:',- 1'\'- ■ '»' ' '*■ .1'' .VJ.^I:' ■ • ' » '!' '..■' i'.t ..■,:U,(v;'..-',' ",,,,,, ,.' ■ . -, • ., (lass H b ' 7 I I'KKSKNTICl) HY LUA ^(T^ ^^^^'^^ PRICE, j^ CENTS ^P^ €. / PROGRESS AND POVERTY BY HENRY GEORGE The struggle that must either revivify or convulse in ruin, is near at hand, if it be not already begun. — Progress and Poverty. THE JOSEPH FELS FUND OF AMERICA CINCINNATI, OHIO The Single Tax We propose to abolish all taxes save one single tax levied on the value of land, irrespective of the value of the improvements in or on it. What we propose is not a tax on real estate, for real estate includes improvements. Nor is it a tax on land, for we would not tax all land, but only land having a value irre- spective of its improvements, and would tax that in proportion to that value. Our plan involves the imposition of no new tax, since we already tax land values in taxing real estate. To carry it out we have only to abolish all taxes save the tax on real estate, and to abolish all of that which now falls on buildings and improvements, leaving only that part of it which now falls on the value of the bare land, increasing that so as to take as nearly as may be the whole of economic rent, or what is sometimes styled the ''unearned in- crement of land values." Henry George PROGRESS A^D POVERTY r* OTHER BOOKS BY HENRY GEORGE The Science of Political Economy, i vol., 8vo, $2.50. A Perplexed Philosopher. 1 2mo, cloth, $1.00; paper, 25 cents. Social Problems. i2mo, cloth, $1.00; paper, 25 cents. Protection or Free Trade? 12 mo, cloth, $1.00; paper, 25 cents. The Land Question. Paper, 20 cents. Property in Land. A Controversy with the Duke of Argyll. Paper, 20 cents. The Condition of Labor. An Open Letter to Pope Leo XIIL i2mo, cloth, 75 cents; paper, 20 cents. Property In Land, The Condition of Labor and The Land Question, bound together in one volume, lamo, cloth, $1.00. Our Land and Land Policy. With Essays and Speeches, i vol., cloth, gilt top, $2.50. Uniform Library Edition of all these works, including The Life of Henry George by his son, 10 vols., i2mo, green buckram, gilt top, $17.00. The Life of Henry George, by Henry George, Jr. I vol., cloth, 8 illustrations, f i.oo. PROGRESS AND POVERTY AN INQUIRY INTO THE CAUSE OF INDUSTRIAL DEPRESSIONS AND OF INCREASE OF WANT WITH INCREASE OF WEALTH THE REMEDY BY HENRY GEORGE Aathor of " The Science of Political Economy," " Protection or Free Trade V "Social Problems," "A Perplexed Philosopher," "The Condition of Labor," "The Land Question," " Property in Land," etc. TWENTY-FIFTH ANNIVEB8ABT EDITION WITH MEDALLION PORTRAIT OF HENRY GEORGE BY HIS SON, RICHARD F. GEORGE Garden City New York DOUBLEDAY, PAGE & COMPANY MCMXVI \9\Co Entered according to act of Congress in the year 187& By Henry George In the office ot the Librarian of Congress. <5|in from Robert L. Owen Nov. 4. 1931 TO THOSE WHO, SEEING THE VICE AND MISERY THAT SPRING FROM THE UNEQUAL DISTRIBUTION OP WEALTH AND PRIVILEGE, PEEL THE POSSIBILITY OP A HIGHER SOCIAL STATE AND WOULD STRIVE POR ITS ATTAINMENT San Fbakoisoo, March, 1878, Make for thyself a definition or description of the thing which is presented to thee, so as to see distinctly what kind of a thing it is, in its sub- stance, in its nudity, in its complete entirety, and tell thyself its proper name, and the names of the things of which it has been compounded, and into which it will be resolved. For nothing is so pro- ductive of elevation of mind as to be able to ex- amine methodically and truly every object which is presented to thee in life, and always to look at things 80 as to see at the same time what kind of universe this is, and what kind of use everything performs in it, and what value everything has with reference to the whole, and what with refer- ence to man, who is a citizen of the highest city, of which all other cities are like families ; what each thing is, and of what it is composed, and how long it is the nature of this thing to endurs. —Marcus Aurelius Antoninus. INTRODUCTION TO THE TWENTY-FIFTH ANNI- VERSARY EDITION OF ''PROGRESS AND POVERTY" Out of the open West came a young man of less than thirty to this great city of New York. He was small of stature and slight of build. His alma mater had been the forecastle and the printing-office. He was poor, un- heralded, unknown. He came from a small city rising at the western golden portals of the country to set up here, for a struggling little newspaper there, a telegraphic news bureau, despite the opposition of the combined powerful press and telegraph monopolies. The strug- gle was too unequal. The young man was overborne by the monopolies and his little paper crushed. This young man was Henry George and the time was 1869. But though defeated, Henry George was not van- quished. Out of this struggle had come a thing that was to grow and grow until it should fill the minds and hearts of multitudes and be as " an army with banners. ' ' For in the intervals of rest from his newspaper strug^. gle in this city the young correspondent had musingly- walked the streets. As he walked he was filled with wonder at the manifestations of vast wealth. Here, as nowhere that he had dreamed of, were private fortunes that rivaled the riches of the fabled Monte Cristo. But here, also, side by side with the palaces of the princely rich, was to be seen a poverty and degradation, a want and shame, such as made the young man from the open West sick at heart, riii INTRODUCTION Why in a land so bountifully blest, with enough and more than enough for all, should there be such inequality of conditions! Such heaped wealth interlocked with Buch deep and debasing want? Why, amid such super- abundance, should strong men vainly look for workt Why should women faint with hunger, and little chil- dren spend the morning of life in the treadmill of toil t Was this intended in the order of things? No, he could not believe it. And suddenly there came to him — there in daylight, in the city street— a burning thought, a call, a vision. Every nerve quivered. And he made a vow that he would never rest until he had found the cause of, and, if he could, the remedy for, this deepening poverty amid advancing wealth. Returning to San Francisco soon after his telegraphic news failure, and keeping his vow nurtured in his heart, Henry George perceived that land speculation locked up vast territories against labor. Every^vhere he perceived an effort to * ' corner ' ' land ; an effort to get it and to hold it, not for use, but for a " rise," Everywhere he perceived that this caused all who wished to use it to compete with each other for it ; and he foresaw that as population grew the keener that competition would be- come. Those who had a monopoly of the land would practically own those who had to use the land. Filled with these ideas, Henry George in 1871 sat down and in the course of four months wrote a little book under title of " Our Land and Land Policy." In that small volume of forty-eight pages he advocated the destruction of land monopoly by shifting all taxes from labor and the products of labor and concentrating them in one tax on the value of land, regardless of improve- ments. A thousand copies of this small book were printed, but the author quickly perceived that reaUy to command attention, the work would have to be done more thoroughly. That more thorough work came something more than six years later. In August, 1877, the writing of ' * Prog- INTRODUCTION 13^ ress and Poverty ' ' was begun. It was the oak that grew out of the acorn of ' ' Our Land and Land Policy. ' ' The larger book became "an inquiry into industrial depres- sions and of increase of want with increase of wealth," and pointed out the remedy. The book was finished after a year and seven months of intense labor, and the undergoing of privations that caused the family to do without a parlor carpet, and which frequently forced the author to pawn his per- sonal effects. And when the last page was written, in the dead of night, when he was entirely alone, Henry George flung himself upon his knees and wept like a child. He had kept his vow. The rest was in the Master's hands. Then the manuscript was sent to New York to find a publisher. Some of the publishers there thought it visionary; some, revolutionary. Most of them thought it unsafe, and all thought that it would not sell, or at least sufficiently to repay the outlay. Works on po- litical economy even by men of renown were notori- ously not money-makers. What hope then for a work of this nature from an obscure man— unknown, and without prestige of any kind? At length, however, D. Appleton & Co. said they would publish it if the author would bear the main cost, that of making the plates. There was nothing else for it, and so in order that the plate-making should be done under his own di- rection Henry George had the type set in a friend's printing-office in San Francisco, the author of the book setting the first two stickfuls himself. Before the plates, made from this type, were shipped East, they were put upon a printing-press and an "Author's Proof Edition" of five hundred copies was struck off. One of these copies Henry George sent to his venerable father in Philadelphia, eighty-one years old. At the same time the son wrote : It is with deep feeling of gratitude to Our Father in Heaven that I send you a printed copy of this book. I am grateful, that I have X INTRODUCTION been enabled to live to write it, and that you have been enabled to live to see it. It represents a great deal of work and a good deal of sacrifice, but now it is done. It will not be recognized at first — maybe not for some time — but it will ultimately be considered a great book, will be published in both hemispheres, and be translated into different languages. This I know, though neither of us may ever see it here. But the belief that I have expressed in this book — the belief that there is yet another life for us — makes that of little moment. The prophecy of recognition of the book's greatness was fulfilled very quickly. The Appletons in New York brought out the first regular market edition in January, 1880, just twenty-five years ago. Certain of the San Francisco newspapers derided book and author as the "hobby" of "little Harry George," and predicted that the work would never be heard of. But the press else- where in the country and abroad, from the old "Thun- derer" in London down, and the great periodical pub- lications, headed by the "Edinburgh Review," hailed it as a remarkable book that could not be lightly brushed aside. In the United States and England it was put into cheap paper editions, and in that form outsold the most popular novels of the day. In both countries, too, it ran serially in the columns of newspapers. Into all the chief tongues of Europe it was translated, there being three translations into German. Probably no exact statement of the book's extent of publication can be made; but a conservative estimate is that, embracing all forms and languages, more than two million copies of "Progress and Poverty" have been printed to date; and that including with these the other books that have followed from Henry George's pen, and which might be called "The Progress and Poverty Literature," per- haps five million copies have been given to the world. Henry George, Jr. New York, January 24, 1905. PREFACE TO FOURTH EDITION. Thk views herein set forth were in the main briefly stated in a pamphlet entitled " Our Land and Land Policy," published in San Francisco in 1871. I then intended, as soon as I could, to present them more fully, but the opportunity did not for a long time occur. In the meanwhile I became even more firmly convinced of their truth, and saw more completely and clearly their relations; and I also saw how many false ideas and erroneous habits of thought stood in the way of their recognition, and how necessary it was to go over the whole ground. This I have here tried to do, as thoroughly as space would permit. It has been necessary for me to clear away before I could build up, and to write at once for those who have made no previous study of such subjects, and for those who are familiar with economic reason, ings; and, so great is the scope of the argument that it has been impossible to treat with the fullness they deserve many of the ques- tions raised. What I have most endeavored to do is to establish general principles, trusting to my readers to carry further their applications where this is needed. In certain respects this book will be best appreciated by those who have some knowledge of economic literature; but no previous read- ing is necessary to the understanding of the argument or the passing of judgment upon its conclusions. The facts upon which I have relied are not facts which can be verified only by a search through libraries. They are facts of common observation and common knowledge, which every reader can verify for himself, just as he can decide whether the reasoning from them is or is not valid. Beginning with a brief statement of facts which suggest this in- quiry, I proceed to examine the explanation currently given in the name of political economy of the reason why, in spite of the increase of productive power, wages tend to the minimum of a bare living. This examination shows that the currentiioetrine of wages is founded Mi^qn a misconception; that, in truth, wages \are produced by the Ikibot for which they are paid, and should; irtner things being equal, • iderease with the number of laborers. Here the inquiry meets a Xll PREFACE. •loctrine which is the foundation and center of most important economic theories, and which has powerfully influenced thought in ill directions — the Malthusian doctrine, that population tends to hicrejise faster than subsistence. Examination, however, shows that this doctrine has no real support cither in fact or in analogy, and that when brought to a decisive test it is utterly disproved. Thus far the results of the inquiry, though extremely important, are mainly negative. They show that current theories do not satis- factorily explain the connection of poverty with material progress, but throw no light upon the problem itself, beyond showing that its solution must be sought in the laws which govern the distribution of wealth. It therefore becomes necessary to carry the inquiry into this field. A preliminary review shows that the three laws of dis- tribution must necessarily correlate with each other, which as laid down by the current political economy they fail to do, and an ex- amination of the terminology in use reveals the confusion of thought by which this discrepancy has been slurred over. Proceeding then to work out the laws of distribution, I first take up the law of rent. This, it is readily seen, is correctly apprehended by the current political economy. But it is also seen that the full .scope of this law , has not been appreciated, and that it involves as corollaries the laws ^of wages and interest— the cause which determines what part of the produce shall go to the land owner necessarily determining what part shall be left for labor and capital. Without resting here, I pro- ceed to an independent deduction of the laws of interest and wages. I have stopped to determine the real cause and justification of in- ; terest, and to point out a source of much misconception — the con- I founding of what are really the profits of monopoly with the legiti- mate earnings of capital. Then returning to the main inquiry, investigation shows that interest must ri.'e and fall with wages, and depends ultimately upon the same thing as rent — the margin of cultivation or point in production where rent begins. A similar but independent investigation of the law of wages yields similar har- monious results. Thus the three laws of distribution are brought into mutual support and harmony, and the fact that with material progress rent everywhere advances is seen to explain the fact that wages and interest do not advance. What causes this advance of rent is the next question that arises, and it necessitates an examination of the effect of material progress upon the distribution of wealth. Separating the factors of material progress into increase of population and improvements in the arts, it is first seen that increase in population tends constantly, not merely •*=)sr PREFACE. Xiii by reducing the margin of cultivation, but by localizing the econ- omies and powers which come with increased population, to increase the proportion of the aggregate produce which is taken in rent, and to reduce that which goes as wages and interest. Then eliminating increase of population, it is seen that improvement in the methods and powers of production tends in the same direction, and, land being held as private property, would produce in a stationary population all the effects attributed by the Malthusian doctrine to pressure of population. And then a consideration of the effects of the continuous increase in land values which thus spring from material progress reveals in the speculative advance inevitably begotten when land is ^ private property a derivative but most powerful cause of the increase I of rent and the crowding down of wages. Deduction shows that this cause must necessarily produce periodical industrial depressions, and induction proves the conclusion; while from the analysis which has thus been made it is seen that the necessary result of material progress, land being private property, is, no matter what the in- crease in population, to force laborers to wages which give but a bare living. This identification of the cause thai associates poverty with prog- ress points to the remedy, but it is to so radical a remedy that I have next deemed it necessary to inquire whether there is any other remedy. Beginning the investigation again from another starting point, I have passed in examination the measures and tendencies currently advocated or trusted in for the improvement of the condi- tion of the laboring masses. The result of this investigation is to prove the preceding one, as it shows that nothing short of making , land common property can permanently relieve poverty and check j the tendency of wages to the starvation point. The question of justice now naturally arises, and the inquiry passes into the field of ethics. An investigation of the nature and basis of property shows that there is a fundamental and irreconcil- able difference between property in things which are the product of labor and property in land; that the one has a natural basis and sanction while the other has none, and that the recognition of ex- clusive property in land is necessarily a denial of the right of prop- erty in the products of labor. Further investigation shows that private property in land always has, and always must, as develop- ment proceeds, lead to the enslavement of the laboring class; that land owners can make no just claim to compensation if society choose to resume its right; that so far from private property m /and being in accordance with the natural perceptions of men, the very reverse Xiv PREFACE. !s tnie, and that In the United States we are already beginning to feel the efifects of having admitted this erroneous and destructive principle. The inquiry then passes to the field of practical statesmanship. It is seen that private property in land, instead of being necessary to its improvement and use, stands in the way of improvement and use, and entails an enormous waste of productive forces; that the recog- nition of the common right to land involves no shock or dispossession, but is to be reached by the simple and easy method of abolishing uU taxation save that upon land values. And this an inquiry into the principles of taxation shows to be, in all respects, the best subject of taxation. A consideration of the effects of the change proposed then shows that it would enormously increase production; would secure justice in distribution; would benefit all classes; and would make possible an advance to a higher and nobler civilization. The inquiry now rises to a wider field, and recommences from another starting point. For not only do the hopes which have been raised come into collision with the widespread idea that social prog- ress is possible only by slow race improvement, but the conclusions we have arrived at assert certain laws which, if they are really nat- ural laws, must be manifest in universal history. As a final test, it therefore becomes necessary to work out the law of human progress, for certain great facts which force themselves on our attention, as soon as we begin to consider this subject, seem utterly inconsistent , with what is now the current theory. This inquiry shows that dif- ^ferences in civilization are not due to differences in individuals, but I I father to differences in social organization ; that progress, always ^i Kindled by association, always passes into retrogression as inequality , is developed; and that even now, in modern civilization, the causes which have destroyed all previous civilizations are beginning to manifest themselves, and that mere political democracy is running its course toward anarchy and despotism. But it also identifies the law of social life with the great moral law of justice, and, proving previous conclusions, shows how retrogression may be prevented and a grander advance begun. This ends the inquiry. The final chapter will explain itself. The great importance of this inquiry will be obvious. If it has been carefully and logically pursued, its conclusions completely change the character of political economy, give it the coherence and certitude of a true science, and bring it into full sympathy with the aspirations of the masses of men, from which it has long been es- PREFACE. lY tranged. What I have done in this book, if I have correctly solved the great problem I have sought to investigate, is, to unite the truth perceived by the school of Smith and Ricardo to the truth perceived by the schools of Proudhon and Lasalle; to show that laissez faire (in its full true meaning) opens the way to a realization of the noble dreams of socialism; to identify social law with moral law, and to disprove ideas which in the minds of many cloud grand and elevat- ing perceptions. This work was wi'itten between August, 1877, and March, 1879, and the plates finished by September of that year. Since that time new illustrations have been given of the correctness of the views herein advanced, and the march of events — and especially that great movement which has begun in Great Britain in the Irish land agita- tion — shows still more clearly the pressing nature of the problem I have endeavored to solve. But there has been nothing in the criticisms they have received to induce the change or modification of these views — in fact, I have yet to see an objection not answered in advance in the book itself. And except that some verbal errors have been corrected and a preface added, this edition is the same as previous ones. ELenby Geobge. New York, November, 1880. There must be refuge f Men Perished in winter winds till one smote fire From flint stones coldly hiding what they held, The red spark treasured from the kindling sun ; They gorged on flesh like wolves, till one sowed com, Which grew a weed, yet makes the life of man ; They mowed and babbled till some tongue struck speech* And patient fingers framed the lettered sound. What good gift have my brothers, but it came Prom search and strife and loving sacrifice! Edwin Arnold. Never yet Share of Truth was vainly set In the world's wide fallow ; After hands shall sow the seed. After hands, from hill and mead, Beap the harvests yellow. Whittier. CONTENTS. Intboductoet. tAom The Problem 3 Book L— Waozs and Capital. Chapter L— The current doctrine of wages— its insufficiency 17 n. — The meaning of the terms 30 IIL— Wages not drawn from capital, but produced by the labor 49 IV.— The maintenance of laborers not drawn from capital 70 v.— The real f unntions of capital 79 Book II.— Population and Subsistence. Chapter I.— The Malthusian theory, its genesis and support 91 n.— Inferences from facts 103 IIL— Inferences from analogy 129 IV.- Disproof of the Malthusian theory 140 Boos in.— The Laws op Distribution. Chapter I.— The Inquiry narrowed to the laws of distribution— necessary relation of these laws 153 n.— Rent and the law of rent 165 in.— Interest and the cause of interest 173 IV.— Of spurious capital and of profits often mistaken for Interest. . 189 v.— The law of interest 195 VI.— Wages and the law of wages 204 Vn.— Correlation and co-ordination of these laws 217 VIII.— The statics of the problem thus explained 219 Book IV.— Effect of Material Progress upon the Distribution of Wealth. Chapter I.— The dynamics of the problem yet to seek 225 n.— Effect of increase of population upon the distribution of wealth 228 in.— Effect of improvements in the arts upon the distribution of wealth 243 IV.— Effect of the expectation raised by material progress 253 Book V.— The Problbu Solved. Chapter I.— The primary cause of recurring paroxysms of industrial depression 261 n.— The persistence of poverty amid advancing wealth 280 XViil C0KTKNT8. BooE VI.— Thk Rkxkdt. Chapter I.— InaufBclency of remedies currently advocated 907 U.— The true remedy 888 Book VIL— Juanos or mx Rkmkdt. Chapter I.— Injustice of private projjerty in land 881 n.— Enslavement of laborere the ultimate result of private property in land 845 nL— Claim of land owners to compensation 866 rv.— Property in land historically considered 8M v.— Property in land in the United SUtes 888 Book vm.— Appucation or thk Rkukdt. Chapter I.— Private property in land inconsistent with the best use of land. 805 II. — How equal rights to the land may be asserted and secured 401 m.— The proposition tried by the canons of taxation 400 IV.— Indorsements and objections 490 Book IX.— Eftkcts of thk Rkukdt. Chapter I.— Of the effect upon the production of wealth 4S1 n.— Of the effect upon distribution and thence upon production. . . . 488 in.— Of the effect upon individuals and clanses 446 IV.— Of the changes that would be wrought In social organization and social life 453 Book X.— The Law or Human Froorbsk. Chapter I.— The current theory of human progress- its insufficiency 478 II.— Differences in civilization— to what due 487 HI. — The law of human progress 608 rv.— How modern civilization may decline 6M v.— The central truth 641 Conclusion. The problem of individual life 668 INTRODUCTORY, THE PKOBLEM. Ye build! ye build! but ye enter not In, Like the tribes whom the desert devoured in their sin; From the land of promise ye fade and die, Ere its verdure gleams forth on your wearied eye. — Mr$. Sigoumey INTRODUCTORY. THE PROBLEM. The present century has been marked by a prodigious increase in wealth-producing power. The utilization of steam and electricity, the introduction of improved proc- esses and labor-saving machinery, the greater subdivision and grander scale of production, the wonderful facilita- tion of exchanges, have multiplied enormously the effect- iveness of labor. At the beginning of this marvelous era it was natural to expect, and it was expected, that labor-saving inven- tions would lighten the toil and improve the condition of the laborer; that the enormous increase in the power of producing wealth would make real poverty a thing of the past. Could a man of the last century — a Franklin or a Priestley — have seen, in a vision of the future, the steamship taking the place of the sailing vessel, the rail- road train of the wagon, the reaping machine of the scythe, the threshing machine of the Hail; could he have heard the throb of the engines that in obedience to human will, and for the satisfaction of human desire, exert a power greater than that of all the men and all the beasts of burden of the earth combined; could he have seen the forest tree transformed into finished lumber — into doors, sashes, blinds, boxes or barrels, with hardly the touch of a human hand; the great work- shops where boots and shoes are turned out by the case with less labor than the old-fashioned cobbler could have 4 INTRODUCTORY. put on a Bole; the factories where, under the eye of a girl, cotton becomes cloth faster than hundreds of stal- wart weavers could have turned it out with their hand- looms; could he have seen steam hammers shaping mam- moth shafts and mighty anchors, and delicate machinery making tiny watches; the diamond drill cutting through the heart of the rocks, and coal oil sparing the whale; could he have realized the enormous saving of labor resulting from improved facilities of exchange and com- munication — sheep killed in Australia eaten fresh in England, and the order given by the London banker in the afternoon executed in San Francisco in the morning of the same day; could he have conceived of the hundred thousand improvements which these only suggest, what would he have inferred as to the social condition of man- kind? It would not have seemed like an inference; further than the vision went it would have seemed as though he saw; and his heart would have leaped and his nerves would have thrilled, as one who from a height beholds just ahead of the thirst-stricken caravan the living gleam of rustling woods and the glint of laughing waters. Plainly, in the sight of the imagination, he would have beheld these new forces elevating society from its very foundations, lifting the very poorest above the possibility of want, exempting the very lowest from anxiety for the material needs of life; he would have seen these slaves of the lamp of knowledge taking on themselves the tradi- tional curse, these muscles of iron and sinews of steel making the poorest laborer's life a holiday, in which every high quality and noble impulse could have scope to grow. And out of these bounteous material conditions he would have seen arising, as necessary sequences, moral conditions realizing the golden age of which mankind have always dreamed. Youth no longer stunted and THE PROBLEM. 5 starved; age no longer harried by avarice; the child at play with the tiger; the man with the muck-rake drink- ing in the glory of the stars: Foul things fled, fierce things tame; discord turned to harmony! For how could thenje be greed where all had enough? How could the vice, the crime, the ignorance, the brutality, that spring from poverty and the fear of poverty, exist where pov- erty had vanished? Who should crouch where all were freemen; who oppress where all were peers? / More or less vague or clear, these have been the hopes, these the dreams born of the improvements which give this wonderful century its preeminence. They have sunk so deeply into the popular mind as radically to change the currents of thought, to recast creeds and displace the most fundamental conceptions. The haunting visions of higher possibilities have not merely gathered splendor and vividness, but their direction has changed — instead of seeing behind the faint tinges of an expiring sunset, all the glory of the daybreak has decked the skies before. It is true that disappointment has followed disappoint- ment, and that discovery upon discovery, and invention after invention, have neither lessened the toil of those who most need respite, nor brought plenty to the poor. But there have been so many things to which it seemed this failure could be laid, that up to our time the new faith has hardly weakened. We have better appreciated the difficulties to be overcome; but not the less trusted that the tendency of the times was to overcome them. Now, however, we are coming into collision with facts which there can be no mistaking. From all parts of the civilized world come complaints of industrial depression; of labor condemned to involuntary idleness; of capital massed and wasting; of pecuniary distress among busi- ness men; of want and suffering and anxiety among thp working classes. All the dull, deadening pain, all the keen, maddening anguish, that to great masses of men 6 INTRODUCTORY. are involved in the words "hard times," aflflict the world to-day. This state of things, common to communities difEcring so widely in situation, in political institutions, in fiscal and financial systems, in density of population and in social organization, can hardly be accounted for by local causes. There is distress where large standing armies are maintained, but there is also distress where the standing armies are nominal; there is distress where protective tarills stupidly and wastefully hamper trade, but there is also distress where trade is nearly free; there is distress where autocratic government yet prevails, but there is also distress where political power is wholly in the hands of the people; in countries where paper is money, and in countries where gold and silver are the only currency. Evidently, beneath all such things as these, we must infer a common cause. That there is a common cause, and that it is either what we call material progress or something closely con- nected with material progress, becomes more than an inference when it is noted that the phenomena we class togethe/ and speak of as industrial depression are but intensifications of phenomena which always accompany material progress, and which show themselves more clearly and strongly as material progress goes on. Where the conditions to which material progress everywhere tends are most fully realized — that is to say, where popu- lation is densest, wealth greatest, and the machinery of production and exchange most highly developed — we find the deepest poverty, the sharpest struggle for existence, and the most of enforced idleness. It is to the newer countries — that is, to the countries where material progress is yet in its earlier stages — that laborers emigrate in search of higher wages, and capital flows in search of higher interest. It is in the older countries — that is to say, the countries where material progress has reached later stages — that widespread desti- THE PROBLEM. 7 tution is found in the midst of the greatest abundance. Go into one of the new communities where Anglo-Saxon vigor is just beginning the race of progress; where the machinery of production and exchange is yet rude and inefficient; where the increment of wealth is not yet great enough to enable any class to live in ease and luxury; where the best house is but a cabin of logs or a cloth and paper shanty, and the richest man is forced to daily work — and though you will find an absence of wealth and all its concomitants, you will find no beggars. There is no luxury, but there is no destitution. No one makes an easy living, nor a very good living; but every one can make a living, and no one able and willing to work is oppressed by the fear of want. But just as such a community realizes the conditions which all civilized communities are striving for, and ad- vances in the scale of material progress — just as closer settlement and a more intimate connection with the rest of the world, and greater utilization of labor-saving ma- chinery, make possible greater economies in production and exchange, and wealth in consequence increases, not merely in the aggregate, but in proportion to population — so does poverty take a darker aspect. Some get an infinitely better and easier living, but others find it hard to get a living at all. The *'tramp" comes with the loco- motive, and almshouses and prisons are as surely the marks of "material progress" as are costly dwellings, /■ich warehouses, and magnificent churches. Upon streets lighted with gas and patrolled by uniformed policemen, beggars wait for the passer-by, and in the shadow of college, and library, and museum, are gather- ing the more hideous Huns and fiercer Vandals of whom Macaulay prophesied. This fact — the great fact that poverty and all its con- comitants show themselves in communities just as they develop into the conditions toward which material prog- 8 INTRODUCTORY. ress tends — proves that the social difficulties existing wherever a certain stage of progress has been reached, do not arise from local circumstances, but are, in some way or another, engendered by progress itself. And, unpleasant as it may be to admit it, it is at last becoming evident that the enormous increase in produc- tive power which has marked the present century and is still going on with accelerating ratio, has no tendency to extirpate poverty or to lighten the burdens of those compelled to toil. It simply widens the gulf between Dives and Lazarus, and makes the struggle for existence more intense. The march of invention has clothed mankind with powers of which a century ago the boldest imagination could not have dreamed. But in factories where labor-saving machinery has reached its most won- derful development, little children are at work; wherever the new forces are anything like fully utilized, large classes are maintained by charity or live on the verge of recourse to it; amid thegreatest accumulations of wealth, men die of starvation, and puny infants suckle dry breasts; while everywhere the greed of gain, the worship of wealth, shows the force of the fear of want. The promised land flies before us like the mirage. The fruits of the tree of knowledge turn as we grasp them to apples of Sodom that crumble at the touch. It is true that wealth has been greatly increased, and that the average of comfort, leisure, and refinement has been raised; but these gains are not general. In them the lowest class do not share.