day labour seem to have been about 3d. They did not probably rise to what they were appointed to be in 1444, that is 4d. or 4½d., till the ten dear years preceding the statute, during which, the average price of the quarter was 10s. 8d. On an average of the whole period of thirty-two years, the wages of day labour appear to have purchased about a peck of corn, rather less perhaps, than more, in reference to the greater portion of the period.
From 1444 to the end of the century, the average money price of wheat was about 6s. while the wages of day labour continued at 4d. or 4½d.* At the latter of these prices of labour, wages would purchase exactly two pecks of wheat, or half a bushel, and at the former price of half a bushel.
From the passing of the first statute of labourers in 1350 to the end of the 15th century, a period of 150 years, successive changes had been taking place in the quantity of metal contained in the same nominal sum; so that the pound of silver, which in the middle of the reign of Edward III. was coined into 1l. 2s. 6d. was, in the reign of Henry VII., coined into 1l. 17s. 6d.
One should naturally have expected, that this depreciation of the coin would have shown itself first, and most conspicuously, in some exportable commodity, such as corn, rather than labour; and so it probably would, as it did afterwards in the reign of Elizabeth, if wheat had not at the same time been cheap in the rest of Europe, particularly in France. In fact, however, this great fall in the intrinsic value of the coin was in no respect made up by the slight rise in the nominal price of wheat which occurred in the course of that period. This rise was only from about 5s. 4d. to 6s. or 6s. 3d. Consequently a very considerable fall had really taken place in the bullion price of wheat.
But the nominal price of labour, instead of rising in the same slight degree as wheat, rose from 1½d. or 2d. to 4d. or 4½d., a rise much more than sufficient to cover the deterioration of the coin; so that the bullion price of labour rose considerably, during the time that the bullion price of wheat fell. It is singular, that Adam Smith, in his Digression concerning the value of silver during the four last centuries, should not have noticed this circumstance. If he had been aware of this rise in the bullion price of labour, his principles, which led him to consider corn as a good measure of value, merely because it is the best measure of labour, should have led him to a very different conclusion from that which he has stated. Referring to labour which, it has been shown in this work, is the true standard measure of value, and in fact, is the standard which Adam Smith himself proposes, it appears that the value of silver from the middle of the 14th to the end of the 15th century, when the effect contemplated was the greatest, instead of rising to nearly double in value, fell in the proportion of from about 3 to 2.*
It was during the favourable part of this period that Sir John Fortesque wrote his work on Absolute and Limited Monarchy, and contrasted the prosperous and happy condition of the peasantry of England with the miserable state of the peasantry of France.†
But it is not sufficient to show that the condition of the lower classes of people in England during the last half of the 15th century, was much superior to what it was either in the preceding century, or subsequently during the depreciation of money occasioned by the discovery of the American mines. To prove that it was peculiar, we must compare it with the condition of the people after the depreciation had ceased.
According to Adam Smith, the effects of the discovery of the American mines seemed to be at an end about 1638 or 40. In 1651 the wages of day-labour, as established by the justices in Essex at the Chelmsford quarter-sessions, were for the summer half year, harvest excepted, 1s. 2d. This is a considerable rise in the money price of labour from the time of Elizabeth; but we shall find that it is hardly proportionate to the rise of the price of wheat. If we take an average of the five years preceding 1651,* the period to which the regulation would probably for the most part refer; it appears that the price of the quarter of wheat in the Windsor market, deducting to reduce it to Winchester measure, was 3l. 4s. 7d.† the quarter, which would be about 8s. the bushel, and 2s. the peck. At this price of wheat, with wages at 14d. the labourer would only earn of a peck, half a peck, and .
In 1661, soon after the accession of Charles II., wages were again regulated by the justices in Essex, at the Easter Sessions, and the price of common day-labour during the summer half year, with the exception of harvest time, was continued at 14d.
