Principles of Economics

§ 1. The production of wealth is but a means to the sustenance of man; to the satisfaction of his wants; and to the development of his activities, physical, mental, and moral. But man himself is the chief means of the production of that wealth of which he is the ultimate aim
*29: and this and the two following chapters will be given to some study of the supply of labour;
i.e. of the growth of population in numbers, in strength, in knowledge, and in character.

In the animal and vegetable world the growth of numbers is governed by the tendency of individuals to propagate their species on the one hand, and on the other hand by the struggle for life which thins out the young before they arrive at maturity. In the human race alone the conflict of these two opposing forces is complicated by other influences. On the one hand regard for the future induces many individuals to control their natural impulses; sometimes with the purpose of worthily discharging their duties as parents; sometimes, as for instance at Rome under the Empire, for mean motives. And on the other hand society exercises pressure on the individual by religious, moral and legal sanctions, sometimes with the object of quickening, and sometimes with that of retarding, the growth of population.

The study of the growth of population is often spoken of as though it were a modern one. But in a more or less vague form it has occupied the attention of thoughtful men in all ages of the world. To its influence, often unavowed, sometimes not even clearly recognized, we can trace a great part of the rules, customs and ceremonies that have been enjoined in the Eastern and Western world by law-givers, by moralists, and those nameless thinkers, whose far-seeing wisdom has left its impress on national habits. Among vigorous races, and in times of great military conflict, they aimed at increasing the supply of males capable of bearing arms; and in the higher stages of progress they have inculcated a great respect for the sanctity of human life; but in the lower stages, they have encouraged and even compelled the ruthless slaughter of the infirm and the aged, and sometimes of a certain proportion of the female children.

In ancient Greece and Rome, with the safety-valve of the power of planting colonies, and in the presence of constant war, an increase in the number of citizens was regarded as a source of public strength; and marriage was encouraged by public opinion, and in many cases even by legislation: though thoughtful men were even then aware that action in the contrary sense might be necessary if the responsibilities of parentage should ever cease to be burdensome
*30. In later times there may be observed, as Roscher says
*31, a regular ebb and flow of the opinion that the State should encourage the growth of numbers. It was in full flow in England under the first two Tudors, but in the course of the sixteenth century it slackened and turned; and it began to ebb, when the abolition of the celibacy of the religious orders, and the more settled state of the country had had time to give a perceptible impetus to population; the effective demand for labour having meanwhile been diminished by the increase of sheep runs, and by the collapse of that part of the industrial system which had been organized by the monastic establishments. Later on the growth of population was checked by that rise in the standard of comfort which took effect in the general adoption of wheat as the staple food of Englishmen during the first half of the eighteenth century. At that time there were even fears, which later inquiries showed to be unfounded, that the population was actually diminishing. Petty
*32 had forestalled some of Carey’s and Wakefield’s arguments as to the advantages of a dense population. Child had argued that “whatever tends to the depopulating of a country tends to the impoverishment of it”; and that “most nations in the civilized parts of the world are more or less rich or poor proportionably to the paucity or plenty of their people, and not to the sterility or fruitfulness of their land
*33.” And by the time that the world-struggle with France had attained its height, when the demands for more and more troops were ever growing, and when manufacturers were wanting more men for their new machinery; the bias of the ruling classes was strongly flowing in favour of an increase of population. So far did this movement of opinion reach that in 1796 Pitt declared that a man who had enriched his country with a number of children had a claim on its assistance. An Act, passed amid the military anxieties of 1806, which granted exemptions from taxes to the fathers of more than two children born in wedlock, was repealed as soon as Napoleon had been safely lodged in St Helena
*34.

