The Online Library of Liberty

A project of Liberty Fund, Inc.

• Translator's Preface to First Edition.
• Introductory Essay, By J. Shield Nicholson
• Memoir.3
• Some Extracts From the Author's Preface to the First Edition.
• First Book: the History
• Chapter I: The Italians.
• Chapter II: The Hansards.
• Chapter III: The Netherlanders.
• Chapter IV: The English.
• Chapter V: The Spaniards and Portuguese.
• Chapter VI: The French.
• Chapter VII: The Germans.
• Chapter VIII: The Russians.
• Chapter IX: The North Americans.
• Chapter X: The Teachings of History.
• Second Book: the Theory
• Chapter XI: Political and Cosmopolitical Economy.
• Chapter XII: The Theory of the Powers of Production and the Theory of Values.
• Chapter XIII: The National Division of Commercial Operations and the Confederation of the National Productive Forces.
• Chapter XIV: Private Economy and National Economy.
• Chapter XV: Nationality and the Economy of the Nation.
• Chapter XVI: Popular and State Financial Administration, Political and National Economy.
• Chapter XVII: The Manufacturing Power and the Personal, Social, and Political Productive Powers of the Nation.
• Chapter XVIII: The Manufacturing Power and the Natural Productive Powers of the Nation.
• Chapter XIX: The Manufacturing Power and the Instrumental Powers (material Capital) of the Nation.
• Chapter XX: The Manufacturing Power and the Agricultural Interest.
• Chapter XXI: The Manufacturing Power and Commerce.
• Chapter XXII: The Manufacturing Power and Navigation, Naval Power and Colonisation.
• Chapter XXIII: The Manufacturing Power and the Instruments of Circulation.
• Chapter XXIV: The Manufacturing Power and the Principle of Stability and Continuity of Work.
• Chapter XXV: The Manufacturing Power and the Inducement to Production and Consumption.
• Chapter XXVI: Customs Duties As a Chief Means of Establishing and Protecting the Internal Manufacturing Power.
• Chapter XXVII: The Customs System and the Popular School.
• Third Book: the Systems
• Chapter XXVIII: The National Economists of Italy.
• Chapter XXIX: The Industrial System (falsely Termed By the School 'the Mercantile System').
• Chapter XXX: The Physiocratic Or Agricultural System.
• Chapter XXXI: The System of Values of Exchange (falsely Termed By the School, the 'industrial' System)—Adam Smith.
• Chapter XXXII: The System of Values of Exchange (continued)—Jean Baptiste Say and His School.
• Fourth Book: the Politics
• Chapter XXXIII: The Insular Supremacy and the Continental Powers—North America and France.
• Chapter XXXIV: The Insular Supremacy and the German Commercial Union.
• Chapter XXXV: Continental Politics.
• Chapter XXXVI: The Commercial Policy of the German Zollverein.
• Appendices Appendix A.
• Appendix B.
• Appendix C.
• Appendix D.

Chapter XXV

THE MANUFACTURING POWER AND THE INDUCEMENT TO PRODUCTION AND CONSUMPTION.

IN society man is not merely productive owing to the circumstance that he directly brings forth products or creates powers of production, but he also becomes productive by creating inducements to production and to consumption, or to the formation of productive powers.

The artist by his works acts in the first place on the ennobling and refinement of the human spirit and on the productive power of society; but inasmuch as the enjoyment of art presupposes the possession of those material means whereby it must be purchased, the artist also offers inducements to material production and to thrift.

Books and newspapers act on the mental and material production by giving information; but their acquisition costs money, and so far the enjoyment which they afford is also an inducement to material production.

The education of youth ennobles society; but what great exertions do parents make to obtain the means of giving their children a good education!

What immense performances in both mental and material production arise out of the endeavour to move in better society!

We can live as well in a house made of boards as in a villa, we can protect ourselves for a few florins against rain and cold as well as by means of the finest and most elegant clothing. Ornaments and utensils of gold and silver add no more to comfort than those of iron and tin; but the distinction connected with the possession of the former acts as an inducement to exertions of the body and the mind, and to order and thrift; and to such inducements society owes a large part of its productiveness. Even the man living on his private property who merely occupies himself with preserving, increasing, and consuming his income, acts in manifold ways on mental and material production: firstly, by supporting through his consumption art and science, and artistic trades; next, by discharging, as it were, the function of a preserver and augmenter of the material capital of society; finally, by inciting through his display all other classes of society to emulation. As a whole school is encouraged to exertions by the offer of prizes, although only a few become winners of the principal prizes, so does the possession of large property, and the appearance and display connected with it, act on civil society. This action of course ceases when the great property is the fruit of usurpation, of extortion, or fraud, or where the possession of it and the enjoyment of its fruits cannot be openly displayed.