If we take an average of the price of wheat for the five years preceding 1661, as before, it appears that the quarter was 2l. 9s. 3d. This is 6s. 2d. the bushel, and 18½d. the peck. At this rate the labourer would earn about ¾ of a peck. It is true that the averages of the prices of corn here taken refer to dear times; but the wages were appointed just at these times: and in the regulations of 1651 it is expressly stated, that they are appointed, “having a special regard and consideration to the prices at this time of all kinds of victuals and apparel, both linen and woollen, and all other necessary charges wherewith artificers, labourers and servants have been more grievously charged with than in times past.”‡
If we take an average of the twenty years from 1646 to 1665 inclusive, we shall find that the price of wheat was rather above than below that of the five years preceding 1661. The average price of the quarter of wheat during these twenty years was £2. 10s. 0¾d.* which is 6s. 3d. the bushel, and nearly 19d. the peck. At this price, with wages at 14d. the labourer for these twenty years would hardly be able to earn so much as ¾ of a peck.
After 1665 the price of corn fell, but money wages seem to have fallen at the same time.
In 1682 wages at Bury in Suffolk were appointed to be 6d. in summer, and 5d. in winter with diet, and double without. This makes the summer wages 1s.; and according to the price of wheat in the preceding five years, the labourer who earned a shilling a day, could hardly command so much as ¾ of a peck of wheat.
The average price of the quarter of wheat from 1665 to 1700 was about £2. 2s. 6d. If we suppose the wages of labour during this period to have been about 1s. the earnings of the labourer would be about ¾ of a peck of wheat. But there is reason to think that the average money wages were not so high as 1s.
In the regulations of the justices at Warwick in 1685,† common labourers were allowed to take only 8d. a day for the summer half year. Sir George Shuckburgh puts down only 7½d. for the period from 1675 to 1720;‡ and Arthur Young estimates the average price of labour during the whole of the 17th century at 10¼d.§ If on these grounds we were to estimate the wages of labour from 1665 to the end of the century at 10½d. it would appear that the earnings of the labourer, in the 17th century, after the depreciation of money had ceased, were only sufficient to purchase [Editor: illegible number - ?/3] of a peck of wheat. Taking however the more favourable supposition of 1s. a day as the earnings of the labourer, they would purchase, as before stated, about ¾ of a peck.
During the first twenty years of the 18th century, the price of corn fell, but not much; and it may be doubted whether the price of labour rose.
In 1725, a few years later than the period alluded to, the wages of labour were settled by the justices at Manchester. The best husbandry labourer, from the middle of March till the middle of September, was not to take more than 1s. a day without meat and drink; but common labourers, and hedgers, ditchers, palers, thrashers, or other task-work, only 10d. Mr. Howlett, as quoted by Sir F. Eden,* states the price of day-labour, so late as 1737, at only 10d. a day; and Sir F. Eden, writing in 1796, observes, that from various information he had collected in different parts of England, he had reason to think that the wages of labour had doubled during the last sixty years, which could hardly be true, unless wages in the early part of the century had been lower than 1s.
The average price of wheat for the first twenty years of the century was rather less than £2.; and if the wages of labour were only 10d. or 10½d., the labourer would earn considerably less than ¾ of a peck. If the wages were 1s. he would earn ⅘ of a peck.
From 1720 to 1755 corn fell and continued low, while the wages of labour seem to have been about 1s. During these thirty-five years the price of wheat was about 33s. the quarter, or a little above 1s. the peck, and the labourer therefore, on an average of thirty-five years together, would be able to earn about a peck of wheat.
From this time corn began gradually to rise, while wages do not appear to have risen in the same proportion. The first authentic accounts that we have of the price of labour, after corn had begun to rise, is in the extensive Agricultural Tours of Arthur Young, which took place in 1767, 1768 and 1770. The general result of the price of labour from these tours, on the mean rate of the whole year, was 7s. 4¼d. a week.* Taking an average of the five years, from 1766 to 1770 inclusive, the price of the quarter of wheat was £2. 7s. 8d. or nearly 48s.† which would be 6s. the bushel, and 1s. 6d. the peck. At these prices of labour and wheat, the labourer would earn very nearly ⅚ of a peck.
