Knowledge is Power Part 2

The consumption of any production is the destruction of its value. The production was created by industry to administer to individual wants, to be consumed, to be destroyed. When a thing capable of being consumed is produced, a value is created; when it is consumed, that value is destroyed. The general ma.s.s of riches then remains the same as it was before that production took place. If the power to produce, and the disposition to consume, were equal and constant, there could be no saving, no acc.u.mulation, no capital. If mankind, by their intelligence, their skill, their division of employments, their union of forces, had not put themselves in a condition to produce more than is consumed while the great body of industrious undertakings is in progress, society would have been stationary,--civilization could never have advanced.

It may a.s.sist us in making the value of capital more clear, if we take a rapid view of the most obvious features of the acc.u.mulation of a highly civilized country.

The first operation in a newly settled country is what is termed to clear it. Look at a civilized country, such as England. It _is_ cleared.

The enc.u.mbering woods are cut down, the unhealthy marshes are drained.

The noxious animals which were once the princ.i.p.al inhabitants of the land are exterminated; and their place is supplied with useful creatures, bred, nourished, and domesticated by human art, and multiplied to an extent exactly proportioned to the wants of the population. Forests remain for the produce of timber, but they are confined within the limits of their utility;--mountains "where the nibbling flocks do stray," have ceased to be barriers between nations and districts. Every vegetable that the diligence of man has been able to transplant from the most distant regions is raised for food. The fields are producing a provision for the coming year; while the stock for immediate consumption is ample, and the laws of demand and supply are so perfectly in action, and the facilities of communication with every region so unimpeded, that scarcity seldom occurs, and famine never. Rivers have been narrowed to bounds which limit their inundations, and they have been made navigable wherever their navigation could be profitable. The country is covered with roads, with ca.n.a.ls, and now, more especially, with railroads, which render distant provinces as near to each other for commercial purposes as neighbouring villages in less advanced countries. Science has created the electric telegraph, by which prices are equalized through every district, by an instant communication between producers and consumers. Houses, all possessing some comforts which were unknown even to the rich a few centuries ago, cover the land, in scattered farm-houses and mansions, in villages, in towns, in cities, in capitals. These houses are filled with an almost inconceivable number of conveniences and luxuries--furniture, gla.s.s, porcelain, plate, linen, clothes, books, pictures. In the stores of the merchants and traders the resources of human ingenuity are displayed in every variety of substances and forms that can exhibit the mult.i.tude of civilized wants; and in the manufactories are seen the wonderful adaptations of science for satisfying those wants at the cheapest cost.

The people who inhabit such a civilized land have not only the readiest communication with each other by the means of roads and ca.n.a.ls, but can trade by the agency of ships with all parts of the world. To carry on their intercourse amongst themselves they speak one common language, reduced to certain rules, and not broken into an embarra.s.sing variety of unintelligible dialects. Their written communications are convoyed to the obscurest corners of their own country, and even to the most remote lands, with prompt and unfailing regularity, and now with a cheapness which makes the poorest and the richest equal in their power to connect the distant with their thoughts by mutual correspondence. Whatever is transacted in such a populous hive, the knowledge of which can afford profit or amus.e.m.e.nt to the community, is recorded with a rapidity which is not more astonishing than the general accuracy of the record. What is more important, the discoveries of science, the elegancies of literature, and all that can advance the general intelligence, are preserved and diffused with the utmost ease, expedition, and security, so that the public stock of knowledge is constantly increasing. Lastly, the general well-being of all is sustained by laws--sometimes indeed imperfectly devised and expensively administered, but on the whole of infinite value to every member of the community; and the property of all is defended from external invasion and from internal anarchy by the power of government, which will be respected only in proportion as it advances the general good of the humblest of its subjects, by securing their capital from plunder and defending their industry from oppression.

This capital is ready to be won by the power of every man capable of work. But he must exercise this power in complete subjection to the natural laws by which every exchange of society is regulated. These laws sometimes prevent labour being instantly exchanged with capital, for an exchange necessarily requires a balance to be preserved between what one man has to supply and what another man has to demand; but in their general effect they secure to labour the certainty that there shall be abundance of capital to exchange with; and that, if prudence and diligence go together, the labourer may himself become a capitalist, and even pa.s.s out of the condition of a labourer into that of a proprietor, or one who lives upon acc.u.mulated produce. The experience of every day shows this process going forward--not in a solitary instance, as in that of the ruined and restored man whose tale we have just told, but in the case of thriving tradesmen all around us, who were once servants. But if the labourer or the great body of labourers were to imagine that they could obtain such a proportion of the capital of a civilized country except as exchangers, the store would instantly vanish. They might perhaps divide by force the crops in barns and the clothes in warehouses--but there would be no more crops or clothes. The principle upon which all acc.u.mulation depends, that of security of property, being destroyed, the acc.u.mulation would be destroyed. Whatever tends to make the state of society insecure, tends to prevent the employment of capital. In despotic countries, that insecurity is produced by the tyranny of one. In other countries, where the people, having been misgoverned, are badly educated, that insecurity is produced by the tyranny of many. In either case, the bulk of the people themselves are the first to suffer, whether by the outrages of a tyrant, or by their own outrages. They prevent labour, by driving away to other channels the funds which support labour. In some eastern countries, where, when a man becomes rich, his property is seized upon by the one tyrant, n.o.body dares to avow that he has any property. Capital is not employed; it is hidden: and the people who have capital live not upon its profits, but by the diminution of the capital itself. In the very earliest times we hear of concealed riches. In the book of Job those who "long for death"

