DISTRIBUTION OF WEALTH
AND ON THE
SOURCES OF TAXATION
JOHN MURRAY, ALBEMARLE STREET,
The causes of the varying wealth and poverty of nations have naturally at all times attracted the eager attention of mankind. For a long time, however, it was thought that there was nothing in the subject very difficult to understand: that the only way for a people to get rich was to procure money or bullion, and that the only way to get poor was to part with them. The art of enriching nations obviously consisted, therefore, in devising the means, first, of getting possession of as much of the precious metals as possible, and then, of holding them fast so as to keep the heap ever growing.
It is in the different measures, or rather systems of measures, successively adopted to effect these purposes, that we must trace the rude but very decided political economy of the ages which elapsed between the conquest of England and the middle of the last century.
For some time, however, before this later period, there may be discerned, meandering through the huge and obscure mass of our mercantile literature, a dim line of twilight truth upon these subjects;a suspicion rather hinted at than revealed, that after all, the accumulating gold and silver might not, when nations were in question, be the only mode of increasing their real wealth. But still it was not till Galiani in Italy, Harris in England, Quesnay in France, and above all Smith in Scotland, had published their respective works, that it became admitted to be an established principle, systematically examined and demonstratively proved, that national wealth may consist not only of gold and silver, but of all such things at least as men are content to give gold and silver in exchange for.
The circumstances which encourage and make easy, or which discourage and obstruct the production of wealth, taking this new and enlarged view of it, became at once the objects of anxious enquiry and speculation. In this new path Smith took the lead; and nothing which has been done since his time in this direction, will bear a comparison with the results of his labors. But to those engaged in the pursuit of this branch of political economy, another soon presented itself. It was not possible to investigate carefully the circumstances which affect the production of national wealth, without being struck by the importance and influence of those which are connected with its distribution: and attempts to discover the laws which determine the respective shares of the landed proprietors, the owners of personal property, and the laborers, in the annual produce, gave occasion to a great deal of research, or rather perhaps a great deal of speculation. Such speculations were pursued the more earnestly, when it was perceived, as it necessarily soon was, that the power of nations to support and render productive peculiar forms of taxation, could be little understood, till the laws were developed which determine the respective shares of the various classes of a community in the wealth annually created.
But the labors of those who have treated of the principles which govern the distribution of wealth, have as yet been rewarded by no such success as that which has crowned the efforts of those who have investigated the circumstances which influence the amount produced. On this last branch of the subject, much knowledge has been accumulated, and principles have been established, important both for theoretical and practical purposes, however difficult the application of them to particular circumstances may sometimes be. These constitute a body of political truths, in the solidity and permanence of which a majority of the enlightened and reflecting part of mankind may be said to have acquiesced: while attempts to explain the appointed course of the distribution of wealth, and to unfold the laws which limit and determine rents, wages and profits, have hitherto led to little besides contradictory opinions; and startling, and in some instances, unhappily, disgusting and most mischievous paradoxes.
The germ of the doctrines of the earliest leading writers on these points, the French economists, may be traced pretty clearly to some hasty, and certainly very erroneous opinions, of our own great Locke. That sect of philosophers at last fancied they could rigidly demonstrate, that a portion of the rent, (the produit net,) constituted a peculiar fund, from which alone all the revenues of the state must directly or indirectly be derived; and this strange and futile dogma came from their hands based on reasonings and assumptions, from which it appeared to result that the amount of wages, and the rate of profits, are determined by causes which keep them beyond the reach of change, and preserve them untouched amidst the workings of any possible scheme of taxation. Mixed with some absurdities, and much rash and sophisticated reasoning, the writings of the economists contain many truths; and some of a high order and lasting importance: but even these could not save their reputation; and by being interwoven in a mass of error, were for a time less current, and therefore less useful, than they must otherwise have been. The system found, it is true, some devoted and fanatical adherents; but in spite of the zeal of these supporters, and of its own theoretical plausibility, the instinctive judgement of mankind revolted from its strange conclusions; and by the great body of the reading world, it was first derided, and then, except as occupying its spot in literary history, forgotten. Smith attempted little on this part of his great subject, and that little he did not do well: but his good sense lept him aloof from absurdities, like those which disfigure the works of some who preceded, and of many who have followed him: and the caution with which he shrunk from plunging deep into the investigation, shews, perhaps, that he was conscious of difficulties which he chose to avoid. Of him, however, it may be said with truth, that he had done as much as could be expected from one mind, when he had illustrated, applied, connected and multiplied the truths which before his time existed insulated, and for the most part half developed, on one main branch of his subject. That subject too we know was itself at once elevated by the success of his work to a rank among the great objects of the intellectual efforts of mankind, which it is little likely ever again to lose; and which, we must hope, will, at some future day, ensure the developement of all its intricacies.