§ 2. But during all this time there had been a growing feeling among those who thought most seriously on social problems, that an inordinate increase of numbers, whether it strengthened the State or not, must necessarily cause great misery: and that the rulers of the State had no right to subordinate individual happiness to the aggrandizement of the State. In France in particular a reaction was caused, as we have seen, by the cynical selfishness with which the Court and its adherents sacrificed the wellbeing of the people for the sake of their own luxury and military glory. If the humane sympathies of the Physiocrats had been able to overcome the frivolity and harshness of the privileged classes of France, the eighteenth century would probably not have ended in tumult and bloodshed, the march of freedom in England would not have been arrested, and the dial of progress would have been more forward than it is by the space of at least a generation. As it was, but little attention was paid to Quesnay’s guarded but forcible protest:—”one should aim less at augmenting the population than at increasing the national income, for the condition of greater comfort which is derived from a good income, is preferable to that in which a population exceeds its income and is ever in urgent need of the means of subsistence
*35.”

Adam Smith said but little on the question of population, for indeed he wrote at one of the culminating points of the prosperity of the English working classes; but what he does say is wise and well balanced and modern in tone. Accepting the Physiocratic doctrine as his basis, he corrected it by insisting that the necessaries of life are not a fixed and determined quantity, but have varied much from place to place and time to time; and may vary more
*36. But he did not work out this hint fully. And there was nothing to lead him to anticipate the second great limitation of the Physiocratic doctrine, which has been made prominent in our time by the carriage of wheat from the centre of America to Liverpool for less than what had been the cost of its carriage across England.

The eighteenth century wore on to its close and the next century began; year by year the condition of the working classes in England became more gloomy. An astonishing series of bad harvests
*37, a most exhausting war
*38, and a change in the methods of industry that dislocated old ties, combined with an injudicious poor law to bring the working classes into the greatest misery they have ever suffered, at all events since the beginning of trustworthy records of English social history
*39. And to crown all, well-meaning enthusiasts, chiefly under French influence, were proposing communistic schemes which would enable people to throw on society the whole responsibility for rearing their children
*40.

Thus while the recruiting sergeant and the employer of labour were calling for measures tending to increase the growth of population, more far-seeing men began to inquire whether the race could escape degradation if the numbers continued long to increase as they were then doing. Of these inquirers the chief was Malthus, and his
Essay on the Principle of Population is the starting-point of all modern speculations on the subject.

§ 3. Malthus’ reasoning consists of three parts, which must be kept distinct. The first relates to the supply of labour. By a careful study of facts he proves that every people, of whose history we have a trustworthy record, has been so prolific that the growth of its numbers would have been rapid and continuous if it had not been checked either by a scarcity of the necessaries of life, or some other cause, that is, by disease, by war, by infanticide, or lastly by voluntary restraint.

His second position relates to the demand for labour. Like the first it is supported by facts, but by a different set of facts. He shows that up to the time at which he wrote no country (as distinguished from a city, such as Rome or Venice) had been able to obtain an abundant supply of the necessaries of life after its territory had become very thickly peopled. The produce which Nature returns to the work of man is her effective demand for population: and he shows that up to this time a rapid increase in population when already thick had not led to a proportionate increase in this demand
*41.

Thirdly, he draws the conclusion that what had been in the past, was likely to be in the future; and that the growth of population would be checked by poverty or some other cause of suffering unless it were checked by voluntary restraint. He therefore urges people to use this restraint, and, while leading lives of moral purity, to abstain from very early marriages
*42.

His position with regard to the supply of population, with which alone we are directly concerned in this chapter, remains substantially valid. The changes which the course of events has introduced into the doctrine of population relate chiefly to the second and third steps of his reasoning. We have already noticed that the English economists of the earlier half of last century overrated the tendency of an increasing population to press upon the means of subsistence; and it was not Malthus’ fault that he could not foresee the great developments of steam transport by land and by sea, which have enabled Englishmen of the present generation to obtain the products of the richest lands of the earth at comparatively small cost.

But the fact that he did not foresee these changes makes the second and third steps of his argument antiquated in form; though they are still in a great measure valid in substance. It remains true that unless the checks on the growth of population in force at the end of the nineteenth century are on the whole increased (they are certain to change their form in places that are as yet imperfectly civilized) it will be impossible for the habits of comfort prevailing in Western Europe to spread themselves over the whole world and maintain themselves for many hundred years. But of this more hereafter
*43.

