The Reading Room
Josiah Child, John Locke, and the Value of Hands
Here is what may be regarded as a footnote to Eric Schliesser’s Reading Room essay, “The Encyclopedie, Trade, and the Jews” (1/25/2022) -- in particular, to Schliesser’s discussion of the late seventeenth century economic thinker, Josiah Child’s A New Discourse of Trade (1693). Schliesser points to Child’s endorsement of a policy of welcoming foreigners and their stock (i.e., their capital) into one’s society for the sake of enhancing its wealth.
According to Child:
Nothing in the world can enable us to coape with the Dutch in any Trade, but increase of Hands and Stock, which a general admission will do; many Hands and much Stock being as necessary to the Prosperity of any Trade, as men and Money to warfare.
I want to point to parallels between Child’s position and that of John Locke in Locke’s short essay, “For a General Naturalisation.” (John Locke, Political Essays, ed. Mark Goldie (Cambridge: Cambridge University Press, 1997). Hereafter, PE) It is a nice factoid that this essay was also composed in 1693. According to Mark Goldie, the essay was written in support of an attempt in Parliament to pass a Bill that would allow “the naturalization of whole groups of immigrants, as opposed to individuals, who could seek private Acts of Parliament.” (PE 322) Goldie notes that, “Many thousands of French Huguenots settled in England after the Revocation of the Edict of Nantes in 1685.” (PE 322)
Locke’s main argument in his 1693 essay is largely an extension of a stance in he had taken in his Second Treatise of Government (1689). In that famous Treatise, Locke maintains that economic value arises almost entirely due to labor -- broadly understood as human industry. This view is not to be confused with the false “labor theory of value” according to which there is a single homogenous thing called labor and the economic value of each particular economic good is proportional to the number of units of this labor that went into the production of that good. In contrast to the notion of labor in the labor theory of value, Locke seems to have a more capacious view of labor that includes all sorts of applications of human capital.
For Locke the creation of wealth in a society turns on the encouragement provided for the development and exercise of labor in that society. The bare presence of natural resources contributes hardly anything to the value of produced goods. For this reason “numbers of men [with their diverse capacities for labor] are to be preferd to largenesse of dominions.” (ST §42) Of course, the value-engendering labor of those men needs to be incentivized by a “Prince, who shall be so wise and godlike, as by established laws of liberty to secure protection and incouragement to the honest industry of mankind . . .” (ST §42)
In “For a General Naturalisation” Locke asserts that “People are the strength of any country or government” because “Tis the number of people that make the riches of any country.” (PE 322) Of course, it is not the absolute numbers of people in two countries that determine the per capita wealth of those countries. Rather, the per capita wealth of nations is determined by the degree to which “honest industry” is conducted among the members of those nations (and between members of that nation and other nations). As does Child, Locke holds up the Dutch as the model for societal prosperity. Locke emphasizes how poorly Spain performs despite “having all the advantages of situation and the yearly afflux of wealth out of its dominions” whereas Holland is “ill situate[d] but being crammed with people [is] abounding in riches.” (PE 322) Moreover, like Child, Locke employs the metonymy of hands to explain the enhancement of wealth. Wealth arises from a “plenty of hands.” “That most can be made where are most hands needs no proof.” (PE 324)
Locke counters the objection that immigrants may turn out to live idly “upon other men‘s labour” (PE 323) by pointing out that foreigners coming to England cannot reasonably expect support from parish maintenance. Therefore, immigrants “must depend only on what they bring with them, either their estates or industry, both which are equally profitable to the kingdom. (PE 324) The only difference here compared to Child is that Locke seems to be thinking of the estates that immigrants bring with them as funding for their living expenses – “those who bring estates to maintain them bring actually so much riches” -- rather than as capital that may directly be invested.
Locke considers whether a policy of general naturalization will result in England having too many people. He counters that Holland does not have too many people and it has (presumably, relative to its size) at least twice as many people as England. Suppose, however, that so many “handicraftsmen and labourers” (PE 324) immigrate to England that there is a significant drop in the level of wages. If that happens, Locke points out, the immigrants will stop coming. (PE 325)