•i..# 
 
 .3*fc^" 
 
 ';>.^ 
 
 -.^ *' i 
 
 
 i 
 
 m,^:^ 
 
 Wr^, 
 
 (^.JtiikLi, 
 
 r^v 
 
 ■sii-i. 
 
 ^vi 
 
 Wi's- 
 
 <V^: 
 
 ..v.V/*- ;. :v 
 
 ■--■.-^ 

 
 [/3 
 
 ESSAYS 
 
 ON 
 
 PRODUCTION, AND ITS INCREASE 
 
 BY THE FREEDOM OF COMMERCE, 
 
 AND THE BEST DISTRIBUTION OF CAPITAL 
 AND LABOUR. 
 
 By ARTHUR D. HAYTER, M.A. 
 
 (late scholar of BRASENOSE COLtEGE, OXPOUD.) 
 
 LONDON : 
 PUBLISHED BY WILLIAM RIDGWAY, 169, PICCADILLY. W. 
 
 MDCCCLXIV. 
 
 Price Eight eenj^ence.
 
 LONDON : 
 
 PRINTED in- WALTER BRKTTELL, 336a, OXFORD STREET, 
 
 NEAR REGENT CIRCUS. 
 
 «
 
 INTRODUCTION. 
 
 In submitting the following essays to the test of 
 publication, I am actuated by no desire to claim for 
 them much merit on the score of originality. My 
 object has simply been to supply otherS, who like 
 myself are the younger students of Political Economy, 
 with the necessary basis established from the writings 
 of its most distinguished professors for advancing 
 further in the knowledge of economical laws. With 
 that view I have limited myself to the discussion of 
 the first branch only of our subject, or the Pro- 
 duction of Wealth; and have sought by examining 
 the processes of its creation, and fixing so far as 
 appears to me possible the application of scientific 
 terms, to render the path easier to those who are 
 entering upon the threshold of this study. To have 
 succeeded, however imperfectly, in doing so will be 
 more than an ample recompense for the time, aiid 
 labour I have willingly bestowed upon my task. 
 
 London, March 1804.

 
 ESSAY I. 
 
 THE PRODUCTION OF WEALTH. 
 
 The subject-matter with which the science of 
 Political Economy professes to deal, has been held by 
 the most popular writers to be susceptible of division 
 for purposes of philosophical enquiry into the three 
 parts, respectively denominated. Production, Distri- 
 bution, and Consumption. Of these three, the first 
 in order of operation naturally stands first also in order 
 of discussion, but more especially since a right under- 
 standing of its processes is essential to the full com- 
 prehension of those parts of the science which relate 
 to such as are consequent upon it. But before attempt- 
 ing to analyse the processes of Production itself, it is 
 absolutely necessary to frame in our own minds a 
 distinct idea of the essence of the things produced. 
 
 Political Economists have generally concurred in 
 adopting the term " Wealth," to signify the object of 
 their research, but they have varied in a remarkable 
 degree in their subsequent application of the term.* 
 "We may pass by as obsolete, and now almost forgotten, 
 the fallacies of that theory, known under the name of 
 
 * Vide " McCulloch'a Principles of Political Economy." Intro- 
 duction. 
 
 B
 
 o 
 
 the Mercantile System, which prevailed up to the 
 close of the seventeenth century, of which the fun- 
 damental doctrine was, that Wealth consists only in 
 the precious metals — a theory, which, embodied in 
 the national policy, tends in its direct operation to 
 the impoverishment of those who adopt it, because, 
 they who seek only to amass the precious metals, must 
 give real values in the produce of their industry and 
 soil, in exchange for that, which, in itself, has its 
 principal value as a means only of circulation, and 
 necessarily, therefore, becomes depreciated from the 
 moment that it overpasses the limit of the amount re- 
 quired for the fulfilment of its proper office. 
 
 To the Mercantile System succeeded in the earlier 
 part of the eighteenth century the theory of the French 
 Economists, of whom the leader was M. Quesnay, the 
 physician of Louis Quinze. M. Quesnay, and the 
 disciples of his school upheld the doctrine that since 
 the earth was the source from whence all things were 
 derived, agriculture must be regarded as the only 
 really productive form of industry. In manufacturing 
 and commercial operations, they considered the amount 
 ultimately produced to be equalised by the amount 
 exhausted in the process of Production, and that, con- 
 sequently, no surplus remained to form a new addition 
 to Wealth. The principal argument in support of this 
 theory -svas deduced by them from the fact, that in agri- 
 culture alone is there a certain surplus remaining, 
 after compensating the capitalists and labourers, which 
 is paid in the shape cf rent to the proprietors of those
 
 3 
 
 natural agents which co-operate with man in the work 
 of agricultural production. But it is obvious that the 
 agency of natural powers is required in every form of 
 Productive Industry, which in reality consists not in 
 any creation of new material, but rather in the trans- 
 formation into things useful of previously existing 
 matter, in which manufacturing industry plays a part 
 equal even to agricultural. It is, however, to be re- 
 membered to M. Quesnay's honour, that he was the 
 first to attempt a scientific enquiry into the nature of 
 '' Wealth," whilst the fallacy which principally led 
 him astray, never received its full refutation, until the 
 real nature of rent, as arising from the varying quality 
 of soils, was explained in the pages of Ricardo. 
 
 From the close, then, of the last century with the 
 publication of the celebrated work of Adam Smith, 
 Political Economy, as a scientific expositon of the 
 phenomena accompanying the Production and Dis- 
 tribution of Wealth, takes its earliest commencement. 
 But Adam Smith* himself in inaugurating the new 
 era of truth, displays an ambiguity of language in 
 relation to the term " Wealth," apparently indicating 
 the absence of a definite idea. So far as we can gather 
 his meaning from the general purport of the passages 
 in his writings, where the production of " Wealth'* 
 is referred to (for he nowhere strictly defines the 
 term), it would appear that the expression " annual 
 
 * Vide ' ' Introduction to the Wealth of Nations," noto hj 
 McCulloch.
 
 produce of . the land, and labour of the country," 
 best conveys the idea which Adam Smith formed of 
 ** Wealth.'* But hoNvever satisfactory that definition 
 may appear, yet apart from the consideration that 
 land does not exhaust the catalogue of natural agents 
 co-operating with man, in the work of Production, 
 a difficulty lies behind in determining what shall be 
 the sense attached to the term "productive labour." 
 No doubt to persons unacquainted with the obstacles 
 to the advancement of truth, arising from the am- 
 biguous use of terms in scientific treatises, and who 
 satisfy themselves with the popular conceptions, the 
 meaning of the term "labour" as applied to the pro- 
 duction of Wealth, seems sufficiently distinct. 
 
 But going a little further into the views advanced 
 by Adam Smith,* we find that he lays down a strict 
 line of demarcation between productive and unpro- 
 ductive labour, and that he enumerates under the 
 former head the labour of the agricultural, manufiic- 
 turing, and commercial classes, under the latter, that 
 of all employed in the various branches of the public 
 service, in the liberal professions, and of all others 
 who are occupied in ministering under any imma- 
 terial form to the enjoyments of the community. 
 Now, if the labourers in every department of Com- 
 merce, who cannot be considered as adding anything 
 to the bulk of material produce, however much they 
 
 * Wealth of Nations. Chap. III. Book II.
 
 may increase its value, are to be described as pro- 
 ductive, can it be considered correct to classify as 
 unproductive the members of every degree belonging 
 to the public service, or to other professions, whose 
 industry is not only essential to the accumulation of 
 any material wealth at all, but whose numbers vary 
 almost in a corresponding proportion with every in- 
 crease and diminution of the strictly productive 
 labourers ? My own impression is, that you must 
 either limit the application of productive labour to 
 that kind, from which issues forth in some stage of 
 its manufacture a material product, or if you extend 
 it to other forms of industry than such as are concerned 
 with the actual processes of Production, you must 
 include many other kinds of labour undertaken to 
 facilitate the operation of the productive machinery, 
 than that- of the commercial classes. 
 
 Next in order of succession to the great founder 
 of Economic Science, comes Monsieur Say, the most 
 distinguished of the earlier French Economists, who 
 both in his '^ Catechisme" and in his larger work, the 
 " Traite d*Economie Politique" speaks of the " Pro- 
 duction of Wealth" as the " production of utilities ;" 
 an "utilite" being according to his doctrine, " un 
 produit materiel, ou immat^riel." I will quote the 
 following passages from his Catechism, in order that 
 I may do full justice to his theory of " Production." 
 *' Mais de facon, oil d'autre, du moment qu'on cr^e, 
 ou qu'on augmcnte Futilite des choscs, on augmente 
 Icur valeur, on excrce une industric, on produit de la
 
 richesse.*" Such is M. Say's language in respect of 
 *^ produits mat^riels," and in speaking of " produits 
 iramateriels" he commences with these words, *' Onf 
 d^signe par ce nom une utility produite, qui n'est 
 attach^e a aucune matiere, qui cependant a une 
 valeur." 
 
 The forms of industry enumerated by M. Say as 
 instances of " Production immat^rielle" include the 
 professions, military, legal, and medical, the offices 
 of the clergy, and of all public functionaries, even 
 employments such as those of the musician, the dancer, 
 and the actor. He next proceeds, in support of his 
 argument, that other than material products may be 
 accounted as " Wealth," to draw an elaborate parallel 
 between what he calls the two forms of Production. 
 Both, he says, require equally the co-operation of three 
 different classes of human agents, viz. the •'' savant" 
 to discover the nature and advantage of the service 
 or pleasure to be rendered, the "entrepreneur," to 
 supply the necessary skill in the provision, and adap- 
 tation of the materials, and the " manocuvrier," to 
 carry out the details of execution. Both forms also, 
 
 * Chap. IX. Catechisme. " The confusion here between " valeur" 
 and " utilite" is obvious, and runs through M. Say's works, who 
 uses thorn as though synonymous terms, whereas the utility of 
 anything may increase, and its value diminish, for instance from 
 a fresh discovery, or from improved skill in its manufacture. 
 Utility I conceive to moan the capacity anything possesses of 
 satisfying a desire, value to express the measure of what it will 
 exchange for. 
 
 t Chap. III. k la fin.
 
 he adds, demand the employment of the three instru- 
 ments in all Production, viz. Labour, Capital, and to 
 some extent, Land. 
 
 From this mode of argument, as well also from 
 the similarity of terms applied in the passages above 
 quoted, both to " produits materiels," and " imma- 
 teriels," we are, I think, justified in supposing that 
 M. Say regarded Production in either form as the 
 production of "Wealth;" the difference between them 
 consisting only in the fact that the "utilite" produced 
 by the one was invested in a material object, and 
 therefore capable of accumulation, while that produced 
 by the other was in its nature immaterial, and there- 
 fore necessarily consumed at the moment of its pro- 
 duction. 
 
 Now such being the language held by so justly 
 celebrated an Economist, it would seem that the 
 science of Political Economy were fairly open to the 
 charge of technically using words in a sense differing 
 from that in ordinary acceptation. No doubt had 
 M. Say more closely compared the terms which he 
 uses with the operations they were intended to re- 
 present, he would have avoided the confusion re- 
 sulting from his indiscriminate application of the term 
 " Production" to every form of industry, and would 
 have perceived the absurdity of describing the occu- 
 pations of musicians, aud actors, in the same terms 
 which he applies to employments strictly creative of 
 Wealth. But we at least ought to accept the ob- 
 scurity so introduced into the writings of this eminent
 
 8 
 
 economist, as a warning of the necessity which exists, 
 both for using the terms which we employ for the 
 purposes of scientific classification in an uniform man- 
 ner, and also with the least possible variation from 
 their commonly received interpretation. 
 
 Let us now see whether a comparison between 
 the language held by Adam Smith and Monsieur Say 
 as to the character of Production will help us to a 
 correct conception of the nature of *' Wealth." Those 
 theories, widely diflfering from each other as to the 
 limit up to which we may extend the application of 
 the term " Production," yet present a common point 
 of agreement in regarding labour expended as the 
 necessary condition for the creation of any object 
 of Wealth. It is true that there do exist some 
 few exceptions to this otherwise universal rule, such 
 as are soils of peculiar fertility, fisheries, waterpower 
 in particular situations, all of which from their scarcity 
 become invested with a value peculiar to themselves, 
 but these form a narrow class, and do not invalidate 
 the general statement that labour, antecedent or im- 
 mediate, is essential to invest any object with the 
 properties belonging to an article of Wealth. 
 
 We have here, then, accomplished the first step 
 towards a correct definition, and since labour expended 
 must command labour in exchange, value or the 
 quality of exchanging for a proportionate amount 
 of articles or for labour becomes essential to the 
 character of Wealth. Lastly, since common sense 
 refuses to permit of the classification of such results of
 
 labour as M. Say describes as '' produits iramat^riels," 
 with the material produce of creative labour, we are 
 prepared to accept the limitation of the term "Wealth" 
 given by Mr. Mill in his Principles of Political 
 Economy, as comprehending " material objects only 
 possessed of exchangeable value,"* and to regard, 
 that labour which is properly classified as Productive, 
 as including all forms of industry by which the creation 
 and increase of such material produce is directly or 
 indirectly promoted. 
 
 Value then, or the property of being exchangeable 
 for some one or more objects, or for labour, is the 
 essential characteristic of every article falling within 
 the definition of " Wealth," and must be carefully 
 distinguished in idea from "utility" or the property 
 of satisfying some want of man. Utility, it is true, 
 must be present to create Value, but whilst there 
 cannot be value without utility, there can be utility 
 without value. All the assistance afforded by the forces 
 of nature, such, for example, as the power of the wind, 
 of fire, or water, the action of the atmosphere, the 
 heat of the sun, acting upon the inherent properties 
 of matter, is of infinite utility, since these are at once 
 the agents and materials in every process of Pro- 
 duction, yet can they neither increase nor confer value 
 so far as they are capable of being enjoyed in common 
 by all. That which alone we really estimate the value 
 of and pay for, is the exercise of human labour, either 
 previous or immediate, and since barter is not the most 
 
 * Preliminary Remarks, p. 10.
 
 10 
 
 convenient mode of doing so, we generally agree to 
 give certain recognised equivalents in the shape of 
 coins, representing upon a rough calculation what, 
 in the estimation of both parties is held to contain, a 
 corresponding value. 
 