In 1810 and 1811, accounts from thirty-seven counties, which, according to Arthur Young, were quite satisfactory, make the wages of day-labour for the mean rate of the year 14s. 6d.‡ a week, or nearly 2s. 6d. a day. The price of wheat for five years ending with 1810 was 92s.—ending with 1811, 96s.§ The prices both of labour and wheat appear to have doubled; and the labourer, in 1810 and 1811, could earn just about the same quantity of wheat as he could about forty years before, that is ⅚ of a peck. The intermediate periods must necessarily have been subject to slight variations, owing to the uncertainty of the seasons, and an occasional advance in the price of corn, not immediately followed by an increased price of labour; but, in general, the average must have been nearly the same, and seldom probably for many years together differed much from ⅚ of a peck.
Since the accounts given by Arthur Young, there has been no general calculation, that I am acquainted with, of the average money wages of agricultural labour, over districts sufficiently extensive to represent the whole. There are great differences in the prices of labour in different counties, and even in different parishes not very distant from each other. But from the numerous statements in the Agricultural Report, and what I have heard from other quarters, I should think that, making allowance for the difference between gold and paper during the high prices, the fall in the money price of standard labour has not been less than between 20 and 25 per cent.* As however the fall in the price of wheat has been much greater, it follows, that the labourer who is fully employed can now earn more wheat than he could at any period of the high prices. According to the calculations just referred to, when wheat on an average of 5 years ending with 1811 was 12s. a bushel, and 3s. a peck, the labourer with his half crown a day could only earn ⅚ of a peck; whereas now if he earns only 20d. a day, and wheat is 52s. a quarter, or 6s. 6d. a bushel, he can purchase a whole peck, and have a halfpenny remaining. If his wages were 2s. a day he could purchase nearly a peck and a quarter. If the price of the quarter of wheat, instead of 52s. were 48s. the quarter, which is higher than it has been for some time latterly, the labourer earning 12s. a week or 2s. a day could purchase a peck and ⅓, and earning only 20d. a day could purchase a peck and , which is a greater quantity than the labourer has been able to command since 1575, when the price of labour is first stated in the reign of Elizabeth.
It is certainly true therefore that for some time, nearly perhaps ever since the war, the fully employed labourers have been able, in spite of the corn laws, to purchase a more than usual quantity of wheat. The specific evil of the present times in regard to agricultural labourers is, that from the low price of corn as compared with the price of labour and the other outgoings of the farmer, he is unable to farm with spirit, and the consequence is that a considerable number of men are unemployed except by the parish. Nothing can shew more clearly that a brisk demand for labourers depends upon an increase of the funds for their maintenance, without a proportionate fall in their value.
On the Conclusions to be drawn from the preceding Review of the Prices of Corn and Labour during the five last Centuries.
From this review of the prices of corn and labour, during nearly the five last centuries, we may draw some important inferences.
In the first place, I think it appears that the great fall in the corn wages of labour which took place in the 16th century, must have been occasioned mainly by the great and unusual elevation which they had previously attained, and not by the discovery of the American mines and the consequent fall in the value of money. When we compare the corn wages of labour during the last half of the 15th century, with what they were both before and subsequently, it appears that whatever may have been the cause of these high wages, they were evidently peculiar, and could not therefore be permanent. This indeed is evident, not only by comparing them with previous and subsequent periods, but by considering their positive amount. Earnings of the value of nearly two pecks or half a bushel of wheat a day would allow of the earliest marriages, and the maintenance of the largest families. They are nearly the same as the earnings of the labourer in the United States. In such a country as England was, even at that time, such wages could only be occasioned by temporary causes. Among these we must reckon, a general improvement in the system of cultivation after the abolition of villanage, which increased the plenty of corn; and the comparatively rapid progress of commerce and manufactures, which occasioned a great demand for labour; while, owing to the wars in France, the civil wars between the Houses of York and Lancaster, and above all perhaps the slow change of habits among a people lately emancipated, this increase of produce and demand had not yet been followed by a proportionate effect on the population.