are said to "dig for it more than for hid treasures." The tales of the East are full of allusions to money buried and money dug up. The poor woodman, in making up his miserable f.a.ggot, discovers a trap-door, and becomes rich. In India, where the rule of Mohammedan princes was usually one of tyranny, even now the search after treasure goes on. The popular mind is filled with the old traditions; and so men dream of bags of gold to be discovered in caves and places of desolation, and they forthwith dig, till hope is banished, and the real treasure is found in systematic industry. It was the same in the feudal times in England, when the lord tyrannized over his va.s.sals, and no property was safe but in the hands of the strongest. In those times people who had treasure buried it. Who thinks of burying treasure now in England? In the plays and story-books which depict the manners of our own early times, we constantly read of people finding bags of money. We never find bags of money now, except when a very old h.o.a.rd, hidden in some time of national trouble, comes to light. So little time ago as the reign of Charles II. we read of the Secretary to the Admiralty going down from London to his country-house, with all his money in his carriage, to bury it in his garden. What Samuel Pepys records of his doings with his own money, was a natural consequence of the practices of a previous time. He also chronicles, in several places of his curious Diary, his laborious searches, day by day, for 7000_l._ hid in b.u.t.ter firkins in the cellars of the Tower of London. Why is money not hidden and not sought for now? Because people have security for the employment of it, and by the employment of it in creating new produce the nation's stock of capital goes on hourly increasing. When we read in Blackstone's 'Commentaries on the Laws of England,' that the concealment of treasure-trove, or found treasure, from the king, is a misdemeanour punishable by fine and imprisonment, and that it was formerly a capital offence, we at once see that this is a law no longer for our time; and we learn from this instance, as from many others, how the progress of civilization silently repeals laws which belong to another condition of the people.

[Ill.u.s.tration: Treasure-finding.]

When we look at the nature of the acc.u.mulated wealth of society, it is easy to see that the poorest member of it who dedicates himself to profitable labour is in a certain sense rich--rich, as compared with the unproductive and therefore poor individuals of any uncivilized tribe.

The very scaffolding, if we may so express it, of the social structure, and the moral forces by which that structure was reared, and is upheld, are to him riches. To be rich is to possess the means of supplying our wants--to be poor is to be dest.i.tute of those means. Riches do not consist only of money and lands, of stores of food or clothing, of machines and tools. The particular knowledge of any art--the general understanding of the laws of nature--the habit from experience of doing any work in the readiest way--the facility of communicating ideas by written language--the enjoyment of inst.i.tutions conceived in the spirit of social improvement--the use of the general conveniences of civilized life, such as roads--these advantages, which the poorest man in England possesses or may possess, const.i.tute individual property. They are means for the supply of wants, which in themselves are essentially more valuable for obtaining his full share of what is appropriated, than if all the productive powers of nature were unappropriated, and if, consequently, these great elements of civilization did not exist.

Society obtains its almost unlimited command over riches by the increase and preservation of knowledge, and by the division of employments, including union of power. In his double capacity of a consumer and a producer, the humblest man has the full benefit of these means of wealth--of these great instruments by which the productive power of labour is carried to its highest point.

But if these common advantages, these public means of society, offering so many important agents to the individual for the gratification of his wants, alone are worth more to him than all the precarious power of the savage state--how incomparably greater are his advantages when we consider the wonderful acc.u.mulations, in the form of private wealth, which are ready to be exchanged with the labour of all those who are in a condition to add to the store. It has been truly said by M. Say, a French economist, "It is a great misfortune to be poor, but it is a much greater misfortune for the poor man to be surrounded only with other poor like himself." The reason is obvious. The productive power of labour can be carried but a very little way without acc.u.mulation of capital. In a highly civilized country, capital is heaped up on every side by ages of toil and perseverance. A succession, during a long series of years, of small advantages to individuals unceasingly renewed and carried forward by the principle of exchanges, has produced this prodigious amount of the aggregate capital of a country whose civilization is of ancient date. This acc.u.mulation of the means of existence, and of all that makes existence comfortable, is princ.i.p.ally resulting from the labours of those who have gone before us. It is a stock which was beyond their own immediate wants, and which was not extinguished with their lives. It is our capital. It has been produced by labour alone, physical and mental. It can be kept up only by the same power which has created it, carried to the highest point of productiveness by the arrangements of society.

CHAPTER V.

Common interests of Capital and Labour--Labour directed by Acc.u.mulation--Capital enhanced by Labour--Balance of rights and duties--Relation of demand and supply--Money exchanges--Intrinsic and representative value of money.

