An Essay on the Principle of Population
Book III, Chapter XIII
Of increasing Wealth, as it affects the Condition of the Poor.
The professed object of Adam Smith's Inquiry is the Nature and Causes of the Wealth of Nations. There is another, however, still more interesting, which he occasionally mixes with it—the causes which affect the happiness and comfort of the lower orders of society, which in every nation form the most numerous class. These two subjects are, no doubt, nearly connected; but the nature and extent of this connexion, and the mode in which increasing wealth operates on the condition of the poor, have not been stated with sufficient correctness and precision.
Adam Smith, in his chapter on the wages of labour, considers every increase in the stock or revenue of the society as an increase in the funds for the maintenance of labour; and having before laid down the position that the demand for those who live by wages can only increase in proportion to the increase of the funds for the payment of wages, the conclusion naturally follows, that every increase of wealth tends to increase the demand for labour and to improve the condition of the lower classes of society.*59
Upon a nearer examination, however, it will be found that the funds for the maintenance of labour do not necessarily increase with the increase of wealth, and very rarely increase in proportion to it; and that the condition of the lower classes of society does not depend exclusively upon the increase of the funds for the maintenance of labour, or the power of supporting a greater number of labourers.
Adam Smith defines the wealth of a state to be the annual produce of its land and labour. This definition evidently includes manufactured produce as well as the produce of the land. Now, upon the supposition that a nation, from peculiar situation and circumstances, was unable to procure an additional quantity of food, it is obvious that the produce of its labour would not necessarily come to a stand, although the produce of its land or its power of importing corn were incapable of further increase. If the materials of manufactures could be obtained either at home or from abroad, improved skill and machinery might work them up to a greatly increased amount with the same number of hands, and even the number of hands might be considerably increased by an increased taste for manufactures, compared with war and menial service, and by the employment consequently of a greater proportion of the whole population in manufacturing and commercial labour.
That such a case does not frequently occur will be most readily allowed. It is not only however possible, but forms the specific limit to the increase of population in the natural progress of cultivation, with which limit, the limit to the further progress of wealth is obviously not contemporary. But though cases of this kind do not often occur, because these limits are seldom reached; yet approximations to them are constantly taking place, and in the usual progress of improvement the increase of wealth and capital is rarely accompanied with a proportionately increased power of supporting an additional number of labourers.
Some ancient nations, which, according to the accounts we have received of them, possessed but an inconsiderable quantity of manufacturing and commercial capital, appear to have cultivated their lands highly by means of an agrarian division of property, and were unquestionably very populous. In such countries, though full of people already, there would evidently be room for a very great increase of capital and riches; but, allowing all the weight that is in any degree probable to the increased production or importation of food occasioned by the stimulus of additional capital, there would evidently not be room for a proportionate increase of the means of subsistence.
If we compare the early state of our most flourishing European kingdoms with their present state, we shall find this conclusion confirmed almost universally by experience.
Adam Smith, in treating of the different progress of opulence in different nations, says, that England, since the time of Elizabeth, has been continually advancing in commerce and manufactures. He than adds, "The cultivation and improvement of the country has no doubt been gradually advancing. But it seems to have followed slowly and at a distance the more rapid progress of commerce and manufactures. The greater part of the country must probably have been cultivated before the reign of Elizabeth, and a very great part of it still remains uncultivated, and the cultivation of the far greater part is much inferior to what it might be."*60 The same observation is applicable to most of the other countries of Europe. The best land would naturally be the first occupied. This land, even with that sort of indolent cultivation and great waste of labour which particularly marked the feudal times, would be capable of supporting a considerable population; and on the increase of capital, the increasing taste for conveniences and luxuries, combined with the decreasing power of production in the new land to be taken into cultivation, would naturally and necessarily direct the greatest part of this new capital to commerce and manufactures, and occasion a more rapid increase of wealth than of population.
The population of England accordingly in the reign of Elizabeth appears to have been nearly five millions, which would not be very far short of the half of what it is at present (1811); but when we consider the very great proportion which the products of commercial and manufacturing industry now bear to the quantity of food raised for human consumption, it is probably a very low estimate to say that the mass of wealth or the stock and revenue of the country must, independently of any change in the value of the circulating medium, have increased above four times. Few of the other countries in Europe have increased to the same extent in commercial and manufacturing wealth as England; but as far as they have proceeded in this career, all appearances clearly indicate that the progress of their general wealth has been greater than the progress of their means of supporting an additional population.
That every increase of the stock or revenue of a nation cannot be considered as an increase of the real funds for the maintenance of labour will appear in a striking light in the case of China.
Adam Smith observes, that China has probably long been as rich as the nature of her laws and institutions will admit; but intimates that, with other laws and institutions, and if foreign commerce were held in honour, she might still be much richer.