* I do not mean that the * It is true that the poorest may now in certain ways enjoy what the richest a century ago could not have commanded, but this doea not show improvement of condition so long as the ability to obtain the necessaries of life is not increased. The beggar in a great city may enjoy many things from which the backwoods farmer Is de- barred, but that does not prove the condition of the city beggar better than that of the independent farmer. THE PROBLEM. 9 condition of the lowest class has nowhere nor in anything been improved; but that there is nowhere any improve- ment which can be credited to increased productive power. I mean that the tendency of what we call material prog- ress is in nowise to improve the condition of the lowest class in the essentials of healthy, happy human life. Nay, more, that it is still further to depress the condition of the lowest class. The new forces, elevating in their nature though they be, do not act upon the social fabric from underneath, as was for a long time hoped and be- lieved, but strike it at a point intermediate between top and bottom. It is as though an immense wedge were being forced, not underneath society, but through soci- ety. Those who are above the point of separation are elevated, but those who are below are crushed down. r This depressing effect is not generally realized, for it 18 not apparent where there has long existed a class just able to live. Where the lowest class barely lives, as has been the case for a long time in many parts of Europe, it is impossible for it to get any lower, for the next low- est step is out of existence, and no tendency to further depression can readily show itself. But in the progress of new settlements to the conditions of older communi- ties it may clearly be seen that material progress does not merely fail to relieve poverty — it actually produces it. In the United States it is clear that squalor and misery, and the vices and crimes that spring from them, every- where increase as the village grows to the city, and the march of development brings the advantages of the im*- proved methods of production and exchange/ It is in the older and richer sections of the Union that pauperism and distress among the working classes are becoming most painfully apparent. If there is less deep poverty in San Francisco than in New York, is it not because San Francisco is yet behind New York in all that both cities are striving for? When San Francisco reaches the point 10 INTRODUCTORY. where New York now is, who can doubt that there will also be ragged and barefooted children on her streets? This association of poverty with progress is the great enigma of our times. It is the central fact from which spring industrial, social, and political difficulties that perplex the world, and with which statesmanship and philanthropy and education grapple in vain. From it come the clouds that overhang the future of the most progressive and self-reliant nations. It is the riddle which the Sphinx of Fate puts to our civilization, and which not to answer is to be destroyed. So long as all the increased wealth which modern progress brings goes but to build up great fortunes, to increase luxury and make sharper the contrast between the House of Have and the House of Want, progress is not real and cannot be permanent. The reaction must come. The tower leans from its foundations, and every new story but hastens the final catastrophe. To educate men who must be condemned to poverty, is but to make them restive; to base on a state of most glaring social in- equality political institutions under which men are theoretically equal, is to stand a pyramid on its apex.) All-important as this question is, pressing itself from every quarter painfully upon attention, it has not yet re- ceived a solution which accounts for all the facts and points to any clear and simple remedy. This is shown by the widely varying attempts to account for the pre- vailing depression. They exhibit not merely a diver- gence between vulgar notions and scientific theories, but also show that the concurrence which should exist be- tween those who avow the same general theories breaks up upon practical questions into an anarchy of opinion. Upon high economic authority we have been told that the prevailing depression is due to over-consumption; upon equally high authority, that it is due to over-pro- duction; while the wastes of war, the extension of rail- THB PROBLEM. 11 roads, the attempts of workmen to keep up wages, the demonetization of silver, the issues of paper money, the increase of labor-saving machinery, the opening of shorter avenues to trade, etc., are separately pointed out as the cause, by writers of reputation, r And while professors thus disagree, the ideas that tnere is a necessary conflict between capital and labor, that machinery is an evil, that competition must be re- strained and interest abolished, that wealth may be created by the issue of money, that it is the duty of gov- ernment to furnish capital or to furnish work, are rapidly making way among the great body of the people, who keenly feel a hurt and are sharply conscious of a wrong. Such ideas, which bring great masses of men, the repositories of ultimate political power, under the leadership of charlatans and demagogues, are fraught with danger; but they cannot be successfully combated until political economy shall give some answer to the great question which shall be consistent with all her teachings, and which shall commend itself to the per- ceptions of the great masses of men.^ It must be within the province of political economy to give such an answer. For political economy is not a set of dogmas. It is the explanation of a certain set of facts. It is the science which, in the sequence of certain phenomena, seeks to trace mutual relations and to iden- tify cause and effect, just as the physical sciences seek to do in other sets of phenomena. It lays its foundations upon firm ground. The premises from which it makes its deductions are truths which have the highest sanc- tion; axioms which we all recognize; upon which we safely base the reasoning and actions of every-day life, and which may be reduced to the metaphysical expres- sion of the physical law that motion seeks the line of least resistance — viz., that men seek to gratify their de- sires with the least exertion. Proceeding from a basis 12 INTEODUCTOUY. thus assured, its processes, which consist simply in identification and separation, have the same certainty. In this sense it is as exact a science as geometry, which, from similar trutlis relative to space, obtains its conclu- sions by similar means, and its conclusions when valid should be as self-apparent. And although in the domain of political economy we cannot test our theories by arti- ficially produced combinations or conditions, as may be done in some of the other sciences, yet we can apply tests no less conclusive, by comparing societies in which different conditions exist, or by, in imagination, separat- ing, combining, adding or eliminating forces or factors of known direction. I propose in the following pages to attempt to solve by the methods of political economy the great problem 1 have outlined. I propose to seek the law which associ- ates poverty with progress, and increases want with advancing wealth; and I believe that in the explanation of this paradox we shall find the explanation of those recurring seasons of industrial and commercial paralysis which, viewed independently of their relations to more general phenomena, seem so inexplicable. Properly commenced and carefully pursued, such an investigation must yield a conclusion that will stand every test, and as truth, will correlate with all other truth. For in the sequence cf phenomena there is no accident. Every efEect has a cause, and every fact implies a preceding fact. Tha', political economy, as at present taught, does not explaiii the persistence of poverty amid advancing wealth in a manner which accords with the deep-seated percep- tions of men; that the unquestionable truths which it does teach are unrelated and disjointed; that it has failed to make the progress in popular thought that truth, even when unpleasant, must make; that, on the con- trary, after a century of cultivation, during which it has THE PROBLEM. 13 engrossed the attention of some of the most subtle and powerful intellects, it should be spurned by the statsman, scouted by the masses, and relegated in the opinion of many educated and thinking men to the rank of a pseudo-science in -which nothing is fixed or can be fixed — must, it seems to me, be due not to any inability of the science when properly pursued, but to some false step in its premises, or overlooked factor in its estimates. And as such mistakes are generally concealed by the re- spect paid to authority, I propose in this inquiry to take nothing for granted, but to bring even accepted theories to the test of first principles, and should they not stand the test, freshly to interrogate facts in the endeavor to discover their law. I propose to beg no question, to shrink from no con- clusion, but to follow truth wherever it may lead. Upon us is the responsibility of seeking the law, for in the very heart of our civilization to-day women faint and little children moan. But what that law may prove to be is not our affair. If the conclusions that we reach run counter to our prejudices, let us not flinch; if they chal- lenge institutions that have long been deemed wise and natural, let us not turn back. BOOK I. WAGES AND CAPITAL. CHAPTER I. — THE CURRENT DOCTRINE — ITS INSr?- FICIENCY. CHAPTER II. — THE MEANING OF THE TERMS. CHAPTER III. — WAGES NOT DRAWN FROM CAPITAL, P»^T PRODUCED BY THE LABOR. CHAPTER IV. — THE MAINTENANCE OF LABORERS NOT DRAWN FROM CAPITAL. CHAPTER V. — THE REAL FUNCTIONS OF CAPITAL. He that is to follow philosophy must be a freeman in mind. —FtoUmp CHAPTER I. THE CURRENT DOCTRINE OF WAGES — ITS INSUFFICIENCY. Eeducing to its most compact form the problem we have set out to investigate, let us examine, step by step, the explanation which political economy, as now accepted by the best authority, gives of it. The cause which produces poverty in the midst of ad- vancing wealth is evidently the cause which exhibits it- self in the tendency, everywhere recognized, of wages to a minimum. Let us, therefore, put our inquiry into this compact form: Why, in spite of increase in productive power, do wages i/iud to a minimum which will give hut a hare living ? I The answer of the current political economy is, that wages are fixed by the ratio between the num ber of laborers and the amount of capital devoted to the em- ployment of labor, and constantly tend to the lowest amount on which laborers will consent to li:£e and repro- duce, because the increase in the number of laborers tends naturally to follow and overtake any increase in •apital. The increase of the divisor being thus held in check only by the possibilities of the quotient, the divi- dend may be increased to infinity without greater result. In current thought this doctrine holds all but undis- puted sway. It bears the indorsement of the very high- est names among the cultivators of political economy, and though there have been attacks upon it, they are V 18 WAGES AND CAPITAL. Book I generally more formal than real.* It is assumed by Buckle as the basis of his generalizations of universal history. It is taught in all, or nearly all, the great Eng- lish and American universities, and is laid down in text- books which aim at leading the masses to reason correctly upon practical affairs, while it seems to harmonize with the new philosophy, which, having in a few years all but conquered the scientific world, is now rapidly permeating the general mind. Thus entrenched in the upper regions of thought, it is in cruder form even more firmly rooted in what may be styled the lower. What gives to the fallacies of protec- i tion such a tenacious hold, in spite of their evident in-/ consistencies and absurdities, is the idea that the sum to be distributed in wages is in each community a fixed one, which the competition of "foreign labor" must stTll further subdivide. The same idea underlies most of the theories which aim at the abolition of interest and the restriction of competition, as the means whereby the share of the laborer in the general wealth can be in- creased; and it crops out in every direction among those who are not thoughtful enough to have any theories, as may be seen in the columns of newspapers and the debates of legislative bodies. * This seems to me true of Mr. Thornton's objections, for while he denies the existence of a predetermined wage fund, consisting of a portion of capital set apart for the purchase of labor, he yet holds (which is the essential thing) that wages are drawn from capital, and that increase or decrease of capital is increase or decrease of the fund available for the payment of wages. The most vital attack upon the wage fund doctrine of which I know is that of Professor Francis A. Walker (The Wages Question: New York, 1876), yet he admits that wages are in large part advanced from capital — which, so far as it goes, is all that the stanchest supporter of the wage fund theory could claim — while he fully accepts the Mallhusian theory. Thus his practical conclusions in nowise differ from those reached by expounders of the current theory. If\4/V\«¥ fW^WJ rAA4U*4 MV«J>#» V^U-f^J'J CIuip. I. THE CURRENT DOCTRINE. Id And yet, widely accepted and deeply rooted as it is, it seems to me that this theory does not tally with obvious facts. For, if wages depend upon the ratio between the amount of labor seeking employment and the amount of capital devoted to its employment, the relative scarcity or abundance of one factor must mean the relative abundance or scarcity of the other. Thus, capital must be relatively abundant where wages are high, and rela- tively scarce where wages are low. Now, as the capital/ used in paying wages must largely consist of the capital constantly seeking investment, the current rate of inter-, est must be the measure of its relative abundance orscar-i city. So, if it be true that wages depend upon the ratio between the amount of labor seeking employment and the capital devoted to its employment, then high wage s, the mark of the relative scarcity of labor, inust_,fe§.J&P" companied by l ow i njerest, the mark of the relative abundance of capital, and reversely, low wages must be accompanied by high interest. This is not the fact, but the contrary. Eliminating from interest tlve element of insurance, and regarding only interest proper, or the return for the use of capital, ^is it not a general truth that interest is high where and^ when wages are high, and low where and when wages are J ^lovv? Both wages and interest have been higher in the United States than in England, in the Pacific than in the Atlantic States. Is it not a notorious fact that where labor flows for higher wages, capital also flows for higher interest? Is it not true that wherever there has been a general rise or fall in wages there has been at the same time a similar rise or fall in interest? In California, for instance, when wages were higher than anywhere else in the world, so also was interest higher. Wages and inter- est have in California gone down together. When com- mon wages were $5 a day, the ordinary bank rate of in- terest was twenty-four per cent, per annum. Now that 20 WAGES AND CAPITAL. Book I common wages are $2 or 12.50 a day, the ordinary bank rate is from ten to twelve per cent. Now, this broad, general fact, that wages are higher in new countries, where capital is relatively scarce, than in old countries, where capital is relatively abundant, is too glaring to be ignored. And although very lightly touched upon, it is noticed by the expounders of the cur rent political economy. The manner in which it is noticed proves what I say, that it is utterly inconsistent with the accepted theory of wages. For in explaining it such writers as Mill, Fawcett, and Price virtually give up the theory of wages upon which, in the same treatises, they formally insist. Though they declare that wages are fixed by the ratio between capital and laborers, they explain the higher wages and interest of new countries by the greater relative production of wealth. I shall hereafter show that this is not the fact, but that, on the contrary, the production of wealth is relatively larger in old and densely populated countries than in new and sparsely populated countries. But at present I merely wish to point out the inconsistency. For to say that the higher wages of new countries are due to greater propor- tionate production, is clearly to make the ratio with pro- duction, and not the ratio with capital, the determinator of wages. Though this inconsistency does not seem to have been perceived by the class of writers to whom I refer, it has been noticed by one of the most logical of the expounders of the current political economy. Professor Cairnes* endeavors in a very ingenious way to reconcile the fact with the theory, by assuming that in new countries, where industry is generally directed to the production of food and what in manufactures is called raw material, a * Some Leading Principles of Political Economy Newly Ei« pounded, Chapter 1, Part 2. Chap. I. THE CURRENT DOCTRINE. 21 much larger proportion of the capital used in production is devoted to the payment of wages than in older coun- tries where a greater part must be expended in machinery and material, and thus, in the new country, though cap- ital is scarcer, and interest is higher, the amount deter- mined to the payment of wages is really larger, and wages are also higher. For instance, of $100,000 devoted in an old country to manufactures, $80,000 would prob- ably be expended for buildings, machinery and the pur- chase of materials, leaving but $20,000 to be paid out in wages; whereas in a new country, of $30,000 devoted to agriculture, etc., not more than $5,000 would be required for tools, etc., leaving $25,000 to be distributed in wages. In this way it is explained that the wage fund may be comparatively large where capital is comparatively scarce, and high wages and high interest accompany each other. In what follows I think I shall be able to show that this explanation is based upon a total misapprehension of the relations of labor to capital — a fundamental error as to the fund from which wages are drawn; but at pres- ent it is necessary only to point out that the connection in the fluctuation of wages and interest in the same countries and in the same branches of industry cannot thus be explained. In those alternations known as *'good times" and "hard times" a brisk demand for labor and good wages is always accompanied by a brisk demand for capital and stiff rates of interest. While, when laborers cannot find employment and wages droop, there is always I an accumulation of capital seeking investment at low rates.* The present depression has been no less marked by want of employment and distress among the working classes than by the accumulation of unemployed capital in all the great centers, and by nominal rates of interest * Times of commercial panic are marked by high rates of dis- count, but this is evidently not a high rate of interest, properly so called, but a high rate of insurance against risk. 22 STAQES AND CAPITAL. Book L on undoubted security. Thus, under conditions which admit of no explanation consistent "with the current theory, do we find high interest coinciding with high wages, and low interest with low wages — capital seemingly scarce when labor is scarce, and abundant when labor is abundant. All these well known facts, which coincide with each other, point to a relation between wages and interest, but it is to a relation of conjunction, not of opposition. Evidently they are utterly inconsistent with the theory that wages are determined by the ratio between labor and capital, or any part of capital. How, then, it will be asked, could such a theory arise? How is it that it has been accepted by a succession of economists, from the time of Adam Smith to the present day? If we examine the reasoning by which in current treatises this theory of wages is supported, we see at once that it is not an induction from observed facts, but a de- duction from a previously assumed theory — viz., that wages are drawn from capital. It being assumed tliat capital is the source of wages, it necessarily follows that the gross amount of wages must .be limited by the amount of capital devoted to the employment of labor, and hence that the amount individual laborers can re- ceive must be determined by the ratio between their number and the amount of capital existing for their rec- ompense.* This reasoning is valid, but the conclusion, * For Instance McCulloch (Note VI to Wealth of Nations) says: "That portion of the capital or wealth of a country which the em ployers of labor intend to or are willing to pay out in the purchase of labor, may be much larger at one time than another. But what- ever may be its absolute magnitude, it obviously forms the only source from which any portion of the wages of labor can be derived. No other fund is in existence from which the laborer, as such, can draw a single shilling, j^jid hence it follows that the average rate Chap. I. THE CURRENT DOCTRINE. 23 as we have seen, does not correspond with the facts. The fault, therefore, must be in the premises. Let us see. I am aware that the theorem that wages are drawn from capital is one of the most fundamental and appar- ently best settled of current political economy, and that it has been accepted as axiomatic by all the great think- ers who have devoted their powers to the elucidation of the science. Nevertheless, I think it can be demon- strated to be a fundamental error — the fruitful parent of a long series of errors, which vitiate most important prac- tical conclusions. This demonstration I am about to attempt. It is necessary that it should be clear and con- clusive, for a doctrine upon which so much important ^ reasoning is based, which is supported by such a weight ^ of authority, which is so plausible in itself, and is so lia- - ble to recur in different forms, cannot be safely brushed aside in a paragraph. ^ The proposition I shall endeavor to prove, is: ^ That wages, instead of being drawn from capital, are in \i r reality draiun from the product of the labor for which < they are paid.* Now, inasmuch as the current theory that wages are drawn from capital also holds that capital is reimbursed from production, this at first glance may seem a distinc- V tion without a difference — a mere change in terminology, I of wages, or the share of the national capital appropriated to the employment of labor falling, at an average, to each laborer, must ^ entirely depend on its amount as compared with the number of ^ those amongst whom it has to be divided." Similar citations might I be made from all the standard economists. > * We are speaking of labor expended in production, to which it is best for the sake of simplicity to confine the inquiry. Any question which may arise in the reader's mind as to wages for unproductive services had best therefore be deferred. 84 WAGES AND CAPITAL. Book I to discuss which would be but to add to those unprofit- able disputes that render so much that has been written upon politico-economic subjects as barren and worthless as the controversies of the various learned societies about the true reading of the inscription on the stone that Mr. Pickwick found. But that it is much more *han a formal distinction will be apparent when it is considered that upon the difference between the two propositions are built up all the current theories as to the relations of capital and labor; that from it are deduced doctrines that, themselves regarded as axiomatic, bound, direct, and govern the ablest minds in the discussion of the most momentous questions. For, upon the assumption that wages are drawn directly from capital, and not from the product of the labor, is based, not only the doctrine that wages depend upon the ratio between capital and labor, but the doctrine that industry is limited by capital — that capital must be accumulated before labor is employed, and labor cannot be employed except as capital is accu- mulated; the doctrine that every increase of capital gives or is capable of giving additional employment to indus- try; the doctrine that the conversion of circulating cap ital into fixed capital lessens the fund applicable to th • maintenance of labor; the doctrine that more laborers can be employed at low than at high wages; the doctrine that capital applied to agriculture will maintain more laborers than if applied to manufactures ; the doctrine that profits are high or low as wages are low or high, or that they depend upon the cost of the subsistence of laborers; together with such paradoxes as that a demand for commodities is not a demand for labor, or that cer- tain commodities may be increased in cost by a reduction in wages or diminished in cost by an increase in wages. In short, all the teachings of the current political economy, in the widest and most important part of its domain, are based more or less directly upon the assump- Chap. 1. THE CURRENT DOCTRINE. 25 tion that labor is maintained and paid out of existing capital before the product which constitutes the ultimate object is secured. If it be shown that this is an errorf and that on the contrary the maintenance and payment of labor do not ev en temporarily trench on capital, but are directly drawn from the product of the labor, then all . this vast supersjructure is left Avithout support and must (all. And so likewise must fall the vulgar theories which also have their base in the belief that the sum to be dis- tributed in wages is a fixed one, the individual shares in which must necessarily be decreased by an increase in the number of laborers. The difference between the current theory and the one I advance is, in fact, similar to that between the mercan- tile theory of international exchanges and that with which Adam Smith supplanted it. Between the theory that commerce is the exchange of commodities for money, and the theory that it is the exchange of commod- ities for commodities, there may seem no real difference when it is remembered that the adherents of the mercan- tile theory did not assume that money had any other use than as it could be exchanged for commodities. Yet, in I the practical application of these two theories, there arises all the difference between rigid governmental pro- tection and free trade. If I have said enough to show the reader the ultimate importance of the reasoning through which I am about to ask him to follow me, it will not be necessary to apologize in advance either for simplicity or prolixity. In arraigning a doctrine of such importance — a doctrine supported by such a weight of authority, it is necessary to be both clear and thorough. Were it not for this I should be tempted to dismiss with a sentence the assumption that wages are drawn from capital. For all the vast superstructure which the current political economy builds upon this doctrine is 26 WAGES AND CAPITAL. Book L in truth based upon u foundation which has been merely taken for granted, without the slightest attempt to dis- tinguish the apparent from the real. Because wages are generally paid in money, and in many of the operations of production are paid before the product is fully com- pleted, or can be utilized, it is inferred that wages are drawn from pre-existing capital, and, therefore, that in- dustry is limited by capital — that is to say that labor can- not be employed until capital has been accumulated, and can only be employed to the extent that capital has been accumulated. Yet in the very treatises in which the limitation of in- dustry by capital is laid down without reservation and made the basis for the most important reasonings and elaborate theories, we are told that capit al i^st^red-uiT ] or accumulated labor — "that part of wealth which isj saved to assist future production." If we substitute for] the word "capital" this definition of the word, the propo- sition carries its own refutation, for that labor cannot be 11 employed until the results of labor are saved becomes too || absurd for discussion. Should we, however, with this redudio ad absiirdum, attempt to close the argument, we should probably be met with the explanation, not that the first laborers were supplied by Providence with the capital necessary to set them to work, but that the proposition merely refers to a state of society in which production has become a com- plex operation. But the fundamental truth, that in all economic rea- soning must be firmly grasped, and never let go, is that society in its most highly developed form is but an elab- oration of society in its rudest beginnings, and that prin- ciples obvious in the simpler relations of men are merely disguised and not abrogated or reversed by the more intricate relations that result from the division of labor and the use of complex tools and methods. Tiie steam Chap. I. THE CURRENT DOCTRINE. 27 grist mill, with its complicated machinery exhibiting every diversity of motion, is simply what the rude stone mortar dug up from an ancient river bed was in its day — an instrument for grinding corn. And every man engaged in it, whether tossing wood into the furnace, running the engine, dressing stones, printing sacks or keeping books, is really devoting his labor to the same purpose that the pre-historic savage did when he used his mortar — the preparation of grain for human food. And so, if we reduce to their lowest terms all the com- plex operations of modern production, we see that each individual who takes part in this infinitely subdivided and intricate network of production and exchange is really doing what the primeval man did when he climbed the trees for fruit or followed the receding tide for shell- fish — endeavoring to obtain from nature by the exertion of his powers the satisfaction of his desires. If we keep this firmly in mind, if we look upon production as a whole — as the co-operation of all embraced in any of its great groups to satisfy the various desires of each, we plainly see that the reward each obtains for his exertions comes as truly and as directly from nature as the result of that exertion, as did that of the first man. To illustrate: In the simplest state of which we can conceive, each man digs his own bait and catches his own fish. The advantages of the division of labor soon be- come apparent, and one digs bait while the others fish. Yet evidently the one who digs bait is in reality doing as much toward the catching of fish as any of those who actually take the fish. So when the advantages of canoes are discovered, and instead of all going a-fishing, ope stays behind and makes and repairs canoes, the canoe- maker is in reality devoting his labor to the taking of fish as much as the actual fishermen, and the fish which he eats at night when the fishermen come home are as truly the product of his labor as of theirs. And thus 28 WAGES AND CAPITAL. Book L when the division of labor is fairly inaugurated, and in- stead of each attempting to satisfy all of his wants bj direct resort to nature, one fishes, another hunts, a third picks berries, a fourth gathers fruit, a fifth makes tools, a sixth builds huts, and a seventh prepares clothing — each one is to the extent he exchanges the direct product of his own labor for the direct product of the labor of others really applying his own labor to the production of the things he uses — is in effect satisfying his particular desires by the exertion of his particular powers; that is jj to say, what he receives he in reality produces. If he 1 1 digs roots and exchanges them for venison, he is in effect as truly the procurer of the venison as though he had gone in chase of the deer and left the huntsman to dig his own roots. The common expression, "I made so and so," signifying "I earned so andso,"or**I earned money with which I purchased so and so," is, economically speaking, not metaphorically but literally true. Earning is making. Now, if we follow these principles, obvious enough in a simpler state of society, through the complexities of the state we call civilized, we shall see clearly that in every case in which labor is exchanged for commodities, production really precedes enjoyment; that wages are the earnings — that is to say, the makings of labor — not the advances of capital, and that the laborer who receives his wages in money (coined or printed, it may be, before his labor commenced) really receives in return for thej addition his labor has made, to the general stock ofp wealth, a draft upon that general stock, which he may i y utilize in any particular form of wealth that will best satisfy his desires; and that neither the money, which is but the draft, nor the particular form of wealth which he uses it to call for, represents advances of capital for his maintenance, but on the contrary represents thT wealth, or a portion of the wealth, his labor has already added to the general stock. theU Chap. 1. THE CUEEENT DOCTRINE. 29 Keeping these principles in view we see that the draughtsman, who, shut up in some dingy office on the banks of the Thames, is drawing the plans for a great marine engine, is in reality devoting his labor to the pro- duction of bread and meat as truly as though he were garnering the grain in California or swinging a lariat on a La Plata pampa; that he is as truly making his own clothing as though he were shearing sheep in Australia or weaving cloth in Paisley, and just as eHectually pro- ducing the claret he drinks at dinner as though he gathered the grapes on the banks of the Garonne. The miner who, two thousand feet under ground in the heart of the Oomstock, is digging out silver ore, is, in effect, by virtue of a thousand exchanges, harvesting crops in valleys five thousand feet nearer the earth's center; chas- ing the whale through Arctic icefields; plucking tobacco leaves in Virginia; picking coffee berries in Honduras; cutting sugar cane on the Hawaiian Islands; gathering cotton in Georgia or weaving it in Manchester or Lowell; making quaint wooden toys for his children in the Hartz Mountains; or plucking amid the green and gold of Los Angeles orchards the oranges which, when his shift is relieved, he will take home to his sick wife. The wages which he receives on Saturday night at the mouth of the shaft, what are they but the certificate to all the world that he has done these things — the primary ex- change in the long series which transmutes his labor into the things he has really been laboring for? All this is clear when looked at in this wf.y; but to meet this fallacy in all its strongholds and lurking places we must change our investigation from the deductive to the inductive form. Let us now see, if, beginning with facts and tracing their relations, we arrive at the same conclusions as are thus obvious when, beginning with first principles, we trace their exemplification in complex IftCtS. CHAPTER II. THE MEANING OP THE TERMS. Before proceeding further in our inquiry, let us make sure of the meaning of our terras, for indistinctness in their use must inevitably produce ambigui^'y and inde- terminateness in reasoning. Not only is it requisite in economic reasoning to give to such words as ''wealth," "capital," "rent," "wages," and the like, a much more definite sense than they bear in common discourse, but, unfortunately, even in political economy there is, as to some of these terms, no certain meaning assigned by common consent, different writers giving to the same term different meanings, and the same writers often using a term in different senses. Nothing can add to the force of what has been said by so many eminent authors as to the importance of clear and precise definitions, save the example, not an infrequent one, of the same authors falling into grave errors from the very cause they warned against. And nothing so shows the importance of lan- guage in thought as the spectacle of even acute thinkers basing important conclusions upon the use of the same word in varying senses. I shall endeavor to avoid these dangers. It will be my effort throughout, as any term becomes oi importance, to state clearly what I mean by it, and to use it in that sense and in no other. Let me ask the reader to note and to bear in mind the definitions thus given, as otherwise I cannot hope to make myself properly understood. I shall not attempt to attach arbitrary meanings to words, or to coin terms, even when Chap. 11. THE MEANIKQ OF THE TERMS. 