There is an old proverb, that "When two men ride on one horse, one man must ride behind." Capital and Labour are, as we think, destined to perform a journey together to the end of time. We have shown how they proceed on this journey. We have shown that, although Labour is the parent of all wealth, its struggles for the conversion of the rude supplies of nature into objects of utility are most feeble in their effects till they are a.s.sisted by acc.u.mulation. Before the joint interests of Labour and Capital were at all understood, they kept separate; when they only began to be understood, as we shall show, they were constantly pulling different ways, instead of giving "a long pull, a strong pull, and a pull altogether;" and even now, when these interests in many respects are still imperfectly understood, they occasionally quarrel about the conditions upon which they will continue to travel in company. In the very outset of the journey, Labour, doubtless, took the lead. In the dim morning of society Labour was up and stirring before Capital was awake. Labour did not then ride; he travelled slowly on foot through very dirty ways. Capital, at length, as slowly followed after, through the same mire, but at an humble distance from his parent. But when Capital grew into strength, he saw that there were quicker and more agreeable modes of travelling for both, than labour had found out. He procured that fleet and untiring horse Exchange; and when he proposed to Labour that they should mount together, he claimed the right, and kept it, for their mutual benefit, of taking the direction of the horse. For this reason, as it appears to us, we are called upon to a.s.sign to one of the companions, according to the practice of the old Knights Templars, the privilege of sitting before the other--holding the reins, indeed, but in all respects having a community of interests, and an equality of duties, as well as rights, with his fellow-traveller.

Let us endeavour to advance another step in the ill.u.s.tration of these positions, by going back to the prodigal who had spent all his substance. Let us survey him at the moment when he had made the wise, and in many respects heroic, resolution to pa.s.s from the condition of a consumer into that of a producer. The story says, "The first thing that drew his attention was a heap of coals shot out of a cart on the pavement before a house. He offered himself to shovel or wheel them into the place where they were to be laid, and was employed." Here, then, we see that the labour of this man was wholly and imperatively directed by acc.u.mulation. It was directed as absolutely by the acc.u.mulation of others as the labour of Dampier's Moskito Indian was directed by his own acc.u.mulation. The Indian could not labour profitably--he could not obtain fish and goats for his food, instead of seal's flesh--till he had called into action the power which he possessed in his knife and his gun-barrel. The prodigal had no acc.u.mulation whatever of his own. He had not even the acc.u.mulation of peculiar skill in any mode of labour;--for a continual process of waste enlarges neither the mental nor physical faculties, and generally leaves the wretched being who has to pa.s.s into the new condition of a producer as helpless as the weakest child. He had nothing but the lowest power, of labouring without peculiar knowledge or skill. He had, however, an intensity and consistency of purpose which raised this humble power into real strength. He was determined never to go backward--always to go on. He knew, too, his duties as well as his rights; and he saw that he must wholly accommodate his power to the greater power which was in action around him. When he pa.s.sed into the condition of a producer, he saw that his powers and rights were wholly limited and directed by the principles necessary to advance production; and that his own share of what he a.s.sisted in producing must be measured by the laws which enabled him to produce at all. He found himself in a position where his labour was absolutely governed by the system of exchanges. No other system could operate around him, because he was in a civilized country. Had he been thrown upon a desert land without food and shelter, his labour must have been instantly and directly applied to procuring food and shelter. He was equally without food and shelter in a civilized country. But the system of exchanges being in action, he did not apply his labour directly to the production of food and lodging for himself. He added by his labour a new value to a heap of coals; he enabled another man more readily to acquire the means of warmth; and by this service, which he exchanged for "a few pence" and "a small gratuity of meat and drink," he indirectly obtained food and lodging. He conferred an additional value upon a heap of coals; and that additional value was represented by the "few pence" and "a small gratuity of meat and drink." Had the system of exchange been less advanced, that is, had society been less civilized, he would probably have exchanged his labour for some object of utility, by another and a ruder mode. He would have received a portion of the coals as the price of the labour by which he gave an additional value to the whole heap. But mark the inconvenience of such a mode of exchange. His first want was food; his next, shelter: had he earned the coals, he must have carried them about till he had found some other person ready to exchange food and lodging for coals.

Such an occurrence might have happened, but it would have been a lucky accident. He could find all persons ready to exchange food and clothes for money--because money was ready again to exchange for other articles of utility which they might require, and which they would more readily obtain by the money than by the food and clothes which our labourer had received for them. During the course of the unprofitable labour of waiting till he had found an exchanger who wanted coals, he might have perished. What then gave him the means of profitable labour, and furnished him with an article which every one was ready to receive in exchange for articles of immediate necessity? Capital in two forms. The heap of coals was capital. The coals represented a very great and various acc.u.mulation of former labour that had been employed in giving them value. The coals were altogether valueless till labour had been employed to raise them from the pit, and to convey them to the door of the man who was about to consume them. But with what various helps had this labour worked! Mere manual labour could have done little or nothing with the coals in the pit. Machines had raised them from the pit.

Machines had transported them from the pit to the door of the consumer.