If trade and foreign commerce were held in great honour in China, it is evident that, from the great number of her labourers and the cheapness of her labour, she might work up manufactures for foreign sale to a great amount. It is equally evident that, from the great bulk of provisions and the prodigious extent of her inland territory, she could not in return import such a quantity as would be any sensible addition to her means of subsistence. Her immense amount of manufactures, therefore, she would either consume at home, or exchange for luxuries collected from all parts of the world. At present the country appears to be over-peopled compared with what its stock can employ, and no labour is spared in the production of food. An immense capital could not be employed in China in preparing manufactures for foreign trade, without altering this state of things, and taking off some labourers from agriculture, which might have a tendency to diminish the produce of the country. Allowing, however, that this would be made up, and, indeed, more than made up, by the beneficial effects of improved skill and economy of labour in the cultivation of the poorest lands, yet, as the quantity of subsistence could be but little increased, the demand for manufactures which would raise the price of labour, would necessarily be followed by a proportionate rise in the price of provisions, and the labourer would be able to command but little more food than before. The country would, however, obviously be advancing in wealth; the exchangeable value of the annual produce of its land and labour would be annually augmented; yet the real funds for the maintenance of labour would be nearly stationary. The argument perhaps appears clearer when applied to China, because it is generally allowed that its wealth has been long stationary, and its soil cultivated nearly to the utmost.*61
In all those cases, it is not on account of any undue preference given to commerce and manufactures, compared with agriculture, that the effect just described takes place, but merely because the powers of the earth in the production of food have narrower limits than the skill and tastes of mankind in giving value to raw materials, and consequently in the approach towards the limits of subsistence there is naturally more room, and consequently more encouragement, for the increase of the one species of wealth than of the other.
It must be allowed then, that the funds for the maintenance of labour do not necessarily increase with the increase of wealth, and very rarely increase in proportion to it.
But the condition of the lower classes of society certainly does not depend exclusively upon the increase of the funds for the maintenance of labour, or the means of supporting more labourers. That these means form always a very powerful ingredient in the condition of the labouring classes, and the main ingredient in the increase of population, is unquestionable. But, in the first place, the comforts of the lower classes of society do not depend solely upon food, nor even upon strict necessaries; and they cannot be considered as in a good state unless they have the command of some conveniences and even luxuries. Secondly, the tendency in population fully to keep pace with the means of subsistence must in general prevent the increase of these means from having a great and permanent effect in improving the condition of the poor. And, thirdly, the cause which has the most lasting effect in improving the situation of the lower classes of society depends chiefly upon the conduct and prudence of the individuals themselves, and is, therefore, not immediately and necessarily connected with an increase in the means of subsistence.
With a view, therefore, to the other causes which affect the condition of the labouring classes, as well as the increase of the means of subsistence, it may be desirable to trace more particularly the mode in which increasing wealth operates, and to state both the disadvantages as well as the advantages with which it is accompanied.
In the natural and regular progress of a country to a state of great wealth and population, there are two disadvantages to which the lower classes of society seem necessarily to be subjected. The first is, a diminished power of supporting children under the existing habits of the society with respect to the necessaries of life. And the second, the employment of a larger proportion of the population in occupations less favourable to health, and more exposed to fluctuations of demand and unsteadiness of wages.
A diminished power of supporting children is an absolutely unavoidable consequence of the progress of a country towards the utmost limits of its population. If we allow that the power of a given quantity of territory to produce food has some limit, we must allow that as this limit is approached, and the increase of population becomes slower and slower, the power of supporting children will be less and less, till finally, when the increase of produce stops, it becomes only sufficient to maintain, on an average, families of such a size as will not allow of a further addition of numbers. This state of things is generally accompanied by a fall in the corn price of labour; but should this effect be prevented by the prevalence of prudential habits among the lower classes of society, still the result just described must take place; and though, from the powerful operation of the preventive check to increase, the wages of labour estimated even in corn might not be low, yet it is obvious that, in this case, the power of supporting children would rather be nominal than real; and the moment this power began to be exercised to its apparent extent, it would cease to exist.
The second disadvantage to which the lower classes of society are subjected in the progressive increase of wealth is, that a larger portion of them is engaged in unhealthy occupations, and in employments in which the wages of labour are exposed to much greater fluctuations than in agriculture, and the simpler kinds of domestic trade.