§ 4. The growth in numbers of a people depends firstly on the
Natural Increase, that is, the excess of their births over their deaths; and secondly on migration.

The number of births depends chiefly on habits relating to marriage, the early history of which is full of instruction; but we must confine ourselves here to the conditions of marriage in modern civilized countries.

The age of marriage varies with the climate. In warm climates where childbearing begins early, it ends early, in colder climates it begins later and ends later
*44; but in every case the longer marriages are postponed beyond the age that is natural to the country, the smaller is the birth-rate; the age of the wife being of course much more important in this respect than that of the husband
*45. Given the climate, the average age of marriage depends chiefly on the ease with which young people can establish themselves, and support a family according to the standard of comfort that prevails among their friends and acquaintances; and therefore it is different in different stations of life.

In the middle classes a man’s income seldom reaches its maximum till he is forty or fifty years old; and the expense of bringing up his children is heavy and lasts for many years. The artisan earns nearly as much at twenty-one as he ever does, unless he rises to a responsible post, but he does not earn much before he is twenty-one: his children are likely to be a considerable expense to him till about the age of fifteen; unless they are sent into a factory, where they may pay their way at a very early age; and lastly the labourer earns nearly full wages at eighteen, while his children begin to pay their own expenses very early. In consequence, the average age at marriage is highest among the middle classes: it is low among the artisans and lower still among the unskilled labourers
*46.

Unskilled labourers, when not so poor as to suffer actual want and not restrained by any external cause, have seldom, if ever, shown a lower power of increase than that of doubling in thirty years; that is, of multiplying a million-fold in six hundred years, a billion-fold in twelve hundred: and hence it might be inferred
a priori that their increase has never gone on without restraint for any considerable time. This inference is confirmed by the teaching of all history. Throughout Europe during the Middle Ages, and in some parts of it even up to the present time, unmarried labourers have usually slept in the farmhouse or with their parents; while a married pair have generally required a house for themselves: when a village has as many hands as it can well employ, the number of houses is not increased, and young people have to wait as best they can.

There are many parts of Europe even now in which custom exercising the force of law prevents more than one son in each family from marrying; he is generally the eldest, but in some places the youngest: if any other son marries he must leave the village. When great material prosperity and the absence of all extreme poverty are found in old-fashioned corners of the Old World, the explanation generally lies in some such custom as this with all its evils and hardships
*47. It is true that the severity of this custom may be tempered by the power of migration; but in the Middle Ages the free movement of the people was hindered by stern regulations. The free towns indeed often encouraged immigration from the country: but the rules of the gilds were in some respects almost as cruel to people who tried to escape from their old homes as were those enforced by the feudal lords themselves
*48.

§ 5. In this respect the position of the hired agricultural labourer has changed very much. The towns are now always open to him and his children; and if he betakes himself to the New World he is likely to succeed better than any other class of emigrants. But on the other hand the gradual rise in the value of land and its growing scarcity is tending to check the increase of population in some districts in which the system of peasant properties prevails, in which there is not much enterprise for opening out new trades or for emigration, and parents feel that the social position of their children will depend on the amount of their land. They incline to limit artificially the size of their families and to treat marriage very much as a business contract, seeking always to marry their sons to heiresses. Francis Galton pointed out that, though the families of English peers are generally large, the habits of marrying the eldest son to an heiress who is presumably not of a fertile stock, and sometimes dissuading younger sons from marriage, have led to the extinction of many peerages. Similar habits among French peasants, combined with their preference for small families, keep their numbers almost stationary.

On the other hand there seem to be no conditions more favourable to the rapid growth of numbers than those of the agricultural districts of new countries. Land is to be had in abundance, railways and steamships carry away the produce of the land and bring back in exchange implements of advanced types, and many of the comforts and luxuries of life. The “farmer,” as the peasant proprietor is called in America, finds therefore that a large family is not a burden, but an assistance to him. He and they live healthy out-of-door lives; there is nothing to check but everything to stimulate the growth of numbers. The natural increase is aided by immigration; and thus, in spite of the fact that some classes of the inhabitants of large cities in America are, it is said, reluctant to have many children, the population has increased sixteen-fold in the last hundred years
*49.