Manufacturing production yields either productive instruments or the means of satisfying the necessities of life and the means of display. The last two advantages are frequently combined. The various ranks of society are everywhere distinguished by the manner in which and where they live, and how they are furnished and clothed, by the costliness of their equipages and the quality, number, and external appearance of their servants. Where the commercial production is on a low scale, this distinction is but slight, i.e. almost all people live badly and are poorly clothed, emulation is nowhere observable. It originates and increases according to the ratio in which industries flourish. In flourishing manufacturing countries almost everyone lives and dresses well, although in the quality of manufactured goods which are consumed the most manifold degrees of difference take place. No one who feels that he has any power in him to work is willing to appear outwardly needy. Manufacturing industry, therefore, furthers production by the community by means of inducements which agriculture, with its mean domestic manufacture, its productions of raw materials and provisions, cannot offer.

There is of course an important difference between various modes of living, and everyone feels some inducement to eat and drink well; but we do not dine in public; and a German proverb says strikingly, 'Man sieht mir auf den Kragen, nicht auf den Magen' (One looks at my shirt collar, not at my stomach). If we are accustomed from youth to rough and simple fare, we seldom wish for better. The consumption of provisions also is restricted to very narrow limits where it is confined to articles produced in the immediate neighbourhood. These limits are extended in countries of temperate climate, in the first instance, by procuring the products of tropical climates. But as respects the quantity and the quality of these products, in the enjoyment of which the whole population of a country can participate, they can only be procured (as we have shown in a former chapter) by means of foreign commerce in manufactured goods.

Colonial products, so far as they do not consist of raw materials for manufacturing purposes, evidently act more as stimulants than necessary means of subsistence. No one will deny that barley coffee without sugar is as nutritious as mocha coffee with sugar; and admitting also that these products contain some nutritious matter, their value in this respect is nevertheless so unimportant that they can scarcely be considered as substitutes for native provisions. With regard to spices and tobacco, they are certainly mere stimulants, i.e. they chiefly produce a useful effect on society only so far as they augment the enjoyments of the masses, and incite them to mental and bodily labour.

In many countries very erroneous notions prevail among those who live by salaries or rents, respecting what they are accustomed to call the luxurious habits of the lower classes; such persons are shocked to observe that labourers drink coffee with sugar, and regret the times when they were satisfied with gruel; they deplore that the peasant has exchanged his poor clothing of coarse homespun for woollen cloth; they express fears that the maid-servant will soon not be distinguishable from the lady of the house; they praise the legal restrictions on dress of previous centuries. But if we compare the result of the labour of the workman in countries where he is clad and nourished like the well-to-do man with the result of his labour where he has to be satisfied with the coarsest food and clothing, we shall find that the increase of his comfort in the former case has been attained not at the expense of the general welfare, but to the advantage of the productive powers of the community. The day's work of the workman is double or three times greater in the former case than in the latter. Attempts to regulate dress and restrictions on luxury have destroyed wholesome emulation in the large masses of society, and have merely tended to the increase of mental and bodily idleness.

In any case products must be created before they can be consumed, and thus production must necessarily generally precede consumption. In popular and national practice, however, consumption frequently precedes production. Manufacturing nations, supported by large capital and less restricted in their production than mere agricultural nations, make, as a rule, advances to the latter on the yield of future crops; the latter thus consume before they produce—they produce later on because they have previously consumed. The same thing manifests itself in a much greater degree in the relation between town and country: the closer the manufacturer is to the agriculturist, the more will the former offer to the latter both an inducement to consume and means for consumption, the more also will the latter feel himself stimulated to greater production.

Among the most potent stimulants are those afforded by the civil and political institutions of the country. Where it is not possible to raise oneself by honest exertions and by prosperity from one class of society to another, from the lowest to the highest; where the possessor necessarily hesitates to show his property publicly or to enjoy the fruits of it because it would expose his property to risk, or lest he should be accused of arrogance or impropriety; where persons engaged in trade are excluded from public honour, from taking part in administration, legislation, and juries; where distinguished achievements in agriculture, industry, and commerce do not lead also to public esteem and to social and civil distinction, there the most important motives for consumption as well as for production are wanting.

Every law, every public regulation, has a strengthening or weakening effect on production or on consumption or on the productive forces.

The granting of patent privileges offers a prize to inventive minds. The hope of obtaining the prize arouses the mental powers, and gives them a direction towards industrial improvements. It brings honour to the inventive mind in society, and roots out the prejudice for old customs and modes of operation so injurious among uneducated nations. It provides the man who merely possesses mental faculties for new inventions with the material means which he requires, inasmuch as capitalists are thus incited to support the inventor, by being assured of participation in the anticipated profits.

Protective duties act as stimulants on all those branches of internal industry the produce of which foreign countries can provide better than the home country, but of the production of which the home country is capable. They guarantee a reward to the man of enterprise and to the workman for acquiring new knowledge and skill, and offer to the inland and foreign capitalist means for investing his capital for a definite and certain time in a specially remunerative manner.