They would have remained buried in the earth but for large acc.u.mulations of knowledge, and large acc.u.mulations of pecuniary wealth to set that knowledge in action by exchanging with it. The heap of coals represented all this acc.u.mulation; and it more immediately represented the Circulating Capital of consumable articles of utility, which had been paid in the shape of wages, at every stage of the labour exercised in raising the coals from the mine, and conveying them to the spot in which the prodigal found them laid. The coals had almost attained their highest value by a succession of labour; but one labour was still wanting to give them the highest value. They were at their lowest value when they remained unbroken in the coal-pit; they were at their highest value when they were deposited in the cellar of the consumer. For that last labour there was circulating capital ready to be exchanged. The man whose course of production we have been tracing imparted to them this last value, and for this labour he received a "few pence" and a "gratuity of meat and drink." These consumable commodities, and the money which might be exchanged for other consumable commodities, were circulating capital. They supplied his most pressing wants with incomparably more readiness and certainty than if he had been turned loose amongst the unappropriated productions of nature, with unlimited freedom and absolute rights. In the state in which he was actually placed his rights were limited by his duties,--but this balance of rights and duties was the chief instrument in the satisfaction of his wants. Let us examine the principle a little more in detail.

An exchange was to be carried on between the owner of the coals and the man who was willing to shovel them into the owner's cellar. The labourer did not want any distinct portion of the coals, but he wanted some articles of more urgent necessity in exchange for the new value which he was ready to bestow upon the coals. The object of each exchanger was, that labour should be exchanged with capital. That object could not have been accomplished, or it would have been accomplished slowly, imperfectly, and therefore unprofitably, unless there had been interchangeable freedom and security for both exchangers,--for the exchanger of capital, and the exchanger of labour. The first right of the labourer was, that his labour should be free;--the first right of the capitalist was, that his capital should be free. The rights of each were built upon the security of property. Could this security have been violated, it might have happened, either that the labourer should have been compelled to shovel in the coals--or, that the capitalist should have been compelled to employ the labourer to shovel them in. Had the lot of the unfortunate prodigal been cast in such a state of society as would have allowed this violation of the natural rights of the labourer and the capitalist, he would have found little acc.u.mulation to give a profitable direction to his labour. He would have found production suspended, or languishing. There would probably have been no heap of coals wanting his labour to give them the last value;--for the engines would have been idle that raised them from the pit, and the men would have been idle that directed the engines. The circulating capital that found wages for the men, and fuel for the engines, would have been idle, because it could not have worked with security. Acc.u.mulation, therefore, would have been suspended;--and all profitable labour would, in consequence, have been suspended. It was the unquestionable right of the labourer that his labour should be free; but it was balanced by the right of the capitalist that his acc.u.mulation should be secure. Could the labour have seized upon the capital, or the capital upon the labour, production would have been stopped altogether, or in part. The mutual freedom and security of labour and capital compel production to go forward; and labour and capital take their respective stations, and perform their respective duties, altogether with reference to the laws which govern production. These laws are founded upon the natural action of the system of exchange, carrying forward all its operations by the natural action of the great principle of demand and supply. When capital and labour know how to accommodate themselves to the direction of these natural laws, they are in a healthy state with respect to their individual rights, and the rights of industry generally. They are in that state in which each is working to the greatest profit in carrying forward the business of production.

The story of the prodigal goes on to say, "He then looked out for the next thing that might chance to offer; and went with indefatigable industry through a succession of servile employments, in different places, of longer and shorter duration." Here we see the principle of Demand and Supply still in active operation. "He _looked out_ for the next thing that might chance to offer." He was ready with his supply of labour immediately that he saw a demand for it. Doubtless, the "indefatigable industry" with which he was ready with his supply created a demand, and thus he had in some degree a control over the demand. But in most cases the demand went before the supply, and he had thus to watch and wait upon the demand. In many instances demand and supply exercise a joint influence and control, each with regard to the other.

Pliny, the Roman naturalist, relates that in the year 454 of the building of Rome (300 years before Christ) a number of barbers came over from Sicily to shave the Romans, who till that time had worn long beards. But the barbers came in consequence of being sent for by a man in authority. The demand here distinctly went before the supply; but the supply, doubtless, acted greatly upon the demand. During a time of wild financial speculation in Paris, created by what is called the Mississippi bubble, a hump-backed man went daily into the street where the stock-jobbers were accustomed to a.s.semble, and earned money by allowing them to sign their contracts upon the natural desk with which he was enc.u.mbered. The hump-back was doubtless a shrewd fellow, and saw the difficulty under which the stock-jobbers laboured. He supplied what they appeared to want; and a demand was instantly created for his hump.

He was well paid, says the story. That was because the supply was smaller than the demand. If other men with humps had been attracted by the demand, or if persons had come to the street with portable desks more convenient than the hump, the reward of his service would naturally have become less. He must have yielded to the inevitable law by which the amount of circulating capital, as compared with the number of labourers, prescribes the terms upon which capital and labour are united.