On the whole it seems proved that the birth-rate is generally lower among the well-to-do than among those who make little expensive provision for the future of themselves and their families, and who live an active life: and that fecundity is diminished by luxurious habits of living. Probably it is also diminished by severe mental strain; that is to say, given the natural strength of the parents, their expectation of a large family is diminished by a great increase of mental strain. Of course those who do high mental work, have as a class more than the average of constitutional and nervous strength; and Galton has shown that they are not as a class unprolific. But they commonly marry late.

§ 6. The growth of population in England has a more clearly defined history than that in the United Kingdom, and we shall find some interest in noticing its chief movements.

The restraints on the increase of numbers during the Middle Ages were the same in England as elsewhere. In England as elsewhere the religious orders were a refuge to those for whom no establishment in marriage could be provided; and religious celibacy while undoubtedly acting in some measure as an independent check on the growth of population, is in the main to be regarded rather as a method in which the broad natural forces tending to restrain population expressed themselves, than as an addition to them. Infectious and contagious diseases, both endemic and epidemic, were caused by dirty habits of life which were even worse in England than in the South of Europe; and famines by the failures of good harvests and the difficulties of communication; though this evil was less in England than elsewhere.

Country life was, as elsewhere, rigid in its habits; young people found it difficult to establish themselves until some other married pair had passed from the scene and made a vacancy in their own parish; for migration to another parish was seldom thought of by an agricultural labourer under ordinary circumstances. Consequently whenever plague or war or famine thinned the population, there were always many waiting to be married, who filled the vacant places; and, being perhaps younger and stronger than the average of newly married couples, had larger families
*50.

There was however some movement even of agricultural labourers towards districts which had been struck more heavily than their neighbours by pestilence, by famine or the sword. Moreover artisans were often more or less on the move, and this was especially the case with those who were engaged in the building trades, and those who worked in metal and wood; though no doubt the “wander years” were chiefly those of youth, and after these were over the wanderer was likely to settle down in the place in which he was born. Again, there seems to have been a good deal of migration on the part of the retainers of the landed gentry, especially of the greater barons who had seats in several parts of the country. And lastly, in spite of the selfish exclusiveness which the gilds developed as years went on, the towns offered in England as elsewhere a refuge to many who could get no good openings for work and for marriage in their own homes. In these various ways some elasticity was introduced into the rigid system of mediæval economy; and population was able to avail itself in some measure of the increased demand for labour which came gradually with the growth of knowledge, the establishment of law and order, and the development of oceanic trade
*51.

In the latter half of the seventeenth and the first half of the eighteenth century the central government exerted itself to hinder the adjustment of the supply of population in different parts of the country to the demand for it by Settlement laws, which made any one chargeable to a parish who had resided there forty days, but ordered that he might be sent home by force at any time within that period
*52. Landlords and farmers were so eager to prevent people from getting a “settlement” in their parish that they put great difficulties in the way of building cottages, and sometimes even razed them to the ground. In consequence the agricultural population of England was stationary during the hundred years ending with 1760; while the manufactures were not yet sufficiently developed to absorb large numbers. This retardation in the growth of numbers was partly caused by, and partly a cause of, a rise in the standard of living; a chief element of which was an increased use of wheat in the place of inferior grains as the food of the common people
*53.