Certain it is that corn was very cheap both in France* and England; and labour in this country could not possibly have risen and kept high for so long a period as between sixty and seventy years, unless some peculiar cause or causes had restrained the supply of population, compared with the supply of corn and the demand for labour.
It is with the fact however of the very high wages of labour in the 15th century rather than with the causes of it, that we are chiefly concerned at present, and of the fact there can be no doubt; but if the fact be allowed, it follows, that such wages must have very greatly fallen during the course of the following century, if the mines of America had not been discovered.
What effect the depreciation of money might have had in aggravating that increasing poverty of the labouring classes of society, which, with or without such a depreciation, would inevitably have fallen upon them, it is not easy to say. But from the still lower wages which prevailed in the 17th century after the depreciation had ceased, and from what has happened of late years (which shall be more fully noticed presently) I should not be disposed to consider a general rise in the price of corn, occasioned by an alteration in the value of money, and not by bad seasons, as likely to affect the labouring classes prejudicially for more than a few years. Still, however, it is quite certain that the condition of the labouring classes was growing much worse during the time that the depreciation of money from the discovery of the American mines was taking place; and whatever may have been the cause, as the people would always be comparing their situation with what it had been, in their own recollection and that of their fathers, it would inevitably excite great complaints; and, after it had grown comparatively very bad, as in the latter end of the reign of Elizabeth, it was likely to lead to those measures relating to the poor, which marked that period of our history.
Another inference which we may draw from the review is, that during the course of nearly 500 years, the earnings of a day’s labour in this country have probably been more frequently below than above a peck of wheat; that a peck of wheat may be considered as something like a middle point, or a point rather above the middle, about which the corn wages of labour, varying according to the demand and supply, have oscillated; and that the population of a country may increase with some rapidity, while the wages of labour are even under this point.
The wages of day labour in France during the two last centuries, are said to have been pretty uniformly about the 20th part of a septier of wheat,* which would be a little above ⅘ of a peck; but just before the revolution, at the time of Arthur Young’s tour in France, they were only about ¾ of a peck. For some time subsequently to the revolution, they appear to have risen so as to command more than a peck.
A third inference which we may draw from this review is, that the seasons have a very considerable influence on the price of corn, not only for two or three years occasionally, but for fifteen or twenty years together, and sometimes much longer. These periods of unfavourable seasons seem to supersede all the other causes which may be supposed to have the greatest influence upon prices. An instance of this occurs after the great pestilence in the time of Edward III. One should naturally have thought that the quantity of good land being abundant, compared with the population, corn would have been very cheap. It was, however, on the contrary, dear during the twenty-five subsequent years,—a fact which cannot be accounted for but from unfavourable seasons.
Another instance of the same kind had occurred in the reign of Edward II., during the whole of which, the average price of wheat was more than double what it had been during the greatest part of the reign of Edward I., and the first half of the reign of Edward III.—evidently owing to unfavourable seasons.
A third instance occurs during the civil wars of the 17th century. So far from thinking that civil wars have a necessary tendency to make corn dear, I am disposed to agree with Sir F. Eden, in attributing a part of the high price of labour and the cheapness of corn in the 15th century, to the circumstance of a greater destruction of men than of cultivation having been occasioned in the civil wars of the Houses of York and Lancaster. But in the civil wars of the 17th century, no such cheapness of corn took place. On the contrary, in the period from 1646 to 1665 the price of corn was higher both in France and England than it had ever been known for twenty years together, either before or since, exclusive of the prices in this country during the war of the French Revolution. For shorter periods, these unfavourable seasons are of frequent recurrence, and must essentially affect the condition of the labourer during ten or five years. It depends upon their continuance and other concomitant circumstances, whether they raise money wages, or leave them as they were.