 If, then, we have now a clear conception of the 
 meaning of the term " Wealth," viz. as comprehending 
 material objects only, possessed of exchangeable value 
 (in which sense its technical application appears most in 
 conformity with its ordinary use in common language), 
 we may proceed to consider the nature of Produc- 
 tion itself, going on, as it ever is, through countless 
 processes in every stage of advancement, visibly and 
 invisibly around us ; and in so contemplating it, I shall 
 endeavour to fix attention upon what are to be re- 
 garded as the three cardinal causes of its increase, 
 with the view of discovering in them the explanation 
 of that singular variety of development in material 
 wealth which the nations of the globe have, from the 
 earliest ages of mankind exhibited, and will, we may 
 suppose, continue to exhibit to the very latest era of 
 their existence. 
 
 In the outset we must remark that there have been 
 three principal stages, or conditions of life, through 
 which the human races have passed in their course of 
 material progress from the primeval state of barba- 
 rism, which may be distinguished under the titles of 
 the nomad or pastoral life, the agricultural life, and 
 the present economical condition of societies, combining 
 the three processes of Agriculture, of Manufactures,
 
 11 
 
 and of Commerce. Of these progressive stages in the 
 developement of societies, the first is, perhaps, best 
 represented by the condition, in its economical aspects, 
 of the families of the Jewish patriarchs, or of those 
 invading hordes who swept in successive tides from 
 East to West over the mountain ranges of Upper 
 Asia, while the second is illustrated by the mode of 
 life imposed upon the conquered peoples of the Roman 
 Empire by their barbarian masters, and the third na- 
 turally finds its expression in the condition of all 
 societies whatever be their state of advancement, which 
 we can regard as having fairly entered upon the career 
 of civilisation. 
 
 But it is worth remarking in passing, that, although 
 it cannot be until this last stage of social improvement, 
 that the active forces or agents in material Production 
 receive their full developement, yet in every stage of 
 progress beyond the barbarian state, they are plainly 
 distinguishable, and in a greater or less degree brought 
 into active operation. In that earliest stage of man's 
 social existence, which precedes all improvement, he 
 lives as it were as the beasts of the field, nor knows 
 from day to day how he shall provide his subsistence ; 
 thus it can hardly be said that he sets in motion any 
 thing more than mere manual labour, to be exercised 
 upon the materials which nature spontaneously pro- 
 vides. But no sooner has he taken the first step 
 towards the improvement of his condition, by accu- 
 mulating a stock of living animals upon which to 
 subsist himself, and his family, than this stock becomes
 
 1<J) 
 
 to him a capital, capable of increase by judicious 
 management, and availing both for reproductive pur- 
 poses, and the present support of the labour which its 
 care demands. Here then, even in the semibarbarous 
 state known as the pastoral life, we have the first 
 glimpse of the three classes of agents which co-operate 
 together in every process of Production, viz. Labour, 
 Capital, and Natural Agents, contributing in their 
 rudest form to supply the material wants of Man. 
 
 Consider next that state of society, where industry 
 is mainly limited to the exercise of Agriculture ; under 
 those circumstances we find the same three agencies 
 present, and though doubtless needing the constant 
 stimulus which manufacturing, and commercial enter- 
 prise can alone give to the earlier operations of pro- 
 ductive industry, yet since human labour will instinc- 
 tively seek the spot best adapted for its exercise, 
 we may be sure that in agricultural production the 
 powers of Nature will always co-operate in the most 
 eflfective manner permitted by the backward condition 
 of man's labour, and the imperfect nature of the in- 
 struments which are employed by him in its support. 
 
 Passing now, however, from these primitive forms 
 of industrial life, in which habits, and circumstances 
 have from time to time detained the various races 
 of man, let us proceed to review the present state of 
 productive industry within the sphere of civilisation, 
 such being in itself the natural transition from the 
 preceding conditions of society we have been con- 
 sidering.
 
 13 
 
 In this final stage of social life, productive industry 
 is usually classified into three principal branches, viz., 
 the Agricultural, the Manufacturing, and the Com- 
 mercial, and by the combination of these three forms of 
 labour, society seeks to supply the daily recurring 
 wants of all its members. In every operation of these 
 separate branches, beyond the very rudest of their 
 kind, we find the combined action of the same three 
 instruments or agents, which we noticed in the simpler 
 process of agriculture. Consequently it may be affirmed 
 that Production, when viewed comprehensively, pre- 
 sents amidst every variety of phenomena something 
 of an uniform character, and that to the comparative 
 improvement of some one, or all of these instruments 
 which it universally employs, we must look for the 
 origin of that singular variety of developement which 
 the material condition of great societies so strikingly 
 displays. 
 
 Before, however, analysing the processes of Pro- 
 duction itself, it is necessary again to call attention 
 to what has been stated by the ablest writers of the 
 present day, viz. that as a scientific expression, "Pro- 
 duction" is hardly a correct representative of the 
 operations to which it relates. Transformation, would 
 represent them more nearly, inasmuch as the result 
 to be obtained by man's industry is never the pro- 
 duction of any new particle of matter, but rather 
 the conversion of that which was before useless and 
 inert material, into something which is calculated to 
 satisfy a want or desire of man. The office of the
 
 14 
 
 human agent in every form of industry is limited to 
 placing his materials and instruments in juxta position 
 after such fashion, as that the properties inherent in the 
 former may be educed by the operation of the latter. 
 
 Man may by this means impress different forms 
 on already existing material, or he may produce even 
 greater results by calling out the latent properties of 
 matter, but within the limits he is strictly confined. 
 No new creation is possible to him, nor again in the 
 opposite process of Consumption is anything destroyed 
 by him, but rather dissolved ; since however the 
 expressions Production, and Consumption, have both 
 been universally adopted, and appear to represent 
 sufficiently well the processes to which they relate, 
 it would appear undesirable to change them, pro- 
 vided we bear in mind a correct conception of the 
 real nature of the operations to which they relate. 
 
 Let us now examine, separately, the various forms 
 of Productive Industry, with the view of arranging 
 a distinct classification, and first of that kind known 
 popularly under the general head of Agriculture. That 
 common denomination must, however, be taken to apply 
 to all forms of Extractive Industry, if the threefold 
 division of productive operations is to be regju'ded as 
 exhaustive. We must comprehend under it beyond the 
 arts of husbandry, properly so called, the operations of 
 mining, including both the process of penetrating into 
 the bowels of the earth, and the transmission of metal 
 to the surface. We must comprise under another cate- 
 gory the operations of cutting trees, draining wastes,
 
 15 
 
 clearing forests, and other processes incidental to the 
 preparation of the soil. Even such occupations as sea, 
 and river fishing, and the hunting of wild animals, 
 must find a place in an enumeration of the forms of ex- 
 tractive industry. Such being the case, it is obvious that 
 Agriculture can only be allowed to retain its position 
 as one of the principal divisions in a classification of 
 Production, because representing the largest portion of 
 such operations as are undertaken either with the view 
 of raising produce from the soil, or of the assem- 
 bling of raw material. While however such extension 
 appears only justifiable on these grounds, I see no rea- 
 sonable objection to admitting within the definition all 
 forms of labour, not immediately resulting in a material 
 product, which are essential to the operations of Agri- 
 cultural Production. By such, I mean those which 
 I have enumerated already as concerned with draining, 
 clearing, or otherwise preparing waste lands, even with 
 road making, or cutting canals. These operations being 
 undertaken principally with the view of increasing the 
 raw produce of the earth, while they are exercised 
 upon the surface of the soil itself, may, I conceive, 
 be ranked with the greatest propriety, under the 
 general head of Agricultural Production. On the 
 other hand, the construction of machinery, instru- 
 ments, and buildings, even for agricultural purposes, 
 together with every process which affects the produce 
 after its final separation from the soil, appear to me 
 more properly classified under the general head of 
 Manufacture.
 
 The whole question of arranging, in this instance, 
 the terminology peculiar to Political Economy, appears 
 to be most easily resolved, by laying down a strict line 
 of demarcation, and placing all the employments con- 
 nected with the raising, or assembly of produce from 
 any part of the earth, whether in a finished or imper- 
 fect state, and every kind of industry exercised upon 
 the soil of the earth itself, with the view of facilitating 
 such operations, under the general head of extractive 
 industry, of which Agriculture is the most available 
 representative ; and on the other hand to classify all 
 employments, subsequent to such raising, or assem- 
 bling of produce, which are undertaken for the purpose 
 of reproducing those materials under every variety of 
 form, including the buildings and instruments ne- 
 cessary for such purposes, under the general head of 
 manufactures. 
 
 Agriculture, then, when regarded as the repre- 
 sentative of the various forms of Extractive Industry, 
 may be said to comprehend all the earlier operations 
 with which Production is concerned. But in review- 
 ing the principal phenomena which attend the de- 
 velopement of its processes, we are at once struck with 
 the difference which is to be observed between the 
 mode in which the co-operation of Natural Agents is 
 secured in them, to that which obtains in all other 
 branches of Productive Industry. In the works of 
 Agriculture natural agents perform their allotted task 
 in the labour of raising produce from the bosom of the 
 earth in a manner, which by comparison with their co-
 
 17 
 
 operation in Manufactures, appears almost spontaneous. 
 In the one case Nature appoints the times, and 
 seasons, the mode of culture, and the kind of produce, 
 the day of sowing, and the abundance of harvest, and 
 in the other man's hand guides while Nature's powers 
 are subordinate, and may consequently be called into 
 action by the machinery which directs and limits 
 them, at whatever time is most convenient for the 
 exercise of that human labour which is essential to 
 their operations. 
 
 Again, the natural agents rendered available in 
 any country for agricultural purposes are not only 
 strictly limited in amount, but vary also infinitely in 
 degree, consequently their exercise under the more 
 favourable circumstances may be monopolised in the 
 hands of a few fortunate individuals, the possessors of 
 the best lands. In the case of Manufacturing pro- 
 duction, on the other hand, neither are the powers of 
 Nature capable of becoming exhausted through de- 
 ficiency of supply, nor may they be appropriated by 
 the few to the exclusion of the competition of the 
 many. Consequently, while agricultural industry is 
 continually limited in its progress by the failure of 
 natural resources, the processes of manufacturing pro- 
 duction might, if self-reliant, advance pari passu, with 
 the numerical strength of the population, and each 
 successive addition to their accumulated resources. 
 But since they are at all times dependent for material 
 upon the earlier processes of extractive industry. Pro- 
 duction, whether agricultural or manufactuiing, re- 
 
 B
 
 18 
 
 mains in the economy of the Universe, subject to an 
 equally strict control ; while either form of industry, 
 independently of the losses and gains, peculiar to 
 itself, which may arise either from sudden variations 
 in the terms of exchange, or from the delicate nature 
 of its own operations, is affected by the causes which 
 influence, either for good or for evil, the develope- 
 ment of its kindred branches of Productive Industry. 
 
 It appears, then, that the limit up to which the 
 general increase of material wealth may be carried, 
 with any given amount of knowledge in the productive 
 arts, is determined by the degree of developement which 
 Extractive Industry may have received, and this law 
 applies equally whether we regard the processes of 
 Production carried on within the limits of a single 
 country, or extend our survey over the entire surface 
 of the habitable globe. While, however, the increase of 
 Production is necessarily dependent upon the exten- 
 sion of agricultural industry, it is to be remembered 
 that the encouragements towards promoting that ex- 
 tension flow from the simultaneous developement of 
 the three sources of issue from which material wealth 
 is held to proceed; consequently that each of these 
 separate branches exercises over the interests of the 
 others an influence, whether beneficial or injurious, 
 corresponding with its own progressive, stationary, 
 or declining condition, only in actual operation, there 
 must of necessity be an extension of agricultural pro- 
 duction, antecedent to the successive developements 
 of manufacturing, and commercial industries.
 
 19 
 
 The second general division to be considered in an 
 enumeration of the agents operating in the processes 
 of agriculture, comprises a great number of instruments 
 of various character, which have been grouped to- 
 gether under the general head of Capital. 
 
 Capital, however, which has been invested in the 
 agricultural operations of a highly cultivated country, 
 presents some difficulties to any attempt at scientific 
 classification, which do not appear in framing a distinct 
 enumeration of the instruments employed in manufac- 
 turing and commercial industry. These difficulties 
 arise from the fact of its being possible to invest capital 
 permanently in the improvement of the productive 
 powers of such natural agents as are capable of appro- 
 priation, the profit upon which is secured to its owner 
 by tl^ limited quantity of these existing for" subse- 
 quent investment. It is not easy to separate the idea 
 of capital so invested from that of the land itself. 
 Previous to its final investment, however, it presented 
 all the features of a real capital, in furnishing sub- 
 sistence to the labourers, together with the materials 
 and instruments for carrying out the improvement 
 upon which they were engaged ; but inasmuch as Mr. 
 Mill* justly remarks, it has become finally incorporated 
 with the soil, from which it is incapable of being se- 
 parated, and being also governed in respect of its 
 profit, not by the prevailing rate of interest upon such 
 capital, but by the laws of rent, it appears more agree- 
 
 * Vide Mill. *' Principles of Political Economy." Book I. 
 Chap. VI. p. 115.
 
 20 
 
 able to correct classification, to place it after its final 
 investment in the soil, amongst the natural agents co- 
 operating in agricultural production, ratlier than to 
 describe it as Capital, of which every part and kind 
 retains, in some greater or less degree, something of 
 a moveable character. 
 
 The two general divisions of Capital, properly so 
 called, are those commonly known under the titles of 
 Circulating and Fixed; each of which according to 
 Adam Smith,* admits of four separate subdivisions. 
 Under the head of Fixed Capital he places, 1st, Ma- 
 chinery and all instruments ; Snd, Buildings of all 
 kinds for industrial purposes ; 3rd, improvements in 
 land ; 4th, the acquired talents of individual labourers. 
 
 Of these, the third is to be excluded if we admit 
 the argument of Mr. Mill, and the fourth category 
 comprehending the skill and dexterity possessed by 
 productive labourers, appears to me, even when re- 
 garded as the result of much time, and money ex- 
 pended in their acquisition to be incorrectly classified 
 as capital, inasmuch as these talents are incapable of 
 being distinguished, or appreciated except in opera- 
 tion, and when we speak of the agents in Pro- 
 duction, we conceive of them as in actual exercise 
 presenting therein certain distinctive characteristics, 
 and governed by certain ascertained and acknowledged 
 laws. In all these respects the acquired skill of pro- 
 ductive labourers, resembles all other forms of common 
 labour, and I cannot think that it would be advisable 
 
 • " Wealth of Nations." Book II. Chap. I.
 