Mr. Malthus was the first philosopher, after Smith, who laid foundations for the farther progre. of knowledge. The earliest distinct views of those laws which govern the revenues of the landed proprietors, and the wages of the laborers in the most advanced stages of civilization,(1) will always be to be traced in his works on population, and on rent: and enough will remain to leave him the character of a powerful and original enquirer after truth, when time and the labors of many other minds have corrected some essential errors, and some hasty extensions of principles,true in themselves, though of more local or limited application, than amidst the fervor of discovery they appeared to their author to be. But Mr. Malthus has been singularly unfortunate in his successors; under their treatment, his works, instead of being made the foundations of a superstructure of useful truth, have been used to give the semblance of plausibility to a mass of error, ingenious and harmless in some of its parts, but as a whole, most delusive, and unfortunately most mischievous.
On the subject of rent, Mr. Malthus, discarding the errors of the economists, shewed satisfactorily, that where land is cultivated by capitalists living on the profits of their stock, and able to move it at pleasure to other employments, there the expence of tilling the worst quality of land cultivated determines the average price of raw produce, while the difference of quality on the superior lands measures the rents yielded by them.
This was a step towards understanding the circumstances which affect the progress of a very limited division of rents, and the causes which in one very peculiar state of society determine the average prices of raw produce. Mr. Ricardo, however, overlooking altogether the limited extent of the field to which these principles were really applicable, undertook from them alone to deduce the laws which regulate the nature and amount of the revenue derived from land at all places, and under all circumstances; and not content with this, proceeded from the same narrow and limited data, to construct a general system of the distribution of wealth, and to explain the causes of variations which take place in the rate of profits, or amount of wages over the surface of the globe. Mr. Ricardo was a man of talent, and he produced a system very ingeniously combined, of purely hypothetical truths; which, however, a single comprehensive glance at the world as it actually exists, is sufficient to shew to be utterly inconsistent with the past and present condition of mankind.
Mr. Malthus' theory of population has been yet more lamentably abused. With the commanding influence of superior talent, he had fixed at once the attention of the world on a physical power possessed by the human race, of multiplying its aggregate numbers; which, if long exerted to its greatest extent, or even to a much less extent, must demonstratively outstrip any possible increase of food; and he had shewn that much of the happiness or misery of a large part of the population of nations, must always depend on the extent to which this power is controlled by themselves, or on the modes by which population is kept down to the level of food by extraneous circumstances. The facts on this subject, which he brought to light, must always hold a prominent place in every enquiry into the causes which determine the social progress and condition of nations: and the most prominent place in such branches of those enquiries, as have for their especial object, the explanation of the laws which govern variations in the aggregate numbers of a people, and the amount of subsistence consumed by the great mass of every community; or in other words, its rate of wages. But to create and to perfect such an important department of human knowledge, was hardly likely to be the lot of one man, and the great work of Mr. Malthus contains certainly the elements of many errors, mixed with the portion of lasting truth which it was his fortune first to demonstrate. Those errors had their originpartly in a logically defective division of the checks to population which he enumerated and examined, partly in some obscurity and indecision existing in his own mind, as to the amount of influence on the progress of the numbers of nations, which might in practice be expected to be exercised by moral causes acting in opposition to the physical propensities of mankind.
It is the perilous privilege of really eminent men, that their errors, as well as their wisdom, should be fertile in consequences. Those of Mr. Malthus led at once to forms of argument, and to a phraseology, which cast a gloom over the whole subject, and have had a very disastrous effect on the further progress of knowledge:more disastrous indeed, than could possibly have been anticipated by any one not gifted with the power of foreseeing the strange combination of credulity and rashness which characterises many of the works in which his speculations have been pushed forwards to their supposed practical conclusions.
Taking together the two subjects of rent, and of population as it affects wages, we shall find that the germs of truth brought to light by Mr. Malthus, have been made to give apparent support to such doctrines as these:`That the revenues of the proprietors of the soil over the surface of the globe, exist only because the qualities of different soils are different; and can only be increased as the differences in productiveness of the soils cultivated increase:That this increase is always contemporary with a decrease in the productive powers of agriculture, and in the gains of the productive classes, and comes ever with loss and distress in its train: And that the interests of the landlords which require such an increase, are, therefore, always and necessarily opposed to the interests of the state, and of every other class of society. The fortunes and position in the ordinary progress of nations, of the owners of stock, the next leading body in communities, are decided on in a spirit scarcely less gloomy. The effects of that diminution in the productive powers of industry, which is supposed to be indicated by increasing rents, reach, it is said, the owners of capital, in the shape of a dwindling rate of profits; and thus their own remuneration, and their capacity to accumulate fresh funds for the employment of labor, are always in a necessary course of gradual diminution, while cultivation is spreading itself to new soils, or multiplying its means and efforts on the old. Of the two richer classes, therefore, the one is threatened that the increase of the people, and the spread of tillage, will bring to it an invidious wealth founded on the public distress, and the other is menaced with a gradual but inevitable decay, produced by the same causes, and advancing at the same pace.