By following the direction which capital gave to his industry, the prodigal, whose course we have traced up to the point when he went into the condition of a labourer, became at length a capitalist. "He had gained, after a considerable time, money enough to purchase, in order to sell again, a few cattle, of which he had taken pains to understand the value. He speedily, but cautiously, turned his first gains into second advantages; retained, without a single deviation, his extreme parsimony; and thus advanced by degrees into larger transactions and incipient wealth. The final result was that he more than recovered his lost possessions, and died an inveterate miser, worth 60,000_l._"

He gained "money," and he "purchased" cattle. In the simple transaction which has been recorded of the first exchange of the prodigal's labour for capital, we find the circ.u.mstances which represent every exchange of labour for capital. The prodigal wanted meat and drink, and he gave labour in exchange for meat and drink; the capitalist wanted the produce of labour--he wanted a new value bestowed upon his coals by labour--and he gave meat and drink in exchange for the labour which the prodigal had to give. But the prodigal wanted something beyond the meat and drink which was necessary for the supply of the day. He had other immediate necessities beyond food; and he had determined to acc.u.mulate capital. He therefore required "a few pence" in addition to the "meat and drink."

The capitalist held that the labour performed had conferred a value upon his property, which would be fairly exchanged for the pence in addition to the food, and he gave, therefore, in exchange, that portion of his capital which was represented by the money and by the food. This blending of one sort of consumable commodity, and of the money which represented any other consumable commodity which the money could be exchanged with, was an accident arising out of the peculiar circ.u.mstances in which the prodigal happened to be placed. In ordinary cases he would have received the money alone,--that is, he would have received a larger sum of money to enable him to exchange for meat and drink, instead of receiving them in direct payment. It is clear, therefore, that as the money represented one portion of the consumable commodities which were ready to pay for the labour employed in giving a new value to the coals, it might represent another portion--the meat, for instance, without the drink; or it might represent all the consumable commodities, meat, drink, lodging, clothes, fuel, which that particular labourer might want; and even represent the acc.u.mulation which he might extract out of his self-denial as to the amount of meat, drink, lodging, clothes, and fuel which he might require as a consumer; and the farthing saved out of his money-payment might be the nest-egg which was to produce the increase out of which he purchased cattle, and died a rich miser.

We may be excused for calling attention to the fact, which is a very obvious one, that if the labourer, whose story we have told, had received a portion of the coals upon which he had conferred a new value in exchange for the labour which produced that value, he would have been paid in a way very unfavourable for production. It would have required a new labour before the coals could have procured him the meat, and drink, and lodging of which he had an instant want; and he therefore must have received a larger portion of coals to compensate for his new labour, or otherwise his labour must have been worse paid. There would have been unprofitable labour, whose loss must have fallen somewhere,--either upon the capitalist or the labourer in the first instance, but upon both ultimately, because there would have been less production. All the unprofitable labour employed in bringing the exchange of the first labour for capital to maturity would have been so much power withdrawn from the efficiency of the next labour to be performed; and therefore production would have been impeded to the extent of that unprofitable labour. The same thing would have happened if, advancing a step forward in the science of exchange, the labourer had received an entire payment in meat and drink, instead of a portion of the coals, which he could have exchanged for meat and drink. Wanting lodging, he would have had to seek a person who wanted meat and drink in exchange for lodging, before he could have obtained lodging. But he had a few pence,--he had money.

He had a commodity to exchange that he might divide and subdivide as long as he pleased, whilst he was carrying on an exchange,--that is, he might obtain as much lodging as he required for an equivalent portion of his money. If he kept his money, it would not injure by keeping as the food would. He might carry it from place to place more easily than he could carry the food. He would have a commodity to exchange, whose value could not be made matter of dispute, as the value of meat and drink would unquestionably have been. This commodity would represent the same value, with little variation, whether he kept it a day, or a week, or a month, or a year; and therefore would be the only commodity whose retention would advance his design of acc.u.mulating capital with certainty and steadiness. It is evident that a commodity possessing all these advantages must have some intrinsic qualities which all exchangers would recognise--that it must be a standard of value--at once a commodity possessing real value, and a measure of all other values. This commodity exists in all commercial or exchanging nations in the shape of coined metal. The metal itself possesses a real value, which represents the labour employed in producing it; and, in the shape of coin, represents also a measure of other value, because the value of the coin has been determined by the sanction of some authority which all admit.

That authority is most conveniently expressed by a Government, as the representative of the aggregate power of society. The metal itself, unless in the shape of coined money, would not represent a definite value; because the metal might be depreciated in value by the admixture of baser or inferior metals, unless it bore the impress of authority to determine its value. The exchangers of the metal for other articles of utility could not, without great loss of labour, be constantly employed in reducing it to the test of value, even if they had the knowledge requisite for so ascertaining its value. It used to cost 1000_l._ a year to the Bank of England for the wages of those who weighed the gold coin brought to the Bank; and it has been estimated that 30,000 sovereigns pa.s.s over the Bank counter daily. A machine is now used at the Bank, which separates the full-weight sovereigns and the light ones, at the rate of 10,000 an hour. In Greece a piece of gold in the rude times was stamped with the figure of an ox, to indicate that it would exchange for an ox. In modern England, a piece of gold, called a sovereign, represents a certain weight in gold uncoined, and the Government stamp indicates its purity; whilst the perpetual separation of the light sovereigns from those of full-weight affords a security that very few light ones are in general circulation. A sovereign purchases so many pounds weight of an ox, and a whole ox purchases so many sovereigns. The great use of the coined metal is to save labour in exchanging the ox for other commodities. The money purchases the ox, and a portion of the ox again purchases some other commodity, such as a loaf of bread from the baker, who obtains a portion of the ox through the medium of the money, which is a standard of value between the bread and the beef. Our great poetical satirist, Pope, in conducting his invective against the private avarice and political corruption of his day, imagines a state of things in which, money and credit being abolished, ministers would bribe and be bribed in kind. It is a true picture of what would be universal, if the exchanges of men resolved themselves into barter:

"A statesman's slumbers how this speech would spoil!