From 1760 onwards those who could not establish themselves at home found little difficulty in getting employment in the new manufacturing or mining districts, where the demand for workers often kept the local authorities from enforcing the removal clauses of the Settlement Act. To these districts young people resorted freely, and the birth-rate in them became exceptionally high; but so did the death-rate also; the net result being a fairly rapid growth of population. At the end of the century, when Malthus wrote, the Poor Law again began to influence the age of marriage; but this time in the direction of making it unduly early. The sufferings of the working classes caused by a series of famines and by the French War made some measure of relief necessary; and the need of large bodies of recruits for the army and navy was an additional inducement to tender-hearted people to be somewhat liberal in their allowances to a large family, with the practical effect of making the father of many children often able to procure more indulgences for himself without working than he could have got by hard work if he had been unmarried or had only a small family. Those who availed themselves most of this bounty were naturally the laziest and meanest of the people, those with least self-respect and enterprise. So although there was in the manufacturing towns a fearful mortality, particularly of infants, the quantity of the people increased fast; but its quality improved little, if at all, till the passing of the New Poor Law in 1834. Since that time the rapid growth of the town population has, as we shall see in the next chapter, tended to increase mortality, but this has been counteracted by the growth of temperance, of medical knowledge, of sanitation and of general cleanliness. Emigration has increased, the age of marriage has been slightly raised and a somewhat less proportion of the whole population are married; but, on the other hand, the ratio of births to a marriage has risen
*54; with the result that population has been growing very nearly steadily
*55. Let us examine the course of recent changes a little more closely.

§ 7. Early in this century, when wages were low and wheat was dear, the working classes generally spent more than half their income on bread: and consequently a rise in the price of wheat diminished marriages very much among them: that is, it diminished very much the number of marriages by banns. But it raised the income of many members of the well-to-do classes, and therefore often increased the number of marriages by licence
*56. Since however these were but a small part of the whole, the net effect was to lower the marriage-rate
*57. But as time went on, the price of wheat fell and wages rose, till now the working classes spend on the average less than a quarter of their incomes on bread; and in consequence the variations of commercial prosperity have got to exercise a preponderating influence on the marriage-rate
*58.

Since 1873 though the average real income of the population of England has indeed been increasing, its rate of increase has been less than in the preceding years, and meanwhile there has been a continuous fall of prices, and consequently a continuous fall in the money incomes of many classes of society. Now people are governed in their calculations as to whether they can afford to marry or not, more by the money income which they expect to be able to get, than by elaborate calculations of changes in its purchasing power. And therefore the standard of living among the working classes has been rising rapidly, perhaps more rapidly than at any other time in English history: their household expenditure measured in money has remained about stationary, and measured in goods has increased very fast. Meanwhile the price of wheat has also fallen very much, and a marked fall in the marriage-rate for the whole country has often accompanied a marked fall in the price of wheat. The marriage-rate is now reckoned on the basis that each marriage involves two persons and should therefore count for two. The English rate fell from 17.6 per thousand in 1873 to 14.2 in 1886. It rose to 16.5 in 1899; in 1907 it was 15.8, but in 1908 only 14.9
*59.

There is much to be learnt from the history of population in Scotland and in Ireland. In the lowlands of Scotland a high standard of education, the development of mineral resources, and close contact with their richer English neighbours have combined to afford a great increase of average income to a rapidly increasing population. On the other hand, the inordinate growth of population in Ireland before the potato-famine in 1847, and its steady diminution since that time, will remain for ever landmarks in economic history.

Comparing the habits of different nations
*60 we find that in the Teutonic countries of Central and Northern Europe, the age of marriage is kept late, partly in consequence of the early years of manhood being spent in the army; but that it has been very early in Russia; where, at all events under the old régime, the family group insisted on the son’s bringing a wife to help in the work of the household as early as possible, even if he had to leave her for a time and go to earn his living elsewhere. In the United Kingdom and America there is no compulsory service, and men marry early. In France, contrary to general opinion, early marriages on the part of men are not rare; while on the part of women they are more common than in any country for which we have statistics, except the Slavonic countries, where they are much the highest.

The marriage-rate, the birth-rate and the death-rate are diminishing in almost every country. But the general mortality is high where the birth-rate is high. For instance, both are high in Slavonic countries, and both are low in the North of Europe. The death-rates are low in Australasia, and the “natural” increase there is fairly high, though the birth-rate is low and falling very fast. In fact its fall in the various States ranged from 23 to 30 per cent. in the period 1881-1901
*61.