The fate revealed to the most important division of the population, to the great body of the people, was yet more appalling. In their case a further cause, and one dependent, like the decreasing fertility of the soil, on an unchangeable law of nature, was pressing them unceasingly towards either misery or guilt. They were endowed, as a part of their physical constitution, with a power and tendency to multiply more rapidly than the means of subsistence; and their numbers could be kept down to the level of those means, only by checks which resolve themselves into either guilt or misery, or into a pure state of moral restraint, which, according to the unhappily narrow definition of it given by the author of the doctrine, was necessarily so rare as to limit but little by its prevalence the wide action of suffering and vice. This last opinion really rested principally on a logical error before alluded to, in the division of those causes into which the admitted checks to population resolve themselves; but it was seized on and pushed to its most repulsive consequences with a headlong and pernicious eagerness, and served to augment the fearful amount of those elements of discord and suffering, which it was believed had been demonstrated to exist in the very constitution of man, and of the earth which he inhabits; and which, according to this school of writers, are necessarily called into a state of increasing action as the world becomes peopled and nations advance. The process by which these conclusions were arrived at, involves, in truth, almost every possible fault to which inattention to facts, and a perverse abuse of the mere reasoning faculty can give birth. First, there is assumed a constantly decreasing power in agricultural industry, as nations multiply and become more civilized: then, that those who procure subsistence by manual toil, the laboring classes of the earth, are maintained exclusively on funds saved from income ;a supposition which, true as to one corner of the world, when stated and reasoned upon as an universal fact, is essentially false and delusive and then, to these primary and fatal blunders, is added a notion, that the diminishing rate of profit observable as nations become numerous and rich, indicates a decreasing power of accumulating fresh resources; a belief which could not be embraced for an instant, without an almost wilful disregard of experience, and of the testimony which the history and statistical position of every country in the world bear to the laws really determining the varying powers of communities to accumulate capital. But the theoretical unsoundness of these doctrines, glaring as it must be to all who are in the habit of subjecting theoretical views to the test of facts, was thrown into the shade by the fearful daring exhibited in the practical inferences to which they have been pushed. The supposed continuous diminution in the returns to agriculture,its assumed effects on the progress of accumulationand then, by an erroneous inference from a fact itself false, a corresponding incapacity in mankind to provide resources for increasing numbersthese points having been first insisted on with a dogmatical air of scientific superiority, an apparent inconsistency between the permanence of human happiness, and the natural action of the laws established by Providence was enforced. It was darkly, but confidently and sedulously hinted at, that the most cherished moral feelings which guide the human heart, were, after all, only a mass of superstition which it might be hoped would decay with the progress of philosophy; that means were in reserve, and ready to be circulcated, of eluding the passions implanted by the Creator in the original constitution of the human race; and that thus at last human wisdom might be made to triumph over defects in the physical arrangements of Providence. Over the daring details with which this miserable philosophy was investedits enduring robe of shameand over the circumstances by which it was brought into actual contact with a part of the population, we must here draw a veil. But that the theoretical advocacy of these visions has, to a certain extent, tainted the moral feeling of a portion, we may hope a small portion, of the educated classes,that their industrious dissemination by ready agents, worthy of the task, has begun the vile work of effecting self-degradation, and extinguishing all sentiment of moral dignity or worth, among a part of the lower orders, are facts, which all familiar with the subject, know to be unhappily beyond the reach of doubt. And it is important that we should not underrate the mischievous moral effects and consequences of a superficial system of philosophy, when we are about to recommend those laborious and united efforts necessary to lay the wide foundations of that body of wholesome truth on these points, which we hope to shew may be safely and solidly constructed.
But although they have had their appropriate sphere of mischief and delusion, it would be a mistake to suppose, that any of the doctrines we have been alluding to have met with a general reception. Philosophers rushing forwards to uncoil a theory, may sometimes be observed shutting their eyes on the corrections offered by the world they live in; but mankind at large have different habits, founded on sounder views of the mode by which great general principles are to be detected amidst the confused action of many causes. It wants no great deal of logical acuteness to perceive, that in political economy, maxims which profess to be universal, can only be founded on the most comprehensive views of society. The principles which determine the position and progress, and govern the conduct, of large bodies of the human race, placed under different circumstances, can be learnt only by an appeal to experience. He must, indeed, be a shallow reasoner, who by mere efforts of consciousness, by consulting his own views, feelings and motives, and the narrow sphere of his personal observation, and reasoning a priori, from them expects that he shall be able to anticipate the conduct, progress and fortunes of large bodies of men, differing from himself in moral or physical temperament, and influenced by differences, varying in extent and variously combined, in climate, soil, religion, education and government. But with the first appeal from the speculation of individuals to the results of experience, as presented by bodies of men really existing, all belief in such maxims on the distribution of wealth, as those of which we have been speaking, must vanish at once. As soon as we withdraw our eyes from books to consult the statistical map of the world, it shews us that the countries in which the rent of land is highest, instead of exhibiting always indications of a decline in the efficiency of agriculture, are ordinarily those in which the largest populations are maintained in the greatest plenty by the exertions of the smallest proportion of their laboring hands. The decline in the rate of profit, which it is admitted may be observed in the advance of population and wealth, is so far from being seen to be accompanied by a decreasing productive power of industry in any of its branches, that in countries in which profits are low, as England and Holland, there industry is found in the most efficient state, and the rate at which capital is accumulating is the most rapid. On the other hand, in those countries in which the rate of profit has been long and permanently high, as in Poland, and many of the ruder parts of Europe and Asia, there the productive power of industry is almost proverbially feeble, and the rate at which capital is accumulating notoriously slow. These are facts which lead directly to the conclusion (of which a careful analysis of the various sources of accumulation will sufficiently shew the soundness,) that high profits, with a great productive power, and a rapid rate of accumulation, are, in the history of mankind, an exception and not the rule.
