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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 V.—

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.

CHAPTER V.

OF THE PROFITS OF CAPITAL.

[* ] 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.