 Of 
 <vl 
 
 technically to describe their talents as invested Capital, 
 because acquired by previous expenditure, and bearing 
 in that respect a certain general resemblance to the 
 accumulated results of creative labour. 
 
 Adam Smith likewise subdivides Circulating Ca- 
 pital into four parts, viz. 1st, Money ; 2nd, Provisions, 
 while still in the possession of the butcher, grazier, 
 corn- merchant, or brewer; 3rd, Materials, whether 
 rude, or in any state of manufacture, while still in the 
 hands of the growers, or manufacturers ; 4th, Com- 
 pleted work not yet disposed of, such as is to be found 
 either in warehouses or shops. " Circulating Capital* 
 consists then, he adds, of the provisions, materials, and 
 finished work of all kinds, that are in the hands of 
 their respective dealers, and of the money that is ne- 
 cessary for circulating, and distributing them t^ those 
 who are finally to use, or to consume them." I con- 
 ceive that there would be no objection to reducing 
 these four subdivisions of Circulating Capital to three, 
 by placing the 2nd class, or provisions, for the sub- 
 sistence of labourers under the same head as the 4th, 
 or finished work previous to sale, inasmuch as pro- 
 visions form the stock in trade of those who respectively 
 deal in them, precisely after the same manner as all 
 other kinds of completed work in the hands of 
 tradesmen. 
 
 If these minor alterations be admissible there will then 
 remain five subdivisions, including all parts of Capital, 
 Circulating, and Fixed. They are 1st, Machinery, and 
 
 * '• Wealth of Nations." Book II. Chai). I.
 
 22 
 
 all instruments ; 2nd, Buildings for industrial pur- 
 poses ; 3rd, Completed work ; 4th, Materials in their 
 various stages of manufacture ; 5th, Money. It appears 
 to me that under some one of these five heads may be 
 classified all the intermediate instruments, which are 
 at one time or another, assembled in the hands of the 
 capitalist, and which form as it were the links of union 
 between human labour on the one side, and natural 
 agents on the other, thereby securing their joint action 
 in promoting the general scheme of Productive ope- 
 rations. 
 
 If this be accepted as a correct description of 
 Capital, it remains only to complete the rapid survey 
 of the agents employed in agricultural production, 
 by considering the remaining class, or labourers them- 
 selves, whose work co-operates with the powers and 
 properties of nature, and the appropriated results of 
 antecedent labour in all the processes of Agriculture. 
 
 Since, however, it is to the general subject of the 
 organisation and distribution of labour, with its econo- 
 mical effects, that the most celebrated chapters of Adam 
 Smith's great work have been dedicated, and to 
 attempt to add anything to that lucid exposition, 
 would be most unbecoming here, I shall limit myself 
 to remarking a few other kinds of labour only, beyond 
 those already enumerated as belonging to extractive 
 industry, which may be classified as I think correctly, 
 under the general head of Agricultural Labour. 
 
 I conceive that, under that description, we may in- 
 clude all labour exercised strictly within the limits of
 
 23 
 
 the farm, mine, hunting ground, or fishery, by which I 
 mean not only the labour exercised in raising, or ap- 
 propriating produce, but also that of transporting it 
 from place to place within the same limits, which in 
 all forms of agricultural industry makes so considerable 
 a feature, without, however, trenching upon industries 
 of a similar character exercised over more extended 
 areas, and which are properly classified under the 
 general title of Commercial. Further than this, it 
 appears to me that we may include such labour, 
 as that of winnowing, stacking, thrashing, and all 
 operations, subsequent to the separation of the pro- 
 duce from the soil, which are undertaken with the 
 view of preparing materials for some future manu- 
 facture ; especially if we make the line of demarcation 
 between extractive and manufacturing industry, to 
 rest at the point where the material for future manu- 
 facture finally passes out of the hand of the producer 
 or appropriator, into the possession of those whose 
 labour is to be employed in working it up through 
 successive stages until it receives its completed form ; 
 all produce however which requires no further pre- 
 paration, after the task of raising, or appropriating it, 
 is fulfilled, of which there are but few kinds, ought 
 naturally to be included in the results of extractive 
 Industry. 
 
 Such appears, then, to be an exhaustive catalogue 
 of the kinds of labour properly classified as Agricul- 
 tural, and those of them which cannot be regarded 
 in strictness as extractive, are yet so closely allied to
 
 it, as hardly to be dissevered from that first process 
 even in idea. Of the produce, again, of Agricultural 
 Labour we may say, I think, that with but few ex- 
 ceptions, such for instance as wood for bui*ning, the 
 milk of animals, and some parts of the simplest produce 
 of the earth, its character is that of materials for the 
 second process in Production, or Manufacture, a de- 
 scription which, it appears, entitles Agriculture still 
 more strongly to its appellation of Extractive Industry. 
 Having now reviewed, however briefly, the nature 
 of the three classes of agents, which are united in the 
 progress of all productive operations, as illustrated 
 in the first or original process of agriculture, it will 
 be unnecessary, if we have a clear conception of each 
 separately, to consider them again in detail, through- 
 out the various processes of Manufacturing and Com- 
 mercial Industry. But it will be apparent upon any 
 reflection, that the same three agencies are invariably 
 present in all the operations of such industries beyond 
 the very simplest of their kind ; and it follows, there- 
 fore, that the more effective assistance in the common 
 task which we can secure from any one or all of them, 
 whether it be by obtaining an actual increase of force, 
 and productive power from the natural agents, by the 
 more ingenious adaptation of machinery, or by im- 
 proving the method of distributing man's labour, the 
 higher will be the limit up to which we shall be en- 
 abled to carry the aggregate increase of material 
 wealth, which is annually accumulating for distri- 
 bution, and consumption amongst the individual
 
 25 
 
 members of each community. Such being the case, 
 and an enquiry into the processes of Production, form- 
 ing the necessary basis of all economical studies, it is 
 of the first importance to keep this in view, which we 
 may call the law of its progressive increase. 
 
 I hope to be enabled in the following essays to 
 describe in general terms, the policy which all com- 
 munities must, in some measure adopt, as well in 
 regulating their intercourse with foreign nations, as 
 in the organisation of their own internal resources, 
 in order to secure such efficient co-operation from the 
 diiferent agents in Production, and I will, therefore, 
 close this present one by simply enumerating the prin- 
 cipal advantages to any community flowing from the 
 possession of a large aggregate amount of material 
 "Wealth, as evidenced both by the position a'hd im- 
 portance it confers in the great family of nations, and 
 by the general well being and prosperity of the 
 individual members who compose the social body. 
 
 There is a just and farsighted observation of Adam 
 Smith intended, doubtless, to refer only to the advance- 
 ment of a society in material Wealth, which appears to 
 me to apply without much straining to the three forms of 
 national progress, the moral, intellectual, and material; 
 it is *' that the progressive state is the only really 
 healthy state, the stationary dull, the declining me- 
 lancholy.'* But however intimately connected the 
 three forms of man's progressive improvement may be, 
 and however much the exercise of the virtues which 
 promote individual happiness in one sense, foster and
 
 2{y 
 
 dcvelope those which do so in another, yet it is abun- 
 dantly evident that human nature remaining such as 
 it is, the earliest and most vigorous efforts of any set 
 of men, assembled together in a society, will be turned 
 towards supplying only their material wants, and that 
 it will not be until these are satisfied in the manner 
 which accords with their ideas of comfort, that they 
 find time and opportunity for specially developing 
 those faculties and virtues which belong to the higher 
 part of their nature, by moral and intellectual culture. 
 The utmost, therefore, to be hoped by those who 
 strive to improve the general condition of the great 
 masses of a people is, that their intellectual and moral 
 improvement may advance side by side with their 
 material, for the evidence of all history bears witness 
 that the former will neither precede nor outlive the 
 latter, but that education and religion will exercise 
 their purifying influence in dissipating the vice and 
 ignorance which prevail in the heart of all large 
 societies^ only when the great masses of the people 
 are provided sufficiently well to satisfy their present 
 wants, and to enable them to look hopefully to the 
 future. 
 
 Another consideration of equal importance con- 
 nected with the subject of increasing Production, 
 ought always to be borne in mind in pursuing an eco- 
 nomical enquiry of this nature. It is that upon the 
 aggregate surplus produce, beyond what is demanded 
 to supply the physical wants of the productive mem- 
 bers of the community, depends the remuneration or
 
 the subsistence of all those whose labour is devoted 
 to raising life above a mere struggle for existence. 
 
 It was to such surplus revenue, whether the pro- 
 duce of her thickly studded colonies, or the hardly 
 won fruits of her barren soil, that Greece owes the 
 lustre that enshrines her name; for from the same 
 source, economically considered, sprang the paintings 
 of Zeuxis, and the sculpture of Phidias, the stately pile 
 of the Parthenon, and the spacious harbours of the 
 Piraeus ; from thence too was recompensed alike the 
 genius which gave birth to the orations of Demos- 
 thenes, and the drama of (Eschylus, to the poetic 
 imagery of Plato and the majestic philosophy of Aris- 
 totle; nay more, while such were the teachers the 
 disciples, too, in the Academy and the Theatre, 
 needed leisure from rude manual toil to appreciate the 
 grandeur of those conceptions by which her poets, her 
 philosophers, and her orators ennobled and refined 
 the mind of Greece. 
 
 Again, when we recall in the mirror of history 
 the days of that pomp and magnificence which suc- 
 ceeded the era of Grecian splendour, in the economy 
 of imperial Rome, we find that to her, as their 
 haughty mistress, were aflforded the spoils of distant pro- 
 vinces, wrung from the labour of a conquered world, 
 to supply that military machinery which rivetted the 
 fetters of each succeeding nation engrossed within 
 the expanding area of her conquests. Nor was it, until 
 that rich harvest of incoming wealth was diverted from 
 supplying at least its nobler use, to pamper luxurious
 
 28 
 
 indolence, or still the murmurs of the sullen herd, 
 who shared around the Capitol in the relics of depart- 
 ing glory, that Rome, with all her grandeur, her 
 dominion, and her power, yielded, a resistless victim, 
 to the hardy barbarians of the North. Later still, 
 after the period of transformation, when the fresh 
 blood of vigorous life was poured into the veins of 
 European society, and its shattered frame reinvested 
 with the new elements of energy and strength, we 
 find feudalism, that first system of any order into which 
 the chaos of barbarism was capable of being resolved, 
 slowly decaying before the growing wealth and power 
 of the urban communities, until the age of baronial 
 rule passed away, and societies became cast within 
 those geographical limits and under those various 
 forms of polity, which marked the era of their re- 
 generation. 
 
 Now, to take the most prominent feature in the 
 history of individual nations, since this general dis- 
 tribution of European societies, viz. the record of their 
 military achievements, we find two circumstances spe- 
 cially, to attract attention in relation to their increase 
 in national wealth ; the one is, that never since their 
 earliest advancement in the career of material pros- 
 perity, has any barbarian nation ventured to array 
 its warlike bands against the organised resources of 
 civilisation; and the other is, that in those mighty 
 conflicts of modern warfare, in which every art of 
 destruction might equally be rendered available, the 
 balance, unless determined by overwhelming odds of
 
 29 
 
 genius or national character, will naturally incline to 
 the wealthier. 
 
 Again, take a wider survey yet, and contrast the 
 power and resources of the vigorous inhabitants of 
 Western Europe, with the poverty and weakness of 
 the scattered tribes of Africa, or of the millions who 
 slave under various forms of Asiatic despotism, and 
 since neither forms of government, nor natural ad- 
 vantages of soil and climate, nor even the peculiarities 
 of man's physical capacity will sufficiently explain the 
 difference in their relative conditions, it remains for 
 the student of Economic Science to mark the import- 
 ance of those laws which govern the increase of 
 material wealth, and by their study to suj^ply himself 
 with the clue for understanding the infinite varieties 
 of social developement which have distinguished the 
 separate races of man, through each succeeding age of 
 their national existence. 
 
 To conclude, then, it would appear upon a general 
 review of societies, regarded specially in reference to 
 their economical condition, that from the surplus pro- 
 duce, beyond what is destroyed in the annual con- 
 sumption of Capital, are drawn the resources which a 
 nation possesses for ennobling her name by pre-emi- 
 nence in science, in arts, or arms ; by her genius, 
 her valour, or her knowledge, while that far more 
 than to the brilliant talents of isolated individuals, 
 she owes to a wise distribution of these resources, the 
 dignity and importance of the position she achieves 
 in the family of the civilised world ; and that above
 
 80 
 
 and beyond all these prizes of no ignoble an am- 
 bition, she may by increasing in wealth attain one 
 higher and purer yet, for she may apportion to each 
 son whom she has borne upon her bosom, the means 
 of raising himself, and those for whose existence he is 
 responsible, to a condition of easy independence, 
 thereby constituting one more link, and that the most 
 important in the chain of causes which binds together 
 each separate section of a happy and a contented 
 people.
 
 ESSAY II. 
 THE FREEDOM OF COMMERCE. 
 
 In the course of the preceding essay we completed 
 the observations necessary for framing a clear con- 
 ception both of the precise meaning attaching to the 
 term " Production " itself, and also of the nature of 
 those objects, in the creation of which its industrial 
 operations are concerned ; we are now, therefore, 
 placed in a more favourable position for examining 
 the various modes of organisation which all societies 
 must in some degree adopt both in their internal ar- 
 rangements, and their intercourse with foreign nations, 
 with the view of securing the largest amount of 
 " "Wealth " which their aggregate productive industry 
 is capable of yielding. 
 
 Of these schemes, or modes of organisation Com- 
 merce, or the Exchange taking place between foreign 
 nations, though doubtless, not the first in order of 
 adoption, seems not unfairly to rank first in order of 
 discussion, as principally affecting the operation of 
 those Natural Agents, which have been described as 
 the primary and most powerful instruments in all pro- 
 cesses of Production.
 
 S2 
 
 The term Commerce itself, however, it is to be 
 remembered, may be applied without verbal inaccuracy 
 to the exchanges taking place either between the in- 
 habitants of different countries, or between the pro- 
 ducers upon various parts of the same soil, or again, 
 in a wider sense, to the interchange between individuals 
 of all those innumerable services which M. Say cha- 
 racterises as resulting in an " utilite produite." 
 