31 it would be convenient to do so, but shall conform to usage as closely as is possible, only endeavoring so to fix the meaning of words that they may clearly express thought. "What we have now on hand is to discover whether, as a matter of fact, wages are drawn from capital. As a pre- liminary, let us settle what we mean by wages and what we mean by capital. To the former word a sufficiently definite meaning has been given by economic writers, but the ambiguities which have attached to the use of the latter in political economy will require a detailed exami- nation. As used in common discourse "wages" means a com- pensation paid to a hired person for his services; and we speak of one man "working for wages," in contradistinc-' tion to another who is "working for himself." The use of the term is still further narrowed by the habit of ap- plying it solely to compensation paid for manual labor. We do not speak of the wages of professional men, man- agers or clerks, but of their fees, commissions, or sala- ries. Thus the common meaning of the word wages is the compensation paid to a hired person for manual labor. But in political economy the word wages has a much wider meaning, and includes all returns for exer- tion. For, as political economists explain, the three agents or factors in production are land, labor, and capi- tal, and that part of the produce which goes to the sec- ond of these factors is by them styled wages. Thus the term labor includes all human exertion in the production of wealth, and wages, being that part of the produce which goes to labor, includes all reward for such exertion. There is, therefore, in the politico-eco- nomic sense of the term wages no distinction as to the kind of labor, or as to whether its reward is received through an employer or not, but wages means the return received for the exertion of labor, as distinguished from 32 WAGES AND CAPITAL. Book L the return received for the use of capital, and the return received by the landholder for the use of land. The man ■who cultivates the soil for himself receives his wages in its produce, just as, if he uses his own capital and owns his own land, he may also receive interest and rent; the hunter's wages are the game he kills; the fisherman's wages are the fish he takes. The gold washed out by the self-employing gold-digger is as much his wages as the money paid to the hired coal miner by the purchaser of his labor,* and, as Adam Smith shows, the high profits of retail storekeepers are in large part wages, being the recompense of their labor and not of their capital. In short, whatever is received as the result or reward of ex- ertion is ''wages." This is all it is now necessary to note as to "wages," but it is important to keep this in mind. For in the standard economic works this sense of the term wages is recognized with greater or less clearness only to be sub- sequently ignored. But it is more diflScult to clear away from the idea of capital the ambiguities that beset it, and to fix the scientific use of the term. In general discourse, all sorts of things that have a value or will yield a return are vaguely spoken of as capital, while economic writers vary so widely that the term can hardly be said to have a fixed meaning. Let us compare with each other the defini- tions of a few representative writers: "That part of a man's stock," says Adam Smith (Book II, Chap. I), "which he expects to afford him a revenue, is called his capital," and the capital of a country or society, he goes on to say, consists of (1) machines and instruments of trade which facilitate and abridge labor; * This was recognized in common speech in California, wh«re the placer miners styled their earnings their "wages," and spoke of making high wages or low wages according to the amount of gold taken out. Chap.n. THE MEANING OF THE TEEMS. 33 (2) buildings, not mere dwellings, but which may be con- sidered instruments of trade — such as shops, farmhouses, etc.; (3) improvements of land which better fit it for tillage or culture; (4) the acquired and useful abilities of all the inhabitants; (5) money; (6) provisions in the hands of producers and dealers, from the sale of which they expect to derive a profit; (7) the material of, or partially completed, manufactured articles still in the hands of producers or dealers; (8) completed articles still in the hands of producers or dealers. The first four of these he styles fixed capital, and the last four circulat- ing capital, a distinction of which it is not necessary to our purpose to take any note. Ricardo's definition is: " Capital is that part of the wealth of a country which is em- ployed in production, and consists of food, clothing, tools, raw materials, machinery, etc., necessary to give effect to labor." — Principles of Political Economy, Chapter V. This definition, it will be seen, is very different from that of Adam Smith, as it excludes many of the things which he includes — as acquired talents, articles of mere taste or luxury in the possession of producers or dealers; and includes some things he excludes — such as food, clothing, etc., in the possession of the consumer. McOulloch's definition is: . " The capital of a nation really comprises all those portions of the produce of industry existing in it that may be directly employed either to support human existence or to facilitate production." — Notes on Wealth of Nations, Book II, Chap. I. This definition follows the line of Ricardo's, but is wider. While it excludes everything that is not capable of aiding production, it includes everything that is so capable, without reference to actual use or necessity for use — the horse drawing a pleasure carriage being, accord- ing to McOulloch's view, as he expressly states, as much 34 WAGES AND CAPITAL. Book I. capital as the horse drawing a plow, because he may, if need arises, be used to draw a plow. John Stuart Mill, following the same general line as Ricardo and McCuUoch, makes neither the use nor the capability of use, but the determination to use, the test of capital. He says: " Whatever things are destined to supply productive labor with the shelter, protection, tools and materials which the work requires, and to feed and otherwise maintain the laborer during the process, are capital." — Principles of Political Economy, Book I, Chap. IV. These quotations sufficiently illustrate the divergence of the masters. Among minor authors the variance is still greater, as a few examples will suffice to show. Professor Wayland, whose "Elements of Political Economy" has long been a favorite text-book in Amer- ican educational institutions, where there has been any pretense of teaching political economy, gives this lucid definition: " The word capital is used in two senses. In relation to product it means any substance on which industry is to be exerted. In re- lation to industry, the material oo which industry is about to confer value, that on which it has conferred value; the instruments which are used for the conferring of value, as well as the means of suste- nance by which the being is supported while he is engaged in per- forming the operation." — Elements of Political Economy, Book I, Chap. I. Henry C. Carey, the American apostle of protection- ism, defines capital as "the instrument by which man obtains mastery over nature, including in it the physical and mental powers of man himself." Professor Perry, a Massachusetts free trader, very properly objects to this that it hopelessly confuses the boundaries between capi- tal and labor, and then himself hopelessly confuses the boundaries between capital and land by defining capital as "any valuable thing outside of man himself from whose use springs a pecuniary increase or profit." An amp. II THE MEANING OF THE TERMS. 35 English economic writer of high standing, Mr. Wm. Thornton, begins an elaborate examination of the rela- tions of labor and capital ("On Labor") by stating that he will include land with capital, which is very much as if one who proposed to teach algebra should begin with the declaration that he would consider the signs plus and minus as meaning the same thing and having the same value. An American writer, also of high standing. Pro- fessor Francis A. Walker, makes the same declaration in his elaborate book on "The Wages Question." Another English writer, N. A. Nicholson ("The Science of Ex- changes," London, 1873), seems to cap the climax of absurdity by declaring in one paragraph (p. 26) that "capital must of course be accumulated by saving," and in the very next paragraph stating that "the land which produces a crop, the plow which turns the soil, the labor which secures the produce, and the produce itself, if a material profit is to be derived from its employment, are all alike capital." But how land and labor are to be accu- mulated by saving them he nowhere condescends to ex- plain. In the same way a standard American writer. Professor Amasa Walker (p. 66, "Science of Wealth"), first declares that capital arises from the net savings of labor and then immediately afterward declares that land is capital. I might go on for pages, citing contradictory and self- contradictory definitions. But it would only weary the reader. It is unnecessary to multiply quotations. Those already given are sufficient to show how wide a difference exists as to the comprehension of the term capital. Any one who wants further illustration of the "confusion worse confounded" which exists on this subject among the professors of political economy may find it in any library where the works of these professors are ranged side by side. Now, it makes little difference what name we give to 36 WAGES AND CAPITAL. Book L things, if when we use the name we always keep in view the same things and no others. But the difficulty arising in economic reasoning from these vague and varying definitions of capital is that it is only in the premises of reasoning that the term is used in the peculiar sense as- signed by the definition, while in the practical conclusions that are reached it is always used, or at least it is always understood, in one general and definite sense. When, for instance, it is said that wages are drawn from capital, the word capital is understood in the same sense as when we speak of the scarcity or abundance, the increase or decrease, the destruction or increment, of capital — a com- monly understood and definite sense which separates capital from the other factors of production, land and labor, and also separates it from like things used merely for gratification. In fact, most people understand well enough what capital is until they begin to define it, and I think their works will show that the economic writers who differ so widely in their definitions use the term in this commonly understood sense in all cases except in their definitions and the reasoning based on them. This common sense of the term is that of wealth de- voted to procuring more wealth. Dr. Adam Smith cor- rectly expresses this common idea when he says: "That part of a man's stock which he expects to afford him revenue is called his capital." And the capital of a community is evidently the sum of such individual stocks, or that part of the aggregate stock which is ex< pected to procure more wealth. This also is the deriva- tive sense of the term. The word capital, as philologists trace it, comes down to us from a time when wealth was estimated in cattle, and a man's income depended upon the number of head he could keep for their increase. The difficulties which beset the use of the word capi.. tal, as an exact term, and which are even more strikingly exemplified in current political and social discussions Chap.n. THE MEAKIl^G OF THE TERMS. 37 than in the definitions of economic writers, arise from two facts — first, that certain classes of things, the pos- session of which to the individual is precisely equivalent to the possession of capital, are not part of the capital of the community; and, second, that things of the same kind may or may not be capital, according to the pur- pose to which they are devoted. With a little care as to these points, there should be no difficulty in obtaining a sufficiently clear and fixed idea of what the term capital as generally used properly includes; such an idea as will enable us to say what things are capital and what are not, and to use the word without ambiguity or slip. Land, labor, and capital are the three factors of pro- duction. If we remember that capital is thus a term used in contradistinction to land and labor, we at once see that nothing properly included under either one of these terms can be properly classed as capital. The term land necessarily includes, not merely the surface of the earth as distinguished from the water and the air, but the whole material universe outside of man himself, for it is only by having access to land, from which his very body is drawn, that man can come in contact with or use nature. The term land embraces, in short, all natural materials, forces, and opportunities, and, therefore, nothing that is freely supplied by nature can be properly classed as capital. A fertile field, a rich vein of ore, a fall- ing stream which supplies power, may give to the possessor advantages equivalent to the possession of capital, but to class such things as capital would be to put an end to the distinction between land and capital, and, so far as they relate to each other, to make the two terms meaningless. The term labor, in like manner, includes all human exertion, and hence human powers whether natural or acquired can never properly be classed as capital. In common parlance we often speak of a man's knowledge, 38 WAGES AND CAPITAL. Book 1. skill, or industry as constituting his capital; but this is evidently a metaphorical use of language that must be eschewed in reasoning that aims at exactness. Superi- ority in such qualities may augment the income of an individual just as capital would, and an increase in the knowledge, skill, or industry of a community may have the same effect in increasing its production as would an increase of capital; but this effect is due to the increased power of labor and not to capital. Increased velocity may give to the impact of a cannon ball the same effect as increased weight, yet, nevertheless, weight is one thing and velocity another. Thus we must exclude from the category of capital everything that may be included either as land or labor. ;, Doing so, there remain only things which are neither (I land nor labor, but which have resulted from the union of these two original factors of production. Nothing can be properly capital that does not consist of these — that is to say, nothing can be capital that is not wealth. But it is from ambiguities in the use of this inclusive term wealth that many of the ambiguities which beset the term capital are derived. As commonly used the word "wealth" is applied to anything having an exchange value. But when used as a term of political economy it must be limited to a much more definite meaning, because many things are commonly spoken of as wealth which in taking account of collective or general wealth cannot be considered as wealth at all. Such things have an exchange value, and are commonly spoken of as wealth, insomuch as they represent as be- tween individuals, or between sets of individuals, the power of obtaining wealth; but they are not truly wealth, inasmuch as their increase or decrease does not affect the sum of wealth. Such are bonds, mortgages, promissory notes, bank bills, or other stipulations for the transfer of wealth. Such are slaves, whose value represents merely Chap. II. THE MEAN^ING OF THE TERMS. 39 the power of one class to appropriate the earnings of another class. Such are lands, or other natural oppor- tunities, the value of which is but the result of the ac- knowledgment in favor of certain persons of an exclusive right to their use, and which represents merely the power thus given to the owners to demand a share of the wealth produced by those who use them. Increase in the amount of bonds, mortgages, notes, or bank bills cannot increase the wealth of the community that in- cludes as well those who promise to pay as those who are entitled to receive. The enslavement of a part of their number could not increase the wealth of a people, for what the enslavers gained the enslaved would lose. In- crease in land values does not represent increase in the common wealth, for what land owners gain by higher prices, the tenants or purchasers who must pay them will lose. And all this relative wealth, which, in com- mon thought and speech, in legislation and law, is un- distinguished from actual wealth, could, without the destruction or consumption of anything more than a few drops of ink and a piece of paper, be utterly annihilated. By enactment of the sovereign political power debts might be canceled, slaves emancipated, and land resumed as the common property of the whole people, without the aggregate wealth being diminished by the value of a pinch of snuff, for what some would lose others would gain. There would be no more destruction of wealth than there was creation of wealth when Elizabeth Tudor enriched her favorite courtiers by the grant of mo- nopolies, or when Boris Godoonof made Russian peasants merchantable property. All things which have an exchange value are, therefore, not wealth, in the only sense in which the term can be used in political economy. Only such things can be wealth the production of which increases and the destruc- tion of which decreases the aggregate of wealth. If we 40 WAGES AND CAPITAL. Book 1 consider what these things are, and what their nature is, we shall have no difficulty in defining wealth. When we speak of a community increasing in wealth — as when we say that England has increased in wealth since the accession of Victoria, or that California is a wealthier country than when it was a Mexican territory — we do not mean to say that there is more land, or that the natural powers of the land are greater, or that there are more people, for when we wish to express that idea we speak of increase of population; or that the debts or dues owing by some of these people to others of their number have increased; but we mean that there is an in- crease of certain tangible things, having an actual and not merely a relative value — such as buildings, cattle, tools, machinery, agricultural and mineral products, manufactured goods, ships, wagons, furniture, and the like. The increase of such things constitutes an increase of wealth; their decrease is a lessening of wealth; and the community that, in proportion to its numbers, has most of such things is the wealthiest community. The common character of these things is that they consist of natural substances or products which have been adapted by human labor to human use or gratification, their value depending on the amount of labor which upon the aver- age would be required to produce things of like kind. Thus wealth, as alone the term can be used in political economy, consists of natural products that have been se- cured, moved, combined, separated, or in other ways modified by human exertion, so as to fit them for the gratification of human desires. It is, in other words, labor impressed upon matter in such a way as to store up, as the heat of the sun is stored up in coal, the power of human labor to minister to human desires. Wealth is not the sole object of labor, for labor is also expended in ministering directly to desire; but it is the object and result of what we call productive labor — that is, labor Chap. II. THE MEAN"IK"G OF THE TERMS. 41 which gives value to material things. Nothing which nature supplies to man without his labor is wealth, nor yet does the expenditure of labor result in wealth unless there is a tangible product which has and retains the power of ministering to desire. Now, as capital is wealth devoted to a certain purpose, nothing can be capital which does not fall within this definition of wealth. By recognizing and keeping this in mind, we get rid of misconceptions which vitiate all reasoning in which they are permitted, which befog pop- ular thought, and have led into mazes of contradiction even acute thinkers. But though all capital is wealth, all wealth is not capi- tal. Capital is only a part of wealth — that part, namely, 7 which is devoted to the aid of production. It is in draw- ing this line between the wealth that is and the wealth that is not capital that a second class of misconceptions are likely to occur. The errors which I have been pointing out, and which consist in confounding with wealth and capital things essentially distinct, or which have but a relative exist- ence, are now merely vulgar errors. They are wide- spread, it is true, and have a deep root, being held, not merely by the less educated classes, but seemingly by a large majority of those who in such advanced countries as England and the United States mold and guide public opinion, make the laws in Parliaments, Congresses and Legislatures, and administer them in the courts. They crop out, moreover, in the disquisitions of many of those flabby writers who have burdened the press and dark- ened counsel by numerous volumes which are dubbed political economy, and which pass as text-books with the ignorant and as authority with those who do not think for themselves. Neverthless, they are only vulgar errors, inasmuch as they receive no countenance from the best writers on political economy. By one of those lapses 42 WAGES AND CAPITAL. Book L which flaw his great work and strikingly evince the im- perfections of the highest talent, Adam Smith counts as capital certain personal qualities, an inclusion which is not consistent with his original definition of capital as stock from which revenue is expected. But this error has been avoided by his most eminent successors, and in the definitions, previously given, of Ricardo, McCulloch, and Mill, it is not involved. Neither in their defini- tions nor in that of Smith is involved the vulgar error which confounds as real capital things which are only rela- tively capital, such as evidences of debt, land values, etc. But as to things which are really wealth, their definitions differ from each other, and widely from that of Smith, as to what is and what is not to be considered as capital. The stock of a jeweler would, for instance, be included as capital by the definition of Smith, and the food or clothing in possession of a laborer would be excluded. But the definitions of Eicardo and McCulloch would ex- clude the stock of the jeweler, as would also that of Mill, if understood as most persons would understand the words I have quoted. But as explained by him, it is neither the nature nor the destination of the things themselves which determines whether they are or are not capital, but the intention of the owner to devote either the things or the value received from their sale to the supply of productive labor with tools, materials, and maintenance. All these definitions, however, agree in including as capital the provisions and clothing of the laborer, which Smith excludes. Let us consider these three definitions, which repre- sent the best teachings of current political economy: To McCulloch's definition of capital as "all those por- tions of the produce of industry that may be directly employed either to support human existence or to facil- itate production," there are obvious objections. One may pass along any principal street in a thriving town aiap. 11. THE MEANING OF THE TERMS. 43 or city and see stores filled with all sorts of valuable things, which, though they cannot be employed either to support human existence or to facilitate production, undoubtedly constitute part of the capital of the store- keepers and part of the capital of the community. And he can also see products of industry capable of support- ing human existence or facilitating production being consumed in ostentation or useless luxury. Surely these, though they might, do not constitute part of capital. Ricardo's definition avoids including as capital things which might be but are not employed in production, by covering only such as are employed. But it is open to the first objection made to McCulloch's. If only wealth that may be, or that is, or that is destined to be, used in supporting producers, or assisting production, is capital, then the stocks of jewelers, toy dealers, tobacconists, confectioners, picture dealers, etc. — in fact, all stocks that consist of, and all stocks in so far as they consist of articles of luxury, are not capital. If Mill, by remitting the distinction to the mind of the capitalist, avoids this difficulty (which does not seem to me clear), it is by making the distinction so vague that no power short of omnisicence could tell in any given country at any given time what was and what was not capital. But the great defect which these definitions have in common is that they include what clearly cannot be ac- counted capital, if any distinction is to be made between laborer and capitalist. For they bring into the category of capital the food, clothing, etc., in the possession of the day laborer, which he will consume whether he works or not, as well as the stock in the hands of the capitalist, with which he proposes to pay the laborer for his work. Yet, manifestly, this is not the sense in which the ierm capital is used by these writers when they speak of 44 WAGES AND CAPITAL. Book I. labor and capital as taking separate parts in the work of production and separate shares in the distribution of its proceeds; when they speak of wages as drawn from capi- tal, or as depending upon the ratio between labor and capital, or in any of the ways in which the term is gen- erally used by them. In all these cases the term capital is used in its commonly understood sense, as that portion of wealth which its owners do not propose to use directly for their own gratification, but for the purpose of obtain- ing more wealth. In short, by political economiBts, in everything except their definitions and first principles, as well as by the world at large, "that part of a man's stock," to use the words of Adam Smith, "which he ex- pects to afford him revenue is called his capital." This is the only sense in which the term capital expresses any fixed idea — the only sense in which we can with any clearness separate it from wealth and contrast it with labor. For, if we must consider as capital everything which supplies the laborer with food, clothing, shelter, etc., then to find a laborer who is not a capitalist we shall be forced to hunt up an absolutely naked man, destitute even of a sharpened stick, or of a burrow in the ground — a situation in which, save as the result of exceptional circumstances, human beings have never yet been found. It seems to me that the variance and inexactitude in these definitions arise from the fact that the idea of what capital is has been deduced from a preconceived idea of how capital assists production. Instead of determining what capital is, and then observing what capital does, the functions of capital have first been assumed, and then a definition of capital made which includes all things which do or may perform those functions. Let us reverse this process, and, adopting the natural order, ascertain what the thing is before settling what it does. All we are trying to do, all that it is necessary to do, is to fix, as it were, the metea and bounds of a term that in Chap.n. THE MEANING OF THE TERMS. 45 the main is well apprehended — to make definite, that is, sharp and clear on its verges, a common idea. If the articles of actual wealth existing at a given time in a given community were presented w situ to a dozen intelligent men who had never read a line of political economy, it is doubtful if they would differ in respect to a single item, as to whether it should be accounted capi- tal or not. Money which its owner holds for use in his business or in speculation would be accounted capital; money set aside for household or personal expenses would not. That part of a farmer's crop held for sale or for seed, or to feed his help in part payment of wages, would be accounted capital; that held for the use of his own family would not be. The horses and carriage of a hackman would be classed as capital, but an equipage kept for the pleasure of its owner would not. So no one would think of counting as capital the false hair on the head of a woman, the cigar in the mouth of a smoker, or the toy with which a child is playing; but the stock of a hair dealer, of a tobacconist, or of the keeper of a toy store, would be unhesitatingly set down as capital. A coat which a tailor had made for sale would be accounted capital, but not the coat he had made for himself. Food in the possession of a hotel-keeper or a restaurateur would be accounted capital, but not the food in the pantry of a housewife, or in the lunch basket of a work- man. Pig iron in the hands of the smelter, or founder, or dealer, would be accounted capital, but not the pig iron used as ballast in the hold of a yacht. The bellows of a blacksmith, the looms of a factory, would be capital, but not the sewing machine of a woman who does only her own work; a building let for hire, or used for busi- ness or productive purposes, but not a homestead. In short, I think we should find that now, as when Dr. Adam Smith wrote, "that part of a man's stock which he expects to yield him a revenue is called his capital." 46 WAGES AND CAPITAL. Boole/. And, omitting his unfortunate slip as to personal quali- ties, and qualifying somewhat his enumeration of money, it is doubtful if we could better list the different articles of capital than did Adam Smith in the passage which in the previous part of this chapter I have condensed. Now, if, after having thus separated the wealth that is capital from the wealth that is not capital, we look for the distinction between the two classes, we shall not find it to be as to the character, capabilities, or final destina- tion of the things themselves, as has been vainly at- tempted to draw it; bi-'t it seems to me that we shall find it to be as to whether they are or are not in the posses- sion of the consumer.* Such articles of wealth as in themselves, in their uses, or in their products, are yet to be exchanged are capital; such articles of wealth as are in the hands of the consumer are not capital. Hence, if we define capital as wealth in course of exchange, understand- ing exchange to include not merely the passing from hand to hand, but also such transmutations as occur when the reproductive or transforming forces of nature are utilized for the increase of wealth, we shall, I think, comprehend all the things that the general idea of capital properly includes, and shut out all it does not. Under this defini- tion, it seems to me, for instance, will fall all such tools as are really capital. For it is as to whether its services or uses are to be exchanged or not which makes a tool an article of capital or merely an article of wealth. * Money may be said to be in the hands of the consumer when devoted to the procurement of gratification, as, though not in itself devoted to consumption, it represents wealth which is; and thus what in the previous paragraph I have given as the common classifi- cation would be covered by this distinction, and would be substan- tially correct. In speaking of money in this connection, I am of course speaking of coin, for although paper money may perform all the functions of coin, it is not wealth, and cannot therefore b« capital, Chap. n. THE MEANING OP THE TERMS. 4t Thus, the lathe of a manufacturer used in making things which are to be exchanged is capital, while the lathe kept by a gentleman for his own amusement is not. Thus, wealth used in the construction of a railroad, a public telegraph line, a stage coach, a theater, a hotel, etc., may be said to be placed in the course of exchange. The ex- change is not effected all at once, but little by little, with an indefinite number of people. Yet there is an ex- change, and the "consumers" of the railroad, the tele- graph line, the stage coach, theater or hotel, are not the owners, but the persons who from time to time use them. Nor is this definition inconsistent with the idea that capital is that part of wealth devoted to production. It is too narrow an understanding of production which con- fines it merely to the making of things. Production in- cludes not merely the making of things, but the bringing of them to the consumer. The merchant or storekeeper is thus as truly a producer as is the manufacturer, or farmer, and his stock or capital is as much devoted to production as is theirs. But it is not worth while now to dwell upon the functions of capital, which we shall be better able to determine hereafter. Nor is the definition of capital I have suggested of any importance. I am not writing a text-book, but only attempting to discover the laws which control a great social problem, and if the reader has been led to form a clear idea of what things are meant when we speak of capital my purpose is served. But before closing this digression let me oall attention to what is often forgotten — namely, that the terms "wealth," "capital," "wages," and the like, as used in political economy are abstract terms, and that nothing can be generally affirmed or denied of them that cannot be aflBrmed or denied of the whole class of things they represent. The failure to bear this in mind has led to much confusion of thought, and permits fallacies, other- wise transparent, to pass for obvious truths. Wealth 48 WAQE8 AND CAPITAL Book L being an abstract term, the idea of wealth, it must be remembered, involves the idea of exchange ability. The possession of wealth to a certain amount is potentially the possession of any or all species of wealth to that equivalent in exchange. And, consequently, so of capital. CHAPTER III. WAGES NOT DRAWN FROM CAPITAL, BUT PRODUCED BT THE LABOR. The importance of this digression will, I think, be- come more and more apparent as we proceed in our in- quiry, but its pertinency to the branch we are now engaged in may at once be seen. It is at first glance evident that the economic meaning of the term wages is lost sight of, and attention is con- centrated upon the common and narrow meaning of the word, when it is affirmed that wages are drawn from capital. For, in all those cases in which the laborer is his own employer and takes directly the produce of his labor as its reward, it is plain enough that wages are not drawn from capital, but result directly as the product of the labor. If, for instance, I devote my labor to gather- ing birds' eggs or picking wild berries, the eggs or berries I thus get are my wages. Surely no one will contend that in such a case wages are drawn from capital. There is no capital in the case. An absolutely naked man, thrown on an island where no human being has before trod, may gather birds' eggs or pick berries. Or if I take a piece of leather and work it up into a pair of shoes, the shoes are my wages — the reward of my exertion. Surely they are not drawn from capital — either my capital or any one else's capital — but are brought into existence by the labor of which they become the wages; and in obtaining this pair of shoes as the wages of my labor, capital is not even momentarily lesB- 60 WAGEa AND CAPITAL. Book 1. ened one iota. For, if we call in the idea of capital, my capital at the beginning consists of the piece of leather, the thread, etc As my labor goes on, value is steadily added, until, when my labor results in the finished shoes, I have my capital plus the difference in value between the material and the shoes. In obtaining this additional value — my wages — how is capital at any time drawn upon? Adam Smith, who gave the direction to economic thought that has resulted in the current elaborate theories of the relation between wages and capital, recognized the fact that in such simple cases as I have instanced, wages are the produce of labor, and thus begins his chapter upon the wages of labor (Chapter VIII): " 77ie produce of labor constitutes the natural recompense or wage* of labor. In that original state of things which precedes both the appropriation of land and the accumulation of stock, the whole produce of labor belongs to the laborer. He has neither landlord nor master to share with him. " Had the great Scotchman taken this as the initial point of his reasoning, and continued to regard the produce of labor as the natural wages of labor, and the landlord and master but as sharers, his conclusions would have been very different, and political economy to-day would not embrace such a mass of contradictions and absurdities; but instead of following the truth obvious in the simple modes of production as a clew through the perplexities of the more complicated forms, he momentarily recognizes it, only immediately to abandon it, and stating that *'in every part of Europe twenty workmen serve under a master for one that is independent," he recommences the inquiry from a point of view in which the master is con- sidered as providing from his capital the wages of his workmen. It is evident that in thus placing the proportion of Chap. III. WAGES NOT DRAWN FROM CAPITAL. 