The periods of the lowest corn wages have been, when a considerable rise in the price of corn has taken place under circumstances not favourable to a proportionate rise in the price of labour. This is the most likely to happen in unfavourable seasons, when it would be impossible for the price of labour to rise in proportion to the price of corn. It may also happen when a fall is taking place in the value of money, if any previous causes have given an extraordinary stimulus to the progress of population. In this case, though the funds for the maintenance of labour may be increasing fast, the population may be increasing faster, and the money wages of labour will not rise in proportion to the price of corn. To this cause I am strongly disposed to attribute the inadequate rise of the money wages of labour during the reigns of Henry VIII., Mary, Edward VI., and Elizabeth. The state of things in the early part of the 16th century must have given a powerful stimulus to population; and considering the extraordinary high corn wages at this period, and that they could only fall very gradually, the stimulus must have continued to operate with considerable force during the greatest part of the century. In fact, depopulation was loudly complained of at the end of the 15th and beginning of the 16th centuries, and a redundancy of population was acknowledged at the end of the 16th. And it was this change in the state of the population, and not the discovery of the American mines, which occasioned so marked a fall in the corn wages of labour.
If the discovery of the American mines had found the labouring classes of the people earning only the same wages which they appear to have earned in the latter half of the reign of Edward III., and if the same increase of capital and produce had taken place during the 16th century, as really did take place, there is every probability that the money wages of labour would have increased as much as the money price of corn. Indeed when an increase of currency is accompanied, as it frequently is, by a rapid increase of capital, there is one reason, why, in the natural state of things, the price of labour should feel it more than other commodities. The encouragement given to population by such increase of resources, could not appear with any considerable effect in the market under sixteen or eighteen years;* and before that time the demand compared with the supply of labour might be greater than the demand compared with the supply of most other commodities.
It is on this account, that in the fall in the value of money which took place from 1793 to 1814, and which was unquestionably accompanied by a great increase of capital, and a great demand for labour, there is strong reason to believe, that if the price of labour had not been kept down by artificial means, it would have risen higher in proportion than the average price of corn. According to the last authentic accounts which had been obtained of the price of labour, previous to 1814, it appears by the statements of Arthur Young, that on an average of the returns of thirty-seven counties in 1810 and 1811, the weekly wages of day labour were 14s. 6d.,—a price, which, compared with the wages of 1767, 1768 and 1770,† is equal to the rise in the price of wheat during the same period. Now it is known that in many counties and districts in the southern parts of England, wages in 1810 and 1811 were unnaturally kept down to 12s., 10s., 9s. and even 7s. 6d. by the baneful system of regularly maintaining the children of the poor out of the rates; it may therefore fairly be concluded that if this system had not prevailed over a large part of England, the money wages of labour would have risen higher than in proportion to the price of wheat.
This conclusion is still further confirmed by what happened in Scotland and some parts of the north of England. In these districts, all accounts agree that the rise of money wages was in fact greater than the rise of corn, and that the condition of the labourer till 1814 was decidedly improved, even in spite of the taxes, many of which certainly bore heavily on the conveniences and comforts of the labourer, though they affected but little his command over strict necessaries.
In considering the corn wages of labour in the course of this review, it has not been possible always to make a distinction between the effects of a fall in the price of corn, and a rise in the money price of labour. In merely comparing the two objects with each other, the result is precisely similar; but their effects on the demand for labour and the encouragement to population are sometimes dissimilar, as I have before intimated. A great demand for labour is perfectly consistent with a fall in the price of raw produce, because, notwithstanding this fall, the whole value of the funds for the maintenance of labour may still be increasing; but it sometimes happens that a fall in the price of raw produce is accompanied by a diminished power on the part of the farmer to employ labour; and in this case the demand for labour and the encouragement to population will not be in proportion to the corn wages of labour.