 But it is to the first only of these three kinds of 
 Exchange that I propose to limit my observations, 
 regarding the second as falling more properly within 
 the discussion of the " Distribution of productive 
 Labour," and the third as embracing considerations 
 which lie altogether beyond the sphere of this part 
 of Political Economy. 
 
 In so doing, I desire chiefly to fix attention upon 
 the marvellous and ever growing encouragement to 
 the production of material wealth, which the adaptation 
 of soils of every degree, and variety of fertility to the 
 peculiar kinds of produce for which they are best 
 fitted, supplies, and at the same time to display in the 
 strongest light the connection which such exercise of 
 the natural resources, enjoyed in common by man, 
 bears to the effective distribution of his Productive 
 Capital and Productive Labour ; so that we may be 
 enabled fully to recognise the wonderful harmony and 
 and completeness of that beneficent scheme, by which 
 the material wants and desires of man have been 
 destined by Divine Providence to be fulfilled. 
 
 In the outset of a review of the general subject
 
 33 
 
 of Exchange, it appears to me appropriate to remark 
 that Foreign Commerce seems but the application 
 over a more extended area of that same principle which 
 guides and stimulates men in the promotion of every 
 kind of exchange ; in other words, that it is but the 
 consequence of that universal law of our being, which 
 renders men mutually dependent for almost every 
 necessary of life, and which may be said to find its 
 clearer expression with each succeeding developement 
 of our advancing civilisation. With regard, however, 
 to the nature of Commerce itself, and the relation 
 which it bears to strict Production, it is evident that 
 a system of Exchange does not include any operation 
 which can be described as productive of material; it 
 can comprehend only such as produce value, by mvest- 
 ing particular articles of merchandise with the property 
 of being in that place where they are required for the 
 consumption of those who are ultimately to enjoy them. 
 Commerce, therefore, properly speaking, is but the 
 auxiliary of agriculture and manufactures, indispensable 
 indeed to their operations on any but the most limited 
 scale, yet not actually co-operating with them in the 
 immediate processes of Production. 
 
 In what peculiar manner, then, is the freedom of 
 Commerce essential to the increase of Production? 
 It is so, in being the system by aid of which the 
 circumstances, and the motives, are supplied for setting 
 at work in their fullest efficiency the most powerful 
 agents in all Production, including not land only, but 
 the forces also, and powers of Nature, such as those 
 
 D
 
 34 
 
 of the sun, of wind, or water, of the temperature of 
 the air which we call climate, all those in fact which 
 act upon and educe the inherent properties of inert 
 matter, under every advantage either of soil or 
 situation, man being as a productive agent unable 
 to secure their co-operation with his industry to the 
 full extent of their powers, until the adoption of a 
 perfectly free system of Exchange permits of their 
 action being developed, unrestricted by apprehensions 
 for the disposal of the produce which is to be the 
 result of this joint exercise of labour. 
 
 If then it be admitted, that the principle of 
 self-interest fosters the adoption of a system of free 
 Exchange between the nations of the civilised world, 
 as being the expansion and legitimate corollary of that 
 scheme of mutual service which forms the common 
 bond of union between the members of each separate 
 society ; we may proceed with a clearer view to remark 
 the necessary effects of such extended Exchange, upon 
 the general condition of the societies which represent, 
 in this aspect, the individual members of the great 
 commercial family. I will, however, preface the re- 
 marks I have to offer in respect of individual societies, 
 with a brief review of the advantages necessarily 
 flowing from a system of unrestricted Exchange, not 
 as illustrated in the case of any one country in par- 
 ticular, but of all countries in general. 
 
 The real advantage to any two parties participating 
 in what is styled in economical language, a legitimate 
 exchange, necessarily consists in their mutually obtain-
 
 35 
 
 ing that which they desire in return for that which 
 in their opinion at the time represents a lesser value, 
 their comparative estimate of the two things, before 
 setting about their production, being governed by 
 the knowledge that they can produce the one with 
 less exertion than they calculate it would cost them 
 to create the other. 
 
 It is obvious enough in the case of services, or as 
 M. Say terms them " produits immat^riels" in what 
 manner exchanges are profitable to all who are con- 
 cerned in them ; some men may enjoy greater physical 
 strength either from nature or active habits of life, 
 others may possess greater aptitude for attending to 
 the details of business, others again may be gifted 
 with readier wit or intellectual powers of greater 
 acuteness, or more comprehensive grasp ; of these it 
 is easy to see how the first are better fitted to serve 
 the society they belong to, as soldiers or manual la- 
 bourers, the second as tradesmen or clerks, and the 
 third as lawyers, statesmen, or judges. 
 
 But it is evident, that that which is true of indi- 
 viduals as to their natural aptitude for dififerent forms 
 of manual and mental toil, is equally true of countries 
 as to their respective fitness for various forms of Pro- 
 duction. 
 
 In a similar manner with the special capacities of 
 individuals, which may result either from diversities 
 of natural talents, from education, or from habit, the 
 aptitude of particular soils to various kinds of produce, 
 may be the result of some one or all of several, and
 
 36 
 
 distinct causes. It may proceed first, from the cha- 
 racter of the soil itself, and the natural properties 
 inherent in it, or from climate necessarily producing 
 a certain effect upon the surface of the earth itself, 
 or even from geographical position, and the configu- 
 ration of coast, and lastly, these natural advantages 
 may be neutralised or enhanced by the peculiar dis- 
 position and habits of the inhabitants themselves. By 
 some one, or all of these causes, is determined the 
 particular form of Production to which the bulk of the 
 labouring population in any country shall devote their 
 industry ; and when they enjoy no peculiar advantage, 
 either natural or acquired, over the producers upon 
 other soils, they must then direct their capital and 
 labour to such forms of Production, as upon a com- 
 parative estimate of their resources, they calculate will 
 expose them to the least possible disadvantage in the 
 general market of competition. 
 
 It is by the gradual recognition of the advantages 
 of this arrangement, that each individual community 
 is enabled, without calling upon its agricultural and 
 manufacturing classes for any additional effort, without 
 increasing the amount of its national capital, or the 
 labour which it annually employs, to multiply to an in- 
 definite degree that aggregate sum of produce by which 
 are supplied the wants of the individual members of 
 whom, as a society, it is composed. The attainment 
 of such a result necessarily stimulates, in a degree, 
 varying with the national enterprise and industry, the 
 accumulation of additional capital, and the employment
 
 37 
 
 of additional labour ; but, it is to be remembered, this 
 is but the proximate result of increased exertions, on 
 the part of the producers, the immediate effect of a 
 system of exchange being discernible in the larger 
 returns which each separate portion of the capitals 
 already employed throughout the country receives ; 
 and that is due solely to the fact that under such a 
 system the choice of natural agents to be employed in 
 creating the aggregate amount of Wealth is no longer 
 confined within the area of a single country, but their 
 operation is secured wherever the circumstances of 
 climate, soil, or natural position, render their develope- 
 ment most favourable for the issue of an abundant 
 produce. 
 
 It would appear then, that a system of Free Exchange 
 is but the further application of the same principle of 
 arrangement which governs the distribution of man's 
 labour in every industrial undertaking, more especially 
 in those which are concerned with the production of 
 material wealth ; because that system equally flows out 
 of the desire natural to man to organise his productive 
 industry, apart from the consideration of particular 
 localities, after the manner which secures the largest 
 aggregate amount of material wealth in return for the 
 least possible exertion on his own part. 
 
 The more this natural tendency of societies, as of 
 individuals, to engage in an unrestricted commercial 
 intercourse becomes recognised, the less likely will it 
 be that any particular community will seek to deprive 
 itself of advantages which are common to all ; and
 
 38 
 
 although there mu8t always be causes, unconnected 
 with the career of material prosperity, which will from 
 time to tijue operate to disturb the course of commer- 
 cial exchanges, yet as this disposition which is inherent 
 in man displays itself more strikingly, the fewer 
 efforts, we may suppose, will be made to oppose the 
 operation of natural laws, to limit the aggregate pro- 
 duce destined to reward the industry of the country, 
 and to render yet more difficult the exercise of their 
 labour to those, by whose exertions the subsistence 
 and enjoyments of the whole community must ulti- 
 mately be measured. 
 
 I will add one more observation before concluding 
 this part of my subject, which is, that in speaking 
 of the largest aggregate produce being obtained by aid 
 of a system of Free Exchange from the already exist- 
 ing capital, and labour, exercised with the present 
 degree of knowledge in the productive arts, it must 
 be understood always of that only which is obtainable 
 from the lands already under cultivation. It would 
 undoubtedly be possible in many cases for the capital 
 and labour already employed, to obtain an ampler 
 yield of wealth in the general scheme of Production, by 
 simply transferring the scene of their operations to the 
 most fruitful fields hitherto unoccupied. For whether 
 we turn our eyes to anciently peopled countries where 
 the period for the exhaustion of nature's resources 
 might with more probability be deemed to be 
 approaching, or to comparatively freshly established 
 colonics where that period would seem beyond all
 
 39 
 
 calculation postponed, we equally find the inherent 
 powers and properties of the soil far from exhibiting any 
 symptoms of present decay, and affording abundant 
 scope for the fresh developements of productive enter- 
 prise. But then, unfortunately perhaps for the rapid 
 improvement of man's estate, obstacles too serious 
 for the sudden removal of capital are interposed by 
 the constitution of his nature which renders him 
 disinclined to leave the land of his birth, and the 
 scenes of his early childhood, to be the pioneer, and 
 perhaps the victim in the hazardous enterprise of early 
 emigration ; and consequently we must be content to 
 limit our expectations of the future increase of material 
 wealth, to that gradual progress which will surely 
 follow, from the adoption of a free exchange, and 
 which acting again upon population, will cause com- 
 munities to overflow their present limits, and send 
 forth their redundant thousands to people distant 
 lands, where nature awaits but their incoming aid 
 to pour forth from her prolific bosom the abundant 
 treasures of her hidden store. 
 
 Having now completed the review of the general 
 influence exercised over the operations of Production 
 by a system of Free Exchange, and having assured 
 ourselves that such influence is neither temporary or 
 accidental, but the necessary eflfect of unchanging laws 
 governing the fabric of the Universe ; let us turn to 
 the evidence afiforded by the material condition of 
 countries most familiar to us, in order, still further,
 
 40 
 
 to strcngtlicn by facts the conclusions to which abstract 
 reasoning has akeady conducted us. 
 
 Let me instance first the material condition, past 
 and present, of a country whose circumstances recent 
 events have rendered peculiarly interesting, and more 
 especially as they illustrate the economical policy 
 pursued by those to whom its destinies have been 
 committed. I allude to the rich and fertile lands of 
 the Italian peninsula. 
 
 It will be, I believe, readily allowed that the 
 natural advantages possessed by the inhabitants of 
 Italy are such as to justify them in aspiring to a 
 foremost place even amongst the wealthy nations of 
 Western Europe. 
 
 For Italy enjoys a central position on the highroad 
 of Eastern and Western commerce, she possesses, in 
 proportion to her territory, the largest extent of sea- 
 board of any continental nation, and if the mountain 
 ranges of the Apennines present some impediments 
 to internal communication, yet her manufactures might 
 with ease be carried along the many rivers rolling down 
 to either sea, and stored in the harbours nestling in their 
 estuaries, with the produce which has already ripened 
 beneath the mellowing influence of their summer sun. 
 Yet with these advantages for the developement of pro- 
 ductive industry, which should have made Italy the 
 garden of the world, her people, especially towards 
 the South, would ill bear a comparison with the 
 less highly favoured inhabitants of Germany, or of
 
 41 
 
 France. The real cause of their backward condition, 
 it is probable has a two-fold origin, first in the sub- 
 division of their soil into separate, and often hostile 
 principalities, and secondly in the economical policy 
 of those who have succeeded each other in the appor- 
 tionment of their dominions. 
 
 Through each succeeding age, since the downfall 
 of the Roman Empire, Italy has presented the uniform 
 spectacle of a disunited family; separate republics, 
 successive conquerors, the Spaniard, and then the 
 Austrian, the Frenchman in his proud career of vic- 
 tory, have emulated each other in seeking to depress 
 an enterprising and intelligent race, in fostering mo- 
 nopolies for the benefit not of peoples but of govern- 
 ments, in accumulating the burdens of taxation, and 
 in checking every attempt to unite more Closely, 
 by commercial intercourse, the separate sections of 
 what should be a single and united people. 
 
 I have before me in the pages of Fabbroni, the 
 economist of Tuscany, the expression of that earnest 
 longing for the era of better things, so keenly felt by 
 those who understood the causes of a country's material 
 prosperity, but uttered long before the removal of that 
 crushing yoke of foreign tyranny which forbad their 
 developement. The passage which I allude to, is 
 this : — 
 
 " Chiederete che prosperi il paese vostro; chie- 
 derete che asccnda al suo maggior grade di potenza 
 e splendore, giacche questo non e difficile. Date al 
 commercio, all' agricoltura, cd alle arti, la stessa e
 
 42 
 
 plena liberty ; permettete che si estraggano dal paese 
 i frutti del terreno, e i prodotti delle manifatture 
 senza pagare verun dazio, e senza sofFrire esame di 
 sorta alcuna : non obbligate il fabbricante a regolare 
 la sue operazioni per leggi particolari ; non lo costrin- 
 gete a far le sue speculazioni col codice economico alia 
 mano : ne tampoco prendete parte alle speculazioni 
 mercantili : abbiate presente che il danaro non e se 
 non il segno della ricchezza ; persuadetevi che non e, 
 ne origine, ne mezzo, della prosperita di una nazione : 
 permettete che liberamente entrino tutti i generi stra- 
 nieri, cioe, distruggete le dogane, e si verificheranno 
 i vostri desiderj di ricchezza nazionale assai piu cer- 
 tamente che non le predizioni degli oracoli di Delfo."* 
 Fabbroni in these passages points out the only certain 
 mode of securing the largest aggregate increase of ma- 
 terial wealth, to be produced by securing the effective 
 co-operation of every kind of industry with the natural 
 resources of the country ; he then alludes to the various 
 false systems which had at different times prevailed 
 to hinder and restrict that increase, to the system of 
 imposing excise duties, entailing vexatious inquisition 
 and heavy burdens upon the producer ; to the system 
 of government interference, both for the regulation of 
 manufactures according to certain limitations, and for 
 taking an actual part in commercial speculations ; to 
 the mercantile theory, according to which wealth con- 
 sisted solely in, instead of being merely represented 
 by, money ; and lastly, to the system of protecting 
 * " Scritti di Pubblica Economia," del Giovanni Fabbroni. — p. 87.
 