Again, looking at the rate of increase of the different orders of the population of any one country, it is seen at once, that the higher and middle classes, that is, those classes which have an almost unlimited command over food and all the means of a healthful subsistence, remain single more frequently, marry later, and increase more slowly, than those whose means of subsistence are more scanty; and comparing afterwards nation with nation, a similar fact forces itself upon us; and we see populations, whose means are comparatively ample, increasing less rapidly than those who are confessedly most wretched. These facts indicate at once, to an unprejudiced observer, the presence and influence, among communities of men, of causes which coming into action during the progress of plenty and refinement, serve to moderate the exercise of man's physical power of increase,(2) and are not resolvable evidently into misery, and almost as evidently, not into unmixed vice, or into a faultless state of moral restraint. The perception of this fact is of itself sufficient to inspire distrust in those dismal systems which teach that the whole human race is under the resistless dominion of an impulse, forcing ever its aggregate numbers forwards to the extreme limit of the subsistence they can procure; and that even wealth and plenty are only forces which impel communities gradually, but inevitably, towards want.
Between the fortunes, then, and varying relative position of the different orders of society, as seen in the ordinary progress of civilization,and the gloomy fate, the constant tendency to decline, the unceasing opposition of conflicting interests, as exhibited in the later theories of political economy: there exist essential differences and contradictions which must strike even a superficial observer, who thinks it worth while to recur to facts at all.
It is in vain to deny, that from this, and perhaps from some other causes, a feeling of dislike to the whole subject has been creeping over a portion of the public mind. Political economy has been distrusted. The facts on which its conclusions must be founded, have been thought too multitudinous, too variable, and too capricious in their combinations, to admit of their being accurately observed or truly analyzed; or, consequently, of their yielding any safe permanent general principles: and men have been inclined to shrink from the task of even examining opinions, which they have thought doomed only to startle without convincing, and then to disappear, and give place to another crop of paradoxes.
This alienation has had an unkindly effect on the growth of knowledge, and has turned away from the labors necessary to promote its progress, many of those, whose minds were the best gifted with the power of eradicating error, and advancing truth. But a little thought must surely shew, that the distrust earnt by many who have treated of the subject, has unjustly been extended to the subject itself.
It must be admitted that political economy must found all maxims which pretend to be universal on a comprehensive and laborious appeal to experience;it must be remembered steadily, that the mixt causes which concur in producing the various phenomena with which the subject is conversant, can only be separated, examined, and thoroughly understood by repeated observation of events as they occur, or have occurred, in the history of nations; and can never be submitted (except in cases extremely rare) to premeditated experiment;and we must not shrink from the inevitable conclusion, that the progress of knowledge on such a subject must be difficult and slow;(3) and that, almost in exact proportion to the extent of the field to be observed, and the complexity and intricacy of the results presented by it. Still even these considerations, while they afford abundant ground for caution, afford none at all for despair. On the contrary, to a mind well instructed in the ordinary road which inductive science has travelled towards perfection, the very abundance and variety of the materials on which we have to work, give rational ground for steadfast hope.
The progress of navigation and the spirit of adventure; a thirst for knowledge, gain, or power; have laid open the structure of society over the far greater part of the surface of the inhabited globe: and we can now embrace in one wide survey, the influence of that structure on the wealth and happiness of communities of human beings, from their rudest to their most advanced states, and under all their varieties of form. To this vast living field of actual observation, the universal story of past times adds another, scarcely less extensive. It is true, that the facts which best illustrate principles in any branch of knowledge, are little likely to be carefully recorded, before some glimmering perception of the principles themselves exists. Hence a neglect in the historians of past days to preserve whole classes of facts which would now be most precious to the philosophical enquirer; and hence, doubtless, in our own times, there pass away daily into oblivion, unnoted by traveller or chronicle, a multitude of events and circumstances, which the more full developement of our present subject will hereafter shew, to have been rich in unheeded instruction. But still, careless or imperfect as have been the observations of contemporary writers, the wide range of history teems everywhere with facts, which may, with care, be made to enlighten or correct us in our pursuit. The past and the present, then, concur in offering to us an abundant harvest of materials for the construction of a system of economical truths, which shall be securely founded on the actual experience of mankind. If we observe these materials thoroughly, and infer from them with modesty and caution, it would be mere intellectual cowardice, to despair of gaining sound knowledge in all the departments of political economy. Difficult as the task may be, we may well hope thus to obtain at last a distinct view of the laws, according to which the produce of their land and labor is divided among the several classes which compose communities of men, under all their varieties of form and circumstances; and of the extent to which the influence of peculiar modes of that division is felt, when reacting on the productive powers, as well as on the political and moral character and structure of nations.