If the labourer commands a peck instead of ⅚ of a peck of wheat a day, in consequence of a rise of money wages, all the labourers who are willing and able to work may be employed, and probably also their wives and children; but if he is able to command this additional quantity of wheat on account of a fall in the price of corn which diminishes the value of the farmers’ returns, the advantage is more apparent than real, and though the price of labour may not nominally fall for some time, yet as the demand for labour may be stationary, if not retrograde, its current price will not be a criterion of what might be earned by the united labours of a large family, or the increased exertions of the head of it in task-work.*
It is certain, therefore, that the same current corn wages will, under different circumstances, have a different effect, both on the demand for labour, and the general condition of the labouring classes.†
It should be observed, that in estimating the corn wages of labour I have uniformly taken wheat, the dearest grain. I have taken one grain to the exclusion of other necessaries, in order to avoid complicating the subject; and have chosen wheat because it is the main food of the greatest part of the population in England. But it is evident that at those periods, or in those countries, in which the main food of the people does not consist of wheat, the wheat wages which can be earned by a family will not form a just criterion of the encouragement given to population. Although the wheat wages might be very unequal at two different periods, or in two different countries, yet if in one case an inferior grain were habitually consumed, the encouragement to the population might be the same. The Irish labourer cannot command the support of so large a family upon wheat as the English labourer, but he can command in general the support of a larger family upon the food on which he is accustomed to live; and consequently, population has increased much faster during the last century in Ireland than in England.
It appears then, that in order to form a just estimate of the demand for labour, the encouragement to population, and the condition of the labourer, we must first consider the increase of the funds specifically destined for the maintenance of labour, instead either of the increase of wealth, the increase of capital, or the increase in the exchangeable value of the whole produce.
Secondly, in estimating these funds we must consider their whole value, not merely their whole quantity, and make a proper allowance for those other parts of the wages of labour which do not consist of corn.
And thirdly, in estimating the amount of food and necessaries earned by the labouring classes, which amount principally affects their condition, we must make a careful distinction between the earnings of a whole family, when employment is difficult to be found, and their earnings when there is a demand for more work to be done than there are hands to do it.
It is further of the utmost importance always to bear in mind that a great command over the necessaries and conveniences of life may be effected in two ways, either by a rapid increase in the quantity and value of the funds destined for the maintenance of labour, or by the prudential habits of the labouring classes; and that as the former mode of improving their condition is neither in the power of the poor to carry into effect themselves, nor can in the nature of things be permanent, the great resource of the labouring classes for their happiness must be in those prudential habits which, if properly exercised, are capable of securing to them a fair proportion of the necessaries and conveniences of life, from the earliest stage of society to the latest.
I have said nothing of the rise or fall of wages according to the language adopted by Mr. Ricardo. Such wages, namely proportionate wages, only determine, or rather are determined by, the rate of profits, and will be considered in the next chapter. They have often little to do with the condition of the labourer, as, in reference to the proportion of the produce which he obtains, his wages are low in the United States of America, and high in countries where he may be starving. If indeed wages as well as profits were estimated by proportions, it would be perfectly true, as stated by Mr. Ricardo, that they could not both rise or fall together. If wages rose, profits must fall, and if wages fell, profits must rise. This is the necessary consequence of the language adopted. But Mr. Ricardo, I believe, was the first who used the term wages in this sense. Profits, indeed, and interest, had always been, and must always be estimated by proportions; but wages had always been, and always should be estimated by quantity, either by the quantity of money which the labourer earns, or by the quantity of the necessaries and conveniences of life, which that money enables him to purchase; and in reference to a period of any considerable length, by the latter, and not by the former.
Let it be remembered then, that this is the usual sense affixed to the term, wages, except when the word proportionate is added for some particular purpose. And consequently, according to the ordinary and most correct language of society, we frequently see high profits and high wages, low profits and low wages going together; in using which expressions, high and low, as applied to profits, always refer to their rate or proportion, and as applied to wages, to their quantity or amount.