 43 
 
 home manufactures and industry generally, from the 
 competition of foreign importers. 
 
 There are, however, a few more lines of his, which 
 60 graphically describe, in contrast to the effects of these 
 systems, the blessings of an abundant produce, created 
 under the system of Free Exchange, that I must quote 
 them also, as fitly accompanying the preceding. After 
 declaring Wealth to consist not in money, but in the 
 abundance of the fruits of the earth, and in manu- 
 factured goods, he proceeds to enumerate the benefits 
 which it confers upon those amongst whom it is dis- 
 tributed, in the following passage : — 
 
 " Tal genere di abbondanza aumenta la popula- 
 zione, vivifica le occupazioni del cittadino, estende la 
 sfera, ed il movimento del commercio, eccita I'attivita, 
 accresce le rendite, e moltiplica il totale dei commodi 
 della vita. In una parola sola, egli e un fiume benefico, 
 il quale ricevendo incessantemente il tribute di diversi 
 ruscelli, ed aumentandosi nel suo corso, abbellisce e 
 fertilizza ogni luogo per dove passa, facendosi ogni 
 giorno piil utile, e piu gradevole."* 
 
 These passages are included in a series of essays 
 and letters written by Fabbroni for the instruction 
 of his countrymen in Tuscany, then too much dis- 
 posed to adopt the economical fallacies and policy of 
 protection prevailing in France, from the imposition 
 of which, by Napoleon, they were a few years later 
 themselves to sufifer. 
 
 Now, however, that their several races have become 
 
 * " Scritti di Pubblica Economia," del Giovanni Fabbroni.—p. 92.
 
 41 
 
 in a measure consolidated into one people, and that 
 they are relieved from the pressure upon their re- 
 sources, inflicted by the taxation, the monopolies, and 
 the restrictive systems of the old governments, they 
 appear, as a nation awakening out of slumber, to enjoy 
 to the full their new condition of liberty. They 
 are seeking, especially in the North, to develope 
 in larger measure the internal resources of their 
 country under the invigorating influence of a free 
 system of Exchange. Citizens of different towns and 
 of distant provinces, are intermingling each year with 
 increasing activity in the business of Commerce ; the 
 crowded port of Genoa will soon be reserved altogether 
 for merchant shipping by the completion of the naval 
 harbour in the bay of la Spezia ; along the coast of the 
 Gulf will run a railroad to unite those of France to 
 that which penetrates into the heart of Tuscany; 
 nor will it be long, we may hope, before the barrier 
 of the Alps is pierced, and the produce of England 
 and of France transported with increasing ease and 
 rapidity to the cities of Northern Italy, or wafted 
 along the waters of the Po to be shipped in the 
 harbour of Venice for the marts of the East. Each 
 succeeding year will, I believe, render still more 
 striking the contrast of what Italy has been, with 
 what she is, and will thus add its meed of testimony 
 to the truth of those economical doctrines introduced 
 amongst her people by the enlightened wisdom of 
 Cavour. 
 
 Let us now turn to Austria, whose condition re-
 
 45 
 
 presents the fruits of that policy, which advocates the 
 protection of productive industry, by the exclusion of 
 foreign competition, or in other words, which limits 
 the reward of the capital and labour, annually em- 
 ployed amongst her people, to the produce of their 
 own soil. In proof of this assertion I may refer to a 
 recent article in the Quarterly Review, in which it is 
 stated that the receipts from the customs revenue of the 
 Imperial Treasury of Austria, whose dominions contain 
 36,000,000 inhabitants, amount only to £1,300,000, 
 while the revenue of England, whose inhabitants num- 
 ber only 29,000,000, from the same source, amounts to 
 no less than £23,000,000. This statement, to all ap- 
 pearance authentic, sufficiently proves the establishment 
 of the principle of excluding, by heavy duties, all kinds 
 of imported goods, throughout the dominions of 
 Austria. 
 
 Now so far as regards her natural advantages, it 
 appears to me indisputable, that Austria must always 
 remain less favourably circumstanced for an extended 
 commercial intercourse than the other great nations 
 of Western Europe. The obstacles in her path appear 
 to me to have a threefold origin ; first, from the hete- 
 rogeneous character of her populations, secondly, from 
 the vast area of her dominions, many provinces of 
 which still possess the most imperfect means of com- 
 munication, and lastly, from her comparatively limited 
 extent of seaboard. But it would seem for these 
 reasons the more incumbent upon her to improve such 
 natural advantages as she does enjoy; if her pro-
 
 46 
 
 ductive industry is at all to keep pace with the in- 
 creasing wealth of her rival neighbours. The channel 
 of the Danube would always afford convenient trans- 
 port for her produce of the interior to the warehouses 
 on the shores of the Black Sea, whilst along the eastern 
 coast of the Adriatic, harbours such as that of Fiume, 
 might be created and adapted as commodious outlets 
 for Hungarian produce, and united by railroad com- 
 munication both with Vienna and with Pesth. 
 
 But it appears also from the same article to which 
 I have referred, that the mineral wealth of Austria 
 far exceeds all calculations of those who form their 
 opinions, on her present very imperfect state of de- 
 velopement; in every part of the empire, with the 
 exceptions of Venetia, of Upper Austria, and Dal- 
 matia, vast beds of iron and coal are said to exist; 
 and in various parts of the plains of Hungary veins 
 even of gold and silver are to be found. In respect too 
 of what we may term the peculiar agriculture of the 
 country, viz. the cultivation of the vine, to which the 
 Hungarian proprietors specially devote the labours of 
 their peasantry, we are told that from the quality and 
 cheapness of Hungarian wine, many kinds of it would 
 with improved means of transport, command an exten- 
 sive sale in the markets of Europe. Again, we know 
 that Austrian manufactures, more especially those of 
 wool, flax, and hardware, require only the stimulus of 
 competition, and a more widely extended commerce, 
 to ensure to her people a rich return in all the choicest 
 produce of the \V'e6t.
 
 47 
 
 On the other hand, compare with this brief and 
 imperfect survey of her resources, the general back- 
 wardness of Austria in the progress of material im- 
 provement, the poverty of her rural populations, and 
 the exhausted state of her national exchequer. Take 
 one example out of many, by comparing the magnifi- 
 cent palaces, the noble architecture, and the ornamental 
 gardens which adorn the capital of France, with the 
 half finished buildings, the narrow streets, and rude 
 wildernesses which border on the parks of the Viennese, 
 and it will be apparent how small are the resources for 
 imperial expenditure in the one capital as contrasted 
 with those in the other. 
 
 Again, we may not unfairly argue that certain 
 evidence of the poverty of the humbler classes in 
 Austria, is oflfered by the general ignorance prevailing 
 amongst her rural populations; in proof of which, 
 beyond my own observations, I would mention that the 
 common soldiers of the Austrian army, who may be 
 taken as not unfavourable specimens of the classes 
 from which they are recruited, never receive any in- 
 struction whatever, beyond what is needed to teach 
 them to supply their bodily necessities. And although 
 it may be said that this is but a blot specially attaching 
 to the military system, yet it would not, I think, exist 
 unless great ignorance, the surest sign of poverty, 
 existed amongst the peasant classes generally. 
 
 Now since for her backwardness in the career of 
 material improvement, we can trace the cause neither 
 in Austria's lack of mineral resources, nor, at least
 
 48 
 
 sufHcicntly, in her system of agriculture which, how- 
 ever capable of improvement, is yet based upon the 
 plan of extensive holdings, and therefore most favour- 
 able for the employment of large capitals, and the 
 more effective distribution of labour ; nor yet so far as 
 the economy of her internal arrangements is concerned, 
 to any obstacles to the successful developement of 
 manufacturing enterprise ; we are almost compelled to 
 conclude that the real cause is to be found in the 
 absence of a Free Exchange with other nations, and 
 that consequent encouragement to every kind of in- 
 dustry which the importation of foreign produce 
 necessarily creates. 
 
 The history of her material developement will 
 afford us, I believe, one of the most striking illustra- 
 tions of the intimate connection subsisting between 
 the various branches of Productive Industry, and prove 
 to us, convincingly, that without a corresponding de- 
 velopement of Commerce, Agriculture and Manufac- 
 tures must pine and droop, not only because they are 
 removed from the invigorating atmosphere of foreign 
 competition, but also because they are robbed of their 
 natural reward in the wealth of the countries with 
 which their produce is exchanged. 
 
 While, however, we may conclude that in Austria 
 the system of Protection arrests the progress of material 
 prosperity, in other countries of Europe, more favour- 
 ably situated, causes of hinderance to the developement 
 of commercial enterprise prevail, not less prejudicial to 
 the aggregate increase of Wealth. In Spain, apart
 
 49 
 
 from other causes, a serious obstacle is to be found in 
 the want of adequate communication between different 
 parts of the kingdom, a want however, gradually be- 
 coming supplied by opening up new lines of railroad, 
 in such slow degrees, as the difficult configuration of 
 the ground will permit. 
 
 Again, in Greece (a country second to none in the 
 advantages she possesses for an extensive commercial 
 intercourse, both from geographical position and 
 the natural configuration of her coasts), the circum- 
 stances of society are such, owing to the inefficient 
 administration of the law, that no security exists to 
 encourage the accumulation of capital, and the develope- 
 ment of that healthy spirit of enterprise, without which 
 the material prosperity of a country can never be 
 effectively promoted. In France, however, amidst 
 many impediments to productive industry, caused on 
 the one hand by excessive taxation, and the jealous 
 supervision of the central government, and on the 
 other by the system of small holdings which obtains 
 throughout their agricultural districts, it appears to 
 be principally to the expunging of the fallacies of 
 Protection from their commercial code, that the wisest 
 of her politicians look for the better developement of 
 their country's elastic resources, and for the means of 
 raising the great bulk of their industrial population to 
 a higher degree of comfort than it has hitherto been 
 their lot to enjoy. 
 
 It would seem then, even upon this superficial 
 survey of the circumstances, which in various countries 
 
 E
 
 50 
 
 affect the increase of material Wealth, that it is in 
 impediments to the establishment of a free commercial 
 intercourse, springing from whatever cause, that the 
 principal obstacles to the developement of their natural 
 resources will be found, and this testimony completes 
 the chain of evidence in support of the wisdom of 
 a policy of Free Exchange, which abstract reasoning 
 so conclusively maintains. 
 
 I will, therefore, conclude the survey of this part 
 of the general scheme of Production, with remarking 
 a few other considerations so intimately connected 
 with the subject of Exchange, that their omission 
 would render imperfect even the most cursory exami- 
 nation of its principal operations. 
 
 I have before had occasion to remark that in pur- 
 suing any examination of the phenomena of Exchange, 
 we are constantly reminded that the real bond of 
 union between the individual members of every society, 
 and which constitutes also the common tie uniting 
 separate societies in the larger family of nations, is to 
 be found in the assistance they are mutually enabled 
 to afford each other in that which is at once the first 
 and most pressing business with all, viz. the provision 
 of their physical wants. It appears sufficiently evident 
 from man's tastes, from his powers, and yet more 
 remarkably from his necessities, that the condition of 
 every member of the human race was decreed by 
 Divine Providence to be that of a social being. But 
 the organisation of society, no less than the organi- 
 sation of the human frame, as the machinery, by aid
 
 51 
 
 of which man's powers are elicited and exhibited, 
 presents features more and more worthy of our in- 
 creasing admiration, the deeper the insight we obtain 
 into its wonderful harmony and completeness. 
 
 The operation of its machinery in full perfection 
 demands the distribution of individual members to 
 tasks, adapted to their peculiar powers, natural or 
 acquired, and depends as its fundamental basis upon 
 the system of Exchange. Although, therefore, we are 
 here limiting our considerations to that Commerce 
 only which is concerned with material values, yet it 
 is to be remembered that this is but a fractional part 
 of a whole system, by which society in its corporate 
 capacity, enjoys the benefit of services rendered to 
 her in the exercise by individual members of every 
 legitimate profession or trade, as well as of the pro- 
 perty she acquires in the fruits of every science, and 
 in the produce of every art. 
 
 And when thus viewing the advantages accruing to 
 society at large from the system of Distribution and 
 Exchange, we are at the same time reminded that it is 
 by the operation of this system that the various parts 
 of the social machinery become so harmoniously, and 
 symmetrically adapted to their allotted tasks, that each 
 individual workman, while conferring upon his fellows 
 the full benefit of the increased ability and skill he 
 derives from his limitation to a single field of labour, is 
 benefitted also himself both by the relief he experiences 
 from all apprehension lest by dedicating himself to a 
 single class of operations he should miss the material
 
 52 
 
 reward which is his due, as well as by the know- 
 ledge, that that reward will be secured to him in a 
 much more abundant measure, being determined, not 
 solely by his own increased efficiency, but by that far 
 higher degree of skill which results from the more 
 perfect arrangements obtaining in every separate 
 department both of Productive and Unproductive 
 Industry. 
 
 These are advantages derived by every member of 
 society from the system of Exchange generally, the 
 next kind belongs specially to the subject of Commer- 
 cial Exchange. It consists in the encouragement 
 which a free commercial system gives to the carrying 
 on of productive operations, whether agricultural, or 
 manufacturing upon a larger scale than before, in con- 
 sequence of the opening fresh markets, and in the 
 subsequent improvements in the distribution of labour 
 which such extension permits. Under these circum- 
 stances every individual nation, united by the ties of 
 commercial intercourse, becomes comprehended in a 
 vast scheme of organisation for productive purposes, 
 of which each society in particular is but the represen- 
 tative in miniature ; with each further develop ement 
 of the principle of Distribution, corresponding im- 
 provements will be introduced into every form of 
 Production, fresh resources will be rendered available 
 by utilising the advantages of soil, of situation, and 
 of climate, fresh capitals will flow into particular trades, 
 more costly machinery will be purchased, buildings 
 will be enlarged, and every detail in the execution
 
 53 
 
 of these improved arrangements will be watched 
 throughout with the most scrupulous care. 
 