Nor ought the passing theories, which have successively been adopted and disappeared on these branches of political economy, to daunt our hopes for the future. There has obviously been repeated here an error, which has been committed so frequently in the pursuit of other objects of human attainment, that the very effort of exposing it has become wearisome. The warning voice of the great prophet of that wisdom which man earns as "the servant and interpreter of nature."(4) has again been raised in vain. Men have preferred the way of anticipation to that of induction;(5) they have shrunk from the inevitable conditions, the appointed labors, by which knowledge can alone be safely acquired; in their effort to establish general principles, they have quitted too soon the duty of dwelling long and humbly among things, that they might prematurely take up the more fascinating employment of laying down those maxims of imposing generality, which seem to elevate the enquirer at once into the legislator of his subject, and gift him, as if by some sudden manifestation of intellectual power, with an instant command over its remotest details.
Truth has been missed therefore, not because a steady and comprehensive survey of the story and condition of mankind would not yield truth, even on this intricate subject, but because those who have been the most prominent in circulating error, have really turned aside from the task of going through such an examination at all: have confined the observations on which they founded their reasonings, to the small portion of the earth's surface by which they were immediately surrounded; and have then proceeded at once to erect a superstructure of doctrines and opinions, either wholly false, or, if partially true, as limited in their application as was the field from which the materials for them were collected.(6)
The work of which the following pages form a part, has been constructed on a different plan, with more humble pretensions, and with an aim less lofty, though it is hoped not less useful, than that of those who begin by laying down axioms which command the whole subject. My object has been to get a sight of the principles, which govern the distribution of the wealth annually produced by the lands and labor of the human race; and of the effects produced by the action of those principles among bodies of men existing under different circumstances. And this I have endeavoured to do, under the guidance of an abiding assurance, that the experience of the past and present, can alone, on such a subject, afford any sure foundations for anticipations as to the future.
I have begun by analysing rents, because a small progress in this subject was sufficient to shew, that the greater part of the nations of the earth are still in that state which is properly called agricultural; that is, in which the bulk of their population depends wholly on agriculture for subsistence: and because in this state of society, the relations between the proprietors of the soil and its occupiers determine the details of the condition of the majority of the people, and the spirit and forms of their political institutions. While tracing the circumstances to which rents owe their origin, or those by which they are affected in their progress, there have been first marked out and examined a few extensive and very distinct classes of tenantry, into which the occupiers of the cultivated surface of the globe soon shew themselves to be divided. An endeavour has next been made to throw light on the forms and conditions of the contract between the proprietors and the cultivators, which are peculiar to each of these classes, and on their distinct effects in the societies in which they prevail, whether economical, political or moral. While travelling through this wide examination, some important principles have been developed, which are applicable to the whole mass of rents taken in the most general point of view.
The next, and yet more important division of the annual produce, is that which is consumed as the wages of labor: and it is taken in the second, instead of in the first place, only because a clear perception of the causes which affect the amount of the remuneration received by the majority of the laborers in the world, (the peasant cultivators,) can only be attained after a survey of the forms and conditions of the various rents they pay.
In enquiring into wages, I have begun by appealing to the experience of the past and present to teach, first, what are the funds which support the laboring population of the globe: secondly, what are the laws by which the numbers of those who are to share those funds are determined.
Uniting the results of these two branches of enquiry, we may attain from them a knowledge of the circumstances which determine the condition and prospects of those various and distinct classes of laborers, which a careful view of the whole surface of human society brings before our notice.
Enumerating first the funds from which labor is supported, it has been shewn that they are various and different, and that of these various funds, that which is saved from income, and is most appropriately called capital, is only one and the least.
In approaching the subject of the numbers of those who are to share these funds, the whole subject of population presents itself, and the task cannot be avoided, of examining both the laws which determine the power of the human race to increase its aggregate numbers, and those by which the exercise and effects of that power are controlled. To apply however the results of this general review to our immediate subject of wages, it will be necessary to recur to those different funds for the support of labor, the origin and limits of which will have been already analysed; and to shew by a reference to the story and condition of the different divisions of mankind supported out of each of them, what are the peculiarities in the nature of those funds, which the most materially affect the habits of the laborers; and through these, stimulate or control their disposition to increase.
The laws which determine fluctuations in the numbers of the laboring classes, and in the amount of the funds devoted to their maintenance, once explained, the circumstances which determine the rate of wages in the different stages and forms of human society will be before us. After such a preparation, and with a proper knowledge of the actual statistical moral and political condition of particular communities, we may apply our knowledge of general principles with some confidence, whether for the purpose of explaining their present position, or of anticipating the future course of the mass of their population.
It is upon the same plan of eliciting principles from the most comprehensive survey it is in our power to make, of the mass of human society in all its details and varieties, that the share of the annual produce allotted to the owners of capital has been investigated. In performing this task, I have not confined myself to those circumstances alone which affect the rate of profits, but have considered the growth of the mass of profits as a point of equal or indeed superior importance. With a view to understand fluctuations in each of these quantities, I have examined in the world, as it lies spread before us, the various and gradually multiplying functions of accumulated stock. They have been traced, first, in those rude tribes or nations among whom the savage may be discerned fashioning his weapons, or the cultivator, with a scanty stock making the first imperfect attempts at tillage; and thence, through many an intermediate grade, to those more brilliant theatres of industry and the arts, in which mankind may be observed, enriched by the successive accumulations of many generations3 as well as by their own; and exercising by the aid of these a commanding and increasing productive power, whether employed in unfolding the resources of the earth, or in fashioning the material world to their purposes.