51 self-employing workmen as but one in twenty, Adam Smith had in mind but the mechanic arts, and that, in- cluding all laborers, the proportion who take their earn- ings directly, without the intervention of an employer, must, even in Europe a hundred years ago, have been much greater than this. For, besides the independent laborers who in every community exist in considerable numbers, the agriculture of large districts of Europe has, since the time of the Roman Empire, been carried on by the metayer system, under which the capitalist re- ceives his return from the laborer instead of the laborer from the capitalist. At any rate, in the United States, where any general law of wages must apply as fully as in Europe, and where in spite of the advance of manufac- tures a very large part of the people are yet self-employ- ing farmers, the proportion of laborers who get their wages through an employer must be comparatively small. But it is not necessary to discuss the ratio in which self- employing laborers anywhere stand to hired laborers, nor is it necessary to multiply illustrations of the truism that where the laborer takes directly his wages they are the product of his labor, for as soon as it is realized that the term wages includes all the earnings of labor, as well when taken directly by the laborer in the results of his labor as when received from an employer, it is evident that the assumption that wages are drawn from capital, on which as a universal truth such a vast superstructure is in standard politico -economic treatises so unhesitatingly built, is at least in large part untrue, and the utmost that can with any plausibility be affirmed, is that some wages, i.e. wages received by the laborer from an em- ployer, are drawn from capital. This restriction of the major premise at once invalidates all the deductions that are made from it; but without resting here, let us sea whether even in this restricted sense it accords with the facts. Let us pick up the clew where Adam Smith 52 WAGES AND CAPITAL. Book L dropped it, and advancing step by step, see whether the relation of facts which is obvious in the simplest forms of production does not run through the most complex. Next in simplicity to "that original state of things," of which many examples may yet be found, where the whole produce of labor belongs to the laborer, is the ar- rangement in which the laborer, though working for another person, or with the capital of another person, receives his wages in kind — that is to say, in the things his labor produces. In this case it is as clear as in the case of the self-employing laborer that the wages are really drawn from the product of the labor, and not at all from capital. If I hire a man to gather eggs, to pick berries, or to make shoes, paying him from the eggs, the berries, or the shoes that his labor secures, there can be no question that the source of the wages is the labor for which they are paid. Of this form of hiring is the saer-and-daer stock tenancy, treated of with such perspicuity by Sir Henry Maine in his **Early History of Institutions," and which so clearly involved the relation of employer and employed as to render the accepter of cattle the man or vassal of the capitalist who thus employed him. It was on such terms as these that Jacob worked for Laban, and to this day, even in civilized countries, it is not an infrequent mode of employing labor. The farming of land on shares, which prevails to a considerable extent in the Southern States of the Union and in California, the metayer system of Europe, as well as the many cases in which superin- tendents, salesmen, etc., are paid by a percentage of prof- its, what are they but the employment of labor for wages which consist of part of its produce? The next step in the advance from simplicity to com- plexity is where the wages, though estimated in kind, are paid in an equivalent of something else. For in- stance, on American whaling ships the custom is not to Chap.m. WAGES NOT DKAWlf FROM CAPITAL. 53 pay fixed wages, but a "lay," or proportion of the catch, which varies from a sixteenth to a twelfth to the captain down to a three-hundredth to the cabin-boy. Thus, when a whaleship comes into New Bedford or San Fran- cisco after a successful cruise, she carries in her hold the wages of her crew, as well as the profits of her owners, and an equivalent which will reimburse them for all the stores used up during the voyage. Can anything be clearer than that these wages — this oil and bone which the crew of the whaler have taken — have not been drawn from capital, but are really a part of the produce of their labor? Nor is this fact changed or obscured in the slightest degree where, as a matter of convenience, in- stead of dividing up between the crew their proportion of the oil and bone, the value of each man's share is esti- mated at the market price, and he is paid for it in money. The money is but the equivalent of the real wages, the oil and bone. In no way is there any advance of capital in this payment. The obligation to pay wages does not accrue until the value from which they are to be paid is brought into port. At the moment when the owner takes from his capital money to pay the crew he adds to his capital oil and bone. So far there can be no dispute. Let us now take another step, which will bring us to the usual method of employing labor and paying wages. The Farallone Islands, off the Bay of San Francisco, are a hatching ground of sea-fowl, and a company who claim these islands employ men in the proper season to collect the eggs. They might employ these men for a proportion of the eggs they gather, as is done in the whale fishery and probably would do so if there were much uncertainty attending the business; but as the fowl are plentiful and tame, and about so many eggs can be gathered by so much labor, they find it more convenient to pay their men fixed wages. The men go out and re- 64 WAGES AND CAPITAL. Book L main on the islands, gathering the eg^s and bringing them to a landing, whence, at intervals of a few days, they are taken in a small vessel to San Francisco and sold. When the season is over the men return and are paid their stipulated wages in coin. Does not this trans- action amount to the same thing as if, instead of being paid in coin, the stipulated wages were paid in an equiva- lent of the eggs gathered? Does not the coin represent the eggs, by the sale of which it was obtained, and are not these wages as much the product of the labor for which they are paid as the eggs would be in tlie posses- sion of a man who gathered them for himself without the intervention of any employer? To take another example, which shows by reversion the identity of wages in money with wages in kind. In San Buenaventura lives a man who makes an excellent living by shooting for their oil and skins the common hair seals which frequent the islands forming the Santa Barbara Channel. When on these sealing expeditions he takes two or three Chinamen along to help him, whom at first he paid wholly in coin. But it seems that the Chinese highly value some of the organs of the seal, which they dry and pulverize for medicine, as well as the long hairs in the whiskers of the male seal, which, when over a certain length, they greatly esteem for some purpose that to outside barbarians is not very clear. And this man soon found that the Chinamen Were very willing to take instead of money these parts of the seals killed, so that now, in large part, he thus pays them their wages. Now, is not what may be seen in all these cases — the identity of wages in money with wages in kind — true of all cases in which wages are paid for productive labor? Is not the fund created by the labor really the fund from which the wages are paid? 1"^ mav, perhaps, be said: ''There is this difference— Chap. III. WAGES NOT DKAWN FROM CAPITAL. 55 where a man works for himself, or where, when working for an employer, he takes his wages in kind, his wages depend upon the result of his labor. Should that, from any misadventure, prove futile, he gets nothing. When he works for an employer, however, he gets his wages anyhow — they depend upon the performance of the labor, not upon the result of the labor." But this is evidently not a real distinction. For on the average, the labor that is rendered for fixed wages not only yields the amount of the wages, but more; else employers could make no profit. When wages are fixed, the employer takes the whole risk and is compensated for this assur- ance, for wages when fixed are always somewhat less than wages contingent. But though when fixed wages are stipulated the laborer who has performed his part of the contract has usually a legal claim upon the employer, it is frequently, if not generally, the case that the disaster which prevents the employer from reaping benefit from the labor prevents him from paying the wages. And in one important department of industry the employer is legally exempt in case of disaster, although the contract be for wages certain and not contingent. For the maxim of admiralty law is, that ''freight is the mother of wages," and though the seaman may have performed his part, the disaster which prevents the ship from earning freight deprives him of claim for his wages. In this legal maxim is embodied the truth for which I am contending. Production is always the mother of wages. Without production, wages would not and could not~Fe. It is from the produce of labor, not from the advances of capital that wages come. Wherever we analyze the facts this will be found to be true. For labor always precedes wages. This is as uni- versally true of wages received by the laborer from an employer as it is of wages taken directly by the laborer who is his own employer. In the one class of cases as S6 WAGES AND CAPITAL. Book I in the other, reward is conditioned upon exertion. Paid sometimes by the day, oftener by the week or month, occasionally by the year, and in many branches of pro- duction by the piece, the payment of wages by an em- ployer to an employee always implies the previous ren- dering of labor by the employee for the benefit of the employer, for the few cases in which advance payments are made for personal services are evidently referable either to charity or to guarantee and purchase. The name "retainer," given to advance payments to lawyers, shows the true character of the transaction, as does the name "blood money" given in 'longshore vernacular to a payment which is nominally wages advanced to sailors, but which in reality is purchase money — both English and American law considering a sailor as much a chattel as a pig. I dwell on this obvious fact that labor always precedes wages, because it is all-important to an understanding of the more complicated phenomena of wages that it should be kept in mind. And obvious as it is, as I have put it, the plausibility of the proposition that wages are drawn from capital — a proposition that is made the basis for such important and far-reaching deductions — comes in the first instance from a statement that ignores and leads the attention away from this truth. That statement is, that labor cannot exert its productive power unless sup- plied by capital with maintenance.* The unwary reader * Industry is limited by capital. . . There can be no more in- dustry than is supplied with materials to work up and food to eat. Self-evident as the thing is, it is often forgotten that the people of a country are maintained and have their wants supplied not by the produce of present labor, but of past. They consume what has been produced, not what is about to be produced. Now, of what ^as been produced a part only is allotted to the support of pro- \ictive labor, and there will not and cannot be more of that labor Chap.in. WAGES NOT DRAWN FROM CAPITAL. 57 at once recognizes the fact that the laborer must have food, clothing, etc., in order to enable him to perform the work, and having been told that the food, clothing, etc., used by productive laborers are capital, he assents to the conclusion that the consumption of capital is nec- essary to the application of labor, and from this it is but an obvious deduction that industry is limited by capital — that the demand for labor depends upon the supply of capital, and hence that wages depend upon the ratio be- tween the number of laborers looking for employment and the amount of capital devoted to hiring them. But I think the discussion in the previous chapter will enable any one to see wherein lies the fallacy of this rea- soning — a fallacy which has entangled some of the most acute minds in a web of their own spinning. It is in the use of the term capital in two senses. In the primary proposition that capital is necessary to the exertion of productive labor, the term "capital" is understood as in- cluding all food, clothing, shelter, etc.; whereas, in the deductions finally drawn from it, the term is used in its common and legitimate meaning of wealth devoted, not to the immediate gratification of desire, but to the pro- curement of more wealth — of wealth in the hands of em- ployers as distinguished from laborers. The conclusion is no more valid than it would be from the acceptance of the proposition that a laborer cannot go to work without his breakfast and some clothes, to infer that no more laborers can go to work than employers first furnish with breakfasts and clothes. Now, the fact is that laborers generally furnish their own breakfasts and the clothes in which they go to work; and the further fact is that than the portion so allotted (which is the capital of the country) cap feed and provide with the materials and instruments of production. — John Btuart Mill, Principles of Political Economy, Book I, Chap, 7, Sec. I. 58 WAGES AND CAPITAL. Book L capital (in the sense in which the word is used in distinc- tion to labor) in exceptional cases sometimes may, but is never compelled to make advances to labor before the work begins. Of all the vast number of unemployed laborers in the civilized world to-day, there is probably not a single one willing to work who could not be em- ployed without any advance of wages. A great propor- tion would doubtless gladly go to work on terms wliich did not require the payment of wages before the end of a month; it is doubtful if there are enougli to be called a class who would not go to work and wait for their wages until the end of the week, as most laborers habit- ually do; while there are certainly none who would not wait for their wages until the end of the day, or if you please, until the next meal hour. The precise time of the payment of wages is immaterial; the essential point — the point I lay stress on — is that it is after the per- formance of work. The payment of wages, therefore, always implies the previous rendering of labor. Now, what does the render- ing of labor in production imply? Evidently the produc- tion of wealth, which, if it is to be exchanged or used in production, is capital. Therefore, the payment of capi- tal in wages pre-supposes a production of capital by the labor for which the wages are paid. And as the em- ployer generally makes a profit, the payment of wages is, so far as he is concerned, but the return to the laborer of a portion of the capital he has received from the labor. So far as the employee is concerned, it is but the receipt of a portion of the capital his labor has previously pro- duced. As the value paid in the wages is thus exchanged for a value brought into being by the labor, how can it be said that wages are drawn from capital or advanced by capital? As in the exchange of labor for wages the em- ployer always gets the cacital created by the labor before Chap.ni. WAGES NOT DRAWN FROM CAPITAL. 59 he pays out capital in the wages, at what point is his capital lessened even temporarily? * Bring the question to the test of facts. Take, for in- stance, an employing manufacturer who is engaged in turning raw material into finished products — cotton into cloth, iron into hardware, leather into boots, or so on, as may be, and who pays his hands, as is generally the case, once a week. Make an exact inventory of his capital on Monday morning before the beginning of work, and it will consist of his buildings, machinery, raw materials, money on hand, and finished products in stock. Sup- pose, for the sake of simplicity, that he neither buys nor sells during the week, and after work has stopped and he has paid his hands on Saturday night, take a new inven- tory of his capital. The item of money will be less, for it has been paid out in wages; there will be less raw material, less coal, etc, and a projier deduction must be made from the value of the buildings and machinery for the week's wear and tear. But if he is doing a remuner- ative business, which must on the average be the case, the item of finished products will be so much greater as to compensate for all these deficiencies and show in the summing up an increase of capital. Manifestly, then, the value he paid his hands in wages was not drawn from * I speak of labor producing capital for the sake of greater clearness. What labor always procures is either wealth, which may or may not be capital, or services, the cases in which nothing is obtained being merely exceptional cases of misadventure. Where the object of the labor is simply the gratification of the employer, as where I hire a man to black my boots, I do not pay the wages from capital, but from wealth which I have devoted, not to reproductive uses, but to consumption for my own satisfaction. Even if wages thus paid be considered as drawn from capital, then by that act they pass from the category of capital to that of wealth devoted to the gratification of the possessor, as when a cigar dealer takes a dozen cigars from tiie stock he has for sale and puts them in his pocket for his own use. 60 WAGES AND CAPITAL. Book L his capital, or from any one else's capital. It came, not from capital, but from the value created by the labor itself. There was no more advance of capital than if he had hired his hands to dig clams, and paid them with a part of the clams they dug. Their wages were as truly the produce of their labor as were the wages of the primitive man, when, long "before the appropriation of land and the accumulation of stock," he obtained an oyster by knocking it with a stone from the rocks. As the laborer who works for an employer does not get his wages until he has performed the work, his case is similar to that of the depositor in a bank who cannot draw money out until he has put money in. And as by drawing out what he has previously put in, the bank de- positor does not lessen the capital of the bank, neither can laborers by receiving wages lessen even temporarily either the capital of the employer or the aggregate capi* tal of the community. Their wages no more come from capital than the checks of depositors are drawn against bank capital. It is true that laborers in receiving wages do not generally receive back wealth in the same form in which they have rendered it, any more than bank deposi- tors receive back the identical coins or bank notes they have deposited, but they receive it in equivalent form, and as we are justified in saying that the depositor re- ceives from the bank the money he paid in, so are we justified in saying that the laborer receives in wages the wealth he has rendered in labor. That this universal truth is so often obscured, is largely due to that fruitful source of economic obscuri- ties, the confounding of wealth with money; and it is re- markable to see so many of those who, since Dr. Adam Smith made the egg stand on its head, have copiously demonstrated the fallacies of the mercantile system, fall into delusions of the very same kind in treating of the relations of capital and labor. Money being the general Chap.m. WAGES NOT DEAWlf FEOM CAPITAL. 61 medium of exchanges, the common flux through which all transmutations of wealth from one form to another take place, whatever difficulties may exist to an exchange will generally show themselves on the side of reduction to money, and thus it is sometimes easier to exchange money for any other form of wealth than it is to ex- change wealth in a particular form into money, for the reason that there are more holders of wealth who desire to make some exchange than there are who desire to make any particular exchange. And so a producing em- ployer who has paid out his money in wages may some- times find it difficult to turn quickly back into money the increased value for which his money has really been exchanged, and is spoken of as having exhausted or ad- vanced his capital in the payment of wages. Yet, unless the new value created by the labor is less than the wages paid, which can be only an exceptional case, the capital which he had before in money he now has in goods — it has been changed in form, but not lessened. There is one branch of production in regard to which the confusions of thought which arise from the habit of estimating capital in money are least likely to occur, in- asmuch as its product is the general material and stand- ard of money. And it so happens that this business fur- nishes us, almost side by side, with illustrations of pro- duction passing from the simplest to most complex forms. In the early days of California, as afterward in Aus- tralia, the placer miner, who found in river bed or sur- face deposit the glittering particles which the slow proc- esses of nature had for ages been accumulating, picked up or washed out his * 'wages'* (so, too, he called them) in actual money, for coin being scarce, gold dust passed as currency by weight, and at the end of the day had his wages in money in a buckskin bag in his pocket. There can be no dispute as to whether these wages came from 68 WAGES AND CAPITAL. Book 1. capital or not. They were manifestly the produce of his labor. Nor could there be any dispute when the holder of a specially rich claim hired men to work for him and paid them o£E in the identical money which their labor had taken from gulch or bar. As coin became more abundant, its greater convenience in saving the trouble and loss of weighing assigned gold dust to the place of a commodity, and with coin obtained by the sale of the dust their labor had procured, the employing miner paid off his hands. "Where he had coin enough to do so, in- stead of selling his gold dust at the nearest store and paying a dealer's profit, he retained it until he got enough to take a trip, or send by express to San Fran- cisco, where at the mint he could have it turned into coin without charge. While thus accumulating gold dust he was lessening his stock of coin; just as the man- ufacturer, while accumulating a stock of goods, lessens his stock of money. Yet no one would be obtuse enough to imagine that in thus taking in gold dust and paying out coin the miner was lessening his capital. But the deposits that could be worked without pre- liminary labor were soon exhausted, and gold mining rapidly took a more elaborate character. Before claims could be opened so as to yield any return deep shafts had to be sunk, great dams constructed, long tunnels cut through the hardest rock, water brought for miles over mountain ridges and across deep valleys, and expensive machinery put up. These works could not be con- structed without capital. Sometimes their construction required years, during which no return could be hoped for, while the men employed had to be paid their wages every week, or every month. Surely, it will be said, in such cases, even if in no others, that wages do actually come from capital; are actually advanced by capital; and must necessarily lessen capital in their payment! Surely here, Chap. III. WAGES KOT DRAWN" FROM CAPITAL. 63 at least, industry is limited by capital, for without capi- tal such works could not be carried on! Let us see: It is cases of this class that are always instanced as showing that wages are advanced from capital. Foi where wages are paid before the object of the labor is ob- tained, or is finished — as in agriculture, where plowing and sowing must precede by several months the harvest- ing of the crop; as in the erection of buildings, the con- struction of ships, railroads, canals, etc. — it is clear that the owners of the capital paid in wages cannot expect an immediate return, but, as the phrase is, must "outlay it," or ''lie out of it" for a time, which sometimes amounts to many years. And hence, if first principle? are not kept in mind, it is easy to jump to the conclusion that wages are advanced by capital. But such cases will not embarrass the reader to whom in what has preceded I have made myself clearly under- stood. An easy analysis wiK show that these instances where wages are paid before the product is finished, or even produced, do not afford any exception to the rule apparent where the product is finished before wages are paid. If I go to a broker to exchange silver for gold, I lay down my silver, which he counts and puts away, and then hands me the equivalent in gold, minus his com- mission. Does the broker advance me any capital? Manifestly not. What he had before in gold he now has in silver, plus his profit. And as he got the silver before he paid out the gold, there is on his part not even mo- mentarily an advance of capital. Now, this operation of the broker is precisely analo- gous to what the capitalist does, when, in such cases as we are now considering, he pays out capital in wages. As the rendering of labor precedes the payment of wages, and aa the rendering of labor in production implies the 64 WAGES AND CAPITAL. Book I creation of value, the employer receives value before he pays out value — he but exchanges capital of one form for capital of another form. For the creation of value does not depend upon the finishing of the product; it takes place at every stage of the process of production, as the immediate result of the application of labor, and hence, no matter how long the process in which it is engaged, labor always adds to capital by its exertion before it takes from capital in its wages. Here is a blacksmith at his forge making picks. Clearly he is making capital — adding picks to his em- ployer's capital before he draws money from it in wages. Here is a machinist or boilermaker working on the keel- plates of a Great Eastern. Is not he also just as clearly creating value — making capital? The giant steamship, as the pick, is an article of wealth, an instrument of pro' duction, and though the one may not be completed for years, while the other is completed in a few minutes, each day's work, in the one case as in the other, is as clearly a production of wealth — an addition to capital. In the case of the steamship, as in the case of the pick, it is not the last blow, any more than the first blow, that creates the value of the finished product — the creation of value is continuous, it immediately results from the exertion of labor. We see this very clearly wherever the division of labor has made it customary for different parts of the full process of production to be carried on by different sets of producers — that is to say, wherever we are in the habit of estimating the amount of value which the labor ex- pended in any preparatory stage of production has created. And a moment's reflection will show that this is the case as to the vast majority of products. Take a ship, a building, a jack-knife, a book, a lady's thimble or a loaf of bread. They are finished products. But they were not produced at one operation or by one set of pr(/- Chap.UL WAGES NOT DEAWN FROM CAPITAL. 65 ducers. And this being the case, we readily distinguish different points or stages in the creation of the value which as completed articles they represent. When we do not distinguish different parts in the final process of production we do distinguish the value of the materials. The value of these materials may often be again decom- posed many times, exhibiting as many clearly defined steps in the creation of the final value. At each of these steps we habitually estimate a creation of value, an ad- dition to capital. The batch of bread which the baker is taking from the oven has a certain value. But this is composed in part of the value of the flour from which the dough was made. And this again is composed of the value of the wheat, the value given by milling, etc. Iron in the form of pigs is very far from being a com- pleted product. It must yet pass through several, or, perhaps, through many, stages of production before it results in the finished articles that were the ultimate ob- jects for which the iron ore was extracted from the mine. Yet, is not pig iron capital? And so the process of pro- duction is not really completed when a crop of cotton is gathered, nor yet when it is ginned and pressed; nor yet when it arrives at Lowell or Manchester; nor yet when it is converted into yarn; nor yet when it becomes cloth; but only when it is finally placed in the hands of the consumer. Yet at each step in this progress there is clearly enough a creation of value — an addition to capital. Why, therefore, although we do not so habitually dis- tinguish and estimate it, is there not a creation of value — an addition to capital — when the ground is plowed for the crop? Is it because it may possibly be a bad season and the crop may fail? Evidently not; for a like possi- bility of misadventure attends every one of the many steps in the production of the finished article. On the average a crop is sure to come up, and so much plowing and sowing will on the average result in so much cotton 66 WAGES AND CAPITAL. Book I in the boll, as surely as so much spinning of cotton yarn will result in so much cloth. In short, as the payment of wages is always condi- tioned upon the rendering of labor, the payment of wages in production, no matter how long the process, never involves any advance of capital, or even tempo- rarily lessens capital. It may take a year, or even years, to build a ship, but the creation of value of which the finished ship will be the sum goes on day by day, and hour by hour, from the time the keel is laid or even the ground is cleared. Nor by the payment of wages before the ship is completed, does the master builder lessen either his capital or the capital of the community, for the value of the partially completed shijj stands in place of the value paid out in wages. There is no advance of capital in this payment of wages, for the labor of the workmen during the week or month creates and renders to the builder more capital than is paid back to them at the end of the week or month, as is shown by the fact that if the builder were at any stage of the construction asked to sell a partially completed ship he would expect a profit. And so, when a Sutro or St. Gothard tunnel or a Suez canal is cut, there is no advance of capital. The tunnel or canal, as it is cut, becomes capital as much as the money spent in cutting it — or, if you please, the powder, drills, etc., used in the work, and the food, clothes, etc., used by the workmen — as is shown by the fact that the value of the capital stock of the company is not lessened as capital in these forms is gradually changed into capital in the form of tunnel or canal. On the contrary, it probably, and on the average, increases as the work progresses, just as the capital invested in a speedier mode of production would on the average increase. And this is obvious in agriculture also. That the Chap.m. WAGES NOT DRAWN FROM CAPITAL. 67 creation of value does not take place all at once when the crop is gathered, but step by step during the whole process which the gathering of the crop concludes, and that no payment of wages in the interim lessens the farmer's capital, is tangible enough when land is sold or rented during the process of production, as a plowed field will bring more than an unplowed field, or a field that has been sown more than one merely plowed. It is tangible enough when growing crops are sold, as is some- times done, or where the farmer does not harvest him- self, but lets a contract to the owner of harvesting ma- chinery. It is tangible in the case of orchards and vine- yards which, though not yet in bearing, bring prices proportionate to their age. It is tangible in the case of horses, cattle and sheep, which increase in value as they grow to\yard maturity. And if not always tangible be- tween what may be called the usual exchange points in production, this increase of value as surely takes place with every exertion of labor. Hence, where labor is rendered before wages are paid, the advance of capital is really made by labor, and is from the employed to the employer, not from the employer to the employed. "Yet," it may be said, "in such cases as we have been considering capital is required!" Certainly; I do not dispute that. But it is not required in order to make advances to labor. It is required for quite another pur- pose. "What that purpose is we may readily see. When wages are paid in kind — that is to say, in wealth of the same species as the labor produces; as, for in- stance, if I hire men to cut wood, agreeing to give them as wages a portion of the wood they cut, a method some- times adopted by the owners or lessees of woodland, it is evident that no capital is required for the payment of wages. Nor yet when, for the sake of mutual conven- ience, arising from the fact that a large quantity of wood can be more readily and more advantageously exchanged 68 WAGES AND CAPITAL. Book I than a number of small quantities, I agree to pay wages in money, instead of wood, shall I need any capital, provided I can make the exchange of the wood for money before the wages are due. It is only when I cannot make such an exchange, or such an advantageous ex- change as I desire, until I accumulate a large quantity of wood that I shall need capital. Nor even then shall I need capital if I can make a partial or tentative ex- change by borrowing on my wood. If I cannot, or do not choose, either to sell the wood or to borrow upon it, and yet wish to go ahead accumulating a large stock of wood, I shall need capital. But manifestly, I need this capital, not for the payment of wages, but for the accu- mulation of a stock of wood. Likewise in cutting a tunnel. If the workmen were paid in tunnel (which, if convenient, might easily be done by paying them in stock of the company), no capital for the payment of wages would be required. It is only when the undertakers wish to accumulate capital in the shape of a tunnel that they will need capital. To recur to our first illustration: The broker to whom I sell my silver cannot carry on his business without capital. But he does not need this capital because he makes any advance of capital to me when he receives my silver and hands me gold. He needs it because the nature of the business requires the keeping of a certain amount of capital on hand, in order that when a customer comes he may be prepared to make the exchange the customer desires. And so we shall find it in every branch of production. Capital has never to be set aside for the payment of wages when the produce of the labor for which the wages are paid is exchanged as soon as produced; it is only required when this produce is stored up, or what is to the individual the same thing, placed in the general cur- rent of exchanges without being at once drawn against—. Ihat is, sold on credit. But the capital thus required ia Chcp.m. WAGES NOT DRAWN FROM CAPITAL. 69 not required for the payment of wages, nor for advances to labor, as it is always represented in the produce of the labor. It is never as an employer of labor that any pro- ducer needs capital; when he does need capital, it is be- cause he is not only an employer of labor, but a merchant or speculator in, or an accumulator of, the products of labor. This is generally the case with employers. To recapitulate: The man who works for himself gets his wages in the things he produces, as he produces them, and exchanges this value into another form whenever he sells the produce. The man who works for another for stipulated wages in money works under a contract of exchange. He also creates his wages as he renders his labor, but he does not get them except at stated times, in stated amounts, and in a different form. In perform- ing the labor he is advancing in exchange; when he gets his wages the exchange is completed. During the time he is earning the wages he is advancing capital to his employer, but at no time, unless wages are paid before work is done, is the employer advancing capital to him. Whether the employer who receives this produce in ex- change for the wages immediately re-exchanges it, or keeps it for awhile, no more alters the character of the transaction than does the final disposition of the product made by the ultimate receiver, who may, perhaps, be iu another quarter of the globe and at the end of a series o} exchanges numbering hundreds. CHAPTER IV» THE MAINTENANCE OF LABORERS NOT DRAWN FROM CAPITAL. But a stumbling block may yet remain, or may recur, in the mind of the reader. As the plowman cannot eat the furrow, nor a partially completed steam engine aid in any way in producing the clothes the machinist wears, have I not, in the words of John Stuart Mill, "forgotten that the people of a coun- try are maintained and have their wants supplied, not by the produce of present labor, but of past?'* Or, to use the language of a popular elementary work — that of Mrs. Fawcett — have I not "forgotten that many months must elapse between the sowing of the seed and the time when the produce of that seed is converted into a loaf of bread," and that "it is, therefore, evident that laborers cannot live upon that which their labor is assist- ing to produce, but are maintained by that wealth which their labor, or the labor of others, has previously pro- duced, which wealth is capital?" * The assumption made in these passages — the assumption that it is so self-evident that labor must be subsisted from capital that the proposition has but to be stated to com- pel recognition — runs through the whole fabric of cur. rent political economy. And so confidently is it held that the maintenance of labor is drawn from capital that * Political Economy for Beginners, by Millicent Garrett Fawcett, Chap. Ill, p. 26. Chap. IV LABORERS NOT MAINTAINED BY CAPITAL. 