 In short we may sum up the general result thus ; 
 that in limiting, through aid of Exchange, the bulk 
 of the labour employed amongst large communities to 
 fewer forms of Production, nations are doing their 
 part in converting the whole area of the trading com- 
 munities into one vast manufactory for the supply of 
 man's wants and desires, by which every improvement 
 introduced into the industrial processes of any one 
 community avails to the common good of all, and in- 
 creases the general stock of material Wealth, which is 
 destined to reward the labour, and measure the enjoy- 
 ments of every individual member of their common 
 family. 
 
 There remains to be considered in enumerating 
 the beneficial eflfects exercised throughout the whole 
 scheme of Production by a system of Free Exchange, 
 that which is the most obvious of all, viz. the competition 
 to which it gives rise amongst similar producers from 
 every part of the world. This it is which may justly 
 be regarded as the vivifying influence of the whole 
 scheme, by its imparting new and vigorous energy to 
 the labour of each individual producer, and sweeping 
 away obsolete and imperfect processes, to make way 
 for those which unite greater rapidity with more perfect 
 manufacture ; in short, which confers such incalculable 
 benefits upon every class of consumers, by placing 
 within their reach the best possible article at the lowest 
 possible cost.
 
 54 
 
 Indeed it is in the operation of Competition that 
 the admirable harmony which prevails, not in the 
 organisation of the productive classes only, but of the 
 whole social body, is most remarkably illustrated. 
 Regarding society in a comprehensive view, we can 
 distinguish its members by an infinite diversity of 
 talents, tastes, and capacities, developed in every 
 variety of occupation, or form of labour ; of these 
 members however, we find a certain proportion only 
 varying with the wealth of the society, engaged upon 
 the business of supplying the material wants and ne- 
 cessities which are the common inheritance of all. 
 Amongst this smaller, as amongst the larger body, 
 some marvellous power appears to be at work, com- 
 jDelling individuals, perhaps unconsciously, to render 
 their most vigorous service in the discharge of their 
 respective functions. What motive power is it which 
 so governs their action? What rule of conduct en- 
 courages them to apply their utmost efforts for the 
 common benefit of all ? One it must be which 
 harmonizes with their own interests, and secures to 
 them a reward proportioned to their zeal. The truth 
 is, that whilst the distribution of employments affords 
 the means and opportunity of bringing every form of 
 labour, but more especially manual labour, to the 
 highest perfection possible, Competition supplies the 
 circumstances, and the encouragement necessary for 
 ensuring their most vigorous exercise, when so per- 
 fected, for the benefit of society at large. 
 
 We shall have a further opportunity of remarking
 
 55 
 
 the operation of the principle of Competition, when 
 dealing with the subject of the Distribution of Labour, 
 but it appeared to me impossible to omit all mention 
 of it from a review of the advantages conferred by a 
 system of Free Commerce, in itself the natural ex- 
 pansion of the same principle of organisation which 
 governs the industrial arrangements of each separate 
 society. 
 
 To conclude, then, we may affirm that to those who 
 seek to ascertain the causes and means of increasing 
 the stock of material Wealth, available for human 
 consumption in every part of the world, the vast area 
 of the habitable globe should appear but as the measure 
 of one mighty engine of Production, whose machinery, 
 various indeed in character, presents amidst every 
 dissimilarity of soil, of situation, and of climate, the 
 common features of an harmonious system organised and 
 adapted to a single end. But this machinery, however 
 wonderful in design, and however perfect and com- 
 plete in all its parts, will be impeded or arrested, 
 unless the labourers employed in conducting it under- 
 stand the manner of its operation. Upon their intelli- 
 gence and industry depends at all times the method 
 of its working, but this at least they should never 
 fail to know, that each fresh improvement in the adap- 
 tation of their own labour to the natural powers which 
 co-operate with them, lightens at once the amount of 
 their toil, and increases the sum of their reward. 
 They ought, then, in their own interests to seek to 
 fulfil their part in this harmonious scheme, by which
 
 56 
 
 not the members only of each individual society, but 
 of all societies together, may be engaged as fellow- 
 labourers for the common good ; when not the poverty, 
 but the riches of other nations becomes the object of 
 each one's hopes, since by the abundance of their 
 wealth is the value of its own produce to be measured ; 
 when finally man becoming possessed of easier means 
 for supplying his physical necessities, may address 
 himself with increased energy and freedom to the task 
 of satisfying those wants, which belong to the higher 
 part of his nature. 
 
 I will add a few sentences of M. Eastiat's, which 
 appear to me to express with peculiar felicity this 
 view of the office of Exchange in setting forward the 
 progress of the human race : 
 
 " L'Echange est un moyen donne aux hommes de 
 tirer un meilleur parti de leurs facultes, d'economiser 
 les capitaux, de faire concourir davantage les agents 
 gratuits de la nature, d'accroitre la proportion de 
 I'utilite gratuite a I'utilite onereuse, de diminuer par 
 consequent le rapport des efforts aux resultats, de 
 laisser a leur disposition une partie de leurs forces, 
 de maniere a en soustraire une portion toujours plus 
 grande au service des besoins les plus imp^rieux, et 
 les premiers dans I'ordre de priorite, pour les con- 
 sacrer a des jouissances d'un ordre de plus en plus 
 ^leve."* 
 
 * Bastiat. Harmonies Economiques. " Chapitre sur rEchange."
 
 ESSAY III. 
 
 THE DISTRIBUTION OF CAPITAL AND LABOUR. 
 
 The object I proposed to myself in the preceding 
 essay, was limited to a review of the influence exer- 
 cised over the general scheme of Production by that 
 economical policy, which will be allowed, I conceive, 
 even by those who oppose its introduction into the 
 commercial code of any particular country, to be the 
 only means of securing in their fullest efficieifcy the 
 operation of those powers which we term, technically^ 
 the Natural Agents in all processes of Production. 
 But when regarding in a comprehensive spirit the 
 details of the productive machinery, we find that there 
 are circumstances exercising an influence equally 
 powerful, and perhaps more immediately connected 
 with the creation and increase of material Wealth, 
 than even the freedom of commercial intercourse. 
 By such I mean the arrangements which govern the 
 the previous distribution of the Capital and Labour 
 available for productive employment within the limits 
 of any particular society. 
 
 The subject of the preceding essay afforded an 
 opportunity of remarking, that the policy which in-
 
 58 
 
 troduccs a free interchange of the produce of various 
 soils, appears to be but the natural sequel of that wise 
 system of economising labour by judiciously distri- 
 buting it, which in some greater or less degree, must 
 obtain in the organisation of all civilised societies; 
 but this broad distinction at once occurs to us, that 
 whereas in the case of international Exchange, the 
 operation of the entire machinery depends upon the 
 conduct of foreigners, in the case of the effective 
 distribution of Capital and Labour, the arrangements 
 though, doubtless, in some measure controlled by the 
 action of others, rest mainly either with the individual 
 members of a society themselves, or with the Executive 
 Government to which, for purposes of convenience, they 
 choose to delegate the exercise of their own proper 
 functions. 
 
 Such being the case, it would seem that, however 
 intimately connected the different agents in Production 
 may be, it is possible to examine the circumstances 
 which affect their operation separately, and this course 
 appears the more desirable, because whilst the advan- 
 tages flowing from a system of Free Exchange at 
 all times form the subject of general comment, those 
 more immediate benefits which result to us all from 
 the Distribution of Labour, appear, perhaps, because 
 our observation of the mechanism which governs the 
 concerns of our daily life is less acute, in some measure 
 open to the risk of being altogether overlooked. 
 
 Before entering, however, upon the examination 
 of the principal phenomena exhibited by the Distri-
 
 69 
 
 bution of Labour, it is necessary to premise both that 
 the subject embraces, according to the best authorities 
 of the present day, a much wider field than that 
 relating only to the organisation of the productive 
 classes, which is the limit imposed upon the discussion 
 by Adam Smith,* and further, that his theory, as to 
 the motive or principle of organisation which fosters 
 universally the adoption of such system, is now con- 
 demned as altogether illusory. 
 
 Adam Smith assigns as the original cause of the 
 Distribution of Labour, an innate propensity in human 
 nature disposing men to truck, barter, or exchange, 
 one thing for another. Such disposition, which un- 
 doubtedly exists, seems more properly described as 
 the effect, than the cause, of the manner in which 
 societies are organised. Men adopt the mod^ of ar- 
 ranging their industry, which they perceive will most 
 facilitate the operations in which they are respectively 
 engaged, but without foreseeing, as Adam Smith justly 
 remarks, that general opulence to which their arrange- 
 ments give rise. When once, however, that distri- 
 bution of employment has taken effect, Exchange 
 follows as the necessary consequence, being the only 
 mode by which the wants of society can be supplied 
 and its various business conducted. It is therefore 
 unnecessary to account for its adoption, by supposing 
 any other motive to guide men in a course of action 
 already best adapted to advance their own individual 
 interests. Adam Smith pursues the argument even 
 
 *" Wealth of Nations." Book I., Chap. II., III.
 
 60 
 
 farther, and traces to the disposition to excliange both 
 the variety of talents possessed by men of different 
 occupations and trades, and the advantages which that 
 variety confers upon society at large. It appears to 
 me, we must admit, that the variety in natural talents 
 is much less striking, than that which is engendered 
 by the pursuit of different occupations, or trades, 
 but it is no doubt to the realisation of the benefits 
 derived from such variety, and not to a predilection 
 existing among the members of society for the business 
 of Exchange^ that the distribution of employments is 
 to be traced. 
 
 So far of the principle which governs in all societies 
 the Distribution of Labour, but before entering upon 
 an examination of its actual organisation, it will 
 be necessary first to recall the circumstances most 
 favourable for the effective employment of its auxi- 
 liary Capital, because, although these two principal 
 agencies in Production are so intimately connected, 
 both in their increase and distribution, yet there are 
 certain circumstances which primarily affect Capital 
 only, and exercise but an indirect influence through 
 that medium upon the interests of Labour. 
 
 First, then, amongst the conditions necessary for 
 the employment and even for the existence of Capital, 
 must rank security, since no man, it is clear, will 
 postpone present enjoyment to future profit, unless that 
 profit be secured to him from all but extraordinary 
 risks, and he remain subject only to such accidental 
 and occasional losses, as are incident to every trade, or
 
 (U 
 
 productive employment. Capitals, however, being 
 susceptible of division into various parts, according 
 to their degree of fixedness, or mobility, are necessarily 
 exposed in very unequal measure to the dangers re- 
 sulting from a state of insecurity; those parts which 
 are least capable of rapid transformation, being the 
 more liable to injury from sudden violence, while those 
 which are easily convertible, rapidly migrate to a more 
 genial atmosphere, and adapt themselves to other, and 
 perhaps dissimilar forms of Production. General in- 
 security may, however, be said to be the cause most 
 fatal to any accumulation of Capital at all, while the 
 variations in the aggregate amount existing in any 
 society will I believe, after a sufficient interval, be 
 found to accommodate themselves to the changes of 
 circumstances which have influenced during that 
 period the safety of industrial enterprise. 
 
 Next to security, the consideration which appears 
 to me principally to affect the aggregate increase of 
 Capital, relates to the freedom of converting it to 
 whatever employment the owner calculates will under 
 existing circumstances prove most remunerative. In 
 every large society the vast variety of articles required 
 for consumption, more especially! the sudden variations 
 in the demand for many of them, would impose an 
 insurmountable obstacle to the right, and consequently 
 the profitable investment of capital, were it not that 
 the interests of the producers are immediately con- 
 cerned in adapting the supply to the demand, and 
 consequently forbid them on the one hand to overstock
 
 62 
 
 the markets with articles for which there is no pro- 
 portionate demand, and on the other to permit the 
 fortunate holders of an insufficient supply to realise 
 more than their just and average reward. This, how- 
 ever, could not be done, unless they were enabled 
 to convert their capitals freely into those channels 
 of industry which experience and observation of the 
 market fluctuations tell them will be best adapted 
 to supply articles, in a measure, proportioned to the 
 extent of the public demand. 
 
 Now since it is obvious upon the most cursory 
 examination of these circumstances affecting the accu- 
 mulation and distribution of Capital, that agencies 
 very dissimilar are required in the one case, to those 
 which obtain in the other, it has been the policy of all 
 wealthy, and well arranged societies to separate as far 
 as possible, the offices of those who are entrusted 
 with the duty of protecting productive operations, 
 from such as are exercised in superintending their 
 actual performance. For, while to the many are en- 
 trusted the functions necessary for providing for the 
 physical wants of all members of the community, by 
 the rapid conversion of Capitals, and the adaptation 
 of each particular part to the best form of Production ; 
 to the few is committed the duty of securing to those 
 who are productively employed that liberty of action 
 without which, no improvement, either in man's ma- 
 terial condition, or in those other arts, which promote 
 his social advancement, becomes in any degree possible. 
 
 The qualifications which are specially required for
 
 63 
 
 the vigorous performance of the former class of opera- 
 tions being a quick general intelligence, the power 
 of mastering details not in themselves demanding much 
 originality of thought, but exacting a close and con- 
 stant attention, and a healthy spirit of enterprise, are 
 manifestly fostered and matured in the atmosphere of 
 publicity; while on the other hand the direction of 
 arrangements such as those which relate to the orga- 
 nisation, and movements of large bodies of men, or to 
 the interior administration of public departments con- 
 cerned with the security and protection of society, 
 cannot be carried on effectively, unless when subjected 
 to the general control of one, or few persons ; and that 
 because the calculations, and combination necessary 
 for conducting such operations to a successful issue, 
 demand secresy, despatch, and above all, unity of 
 action, conditions necessarily wanting to the delibe- 
 rations, and divided counsels of large assemblies of 
 men. 
 
 So far, then, of the circumstances immediately 
 affecting the aggregate increase of Capital, and its 
 flow into the most productive channels, to secure the 
 favourable operation of which demands constant vigi- 
 lance both on the part of Government, and of indi- 
 viduals, lest any sinister influence interfering with the 
 arrangements of the producers should mar the most 
 eflfective disposition of the national resources. 
 