On the state of the poor employed in manufactories with respect to health, and the fluctuations of wages, I will beg leave to quote a passage from Dr. Aikin's Description of the Country round Manchester:—
"The invention and improvements of machines to shorten labour have had a surprising influence to extend our trade, and also to call in hands from all parts, particularly children for the cotton-mills. It is the wise plan of Providence, that in this life there shall be no good without its attendant inconvenience. There are many which are too obvious in these cotton-mills, and similar factories, which counteract that increase of population usually consequent on the improved facility of labour. In these, children of a very tender age are employed, many of them collected from the workhouses in London and Westminster, and transported in crowds as apprentices to masters resident many hundred miles distant, where they serve unknown, unprotected and forgotten by those to whose care nature or the laws had consigned them. These children are usually too long confined to work in close rooms, often during the whole night. The air they breathe from the oil, &c. employed in the machinery, and other circumstances, is injurious; little attention is paid to their cleanliness; and frequent changes from a warm and dense to a cold and thin atmosphere are pre-disposing causes to sickness and debility, and particularly to the epidemic fever which is so generally to be met with in these factories. It is also much to be questioned if society does not receive detriment from the manner in which children are thus employed during their early years. They are not generally strong to labour, or capable of pursuing any other branch of business when the term of their apprenticeship expires. The females are wholly uninstructed in sewing, knitting, and other domestic affairs requisite to make them notable and frugal wives and mothers. This is a very great misfortune to them and to the public, as is sadly proved by a comparison of the families of labourers in husbandry and those of manufacturers in general. In the former we meet with neatness, cleanliness, and comfort; in the latter with filth, rags, and poverty, although their wages may be nearly double to those of the husbandman. It must be added, that the want of early religious instruction and example, and the numerous and indiscriminate association in these buildings, are very unfavourable to their future conduct in life."*62
In the same work it appears that the register for the collegiate church of Manchester, from Christmas, 1793, to Christmas 1794, shewed a decrease of 168 marriages, 538 christenings, and 250 burials. In the parish of Rochdale, in the neighbourhood, a still more melancholy reduction in proportion to the number of people took place. In 1792 the births were 746, the burials 646, and the marriages 339. In 1794 the births were 373, the burials 671, and the marriages 199. The cause of this sudden check to population was the failure of demand and of commercial credit which occurred at the commencement of the war, and such a check could not have taken place in so sudden a manner without the most severe distress, occasioned by the sudden reduction of wages.
In addition to the fluctuations arising from the changes from peace to war and from war to peace, it is well known how subject particular manufactures are to fail from the caprices of taste. The weavers of Spitalfields were plunged into the most severe distress by the fashion of muslins instead of silks; and great numbers of workmen in Sheffield and Birmingham were for a time thrown out of employment owing to the adoption of shoe strings and covered buttons, instead of buckles and metal buttons. Our manufactures, taken in the mass, have increased with prodigious rapidity, but in particular places they have failed; and the parishes where this has happened are invariably loaded with a crowd of poor in the most distressed and miserable condition.
In the evidence brought before the House of Lords during the inquiries which preceded the Corn-Bill of 1815, various accounts are produced from different manufactories, intended to shew that the high price of corn has rather the effect of lowering than of raising the price of manufacturing labour.*63 Adam Smith has clearly and correctly stated that the money price of labour depends upon the money price of provisions, and the state of the demand and the supply of labour. And he shews how much he thinks it is occasionally affected by the latter cause, by explaining in what manner it may vary in an opposite direction from the price of provisions during the pressure of a scarcity. The accounts brought before the House of Lords are a striking illustration of this part of his proposition; but they certainly do not prove the incorrectness of the other part of it, as it is quite obvious that, whatever may take place for a few years, the supply of manufacturing labour cannot possibly be continued in the market unless the natural or necessary price, that is, the price necessary to continue it in the market, be paid, and this of course is not done unless the money price be so proportioned to the price of provisions that labourers are enabled to bring up families of such a size as will supply the number of hands required.
But though these accounts do not in any degree invalidate the usual doctrines respecting labour, or the statements of Adam Smith, they shew very clearly the great fluctuations to which the condition of the manufacturing labourer is subjected.
In looking over these accounts it will be found that in some cases the price of weaving has fallen a third, or nearly one-half, at the same time that the price of wheat has risen a third, or nearly one half; and yet these proportions do not always express the full amount of the fluctuations, as it sometimes happens that when the price is low, the state of the demand will not allow of the usual number of hours of working; and when the price is high, it will admit of extra hours.
That from the same causes there are sometimes variations of a similar kind in the price of task-work in agriculture will be readily admitted; but, in the first place, they do not appear to be nearly so considerable; and secondly, the great mass of agricultural labourers is employed by the day, and a sudden and general fall in the money price of agricultural day-labour is an event of extremely rare occurrence.*64
It must be allowed then, that in the natural and usual progress of wealth, the means of marrying early and supporting a family are diminished, and a greater proportion of the population is engaged in employments less favourable to health and morals, and more subject to fluctuations in the price of labour, than the population employed in agriculture.
These are no doubt considerable disadvantages, and they would be sufficient to render the progress of riches decidedly unfavourable to the condition of the poor, if they were not counteracted by advantages which nearly, if not fully, counterbalance them.