At each step of this progress, society is seen to receive a fresh impression and an altered form. To detect the laws which determine these changes, we shall watch the growth of the capitalists, and observe them at first scarcely distinguishable as a peculiar body; then separating themselves slowly, from the mass of laborers or landowners with which they were before confounded; assuming a gradually increasing share in the direction of national industry; and influencing at last (in a few instances) in the most marked and decisive manner, not only the productive powers, but the social and political elements of nations. In the progress of this survey, there will have been marked the various sources gradually multiplying and enlarging themselves, which yield the successive additions made to the existing stock of accumulated wealth.
We come then to the causes which determine the proportion which the annual revenue allotted to its owners bears to the mass of accumulated wealth employed, that is, which determine the rate of profit: and while tracking the changes which take place in this, as communities became more full of wealth, we shall, from the results of our previous survey, have been placed in a position to explain a phenomenon, the existence of which, (however contrary to doctrines lately current,) the instances of our own country, and of a few others, will be seen to put beyond the reach of cavil or doubt namely, the increasing national power of rapid accumulation, which is seen to advance hand in hand with a decreasing rate of profits.
Rents, Wages and Profits thus examined, the last division of our subject will be in sight, "The sources of Taxation." We shall here appeal first to history and facts, to dissipate the error which has led more than one sect of reasoners(7) to teach, that some portions of the wealth annually produced and distributed, are marked by the peculiarity of yielding no revenue to the state, and that their receivers are unconsciously gifted with a power of throwing back on other classes the impositions nominally laid upon them. Tracing society then once more through its many forms and many stages, we shall endeavour to point out what in each is the nature and amount of the revenue drawn by the state from the incomes of the laborers, the landowners, or the capitalists. We shall then attempt to observe the limits of the financial fruitfulness of each class; and to determine the points, at which an attempt to press further upon a single division, ends in a real burthen upon one or both of the others.
Viewing then the revenues of the community as a whole, it may perhaps be practicable to estimate how far the state may share in the joint wealth of its subjects, without causing production to retrograde: and where the limits are, beyond which all attempts to extract from a people a permanent public revenue fail, and if persevered in, serve only to impoverish the sources of wealth.
Most assuredly it is not even hoped that so large a field as that of which the outline has just been sketched, has been fully explored in one survey, or all its harvest of instruction reaped. But however much may remain to be done, it is cheering to reflect that whatever knowledge is thus elicited by a legitimate and careful reference to experience cannot deceive us.
Even by the present imperfect effort, enough at least of knowledge has been so obtained, to demonstrate the error of those gloomy notions of a perpetual discord between rival interests in society, and of an inevitable tendency to ultimate decline, which it has been the evil triumph of the specious reasonings lately inculcated on these subjects, to make, to a certain extent, plausible and current. We shall see first rising up before us in all parts of the globe this prominent and unquestionable fact;that under no form or modification of the relations between the proprietors and cultivators are the permanent interests of the landlords opposed to those of the community at large. We shall observe circumstances and ties gradually unfolding themselves, which in every stage and form of civilization, completely identify the real interests of the owners of the soil with those of society; and make the permanent and progressive growth of the revenues of the landed body, not only consistent with, but dependent on, the prosperous career of their tenantry, and of the community to which they belong. Next, that fall of the rate of profits which is so common a phenomenon as to be almost a constant attendant on increasing population and wealth, is, it will be seen, so far from indicating greater feebleness in any branch of industry, that it is usually accompanied by an increasing productive power in all, and by an ability to accumulate fresh resources, more abundantly and more rapidly.(8) So far, therefore, is this circumstance from being, as it has hastily been feared and described to be, an unerring symptom of national decay, that it will be shewn to be one of the most constant accompaniments and indications of economical prosperity and vigor.
Turning, then, to that part of the animal constitution of mankind which makes an extremely rapid increase of their numbers possible under certain circumstances, (which has been the cause of yet more formidable apprehensions,) it will be seen that it is an error to suppose that the consequences of this power of increase present any real obstacle to the permanent ease and happiness of any class of society.
But before we proceed with the little we have to say on this subject now, there are a few preliminary observations to be made. The states of society from which the principles here developed are collected, are such as are found actually existing over the surface of the earth. Some portion of misery and vice therefore will meet our view at every step, and of these a part may doubtless be traced to the consequences of man's animal power of multiplying rapidly his kind. Nay more, while the world exists, considerable suffering arising from this cause will always probably be to be met with. So far therefore the sufferings which can be traced to this source, like those produced by the earthquake or the storm, belong to a course of events which we may not flatter ourselves we shall ever be able wholly to arrest. Both have their origin in the physical constitution of the creation. As a consequence of this view of the power of multiplication, it has been truly stated, that those persons who do not see in evils produced by purely material causes any thing inconsistent with the benevolence of the Creator, act very idly in being indignant with others, who assert the constant presence of a certain quantity of suffering and evil, which is produced by causes of a mixt character, partly moral and partly physical, such as those are which influence the growth of the numbers of mankind. But then we must not be led too far by this analogy. There are important distinctions between evils produced by the action of mere material causes, and those evils, in the production of which man is himself an agent. In the one case the amount of evil to be endured is certain and unavoidable, and the individual sufferers cannot escape their doom. In the latter case the average amount of evil may be indefinitely diminished by human efforts, and no individual sufferer is necessarily a victim.