'Sir, Spain has sent a thousand jars of oil; Huge bales of British cloth blockade the door; A hundred oxen at your levee roar.'"

CHAPTER VI.

Importance of capital to the profitable employment of labour--Contrast between the prodigal and the prudent man: the Dukes of Buckingham and Bridgewater--Making good for trade--Unprofitable consumption--War against capital in the middle ages--Evils of corporate privileges--Condition of the people under Henry VIII.

If we have succeeded in making our meaning clear, by stating a general truth, not in an abstract form, but as brought out by various instances of the modes in which it is exhibited, we shall have led the reader to the conclusion that acc.u.mulation, or capital, is absolutely essential to the profitable employment of labour; and that the greater the acc.u.mulation the greater the extent of that profitable employment. This truth, however, has been denied altogether by some speculative writers;--and, what is more important, has been practically denied by the conduct of nations and individuals in the earlier state of society,--and is still denied by existing prejudices, derived from the current maxims of former days of ignorance and half-knowledge. With the speculative writers we have little to do. When Rousseau, for instance, advises governments not to secure property to its possessors, but to deprive them of all means of acc.u.mulating, it is sufficient to know that the same writer advocated the savage state, in which there should be no property, in preference to the social, which is founded on appropriation. Knowing this, and being convinced that the savage state, even with imperfect appropriation, is one of extreme wretchedness, we may safely leave such opinions to work their own cure. For it is not likely that any individual, however disposed to think that acc.u.mulation is an evil, would desire, by destroying acc.u.mulation, to pa.s.s into the condition, described by John Tanner, of a constant encounter with hunger in its most terrific forms: and seeing, therefore, the fallacy of such an opinion, he will also see that, if he partially destroys acc.u.mulation, he equally impedes production, and equally destroys his share in the productive power of capital and labour working together for a common good in the social state.

But, without going the length of wishing to destroy capital, there are many who think that acc.u.mulation is a positive evil, and that consumption is a positive benefit; and, therefore, that economy is an evil, and waste a benefit. The course of a prodigal man is by many still viewed with considerable admiration. He sits up all night in frantic riot--he consumes whatever can stimulate his satiated appet.i.te--he is waited upon by a crowd of unproductive and equally riotous retainers--he breaks and destroys everything around him with an unsparing hand--he rides his horses to death in the most extravagant attempts to wrestle with time and s.p.a.ce; and when he has spent all his substance in these excesses, and dies an outcast and a beggar, he is said to have been a hearty fellow, and to have "made good for trade." When, on the contrary, a man of fortune economizes his revenue--lives like a virtuous and reasonable being, whose first duty is the cultivation of his understanding--eats and drinks with regard to his health--keeps no more retainers than are sufficient for his proper comfort and decency--breaks and destroys nothing--has respect to the inferior animals, as well from motives of prudence as of mercy--and dies without a mortgage on his lands; _he_ is said to have been a stingy fellow who did not know how to "circulate his money." To "circulate money," to "make good for trade,"

in the once common meaning of the terms, is for _one_ to consume unprofitably what, if economized, would have stimulated production in a way that would have enabled _hundreds_, instead of one, to consume profitably. Let us offer two historical examples of these two opposite modes of making good for trade, and circulating money. The Duke of Buckingham, "having been possessed of about 50,000_l._ a year, died in 1687, in a remote inn in Yorkshire, reduced to the utmost misery."[12]

After a life of the most wanton riot, which exhausted all his princely resources, he was left at the last hour, under circ.u.mstances which are well described in the following lines by Pope:--

"In the worst inn's worst room, with mat half hung, The floors of plaster, and the walls of dung, On once a flock bed, but repair'd with straw, With tape-tied curtains never meant to draw, The George and Garter dangling from that bed Where tawdry yellow strove with dirty red; Great Villiers lies....

No wit to flatter left of all his store, No fool to laugh at, which he valued more, There, victor of his health, of fortune, friends, And fame, this lord of useless thousands ends."

Contrast the course of this unhappy man with that of the Duke of Bridgewater, who devoted his property to really "making good for trade,"

by constructing the great ca.n.a.ls which connect Manchester with the coal countries and with Liverpool. The Duke of Buckingham lived in a round of sensual folly: the Duke of Bridgewater limited his personal expenditure to 400_l._ a-year, and devoted all the remaining portion of his revenues to the construction of a magnificent work of the highest public utility.

The one supported a train of cooks and valets and horse-jockeys: the other called into action the labour of thousands, and employed in the direction of that labour the skill of Brindley, one of the greatest engineers that any country has produced. The one died without a penny, loaded with debt, leaving no trace behind him but the ruin which his waste had produced: the other bequeathed almost the largest property in Europe to his descendants, and opened a channel for industry which afforded, and still affords, employment to thousands.

