Front Page Titles (by Subject) Section V.—: Of Inventions to save Labour, considered as a Stimulus to the continued Increase of Wealth. - Principles of Political Economy
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Section V.—: Of Inventions to save Labour, considered as a Stimulus to the continued Increase of Wealth. - Thomas Robert Malthus, Principles of Political Economy 
Principles of Political Economy (London: W. Pickering, 1836).
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Of Inventions to save Labour, considered as a Stimulus to the continued Increase of Wealth.
Inventions to save labour seldom take place to any considerable extent, except when there is a decided demand for them. They are the natural consequence of improvement and civilization, and, in their more perfect forms, generally come in aid of the failing powers of production on the land. The fertility of the soil, being a gift of nature, exists whether it is wanted or not; and must often therefore exceed for many hundred years the power of fully using it. Inventions, which substitute machinery for manual exertions, being the result of the ingenuity of man, and called forth by his wants, will, as might be expected, seldom exceed those wants.
But the same law applies to both. They both come under the head of facilities of production; and in both cases a full use cannot be made of this facility, unless the power of supply which it furnishes be accompanied by an adequate extension of the market.
When a machine is invented, which, by saving labour, will bring goods into the market at a much cheaper rate than before, the most usual effect is such an extension of the demand for the commodity, by its being brought within the power of a much greater number of purchasers, that the value of the whole mass of goods made by the new machinery greatly exceeds their former value; and, notwithstanding the saving of labour, more hands, instead of fewer, are required in the manufacture.
This effect has been very strikingly exemplified in the cotton machinery of this country. The consumption of cotton goods has been so greatly extended both at home and abroad, on account of their cheapness, that the value of the whole of the cotton goods and twist now made exceeds, beyond comparison, their former value; while the rapidly increasing population of the towns of Manchester, Glasgow, &c. during the last thirty years, amply testifies that, with a few temporary exceptions, the demand for the labour concerned in the cotton manufactures, in spite of the machinery used, has been increasing very greatly.
When the introduction of machinery has this effect, it is not easy to appreciate its enriching power, or its tendency to increase both the value and quantity of domestic and foreign commodities.
When however the commodity to which machinery is applied is not of such a nature that its consumption can extend with its cheapness, the increase of wealth derived from it is neither so great nor so certain. Still however it may be highly beneficial; but the extent of this benefit* depends upon circumstances. Let us suppose a number of capitalists in the habit of employing £20,000 each for labour, in a manufacture of limited consumption, and that machines were introduced which, by the saving of labour, would enable them to supply the actual demand for the commodity with capitals of ten thousand pounds each in the purchase of labour, instead of twenty. There would, in this case, be a certain number of ten thousand pounds, and the men employed by these capitals, thrown out of employment. On the other hand, there would be a portion of revenue set free for the purchase of fresh commodities; and this demand would undoubtedly be of the greatest advantage in encouraging the employment of the vacant capitals in other directions. At the same time it must be recollected that this demand would not be a new one, and, even when fully supplied, could only replace the diminution of capital and profits in one department, occasioned by the employment of so many ten thousands, instead of twenty thousands. But in withdrawing capital, a part of which must necessarily be fixed, from one employment and placing it in another, there is almost always a considerable loss. The use-lessness of the old fixed capital would be at once a loss of revenue to the amount of the former interest and profits upon it. Even if the whole of the remainder could be immediately employed, it would probably be less in value: and on the whole, unless more menial servants were used, many persons would be thrown out of work; and thus the power of the whole capital and revenue to command the same quantity of labour would evidently depend upon the contingency of the vacant capitals being withdrawn undiminished from their old occupations, and finding immediately equivalent employment in others. But this assumed facility of finding immediate employment for fresh capital in new occupations with undiminished profits, appears to me to be contradicted by general experience; and the supposition here made must be allowed to present a case essentially distinct from that where, as in most of our great manufactures, the extension of demand, owing to the cheapness occasioned by machinery, has greatly increased the whole value as well as the whole quantity of the produce.
If, in order to try the principle, we were to push it farther, and to suppose that, without any extension of the foreign market for our goods, we could by means of machinery obtain all the commodities at present obtained at home, with one third of the labour now applied, is it in any degree probable that the mass of vacant capitals could be advantageously employed, or that the mass of labourers thrown out of work could find the means of commanding an adequate share of the national produce? If there were other foreign trades which, by means of the capital and labour thrown out of employment, might be greatly extended, the case would be at once quite altered, and the returns of such trades might furnish stimulants sufficient to keep up the value of the national income. But, if only an increase of domestic commodities could be obtained, there is every reason to fear that the exertions of industry would slacken. The peasant, who might be induced to labour an additional number of hours for tea or tobacco, might prefer indolence to a new coat. The tenant or small owner of land, who could obtain the common conveniences and luxuries of life at one third of their former price, might not labour so hard to procure the same amount of surplus produce from the land. And the trader or merchant, who would continue in his business in order to be able to drink and give his guests claret and champagne, might think an addition of homely commodities by no means worth the trouble of so much constant attention.