The earthquake and the storm do their appointed work, and man can hardly produce a perceptible influence on the amount of their ravages, or the fate of the sufferers. Now it must be allowed that the passions which lead to wrong and violence, are as much a part of the Creator's work, as the obscure causes which produce physical convulsions. But then the average amount of wrong or violence may be diminished indefinitely by the institution of good laws, and by the greater prevalence of sound morals: and no individual robber or murderer is recognized to be a fated victim, compelled to be such by providence itself. These two important reflexions go very far to remove both the gloomy and the depraved tendency which some have perversely persisted in affixing to all admissions of the constant presence of a certain quantity of moral evil. If we apply a similar distinction to the case of communities, and to the peculiar class of evils we are now considering, we shall find in the statistical history of nations, satisfactory indications of this truth, that although cases of national suffering caused by superabundant numbers, may be traced to the animal constitution of man, and so to the physical structure of the universe, and will probably always prevail to some extent; still that, first the average amount of those sufferings may be repressed indefinitely by human effort, and by the re-action of moral causes; and Men that no one community is necessarily doomed to endure any portion of such suffering at all. This view of the subject is evidently full of cheerful promise to all enlightened and well-governed societies, as it is too of plain instruction to individuals, whom it very clearly warns, that their aim and wisdom must ever be to fulfil their own duties, and follow up their own chances of happiness steadily, without casting furtive glances towards the general mass of evil, as a source of either perplexity or excuse.
These considerations once understood, we may proceed; and it will be obvious, that since the subject of population as connected with wages must occupy an important portion of our enquiry, it will be our business to appeal to the experience of mankind as contained by the past story and present condition of its various branches, and to collect thence a knowledge of the circumstances which in different forms and stages of society, contribute to the prevalence of moral controul over the powers of increase. The results of such a survey will be found to be these. Viewing the subject first as it affects the human race generally, and with no reference to wages, we shall see that the disposition to exert the full animal power of increase yields readily in the upper classes, to the accumulating force of various motives for restraint, which necessarily multiply and gather more joint strength, with the growth of those artificial wants the fruit of wealth aud refinement. Limiting our observations then to the laborers, in the less advanced stages of society, we shall observe a great influence exercised over the industrious classes by others, which controls the exercise of their full powers of increase: and when those ruder stages are passed through, and the lower classes are, like the higher, abandoned wholly to the guidance of such motives as may spring up within their own bosoms, we shall again, in their case, have to trace the effects of refinement and the multiplication of artificial wants gradually influencing the whole mass, as they always influence the upper portion of society. And, where the gradual spread of refinement does not produce the effect of moderating the rate of increase of the mass of a population, we shall be able to trace the failure to unfavorable peculiarities in the circumstances, or in the legislation of nations.
During this survey, we shall have abundant opportunities of observing, that those natural and wholesome causes of retardation which come into general action with the spread of increasing prosperity are never found necessarily accessory to the increase of vicious habits; much less dependent on them. The providence which implanted in the heart of man his feelings as to right and wrong, will never be found to act so inconsistently with its own purposes; as to make pollution and crime means for attaining, or retaining, the happiness of mankind. On the contrary, the portion of voluntary restraint necessary to produce such an influence on the progress of numbers, as calculation may shew to be rationally desirable, in any stage of society, will be observed introducing a long train of wholesome consequences, and among them much dignity, energy, and intellectual and moral purity and elevation. These, after a fair balance has been struck, will be seen very far to outweigh that portion of evil, which (such is the condition of humanity) will in this, as in all other cases, be found mingling itself among the consequences of the wisest institutions of our race, and of the best and most exalted feelings and passions of our nature.
When we have advanced so far with our examination of the phenomena which regulate or follow the distribution of the annual produce into rent, wages, and profits, we shall at least have shewn that the deep gloom which wa thought to overhang much of the subject, was but an illusion; that no causes of inevitable decay haunt the fortunes of any class during the progressive developement of the resources of a country; that the interests of no portion of society are ever permanently in opposition to those of any other; and that there is nothing either in the physical constitution of man, or in that of the earth which he inhabits, that need enfeeble the hopes and exertions of those to whom the high, and if properly understood, cheerful and animating task is committed, of laboring, through wise laws and honest government, to secure the permanent harmony and common prosperity of all classes of society.
