The Online Library of Liberty

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• Advertisement to the Second Edition.
• Memoir of Robert Malthus.
• Principles of Political Economy.
• Introduction.
• Book I
• Chapter I.: Of the Definitions of Wealth and of Productive Labour.
• Section I.—: On the Definitions of Wealth.
• Section II.—: On Productive Labour.
• Chapter II.: On the Nature, Causes, and Measures of Value.
• Section I.—: On the Different Sorts of Value.
• Section II.—: Of Demand and Supply As They Affect Exchangeable Value.
• Section III.—: Of the Cost of Production As Affected By the Demand and Supply, and On the Mode of Representing Demand.
• Section IV.—: Of the Labour Which Has Been Employed On a Commodity Considered As a Measure of Its Exchangeable Value.
• Section V.—: Of the Labour Which a Commodity Will Command, Considered As a Measure of Value In Exchange.
• Section VI.—: On the Practical Application of the Measure of Value, and Its General Use and Advantages.
• Section VII.—: On the Variations In the Value of Money In the Same, and Different Countries.
• Chapter III.: Of the Rent of Land.
• Section I.—: Of the Nature and Causes of Rent.
• Section II.—: On the Necessary Separation of the Rent of Land From the Profits of the Cultivator and the Wages of the Labourer.
• Section III.—: Of the Causes Which Tend to Raise Rents In the Ordinary Progress of Civilized and Improved Societies.
• Section IV.—: Of the Causes Which Tend to Lower Rents.
• Section V.—: On the Dependance of the Actual Quantity of Produce Obtained From the Land, Upon the Existing Prices of Produce, and Existing Rents, Under the Same Agricultural Skill and the Same Value of Money.
• Section VI.—: Of the Connexion Between Great Comparative Wealth, and a High Comparative Price of Raw Produce.
• Section VII.—: On the Causes Which May Mislead the Landlord In Letting His Lands, to the Injury Both of Himself and the Country.
• Section VIII.—: On the Strict and Necessary Connection of the Interests of the Landlord and of the State.
• Section IX.—: General Remarks On the Surplus Produce of the Land.
• Chapter IV.: Of the Wages of Labour.
• Section I.—: On the Definition of the Wages of Labour, and Their Dependance Upon Supply and Demand.
• Section II.—: Of the Causes Which Principally Affect the Habits of the Labouring Classes.
• Section III.—: Of the Causes Which Principally Influence the Demand For Labour, and the Increase of the Population.
• Section IV.—: A Review of the Corn Wages of Labour From the Reign of Edward III.
• Section V.—: On the Conclusions to Be Drawn From the Preceding Review of the Prices of Corn and Labour During the Five Last Centuries.
• Chapter V.: Of the Profits of Capital.
• Section I.—: Of the Nature of Profits, and the Mode In Which They Are Estimated.
• Section II.—: Of the Limiting Principle of Profits.
• Section III.—: Of the Regulating Principle of Profits.
• Section IV.—: Of Profits As Affected By the Causes Practically In Operation.
• Section V. —: Remarks On Mr. Ricardo’s Theory of Profits.
• Chapter VI.: Of the Distinction Between Wealth and Value.
• Book II.
• Chapter I.: On the Progress of Wealth.
• Section I.—: Statement of the Particular Object of Inquiry.
• Section II.—: Of the Increase of Population Considered As a Stimulus to the Continued Increase of Wealth.
• Section III.—: Of Accumulation, Or the Saving From Revenue to Add to Capital, Considered As a Stimulus to the Increase of Wealth.
• Section IV.—: Of the Fertility of the Soil, Considered As a Stimulus to the Continued Increase of Wealth.
• Section V.—: Of Inventions to Save Labour, Considered As a Stimulus to the Continued Increase of Wealth.
• Section VI.—: Of the Necessity of a Union of the Powers of Production With the Means of Distribution, In Order to Ensure a Continued Increase of Wealth.
• Section VII.—: Of the Distribution Occasioned By the Division of Landed Property Considered As the Means of Increasing the Exchangeable Value of the Whole Produce.
• Section VIII.—: Of the Distribution Occasioned By Commerce, Internal and External, Considered As the Means of Increasing the Exchangeable Value of Produce.
• Section IX.—: Of the Distribution Occasioned By Personal Services and Unproductive Consumers, Considered As the Means of Increasing the Exchangeable Value of the Whole Produce.
• Section X.—: Application of Some of the Preceding Principles to the Distresses of the Labouring Classes Since 1815, With General Observations.

Section II.—

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.

[* ] 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.