[Ill.u.s.tration: Brindley.]

When a mob amused themselves by breaking windows, as was once a common recreation on an illumination night, by way of showing the amount of popular intelligence, some were apt to say they have "made good for trade." Is it not evident that the capital which was represented by the unbroken windows was really so much destroyed of the national riches when the windows were broken?--for if the windows had remained unbroken, the capital would have remained to stimulate the production of some new object of utility. The glaziers, indeed, replaced the windows; but there having been a destruction of windows, there must have been a necessary retrenchment in some other outlay, that would have afforded benefit to the consumer. Doubtless, when the glazier is called into activity by a mob breaking windows, some other trade suffers; for the man who has to pay for the broken windows must retrench somewhere, and, if he has less to lay out, some other person has less to lay out. The gla.s.s-maker, probably, makes more gla.s.s at the moment; but he does so to exchange with the capital that would otherwise have gone to the maker of clothes or of furniture: and, there being an absolute destruction of the funds for the maintenance of labour, by an unnecessary destruction of what former labour has produced, trade generally is injured to the extent of the destruction. Some now say that a fire makes good for trade. The only difference of evil between the fire which destroys a house, and the mob which breaks the windows, is, that the fire absorbs capital for the maintenance of trade, or labour, in the proportion of a hundred to one when compared with the mob. Some say that war makes good for trade. The only difference of pecuniary evil (the moral evils admit of no comparison) between the fire and the war is, that the war absorbs capital for the maintenance of trade, or labour, in the proportion of a million to a hundred when compared with the fire. If the incessant energy of production were constantly repressed by mobs, and fires, and wars, the end would be that consumption would altogether exceed production; and that then the producers and the consumers would both be starved into wiser courses, and perceive that nothing makes good for trade but profitable industry and judicious expenditure. Prodigality devotes itself too much to the satisfaction of present wants: avarice postpones too much the present wants to the possible wants of the future. Real economy is the happy measure between the two extremes; and that only "makes good for trade," because, while it carries on a steady demand for industry, it acc.u.mulates a portion of the production of a country to stimulate new production. That judicious expenditure consists in

"The sense to value riches, with the art T' enjoy them."

The fashion of "making good for trade" by unprofitable consumption is a relic of the barbarous ages. In the twelfth century a count of France commanded his va.s.sals to plough up the soil round his castle, and he sowed the ground with coins of gold, to the amount of fifteen hundred guineas, that he might have all men talk of his magnificence. Piqued at the lordly prodigality of his neighbour, another n.o.ble ordered thirty of his most valuable horses to be tied to a stake and burnt alive, that he might exhibit a more striking instance of contempt for acc.u.mulation.

In the latter part of the fourteenth century, a Scotch n.o.ble, Colin Campbell, on receiving a visit from the O'Neiles of Ireland, ostentatiously burnt down his house at Inverary upon their departure; and an Earl of Athol pursued the same course in 1528, after having entertained the papal legate, upon the pretence that it was "the constant habitude of the high-landers to set on fire in the morning the place which had lodged them the night before." When the feudal lords had so little respect for their own property, it was not likely that they would have much regard for the acc.u.mulation of others. The Jews, who were the great capitalists of the middle ages, and who really merit the grat.i.tude of Europeans for their avarice, as that almost alone enabled any acc.u.mulation to go forward, and any production to increase, were, as it is well known, persecuted in every direction by the crown, by the n.o.bles, by the people. When a solitary farmer or abbot attempted to acc.u.mulate corn, which acc.u.mulation could alone prevent the dreadful famines invariably resulting from having no stock that might be available upon a bad harvest, the people burnt the ricks of the provident men, by way of lessening the evils of scarcity. The consequence was, that no person thought of acc.u.mulating at all, and that the price of wheat often rose, just before the harvest, from five shillings a quarter to five pounds.

We are accustomed to read and talk of "merry England," but we sometimes fail to think how much real suffering lay beneath the surface of the merriment. Herrick, one of our charming old lyric poets, has sung the glories of the hock-cart--the cart that bore the full sheaves to the empty barn:--

"The harvest swains and wenches bound For joy, to see the hock-cart crown'd; About the cart hear how the rout Of rural younglings raise the shout, Pressing before, some coming after, Those with a shout, and these with laughter.

Some bless the cart, some kiss the sheaves, Some prank them up with oaken leaves; Some cross the fill-horse, some with great Devotion stroke the home-borne wheat."

a.s.suredly there was joy and there was devotion; for the laden cart made the difference between plenty and starvation. Before that harvest-home came there had been many an aching heart in the village hovels, for there was no store to equalize prices, and no communication to make the abundance of one district--much less of one country--mitigate the scarcity of another. It was not a question of the rise or the fall of a penny or two in the price of a loaf of bread; it was a question of bread or no bread.

[Ill.u.s.tration: The Hock-Cart.]