But these general views are but a portion, though in the present state of public opinion, they are perhaps not the least important portion, of our subject. There remain to be developed and. explained a variety of minor truths, which, if this branch of political economy is ever to be a safe and useful guide, must be securely placed on the firm basis of experience. The principles which contain many of these will, it is hoped, be found so established here: but I should shew that I ill understood the extent and difficulty of the subject, and the mode of mastering it which I have myself so strenuously recommended, did I not state my conviction that to compleat the knowledge really and securely attainable, on the subjects treated in the following pages, will still require the patient and assiduous observations and labor of many minds, and probably of more than one generation. During this process, the too hasty erection of whole systems, a frail thirst for the premature exhibition of commanding generalities, will probably continue to be the sources of error most to be guarded against. It is, assuredly not by indulging and encouraging such errors that the boundary of human knowledge in this direction will be successfully or safely approached. The portions of truth which can in the first instance be safely attained, must necessarily be narrow principles, grounded upon a limited field of experience, cautiously and patiently worked out. Wider generalities of more scientific simplicity, can only be approached after these intermediate truths have been mastered. This is the appointed course of true and permanent science. To spring at once from partial and broken observations to the most general axioms; to dart from a state of ignorance and confusion upon the fundamental and ultimate elements of systematic knowledge, without touching the ground during the intermediate flight: this is the course of a rash theorist, and not of a philosopher; and those who have often tracked that course, must know but too well, that the very simplicity and commanding aspect of propositions so attained, is much oftener a warning of the insecurity of their application, than any evidence of their truth.
It will not be thought, I hope, that these many warnings come of faintheartedness. Did I not distinctly see in the far distance a goal worthy of the toil, I should not have applied my shoulder to the humble task of advancing the car of knowledge one span's length in its career. I firmly believe that the day will come when the most intricate practical problems connected with the whole subject of the "Distribution of Wealth" will be readily solved by the application of principles firmly established and thoroughly understood; nor do I think that this confidence is tinged with rashness. If, in the road to truth through observation and induction, men can advance only by slow and laborious steps, it is at least the privilege of those who tread it, to see through its long vista, a cheering spectacle of final triumphs. While viewing the destined progress of a career so full of majesty and promise, they may forget without presumption, both their own individual feebleness, and that of their fellow men; and look forward to conquests to be won by the united efforts of the race, and by the growing discoveries of successive generations.
Before I close this Preface, the grateful task remains to be performed, of returning my thanks to the University of Cambridge, and to the Syndics of its Press, for having extended their assistance to my attempt. These pages were printed at their press, and at their expence. The aid thus given is in itself an obligation: but the feelings with which it is received, are in my case considerably heightened, by its being in some measure a renewal in maturer life, of my connection with a body which I have never ceased to regard with the utmost affection and respect; because I owe to my entrance into it much of the purest and most vivid happiness of my early life, and opportunities at least of intellectual culture, for which I can only feel the more grateful, as advancing years shew me more dearly, what benefits they may bestow, on those who have the good fortune and the industry to use them worthily.
1. As far as rent is concerned, the late Sir Edward West ought to share this praise.
2. We shall not be supposed to refer to the law of nature proclaimed by Mr. Sadler, according to which the fecundity of females is diminished as population becomes dense. Of this we shall have a few words to say hereafter. It is enough for our present purpose to shew, that the glance even of a hasty observer must detect the existence of such moderating causes as we are now speaking of, and see them to be distinct from misery, vice, or a faultless moral restraint. To shew the nature of those causes, to throw light upon their details, to exhibit the manner in which their action is felt in different stages of civilization, and in communities differently organizedthis is a serious task, the successful execution of any part of which presupposes wide and patient observation, and very cautious inferences. A portion of that talk will be hereafter attempted, with a very deep sense both of its importance and its intricacy.
3. See in the Appendix some observations by Mr. Herschel, on the different rates of progress of those sciences which are dependent on mere observation for their materials, and of those in which experiment can be resorted to. I have Mr. Herschel's leave to use these observations here, although it is possible that they may not be actually published before this work is out.
4. Nov. Org. Ap. I.
5. Nov. Org. Ap. 26. to 30. and passim.
6. An instance of this which looks almost like wilfulness (relating however to a doctrine of inferior importance) occurs in a little work on political economy by M. Destutt de Tracy, a metaphysical writer of deserved eminence in his own department of literature. It is curious, because the fault is ushered in by a formula which seems meant to serve for its justification in that and all similar cases. After stating his individual experience, as a proprietor in different parts of France, he says, "quand on a ainsi un champ suffisant d'observations, on gagne plus à les approfoudir qu'à les étendre;" and then upon the strength of a maxim so consolatory to indolent speculators, he proceeds to announce as an universal law, that métayer cultivation is peculiar to bad soils, "c'est le propre des mauvais pays," a position, the utter fallacy of which must have become immediately apparent to M. Destutt de Tracy, or indeed to any inquirer very much his inferior, if he had luckily adopted the plan of extending his observations to other districts, countries, or times, instead of that of speculating profoundly upon a limited stock of facts. Traité D'Economie Politique Par M. Le Comte Destutt de Tracy, &c. pp. 122, 123. and note. What M. de Tracy has done in one point, others have done in whole systems, as we shall see.
7. Locke and the Economists as to Profits and Wages; Ricardo (more partially) as to Wages.
8. If the prepossessions of any reader should lead him at once to treat this statement as paradoxical, let me beg of him to turn his eye to the growing powers of production and accumulation displayed by England during the last century, and to compare them with those of the countries in Europe in which profits have continued the highest. The review must, I think, at least produce patience to wait for the demonstration which is promised, of the truth of the statement in the text.