[* ] It must always be recollected, that a plenty of labour, if that labour be employed, always tends to increase the competition for money, and raise its value.
[* ] Wealth of Nations, Book i. ch. viii. p. 130, 6th edit.
[* ] Wealth of Nations, B. i. ch. x. part i. p. 152, 6th edit.
[† ] Id. p. 161.
[* ] Wealth of Nations, B. i. ch. vi. p. 71, 6th edit.
[† ] Id. ch. vii. p. 108.
[* ] Polit. Econ. c. v. p. 86, 3rd edit.
[* ] We might with almost as much propriety define the natural rate of profits to be that rate which would just keep up the capital without increase or diminution. This is in fact the rate to which profits are constantly tending.
[* ] Wealth of Nat. Book I. chap. viii. p. 114. 6th edit.
[* ] In new countries, such as the United States, the funds for the maintenance of labour are so ample, and are increasing so rapidly, that for a considerable time the prudential check to early marriages may hardly be necessary.
[* ] See Section IV. of this chapter.
[* ] Eden’s State of the Poor. Table, vol. iii. p. 79. In this table, a deduction is made for for the quarter of middling wheat of eight bushels, which is too much.
[† ] Tracts on the Corn Trade, Supp. p. 199.
[* ] Tracts on the Corn Trade, p. 50.
[* ] It is most fortunate for the country and the labouring classes of society, that the bill which passed the House of Commons, for taking from their parents the children of those who asked for relief, and supporting them on public funds, did not pass the House of Lords. Such a law would have been the commencement of a new system of poor laws beyond all comparison worse than the old.
[* ] This view of the subject was stated by me above thirty years ago in the quarto edition of the Essay on Population, p. 421, and by Mr. Ricardo in his 3rd edition, p. 475.
[* ] It has lately been stated, that spade cultivation will yield both a greater gross produce and a greater neat produce. I am always ready to bow to well established experience; but if such experience applies in the present case, one cannot sufficiently wonder at the continued use of ploughs and horses in agriculture. Even supposing however that the use of the spade might, on some soils, so improve the land, as to make the crop more than pay the additional expense of the labour, taken separately; yet, as horses must be kept to carry out dressing to a distance and to convey the produce of the soil to market, it could hardly answer to the cultivator to employ men in digging his fields, while his horses were standing idle in his stables. As far as experience has yet gone, I should certainly say, that it is commerce, price and skill, which will cultivate the wastes of large and poor territories—not the spade.
No inference whatever in regard to the cultivation of a large country can be drawn from what may be done on a few acres in the immediate neighbourhood of houses and manure.
[* ] State of the Poor, vol. iii. p. xli.
[* ] State of the Poor, vol. iii. p. lxxxix.
[† ] Ibid. vol. iii. p. lx.
[* ] The year 1597 seems to have been an extraordinary dear one, and ought not to be included in so short an average. If an average were taken of the five years beginning with 1598, the labourer would appear to earn about of a peck; and, on an average of ten years, from the same period, he would earn about ⅘ of a peck. During the five years from 1594 to 1598 inclusive, the price of wheat seems to have been unusually high from unfavourable seasons.
[* ] Eden’s State of the Poor, vol. i. p. 32.
[† ] Ibid. p. 33.
[‡ ] Ibid, p. 36. 42.
[* ] Eden’s State of the Poor, vol. iii. p. xxv. et seq.
[† ] Eden’s State of the Poor, Table of Prices, vol. iii.
[* ] Mr. Hallam, in his valuable Work on the Middle Ages, has overlooked the distinction between the reigns of Edward III. and Henry VI. with regard to the state of the labouring classes. The two periods appear to have been essentially different in this respect.