It has been said that, when there is an income ready for the demand, it is impossible that there should be any difficulty in the employment of labour and capital to supply it, as the owner of such an income, rather than not spend it, would purchase a table or chair that had cost the labour of a hundred men for a year. This may be true, in cases of fixed monied revenues, obtained by inheritance, or with little or no trouble. We well know that some of the Roman nobles, who obtained their immense wealth chiefly by the expeditious mode of plunder, sometimes gave the most enormous prices for fancied luxuries. A feather will weigh down a scale when there is nothing in the opposite one. But where the amount of the revenues of a country depend, in a considerable degree, upon the exertion of labour, activity and attention, there must be something in the commodities to be obtained sufficiently desirable to balance this exertion, or the exertion will cease. And experience amply shews, by the number of persons who daily leave off business, when they might certainly have continued to improve their fortunes, that most men place some limits, however variable, to the quantity of conveniences and luxuries which they will labour for; and that very few indeed would attend a counting-house six or eight hours a day, in order to purchase commodities which have no other merit than the quantity of labour which has been employed upon them.
Still however it is true that, when a great revenue has once been created in a country, in the shape of a large mass of rents, profits and wages, a considerable resistance will be made to any essential fall in its value. It is a very just remark of Hume,* that when the affairs of a society are brought to this situation; that is, when, by means of foreign trade, it has acquired the tastes necessary to give value to a great quantity of labour not employed upon actual necessaries, it may lose most of this trade, and yet continue great and powerful, on account of the extraordinary efforts which would be made by the spare capital and ingenuity of the country to refine home manufactures, in order to supply the tastes already formed, and the incomes already created. But if we were to allow that the revenue of such a nation might, in this way, by possibility be maintained, there is little chance of its increasing; and it is almost certain that it would not have reached the same amount, without the market occasioned by foreign commerce.
Of this I think we shall be convinced, if, in our own country, we look at the quantity of goods which we export chiefly in consequence of our machinery, and consider the nature of the returns obtained for them. In the accounts of the year ended the 5th of January, 1818, it appears that the exports of three articles alone in which machinery is used—cottons, woollen and hardware, including steel goods, &c. are valued at above 29 millions. And among the most prominent articles of the imports of the same year, we find coffee, indigo, sugar, tea, silks, tobacco, wines, and cotton-wool, amounting in value altogether to above 18 millions out of thirty! Now I would ask how we should have obtained these valuable imports, if the foreign markets for our cottons, woollens, and hardware had not been extended with the use of machinery? And further, where we could have found substitutes at home for such imports, which would have been likely to have produced the same effects, in stimulating the cultivation of the land, the accumulation of capital, and the increase of population? And when to these considerations we add the fortunes which have been made in these manufactures, the market for which has been continually extending, and continually requiring more capital and more people to be employed in them; and contrast with this state of things the constant necessity of looking out for new modes of employing the same capital and the same people, a portion of which would be thrown out of their old occupations by every new invention;—we must be convinced that the state of this country would have been totally different from what it is, and that it would not certainly have acquired the same revenue in rents, profits and wages, if the same ingenuity had been exercised in the invention of machinery, without the same extension of the market for the commodities produced.
It may justly be doubted, whether, at the present moment, upon the supposition of our foreign intercourse being interrupted, we should be likely to find efficient substitutes for teas, coffee, sugar, wines, silks, indigo, cottons, &c. so as to keep up the value of our present revenue; but it cannot well be doubted, that if, from the time of Edward the First, and setting out with the actual division of landed property which then prevailed, the foreign vent for our commodities had remained stationary, our revenue from the land alone would not have approached to what it is at present, and still less, the revenue from trade and manufactures.
Even under the actual division of the landed property in Europe, which is very much better than it was 500 years ago, most of the states of which it is composed would be comparatively unpeopled, if it were not for trade and manufactures. Without the excitements arising from the results of this sort of industry, no sufficient motives could be presented to great landholders either to divide their estates by sale, or to take care that they were well cultivated.
According to Adam Smith, the most important manufactures of the northern and western parts of Europe were established either in imitation of foreign articles, the tastes for which had been already formed by a previous foreign trade, or by the gradual refinement of domestic commodities till they were fit for exportation.* In the first case, the very origin of the manufacture is made to depend upon a previous extension of market, and the importation of foreign articles, and in the second case, the main object and use of refining the domestic commodities in an inland country, appears to be the fitting them for an extensive market, without which the local advantages enjoyed would be in a great measure lost.