 We now come to consider the circumstances, which 
 indirectly hinder the best distribution of Capital, and 
 which may be said to owe their influence specially to
 
 64 
 
 the delicacy with which in all its operations it requires 
 to be handled. I allude to two separate kinds of 
 danger by which the interests of Production are 
 liable to be assailed. By the first, I mean, such as 
 may result from the capricious conduct of Government, 
 in varying its scheme of taxation without sufficient 
 notice given to those who are employing, or investing 
 Capital, such variations being necessarily accompanied 
 by a corresponding change in the demand for the 
 articles which they are devoted to producing. This 
 effect of sudden changes in the real and market prices 
 of articles, resembles that produced upon the accu- 
 mulation of Capital by any state of insecurity^ and in 
 this case, the producers when unable to foresee the 
 change, may, in addition, have to suffer from the loss 
 occasioned either by removing much expensive capital 
 already invested in a particular form of Production, 
 to others to which it is less adapted, or by its remain- 
 ing for a time upon their hands altogether unemployed. 
 
 Of the dangers which operate to disturb the most 
 advantageous distribution of Capitals throughout the 
 whole circle of the trading communities, resulting from 
 a capricious system of taxation, we shall find the most 
 striking illustration, in the commercial history of this 
 country, in the effects of the sliding scale introduced 
 by Sir Robert Peel ; and introduced, let it be remem- 
 bered, specially, with the object of securing a certain 
 supply of corn, under every variety of circumstances, 
 at a low market price. 
 
 It was then anticipated that, under the operation
 
 65 
 
 of a graduated tax, corn would never rise to an ex- 
 cessive price in this country, because whenever 
 growing scarcer here foreign supplies would flow in, 
 attracted by the low rate of duty, until the pressure 
 was relieved, and again conversely, that when corn 
 was abundant here, the scale of duty rising would 
 cause the influx of foreign supplies to fall off", the 
 importers being no longer able to bring them into the 
 market in competition with the untaxed produce of the 
 home growers. 
 
 But how could foreign producers be induced to 
 risk their capitals, in this case requiring to be perma- 
 nently invested, in producing and bringing an article 
 to us for which, by the varying character of our tax, 
 there might be no sale, whilst there could at no time 
 be any certain sale. Was it likely that they would 
 run all the risk, for us to reap the benefit ? and 
 could corn be grown in Russia, or in any foreign 
 country when the price of it at its destination was to 
 be determined by the abundance of the harvest, not 
 in Russia, or at the place of its production, but in 
 England, the place of its consumption ? 
 
 Such a degree of uncertainty in disposing of pro- 
 duce exercises an influence little short of an actual 
 prohibition over the determination of Capital, and 
 is in an equal degree injurious with any protective 
 duty to the most effective developement of the national 
 resources of either country. Probably no such degree 
 of uncertainty would be produced by an anticipation 
 of variations in the tariff" in countries, between which 
 
 F
 
 66 
 
 a free system of exchange prevails, as to disturb from 
 their natural channels the main bulk of the Capitals; 
 but the necessity of avoiding sudden and serious 
 changes in the amount of tax levied, especially upon 
 articles in large demand, in order to permit the release 
 of capitals before the demand declines, has been gene- 
 rally recognised in considering our financial schemes ; 
 and it is this anticipation which creates a feeling of 
 confidence amongst producers, greatly beneficial to the 
 advantageous distribution of the productive resources 
 of the country. 
 
 The other kind of danger which will exercise a 
 disturbing influence over the natural disposition of 
 Capital, is such as may result from the conduct of the 
 labourers themselves. 
 
 They may seek to inflict injuries upon the em- 
 ployers of labour in two difierent ways, but the pro- 
 babilities of a frequent recurrence of either kind appear 
 to me to vary with the different periods of a nation's 
 social and material developement. Active injuries, 
 such for example as we have known in the manu- 
 facturing districts, by the breaking of framework and 
 machinery, or by the burning of warehouses, farm 
 buildings and stacks, or such as are even now not 
 altogether out of date amongst us, by the wanton 
 destruction of machines ingeniously devised to lessen 
 manual labour in agricultural production, seem to 
 belong rather to the state of insecurity common to 
 half civilised societies, and grow naturally of less 
 frequent occurrence, in proportion both to the spread
 
 67 
 
 of education amongst the labouring classes generally, 
 and the better security extended to capitalists and pro- 
 prietors under an improved system of police. 
 
 But with regard to such as I may term passive 
 injuries to Capital, which result from organised strikes, 
 or refusals on the part of labourers to co-operate with 
 their employers in particular trades, except at such 
 wages as would reduce the rate of profit below the 
 ordinary level, the probabilities of frequent recurrence 
 do not appear to me necessarily to diminish with 
 the increasing wealth and industry of any society. 
 Undoubtedly the spread of education, by fostering a 
 spirit of intelligence amongst the labouring classes gene- 
 rally, will do much towards teaching them that their 
 own interests are not antagonistic but identical with 
 those of their employers; yet it is to be remembered 
 that while such is the comparatively late result of in- 
 creasing knowledge, the immediate effect of the more 
 general diffusion of a large store of Wealth, is to supply 
 the active and mischievous spirits with more ample 
 means of guiding the conduct of others, inasmuch as 
 discontent and disunion naturally spread more slowly 
 amongst those who are armed with better resources 
 to sustain a protracted resistance. Moreover it will, 
 I think, be found that some influences in themselves 
 most beneficial to the healthy developement of the 
 national character, such for instance as those which 
 spring from the spirit of independence, from the 
 active desire of improving their condition, or even 
 from the readiness to submit their cause to the test
 
 of public discussion, combine with these improved 
 circumstances to foster that spirit of obstinacy which 
 in reality is tending to impede the productive pro- 
 cesses, upon the well working of which the material 
 welfare of the labouring classes so immediately de- 
 pends. 
 
 Beyond these causes there remain only to alarm 
 the delicate nature of Capital, those temporary but 
 ever recurring changes in the public taste, against 
 which no degree of caution or foresight on the part of 
 the producers can offer a fully sufficient safeguard. 
 The best security however, for the most advantageous 
 distribution of capital will naturally be found to lie in 
 entrusting the employers themselves with its disposal; 
 since they not only enjoy the advantage of a better 
 acquaintance with these periodical variations, but are 
 stimulated by the knowledge that the amount of their 
 own reward depends upon the accuracy of their 
 operations, in adjusting throughout these fluctuations 
 in the market, the relative dimensions of supply and 
 demand. 
 
 Having now completed in this brief summary the 
 enumeration of the principal causes affecting by their 
 influence the distribution of Capital throughout the 
 various channels of Production, we may proceed with 
 a clearer view to consider that which is the most 
 interesting branch of our subject, or the distribution 
 of the Productive labourers themselves. For although 
 we are at all times concerned with the arrange- 
 ments which govern their organisation in the practical
 
 69 
 
 details of everyday life, yet are we so liable to 
 confusion of ideas in contemplating even with an 
 intelligent eye the rapidly varying phenomena of 
 the social machinery, that we need the clue which 
 political economy supplies, to unravel the complicated 
 scheme presented by the organisation of great societies, 
 and to understand in every variety of circumstances 
 the principles which dictate, the processes which exact, 
 and the results which are attained, by the best distribu- 
 tion of Labour. 
 
 It is in connection with this part of the general 
 subject of Production, that the value of the additions 
 made to scientific truth by the publication of the 
 Wealth of Nations, is most strikingly illustrated ; 
 because then for the first time were pointed oozt the 
 marvellous efifects of that system of organisation, 
 whch is in all cases the means of bringing man's 
 labour to its highest point of efficiency in every de- 
 partment of industry, and in many cases as Mr. Mill 
 most justly remarks, the only means of producing 
 at all. 
 
 But of that part of the general scheme which relates 
 specially to the industry of the productive classes, I 
 have found no illustration more complete than one 
 given by the late Archbishop Whately, in a lecture 
 delivered from the Professor's Chair at Oxford. He 
 there supposes us " to be looking down upon that 
 province covered with houses, the huge metropolis 
 of this kingdom, and that we ask ourselves how for 
 so vast a multitude contained within its limits, the
 
 70 
 
 numbers of which are continually fluctuating, can there 
 be regularly produced and distributed the daily supplies 
 of food. These supplies " he continues, " are, it is to 
 be remembered, not only of enormous bulk, and of 
 infinite variety, but frequently of most perishable 
 material, and are generally required to be delivered 
 at the door of the consumers. It is also necessary that 
 these supplies should be so nicely adjusted to the 
 stock from whence they are taken, that the population 
 may not on the one hand be unnecessarily stinted in 
 their consumption, nor on the other be exposed to the 
 risk of scarcity which would ensue from a too liberal use 
 of any article. Would any board of Commissaries," 
 he asks, " be found equal to the undertaking ? Yet 
 this object is accomplished far better than it would be 
 by any effort of human wisdom, through the agency of 
 men who think each of nothing beyond his own in- 
 terest, who with that object in view perform their 
 respective parts with cheerful zeal, and continue un- 
 consciously to employ the wisest means for effecting 
 an object, the vastness of which it would bewilder 
 them even to contemplate." 
 
 I am aware that this passage is intended principally 
 to illustrate the marvellous wisdom of that skilfully 
 proportioned scheme, by which man is placed as a 
 member of society, in such circumstances that he 
 cannot benefit himself without benefitting others, and 
 which secures his co-operation in promoting the wel- 
 fare of his fellows by enlisting in their behalf the 
 most powerful instinct of his nature. But since it is
 
 71 
 
 by the Distribution of Labour alone that the necessary- 
 organisation is afforded for carrying out the design 
 upon which society thus appears to be based; we 
 are, I conceive, justified in believing that that system, 
 whether illustrated by the relations existing between 
 the inhabitants of any particular district, or of dif- 
 ferent districts of the same land, or of different lands, 
 bears alike the genuine impress and stamp of Divine 
 Wisdom, from which alone all schemes for the benefit 
 of the human race in their full perfection emanate. 
 
 Now in entering upon any review of the principal 
 features which characterise the organisation of Pro- 
 ductive Labour, it appears to me of the first im- 
 portance to bear in mind what I before remarked, 
 viz., that we are here regarding but a part only of a 
 general and well-connected scheme, a part indeed to 
 which the arrangement of all others is in some mea- 
 sure subordinate, but which in itself represents but a 
 segment only of the machinery upon which the entire 
 fabric of society so essentially depends. Indeed, it 
 appears, we may illustrate their relative proportions 
 by saying, that as in the general scheme of Exchange 
 the commercial intercourse subsisting between distant 
 and mighty nations, seems but the natural develope- 
 ment of that principle which establishes a system of 
 barter or traffic between the individual members of 
 each separate society; so in the organisation of industry 
 the distribution of the productive agents (which how- 
 ever imperfect in its arrangements must always be 
 the earliest in order of adoption) seems accurately to
 
 72 
 
 represent in miniature that larger scheme, which governs 
 the general division of labour amongst all the mem- 
 bers actively employed within the limits of each 
 separate community. 
 
 I may be pardoned therefore, for travelling some- 
 what out of the limits of our present subject, in order 
 to refer to a classification which Mr. Mill adopts in 
 his Principles of Political Economy, in which he dis- 
 tinguishes the industrious members of society according 
 to the relation which their several occupations bear to 
 the processes of strict Production. 
 
 In addition to those whose labour is strictly creative 
 of " Wealth," a description which Mr. Mill limits to 
 those who are engaged in any of the operations of 
 Agriculture, Manufactures, or Commerce, he classifies 
 as indirectly Productive all others whose labour, how- 
 ever ancillary and subordinate to the former processes, 
 is yet necessary to facilitate^ and in most cases to render 
 possible the exercise of productive industry. Of such 
 a character, he maintains, is the labour of all persons 
 employed at the public expense, or even of members of 
 Parliament, so far as their exertions tend to increase the 
 store of material wealth, by preserving order, justice, 
 and the public safety. In a similar way is the industry 
 indirectly productive which is exercised by the mem- 
 bers of all other professions and callings, so far as 
 they are engaged in promoting these same ends, or 
 in training bodily or mentally, healing, improving, and 
 instructing the strictly productive labourers. 
 
 If this may be accepted as a correct enumeration of
 
 73 
 
 the modes in which industry not strictly creative of 
 "Wealth, may indirectly promote the operations of Pro- 
 duction, it will be easy to distinguish such as in the 
 economical sense, is to be described as Unproductive. 
 Of this character must be esteemed all forms of industry 
 which are never attended, however remotely, with any 
 increase of material produce, but whose results vanish 
 to outward appearance with the exercise of the labour 
 which gives them birth. Of such kinds many are 
 employed in conferring upon society the most lasting 
 benefits, and many the most fleeting pleasure. For in 
 the same category with the offices of the clergy, of 
 philosophers, of orators, and teachers, will rank the 
 occupations of the musician, the dancer, and the 
 actor. Society, as a productive body, supports each 
 member of these various classes out of her surplus re- 
 venues for purposes either of instruction or amusement ; 
 but while the increase in their numerical strength is 
 strictly regulated by the aggregate growth of material 
 Wealth, their industry can in no sense be regarded as 
 contributing, however indirectly, to the creation of it ; 
 and we are therefore, bound to leave the discussion of 
 their functions altogether out of sight in considering 
 the organisation of the machinery of Production. 
 
 While accepting, however, Mr. Mill's description 
 of Directly and Indirectly Productive Labour, as 
 affording the most satisfactory basis for framing scien- 
 tific distinctions, I should desire to make in two in- 
 stances a variation from the classification he adopts of 
 their various forms of labour. The first is in the classi-
 
 74 
 
 fication of the operations of Commerce, with the forms of 
 strictly productive industry; the reason given being, that 
 the result of such labour is to invest material objects 
 with a new property, viz., that of being where they are 
 most required for use, a property necessarily conferring 
 upon them additional value, and placing them in the 
 aggregate store of Wealth. I confess it appears to me 
 that we should avoid a straining of terms, by regarding 
 the operations of Commerce properly so called, as 
 bearing the same relation to the actual production of 
 Wealth, with the duties performed by all others whom 
 Mr. Mill classifies as belonging to the Distributive Class ; 
 and this view of the office of Commerce, moreover, 
 enables us to draw the line of demarcation between 
 Directly and Indirectly Productive Labour where the 
 creation of material objects ceases, and so to consider 
 all forms of industry exercised in the transmission, or 
 distribution of produce, as ancillary to, but not actually 
 engaged in, the processes of strict Production. 
 
 The other variation I should propose, relates 
 to Mr. Mill's description of the kind of labour, en- 
 gaged in the production of materials and tools, or de- 
 voted to the construction of warehouses, docks, manu- 
 factories, granaries, and all other buildings destined 
 for the protection of productive industry, as " indi- 
 rectly instrumental" or as *' subservient to Production," 
 thereby placing them in the same category with the 
 industry exercised by the judge, the soldier, or the 
 tradesman. 
 