[* ] The nominal price of labour rose from about 1½d. or 2d. to 4d. or 4¼d. If we combine these proportions of 3 to 8, and 4 to 9 together, and correct the result by the diminution of the quantity of metal contained in the same nominal sum in the latter period, which was in the proportions of 1l. 17s. 6d. to 1l. 2s. 6d., or of 5 to 3, it will appear that the bullion price of labour rose nearly in the proportion of from 2 to 3, and consequently that the value of silver fell nearly in the proportions of from 3 to 2.
[† ] The rise in the bullion price of labour, while the bullion price of corn was falling, proved not only, that the English labourer could command a greater quantity of corn than usual, but that at the same time there was a great demand for labour, and all who were willing to work might be employed, two events which do not always go together, but which when they do, are most favourable to the labouring classes.
[* ] As the regulation passed in April, the year 1651 is not included in the average.
[† ] Encyclopædia Brit. Supp. Artic. Corn Laws, where a table is given with the deducted.
[‡ ] Eden’s State of the Poor, vol. iii. p. 98.
[* ] Windsor Table, deducting .
[† ] Eden’s State of the Poor, vol. iii. p. 104.
[‡ ] Philosoph. Trans. for 1798. Part i. p. 176.
[§ ] Annals of Agriculture, No. 270, p. 88.
[* ] Vol. i. p. 385.
[* ] Annals of Agriculture, No. 271, p. 215.
[† ] Deducting from the prices in the Windsor Table. Arthur Young deducts another 9th for the quality; but this is certainly too much, in reference to the general average of the kingdom to which the latest tables apply. I have therefore preferred adhering all along to the Windsor prices; and the reader will make what allowances he thinks fit for the quality, which, according to Mr. Rose, is not much above the average.
[‡ ] Annals of Agriculture, No. 271, p. 215 and 216.
[§ ] Windsor Table, Supp. to Encyclopædia Brit. Art. Corn Laws.
[* ] In many cases the apparent fall has been in the proportion of 15 to 10, and even greater. In the North Riding of Yorkshire wages of the same description are said to have fallen from 3s. 6d. to 2s. and 2s. 3d. (Agricultural Report, Merry, p. 112.) In Shropshire from 2s. 4d. to 1s. 6d. (White, p. 24.) In Northamptonshire, Leicestershire, and Nottinghamshire, from 15s. and 18s. to 10s. since 1824. (Buckly, p. 398.) In Scotland, harvest wages from 2s. 6d. and 2s. to 1s. 6d. and 1s., and from 15s. and 12s. to 10s. and 8s. 6d. (Oliver, pp. 128 and 126.) Generally in the Lowlands the principal portion of the wages of labour is paid in kind, and the money value of that portion must therefore fall with the fall in the price of corn. The part paid in money has fallen, but not in proportion. In a private account which I received some years ago from the stewartry of Kircudbright, where the wages were all paid in money, it appears that from 1811 to 1822 the fall of summer wages was from 22d. to 15d., and of winter wages from 18d. to 1s.
[* ] It is a very curious fact, that the bullion price of corn continued unusually low in France from 1444 to 1510. (Garnier’s Richesse des Nations, vol. ii. p. 184.) just during the same period that it was low in England. Adam Smith is inclined to attribute this fall and low price to a deficiency in the supply of the mines, compared with the demand; (B. i. ch. xi.) but this solution in no respect accounts for the rise of the bullion price of labour in England, at the time that the bullion price of corn was falling. Nothing can account for this fact, but a relative plenty of corn compared with labour—a state of things which has little to do with the mines. The low prices in France were probably connected with the abolition of villanage, and an extended cultivation in the reign of Charles VII. and his immediate successors, after the ravages of the English were at an end.
[* ] Wealth of Nations, b. i. c. xi. p. 313.
[* ] The increase of the funds for the maintenance of labour would however have some effect soon, by diminishing mortality, both among those rising to the age of puberty, and the full grown labourers.
[† ] Annals of Agriculture, No. 271. pp. 215 and 216.
[* ] Under all ordinary circumstances, more labour may be set in motion, before any increase of population has taken place.
[† ] This is frequently noticed in the Agricultural Report.