And, first, it is obvious that the profits of stock are that source of revenue from which the middle classes are chiefly maintained; and the increase of capital, which is both the cause and effect of increasing riches, may be said to be the efficient cause of the emancipation of the great body of society from a dependence on the landlords. In a country of limited extent, consisting of fertile land divided into large properties, as long as the capital remains inconsiderable, the structure of society is most unfavourable to liberty and good government. This was exactly the state of Europe in the feudal times. The landlords could in no other way spend their incomes than by maintaining a great number of idle followers; and it was by the growth of capital in all the employments to which it is directed, that the pernicious power of the landlords was destroyed, and their dependent followers were turned into merchants, manufacturers, tradesmen, farmers, and independent labourers;—a change of prodigious advantage to the great body of society, including the labouring classes.
Secondly; in the natural progress of cultivation and wealth, the production of all additional quantity of corn will require more labour, while, at the same time, from the accumulation and better distribution of capital, the continual improvements made in machinery, and the facilities opened to foreign commerce, manufactures and foreign commodities will be produced or purchased with less labour; and consequently a given quantity of corn will command a much greater quantity of manufactures and foreign commodities than while the country was poor. Although, therefore, the labourer may earn less corn than before, the superior value which every portion which he does not consume in kind will have in the purchase of conveniences, may more than counterbalance this diminution. He will not indeed have the same power of maintaining a large family; but with a small family he may be better lodged and clothed, and better able to command the decencies and comforts of life.
Thirdly; it seems to be proved by experience, that the labouring classes of society seldom acquire a decided taste for conveniences and comforts till they become plentiful compared with food, which they never do till food has become in some degree scarce. If the labourer can obtain the bill support of himself and family by two or three days' labour; and if, to furnish himself with conveniences and comforts, he must work three or four days more, he will generally think the sacrifice too great compared with the objects to be obtained, which are not strictly necessary to him, and will therefore often prefer the luxury of idleness to the luxury of improved lodging and clothing. This is said by Humboldt to be particularly the case in some parts of South America, and to a certain extent prevails in Ireland, India, and all countries where food is plentiful compared with capital and manufactured commodities. On the other hand, if the main part of the labourer's time be occupied in procuring food, habits of industry are necessarily generated, and the remaining time, which is but inconsiderable compared with the commodities it will purchase, is seldom grudged. It is under these circumstances, particularly when combined with a good government, that the labouring classes of society are most likely to acquire a decided taste for the conveniences and comforts of life; and this taste may be such as even to prevent, after a certain period, a further fall in the corn price of labour. But if the corn price of labour continues tolerably high while the relative value of commodities compared with corn falls very considerably, the labourer is placed in a most favourable situation. Owing to his decided taste for conveniences and comforts, the good corn wages of labour will not generally lead to early marriages; yet in individual cases, where large families occur, there will be the means of supporting them independently, by the sacrifice of the accustomed conveniences and comforts; and thus the poorest of the lower classes will rarely be stinted in food, while the great mass of them will not only have sufficient means of subsistence, but be able to command no inconsiderable quantity of those conveniences and comforts, which, at the same time that they gratify a natural or acquired want, tend unquestionably to improve the mind and elevate the character.
On an attentive review, then, of the effects of increasing wealth on the condition of the poor, it appears that, although such an increase does not imply a proportionate increase of the funds for the maintenance of labour, yet it brings with it advantages to the lower classes of society which may fully counterbalance the disadvantages with which it is attended; and, strictly speaking, the good or bad condition of the poor is not necessarily connected with any particular stage in the progress of society to its full complement of wealth. A rapid increase of wealth indeed, whether it consists principally in additions to the means of subsistence or to the stock of conveniences and comforts, will always, cæteris paribus, have a favourable effect on the poor; but the influence even of this cause is greatly modified and altered by other circumstances, and nothing but the union of individual prudence with the skill and industry which produce wealth can permanently secure to the lower classes of society that share of it which it is, on every account, so desirable that they should possess.
Notes for this chapter
Vol i. book i. c. 8.
Vol. ii. book iv. c. 4. p. 133.
How far this latter opinion is to be depended upon it is not very easy to say. Improved skill and a saving of labour would certainly enable the Chinese to cultivate some lands with advantage which they cannot cultivate now, but the more general use of horses, instead of men, might prevent this extended cultivation from giving any encouragement to an increase of people.
P. 219. Dr. Aikin says that endeavours have been made to remedy these evils, which in some factories have been attended with success. And it is very satisfactory to be able to add, that, since this account was written, the situation of the children employed in the cotton-mills has been further very essentially improved, partly by the interference of the legislature, and partly by the humane and liberal exertions of individuals.
Reports, p. 51.
Almost the only instance on record in this country is that which has lately taken place (1815 and 1816), occasioned by an unparalleled fall in the exchangeable value of the raw produce, which has necessarily disabled the holders of it from employing the same quantity of labour at the same price. .
End of Notes
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