71 the proposition that "population regnlates itself by the funds which are to employ it, and, therefore, always in- creases or diminishes with the increase or diminution of capital," * is regarded as equally axiomatic, and in its turn made the basis of important reasoning. Yet being resolved, these propositions are seen to be, not self-evident, but absurd; for they involve the idea that labor cannot be exerted until the products of labor are saved — thus putting the product before the producer. And being examined, they will be seen to derive their apparent plausibility from a confusion of thought. I have already pointed out the fallacy, concealed by an erroneous definition, which underlies the proposition that because food, raiment and shelter are necessary to productive labor, therefore industry is limited by capital. To say that a man must have his breakfast before going to work is not to say that he cannot go to work unless a capitalist furnishes him with a breakfast, for his break- fast may, and in point of fact in any country where there is not actual famine will, come not from wealth set apart for the assistance of production, but from wealth set apart for subsistence. And, as has been previously shown, food, clothing, etc. — in short, all articles of wealth — are only capital so long as they remain in the possession of those who propose, not to consume, but to exchange them for other commodities or for productive services, and cease to be capital when they pass into the posses- sion of those who will consume them; for in that trans- action they pass from the stock of wealth held for the purpose of procuring other wealth, and pass into the stock of wealth held for purposes of gratification, irre- spective of whether their consumption wilL aid in the production of wealth or not. Unless this distinction is preserved it is impossible to draw tiie line between the * The words quoted are Ricardo's (Chap. II); but the idea is com- mon in standard? works. 72 WAGES AND CAPITAL. Book L wealth that is capital and the wealth that is not capital, even by remitting the distinction to the "mind of the possessor," as docs John Stuart Mill. For men do not eat or abstain, wear clothes or go naked, as they propose to engage in productive labor or not. They eat because they are hungry, and wear clothes because they would be uncomfortable without them. Take the food on the breakfast table of a laborer who will work or not that day as he gets the opportunity. If the distinction between capital and non-capital be the support of productive labor, is this food capital or not? It is as impossible for the laborer himself as for any philosopher of the Ricardo- Mill school to tell. Nor yet can it be told when it gets into his stomach; nor, supposing that he does not get work at first, but continues the search, can it be told until it has passed into the blood and tissues. Yet the man will eat his breakfast all the same. But, though it would be logically sufficient, it is hardly safe to rest here and leave the argument to turn on the distinction between wealth and capital. Nor is it neces- sary. It seems to me that the proposition that present labor must be maintained by the produce of past labor will upon analysis prove to be true only in the sense that the afternoon's labor must be performed by the aid of the noonday meal, or that before you eat the hare he must be caught and cooked. And this, manifestly, is not the sense in which the proposition is used to support the important reasoning that is made to hinge upon it. That sense is, that before a work which will not immedi- ately result in wealth available for subsistence can be carried on, there must exist such a stock of subsistence as will support the laborers during the process. Let us see if this be true: The canoe which Robinson Crusoe made with such in- finite toil and pains was a production in which his labor could not yield an immediate return. But was it necei' Chap. IV. LABORERS KOT MAINTAINED BY CAPITAL. 73 sary that, before he commenced, he should accumulate a stock of food sufficient to maintain him while he felled the tree, hewed out the canoe, and finally launched her into the sea? Not at all. It was necessary only that he should dev.ote part of his time to the procurement of food while he was devoting part of his time to the build- ing and launching of the canoe. Or supposing a hun- dred men to be landed, without any stock of provisions, in a new country. Will it be necessary for them to ac- cumulate a season's stock of provisions before they can begin to cultivate the soil? Not at all. It will be neces- sary only that fish, game, berries, etc., shall be so abun- dant that the labor of a part of the hundred may suffice to furnish daily enough of these for the maintenance of all, and that there shall be such a sense of mutual interest, or such a correlation of desires, as shall lead those who in the present get the food to divide (ex- change) with those whose efforts are directed to future recompense. What is true in these cases is true in all cases. It is not necessary to the production of things that cannot be used as subsistence, or cannot be immediately utilized, that there should have been a previous production of the wealth required for the maintenance of the laborers while the production is going on. It is only necessary that there should be, somewhere within the circle of ex- change, a contemporaneous production of sufficient sub- sistence for the laborers, and a willingness to exchange this subsistence for the thing on which the labor is being bestowed. And as a matter of fact, is it not true, in any normal condition of things, that consumption is supported by contemporaneous production? Here is a luxurious idler, who does no productive work either with head or hand, but lives, we say, upon wealth which his father left him securely invested in govern- 74 WAGES AND CAPITAL. Book I mcnt bonds. Does his subsistence, as a matter of fact, come from wealth accumulated in the past or from the productive labor that is going on around him? On his table are new-laid eggs, butter churned but a few days before, milk which the cow gave this morning, fish which twenty-four hours ago were swimming in the sea, meat which the butcher boy has just brought in time to be cooked, vegetables fresh from the garden, and fruit from the orchard — in sbort, hardly anything that has not re- cently left the hand of the productive laborer (for in this category must be included transporters and distributors as well as those who are engaged in the first stages of production), and nothing that has been produced for any considerable length of time, unless it may be some bottles of old wine. What this man inherited from his father, and on which we say he lives, is not actually wealth at all, but only the power of commanding wealth as others produce it. And it is from this contemporaneous pro- duction that his subsistence is drawn. The fifty square miles of London undoubtedly contain more wealth than within the same space anywhere else exists. Yet were productive labor in London absolutely to cease, within a few hours people would begin to die like rotten sheep, and within a few weeks, or at most a few months, hardly one would be left alive. For an entire suspension of productive labor would be a disaster more dreadful than ever yet befell a beleaguered city. It would not be a mere external wall of circumvallation, such as Titus drew around Jerusalem, which would pre- vent the constant incoming of the supplies on which a great city lives, but it would be the drawing of a similar wall around each household. Imagine such a suspension of labor in any community, and you will see how true it is that mankind really live from hand to mouth; that it is the daily labor of the community that supplies the community with its daily bread. Chap. IV. LAB0KER5 NOT MAINTAINED BY CAPITAL. 75 Just as the subsistence of the laborers who built the Pyramids was drawn not from a previously hoarded stock, but from the constantly recurring crops of the Nile Valley; just as a modern government when it undertakes a great work of years does not appropriate to it wealth already produced, but wealth yet to be produced, which is taken from producers in taxes as the work progresses; so it is that the subsistence of the laborers engaged in production which does not directly yield subsistence comes from the production of subsistence in which others are simultaneously engaged. If we trace the circle of exchange by which work done in the production of a great steam engine secures to the worker bread, meat, clothes and shelter, we shall find that though between the laborer on the engine and the producers of the bread, meat, etc., there may be a thou- sand intermediate exchanges, the transaction, when re- duced to its lowest terms, really amounts to an exchange of labor between him and them. Now the cause which induces the expenditure of the labor on the engine is evidently that some one who has power to give what is desired by the laborer on the engine wants in exchange ' an engine — that is to say, there exists a demand for an engine on the part of those producing bread, meat, etc., or on the part of those who are producing what the pro- ducers of the bread, meat, etc., desire. It is this demand which directs the labor of the machinist to the produc- tion of the engine, and hence, reversely, the demand of the machinist for bread, meat, etc., really directs an equivalent amount of labor to the production of these things, and thus his labor, actually exerted in the pro- duction of the engine, virtually produces the things in which he expends his wages. Or, to formularize this principle: The demand for consumption determines the direction in which labor will be expended in production. 76 WAGES AND CAPITAL. B^ok t This principle is so simple and obvious that it needs no further illustriition, yet in its light all the complexi- ties of our subject disappear, and we thus reach the same view of the real objects and rewards of labor in the intri- cacies of modern production that we gained by observing in the first beginnings of society the simpler forms of production and exchange. Wo see that now, as then, each laborer is endeavoring to obtain by his exertions the satisfaction of his own desires; we see that although the minute division of labor assigns to each producer the production of but a small part, or perhaps nothing at all, of the particular things he labors to get, yet, in aiding in the production of what other producers waut, ho is directing other labor to the production of the things he wants — in effect, producing them himself. And thus, if he make jack-knives and eat wheat, the wheat is really as much the produce of his labor as if he had grown it for himself and left wheat-growers to make their own jack-knives. We thus see how thoroughly and completely true it is, that in whatever is taken or consumed by laborers in return for labor rendered, there is no advance of capital to the laborers. If I have made jack-knives, and with the wages received have bought wheat, I have simply ex- changed jack-knives for wheat — added jack-knives to the existing stock of wealth and taken wheat from it. And as the demand for consumption determines the direction in which labor will be expended in production, it cannot even be said, so long as the limit of wheat production has not been reached, that I have lessened the stock of wheat, for, by placing jack-knives in the exchangeable stock of wealth and taking wheat out, I have determined labor at the other end of a series of exchanges to the pro- duction of wheat, just as the wheat grower, by putting in wheat and demanding jack-knives, determined labor to the production of jack-knives, as the easiest way by (vhich wheat could be obtained. Chap. IV. LABORERS IfOT MAINTAINED BY CAPITAL. 77 And so the man who is following the plow — though the crop for which he is opening the ground is not yet sown, and after being sown will take months to arrive at maturity — he is yet, by the exertion of his labor in plow- ing, virtually producing the food he eats and the wages he receives. For, though plowing is but a part of the operation of producing a crop, it is a part, and as neces- sary a part as harvesting. The doing of it is a step to- ward procuring a crop, which, by the assurance which it gives of the future crop, sets free from the stock con- stantly held the subsistence and wages of the plowman. This is not merely theoretically true, it is practically and literally true. At the proper time for plowing, let plow- ing cease. Would not the symptoms of scarcity at once manifest themselves without waiting for the time of the harvest? Let plowing cease, and would not the effect at once be felt in counting-room, and machine shop, and factory? Would not loom and spindle soon stand as idle as the plow? That this would be so, we see in the effect which immediately follows a bad season. And if this would be so, is not the man who plows really producing his subsistence and wages as much as though during the day or week his labor actually resulted in the things for which his labor is exchanged ? As a matter of fact, where there is labor looking for employment, the want of capital does not prevent the owner of land which promises a crop for which there is a demand from hiring it. Either he makes an agreement to cultivate on shares, a common method in some parts of the United States, in which case the laborers, if they are without means of subsistence, will, on the strength of the work they are doing, obtain credit at the nearest store; or, if he prefers to pay wages, the farmer will him- self obtain credit, and thus the work done in cultivation is immediately utilized or exchanged as it is done. If ^njtiiing more will be used up than would be used up if 78 WAQE8 AND CAPITAL. BookM. the laborers were forced to beg instead of to work (for in any civilized country during a normal condition of things the laborers must be supported anyhow), it will be the re- serve capital drawn out by the prospect of replacement, and which is in fact replaced by the work as it is done. For instance, in the purely agricultural districts of Southern California there was in 1877 a total failure of the crop, and of millions of sheep nothing renuiined but their bones. In the great San Joaquin Valley were many farmers without food enough to support their families until the next harvest time, let alone to support any laborers. But the rains came again in proper season, and these very farmers proceeded to hire hands to plow and to sow. For every here and there was a farmer who had been holding back part of his crop. As soon as the rains came he was anxious to sell before the next harvest brought lower prices, and the grain thus held in reserve, through the machinery of exchanges and advances, passed to the use of the cultivators — set free, in effect produced, by the work done for the next crop. The series of exchanges which unite production and consumption may be likened to a curved pipe filled with water. If a quantity of water is poured in at one end, a like quantity is released at the other. It is not iden- tically the same water, but is its equivalenc. And so they who do the work of production put in as they take out — they receive in subsistence and wages but the prod- uce of their labor. CHAPTER V. THE REAL FUNCTIONS OF CAPITAL. It may now be asked. If capital is not required for the payment of wages or the support of labor during produc- tion, what, then, are its functions? The previous examination has made the answer clear. Capital, as we have seen, consists of wealth used for the procurement of more wealth, as distinguished from wealth used for the direct satisfaction of desire; or, as I think it may be defined, of wealth in the course ol exchange. Capital, therefore, increases the power of labor to pro- duce wealth: (1) By enabling labor to apply itself in more effective ways, as by digging up clams with a spade instead of the hand, or moving a vessel by shoveling coal into a furnace, instead of tugging at an oar. (2) By en- abling labor to avail itself of the reproductive forces of nature, as to obtain corn by sowing it, or animals by breeding them. (3) By permitting the division of labor, and thus, on the one hand, increasing the eflBciency of the human factor of wealth, by the utilization of special capabilities, the acquisition of skill, and the reduction of waste; and, on the other, calling in the powers of the natural factor at their highest, by taking advantage of the diversities of soil, climate and situation, so as to ob- tain each particular species of wealth where nature is most favorable to its production. Capital does not supply the materials which labor works up into wealth, as is erroneously taught; the ma- 80 WAGES AND CAPITAL. Book I terials of wealth are supplied by nature. But such ma- terials partially worked up and in the course of exchange are capital. Capital does not supply or advance wages, as is erro- fneously taught. Wages are th at part of the produce of his labor obtained by the laborer. Capital does not maintain laborers during the progress of their work, as is erroneously taught. Laborers are maintained by their labor, the man who produces, in whole or in part, anything that will exchange for articles of maintenance, virtually producing that maintenance. Capital, therefore, does not limit industry, as is erro- neouly taught, the only limit to industry being the access to natural material. But capital may limit the form of ^dustry and the productiveness of industry, by limiting the use of tools and the division of labor. That capital may limit the form of industry is clear. Without the factory, there could be no factory opera- tives; without the sewing machine, no machine sewing; without the plow, no plowman; and without a great capi- tal engaged in exchange, industry could not take the many special forms which are concerned with exchanges. It is also as clear that the want of tools must greatly limit the productiveness of industry. If the farmer must use the spade because he has not capital enough for a plow, the sickle instead of the reaping machine, the flail instead of the thresher; if the machinist must rely upon the chisel for cutting iron; the weaver on the hand loom, and so on, the productiveness of industry cannot be a tithe of what it is when aided by capital in the shape of the best tools now in use. Nor could the division of labor go further than the very rudest and almost imper- ceptible beginnings, nor the exchanges which make it possible extend beyond the nearest neighbors, unless a portion of the things produced were constantly kept in stock or in transit. Even the pursuits of hunting. Ckap. V. THE REAL FUNCTIONS OF CAPlIxVL. 81 fishing, gathering nuts, and making weapons could not be specialized so that an individual could devote himself to any one, unless some part of what was procured by each was reserved from immediate consumption, so that he who devoted himself to the procurement of things of one kind could obtain the others as he wanted them, and could make the good luck of one day supply the short- comings of the next. While to permit the minute sub- division of labor that is characteristic of, and necessary to, high civilization, a great amount of wealth of all descrip- tions must be constantly kept in stock or in transit. To enable the resident of a civilized community to exchange his labor at option with the labor of those around him and with the labor of men in the most remote parts of the globe, there must be stocks of goods in warehouses, in stores, in the holds of ships, and in railway cars, just as to enable the denizen of a great city to draw at will a cupful of water, there must be thousands of millions of gallons stored in reservoirs and moving through miles of pipe. But to say that capital may limit the form of industry or the productiveness of industry is a very different thing from saying that capital limits industry. For the dictum of the current political economy that "capital limits in- dustry,*' means not that capital limits the form of labor or the productiveness of labor, but that it limits the ex- , ertion of labor. This proposition derives its plausibility i from the assumption that capital supplies labor with ma- terials and maintenance — an assumption that we have seen to be unfounded, and which is indeed transparently preposterous the moment it is remembered that capital is produced by labor, and hence that there must be labor before there can be capital. Capital may limit the form j of industry and the productiveness of industry; but this] is not to say that there could be no industry without capi- tal, any more than it is to say that wiuhout the power 68 WAGES AND CAPITAL. Rook I loom tlicro could bo no -weaving; without the sewing nmchiuo no scwiiig; no cultivation without the plow; or that in a community of one, like that of Hobinson Crusoe, there could bo no hibor because there could be no exchange. And to say that capital mai/ limit the form and pro- ductiveness of industry is a dilTerent thing from saying that capital does. For the cases in wliich it can be truly said that the form of productiveness of the industry of a community is limited by its capital, will, I think, appear upon examination to be more theoretical than real. It is evident that in such a country as Alexico or Tunis the larger and more general use of capital would greatly change the forms of industry and enormously increase its productiveness; and it is often said of such countries that they need capital for the development of their re- sources. But is there not something back of this — a want which includes the want of capital? Is it not the rapacity and abuses of government, the insecurity of property, the ignorance and prejudice of the people, that prevent the accumulation and use of capital? Is not the real limitation in these things, and not in the want of capital, which would not be used even if placed there? "We can, of course, imagine a community in which the want of capital would be the only obstacle to an increased productiveness of labor, but it is only by imagining a conjunction of conditions that seldom, if ever, occurs, except by accident or as a passing phase. A community in which capital has been swept away by war, conflagra- tion, or convulsion of nature, and, possibly, a community composed of civilized people just settled in a new land, seem to me to furnish the only examples. Yet how quickly the capital habitually used is reproduced in a community that has been swept by Avar, has long been noticed, while the rapid production of the capital it can. Chap. V. THE REaL FUNCTIONS OF CAPITAL. 83 or is disposed to use, is equally noticeable in the case of a new community. I am unable to think of any other than such rare and passing conditions in which the productiveness of labor is really limited by the want of capital. For, although there may be in a community individuals who from want of capital cannot apply their labor as efficiently as they would, yet so long as there is a sufficiency of capital in the community at large, the real limitation is not the want of capital, but the want of its proper distribution. If bad government rob the laborer of his capital, if unjust laws take from the producer the wealth with which he would assist production, and hand it over to those who are mere pensioners upon industry, the real limitation to the effectiveness of labor is in misgovernment, and not in want of capital. And so of ignorance, or custom, or other conditions which prevent the use of capital. It is they, not the want of capital, that really constitute the limitation. To give a circular saw to a Terra del Fuegan, a locomotive to a Bedouin Arab, or a sewing machine to a Flathead squaw, would not be to add to the efficiency of their labor. Neither does it seem possible by giving anything else to add to their capital, for any wealth beyond what they had been accustomed to use as capital would be consumed or suffered to waste. It is not the want of seeds and tools that keeps the Apache and the Sioux from cultivating the soil. If provided with seeds and tools they would not use them produc- tively unless at the same time restrained from wandering and taught to cultivate the soil. If all the capital of a i London were given them in their present condition, it I would simply cease to be capital, for they would only use; productively such infinitesimal part as might assist in \ the chase, and would not even use that until all the edible part of the stock thus showered upon them had been consumed. Yet such capital as they do want B4 WAGES AND CAPITAL. Book L they manage to acquire, and in some forms in spite of the greatest difficulties. These wild tribes hunt and fight with the best weapons that American and English factories produce, keeping up with the latest improve- ments. It is only as they became civilized that they would care for such other capital as the civilized state r<5quires, or that it would be of any use to them. In the reign of George IV., some returning mission- aries took with them to England a New Zealand chief called Hongi. His noble appearance and beautiful tatooing attracted much attention, and when about to return to his people he was presented by the monarch and some of the religious societies with a considerable stock of tools, agricultural instruments, and seeds. The grateful New Zealander did use this capital in the production of food, but it was in a manner of which his English entertainers little dreamed. In Sydney, on his way back, he exchanged it all for arms and ammunition, with which, on getting home, he began war against an- other tribe with such success that on the first battle field three hundred of his prisoners were cooked and eaten, Hongi having preluded the main repast by scooping out and swallowing the eyes and sucking the warm blood of his mortally wounded adversary, the opposing chief.* But now that their once constant wars have ceased, and the remnant of the Maoris have largely adopted European habits, there are among them many who have and use considerable amounts of capital. Likewise it would be a mistake to attribute the simple modes of production and exchange which are resorted to in new communities solely to a want of capital. These modes, which require little capital, are in themselves rude and inefficient, but when the conditions of such * New Zealand and its Inhabitants. Rev. Richard Taylor. Lon- 4on, 1855. Chap. XXI. Chap. V. THE REAL FUNCTIONS OF CAPITAL. 85 communities are considered, they will be found in reality the most effective. A great factory with all the latest improvements is the most eflBcient instrument that has yet been devised for turning wool or cotton into cloth, but only so where large quantities are to be made. The cloth required for a little village could be made with far less labor by the spinning wheel and hand loom. A perfecting press will, for each man required, print many thousand impressions while a man and a boy would be printing a hundred with a Stanhope or Franklin press; yet to work off the small edition of a country newspaper the old-fashioned press is by far the most efficient ma- chine. To carry occasionally two or three passengers, a canoe is a better instrument than a steamboat; a few sacks of flour can be transported with less expenditure of labor by a pack horse than by a railroad train; to put a great stock of goods into a cross-roads store in the backwoods would be but to waste capital. And, gener- ally, it will be found that the rude devices of production and exchange which obtain among the sparse populations of new countries result not so much from the want of capital as from inability profitably to employ it. As, no matter how much water is poured in, there can never be in a bucket more than a bucketful, so no greater amount of wealth will be used as capital than is required by the machinery of production and exchange that under all the existing conditions — intelligence, habit, security, density of population, etc. — best suit the people. And I am inclined to think that as a general rule this amount will be had — that the social organism secretes, as it were, the necessary amount of capital just as the human organism in a healthy condition secretes the requisite fat. But whether the amount of capital ever does limit the productiveness of industry, and thus fix a maximum which wages cannot exceed, it is evident that it is not li 86 WAGES AND CAPITAL. Book I from any scarcity of capital that the poverty of the masses in civilized countries proceeds. For not only do wages nowhere reach the limit fixed by the productive- ness of industry, but wages are relatively the lowest where capital is most abundant. The tools and machin- ery of production are in all the most progressive coun- tries evidently in excess of the use made of them, and any prospect of remunerative employment brings out more than the capital needed. The bucket is not only full; it is overflowing. So evident is this, that not only among the ignorant, but by men of high economic repu- tation, is industrial depression attributed to the abun- dance of machinery and the accumulation of capital; and war, which is the destruction of capital, is looked upon as the cause of brisk trade and high wages — an idea strangely enough, so great is the confusion of thought on such matters, countenanced by many who hold that capital employs labor and pays wages. Our purpose in this inquiry is to solve the problem to which so many self-contradictory answers are given. In ascertaining clearly what capital really is and what capi- tal really does, we have made the first, and an all-impor- tant step. But it is only a first step. Let us recapitulate and proceed. We have seen that the current theory that wages de- pend upon the ratio between the number of laborers and the amount of capital devoted to the employment of labor is inconsistent with the general fact that wages and interest do not rise and fall inversely, but conjointly. This discrepancy having led us to an examination of the grounds of the theory, we have seen, further, that, contrary to the current idea, wages are not drawn from capital at all, but come directly from the produce of the labor for which they are paid. We have seen that capi- Chap. V. EECAPITULATIOiT. 87 tal does not advance wages or subsist laborers, but that its functions are to assist labor in production with tools, seed, etc., and with the wealth required to carry on ex- changes. We are thus irresistibly led to practical conclusions so important as amply to justify the pains taken to make sure of them. For if wages aro drawn, not from capital, but from the produce of labor, the current theories as to the relations of capital and labor are invalid, and all remedies, whether proposed by professors of political economy or working- men, which look to the alleviation of poverty either by the increase of capital or the restriction of the number of laborers or the efficiency of their work, must be con- demned. If each laborer in performing the labor really creates the fund from which his wages are drawn, then wages cannot be diminished by the increase of laborers, but, on the contrary, as the efficiency of labor manifestly increases with the number of laborers, the more laborers, other things being equal, the higher should wages be. But this necessary proviso, "other things being equal," brings us to a question which must be considered and disposed of before we can further proceed. That ques- tion is. Do the productive powers of nature tend to diminish with the increasing drafts made upon them by increasing population? BOOK II. POPULATION AND SUBSISTENCE. CHAPTER I. — ^THE MALTHUSIAN THEORY, ITS GENESIS AKD SUPPORT. CHAPTER II. — INFERENCES PROM FACTS. CHAPTER III. — INFERENCES FROM ANALOGY. CHAPTER IV. — DISPROOF OP THE MALTHUSIAN THEORY, Are God and Nature then at strife. That Nature lends such evil dreams? So careful of the type she seems, So careless of the single life. — Tennyson CHAPTER I. THE MALTHUSIAN THEORY, ITS GENESIS AND SUPPORT. Behind the theory we have been considering lies a theory we have yet to consider. The current doctrine as to the derivation and law of wages finds its strongest feupport in a doctrine as generally accepted — the doctrine to which Malthus has given his name — that population naturally tends to increase faster than subsistence. These two doctrines, fitting in with each other, frame the answer which the current political economy gives to the great problem we are endeavoring to solve. In what has preceded, the current doctrine that wage? are determined by the ratio between capital and laborers has, I think, baen shown to be so utterly baseless as to excite surprise as to how it could so generally and so long obtain. It is not to be wondered at that such a theory should have arisen in a state of society where the great body of laborers seem to depend for employment and wages upon a separate class of capitalists, nor yet that under these conditions it should have maintained itself among the masses of men, who rarely take the trouble to separate the real from the apparent. But it is surprising that a theory which on examination appears to be so groundless could have been successively accepted by so many acute thinkers as have during the present century devoted their powers to the elucidation and development of the science of political economy. The explanation of this otherwise unaccountable fact is to be found in the general acceptance of the Malthu- sian theory. The current theory of wages has never been fairly put upon its trial, because, backed by th^ 92 POPULATION AND SUBSISTENCE. Book tt Malthusian theory, it has seemed in the minds of polit- ical economists a self-evident truth. These two theories mutually blend with, strengthen, and defend each other, while they both derive additional support from a princi- ple brought prominently forward in the discussions of the theory of rent — viz., that past a certain point the application of capital and labor to land yields a diminish- ing return. Together they give such an explanation of the phenomena presented in a highly organized and advancing society as seems to fit all the facts, and which has thus prevented closer investigation. Which of these two theories is entitled to historical precedence it is hard to say. The theory of population was not formulated in such a way as to give it the stand- ing of a scientific dogma until after that had been done for the theory of wages. But they naturally spring up and grow with each other, and were both held in a form more or less crude long prior to any attempt to construct a system of political economy. It is evident, from several passages, that though he never fully developed it, the Malthusian theory was in rudimentary form present in the mind of Adam Smith, and to this, it seems to me, must be largely due the misdirection which on the sub- ject of wages his speculations took. But, however this may be, so closely are the two theories connected, so completely do they complement each other, that Buckle, reviewing the history of the development of political economy in his "Examination of the Scotch Intellect during the Eighteenth Century," attributes mainly to Malthus the honor of ''decisively proving" the current theory of wages by advancing the current theory of the pressure of population upon subsistence. He says in his "History of Civilization in England," Vol. 3, Chap. 5: ** Scarcely had the Eighteenth Century passed away when It was decisively proved that the reward of labor depends solely on two things; namely, the magnitude of that national fund out of which CStap. I. THE MALTHUSIAN THEORY. 93 all labor is paid, and the number of laborers among whom the fund is to be divided. This vast step in our Itnowledge is due, mainly, though not entirely, to Malthus, whose work on population, besides marking an epoch in the history of speculative thought, has already produced considerable practical resalts, and will probably give rise to others more considerable still. It was published in 1798; so that A.dam Smith, who died in 1790, missed what to him would have been the intense pleasure of seeing how, in it, his own views were expanded rather than corrected. Indeed, it is certain that without Smith there would have been no Malthus; that is, unless Smith had laid the foundation, Malthus could not have raised the super- structure." The famous doctrine which ever since its enunciation has so powerfully influenced thought, not alone in the province of political economy, but in regions of even higher speculation, was formulated by Malthus in the proposition that, as shown by the growth of the North American colonies, the natural tendency of population is to double itself at least every twenty-five years, thus increasing in a geometrical ratio, while the subsistence that can be obtained from land "under circumstances the most favorable to human industry could not possibly be made to increase faster than in an arithmetical ratio, or by an addition every twenty-five years of a quantity equal to what it at present produces.'