During those dark periods the crown carried on the war against capital with an industry that could not be exceeded by that of the n.o.bles or the people. Before the great charter the Commons complained that King Henry seized upon whatever was suited to his royal pleasure--horses, implements, food, anything that presented itself in the shape of acc.u.mulated labour. In the reign of Henry III. a statute was pa.s.sed to remedy excessive distresses; from which it appeared that it was no unfrequent practice for the king's officers to take the opportunity of seizing the farmer's oxen at the moment when they were employed in ploughing, or, as the statute says, "winning the earth,"--taking them off, and starving them to death, or only restoring them with new and enormous exactions for their keep. Previous to the Charter of the Forest no man could dig a marl-pit on his own ground, lest the king's horses should fall into it when he was hunting. As late as the time of James I.

we find, from a speech of the great Lord Bacon, that it was a pretty constant practice of the king's purveyors to extort large sums of money by threatening to cut down favourite trees which grew near a mansion-house or in avenues. Despotism, in all ages, has depopulated the finest countries, by rendering capital insecure, and therefore unproductive; insomuch that Montesquieu lays it down as a maxim, that lands are not cultivated in proportion to their fertility, but in proportion to their freedom. In the fifteenth century, in England, we find sums of money voted for the restoration of decayed towns and villages. Just laws would have restored them much more quickly and effectually. The state of agriculture was so low that the most absurd enactments were made to compel farmers to till and sow their own lands, and calling upon every man to plant at least forty beans. All the laws for the regulation of labourers, at the same period, a.s.sumed that they should be _compelled_ to work, and not wander about the country,--just in the same way that farmers should be compelled to sow and till. It is perfectly clear that the towns would not have been depopulated, and gone to decay, if the acc.u.mulation of capital had not been obstructed by insecurity and wasted by ignorance, and that the same insecurity and the same waste rendered it necessary to a.s.sume that the farmer would not till and sow, and the labourer would not labour, without compulsion. The natural stimulus to industry was wanting, and therefore there was no industry, or only unprofitable industry. The towns decayed, the country was uncultivated--production languished--the people were all poor and wretched; and the government dreamt that acts of parliament and royal ordinances could rebuild the houses and cultivate the land, when the means of building and cultivation, namely, the capital of the country, was exhausted by injustice producing insecurity.

But if the king, the n.o.bles, and the people of the middle ages conspired together, or acted at least as if they conspired, to prevent the acc.u.mulation of capital, the few capitalists themselves, by their monstrous regulations, which still throw some dark shadows over our own days, prevented that freedom of industry without which capital could not acc.u.mulate. Undoubtedly the commercial privileges of corporations originally offered some barriers against the injustice of the crown and of the n.o.bility; but the good was always accompanied with an evil, which rendered it to a certain extent valueless. Where these privileges gave security, they were a good; where they destroyed freedom, they were an injury. Instead of encouraging the intercourse between one trade and another, they encircled every trade with the most absurd monopolies and exclusive privileges. Instead of rendering commerce free between one district and another, they, even in the same country, encompa.s.sed commerce with the most hara.s.sing restrictions, which separated county from county, and town from town, as if seas ran between them. If a man of Coventry came to London with his wares, he was encountered at every step with the privileges of companies; if the man of London sought to trade at Coventry, he was obstructed by the same corporate rights, preventing either the Londoner or the Coventry man trading with advantage. The revenues of every city were derived from forfeitures upon trades, almost all established upon the principle that, if one trade became too industrious or too clever, it would be the ruin of another trade. Every trade was fenced round with secrets; and the commonest trade, as we know from the language of an apprentice's indenture, was called an "art and mystery." All these follies went upon the presumption that "one man's gain is another man's loss," instead of vanishing before the truth, that, in proportion as the industry of all men is free, so will it be productive; and that production on all sides ensures a state of things in which every exchanger is a gainer, and no one a loser.

It is not to be wondered at that, while such opinions existed, the union of capital and labour should have been very imperfect; and that, while the capitalists oppressed the labourers, in the same way that they oppressed each other, the labourers should have thought it not unreasonable to plunder the capitalists. It is stated by Harrison, an old writer of credit,[13] that during the single reign of Henry VIII.

seventy-two thousand thieves were hanged in England. No fact can exhibit in a stronger light the universal misery that must have existed in those days. The whole kingdom did not contain half a million grown-up males, so that, considering that the reign of Henry VIII. extended over two generations, about one man in ten must have been, to use the words of the same historian, "devoured and eaten up by the gallows." In the same reign the first statute against Egyptians (gipsies) was pa.s.sed. These people went from place to place in great companies--spoke a cant language, which Harrison calls Pedler's French--and were subdivided into fifty-two different cla.s.ses of thieves. The same race of people prevailed throughout Europe. Cervantes, the author of 'Don Quixote,'

says of the Egyptians or Bohemians, that they seem to have been born for no other purpose than that of pillaging. While this universal plunder went forward, it is evident that the insecurity of property must have been so great that there could have been little acc.u.mulation, and therefore little production. Capital was destroyed on every side; and because profitable labour had become so scarce by the destruction of capital, one-half of the community sought to possess themselves of the few goods of the other half, not as exchangers but as robbers. As the robbers diminished the capital, the diminution of capital increased the number of robbers; and if the unconquerable energy of human industry had not gone on producing, slowly and painfully indeed, but still producing, the country would have soon fallen back to the state in which it was a thousand years before, when wolves abounded more than men. One great cause of all this plunder and misery was the oppression of the labourers.