 It appears to me that if this be admitted as a correct
 
 75 
 
 classification of such industry, we at once lose the whole 
 advantage (an inestimable one for the purpose of 
 arranging scientific terminology), which consists in 
 making the creation at whatever stage of its manu- 
 facture of a material object of value, the true test of 
 Productive Industry. Materials, tools, and all build- 
 ings whether intended for the protection of future 
 industrial undertakings, or for immediate enjoyment, 
 themselves fulfil all the conditions we are accustomed 
 to require before accounting any object an article of 
 Wealth. They are the realised results of capital and 
 industry expended, and consequently possess a re- 
 cognised value, in virtue of which they command a 
 certain quantity of other produce in exchange; and 
 it appears to me that since the products themselves 
 are thus entitled to assume the character of articles of 
 Wealth, it is altogether beside the question to con- 
 sider, with what ultimate object the industry which 
 creates them was in the first instance undertaken. But 
 further it is to be remembered, that by refusing the 
 title of Directly Productive to industry which ter- 
 minates in the creation of actual material objects, 
 whether valuable or not for purposes of future Pro- 
 duction, we become involved in the difficulties en- 
 tailed by the attempt, to distinguish the precise moment 
 at which any article in the process of manufacture re- 
 linquishes its character of material to assume that of 
 finished article ; a difficulty which amounts in many 
 cases to an impossibility, especially when an article
 
 76 
 
 bears the relation of the former to one manufacture, 
 and of the latter to another. 
 
 The only case which occurs to me, in which any 
 obscurity could arise from requiring the issue of a 
 material product in some stage of its manufacture, 
 as the necessary test for determining whether a par- 
 ticular form of industry is entitled to be styled 
 Directly Productive, is that of the labour, which in 
 agricultural operations is expended in preparing the 
 soil for the reception of seed. But it is obvious, that 
 by the exercise of that industry land itself is sub- 
 mitted to the process of transformation, and becomes 
 invested by it with the character of an improved in- 
 strument, bearing an additional value in the market, 
 proportioned to the amount of capital and industry 
 which has been expended in its preparation. 
 
 Now, therefore, that we are supplied with a safe 
 and intelligible test for determining the character of 
 Productive Industry, no ambiguity need remain in 
 classifying each of the various industries exercised 
 within the limits of any large society, according to the 
 relation which they respectively bear to the creation 
 and increase of material Wealth. "We have first, in the 
 general distribution of the members of any community, 
 to consider the strictly Productive labourers, or those 
 the quality of whose industry is at all times capable of 
 being ascertained, by applying the test alluded to as to 
 the issue from its exercise of a material product. In 
 this first class we may reckon without disregarding
 
 77 
 
 this rule, besides the large numbers engaged in the 
 immediately productive processes of Agriculture and 
 Manufactures, all others who are employed in facili- 
 tating those operations by making roads, cutting canals, 
 clearing woods, preparing land by draining, trenching, 
 or manuring, by the construction of docks, granaries, 
 or warehouses ; in short we may include every labourer 
 whose industry, exercised with a view to Production, 
 is capable of being distinguished in the effect it has 
 wrought by the creation or improvement of some 
 material object of value. 
 
 In the second class, viewed in respect to our present 
 object of inquiry, should be enumerated the indirectly 
 Productive Labourers]; a description which I conceive 
 may be applied alike to all members of the Distributive 
 or Commercial classes; to the Ministers of the 'Crown 
 in most of their functions, with the staffs of their 
 respective departments ; some of which no doubt, 
 as for instance the Treasury, the Customs, and the 
 Board of Trade, are more immediately concerned with 
 the interests of the productive classes, but all of which 
 exercise an influence by the operations which they 
 conduct, indispensable to the well-working of that 
 machinery upon which the aggregate increase of 
 material Wealth more directly depends. Of the same 
 character, economically considered, is the chief part 
 the industry exercised by the Judges and the legal 
 profession generally, being devoted to maintaining 
 order, and defending the rights of property; since 
 without this security no sufficient encouragement re-
 
 78 
 
 mains to stimulate to prolonged exertions those im- 
 mediately engaged in the processes of Production. We 
 must reckon in the same sense with the labourers in 
 these professions, the members of our national forces, 
 both military and naval, as also the police; since 
 although the character of the functions performed by 
 these classes appears to remove them farthest from the 
 idea of Productive Industry, yet are they entitled to 
 be considered as promoting the success of its under- 
 takings in virtue of sharing alike in the common 
 task of providing for the safety of the community. In 
 the enumeration also of public functionaries, in- 
 directly promoting the operations of Production, we 
 must not omit the offices of consuls at foreign ports ; 
 who being specially charged with the superintendence 
 of commercial transactions, labour in their respective 
 spheres to facilitate the transmission to our shores of 
 that enormous bulk of foreign Wealth, which is 
 annually seeking to exchange for the produce of our 
 own industry and soil. 
 
 Lastly, to complete the list of the employments in 
 which Labour may render an indirect service to Pro- 
 duction, we must frame a class in which to include, 
 first the men of science who have enriched mth their 
 discoveries the store of mechanical appliances, and by 
 the aid of new powers have enlarged the field of 
 man's dominion over the material universe ; secondly 
 the men of enterprise, but especially those of en- 
 gineering skill, who have availed themselves of this 
 increased knowledge of the secrets of nature to govern
 
 79 
 
 results which can only be attained by working in 
 obedience to her laws; and lastly those whose labour 
 is exercised, in training and developing by bodily and 
 mental education the faculties of those who either are, 
 or hereafter are to be employed in the numberless 
 processes of purely creative Industry. 
 
 Now even if this enumeration does not exhaust 
 the modes in which labour is distributed in the 
 organisation of great societies, viewed relatively 
 to their production of material wealth, it will be ad- 
 mitted, I think, to be sufficiently comprehensive, to 
 enable us to determine what description to apply to 
 the character of any particular employment, which we 
 may desire to classify. I will now attempt, (since it 
 would be impossible within my present limits to follow 
 out the details of the productive machinery in every 
 department of industry,) to sum up in a few words 
 the most prominent effects upon the efficiency of labour 
 of that system of entire division of employments, which 
 appears to govern alike the arrangements of each 
 special branch of Production, and the highly elaborate 
 organisation, upon which depends the fabric of entire 
 societies. That system cannot of course, owing to the 
 difference in the mode in which the Natural Agents 
 lend their co-operation, be applied so universally in 
 the processes of Agriculture as it is in those of Man- 
 ufacture ; but it may be said to be the general law 
 of productive industry to limit the labourer, at 
 least in the lower branches, whenever possible, to a 
 single field of operations. Whether that system
 
 80 
 
 be productive of unmixed advantage in securing 
 the highest degree of general efficiency, has long 
 been a point of discussion amongst the most celebrated 
 economists. 
 
 By Adam Smith, it will be remembered, the advan- 
 tages of this system were enumerated under three 
 separate heads.* The first, is that which proceeds from 
 the increased dexterity of the workman himself. The 
 second, from the saving of time which would be lost 
 in passing from one occupation to another. The third, 
 from the greater probability of inventions being made 
 by workmen wholly devoted to a particular field of 
 industry. Of these three it appears to me impossible 
 to deny that the first is an advantage really acquired, 
 because as Mr. Millf justly remarks, while increasing 
 energy depends upon the individual workman who has 
 constantly to perform a particular task, increasing 
 facility must of necessity attend all workmen who by 
 continual repetition become habituated to their employ- 
 ment. As to the third advantage, which relates to the 
 greater probability of inventions being made by 
 labourers wholly devoted to special forms of industry ; 
 it appears to me, notwithstanding the examples cited 
 by Adam Smith in support of his theory, that the 
 possibility is too remote to be fairly taken into account 
 in determining the relative advantages of the two 
 modes of employing productive labourers. 
 
 The real difficulty remains with respect to the 
 
 * Book I. Chap. I. Wealth of Nations. 
 
 t Principles of Political Economy. Book I. Chap. VIII. Par. 5.
 
 81 
 
 second advantage, and indeed it seems impossible to 
 decide, without taking into consideration the nature 
 of the employment itself, whether variety or monotony 
 be most favourable to the rapid and vigorous perform- 
 ance of particular tasks of manual labour. Mr. Mill 
 in the chapter just referred to, rather inclines to 
 the side of variety, and says "that neither in 
 manual nor mental toil is it an unmixed advantage to 
 confine the labourer's energies entirely to a particular 
 field of employment; it is the change from one branch 
 of work to another, which refreshs and invigorates 
 the powers of men, by calling into play different facul- 
 ties of the mind, and different muscles of the body. 
 In this respect however," he adds, *' much depends 
 upon temperament, and much more upon habit, the 
 habit of passing rapidly from one occupation to another, 
 being generally acquired like other habits by early 
 cultivation, and when acquired, the workman comes 
 to each part of his day's labour with all the increased 
 vigour and energy which the novelty and variety of 
 his employments are calculated to awaken." This 
 statement which appears to me perfectly accurate, 
 establishes my conclusion, that whereas variety prevails 
 generally only in the employments which demand 
 skilled labour, while those of common labour are 
 chiefly of a monotonous character, a different rule of 
 distribution must be applied in order to secure the 
 highest efficiency in either form of industry. 
 
 The efficiency of such labourers as those employed 
 in engineering operations, in gardening, or any of the 
 
 G
 
 82 
 
 liighcr branches of agricultural industry, and of such 
 workmen as watchmakers, opticians, or instrument 
 makers, can I think, in no sense, be considered as 
 impaired by the variety of their occupations ; while 
 on the other hand it would appear unreasonable to 
 suppose, that common or unskilled labourers would 
 devote themselves with more vigour to the perform- 
 ance of their daily tasks, if relieved from that un- 
 ceasing monotony which with persons of higher intelli- 
 gence and activity of mind, might fairly be regarded as 
 most seriously aggravating the weight of their burdens. 
 I am far from believing that they are accustomed so 
 to regard it, while it is to be remembered, in favour 
 of monotonous employment, that the increased facility 
 they acquire in performing their tasks by constant 
 repetition is a certain advantage; and although they may 
 not understand how their interests are immediately 
 concerned in the great work of Production, they do 
 understand sufficiently well that he receives the largest 
 reward whose labour is most effective; and they are, 
 therefore, encouraged both by the facility of the task 
 and the desire of emulation, to use their utmost exer- 
 tions in the work, far more than they could be by any 
 artificial arrangements introduced to diversify the rou- 
 tine of their daily employments. 
 
 It appears then, that in order to secure the highest 
 efficiency in every department of productive industry, 
 the principle of division may be carried to its utmost 
 limit in the apportionment of those tasks which de- 
 mand the exercise of simple manual labour ; while
 
 83 
 
 such variety is admissible in those employments which 
 in the outset exact a higher degree of intelligence and 
 skill, as shall at once relieve the labourers from a 
 burdensome sense of the monotonous character of their 
 task, and foster the healthy developement of their 
 mental and muscular powers. 
 
 Some persons from philanthropic motives, most 
 honourable to themselves, may regret the mechanical 
 nature of the labour which employs great masses of our 
 industrial population, as detrimental to the progressive 
 developement of their intellectual faculties ; but ex- 
 perience tells us, that habits formed by working in 
 obedience to the laws which govern the course of 
 Material Production, are too powerful to yield to any 
 schemes, however ingeniously organised, which har- 
 monise ill with the most effective distribution of 
 labour. I confess therefore, that I expect no more 
 direct mode of advancing the intellectual condition 
 of the humbler classes will be found practicable, than 
 that which, by developing the national resources, and 
 adding to the aggregate store of Wealth, assures to 
 them both a higher degree of material comfort, and 
 enables them to provide more liberally for other 
 than mere physical wants. 
 
 And now that I must bring these essays to a con- 
 clusion, it remains only to remark that this last con- 
 sideration seems to bring us back to the point from 
 whence we started. For at the first we were engaged 
 in reviewing the advantages accruing to each society 
 from the possession of a large and increasing aggro-
 
 84 
 
 gate of national Wealth. We ascertained by analysis 
 of the forms of industry in which each society, as a 
 productive body, engages for the supply of its material 
 wants, that the increase of that wealth depends upon the 
 amount of co-operation secured from the Natural 
 Agents in the great work of Production, and the 
 judicious distribution of its Capital and Labour. We 
 found the Freedom of Commerce the only mode of 
 assuring the one, and the Division of Employments, 
 the other. And now in conclusion we appear to return 
 to the blessings which such increase of Production 
 confers upon that large portion of every community, 
 known as the industrial classes, or in the stricter 
 language of Political Economy, as the productive 
 labourers. 
 
 For upon material progress, as its sure and certain 
 basis, does indeed rest the security for national gran- 
 deur, and national power, while from thence too flow 
 forth in rich abundance those springs of individual 
 happiness, the bright auspices of a better life, which 
 travel downwards to each toil-worn son of industry, 
 and minister alike to his comfort and his pleasure. 
 
 Only let us remember, that in endeavouring so 
 far as our individual eiForts can avail, to secure the 
 operation of that machinery upon the efficiency of 
 which the welfare of great societies depends, we are 
 but fulfilling our part in the wonderful scheme of 
 Infinite Wisdom, by which the vast fabric of the 
 Universe is rendered subservient to the good of 
 Man; by which human societies of every language.
 
 85 
 
 and of every race, are knitted together in the closest 
 bonds a common interest can supply ; and even more, 
 that whilst our mode of action is in accordance with 
 those laws only which govern the course of material 
 prosperity, we are adding to the appointed means 
 which others, as well as ourselves may enjoy, for 
 securing the progress of man in those higher fields 
 of improvement towards which, the aspirations of his 
 Intellectual and Moral being are for ever yearning. 
 
 THE END. 
 
 Walter BretUU, Printer, 336a, Oxford Street, near Regent Circua.
 
 /^
 
 iif'.ys-r- 
 
 ^^:y\ 
 
 Wb- ■'4.J 
 
 mSffi ' *: fib^lijt^ 
 
 I^H^° ^1^' 
 
 ^te^Sii 
 
 raCj 
 
 ^^W^ 
 
 W:M 
 
 Spi^^^ 
 
 WtWjk 
 
 [T^fJinfMBI 
 
 bsb'^^3 
 
 ^h 
 
 '^t 
 
 •<»^t 
 
 A 'i:^)^