* "The necessary effects of these two different rates of increase, when brought together,** Mr. Malthus naively goes on to say, "will be very striking.'* And thus (Chap. I) he brings them together: "Let us call the population of this island eleven millions; and suppose the present produce equal to the easy support of such a number. In the first twenty-five years the population would be twenty-two millions, and the food being also doubled, the means of subsistence would be equal to this increase. In the next twenty-five years the population would be forty-four millions, and the means of subsistance only equal to the support of thirty-three millions. In the next period the population would be equal to eighty-eight mil- lions, and the means of subsistence just equal to the support of half 94 POPULATION AND 8UB9I8TENCB. Book h. that number And at the conclusion of the first century, the popu. lation woulil be a hundred and seventy-six millions, and the means of subsistence only equal to the support of llfty-five millions; leaving a population of a hundred and twenty-one millions totally unprovided for. "Taking the whole earth instead of this island, emigration would of course be excluded; and supposing the present population equal to a thousand millions, the human species would increase as the numbers 1, 2, 4, 8, 16, 33, 64, 128, 256, and subsistence as 1, 2, 3, 4, 5, 6, 7, 8, 9. In two centuries the population would be to the means of subsistence as 256 to 9; in three centuries, 4,096 to 13, and in two thousand years the difference would be almost incalculable." Such a result is of course prevented by the physical fact that no more people can exidt than can find subsist- ence, and hence Malthus' conclusion is, that this ten- dency of population to indefinite increase must be held back either by moral restraint upon the reproductive faculty, or by the various causes which increase mortality, which he resolves into vice and misery. Such causes aa prevent propagation he styles the preventive check; such causes as increase mortality he styles the positive check. This is the famous Malthusian doctrine, as promulgated by Malthus himself in the "Essay on Popu- lation." It is not worth while to dwell upon the fallacy in- volved in the assumption of geometrical and arithmetical rates of increase, a play upon proportions which hardly rises to the dignity of that in the familiar puzzle of the hare and the tortoise, in which the hare is made to chase the tortoise through all eternity without coming up with him. For this assumption is not necessary to the Mal- thusian doctrine, or at least is expressly repudiated by some of those who fully accept that doctrine; as, for in- stance, John Stuart Mill, who speaks of it as "an un- lucky attempt to give precision to things which do not admit of it, which every person capable of reasoning Chap. 1. THE MALTHirSlAK THEORY. 95 must see is wholly superfluous to the argUftient." * The essence of the Malthusian doctrine is, that population tends to increase faster than the power of providing food, and whether this difference be stated as a geometrical ratio for population and an arithmetical ratio for subsist- ence, as by Malthus; or as a constant ratio for popula- tion and a diminishing ratio for subsistence, as by Mill, is only a matter of statement. The vital point, on which both agree, is, to use the words of Mathus, "that there is a natural tendency and constant effort in popu* lation to increase beyond the means of subsistence." The Malthusian doctrine, as at present held, may be thus stated in its strongest and least objectionable form: That population, constantly tending to increase, must, when unrestrained, ultimately press against the limits of subsistence, not as against a fixed, but as against an elastic barrier, which makes the procurement of subsist- ence progressively more and more difficult. And thus, wherever reproduction has had time to assert its power, and is unchecked by prudence, there must exist that de- gree of want which will keep population within the bounds of subsistence. Although in reality not more repugnant to the sense of harmonious adaptation by creative beneficence and wis- dom than the complacent no-theory which throws the responsibility for poverty and its concomitants upon the inscrutable decrees of Providence, without attempting to trace them, this theory, in avowedly making vice and Buffering the necessary results of a natural instinct with ♦Principles of Political Economy, Book II, Chap. IX., Sec. VL —Yet notwithstanding what Mill says, it is clear that Malthus him- self lays great stress upon his geometrical and arithmetical ratios, and it is also probable that it is to these ratios that Malthus is largely indebted for his fame, as they supplied one of those high-sounding formulas that with many people carry far more weight than the 'clearest reasoning. 96 POPULATION AND SUBSISTENCE. Book II which are linked the purest and sweetest affections, comes rudely in collision with ideas deeply rooted in the human mind, and it was, as soon as formally promul- gated, fought with a bitterness in which zeal was often more manifest than logic. But it has triumphantly withstood the ordeal, and in spite of the refutations of the Godwins, the denunciations of the Cobbetts, and all the shafts that argument, sarcasm, ridicule, and senti- ment could direct against it, to-day it stands in the world of thought as an accepted truth, which compels the recognition even of those who would fain disbelieve it. The causes of its triumph, the sources of its strength, are not obscure. Seemingly backed by an indisputable arithmetical truth — that a continuously increasing popu- lation must eventually exceed the capacity of the earth to furnish food or even standing room, the Malthusian theory is supported by analogies in the animal and vege- table kingdoms, where life everywhere beats wastefully against the barriers that hold its different species in check — analogies to which the course of modern thought, in leveling distinctions between different forms of life, has given a greater and greater weight; and it is appar- ently corroborated by many obvious facts, such as the prevalence of poverty, vice, and misery amid dense pop- ulations; the general effect of material progress in in- creasing population without relieving pauperism; the rapid growth of numbers in newly settled countries and the evident retardation of increase in more densely set- tled countries by the mortality among the class con- demned to want. The Malthusian theory furnishes a general principle which accounts for these and similar facts, and accounts for them in a way which harmonizes with the doctrine that wages are drawn from capital, and with all the prin- ciples that are deduced from it. According to the cur- rent doctrine of wages, wages fall as increase in the num- Chap.L^ THE MALTHUSIAN THEORY. 97 ber of laborers necessitates a more minute division of capital; according to the Malthusian theory, poverty appears as increase in population necessitates the more minute division of subsistence. It requires but the identification of capital with subsistence, and number of laborers with population, an identification made in the current treatises on political economy, where the terms are often converted, to make the two propositions as identical formally as they are substantially.* And thus it is, as stated by Buckle in the passage previously quoted, that the theory of population advanced by Mal- thus has appeared to prove decisively the theory of wages advanced by Smith. Ricardo, who a few years subsequent to the publica- tion of the "Essay on Population" corrected the mistake into which Smith had fallen as to the nature and cause of rent, furnished the Malthusian theory an additional support by calling attention to the fact that rent would increase as the necessities of increasing population forced cultivation to less and less productive lands, or to less and less productive points on the same lands, thus ex- plaining the rise of rent. In this way was formed a triple combination, by which the Malthusian theory has been buttressed on both sides — the previously received doctrine of wages and the subsequently received doctrine of rent exhibiting in this view but special examples of the operation of the general principle to which the name of Malthus has been attached — the fall in wages and the rise in rents which come with increasing population being but modes in which the pressure of population upon subsistence shows itself. Thus taking its place in the very framework of polit- * The effect of the Malthusian doctrine upon the definitions of capital may. I think, be seen by comparing (see pp. 33, 33, 34) the defi- nition of Smith, who wrote prior to Malthus, with the definitions of Ricardo, McCuUoch and Mill, who wrote subsequently 98 POPULATION AND SUBSISTENCE. Book U ical economy (for the science as currently accepted has undergone no material change or improvement since the time of Ricardo, though in some minor points it has been cleared and illustrated), the Malthusian theory, though repugnant to sentiments before alluded to, is not repug- nant to other ideas, which, in older countries at least, generally prevail among the working classes; but, on the contrary, like the theory of wages by which it i; supported and in turn supports, it harmonizes wilr, them. To the mechanic or operative the cause of low wages and of the inability to get employment is obviously the competition caused by the pressure of numbers, and in the squalid abodes of poverty what seems clearer than that there are too many people? But the great cause of the triumph of this theory is, that, instead of menacing any vested right or antagoniz- ing any powerful interest, it is eminently soothing and reassuring to the classes who, wielding the power of wealth, largely dominate thought. At a time when old supports were falling away, it came to the rescue of the special privileges by which a few monopolize so much of the good things of this world, proclaiming a natural cause for the want and misery which, if attributed to political institutions, must condemn every government under which they exist. The "Essay on Population'* was avowedly a reply to William Godwin's "Inquiry con- cerning Political Justice," a work asserting the principle of human equality; and its purpose was to justify exist- ing inequality by shifting the responsibility for it from human institutions to the laws of the Creator. There was nothing new in this, for Wallace, nearly forty years before, had brought forward the danger of excessive multiplication as the answer to the demands of justice to\ an equal distribution of wealth; but the circum- stances of the times were such as to make the same idea, vhaix brought forward by Malthus, peculiarly grate:ful Chap.l. THE MALTHlTStAN THEORY. 99 to a powerful class, in whom an intense fear of any ques- tioning of the existing state of things had been generated by the outburst of the French Eevolution. Now, as then, the Malthusian doctrine parries the de- mand for reform, and shelters selfishness from question and from conscience by the interposition of an inevitable necessity. It furnishes a philosophy by which Dives as he feasts can shut out the image of Lazarus who faints with hunger at his door; by which wealth may complacently but- ton up its pocket when poverty asks an alms, and the rich Christian bend on Sundays in a nicely upholstered pew to implore the good gifts of the All Father without any feeling of responsibility for the squalid misery that is festering but a square away. For poverty, want, and starvation are by this theory not chargeable either to in- dividual greed or to social mal-adjustments; they are the inevitable results of universal laws, with which, if it were not impious, it were as hopeless to quarrel as with the law of gravitation. In this view, he who in the midst of want has accumulated wealth, has but fenced in a little oasis from the driving sand which else would have overwhelmed it. He has gained for himself, but has hurt nobody. And even if the rich were literally to obey the injunctions of Christ and divide their wealth among the poor, nothing would be gained. Population would be increased, only to press again upon the limits of subsistence or capital, and the equality that would be produced would be but the equality of common misery. And thus reforms which would interfere with the inter- ests of any powerful class are discouraged as hopeless. As the moral law forbids any forestalling of the methods by which the natural law gets rid of surplus population and thus holds in check a tendency to increase potent enough to pack the surface of the globe with human beings as sardines are packed in a box, nothing can really be done, either by individual or by combined 100 POPULATION AND SUBSISTENCE. Bock It effort, to extirpate poverty, save to trust to the efficacy of education and preach the necessity of prudence. A theory that, falling in with the habits of thought of the poorer classes, thus justifies the greed of the rich and the selfishness of the powerful, will spread quickly and strike its roots deep. This has been the case with the theory advanced by Malthus. And of late years the Malthusian theory has received new support in the rapid change of ideas as to the origin of man and the genesis of species. That Buckle was right in saying that the promulgation of the Malthusian theory marked an epoch in the history of speculative thought could, it seems to me, be easily shown; yet ta trace its influence in the higher domains of philosophy, of which Buckle's own work is an example, would, though extremely interesting, carry us beyond the scope of this investigation. But how much be reflex and how much original, the support which is given to the Malthu- sian theory by the new philosophy of development, now rapidly spreading in every direction, must be noted in any estimate of the sources from which this theory de- rives its present strength. As in political economy, the support received from the doctrine of wages and the doctrine of rent combined to raise the Malthusian theory to the rank of a central truth, so the extension of similar ideas to the development of life in all its forms has the effect of giving it a still higher and more impregnable position. Agassiz, who, to the day of his death, was a strenuous opponent of the new philosophy, spoke of Darwinism as "Malthus all over," * and Darwin himself says the struggle for existence *Ms the doctrine of Mal- thus applied with manifold force to the whole animal and vegetable kingdoms."! * Address before Massachusetts State Board of Agricuslture; 1875k Report U. S. Department of Agriculture, 1873. \ Origiu of ^'"er'.ies. Chap. III. Chap. L THE MALTHUSIAN THEORY. 101 It does not, however, seem to me exactly correct to say that the theory of development by natural selection or survival of the fittest is extended Malthusianism, for the doctrine of Malthus did not originally and does not necessarily involve the idea of progression. But this was soon added to it. McCulloch* attributes to the ''prin- ciple of increase" social improvement and the progress of the arts, and declares that the poverty that it engen- ders acts as a powerful stimulus to the development of industry, the extension of science and the accumulation of wealth by the upper and middle classes, without which stimulus society would quickly sink into apathy and de- cay. What is this but the recognition in regard to human society of the developing effects of the "struggle for existence" and "survival of the fittest," which we are now told on the authority of natural science have been the means which Nature has employed to bring forth all the infinitely diversified and wonderfully adapted forms which the teeming life of the globe as- sumes? What is it but the recognition of the force, which, seemingly cruel and remorseless, has yet in the course of unnumbered ages developed the higher from the lower type, differentiated the man and the monkey, and made the Nineteenth Century succeed the age of stone? Thus commended and seemingly proved, thus linked and buttressed, the Malthusian theory — the doctrine that poverty is due to the pressure of population against subsistence, or, to put it in its other form, the doctrine that the tendency to increase in the number of laborers must always tend to reduce wages to the minimum on which laborers can reproduce — is now generally accepted as an unquestionable truth, in the light of which social phenomena are to be explained, just as for ages the *Note IV. to Wealth of Nations. 102 POPULATION AND SUBSISTENCE. Book H. phenomena of the sidereal heavens were explained upon the supposition of the fixity of the earth, or the facts of geology upon that of the literal inspiration of the Mosaic record. If authority were alone to be considered, for- mally to deny this doctrine would require almost as much audacity as that of the colored preacher who recently started out on a crusade against the opinion that the earth moves around the sun, for in one form or another, the Malthusian doctrine has received in the intellectual world an almost universal indorsement, and in the best as in the most common literature of the day may be seen cropping out in every direction. It is indorsed by economists and by statesmen, by historians and by natural investigators; by social science congresses and by trade unions; by churchmen and by materialists; by conservatives of the strictest sect and by the most radical of radicals. It is held and habitually reasoned from by many who never heard of Malthus and who have not the slightest idea of what his theory is. Nevertheless, as the grounds of the current theory of wages have vanished when subjected to a candid exami- nation, so, do I believe, will vanish the grounds of this, its twin. In proving that wages are not drawn from capital we have raised this Antaeus from the earth. CHAPTER II. INFEREKCES FROM FACTS. The general acceptance of the Malthusian theory and the high authority by which it is indorsed have seemed to me to make it expedient to review its grounds and the causes which have conspired to give it such a domi- nating influence in the discussion of social questions. But when we subject the theory itself to the test of straightforward analysis, it will, I think, be found as utterly untenable as the current theory of wages. In the first place, the facts which are marshaled in support of this theory do not prove it, and the analogies do not countenance it. And in the second place, there are facts which con- clusively disprove it. I go to the heart of the matter in saying that there is no warrant, either in experience or analogy, for the as- sumption that there is any tendency in population to increase faster than subsistence. The facts cited to show this simply show that where, owing to the sparseness of population, as in new countries, or where, owing to the unequal distribution of wealth, as among the poorer classes in old countries, human life is occupied with the physical necessities of existence, the tendency to repro- duce is at a rate which would, were it to go on un- checked, some time exceed subsistence. But it is not a legitimate inference from this that the tendency to re- produce would show itself in the same force where popu- 104 POPULATION AND SUBSISTENCE. Book IL lation was sufficiently dense and wealth distributed with sufficient evenness to lift a whole community above the necessity of devoting their energies to a struggle for mere existence. Nor can it be assumed that the tendency to reproduce, by causing poverty, must prevent the exist- ence of such a community; for this, manifestly, would be assuming the very point at issue, and reasoning in a circle. And even if it be admitted that the tendency to multiply must ultimately produce poverty, it cannot from this alone be predicated of existing poverty that it is due to this cause, until it be shown that there are no other causes which can account for it — a thing in the present state of government, laws, and customs, mani- festly impossible. This is abundantly shown in the "Essay on Popula- tion" itself. This famous book, which is much oftener spoken of than read, is still well worth perusal, if only as a literary curiosity. The contrast between the merits of the book itself and the effect it has produced, or is at least credited with (for though Sir James Stewart, Mr. Townsend, and others, share with Malthus the glory of discovering "the principle of population," it was the publication of the "Essay on Population" that brought it prominently forward), is, it seems to me, one of the most remarkable things in the history of literature; and it is easy to understand how Godwin, whose "Political Justice" provoked the "Essay on Population," should until his old age have disdained a reply. It begins with the assumption that population tends to increase in a geometrical ratio, while subsistence can at best be made to increase only in an arithmetical ratio — an assumption just as valid, and no more so, than it would be, from the fact that a puppy doubled the length of his tail while he added so many pounds to his weight, to assert a geomet- ric progression of tail and an arithmetical progression of weight. And, the inference from the assumption la Chap, a INFERENCES FROM FACTS. 105 just such as Swift in satire might have credited to the savaEts of a previously dogless island, who, by bringing these two ratios together, might deduce the very "strik- ing consequence" that by the time the dog grew to a weight of fifty pounds his tail would be over a mile long, and extremely difficult to wag, and hence recommend the prudential check of a bandage as the only alterna- tive to the positive check of constant amputations. Commencing with such an absurdity, the essay includes a long argument for the imposition of a duty on the im- portation, and the payment of a bounty for the exporta- tion of corn, an idea that has long since been sent to the limbo of exploded fallacies. And it is marked through- out the argumentative portions by passages which show on the part of the reverend gentleman the most ridicu- lous incapacity for logical thought — as, for instance, that if wages were to be increased from eighteen pence or two shillings per day to five shillings, meat would necessarily increase in price from eight or nine pence to two or three shillings per pound, and the condition of the laboring classes would therefore not be improved, a statement to which I can think of no parallel so close as a proposition I once heard a certain printer gravely ad- vance — that because an author, whom he had known, was forty years old when he was twenty, the author must now be eighty years old because he (the printer) was forty. This confusion of thought does not merely crop out here and there; it characterizes the whole work.* * Malthus' other works, though written after he became famous, made no mark, and are treated with contempt even by those who find in the Essay a great discovery. The Encyclopaedia Britannica, for instance, though fully accepting the Malthusian theory, says of Malthus' Political Economy: " It is very ill arranged, and is in no respect either a practical or a scientific exposition of the subject. It is in great part occupied with an examination of parts of Mr. Ricardo's peculiar doctrines, and with an inquiry into the nature and 106 POPULATION AND SUBSISTENCE. Book R The main body of the book is taken up with what is in reality a refutation of the theory which the book ad- vances, for Malthus' review of what he calls the positive checks to population is simply the showing that the re- sults which he attributes to over-population actually arise from other causes. Of all the cases cited, and pretty much the whole globe is passed over in the survey, in which vice and misery check increase by limiting mar- riages or shortening the term of human life, there is not a single case in which the vice and misery can be traced to an actual increase in the number of months over the power of the accompanying hands to feed them; but in every case the vice and misery are shown to spring either from unsocial ignorance and rapacity, or from bad gov- ernment, unjust laws or destructive warfare. Nor what Malthus failed to show has any one since him shown. The globe may be surveyed and history may be reviewed in vain for any instance of a considera- ble country* in which poverty and want can be fairly attributed to the pressure of an increasing population. Wnatever be the possible dangers involved in the power of human increase, they have never yet appeared. What- ever may some time be, this never yet has been the evil that has afflicted mankind. Population always tending . causes of value. Nothing, however, can be more unsatisfactory than these discussions. In truth Mr. Malthus never had any clear or accurate perception of Mr. Ricardo's theories, or of the principles which determine the value in exchange of different articles." * I say considerable country, because there may be small islands, such as Pitcairn's Island, cut off from communication with the rest of the world and consequently from the exchanges which are nec- essary to the improved modes of production resorted to as population becomes dense, which may seem to offer examples in point. A moment's reflection, however, will show that these exceptional cases are not in point- Chap. II. INPERENCES FROM FACTS. 107 to overpass the limit of subsistence! How is it, then, that this globe of ours, after all the thousands, and it is now thought millions, of years that man has been upon the earth, is yet so thinly populated? How is it, then, that so many of the hives of human life are now deserted — that once cultivated fields are rank with jungle, and the wild beast licks her cubs where onco were busy haunts of men? It is a fact, that, as we count our increasing millions, we are apt to lose sight of — nevertheless it is a fact — that in what we know of the world's history decadence of population is as common as increase. Whether the aggregate population of the earth is now greater than at any previous epoch is a speculation which can deal only with guesses. Since Montesquieu, in the early part of the last century, asserted, what was then probably the prevailing impression, that, the population of the earth had, since the Christian era, greatly declined, opinion has run the other way. But the tendency of recent in- vestigation and exploration has been to give greater credit to what have been deemed the exaggerated accounts of ancient historians and travelers, and to reveal indica- tions of denser populations and more advanced civiliza- tions than had before been suspected, as well as of a higher antiquity in the human race. And in basing our estimates of population upon the development of trade, the advance of the arts, and the size of cities, we -are apt to underrate the density of population which the inten- sive cultivations, characteristic of the earlier civiliza- tions, are capable of maintaining — especially where irri- gation is resorted to. As we may see from the closely cultivated districts of China and Europe a very great population of simple habits can readily exist with very little commerce and a much lower stage of those arts in "which modern progress has been most marked, and with- 108 POPULATION AND SUBSISTENCE. Book JL out that tendency to concentrate in cities which modern populations show.* Be this as it may, the only continent which we can be sure now contains a larger population than ever before is Europe. But this is not true of all parts of Europe. Certainly Greece, the Mediterranean Islands, and Turkey in Europe, probably Italy, and possibly Spain, have con- tained larger populations than now, and this may be likewise true of Northwestern and parts of Central and Eastern Europe. America also has increased in population during the time we know of it; but this increase is not so great as is popularly supposed, some estimates giving to Peru alone at the time of the discovery a greater population than now exists on the whole continent of South America. And all the indications are that previous to the discovery the population of America had been declining. "What great nations have run their course, what empires have arisen and fallen in "that new world which is the old," we can only imagine. But fragments of massive ruins yet attest a grander pre-Incan civilization; amid the tropical forests of Yucatan and Central America are the remains of great cities forgotten ere the Spanish conquest; Mexico, as Cortez found it, showed the superimposition of barbarism upon a higher social development, while through a great * As may be seen from the map in H. H. Bancroft's "Native Races," the State of Vera Cruz is not one of those parts of Mexico noticeable for its antiquities. Yet Hugo Fink, of Cordova, writing to the Smithsonian Institute (Reports 1870), says there is hardly a foot in the whole State in which by excavation either a broken obsidian knife or a broken piece of pottery is not found; that the whole country is intersected with parallel lines of stones intended to keep the earth from washing away in the rainy season, which show that even the very poorest land was put into requisition, and that it is impossible to resist the conclusion that the ancient population was at least as dense as it is at present in the most populous districts of Europe. Chap.n. INFEEENCES FROM FACTS. 109 part of what is now the United States are scattered mounds which prove a once relatively dense population, and here and there, as in the Lake Superior copper mines, are traces of higher arts than were known to the Indians with whom the whites came in contact. As to Africa there can be no question. Northern Af- rica can contain but a fraction of the population that it had in ancient times; the Nile Valley once held an enor- mously greater population than now, while south of the Sahara there is nothing to show increase within historic times, and widespread depopulation was certainly caused by the slave trade. As for Asia, which even now contains more than half the human race, though it is not much more than half as densely populated as Europe, there are indications that both India and China once contained larger popula- tions than now, while that great breeding ground of men from which issued swarms that overran both countries and sent great waves of people rolling upon Europe, must have been once far more populous. But the most marked change is in Asia Minor, Syria, Babylonia, Persia, and in short that vast district which yielded to the conquering arms of Alexander. Where were once great cities and teeming populations are now squalid villages and barren wastes. It is somewhat strange that among all the theories that have been raised, that of a fixed quantity to human life on this earth has not been broached. It would at least better accord with historical facts than that of the constant tendency of population to outwin subsistence. It is clear that population has here ebbed and there flowed; its centers have changed; new nations have arisen and old nations declined; sparsely settled districts have become populous and populous districts have lost their population; but as far back as we can go without abandoning ourselves wholly to inference, there is noth- 110 POPULATION AND SUBSISTENCE. Book H ing to show continuous increase, or even clearly to show an aggregate increase from time to time. The advance of the pioneers of peoples has, so far as we can discern, never been into uninluibited lands — their march has always been a battle with some other people pre- viously in possession; behind dim empires vaguer ghosts of empire loom. That the population of the world must have had its small beginnings we confidently infer, for we know that there was a geologic era when human life could not have existed, and we cannot believe that men sprang up all at once, as from the dragon teeth sowed by Cadmus; yet through long vistas, where history, tradi- tion and antiquities shed a light that is lost in faint glim- mers, we may discern large populations. And during these long periods the principle of population has not .been strong enough fully to settle the world, or even so far as we can clearly see materially to increase its aggre- gate population. Compared with its capacities to sup- port human life the earth as a whole is yet most sparsely populated. There is another broad, general fact which cannot fail to strike any one who, thinking of this subject, extends his view beyond modern society. Malthusianism pred- icates a universal law — that the natural tendency of popu- lation is to outrun subsistence. If there be such a law, it must, wherever population has attained a certain density, become as obvious as any of the great natural laws which have been everywhere recognized. How is it, then, that neither in classical creeds and codes, nor in those of the Jews, the Egyptians, the Hindoos, the Chinese, nor any of the peoples who have lived in close association and have built up creeds and codes, do we find any injunctions to the practice of the prudential restraints of Malthus; but that, on the contrary, the wis- dom of the centuries, the religions of the world, have always inculcated ideas of civic and religious duty the Chap.n. IKFEREKCES FROM FACTS. Ill very reverse of those which the current political econ- omy enjoins, and which Annie Besant is now trying to popularize in England? And it must be remembered that there have been societies in which the community guaranteed to every member employment and subsistence. John Stuart Mill says (Book II, Chap. XII, Sec. 2), that to do this with- out state regulation of marriages and births, would be to produce a state of general misery and degradation. "These consequences," he says, "have been so often and so clearly pointed out by authors of reputation that ignorance of them on the part of educated persons is no longer pardonable." Yet in Sparta, in Peru, in Para- guay, as in the industrial communities which appear almost everywhere to have constituted the primitive agricultural organization, there seems to have been an utter ignorance of these dire consequences of a natural tendency. Besides the broad, general facts I have cited, there are facts of common knowledge which seem utterly inconsist- ent with such an overpowering tendency to multiplica- tion. If the tendency to reproduce, be so strong as Mal- thusianism supposes, how is it that families so often be- come extinct — families in which want is unknown? How is it, then, that when every premium is offered by heredi- tary titles and hereditary possessions, not alone to the principle of increase, but to the preservation of genea- logical knowledge and the proving up of descent, that in such an aristocracy as that of England, so many peer- ages should lapse, and the House of Lords be kept up from century to century only by fresh creations K For the solitary example of a family that has survived any great lapse of time, even though assured of subsist- ence and honor, we must go to unchangeable China. The descendants of Confucius still exist there, and enjoy peculiar privileges and consideration, forming, in fact. 113 POPULATION AND SUBSISTENCE. Book ft the only hereditary aristocracy. On the presumption that popuhiticn tends to double every twenty-five years, they should, in 2,150 years after the death of Confucius, have amounted to 859,559,193,106,709,670,198,710,528 souls. Instead of any such unimaginable number, the de- scendants of Confucius, 2,150 years after his death, in the reign of Kanghi, numbered 11,000 males, or say 22,000 souls. This is quite a discrepancy, and is the more strik- ing when it is remembered that the esteem in which this family is held on account of their ancestor, "the Most Holy Ancient Teacher," has prevented the operation of the positive check, while the maxims of Confucius incul- cate anything but the prudential check. Yet, it may be said, that even this increase is a great one. Twenty-two thousand persons descended from a single pair in 2,150 years is far short of the Malthusian rate. Nevertheless, it is suggestive of possible over- crowding. But consider. Increase of descendants does not show increase of population. It could only do this when the breeding was in and in. Smith and his wife have a son and daughter, who marry respectively some one else's daughter and son, and each have two children. Smith and his wife would thus have four grandchildren; but there would be in the one generation no greater number than in the other — each child would have four grand- parents. And supposing this process were to go on, the line of descent might constantly spread out into hun- dreds, thousands and millions; but in each generation of descendants there would be no more individuals than in any previous generation of ancestors. The web of gener- ations is like lattice-work or the diagonal threads in cloth. Commencing at any point at the top, the eye fol- lows lines which at the bottom widely diverge; but be- ginning at any point at the bottom, the lines diverge in the same way to the top. How many children a man Chap. II. INFERENCES FROM FACTS. 