In carrying on the late war, we were powerfully assisted by our steam-engines, which enabled us to command a prodigious quantity of foreign produce and foreign labour. But how would their efficacy have been weakened if we could not have exported our cottons, cloths and hardware?
If the mines of America could be successfully worked by machinery, and the King of Spain’s tax could be increased at will, so as to make the most of this advantage, what a vast revenue might they not be made to afford him! But it is obvious that the effects of such machinery would sink into insignificance, if the market for the precious metals were confined to the adjacent countries, and the principal effect of it was to throw capital and labour out of employment.
In the actual state of things in this country, the population and wealth of Manchester, Glasgow, Leeds, &c. have been greatly increasing; because, on account of the extending demand for their goods, more people have been continually required to work them up; but if a much smaller number of people had been required, on account of a saving of labour from machinery, without an adequate extension of the market, it is obvious that these towns would have been poorer, and more thinly peopled. To what extent the spare capital and labour thrown out of employment in one district would have enriched others, it is impossible to say; and on this subject any assertion may be made, as we cannot be set right by an appeal to facts. But I would ask, whether there are any grounds in the slightest degree plausible for saying, that not only the capital spared at any time from these manufactures would be preserved and employed elsewhere; but that it would be employed as profitably, and create as much exchangeable value in other places as it would have done in Manchester and Glasgow, with an extending market? In short, are there any plausible grounds whatever for stating that, if the twenty millions worth of cottons which we now export, were entirely stopped, either by successful foreign competition or positive prohibitions, we should have no difficulty in finding employment for our capital and labour equally advantageous to individuals in point of profit, and equally enriching to the country with respect to the exchangeable value of its revenue?
Unquestionably any country is entitled to consume all that it produces, however great in quantity; and every man in health has the power of applying his mind and body to productive labour for ten or twelve hours of the day. But these are dry assertions, which do not necessarily involve any practical consequences relating to the increase of wealth. If we could not export our cottons, it is quite certain that, though we might have the power, we should not have the will, to consume them all ourselves at such prices as would pay the producers. The quantity produced therefore would be very greatly diminished; and the maintenance of our national wealth and revenue would depend upon the circumstance whether the capital thrown out of the cotton trade could be so applied as to produce commodities which would be estimated as highly and consumed as eagerly as the foreign goods before imported. There is no magic in foreign markets. The final demand and consumption must always be at home; and if goods could be produced at home, which would excite people to work as many hours in the day, would communicate the same enjoyments, and create a consumption of the same value, foreign markets would be useless. We know however from experience, that very few countries are capable of producing commodities of the same efficacy, in this respect, as those which may be obtained by a trade to various climates and soils. Without such a trade, and with a great increase in the power of production, there is no inconsiderable danger that industry, consumption, and exchangeable value would diminish; and this danger would most unquestionably be realized if the cheapness of domestic commodities occasioned by machinery, were to lead to increased saving rather than to increased expenditure.
But it is known that facilities of production have the strongest tendency to open markets, both at home and abroad. In the actual state of things therefore, there are great advantages to be looked forward to, and little reason to apprehend any permanent evil from the increase of machinery. The presumption always is, that it will lead to a great extension both of wealth and value. But still we must allow that the pre-eminent advantages derived from the substitution of machinery for manual labour, depend upon the extension of the market for the commodities produced, and the increased stimulus given to consumption; and that, without this extension of market and increase of consumption, they must be in a considerable degree diminished. Like the fertility of land, the invention of good machinery confers a prodigious power of production. But neither of these great powers can be called fully into action, if the situation and circumstances, or the habits and tastes of the society prevent the opening of a sufficient market, and an adequate increase of consumption.
The three great causes most favourable to production are, accumulation of capital, fertility of soil, and inventions to save labour. They all act in the same direction; and as they all tend to facilitate supply, without reference to demand, it is not probable that they should either separately or conjointly afford an adequate stimulus to the continued increase of wealth.
[* ] Considering the manner in which I have expressed myself here, it appears to me not a little extraordinary that I should sometimes have been classed with Mr. Sismondi as an enemy to machinery. If the reader will direct his attention to what I have said, I think he must allow that it is hardly possible to say more with truth. To maintain that the same extent of benefit will result in all cases, and that there never can be the least difficulty in finding new employments for capital at the same profits, does appear to me, I own, an assertion equally contradicted by all just theory, and universal experience.
[* ] Essays, vol. i. p. 293.
[* ] Wealth of Nations, Vol. ii. B. iii. ch. iii. p. 115. 6th edit.