Front Page Titles (by Subject) Section III.—: Of the Causes which principally influence the Demand for Labour, and the Increase of the Population. - Principles of Political Economy
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Section III.—: Of the Causes which principally influence the Demand for Labour, and the Increase of the Population. - Thomas Robert Malthus, Principles of Political Economy 
Principles of Political Economy (London: W. Pickering, 1836).
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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.
[* ] 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.