113 may have is problematical. But that he had two parents is certain, and that these again had two parents each is also certain. Follow this geometrical progression through a few generations and see if it does not lead to quite as "striking consequences" as Mr. Malthus' peo- pling of the solar systems. But from such considerations as these let us advance to a more definite inquiry. I assert that the cases com- monly cited as instances of over-population will not bear investigation. India, China, and Ireland furnish the strongest of these cases. In each of these countries, large numbers have perished by starvation and large classes are reduced to abject misery or compelled to emigrate. But is this really due to over-population? Comparing total population with total area, India and China are far from being the most densely populated countries of the world. According to the estimates of MM. Behm and Wagner, the population of India is but 132 to the square mile and that of China 119, whereas Saxony has a population of 443 to the square mile; Bel- gium 441; England 422; the Netherlands 291; Italy 234 and Japan 233.* There are thus in both countries large areas unused or not fully used, but even in their more densely populated districts there can be no doubt that either could maintain a much greater population in a much higher degree of comfort, for in both countries is labor applied to production in the rudest and most in- efficient ways, and in both countries great natural re- sources are wholly neglected. This arises from no innate *I take these figures from the Smithsonian Report for 1873, leaving out decimals. MM. Behm and Wagner put the population of China at 446,500,000, though there are some who contend that it does not exceed 150,000,000. They put the population of Hither India at 206,225,580, giving 132.29 to the square mile; of Ceylon at 2,405,287 or 97.36 to the square mile; of Further India at 21,018,062, or 27.94 to the square mile. They estimate the population of the world at 1,377,000,000, an average of 26.64 to the square mile. Hi POPULATION AND SUBSISTENCE. Book II deficiency in the people, for the Hindoo, as comparative philology has shown, is of our own blood, and China pos- sessed a high degree of civilization and the rudiments of the most important modern inventions when our ances- tors were wandering savages. It arises from the form which the social organization has in both countries taken, which has shackled productive power and robbed indus- try of its reward. In India from time immemorial, the working classes have been ground down by exactions and oppressions into a condition of helpless and hopeless degradation. For ages and ages the cultivator of the soil has esteemed himself happy if, of his produce, the extortion of the strong hand left him enough to support life and furnish seed; capital could nowhere be safely accumulated or to any considerable extent be used to assist production; all wealth that could be wrung from the people was in the possession of princes who were little better than robber chiefs quartered on the country, or in that of their farmers or favorites, and was wasted in useless or worse than useless luxury, while religion, sunken into an elab- orate and terrible superstition, tyrannized over the mind as physical force did over the bodies of men. Under these conditions, the only arts that could advance were those that ministered to the ostentation and luxury of the great. The elephants of the rajah blazed with gold of exquisite workmanship, and the umbrellas that sym- bolized his regal power glittered with gems; but the plow of the ryot was only a sharpened stick. The ladies of the rajah's harem wrapped themselves in muslins so fine as to take the name of woven wind, but the tools of the artisan were of the poorest and rudest description, and commerce could only be carried on, as it were, by stealth. Is it not clear that this tyranny and insecurity have produced the want and starvation of India; and not, as according to Buckle, the pressure of population upon Chap. 11. IN-FEREKCES FROM FACTS. 115 subsistence that has produced the want, and the want the tyranny.* Says the Rev, William Tennant, a chaplain in the service of the East India Company, writing in 1796, two years before the publication of the *'Essay on Population:'* " When we reflect upon the great fertility of Hindostan, it is amazing to consider the frequency of famine. It is evidently not owing to any sterility of soil or climate; the evil must be traced to some political cause, and it requires but little penetration to discover it in the avarice and extortion of the various governments. The great spur to industry, that of security, is taken away. Hence no man raises more grain than is barely sufficient for himself, and the first unfavorable season produces a famine. " The Mogul government at no period offered full security to the prince, still less to his vassals; and to peasants the most scanty pro- tection of all. It was a continued tissue of violence and insurrection, treachery and punishment, under which neither commerce nor the arts could prosper, nor agriculture assume the appearance of a sys- tem. Its downfall gave rise to a state still more afflictive, since anarchy is worse than misrule. The Mohammedan government, wretched as it was, the European nations have not the merit of over- turning. It fell beneath the weight of its own corruption, and had already been succeeded by the multifarious tyranny of petty chiefs, whose right to govern consisted in their treason to the state, and whose exactions on the peasants were as boundless as their avarice. The rents to government were, and, where natives rule, still are, levied twice a year by a merciless banditti, under the semblance of an army, who wantonly destroy or carry off whatever part of the produce may satisfy their caprice or satiate their avidity, after having hunted the ill-fated peasants from the villages to the woods. Any attempt of the peasants to defend their persons or property within the mud walls of their villages only calls for the more signal venge- ance on those useful, but ill-fated mortals. They are then sur- ♦History of Civilization. Vol. I., Chap. 2. In this chapter Buckle has collected a great deal of evidence of the oppression and degradation of the people of India from the most remote times, a condition which, blinded by the Malthusian doctrine, he has acceptec? and made the cornerstone of his theory of the development of civili- zation, he attributes to the ease with which food can there be pr(^ duced 116 POPULATION AND SUBSISTENCE. Boole n. TDunded and attacked with musketry and field pieces till resistanco ceases, when the survivors arc sold, and their habitations burned and leveled with the ground. Hence you will frequently meet with the ryots gathering up the scattered remnants of what had yesterday been their habitation, if fear has permitted them to return; but oftener the ruins are seen smoking, after a second visitation of this kind, without the appearance of a human being to interrupt the awful silence of desolation. This description does not apply to the Mohammedan chieftains alone; it is equally applicable to the Raj&bg in the districts governed by Hindoos." * To this merciless rapacity, "which would have produced want and famine were the population but one to a square mile and the land a Garden of Eden, succeeded, in the first era of British rule in India, as merciless a rapacity, backed by a far more irresistible power. Says Macaulay, in his essay on Lord Olive: "Enormous fortunes were rapidly accumulated at Calcutta, while millions of human beings were reduced to the extremity of wretched- ness. They had been accustomed to live under tyranny, but never under tyranny like this. They found the little finger of the Com- pany thicker than the loins of Surajah Dowlah. * * * It resembled the government of evil genii, rather than the government of human tyrants. Sometimes they submitted in patient misery. Sometimes they fled from the white man as their fathers had been used to fly from the Maharatta, and the palanquin of the English traveler was often carried through silent villages and towns that the report of his approach had made desolate." Upon horrors that Macaulay thus but touches, the vivid eloquence of Burke throws a stronger light — whole districts surrendered to the unrestrained cupidity of the worst of human kind, poverty-stricken peasants fiend- ishly tortured to compel them to give up their little hoards, and once populous tracts turned into deserts. But the lawless license of early English rule has been long restrained. To all that vast population the strong * Indian Recreations. By Rev. Wm. Tennant. London, 1804. Vol. I., Sec. XXXIX. Chap.n. IKFERENCES FROM FACTS. 117 hand of England has given a more than Roman peace; the just principles of English law have been extended by an elaborate system of codes and law officers designed to secure to the humblest of these abject peoples the rights of Anglo-Saxon freemen; the whole peninsula has been intersected by railways, and great irrigation works have been constructed. Yet, with increasing frequency, famine has succeeded famine, raging with greater intensity over wider areas. Is not this a demonstration of the Malthusian theory? Does it not show that no matter how much the possibili- ties of subsistence are increased, population still con- tinues to press upon it? Does it not show, as Malthus contended, that, to shut up the sluices by which super- abundant population is carried off, is but to compel nature to open new ones, and that unless the sources of human increase are checked by prudential regulation, the alternative of war is famine? This has been the orthodox explanation. But the truth, as may be seen in the facts brought forth in recent discussions of Indian affairs in the English periodicals, is that these famines, which have been, and are now, sweeping away their mil- lions, are no more due to the pressure of population upon the natural limits of subsistence than was the desolation of the Carnatic when Hyder All's horsemen burst upon it in a whirlwind of destruction. The millions of India have bowed their necks beneath the yokes of many conquerors, but worst of all is the steady, grinding weight of English domination — a weight which is literally crushing millions out of existence, and, as shown by English writers, is inevitably tending to a most frightful and widespread catastrophe. Other con- querors have lived in the land, and, though bad and tyrannous in their rule, have understood and been un- derstood by the people; but India now is like a great estate owned by an absentee and alien landlord. A most 118 POPULATION AND SUBSISTENCE. Book Tl expensive military and civil establishment is kept up, managed and officered by Englishmen who regard India as but a place of temporary exile; and an enormous sum, estimated as at least £20,000,000 annually, raised from a population where laborers are in many places glad in good times to work for l^d. to 4d. a day, is drained away to England in the shape of remittances, pensions, home charges of the government, etc. — a tribute for which there is no return. The immense sums lavished on railroads have, as siiown by the returns, been econom- ically unproductive; the great irrigation works are for the most part costly failures. In large parts of India the English, in their desire to create a class of landed proprietors, turned over the soil in absolute possession to hereditary tax-gatherers, who rack-rent the cultivators most mercilessly. In other parts, where the rent is still taken by the State in the shape of a land tax, assessments are so high, and taxes are collected so relentlessly, as to drive the ryots, who get but the most scanty living in good seasons, into the claws of money lenders, who are, if possible, even more rapacious than the zemindars. Upon salt, an article of prime necessity everywhere, and of especial necessity where food is almost exclusively vegetable, a tax of nearly twelve hundred per cent, is imposed, so that its various industrial uses are prohib- ited, and large bodies of the people cannot get enough to keep either themselves or their cattle in health. Below the English officials are a horde of native employees who oppress and extort. The effect of English law, with its rigid rules, and, to the native, mysterious proceedings, has been but to put a potent instrument of plunder into the hands of the native money lenders, from whom the peasants are compelled to borrow on the most extrava- gant terms to meet their taxes, and to whom they are easily induced to give obligations of which they know not the meaning. "We do not care for the people of Chap.IL INFERENCES FROM FACTS. 119 India/' writes Florence Nightingale, with what seems like a sob. "The saddest sight to be seen in the East — nay, probably in the world — is the peasant of our East- ern Empire." And she goes on to show the causes of the terrible famines, in taxation which takes from the cultivators the very means of cultivation, and the actual slavery to which the ryots are reduced as "the conse- quences of our own laws;" producing in "the most fer- tile country in the world, a grinding, chronic semi-star- vation in many places where what is called famine does not exist." * "The famines which have been devastating India," says H. M. Hyndman,f "are in the main finan- cial famines. Men and women cannot get food, because they cannot save the money to buy it. Yet we are driven, so we say, to tax these people more." And he shows how, even from famine stricken districts, food is exported in payment of taxes, and how the whole of India is subjected to a steady and exhausting drain, which, combined with the enormous expenses of govern- ment, is making the population year by year poorer. The exports of India consist almost exclusively of agri- cultural products. For at least one-third of these, as Mr. Hyndman shows, no return whatever is received; * Miss Nightingale (The People of India, in " Nineteenth Century" for August, 1878) gives instances, which she says represent millions of cases, of the state of peonage to which the cultivators of Southern India have been reduced through the facilities afforded by the Civil Courts to the frauds and oppressions of money lenders and minor native officials. ' ' Our Civil Courts are regarded as institutions for enabling the rich to grind the faces of the poor, and many are fain to seek a refuge from their jurisdiction within native territory, " says Sir David Wedderburn, in an article on Protected Princes in India, in a previous (July) number of the same magazine, in which he also gives a native State, where taxation is comparatively light, as an instance of the most prosperous population of India. f See articles in "Nineteenth Century "for October, 1878, and March, 1879. 120 POPULATION AND SUBSISTENCE. Book a they represent tribute — remittances made by English- men in India, or expenses of the English branch of the Indian government.* And for the rest, the return is for the most part government stores, or articles of comfort and luxury used by the English masters of India. He shoAVS that the expenses of government have been enor- mously increased under Imperial rule; that the relentless taxation of a population so miserably poor that the masses are not more than half fed, is robbing them of their scanty means for cultivating the soil; that the number of bullocks (the Indian draft animal) is decreas- ing, and the scanty implements of culture being given up to money lenders, from whom "we, a business people, are forcing the cultivators to borrow at 12,24, 60 per cent, f to build and pay the interest on the cost of vast public works, which have never paid nearly five per cent." Says Mr. Hyndman: "The truth is that Indian society as a whole has been frightfully impoverished under our rule, and that the process is now going on at an exceed- ingly rapid rate" — a statement which cannot be doubted, in view of the facts presented not only by such writers as I have referred to, but by Indian oflBcials themselves. The very efforts made by the government to alleviate famines do, by the increased taxation imposed, but in- tensify and extend their real cause. Although in the recent famine in Southern India six millions of people, it is estimated, perished of actual starvation, and the great mass of those who survived were actually stripped, *Prof. Fawcett, in a recent article on the Proposed Loans to India, calls attentions to such items as £1,200 for outfit and passage of a member of the Governor General's Council; £2,450 for outfit and passage of Bishops of Calcutta and Bombay. f Florence Nightingale says 100 per cent, is common, and even then the cultivator is robbed in ways which she illustrates. It Ls hardly necessary to say that these rates, like those of the pawnbroker, are not Interest in the economic sense of the temou Chap. 11. INFERENCES FROM FACTS. 121 yet the taxes were not remitted and the salt tax, already prohibitory to the great bulk of these poverty stricken people, was increased forty percent., Just as after the ter- rible Bengal famine in 1770 the revenue was actually driven up, by raising assessments upon the survivors and rigorously enforcing collection. In India now, as in India in past times, it is only the most superficial view that can attribute want and starva- tion to pressure of population upon the ability of the land to produce subsistence. Could the cultivators retain their little capital — could they be released from the drain which, even in non-famine years, reduces great masses of them to a scale of living not merely below what is deemed necessary for the sepoys, but what Eng- lish humanity gives to the prisoners in the jails — reviv- ing industry, assuming more productive forms, would undoubtedly sufiBce to keep a much greater population. There are still in India great areas uncultivated, vast mineral resources untouched, and it is certain that the population of India does not reach, as within historical times it never has reached, the real limit of the soil to furnish subsistence, or even the point where this power begins to decline with the increasing drafts made upon it. The real cause of want in India has been, and yet is, the rapacity of man, not the niggardliness of nature. What is true of India is true of China. Densely popu- lated as China is in many parts, that the extreme poverty of the lower classes is to be attributed to causes similar to those which have operated in India, and not to too great population, is shown by many facts. Insecurity prevails, production goes on under the greatest disad- vantages, and exchange is closely fettered. Where the government is a succession of squeezings, and security for capital of any sort must be purchased of a mandarin; where men's shoulders are the great reliance for inland transportation; where the junk is obliged to be cop- 123 POPULATION AND SUBSISTENCE. Book IL structed so as to unfit it for a sea-boat; where piracy is a regular trade, and robbers often march in regiments, poverty would prevail and the failure of a crop result in famine, no matter how sparse tlie population.* That China is capable of supporting a much greater population is shown not only by the great extent of uncultivated land to which all travelers testify, but by the immense un- worked mineral deposits which are there known to exist. China, for instance, is said to contain the largest and finest deposit of coal yet anywhere discovered. How much the working of these coal beds would add to the ability to support a greater population, may readily be imagined. Coal is not food, it is true; but its production is equivalent to the production of food. For, not only may coal be exchanged for food, as is done in all mining districts, but the force evolved by its consumption may be used in the production of food, or may set labor fre« for the production of food. Neither in India nor China, therefore, can poverty and starvation be charged to the pressure of population against subsistence. It is not dense popuhition, but the causes which prevent social organization from taking its natural development and labor from securing its full return, that keep millions just on the verge of starva- tion, and every now and again force millions beyond it. That the Hindoo laborer thinks himself fortunate to get a handful of rice, that the Chinese eat rats and puppies, is no more due to the pressure of population than it is due to the pressure of population that the Digger Indians live on grasshoppers, or the aboriginal inhabitants of Australia eat the worms found in rotten wood. Let me be understood. I do not mean merely to say that India or China could, with a more highly developed * The seat of recent famine in China was not the most tLicklj/ settled districts. ^^hap.n. INFERENCES FROM FACTS. 123 civilization, maintain a greater population, for to this any Malthusian would agree. The Malthusian doctrine does not deny that an advance in the productive arts would permit a greater population to find subsistence. But the Malthusian theory affirms — and this is its essence — that, whatever be the capacity for production, the natural tendency of population is to come up with it, and, in the endeavor to press beyond it, to produce, to use the phrase of Malthus, that degree of vice and misery which is necessary to prevent further increase; so that as productive power is increased, population will corre- spondingly increase, and in a little time produce the same results as before. What I say is this: that nowhere is there any instance which will support this theory; that nowhere can want be properly attributed to the pressure of population against the power to procure sub- sistence in the then existing degree of human knowledge; that everywhere the vice and misery attributed to over- population can be traced to the warfare, tyranny, and oppression which prevent knowledge from being utilized and deny the security essential to production. The rea- son why the natural increase of population does not pro- duce want, we shall come to hereafter. The fact that it has not yet anywhere done so, is what we are now con- cerned with. This fact is obvious with regard to India and China. It will be obvious, too, wherever we trace to their causes the results which on superficial view are often taken to proceed from over-population. Ireland, of all European countries, furnishes the great stock example of over-population. The extreme poverty of the peasantry and the low rate of wages there prevail- ing, the Irish famine, and Irish emigration, are con- stantly referred to as a demonstration of the Malthusian theory worked out under the eyes of the civilized world. I doubt if a more striking instance can be cited of the power of a preaccepted theory to blind men as to the 124 POPULATION AND SUBSISTENCE. Book il true relations of facts. The truth is, and it lies on the surface, that Ireland has never yet had a population which the natural powers of the country, in the existing state of the productive arts, could not have maintained in ample comfort. At the period of her greatest popu- lation (1840-45) Ireland contained something over eight millions of people. But a very large proportion of them managed merely to exist — lodging in miserable cabins, clothed with miserable rags, and with but potatoes for their staple food. When the potato blight came, they died by thousands. But was it the inability of the soil to support so large a population that compelled so many to live in this miserable way, and exposed them to starva- tion on the failure of a single root crop? On the con- trary, it was the same remorseless rapacity that robbed the Indian ryot of the fruits of his toil and left him to starve where nature offered plenty. A merciless banditti of tax-gatherers did not march through the land plunder- ing and torturing, but the laborer was just as effectually stripped by as merciless a horde of landlords, among whom the soil had been divided as their absolute posses- sion, regardless of any rights of those who lived upon it. Consider the conditions of production under which this eight millions managed to live until the potato blight came. It was a condition to which the words used by Mr. Tennant in reference to India may as appro- priately be applied — "the great spur to industry, that of security, was taken away." Cultivation was for the most part carried on by tenants at will, who, even if the rack-rents which they were forced to pay had permitted them, did not dare to make improvements which would have been but the signal for an increase of rent. Labor was thus applied in the most inefficient and wasteful manner, and labor was dissipated in aimless idlenesg that, with any security for its fruits, would have been applied unremittingly. But even under these condi- Chap.Jl IKFERENCES FROM FACTS. 125 tions, it is a matter of fact that Ireland did more than support eight millions. For when her population was at its highest, Ireland was a food-exporting country. Even during the famine, grain and meat and butter and cheese were carted for exportation along roads lined with the starving and past trenches into which the dead were piled. For these exports of food, or at least for a great part of them, there was no return. So far as the people of Ireland were concerned, the food thus exported might as well have been burned up or thrown into the sea, or never produced. It went not as an exchange, but as a tribute — to pay the rent of absentee landlords; a levy wrung from producers by those who in no wise con- tributed to production. Had this food been left to those who raised it; had the cultivators of the soil been permitted to retain and use the capital their labor produced; had security stimulated industry and permitted the adoption of economical methods, there would have been enough to support in bounteous comfort the largest population Ireland ever had, and the potato blight might have come and gone without stinting a single human being of a full meal. For it was not the imprudence **of Irish peasants," as English economists coldly say, which induced them to make the potato the staple of their food. Irish emi- grants, when they can get other things, do not live upon the potato, and certainly in the United States the pru- dence of the Irish character, in endeavoring to lay by something for a rainy day, is remarkable. They lived on the potato, because rack-rents stripped everything else from them. The truth is, that the poverty and misery of Ireland have never been fairly attributable to over- population. McCuUoch, writing in 1838, says, in Note IV ta "Wealth of Nations:" 126 POPULATION AND SUBSISTENCE. Book IL "The wonderful density of population in Ireland is the immediata cause of the abject poverty and depressed condition of the great bulk of the people. It is not too much to say that there are at present more than double the persons in Ireland it is, with its exist- ing means of production, able either fully to employ or to maintain in a moderate state of comfort." As in 1841 the population of Ireland was given as 8,175,124, we may set it down in 1838 as about eight millions. Thus, to change MeCulloch's negative into an affirmative, Ireland would, according to the over-popu- lation theory, have been able to employ fully and main- tain in a moderate state of comfort something less than four million persons. Now, in the early part of the pre- ceding century, when Dean Swift wrote his "Modest Proposal," the population of Ireland was about two mil- lions. As neither the means nor the arts of production had perceptibly advanced in Ireland during the interval, then — if the abject poverty and depressed condition of the Irish people in 1838 were attributable to over-popula- tion — there should, upon MeCulloch's own admission, have been in Ireland in 1727 more than full employment, and much more than a moderate state of comfort, for the whole two millions. Yet, instead of this being the case, the abject poverty and depressed condition of the Irish people in 1727 were such, that, with burning, blis- tering irony. Dean Swift proposed to relieve surplus population by cultivating a taste for roasted babies, and bringing yearly to the shambles, as dainty food for the rich, 100,000 Irish infants! It is difficult for one who has been looking over the literature of Irish misery, as while writing this chapter I have been doin^-», to speak in decorous terms of the com- placent attribution of Irish want and suffering to over- population which are to be found even in the works of such high-minded men as Mill and Buckle. I know of nothing better calculated to make the blood boil than Chap.n. INFERENCES FROM FACTS. 127 the cold accounts of the grasping, grinding tyranny to which the Irish people have been subjected, and to which, and not to any inability of the land to support its population, Irish pauperism and Irish famine are to be attributed; and were it not for the enervating effect which the history of the world proves to be everywhere the result of abject poverty, it would be difficult to resist something like a feeling of contempt for a race who, stung by such wrongs, have only occasionally murdered a landlord! Whether over-population ever did cause pauperism and starvation, may be an open question; but the pauperism and starvation of Ireland can no more be attributed to this cause than can the slave trade be attributed to the over-population of Africa, or the destruction of Jerusa- lem to the inability of subsistence to keep pace with reproduction. Had Ireland been by nature a grove of bananas and bread-fruit, had her coasts been lined by the guano-deposits of the Chinchas, and the sun of lower latitudes warmed into more abundant life her moist soil, the social conditions that have prevailed there would still have brought forth poverty and starvation. How could there fail to be pauperism and famine in a country where rack-rents wrested from the cultivator of the soil all the produce of his labor except just enough to main- tain life in good seasons; where tenure at will forbade improvements and removed incentive to any but the most wasteful and poverty-stricken culture; where the tenant dared not accumulate capital, even if he could get it, for fear the landlord would demand it in the rent; where in fact he was an abject slave, who, at the nod of a human being like himself, might at any time be driven from his miserable mud cabin, a houseless, homeless, starving wanderer, forbidden even to pluck the spontaneous fruits of the earth, or to trap a wild hare to satisfy his hunger? No matter how sparse the population, no matter what 128 POPULATION AND SUBSISTENCE. Book IL the natural resources, are not pauperism and starvation necessary consequences in a land where the producers of wealth are compelled to work under conditions which deprive them of hope, of self-respect, of energy, of thrift; where absentee landlords drain away without return at least a fourth of the net produce of the soil, and when, besides them, a starving industry must support resident landlords, with their horses and hounds, agents, jobbers, middlemen and bailiffs, an alien state church to insult religious prejudices, and an army of policemen and sol- diers to overawe and hunt down any opposition to the iniquitous system? Is it not impiety far worse than atheism to charge upon natural laws misery so caused? What is true in these three cases will be found upon examination true of all cases. So far as our knowl- edge of facts goes, we may safely deny that the in- crease of population has ever yet pressed upon subsist- ence in such a way as to produce vice and misery; that increase of numbers has ever yet decreased the relative production of food. The famines of India, China, and Ireland can no more be credited to over-population than the famines of sparsely populated Brazil. The vice and misery that come of want can no more be attributed to the niggardliness of Nature than can the six mil- lions slain by the sword of Genghis Khan, Tamerlane's pyramid of skulls, or the extermination of the ancient Britons or of the aboriginal inhabitants of the West Indies. CHAPTER III. INFEREKCES FROM ANALOGY, If we turn from an examination of the facts brought forward in illustration of the Malthusian theory to con- sider the analogies by which it is supported, we shall find the same inconclusiveness. The strength of the reproductive force in the animal and vegetable kingdoms — such facts as that a single pair of salmon might, if preserved from their natural enemies for a few years, fill the ocean; that a pair of rabbits would, under the same circumstances, soon overrun a continent; that many plants scatter their seeds by the hundred fold, and some insects deposit thousands of eggs; and that everywhere through these kingdoms each species constantly tends to press, and when not limited by the number of its enemies, evidently does press, against the limits of subsistence — is constantly cited, from Malthus down to the text-books of the present day, as showing that population likewise tends to press against subsistence, and, when unrestrained by other means, its natural increase must necessarily result in such low wages and want, or, if that will not suffice, and the in- crease still goes on, in such actual starvation, as will keep it within the limits of subsistence. But is this analogy valid? It is from the vegetable and animal kingdoms that man's food is drawn, and hence the greater strength of the reproductive force in the vegetable and animal kingdoms than in man simply proves the power of subsistence to increase faster than 130 POPULATION AND SUBSISTENCE. Book 11 population. Does not the fact that all of the things which furnish niiin's subsistence have the power to multi- ply many fold — some of them many thousand fold, and some of them many million or even billion fold — while he is only doubling his numbers, show that, let human beings increase to the full extent of their reproductive power, the increase of population can never exceed 8ub« sistence? This is clear when it is remembered that though in the vegetable and animal kingdoms each species, by virtue of its reproductive power, naturally and necessarily presses against the conditions which limit its further increase, yet these conditions are nowhere fixed and final. No species reaches the ultimate limit of soil, water, air, and sunshine; but the actual limit of each is in the existence of other species, its rivals, its enemies, or its food. Thus the conditions which limit the existence of such of these species as afEord him sub- sistence man can extend (in some cases his mere appear- ance will extend them), and thus the reproductive forces of the species which supply his wants, instead of wasting themselves against their former limit, start forward in his service at a pace which his powers of increase can- not rival. If he but shoot hawks, food-birds will in- crease, if he but trap foxes the wild rabbits will multiply; the honey bee moves with the pioneer, and on the or- ganic matter with which man's presence fills the rivers, fishes feed. Even if any consideration of final causes be excluded; even if it be not permitted to suggest that the high and constant reproductive force in vegetables and animals has been ordered to enable them to subserve the uses of man, and that therefore the pressure of the lower forms of life against subsistence does not tend to show that it must likewise be so with man, "the roof and crown of things;" yet there still remains a distinction between man and all other forms of life that destroys the analogy. Chap.m. INFERENCES FROM ANALOGY. 131 Of all living things, man is the only one who can give play to the reproductive forces, more powerful than his own, which supply him with food. Beast, insect, bird, and fish take only what they find. Their increase is at the expense of their food, and when they have reached the existing limits of food, their food must increase be- fore they can increase. But unlike that of any other living thing, the increase of man involves the increase of his food. If bears instead of men had been shipped from Europe to the North American continent, there would now be no more bears than in the time of Colum- bus, and possibly fewer, for bear food would not have been increased nor the conditions of bear life extended, by the bear immigration, but probably the reverse. But within the limits of the United States alone, there are now forty-five millions of men where then there were only a few hundred thousand, and yet there is now within that territory much more food per capita for the forty- five millions than there was then for the few hundred thousand. It is not the increase of food that has caused this increase of men; but the increase of men that has brought about the increase of food. There is more food, simply because there are more men. Here is a difference between the animal and the man. Both the jay-hawk and the man eat chickens, but the more jay-hawks the fewer chickens, while the more men the more chickens. Both the seal and the man eat salmon, but when a seal takes a salmon there is a salmon the less, and were seals to increase past a certain point salmon must diminish; while by placing the spawn of the salmon under favorable conditions man can so increase the namber of salmon as more than to make up for all he may take, and thus, no matter how much men may in- crease, their increase need never outrun the supply of salmon. In short, while all through the vegetable and animal 132 POPULATION AND SUBSISTENCE. Book a kingdoms the limit of subsistence is independent of the thing subsisted, with man the limit of subsistence is, within the final limits of earth, air, water, and sunshine, dependent upon man himself. And this being the case, the analogy which it is sought to draw between the lower forms of life and man manifestly fails. "While vegetables and animals do press against the limits of subsistence, man cannot press against the limits of his subsistence until the limits of the globe are reached. Observe, this is not merely true of the whole, but of all the parts. As we cannot reduce the level of the smallest bay or harbor without reducing the level not merely of the ocean with which it communicates, but of all the seas and oceans of the world, so the limit of subsistence in any particular place is not the physical limit of that place, but the physical limit of the globe. Fifty square miles of soil will in the present state of the productive arts yield sub- sistence for only some thousands of people, but on the fifty square miles which comprise the city of London some three and a half millions of people are maintained, and subsistence increases as population increases. So far as the limit of subsistence is concerned, London may grow to a population of a hundred millions, or five hundred millions, or a thousand millions, for she draws for sub- sistence upon the whole globe, and the limit which sub- sistence sets to her growth in population is the limit of the globe to furnish food for its inhabitants. But here will arise another idea from which the Mal- thusian theory derives great support — that of the dimin- ishing productiveness of land. As conclusively proving the law of diminishing productiveness it is said in the current treatises that were it not true that beyond a cer- tain point land yields less and less to additional applica- tions of labor and capital, increasing population would not cause any extension of cultivation, but that all the increased supplies needed could and would be raised Chap.m. INFERENCES FROM ANALOGY. 133 without taking into cultivation any fresh ground. As- sent to this seems to involve assent to the doctrine that the difficulty of obtaining subsistence must increase with increasing population. But I think the necessity is only in seeming. If tho proposition be analyzed it will be seen to belong to a class that depend for validity upon an implied or sug- gested qualification — a truth relatively, which taken ab- solutely becomes a non-truth. For that man cannot exhaust or lessen the powers of nature follows from the indestructibility of matter and the persistence of force. Production and consumption are only relative terms. Speaking absolutely, man neither produces nor con- sumes. The whole human race, were they to labor to infinity, could not make this rolling sphere one atom heavier or one atom lighter, could not add to or diminish by one iota the sum of the forces whose everlasting cir- cling produces all motion and sustains all life. As the water that we take from the ocean must again return to the ocean, so the food we take from the reservoirs of nature is, from the moment we take it, on its way back to those reservoirs. What we draw from a limited ex- tent of land may temporarily reduce the productiveness of that land, because the return may be to other land, or may be divided between that land and other land, or, perhaps, all land; but this possibility lessens with in- creasing area, and ceases when the whole globe is con- sidered. That the earth could maintain a thousand bil- lions of people as easily as a thousand millions is a neces- sary deduction from the manifest truths that, at least so far as our agency is concerned, matter is eternal and force must forever continue to act. Life does not use up the forces that maintain life. We come into the material universe bringing nothing; we take nothing away when we depart. The human being, physically considered, is but a transient form of matter, a changing 184 POPULATION AND SUBSISTENCE. Book 11 mode of motion. The matter remains and the force persists. Nothing is lessened, nothing is weakened. And from this it follows that the limit to the population of the globe can be only the limit of space. Now this limitation of space — this danger that the human race may increase beyond the possibility of finding elbow room — is so far off as to have for us no more prac- tical interest than the recurrence of the glacial period or the final extinguishment of the sun. Yet remote and shadowy as it is, it is this possibility which gives to the Malthusian theory its apparently self-evident character. But if we follow it, even this shadow will disappear. It, also, springs from a false analogy. That vegetable and animal life tend to press against the limits of space does not prove the same tendency in human life. Granted that man is only a more highly developed animal; that the ring-tailed monkey is a distant relative who has gradually developed acrobatic tendencies, and the hump-backed whale a far-otf connection who in early life took to the sea — granted that back of these he is kin to the vegetable, and is still subject to the same laws as plants, fishes, birds, and beasts. Yet there is still this difference between man and all other animals — he is the only animal whose desires increase as they are fed; the only animal that is never satisfied. The wants of every other living thing are uniform and fixed. The ox of to- day aspires to no more than did the ox when man first yoked him. The sea gull of the English Channel, who poises himself above the swift steamer, wants no better food or lodging than the gulls who circled round as the keels of Csesar's galleys first grated on a British beach. Of all that nature offers them, be it ever so abundant, all living things save man can take, and care for, only enough to supply wants which are definite and fixed. The only use they can make of additional supplies oi additional opportunities is to multiply. dhap.ni. INFERENCES FROM ANALOGY. 135 But not so with man. No sooner are his animal wants satisfied than new wants arise. Food he wants first, as does the beast; shelter next, as does the beast; and these given, his reproductive instincts assert their sway, as do those of the beast. But here man and beast part com- pany. The beast never goes further; the man has but set his feet on the first step of an infinite progression — a progression upon which the beast never enters; a pro- gression away from and above the beast. The demand for quantity once satisfied, he seeks quality. The very desires that he has in common with the beast become extended, refined, exalted. It is not merely hunger, but taste, that seeks gratification in food; in clothes, he seeks not merely comfort, but adornment; the rude shelter becomes a house; the undiscriminating sexual attraction begins to transmute itself into subtile in- fluences, and the hard and common stock of animal life to blossom and to bloom into shapes of delicate beauty. As power to gratify his wants increases, so does aspira- tion grow. Held down to lower levels of desire, Lucullus will sup with Lucullus; twelve boars turn on spits that Antony's mouthful of meat maybe done to a turn; every kingdom of Nature be ransacked to add to Cleopatra's charms, and marble colonnades and hanging gardens and pyramids that rival the hills arise. Passing into higher forms of desire, that which slumbered in the plant and fit- fully stirred in the beast, awakes in the man. The eyes of the mind are opened, and he longs to know. He braves the scorching heat of the desert and the icy blasts of the polar sea, but not for food; he watches all night, but it is to trace the circling of the eternal stars. He adds toil to toil, to gratify a hunger no animal has felt; to assuage a thirst no beast can know. T- Out upon nature, in upon himself, back through the mists that shroud the past, forward into the darkness that overhangs the future, turns the restless desire that 136 POPULATION AND SUBSISTENCE. Book H arises when the animal wants slumber in satisfaction. Beneath things, he seeks the law; ho would know how the globe was forged and the stars were hung, and trace to their origins the springs of life. And, then, as the man develops his nobler nature, there arises the desire higher yet — the passion of passions, the hope of hopes — the desire that he, even he, may somehow aid in making life better and brighter, in destroying want and sin, sor- row and shame. He masters and curbs the animal; he turns his back upon the feast and renounces the place of power; he leaves it to others to accumulate wealth, to gratify pleasant tastes, to bask themselves in the warm sunshine of the brief day. He works for those he never saw and never can see; for a fame, or maybe but for a scant justice, that can only come long after the clods have rattled upon his coffin lid. He toils in the advance, where it is cold, and there is little cheer from men, and the stones are sharp and the brambles thick. Amid the scoffs of the present and the sneers that stab like knives, he builds for the future; he cuts the trail that progress- ive humanity may hereafter broaden into a highroad. Into higher, grander spheres desire mounts and beckons, and a star that rises in the east leads him on. Lo! the pulses of the man throb with the yearnings of the god^ he would aid in the process of the suns! Is not the gulf too wide for the analogy to span? Give more food, open fuller conditions of life, and the vege- table or animal can but multiply; the man will develop. In the one the expansive force can but extend existence in new numbers; in the other, it will inevitably tend to extend existence in higher forms and wider powers. Man is an animal; but he is an animal plus something else. He is the mythic earth-tree, whose roots are in the ground, but whose topmost branches may blossom in the heavens! Whichever way it be turned, the reasoning by which Chap. in. INFERENCES FROM ANALOGY. 137 this theory of the constant tendency of population to press against the limits of subsistence is supported shows an unwarranted assumption, an undistributed middle, as the logicians would say. Facts do not warrant it, anal- ogy does not countenance it. It is a pure chimera of the imagination, such as those that for a long time pre- vented men from recognizing the rotundity and motion of the earth. It is just such a theory as that under- neath us everything not fastened to the earth must fall off; as that a ball dropped from the mast of a ship in motion must fall behind the mast; as that a live fish placed in a vessel full of water will displace no water. It is as unfounded, if not as grotesque, as an assumption we can imagine Adam might have made had he been of an arithmetical turn of mind and figured on the growth of his first baby from the rate of its early months. From the fact that at birth it weighed ten pounds and in eight months thereafter twenty pounds, he might, with the arithmetical knowledge which some sages have supposed him to possess, have ciphered out a result quite as strik- ing as that of Mr. Malthus; namely, that by the time it got to be ten years old it would be as heavy as an ox, at twelve as heavy as an elephant, and at thirty would weigh no less than 175,716,339,548 tons. The fact is, there is no more reason for us to trouble ourselves about the pressure of population upon subsist- ence than there was for Adam to worry himself about the rapid growth of his baby. So far as an inference is really warranted by facts and suggested by analogy, it is that the law of population includes such beautiful adap- tations as investigation has already shown in other natural laws, and that we are no more warranted in as- suming that the instinct of reproduction, in the natural development of society, tends to produce misery and vice, than we should be in assuming that the force of gravita- tion must hurl the moon to the earth and the earth to the 138 POPULATION AND SUBSISTENCE. Book IL tvTo sun, or tlian in assuming from the contraction of wal with reductions of temperature down to thirty-t\ degrees that rivers and lakes must freeze to the bottom with every frost, and the temperate regions of earth be thus rendered uninhabitable by even moderate winters. That, besides the positive and prudential checks of Mai* thus, there is a third check which comes into play with the elevation of the standard of comfort and the develop- ment of the intellect, is pointed to by many well-known facts. The proportion of births is notoriously greater in new settlements, where the struggle with nature leaves little opportunity for intellectual life, and among the poverty-bound classes of older countries, who in the midst of wealth are deprived of all its advantages and re- duced to all but an animal existence, than it is among the classes to whom the increase of wealth has brought independence, leisure, comfort, and a fuller and more varied life. This fact, long ago recognized in the homely adage, "a rich man for luck, and a poor man for children," was noted by Adam Smith, who says it is not uncommon to find a poor half-starved Highland woman has been the mother of twenty-three or twenty-four chil- dren, and is everywhere so clearly perceptible that it is only necessary to allude to it. If the real law of population is thus indicated, as I think it must be, then the tendency to increase, instead of being always uniform, is strong where a greater popu lation would give increased comfort, and where the per- petuity of the race is threatened by the mortality in* dnced by adverse conditions; but weakens just as the higher development of the individual becomes possible and the perpetuity of the race is assured. In other words, the law of population accords with and is subordi- nate to the law of intellectual development, and any danger tJiat human beings may be brought into a world where they cannot be provided for arises not from the Chap.m. INFEKENCES FROM ANALOGY. 139 ordinances of nature, but from social mal-adjustmenta that in the midst of wealth condemn men to want. The truth of this will, I think, be conclusively demonstrated when, after having cleared the ground, we trace out the true laws of social growth. But it would disturb the natural order of the argument to anticipate them now. If I have succeeded in maintaining a negative — in show- ing that the Malthusian ttiCory is not proved by the rea- soning by which it is supported — it is enough for the present. In the next chapter I propose to take th( affirmative and show that it is disproved by facts. CHAPTER IV. DISPROOF OF THE MALTHUSIAN THEOBT. So deeply rooted and thoroughly entwined with the reasonings of the current political economy is this doc- trine that increase of population tends to reduce wages and produce poverty, so completely does it harmonize with many popular notions, and so liable is it to recur in different shapes, that I have thought it necessary to meet and show in some detail the insufficiency of the argu- ments by which it is supported, before bringing it to the test of facts; for the general acceptance of this theory adds a most striking instance to the many which the his- tory of thought affords of how easily men ignore factft when blindfolded by a preaccepted theory. To the supreme and final test of facts we can easily bring this theory. Manifestly the question whether in- crease of population necessarily tends to reduce wages and cause want, is simply the question whether it tends to reduce the amount of wealth that can be produced by a given amount of labor. This is what the current doctrine holds. The accepted theory is, that the more that is required from nature the less generously does she respond, so that doubling the application of labor will not double the product; and hence, increase of population must tend to reduce wages and deepen poverty, or, in the phrase of Malthus, must result in vice and misery. To quote the language of John Stuart Mill: " A greater number of people cannot, in any given state of civfll- Chap. IV. DISPROOF OF THE MALTHUSIAN THEORY. 141 zation, be collectively so well provided for as a smaller. The niggardliness of nature, not the injustice of society, is the cause of the penalty attached to over-population. An unjust distribution of wealth does not aggravate the evil, but, at most, causes it be some- what earlier felt. It is in vain to say that all mouths which the in- crease of mankind calls into existence bring with them hands. The new mouths require as much food as the old ones, and the hands do not produce as much. If all instruments of production were held in joint property by the whole people, and the produce divided with perfect equality among them, and if in a society thus constituted, industry were as energetic and the produce as ample as at the present time, there would be enough to make all the existing population ex- tremely comfortable; but when that population had doubled itself, as, with existing habits of the people, under such an encouragement, it undoubtedly would in little more than twenty years, what would then be their condition? Unless the arts of production were in the same time improved in an almost unexampled degree, the inferior soils which must be resorted to, and the more laborious and scantily remunerative cultivation which must be employed on the superior soils, to procure food for so much larger a population, would, by an insuperable necessity, render every individual in the community poorer than before. If the population continued to increase at the same rate, a time would soon arrive when no one would have more than mere necessaries, and, soon after, a time when no one would have a sufficiency of those, and the further increase of population would be arrested by death." * All this I deny. I assert that the very reverse of these propositions is true. I assert that in any given state of civilization a greater number of people can collectively be better provided for than a smaller. I assert that the injustice of society, not the niggardliness of nature, is the cause of the want and misery which the current theory attributes to over-population. I assert that the new mouths which an increasing population calls into existence require no more food than the old ones, while the hands they bring with them can in the natural order of things produce more. I assert that, other things being equal, the greater the population, the greater the com- * Principles of Political Economy, Book I., Chap. XIII., Sec. 2. 142 POPULATION AND SUBSISTENCE. Book 71 fort which an equitable distribution of wealth would give to each individual. I assert that in a state of equality the natural increase of population would con- stantly tend to make every individual richer instead of poorer. I thus distinctly join issue, and submit the question to the test of facts. But observe (for even at the risk of repetition I wish to warn the reader against a confusion of thought that is observable even in writers of great reputation), that the question of fact into which this issue resolves itself is not in what stage of population is most subsistence pro- duced? but in what stage of population is there exhibited the greatest power of producing wealth? For the power of producing wealth in any form is the power of produc. ing subsistence — and the consumption of wealth in any form, or of wealth-producing power, is equivalent to the consumption of subsistence. I have, for instance, some money in my pocket. With it I may buy either food or cigars or jewelry or theater tickets, and just as I expend my money do I determine labor to the production of food, of cigars, of jewelry, or of theatrical representa- tions. A set of diamonds has a value equal to so many barrels of flour — that is to say, it takes on the average as much labor to produce the diamonds as it would to pro- duce so much flour. If I load my wife with diamonds, it is as much an exertion of subsistence-producing power as though I had devoted so much food to purposes of ostentation. If I keep a footman, I take a possible plow- man from the plow. The breeding and maintenance of a race-horse require care and labor which would suffice for the breeding and maintenance of many work-horses. The destruction of wealth involved in a general illumina- tion or the firing of a salute is equivalent to the burning up of so much food; the keeping of a regiment of sol- diers, or of a war-ship and her crew, is the diversion to Chap. IV. DISPROOF OF THE MALTHUSIAN THEORY. 143 unproductive uses of labor that could produce subsist- ence for many thousands of people. Thus the power of any population to produce the necessaries of life is not to be measured by the necessaries of life actually pro- duced, but by the expenditure of power in all modes. There is no necessity for abstract reasoning. The question is one of simple fact. Does the relative power of producing wealth decrease with the increase of popu- lation? The facts are so patent that it is only necessary to call attention to them. We have, in modern times, seen many communities advance in population. Have they not at the same time advanced even more rapidly in wealth? We see many communities still increasing in population. Are they not also increasing their wealth still faster? Is there any doubt that while England has been increasing her population at the rate of two per cent, per annum, her wealth has been growing in still greater proportion? Is it not true that while the popu lation of the United States has been doubling every twenty-nine* years her wealth has been doubling at much shorter intervals? Is it not true that under sim- ilar conditions — that is to say, among communities of similar people in a similar stage of civilization — the most densely populated community is also the richest? Are not the more densely populated Eastern States richer in proportion to population than the more sparsely popu- lated Western or Southern States? Is not England, where population is even denser than in the Eastern States of the Union, also richer in proportion? Where will you find wealth devoted with the most lavishness to non-productive use — costly buildings, fine furniture, lux- urious equipages, statues, pictures, pleasure gardens and yachts? Is it not where population is densest rather * The rate up to 1860 was 35 per cens each decade 144 POPULATION AND SUBSISTENCE. Book a than where it is sparsest? Where will you find in largest proportion those whom the general production suflBcesto keep without productive labor on their part — men of in- come and of elegant leisure, thieves, policemen, menial servants, lawyers, men of letters, and the like? Is it not where population is dense rather than where it is sparse? Whence is it that capital overflows for remunerative in- vestment? Is it not from densely populated countries to sparsely populated countries? These things conclusively show that wealth is greatest where population is densest; that the production of wealth to a given amount of labor increases as population increases. These things are ap- parent wherever we turn our eyes. On the same level o£ civilization, the same stage of the productive arts, gov- ernment, etc., the most populous countries are always the most wealthy. Let us take a particular case, and that a case which of all that can be cited seems at first blush best to support the theory we are considering — the case of a community where, while population has largely increased, wages have greatly decreased, and it is not a matter of dubious inference but of obvious fact that the generosity of nature has lessened. That community is California. When upon the discovery of gold the first wave of immi- gration poured into California it found a country in which nature was in the most generous mood. From the river banks and bars the glittering deposits of thou- sands of years could be taken by the most primitive appli- ances, in amounts which made an ounce ($16) per day only ordinary wages. The plains, covered with nutri- tious grasses, were alive with countless herds of horses and cattle, so plenty that any traveler was at liberty to shift his saddle to a fresh steed, or to kill a bullock if he needed a steak, leaving the hide, its only valuable part, for the owner. From the rich soil which came first under cultivation, the mere plowing and sowing brought Chap. IV. DISPKOOF OF THE MALTHUSIA]!^ THEORY. 145 crops that in older countries, if procured at all, can only be procured by the most thorough manuring and culti- vation. In early California, amid this profusion of nature, wages and interest were higher than anywhere else in the world. This virgin profusion of nature has been steadily giv- ing way before the greater and greater demands which an increasing population has made upon it. Poorer and poorer diggings have been worked, until now no dig- gings worth speaking of can be found, and gold mining requires much capital, large skill, and elaborate machin- ery, and involves great risks. ''Horses cost money,'* and cattle bred on the sage-brush plains of Nevada are brought by railroad across the mountains and killed in San Francisco shambles, while farmers are beginning to save their straw and look for manure, and land is in cul- tivation which will hardly yield a crop three years out of four without irrigation. At the same time wages and interest have steadily gone down. Many men are now glad to work for a week for less than they once demanded for the day, and money is loaned by the year for a rate which once would hardly have been thought extortionate by the month. Is the connection between the reduced productiveness of nature and the reduced rate of wages that of cause and effect? Is it true that wages are lower because labor yields less wealth? On the contrary! In- stead of the wealth-producing power of labor being less in California in 1879 than in 1849, I am convinced that it is greater. And, it seems to me, that no one who considers how enormously during these years the effici- ency of labor in California has been increased by roads, wharves, flumes, railroads, steamboats, telegraphs, and machinery of all kinds; by a closer connection with the rest of the world; and by the numberless economies re- sulting from a larger population, can doubt that the return which labor receives from nature in California is 146 POPULATION AND SUBSISTENCE. Book n on the whole much greater now than it was in the days of unexhausted placers and virgin soil — the increase in the power of the human factor having more than compen- sated for the decline in the power of the natural factor. That this conclusion is the correct one is proved by many 2acts which show that the consumption of wealth is now much greater, as compared with the number of laborers, than it was then. Instead of a population composed al- most exclusively of men in the prime of life, a large pro- portion of women and children are now supported, and other non-producers have increased in much greater ratio than the population; luxury has grown far more than wages have fallen; where the best houses were cloth and paper shanties, are now mansions whose magnificence rivals European palaces; there are liveried carriages on the streets of San Francisco and pleasure yachts on her bay; the class who can live sumptuously on their incomes has steadily grown; there are rich men beside whom the richest of the earlier years would seem little better than paupers — in short, there are on every hand the most striking and conclusive evidences that the production and consumption of wealth have increased with even greater rapidity than the increase of population, and that if any class obtains less it is solely because of the greater inequality of distribution. What is obvious in this particular instance is obvious where the survey is extended. The richest countries are not those where nature is most prolific; but those where labor is most efficient — not Mexico, but Massa- chusetts; not Brazil, but England. The countries where population is densest and presses hardest upon the capa- bilities of nature, are, other things being equal, the countries where the largest proportion of the produce can be devoted to luxury and the support of non-pro- ducers, the countries where capital overflows, the coun- tries that upon exigency, such as war, can stand the Chap. IV. DISPROOF OP THE MALTHUSIAN THEORY. 147 greatest drain. That the production of wealth must, in proportion to the labor employed, be greater in a densely populated country like England than in new countries where wages and interest are higher, is evident from the fact that, though a much smaller proportion of the popu- lation is engaged in productive labor, a much larger sur- plus is available for other purposes than that of supplying physical needs. In a new country the whole available force of the community is devoted to production — there is no well man who does not do productive work of some kind, no well woman exempt from household tasks. There are no paupers or beggars, no idle rich, no class whose labor is devoted to ministering to the convenience or caprice of the rich, no purely literary or scientific class, no criminal class who live by preying upon society, no largo class maintained to guard society against them. Yet with the whole force of the community thus devoted to production, no such consumption of wealth in propor- tion to the whole population takes place, or can be afforded, as goes on in the old country; for, though the condition of the lowest class is better, and there is no one who cannot get a living, there is no one who gets much more — few or none who can live in anything like what would be called luxury, or even comfort, in the older country. That is to say, that in the older country the consumption of wealth in proportion to population is greater, although the proportion of labor devoted to the production of wealth is less — or that fewer laborers pro- duce more wealth; for wealth must be produced before it can be consumed. It may, however, be said, that the superior wealth of older countries is due not to superior productive power, but to the accumulations of wealth which the new country has not yet had time to make. It will be well for a moment to consider this idea of accumulated wealth. The truth is, that wealth can be 148 POPULATION AND SUBSISTENCE. Book a accumulated but to a slight degree, and that communities really live, as the vast majority of individuals live, from hand to mouth. Wealth will not bear much accumula- tion; except in a few unimportant forms it will not keep. The matter of the universe, which, when worked up by labor into desirable forms, constitutes wealth, is con- stantly tending back to its original state. Some forma of wealth will last for a few hours, some for a few days, some for a few montlis, some for a few years; and there are very few forms of wealth that can be passed from one generation to another. Take wealth in some of its most useful and permanent forms — ships, houses, railways, machinery. Unless labor is constantly exerted in pre- serving and renewing them, they will almost immediately become useless. Stop labor in any community, and wealth would vanish almost as the jet of a fountain vanishes when the flow of water is shut off. Let labor again exert itself, and wealth will almost as immediately reappear. This has been long noticed where war or other calamity has swept away wealth, leaving population unimpaired. There is not less wealth in London to-day because of the great fire of 1666; nor yet is there less wealth in Chicago because of the great fire of 1870. On those fire-swept acres have arisen, under the hand of labor, more magnificent buildings, filled with greater stocks of goods; and the stranger who, ignorant of the history of the city, passes along those stately avenues would not dream that a few years ago all lay so black and bare. The same principle — that wealth is constantly re- created — is obvious in every new city. Given the same population and the same efficiency of labor, and the town of yesterday will possess and enjoy as much as the town founded by the Romans. No one who has seen Mel- bourne or San Francisco can doubt that if the population of England were transported to New Zealand, leaving all accumulated wealth behind. New Zealand would soon be Chap. IV. DISPROOF OF THE MALTHUSIAN THEORY, 149 as rich as England is now; or, conversely, that if the population of England were reduced to the sparseness of the present population of New Zealand, in spite of accu- mulated wealth, they would soon be as poor. Accumu- lated wealth seems to play just about such a part in rela- tion to the social organism as accumulated nutriment does to the physical organism. Some accumulated wealth is necessary, and to a certain extent it may be drawn upon in exigencies; but the wealth produced by past gen- erations can no more account for the consumption of the present than the dinners he ate last year can supply a man with present strength. But without these considerations, which I allude to more for their general than for their special bearing, it is evident that superior accumulations of wealth can ac- count for greater consumption of wealth only in cases where accumulated wealth is decreasing, and that wherever the volume of accumulated wealth is maintained, and even more obviously where it is increasing, a greater consump- tion of wealth must imply a greater production of wealth. Now, whether we compare different communi- ties with each other, or the same community at different times, it is obvious that the progressive state, which is marked by increase of population, is also marked by an increased consumption and an increased accumulation of wealth, not merely in the aggregate, but per capita. And hence, increase of population, so far as it has yet anywhere gone, does not mean a reduction, but an in- crease in the average production of wealth. And the reason of this is obvious. For, even if the increase of population does reduce the power of the natural factor of wealth, by compelling a resort to poorer soils, etc., it yet so vastly increases the power of the human factor as more than to compensate. Twenty men working together will, where nature is niggardly, produce more than twentv times the wealth that one may 160 POPULATION AND SUBSISTENCE. Book H can produce where nature is most bountiful. The denser the population the more minute becomes the subdivision of labor, the greater the economies of production and distribution, and, hence, the very reverse of the Malthu- sian doctrine is true; and, within the limits in which we have reason to suppose increase would still go on, in any given state of civilization a greater number of people can produce a larger proportionate amount of wealth, and more fully supply their wants, than can a smaller number. Look simply at the facts. Can anything be clearer than that the cause of the poverty which festers in the centers of civilization is not in the weakness of the pro- ductive forces? In countries where poverty is deepest, the forces of production are evidently strong enough, if fully employed, to provide for the lowest not merely comfort but luxury. The industrial paralysis, the com- mercial depression which curses the civilized world to-day, evidently springs from no lack of productive power. Whatever be the trouble, it is clearly not in the want of ability to produce wealth. It is this very fact — that want appears where produc tive power is greatest and the production of wealth is largest — that constitutes the enigma which perplexes the civilized world, and which we are trying to unravel. Evidently the Malthusian theory, which attributes want to the decrease of productive power, will not explain it. That theory is utterly inconsistent with all the facts. It is really a gratuitous attribution to the laws of God of results which, even from this examination, we may infer really spring from the mal-adjustments of men — an infer- ence which, as we proceed, will become a demonstration. For we have yet to tind what does produce poverty amid advancing wealth- BOOK III. THE LAWS OF DISTRIBUTION. CHAPTER I. — ' CHAPTER II. CHAPTER III. CHAPTER IV. CHAPTER V. CHAPTER VI. CHAPTER VII. CHAPTER VIII. — ' THE INQUIRY NARROWED TO THE LAWS OF DISTRIBUTION — NECESSARY RELA- TION OF THESE LAWS. •RENT AND THE LAW OF RENT. INTEREST AND THE CAUSE OF INTEREST. •OF SPURIOUS CAPITAL AND OF PROFITS OFTEN MISTAKEN FOR INTEREST. THE LAW OF INTEREST. WAGES AND THE LAW OP WAGES. CORRELATION AND CO-ORDINATION OP THESE LAWS. THE STATICS OF THE PROBLEM THUS EXPLAINED. The machines that are first invented to perform any particular movement are always the most complex, and succeeding artLits generally discover that with fewer wheels, with fewer principles of motion than had originally been employed, the same effects may be more easily produced. The first philosophical systems, in the same manner, are always the most complex, and a particular connecting chain, or principle, is generally thought necessary to unite every two seemingly disjointed appearances; but it often happens that one great connecting principle is afterward found to be sufficient to bind together all the discordant phenomena that occur in a whole species of things. — Adam Smith, Essay on the PrineipUt -uhich Lead and Direct Philosophical Inquiries, as IllusiraUd by iht Hittory